Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2016 | Aug. 10, 2016 | |
OptionsToPurchaseSharesOfCommonStockMember | ||
Entity Registrant Name | LIVE VENTURES Inc | |
Entity Central Index Key | 1,045,742 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 16,736,675 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Assets | ||
Cash and cash equivalents | $ 3,133,422 | $ 2,727,818 |
Accounts receivable, net | 8,640,663 | 8,243,992 |
Inventories, net | 10,763,723 | 13,335,598 |
Prepaid expenses and other current assets | 1,466,178 | 1,522,027 |
Total current assets | 24,003,986 | 25,829,435 |
Property and equipment, net | 13,651,146 | 12,481,901 |
Deposits and other assets | 19,765 | 36,090 |
Deferred taxes | 12,254,278 | 0 |
Intangible assets, net | 1,343,138 | 1,516,930 |
Goodwill | 800,000 | 800,000 |
Total assets | 52,072,313 | 40,664,356 |
Liabilities: | ||
Accounts payable | 6,093,712 | 5,536,796 |
Accrued liabilities | 3,995,302 | 3,660,949 |
Income tax payable | 0 | 376,000 |
Note payable | 1,811,701 | 1,443,036 |
Total current liabilities | 11,900,715 | 11,016,781 |
Notes payable, net of current portion | 16,953,378 | 14,568,190 |
Note payable, related party | 1,989,846 | 6,495,825 |
Contingent consideration from business combination | 0 | 316,000 |
Total Liabilities | 30,843,939 | 32,396,796 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 127,840 shares issued and outstanding at June 30, 2016 and September 30, 2015, liquidation preference $38,203 | 10,866 | 10,866 |
Common stock, $0.001 par value, 30,000,000 shares authorized, 16,917,406 shares issued and 16,793,743 shares outstanding at June 30, 2016; 16,903,014 shares issued and 16,903,014 shares outstanding at September 30, 2015 | 16,923 | 16,908 |
Paid in capital | 53,306,178 | 52,950,945 |
Treasury stock (123,663 shares) | (202,005) | 0 |
Accumulated deficit | (31,903,588) | (46,665,003) |
Total Live Ventures stockholders' equity | 21,228,374 | 6,313,716 |
Noncontrolling interest | 0 | 1,953,844 |
Total equity | 21,228,374 | 8,267,560 |
Total liabilities and equity | $ 52,072,313 | $ 40,664,356 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Stockholders' equity: | ||
Series E convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Series E convertible preferred stock, shares authorized | 200,000 | 200,000 |
Series E convertible preferred stock, issued | 127,840 | 127,840 |
Series E convertible preferred stock, outstanding | 127,840 | 127,840 |
Series E convertible preferred stock, liquidation preference | $ 38,203 | $ 38,203 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 16,917,406 | 16,903,014 |
Common stock, shares outstanding | 16,793,743 | 16,903,014 |
Treasury stock, shares | 122,663 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenues | $ 19,994,363 | $ 2,939,405 | $ 59,938,720 | $ 15,210,436 |
Cost of revenues | 14,894,949 | 1,796,359 | 42,823,232 | 8,895,338 |
Gross profit | 5,099,414 | 1,143,046 | 17,115,488 | 6,315,098 |
Operating expenses: | ||||
General and administrative expenses | 2,172,366 | 3,941,273 | 6,696,637 | 7,429,372 |
Sales and marketing expenses | 1,869,830 | 899,526 | 7,115,903 | 4,540,708 |
Impairment of intangible assets | 0 | 445,884 | 0 | 445,884 |
Total operating expenses | 4,042,196 | 5,286,683 | 13,812,540 | 12,415,964 |
Operating income (loss) | 1,057,218 | (4,143,637) | 3,302,948 | (6,100,866) |
Other expense: | ||||
Interest expense, net | (270,007) | (5,678) | (950,476) | (4,202,622) |
Other income | 326,708 | (59,076) | 694,277 | (31,137) |
Gain on deriative liability | 0 | 0 | 0 | 83,580 |
Total other expense, net | 56,701 | (64,754) | (256,199) | (4,150,179) |
Income (loss) before provision for income taxes | 1,113,919 | (4,208,391) | 3,046,749 | (10,251,045) |
Income tax benefit | (12,254,278) | 0 | (11,840,298) | 0 |
Net income (loss) | 13,368,197 | (4,208,391) | 14,887,047 | (10,251,045) |
Net income attributed to noncontrolling interest | 0 | 0 | 124,194 | 0 |
Net income (loss) attributed to Live Ventures Incorporated | $ 13,368,197 | $ (4,208,391) | $ 14,762,853 | $ (10,251,045) |
Earnings (loss) per share - basic | $ 0.79 | $ (0.26) | $ 0.87 | $ (0.65) |
Earnings (loss) per share - diluted | $ 0.7 | $ (0.26) | $ 0.77 | $ (0.65) |
Weighted average common shares outstanding - basic | 16,836,361 | 16,151,289 | 16,879,151 | 15,766,001 |
Weighted average common shares outstanding - diluted | 19,142,832 | 16,151,289 | 19,115,798 | 15,766,001 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
OPERATING ACTIVITIES: | ||
Net income (loss) | $ 14,887,047 | $ (10,251,045) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,623,013 | 500,699 |
Non-cash interest expense associated with convertible debt and warrants | 4,749 | 2,194,013 |
Non-cash interest expense associated with loan fees | 0 | 2,004,202 |
Non-cash change in fair value of derivative liability | 0 | (83,580) |
Stock based compensation expense | 254,710 | 621,311 |
Repricing of stock option exercise price | 0 | 54,677 |
Non-cash issuance of common stock for services | 22,500 | 2,008,559 |
Provision for uncollectible accounts | 30,073 | 24,819 |
Reserve for obsolete inventory | 703,532 | 255,110 |
Change in deferred taxes | (12,254,278) | 0 |
Change in contingent liability | (316,000) | 0 |
Loss on disposal of property and equipment | 71,614 | 48,534 |
Impairment of intangible assets | 0 | 445,884 |
Changes in assets and liabilities: | ||
Accounts receivable | (426,744) | (85,049) |
Prepaid expenses and other current assets | 55,849 | 245,198 |
Inventories | 1,868,343 | 1,485,196 |
Deposits and other assets | 16,325 | (5,082) |
Accounts payable | 556,916 | (971,874) |
Accrued liabilities | 332,915 | 13,094 |
Income tax payable | (376,000) | 0 |
Net cash provided by (used in) operating activities | 7,054,564 | (1,495,334) |
INVESTING ACTIVITIES: | ||
Proceeds from the sale of property and equipment | 653,857 | 0 |
Expenditures for intangible assets | 0 | (52,985) |
Purchases of property and equipment | (3,343,937) | (43,453) |
Net cash used in investing activities | (2,690,080) | (96,438) |
FINANCING ACTIVITIES: | ||
Net borrowings under revolver loans | (2,485,546) | 0 |
Issuance of common stock for cash, net of issuance costs | 0 | 538,441 |
Payments on notes payable | (4,400,114) | (556,047) |
Payments on notes payable, related party | (4,505,979) | 0 |
Payments on debt issue costs | (415,757) | 0 |
Purchase of treasury stock | (202,005) | |
Payment for the purchase of the noncontrolling interest | (2,000,000) | 0 |
Proceeds from issuance of notes payable | 10,050,521 | 0 |
Proceeds from issuance of convertible debt | 0 | 100,000 |
Net cash provided by (used in) financing activities | (3,958,880) | 82,394 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 405,604 | (1,509,378) |
CASH AND CASH EQUIVALENTS, beginning of period | 2,727,818 | 8,114,682 |
CASH AND CASH EQUIVALENTS, end of period | 3,133,422 | 6,605,304 |
Supplemental cash flow disclosures: | ||
Interest paid | 842,202 | 24,312 |
Income taxes paid | 466,000 | 0 |
Noncash financing and investing activities: | ||
Recognition of contingent beneficial conversion feature | 0 | 100,000 |
Conversion of notes payable and accrued interest into common stock | 0 | 635,756 |
Accrued and unpaid dividends | 480 | 1,442 |
Note payable issued for purchase of noncontrolling interest | $ 500,000 | $ 0 |
1. Organization and Basis of Pr
1. Organization and Basis of Presentation | 9 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | The accompanying consolidated financial statements include the accounts of Live Ventures, Incorporated, a Nevada corporation, and its subsidiaries (collectively the “Company”). The Company is a holding company for diversified businesses. The Company promoted online marketing solutions to small and medium businesses to help them boost customer awareness, gain visibility and manage their online presence. The Company also offered affordable acquisition services to the small businesses through the Instant Agency suite of products and services. The Company continues to actively develop, revise and evaluate its products, services and its marketing strategies in its businesses. Under the Live Ventures brand the Company seeks opportunities to acquire profitable and well-managed companies. The Company believes that with the proper positioning and its investment capital these companies can become very profitable. W ith its recent acquisition of Marquis Industries, Inc., the Company became engaged in the manufacture and sale of carpet and the sale of vinyl and wood floorcoverings. Effective October 7, 2015, the Company changed its corporate name from LiveDeal, Inc. to Live Ventures, Incorporated. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“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 the nine months ended June 30, 2016 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2016. The accompanying note disclosures related to the interim financial information included herein are also unaudited. This financial information should be read in conjunction with the consolidated financial statements and related notes thereto as of September 30, 2015 and for the fiscal year then ended included in the Company’s Annual Report on Form 10-K filed with the SEC on January 13, 2016. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Significant estimates and assumptions have been made by management throughout the preparation of the condensed consolidated financial statements, including in conjunction with establishing allowances for customer refunds, non-paying customers, dilution and fees, analyzing the recoverability of the carrying amount of intangible assets, evaluating the merits of pending litigation, estimating forfeitures of stock-based compensation, valuing beneficial conversion features in convertible debt, and evaluating the recoverability of deferred tax assets. Actual results could differ from these estimates. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Principles of Consolidation The accompanying consolidated financial statements represent the consolidated financial position and results of operations of the Company and its subsidiaries as follows: Percentage Company Owned Parent Telco Billing, Inc. 100% Live Ventures Incorporated Velocity Marketing Concepts, Inc. 100% Live Ventures Incorporated Velocity Local, Inc. 100% Live Ventures Incorporated Modern Everyday, Inc. 100% Live Ventures Incorporated Modern Everyday, LLC 100% Modern Everyday, Inc. Super Nova, LLC 100% Modern Everyday, Inc. Live Goods, LLC 100% Live Ventures Incorporated Marquis Affiliated Holdings, LLC* 100% Live Ventures Incorporated Marquis Industries, Inc. 100% Marquis Affiliated Holdings, LLC A-O Industries, LLC 100% Marquis Industries, Inc. Astro Carpet Mills, LLC 100% Marquis Industries, Inc. Constellation Industries, LLC 100% Marquis Industries, Inc. S F Commercial Properties, LLC 100% Marquis Industries, Inc. Marquis Real Estate Holdings, LLC 100% Marquis Industries, Inc. The results of operations for Marquis Industries, Inc. have only been included since the date of acquisition of July 6, 2015. All intercompany transactions and balances have been eliminated in consolidation. * Effective November 30, 2015, the Company acquired the remaining 20% interest. Noncontrolling Interest On July 6, 2015, the Company, through Marquis Affiliated Holdings, LLC (“MAH”), acquired an 80% interest in Marquis Industries, Inc. The transaction was accounted for under the acquisition method of accounting, with the purchase price allocated based on the fair value of the individual assets acquired and liabilities assumed. The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, “ Consolidation The net income attributed to the NCI is separately designated in the accompanying consolidated statements of operations. Losses attributable to the NCI in a subsidiary may exceed the NCI’s in the subsidiary’s equity. The excess attributable to the NCI is attributed to those interests. The NCI shall continue to attribute its share of losses even if that attribution results in a deficit NCI balance. Effective November 30, 2015, the Company purchased the remaining 20% interest in Marquis for $2,000,000. In accordance with ASC 810, the excess of the noncontrolling interest at November 30, 2015 over the $2,000,000 purchase price of $78,038 has been recorded directly to additional paid in capital. Inventories Inventories are valued at the lower of the inventory’s cost (first in, first out basis) or the current market price of the inventory. Management compares the cost of inventory with its market value and an allowance is made to write down inventory to market value, if lower. At June 30, 2016 and September 30, 2015, the allowance for obsolete inventory was $339,238 and $402,278, respectively. Revenue Recognition Directory Services Revenue is billed and recognized monthly for services subscribed in that specific month. The Company has historically utilized outside billing companies to perform billing services through direct ACH withdrawals. For billings via ACH withdrawals, revenue is recognized when such billings are accepted. For billings via LECs, the Company recognizes revenue based on net billings accepted by the LECs. Due to the periods of time for which adjustments may be reported by the LECs and the billing companies, the Company estimates and accrues for dilution and fees reported subsequent to year-end for initial billings related to services provided for periods within the fiscal year. Such dilution and fees are reported in cost of services in the accompanying consolidated statements of operations. Customer refunds are recorded as an offset to gross revenue. Revenue for billings to certain customers that are billed directly by the Company and not through the outside billing companies is recognized based on estimated future collections which is reasonably assured. The Company continuously reviews this estimate for reasonableness based on its collection experience. Deals Revenue The Company recognizes revenue from its sales through its strategic publishing partners of discounted goods and services offered by its merchant clients (“Deals”) when the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the selling price is fixed or determinable; and collectability is reasonably assured. These criteria are met when the number of customers who purchase the daily deal exceeds the predetermined threshold, where, if applicable, the Deal has been electronically delivered to the purchaser and a listing of Deals sold has been made available to the merchant. At that time, the Company's obligations to the merchant, for which it is serving as an agent, are substantially complete. The Company's remaining obligations, which are limited to remitting payment to the merchant, are inconsequential or perfunctory. The Company records as revenue an amount equal to the net amount it retains from the sale of Deals after paying an agreed upon percentage of the purchase price to the featured merchant excluding any applicable taxes. Revenue is recorded on a net basis because the Company is acting as an agent of the merchant in the transaction. Deferred Revenue In some instances, the Company receives payments in advance of rendering services, whereupon such revenues are deferred until the related services are rendered. There is no deferred revenue as of June 30, 2016 and September 30, 2015. Product Revenue The Company derives product revenue primarily from direct revenue and fulfillment partner revenue from product sales. Product revenue is recognized when the following revenue recognition criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or the service has been provided; (3) the selling price or fee revenue earned is fixed or determinable; and (4) collection of the resulting receivable is reasonably assured. The Company evaluates the criteria outlined in ASC Topic 605-45, Principal Agent Considerations Manufacturing Revenue Revenues from the sale of carpet products, including shipping and handling amounts, are recognized when the following criteria are met: there is persuasive evidence that a sales agreement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed or determinable, and collectability is reasonably assured. Delivery is not considered to have occurred until the customer takes title to the goods and assumes the risks and rewards of ownership, which is generally on the date of shipment. At the time revenue is recognized, the Company records a provision for the estimated amount of future returns based primarily on historical experience and any known trends or conditions that exist at the time revenue is recognized. Revenues are recorded net of taxes collected from customers. Income Taxes Income taxes are accounted for using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance would be provided for those deferred tax assets for which if it is more likely than not that the related benefit will not be realized. The Company classifies tax-related penalties and interest as a component of income tax expense for financial statement presentation. For the period from October 1, 2015 to November 30, 2015, Marquis Industries, Inc. and subsidiaries is required to file a separate income tax return, and therefore, the income generated by these subsidiaries cannot be offset against the Company’s net operating losses. Segment Reporting ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has three reportable segments (See Note 15). Derivative Financial Instruments The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of June 30, 2016 and September 30, 2015, the Company had no financial instruments with derivative feature. Recently Issued Accounting Pronouncements No accounting standards or interpretations issued recently are expected to a have a material impact on our consolidated financial position, operations or cash flows. |
3. Balance Sheet Information
3. Balance Sheet Information | 9 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Information | Balance sheet information is as follows: June 30, September 30, 2016 2015 Receivables, current, net: Accounts receivable, current $ 9,433,871 $ 9,007,127 Less: Allowance for doubtful accounts (793,208 ) (763,135 ) $ 8,640,663 $ 8,243,992 Receivables, long term, net: Accounts receivable, long term $ 344,572 $ 344,572 Less: Allowance for doubtful accounts (344,572 ) (344,572 ) $ – $ – Total receivables, net: Gross receivables $ 9,778,443 $ 9,351,699 Less: Allowance for doubtful accounts (1,137,780 ) (1,107,707 ) $ 8,640,663 $ 8,243,992 Components of allowance for doubtful accounts are as follows: Allowance for dilution and fees on amounts due from billing aggregators $ 1,063,617 $ 1,063,617 Allowance for customer refunds 1,225 1,715 Allowance for other trade receivables 72,938 42,375 $ 1,137,780 $ 1,107,707 Inventory Raw materials $ 6,543,795 $ 6,715,298 Work in progress 900,054 836,837 Finished goods 4,425,684 6,185,741 11,869,533 13,737,876 Less: Obsolescence reserve (1,105,810 ) (402,278 ) $ 10,763,723 $ 13,335,598 Property and equipment, net: Land and improvements $ – $ 687,999 Building and improvements 5,699,489 4,202,000 Transportation equipment 77,419 77,419 Machinery and equipment 9,483,125 7,676,561 Furnishings and fixtures 192,757 211,701 Office, computer equipment and other 216,793 244,674 15,669,583 13,100,354 Less: Accumulated depreciation (2,018,437 ) (618,453 ) $ 13,651,146 $ 12,481,901 Intangible assets, net: Domain name and marketing related intangibles $ 18,957 $ 18,957 Website and technology related intangibles 25,300 25,300 Purchased software 1,500,000 1,500,000 1,544,257 1,544,257 Less: Accumulated amortization (201,119 ) (27,327 ) $ 1,343,138 $ 1,516,930 Accrued liabilities: Accrued payroll and bonuses $ 681,110 $ 731,782 Accrued software costs 1,500,000 1,500,000 Accrued expenses - other 1,814,192 1,429,167 $ 3,995,302 $ 3,660,949 |
4. Intangible Assets
4. Intangible Assets | 9 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | During the year ended September 30, 2015, the Company purchased software for $1,500,000. This software is being amortized over 84 months which is the term that the software is expected to produce revenue. The Company has the option to pay for the software in cash or in 800,000 shares of the CompanyÂ’s common stock. The Company has until December 31, 2016 to pay for the software either in cash or common stock. At June 30, 2016, the Company had not made any payments towards the purchase of this software and has reflected the $1,500,000 purchase price for the software in accrued liabilities in the accompanying condensed consolidated balance sheet. The following summarizes estimated future amortization expense related to intangible assets for the twelve month periods ending June 30: 2017 $ 219,221 2018 214,286 2019 214,286 2020 214,286 2021 214,286 Thereafter 266,773 $ 1,343,138 Total amortization expense related to intangible assets was $173,791 and $451,024 for the nine months ended June 30, 2016 and 2015, respectively. |
5. Notes Payable
5. Notes Payable | 9 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes payable as of June 30, 2016 and September 30, 2015 consisted of the following: June 30, September 30, 2016 2015 Base Rate Revolver Loan- interest rate based on prime rate adjusted for fixed coverage ratio (table below), maturity date July 6, 2020 $ 4,955,962 $ 7,225,745 Base Rate Term Loan- interest rate based on prime rate adjusted for fixed coverage ratio (table below) fixed coverage ratio, maturity date July 6, 2020 3,580,617 7,628,438 Note payable to individual, payable on demand, interest at 10.0% per annum, unsecured 90,148 92,441 Acquisition note payable, due September 6, 2016, as amended, non-interest bearing 50,000 395,251 Note payable to Store Capital Acquisitions, LLC, due June 13, 2056, monthly principal and interest payments of $73,970, interest at 9.25% per annum, secured by land and buildings 9,355,521 – Note payable to individual, payable within 90 days of a written demand notice, interest at 10.0% per annum, unsecured 495,000 – Note payable to individual, payable within 90 days of a written demand notice, interest at 10.0% per annum, unsecured 200,000 – Credit line due January 1, 2024, with interest rate of 2.75% 453,588 669,351 Total debt 19,180,836 16,011,226 Less debt discount (415,757 ) – Net amount 18,765,079 16,011,226 Current portion 1,811,701 1,443,036 Long-term portion $ 16,953,378 $ 14,568,190 Real Estate Transaction On June 14, 2016, the Company entered into a transaction with Store Capital Acquisitions, LLC. The transaction included a sale-leaseback of land owned by Marquis Industries and a loan secured by the improvements on such land. The total aggregate proceeds received from the sale of the land and the loan was $10,000,000, which consisted of $644,479 from the sale of the land and a note payable of $9,355,521. The Company recognized a loss of $43,520 on the sale of the land. In connection with the transaction, the Company entered into a lease with a 15 year term commencing on the closing of the transaction, which provides the Company an option to extend the lease upon the expiration of its term. The initial annual lease rate is $59,614. The proceeds from this transaction were used to pay down the revolver and terms loans, and related party loan, as well as purchasing a building from the previous owners of Marquis Industries that was not purchased in the July 2015 transaction. In connection with the note payable, the Company incurred $415,757 in transaction costs that are recognized as a debt discount that will be amortized to interest expense over the term of the note payable. Revolver Loan and Term Loan In connection with the purchase of Marquis Industries Inc., the Company entered into an agreement with Bank of America for a Term and Revolving Loan for approximately $7.8 million for the term component and approximately $15 million for the revolving component. As part of the Bank of America Revolving Loan, Marquis Industries may borrow up to $15 million (based on eligibility). The Bank of America term loan bears interest at a variable rate based on a base rate plus a margin. The current base rate is the greater of (a) Bank of America prime rate, (b) the current federal funds rate plus 0.50%, or (c) 30-day LIBOR plus 1.00% plus the margin, which varies, depending on the fixed coverage ratio table below. Levels I – IV which determine the interest rate to be charge is based on the fixed charge coverage ratio. Fixed Coverage Ratio Table Level Fixed Charge Coverage Ratio Base Rate Revolver Loan LIBOR Revolver Loans Base Rate Term Loans LIBOR Term Loans I greater than 2.0 to 1 0.50% 1.50% 0.75% 1.75% II less than or equal to 2.0 to 1 but greater than 1.5 to 1 0.75% 1.75% 1.00% 2.00% III less than or equal to 1.5 to 1 but greater than 1.2 to 1 1.00% 2.00% 1.25% 2.25% IV less than or equal to 1.2 to 1 1.25% 2.25% 1.50% 2.5% The loans are cross-collateralized with substantially all real and personal property of Marquis Industries, Inc. As of June 30, 2016, the Company was at Level II with the fixed coverage ratio. Monthly payments to Bank of America are approximately $79,000 plus accrued interest. The term component is due and payable in July 2020, which is when the revolving component terminates. The loans contain certain covenants that require, among other things, for the Company to maintain a fixed charge coverage ratio of at least 1.05 to 1. Since the loan was obtained on July 6, 2015, the Company still has until July 5, 2016 to be in compliance with this ratio. ICG Convertible Note Transaction On January 23, 2014, the Company issued a note to Isaac Capital Group (“ICG”), a related party, in the principal amount of $500,000. Because the conversion price of $2.29 was less than the stock price, this gave rise to a beneficial conversion feature valued at $500,000. The Company recognized this beneficial conversion feature as a debt discount and additional paid in capital. The debt discount is being amortized over the one year term. On December 3, 2014, ICG converted the note into 674,370 shares of common stock, therefore the remaining debt discount of $158,219 was written off and recognized as interest expense. In addition, upon the conversion of note, the Company issued to ICG a warrant to acquire 674,370 additional shares of the Company’s common stock at an exercise price of $0.95 per share. The fair value of the warrants issued in connection with the conversion of note was $1,853,473 and was immediately recognized as interest expense. Kingston Convertible Note Transaction ($10 Million Line of Credit) On January 7, 2014, the Company entered into a Note Purchase Agreement (the “Kingston Purchase Agreement”) with Kingston Diversified Holdings LLC (“Kingston”), pursuant to which the Investor agreed to purchase for cash up to $5,000,000 in aggregate principal amount of the Company’s Convertible Notes (“Notes”). The Kingston Purchase Agreement and the Notes, which are unsecured, provide that all amounts payable by the Company to Kingston under the Notes will be due and payable on the second (2nd) anniversary of the date of the Kingston Purchase Agreement (the “Maturity Date”). The Kingston Purchase Agreement provides for a 5% discount to the note amount, interest at 8% per annum and convertible into shares of the Company’s common stock equal to 70% of the lesser of: (i) the closing bid price of the common stock on the date of the Kingston Purchase Agreement (i.e., $3.12 per share); or (ii) the 10-day volume weighted average closing bid price for the common stock, as listed on NASDAQ for the 10 business days immediately preceding the date of conversion (the “Average Price”); provided, however, that in no event will the Average Price per share be less than $0.33. On October 29, 2014, the Company entered into an amended convertible note purchase agreement with Kingston whereby the Company and Kinston agreed to (i) i ncrease the maximum principal amount of the notes from $5 million to $10 million in principal amount, (ii) eliminate the original issue discount provision of the agreement and replaces it with an execution payment equal to 5% of the maximum loan amount, and (iii) provides certain additional adjustments to the note conversion price. On October 16, 2014, the Company issued a Note to Kingston in the principal amount of $100,000. Because the conversion price of $0.79 was less than the stock price on the date of issuance, this gave rise to a beneficial conversion feature valued at $100,000. The Company recognized this beneficial conversion feature as a debt discount and additional paid in capital. The debt discount is being amortized over the one year term. On November 17, 2014, Kingston converted the note into 127,008 shares of common stock, therefore the debt discount of $100,000 was written off and recognized as interest expense. In addition, as a result of the October 29, 2014 amendment, the Company was required to issue to Kingston, the original issue discount payment equal to 5% of the maximum loan in shares of the Company’s common stock based upon the conversion price of the first conversion which was $0.79 per shares. The Company issued 630,252 shares of common stock that had a fair value of $2,004,202 which Credit line In connection with the purchase of Modern Everyday, Inc., the Company assumed a credit line from a bank. The credit line is collateralized by all the assets of Modern Everyday, Inc., accrues interest at prime plus 2% and is due on December 31, 2017. |
6. Note Payable, Related Party
6. Note Payable, Related Party | 9 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Note Payable, Related Party | In connection with the purchase of Marquis Industries Inc., the Company entered into a mezzanine loan in an amount of up to $7,000,000 provided by Isaac Capital Fund, a private lender whose managing member is Jon Isaac, the chief executive officer of the Company. The Isaac Capital Fund mezzanine loan bears interest at 12.5% with payment obligations of interest each month and all principal due in January 2021 (nine months after the final payments are due under the Bank of America Term and Revolving Loan). As of June 30, 2016 and September 30, 2015, there was $1,989,846 and $6,495,825, respectively, outstanding on this mezzanine loan. |
7. Equity
7. Equity | 9 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Equity | Common Stock During the nine months ended June 30, 2016, the Company issued: · 14,392 shares of common stock for services rendered valued at $22,500. The value was based on the market value of the Company’s common stock on the date of issuance. During the nine months ended June 30, 2015, the Company issued: · 787,358 shares of common stock for services rendered valued at $2,008,559. The value was based on the market value of the Company’s common stock on the date of issuance; · 155,000 shares of common stock for net cash proceeds of $538,441; · 801,378 share of common stock for the conversion of convertible notes and accrued interest of $635,756; · 630,252 shares of common stock as payment for the original issue discount fees associated with the Kingston agreement. The value of the shares of $2,004,202 was based on the market value of the Company’s common stock at the date of issuance. Treasury Stock During the nine months ended June 30, 2016, the Company purchased 123,663 shares of its common stock on the open market (treasury shares) for $202,005. The Company accounted for the purchase of these treasury shares using the cost method. 2014 Omnibus Equity Incentive Plan On January 7, 2014, our Board of Directors adopted the 2014 Omnibus Equity Incentive Plan (the “2014 Plan”), which 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 officers, employees, directors, consultants and advisors. The Company has reserved up to 1,800,000 shares of common stock for issuance under the 2014 Plan. As required under Nasdaq Listing Rule 5635(c), the Company included a proposal at its 2014 Annual Meeting of Stockholders, which was held on July 11, 2014, to obtain approval of the 2014 Plan. The 2014 Plan was approved. Series E Convertible Preferred Stock Pursuant to a tender offer, in 2002, holders of 13,184 shares of the Company’s common stock exchanged said shares for 127,840 shares of Series E Convertible Preferred Stock, at the then $0.85 market value of the common stock. The shares carry a $0.30 per share liquidation preference and accrue dividends at the rate of 5% per annum on the liquidation preference per share, payable quarterly from legally available funds. If such funds are not available, dividends shall continue to accumulate until they can be paid from legally available funds. Holders of the preferred shares are entitled, after two years from issuance, to convert them into common shares on a one-to-one basis together with payment of $0.45 per converted share. Dividends During the nine months ended June 30, 2016 and 2015, the Company accrued dividends of $1,438 and $1,442, respectively, payable to holders of Series E preferred stock. At June 30, 2016 unpaid dividends were $479. |
8. Warrants
8. Warrants | 9 Months Ended |
Jun. 30, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | The Company issued several Notes in prior periods and converted them resulting in the issuance of warrants. The following table summarizes information about the Company’s warrant activity for the nine months ended June 30, 2016: Number of Units Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Intrinsic Value Outstanding at September 30, 2015 3,540,876 $ 0.69 2.73 $ 3,498,531 Granted – Exercised – Outstanding at June 30, 2016 3,540,876 $ 0.69 1.98 $ 2,861,174 Exercisable at June 30, 2016 3,540,876 $ 0.69 1.98 $ 2,861,174 Most of the above warrants were issued in connection with conversion of convertible notes (See Note 5). When the debt is converted and warrants are issued, the Company determines the fair value of the warrants using the Black-Scholes model and takes a charge to interest expense at the date of issuance. The exercise price for warrants outstanding and exercisable at June 30, 2016 is as follows: Outstanding Exercisable Number of Exercise Number of Exercise Warrants Price Warrants Price 1,631,886 $ 0.55 1,631,886 $ 0.55 535,716 0.56 535,716 0.56 371,487 0.81 371,487 0.81 1,001,787 0.95 1,001,787 0.95 3,540,876 3,540,876 |
9. Stock Options
9. Stock Options | 9 Months Ended |
Jun. 30, 2016 | |
Share-based Compensation [Abstract] | |
Stock Options | From time to time, the Company grants stock options and restricted stock awards to officers, directors, employees and consultants. These awards are valued based on the grant date fair value of the instruments, net of estimated forfeitures. The value of each award is amortized on a straight-line basis over the requisite service period. Stock Options The following table summarizes stock option activity for the nine months ended June 30, 2016: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Intrinsic Value Outstanding at September 30, 2015 1,050,000 $ 1.87 4.76 $ 225,750 Granted – Exercised – Forfeited – Outstanding at June 30, 2016 1,050,000 $ 1.87 4.01 $ 162,500 Exercisable at June 30, 2016 1,012,500 $ 1.85 3.94 $ 162,500 The Company recognized compensation expense of $254,710 and $621,311 during the nine months ended June 30, 2016 and 2015, respectively, related to stock option awards granted to certain employees and executives based on the grant date fair value of the awards, net of estimated forfeitures. At June 30, 2016, the Company had $5,089 of unrecognized compensation expense (net of estimated forfeitures) associated with stock option awards which the Company expects will be recognized through June 2017. The exercise price for options outstanding and exercisable at June 30, 2016 is as follows: Outstanding Exercisable Number of Exercise Number of Exercise Options Price Options Price 187,500 $ 0.83 187,500 $ 0.83 150,000 1.25 150,000 1.25 187,500 1.67 187,500 1.67 37,500 2.08 37,500 2.08 37,500 2.50 – 2.50 450,000 2.53 450,000 2.53 1,050,000 1,012,500 The following table summarizes information about the Company’s non-vested shares as of June 30, 2016: Weighted- Average Number of Grant-Date Non-vested Shares Shares Fair Value Nonvested at September 30, 2015 375,000 $ 1.44 Granted – Vested ( 337,500 ) Nonvested at June 30, 2016 37,500 $ 1.44 |
10. Earnings (Loss) Per Share
10. Earnings (Loss) Per Share | 9 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (loss) per share is calculated using the weighted average number of shares of common stock outstanding during the applicable period. Basic weighted average common shares outstanding is computed using the weighted average shares outstanding during the period. Diluted earnings (loss) per share is computed using the weighted average number of common shares outstanding and if dilutive, potential common shares outstanding during the period. Potential common shares consist of the additional common shares issuable in respect of stock options, warrants and convertible preferred stock. The potential dilutive effect of stock options and warrants is calculated using the treasury stock method. Preferred stock dividends are subtracted from net loss to determine the amount available to common stockholders. The following table presents the computation of basic and diluted earnings (loss) per share: Three Months Ended June 30, Nine Months Ended June 30, 2016 2015 2016 2015 Basic Net income (loss) attributed to Live Ventures Incorporated $ 13,368,197 $ (4,208,391 ) $ 14,762,853 $ (10,251,045 ) Less: preferred stock dividends (479 ) (480 ) (1,438 ) (1,442 ) Net income (loss) applicable to common stock $ 13,367,718 $ (4,208,871 ) $ 14,761,415 $ (10,252,487 ) Weighted average common shares outstanding 16,836,361 16,151,289 16,879,151 15,766,001 Basic earnings (loss) per share $ 0.79 $ (0.26 ) $ 0.87 $ (0.65 ) Diluted Net income (loss) applicable to common stock $ 13,367,718 $ (4,208,871 ) $ 14,761,415 $ (10,252,487 ) Add: preferred stock dividends 479 – 1,438 – Net income (loss) applicable for diluted earnings (loss) per share $ 13,368,197 $ (4,208,871 ) $ 14,762,853 $ (10,252,487 ) Weighted average common shares outstanding 16,836,361 16,151,289 16,879,151 15,766,001 Add: Options 128,375 – 119,784 – Add: Warrants 2,050,296 – 1,989,063 – Add: preferred stock 127,800 – 127,800 – Assumed weighted average common shares outstanding 19,142,832 16,151,289 19,115,798 15,766,001 Diluted earnings (loss) per share $ 0.70 $ (0.26 ) $ 0.77 $ (0.65 ) The following is a list of potentially dilutive securities outstanding (prior to dilutive effect) at the respective periods: Three Months Ended June 30, Nine months Ended June 30, 2016 2015 2016 2015 Options to purchase shares of common stock 1,050,000 1,050,000 1,050,000 1,050,000 Warrants to purchase shares of common stock 3,540,876 3,540,876 3,540,876 3,540,876 Series E convertible preferred stock 127,840 127,840 127,840 127,840 Total potentially dilutive shares 4,718,716 4,718,716 4,718,716 4,718,716 |
11. Income Taxes
11. Income Taxes | 9 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | At June 30, 2016, the Company evaluated its valuation allowance against its deferred tax assets. The Company reduced its valuation allowance by $12,254,278 based on the profitable operations of its Marquis subsidiary that can be offset against the Company net operating loss carryforwards. |
12. Related Party Transactions
12. Related Party Transactions | 9 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | The Company entered into a Note Purchase Agreement with ICG, an entity owned by Jon Isaac, the CompanyÂ’s President and Chief Executive Officer and a director of the Company, and subsequently issued a series of Subordinated Convertible Notes thereunder to ICG. In connection with these transactions, the Company received gross proceeds of $500,000 during the year ended September 30, 2014. Because the conversion price under ICGÂ’s notes was less than the fair market value of the stock on the date of issuance, the Company recognized a beneficial conversion feature which was treated as a debt discount and amortized on a straight line basis as interest expense until the date of conversion, at which time all remaining debt discount was recognized as interest expense. Additionally, the fair value of the warrants that were contingently issuable to ICG upon conversion were recognized as additional interest expense. During the nine months ended June 30, 2016 and 2015, the Company recognized total interest expense of $0 and $2,018,803, respectively, associated with the ICG notes. The Company leases a building from a related party under long-term operating lease. The building lease from a related party is $18,562 per month and expires in July 2020. This lease was terminated in June 2016 when the Company purchased this building from the related party. On January 12, 2016, ICG advanced $800,000 to the Company. The advance was non-interest bearing and was repaid on January 29, 2016. Also see Note 6 and 7. |
13. Commitments and Contingenci
13. Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Purchase price contingency In connection with acquisition of Modern Everyday, Inc., the Company issued 50,000 shares of the CompanyÂ’s common stock as part of the consideration for the acquisition. The Company has guaranteed the holder of the 50,000 shares that the value of those shares will be at least $8.00 per shares 30 months after the acquisition date. The Company has agreed to compensate the holder, if the share price is less than $8.00 at the 30 months anniversary of the acquisition, the difference between $8.00 and the share price at the 30 month anniversary times the number of shares still owned by the holder. The Company reached an agreement with the holder of these shares that would not require the Company to compensate the holder if the value of the shares was under $8.00 per share; therefore the Company removed the contingent liability during the quarter ended March 31, 2016 and recorded other income of $316,000. Litigation The Company is party to certain legal proceedings from time to time incidental to the conduct of its business. These proceedings could result in fines, penalties, compensatory or treble damages or non-monetary relief. The nature of legal proceedings is such that the Company cannot assure the outcome of any particular matter, and an unfavorable ruling or development could have a materially adverse effect on our consolidated financial position, results of operations and cash flows in the period in which a ruling or settlement occurs. However, based on information available to the CompanyÂ’s management to date, the CompanyÂ’s management does not expect that the outcome of any matter pending against us is likely to have a materially adverse effect on the CompanyÂ’s consolidated financial position as of June 30, 2016, results of operations, cash flows or liquidity of the Company. |
14. Concentration of Credit Ris
14. Concentration of Credit Risk | 9 Months Ended |
Jun. 30, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | The Company maintains cash balances at banks in California, Nevada and Georgia. Accounts are insured by the Federal Deposit Insurance Corporation up to $250,000 per institution as of June 30, 2016. At times, balances may exceed federally insured limits. |
15. Segment Reporting
15. Segment Reporting | 9 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | The Company operates in three segments which are characterized as: (1) legacy merchant’s services, (2) online marketplace platform (includes corporate operations) and (3) manufacturing. The legacy merchants’ services consists of directory services, the online marketplace platform consists of livedeal.com and the fiscal 2014 acquisitions of consumer products entities and the manufacturing segment consists of the 2015 acquisition of Marquis Industries. The following tables summarize segment information for the three and nine months ended June 30, 2016 and 2015: Three Months Ended June 30, Nine Months Ended June 30, 2016 2015 2016 2015 Revenues Marketplace platform $ 508,099 $ 2,565,330 $ 5,284,851 $ 14,042,094 Manufacturing 19,243,019 – 53,881,143 – Services 243,245 374,075 772,726 1,168,342 $ 19,994,363 $ 2,939,405 $ 59,938,720 $ 15,210,436 Gross profit Marketplace platform $ (616,754 ) $ 809,253 $ 1,233,705 $ 5,268,391 Manufacturing 5,483,896 – 15,143,363 – Services 232,272 333,793 738,420 1,046,707 $ 5,099,414 $ 1,143,046 $ 17,115,488 $ 6,315,098 Operating income (loss) Marketplace platform $ (2,228,857 ) $ (4,414,858 ) $ (4,378,431 ) $ (6,954,605 ) Manufacturing 3,055,516 – 6,946,781 – Services 230,559 271,221 734,598 853,739 $ 1,057,218 $ (4,143,637 ) $ 3,302,948 $ (6,100,866 ) Depreciation and amortization Marketplace platform $ 65,404 $ 165,205 $ 201,647 $ 490,659 Manufacturing 496,591 – 1,421,366 – Services – 3,347 – 10,040 $ 561,995 $ 168,552 $ 1,623,013 $ 500,699 Interest Expenses Marketplace platform $ 10,346 $ 5,678 $ 121,319 $ 4,202,622 Manufacturing 259,661 – 829,157 – Services – – – – $ 270,007 $ 5,678 $ 950,476 $ 4,202,622 Provision for income taxes Marketplace platform $ (12,254,278 ) $ – $ (12,254,278 ) $ – Manufacturing – – 413,980 – Services – – – – $ (12,254,278 ) $ – $ (11,840,298 ) $ – Net income (loss) Marketplace platform $ 10,680,437 $ (4,479,612 ) $ 8,935,139 $ (11,104,784 ) Manufacturing 2,457,201 – 5,229,753 – Services 230,559 271,221 722,155 853,739 $ 13,368,197 $ (4,208,391 ) $ 14,887,047 $ (10,251,045 ) As of As of June 30, September 30, 2016 2015 Total Assets Marketplace platform $ 15,140,362 $ 6,811,977 Manufacturing 36,823,082 33,714,344 Services 108,869 138,035 $ 52,072,313 $ 40,664,356 Intangible assets Marketplace platform $ 1,343,138 $ 1,516,930 Manufacturing 800,000 800,000 Services – – $ 2,143,138 $ 2,316,930 |
16. Business Combinations
16. Business Combinations | 9 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Business Combinations | On July 6 and July 7, 2015, the Company entered into a series of agreements in connection with its indirect purchase of Marquis Industries, Inc., a Georgia corporation, and its subsidiaries. The purchase price allocation made by the Company as disclosed in the footnotes to its audited financial statements included in Form 10K is preliminary and subject to change. The Company has not yet completed its analysis to determine the fair value of inventory, property and equipment and a mezzanine loan on the acquisition date. Once this analysis is complete, the Company will adjust, if necessary, the provisional amounts assigned to inventory, property and equipment and a mezzanine loan in the accounting period in which the analysis is completed. The unaudited pro forma information below present statement of operations data for the nine months ended June 30, 2015 as if the acquisition of Marquis Industries took place on October 1, 2014. Nine months Ended June 30, 2015 (unaudited) Net revenue $ 63,163,294 Gross profit 18,866,546 Operating loss (469,659 ) Net loss (5,668,192 ) Loss per share (0.36 ) |
2. Summary of Significant Acc22
2. Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements represent the consolidated financial position and results of operations of the Company and its subsidiaries as follows: Percentage Company Owned Parent Telco Billing, Inc. 100% Live Ventures Incorporated Velocity Marketing Concepts, Inc. 100% Live Ventures Incorporated Velocity Local, Inc. 100% Live Ventures Incorporated Modern Everyday, Inc. 100% Live Ventures Incorporated Modern Everyday, LLC 100% Modern Everyday, Inc. Super Nova, LLC 100% Modern Everyday, Inc. Live Goods, LLC 100% Live Ventures Incorporated Marquis Affiliated Holdings, LLC* 100% Live Ventures Incorporated Marquis Industries, Inc. 100% Marquis Affiliated Holdings, LLC A-O Industries, LLC 100% Marquis Industries, Inc. Astro Carpet Mills, LLC 100% Marquis Industries, Inc. Constellation Industries, LLC 100% Marquis Industries, Inc. S F Commercial Properties, LLC 100% Marquis Industries, Inc. Marquis Real Estate Holdings, LLC 100% Marquis Industries, Inc. The results of operations for Marquis Industries, Inc. have only been included since the date of acquisition of July 6, 2015. All intercompany transactions and balances have been eliminated in consolidation. * Effective November 30, 2015, the Company acquired the remaining 20% interest. |
Noncontrolling Interest | Noncontrolling Interest On July 6, 2015, the Company, through Marquis Affiliated Holdings, LLC (“MAH”), acquired an 80% interest in Marquis Industries, Inc. The transaction was accounted for under the acquisition method of accounting, with the purchase price allocated based on the fair value of the individual assets acquired and liabilities assumed. The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, “ Consolidation The net income attributed to the NCI is separately designated in the accompanying consolidated statements of operations. Losses attributable to the NCI in a subsidiary may exceed the NCI’s in the subsidiary’s equity. The excess attributable to the NCI is attributed to those interests. The NCI shall continue to attribute its share of losses even if that attribution results in a deficit NCI balance. Effective November 30, 2015, the Company purchased the remaining 20% interest in Marquis for $2,000,000. In accordance with ASC 810, the excess of the noncontrolling interest at November 30, 2015 over the $2,000,000 purchase price of $78,038 has been recorded directly to additional paid in capital. |
Inventories | Inventories Inventories are valued at the lower of the inventoryÂ’s cost (first in, first out basis) or the current market price of the inventory. Management compares the cost of inventory with its market value and an allowance is made to write down inventory to market value, if lower. At June 30, 2016 and September 30, 2015, the allowance for obsolete inventory was $339,238 and $402,278, respectively. |
Revenue Recognition | Revenue Recognition Directory Services Revenue is billed and recognized monthly for services subscribed in that specific month. The Company has historically utilized outside billing companies to perform billing services through direct ACH withdrawals. For billings via ACH withdrawals, revenue is recognized when such billings are accepted. For billings via LECs, the Company recognizes revenue based on net billings accepted by the LECs. Due to the periods of time for which adjustments may be reported by the LECs and the billing companies, the Company estimates and accrues for dilution and fees reported subsequent to year-end for initial billings related to services provided for periods within the fiscal year. Such dilution and fees are reported in cost of services in the accompanying consolidated statements of operations. Customer refunds are recorded as an offset to gross revenue. Revenue for billings to certain customers that are billed directly by the Company and not through the outside billing companies is recognized based on estimated future collections which is reasonably assured. The Company continuously reviews this estimate for reasonableness based on its collection experience. Deals Revenue The Company recognizes revenue from its sales through its strategic publishing partners of discounted goods and services offered by its merchant clients (“Deals”) when the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the selling price is fixed or determinable; and collectability is reasonably assured. These criteria are met when the number of customers who purchase the daily deal exceeds the predetermined threshold, where, if applicable, the Deal has been electronically delivered to the purchaser and a listing of Deals sold has been made available to the merchant. At that time, the Company's obligations to the merchant, for which it is serving as an agent, are substantially complete. The Company's remaining obligations, which are limited to remitting payment to the merchant, are inconsequential or perfunctory. The Company records as revenue an amount equal to the net amount it retains from the sale of Deals after paying an agreed upon percentage of the purchase price to the featured merchant excluding any applicable taxes. Revenue is recorded on a net basis because the Company is acting as an agent of the merchant in the transaction. Deferred Revenue In some instances, the Company receives payments in advance of rendering services, whereupon such revenues are deferred until the related services are rendered. There is no deferred revenue as of June 30, 2016 and September 30, 2015. Product Revenue The Company derives product revenue primarily from direct revenue and fulfillment partner revenue from product sales. Product revenue is recognized when the following revenue recognition criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or the service has been provided; (3) the selling price or fee revenue earned is fixed or determinable; and (4) collection of the resulting receivable is reasonably assured. The Company evaluates the criteria outlined in ASC Topic 605-45, Principal Agent Considerations Manufacturing Revenue Revenues from the sale of carpet products, including shipping and handling amounts, are recognized when the following criteria are met: there is persuasive evidence that a sales agreement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed or determinable, and collectability is reasonably assured. Delivery is not considered to have occurred until the customer takes title to the goods and assumes the risks and rewards of ownership, which is generally on the date of shipment. At the time revenue is recognized, the Company records a provision for the estimated amount of future returns based primarily on historical experience and any known trends or conditions that exist at the time revenue is recognized. Revenues are recorded net of taxes collected from customers. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance would be provided for those deferred tax assets for which if it is more likely than not that the related benefit will not be realized. The Company classifies tax-related penalties and interest as a component of income tax expense for financial statement presentation. For the period from October 1, 2015 to November 30, 2015, Marquis Industries, Inc. and subsidiaries is required to file a separate income tax return, and therefore, the income generated by these subsidiaries cannot be offset against the CompanyÂ’s net operating losses. |
Segment Reporting | Segment Reporting ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has three reportable segments (See Note 15). |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of June 30, 2016 and September 30, 2015, the Company had no financial instruments with derivative feature. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements No accounting standards or interpretations issued recently are expected to a have a material impact on our consolidated financial position, operations or cash flows. |
2. Summary of Significant Acc23
2. Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
List of subsidiaries | Percentage Company Owned Parent Telco Billing, Inc. 100% Live Ventures Incorporated Velocity Marketing Concepts, Inc. 100% Live Ventures Incorporated Velocity Local, Inc. 100% Live Ventures Incorporated Modern Everyday, Inc. 100% Live Ventures Incorporated Modern Everyday, LLC 100% Modern Everyday, Inc. Super Nova, LLC 100% Modern Everyday, Inc. Live Goods, LLC 100% Live Ventures Incorporated Marquis Affiliated Holdings, LLC* 100% Live Ventures Incorporated Marquis Industries, Inc. 100% Marquis Affiliated Holdings, LLC A-O Industries, LLC 100% Marquis Industries, Inc. Astro Carpet Mills, LLC 100% Marquis Industries, Inc. Constellation Industries, LLC 100% Marquis Industries, Inc. S F Commercial Properties, LLC 100% Marquis Industries, Inc. Marquis Real Estate Holdings, LLC 100% Marquis Industries, Inc. |
3. Balance Sheet Information (T
3. Balance Sheet Information (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance sheet information - Receivables | June 30, September 30, 2016 2015 Receivables, current, net: Accounts receivable, current $ 9,433,871 $ 9,007,127 Less: Allowance for doubtful accounts (793,208 ) (763,135 ) $ 8,640,663 $ 8,243,992 Receivables, long term, net: Accounts receivable, long term $ 344,572 $ 344,572 Less: Allowance for doubtful accounts (344,572 ) (344,572 ) $ – $ – Total receivables, net: Gross receivables $ 9,778,443 $ 9,351,699 Less: Allowance for doubtful accounts (1,137,780 ) (1,107,707 ) $ 8,640,663 $ 8,243,992 |
Components of allowance for doubtful accounts | June 30, September 30, 2016 2015 Components of allowance for doubtful accounts are as follows: Allowance for dilution and fees on amounts due from billing aggregators $ 1,063,617 $ 1,063,617 Allowance for customer refunds 1,225 1,715 Allowance for other trade receivables 72,938 42,375 $ 1,137,780 $ 1,107,707 |
Schedule of inventory | June 30, September 30, 2016 2015 Inventory Raw materials $ 6,543,795 $ 6,715,298 Work in progress 900,054 836,837 Finished goods 4,425,684 6,185,741 11,869,533 13,737,876 Less: Obsolescence reserve (1,105,810 ) (402,278 ) $ 10,763,723 $ 13,335,598 |
Schedule of property and equipment | June 30, September 30, 2016 2015 Property and equipment, net: Land and improvements $ – $ 687,999 Building and improvements 5,699,489 4,202,000 Transportation equipment 77,419 77,419 Machinery and equipment 9,483,125 7,676,561 Furnishings and fixtures 192,757 211,701 Office, computer equipment and other 216,793 244,674 15,669,583 13,100,354 Less: Accumulated depreciation (2,018,437 ) (618,453 ) $ 13,651,146 $ 12,481,901 |
Schedule of intangible assets | June 30, September 30, 2016 2015 Intangible assets, net: Domain name and marketing related intangibles $ 18,957 $ 18,957 Website and technology related intangibles 25,300 25,300 Purchased software 1,500,000 1,500,000 1,544,257 1,544,257 Less: Accumulated amortization (201,119 ) (27,327 ) $ 1,343,138 $ 1,516,930 |
Schedule of accrued liabilities | June 30, September 30, 2016 2015 Accrued liabilities: Accrued payroll and bonuses $ 681,110 $ 731,782 Accrued software costs 1,500,000 1,500,000 Accrued expenses - other 1,814,192 1,429,167 $ 3,995,302 $ 3,660,949 |
4. Intangible Assets (Tables)
4. Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Future amortization expense related to intangible assets | 2017 $ 219,221 2018 214,286 2019 214,286 2020 214,286 2021 214,286 Thereafter 266,773 $ 1,343,138 |
5. Notes Payable (Tables)
5. Notes Payable (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of credit line debt | June 30, September 30, 2016 2015 Base Rate Revolver Loan- interest rate based on prime rate adjusted for fixed coverage ratio (table below), maturity date July 6, 2020 $ 4,955,962 $ 7,225,745 Base Rate Term Loan- interest rate based on prime rate adjusted for fixed coverage ratio (table below) fixed coverage ratio, maturity date July 6, 2020 3,580,617 7,628,438 Note payable to individual, payable on demand, interest at 10.0% per annum, unsecured 90,148 92,441 Acquisition note payable, due September 6, 2016, as amended, non-interest bearing 50,000 395,251 Note payable to Store Capital Acquisitions, LLC, due June 13, 2056, monthly principal and interest payments of $73,970, interest at 9.25% per annum, secured by land and buildings 9,355,521 – Note payable to individual, payable within 90 days of a written demand notice, interest at 10.0% per annum, unsecured 495,000 – Note payable to individual, payable within 90 days of a written demand notice, interest at 10.0% per annum, unsecured 200,000 – Credit line due January 1, 2024, with interest rate of 2.75% 453,588 669,351 Total debt 19,180,836 16,011,226 Less debt discount (415,757 ) – Net amount 18,765,079 16,011,226 Current portion 1,811,701 1,443,036 Long-term portion $ 16,953,378 $ 14,568,190 |
Fixed coverage ratio table | Level Fixed Charge Coverage Ratio Base Rate Revolver Loan LIBOR Revolver Loans Base Rate Term Loans LIBOR Term Loans I greater than 2.0 to 1 0.50% 1.50% 0.75% 1.75% II less than or equal to 2.0 to 1 but greater than 1.5 to 1 0.75% 1.75% 1.00% 2.00% III less than or equal to 1.5 to 1 but greater than 1.2 to 1 1.00% 2.00% 1.25% 2.25% IV less than or equal to 1.2 to 1 1.25% 2.25% 1.50% 2.5% |
8. Warrants (Tables)
8. Warrants (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrant activity | Number of Units Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Intrinsic Value Outstanding at September 30, 2015 3,540,876 $ 0.69 2.73 $ 3,498,531 Granted – Exercised – Outstanding at June 30, 2016 3,540,876 $ 0.69 1.98 $ 2,861,174 Exercisable at June 30, 2016 3,540,876 $ 0.69 1.98 $ 2,861,174 |
Warrants outstanding and exercisable | Outstanding Exercisable Number of Exercise Number of Exercise Warrants Price Warrants Price 1,631,886 $ 0.55 1,631,886 $ 0.55 535,716 0.56 535,716 0.56 371,487 0.81 371,487 0.81 1,001,787 0.95 1,001,787 0.95 3,540,876 3,540,876 |
9. Stock Options (Tables)
9. Stock Options (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Share-based Compensation [Abstract] | |
Stock option activity | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Intrinsic Value Outstanding at September 30, 2015 1,050,000 $ 1.87 4.76 $ 225,750 Granted – Exercised – Forfeited – Outstanding at June 30, 2016 1,050,000 $ 1.87 4.01 $ 162,500 Exercisable at June 30, 2016 1,012,500 $ 1.85 3.94 $ 162,500 |
Options outstanding and exercisable | Outstanding Exercisable Number of Exercise Number of Exercise Options Price Options Price 187,500 $ 0.83 187,500 $ 0.83 150,000 1.25 150,000 1.25 187,500 1.67 187,500 1.67 37,500 2.08 37,500 2.08 37,500 2.50 – 2.50 450,000 2.53 450,000 2.53 1,050,000 1,012,500 |
Non-vested share activity | Weighted- Average Number of Grant-Date Non-vested Shares Shares Fair Value Nonvested at September 30, 2015 375,000 $ 1.44 Granted – Vested ( 337,500 ) Nonvested at June 30, 2016 37,500 $ 1.44 |
10. Earnings (Loss) Per Share (
10. Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Basic and diluted net loss per share | Three Months Ended June 30, Nine Months Ended June 30, 2016 2015 2016 2015 Basic Net income (loss) attributed to Live Ventures Incorporated $ 13,368,197 $ (4,208,391 ) $ 14,762,853 $ (10,251,045 ) Less: preferred stock dividends (479 ) (480 ) (1,438 ) (1,442 ) Net income (loss) applicable to common stock $ 13,367,718 $ (4,208,871 ) $ 14,761,415 $ (10,252,487 ) Weighted average common shares outstanding 16,836,361 16,151,289 16,879,151 15,766,001 Basic earnings (loss) per share $ 0.79 $ (0.26 ) $ 0.87 $ (0.65 ) Diluted Net income (loss) applicable to common stock $ 13,367,718 $ (4,208,871 ) $ 14,761,415 $ (10,252,487 ) Add: preferred stock dividends 479 – 1,438 – Net income (loss) applicable for diluted earnings (loss) per share $ 13,368,197 $ (4,208,871 ) $ 14,762,853 $ (10,252,487 ) Weighted average common shares outstanding 16,836,361 16,151,289 16,879,151 15,766,001 Add: Options 128,375 – 119,784 – Add: Warrants 2,050,296 – 1,989,063 – Add: preferred stock 127,800 – 127,800 – Assumed weighted average common shares outstanding 19,142,832 16,151,289 19,115,798 15,766,001 Diluted earnings (loss) per share $ 0.70 $ (0.26 ) $ 0.77 $ (0.65 ) |
Potentially dilutive securities | Three Months Ended June 30, Nine months Ended June 30, 2016 2015 2016 2015 Options to purchase shares of common stock 1,050,000 1,050,000 1,050,000 1,050,000 Warrants to purchase shares of common stock 3,540,876 3,540,876 3,540,876 3,540,876 Series E convertible preferred stock 127,840 127,840 127,840 127,840 Total potentially dilutive shares 4,718,716 4,718,716 4,718,716 4,718,716 |
15. Segment Reporting (Tables)
15. Segment Reporting (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment reporting | Three Months Ended June 30, Nine Months Ended June 30, 2016 2015 2016 2015 Revenues Marketplace platform $ 508,099 $ 2,565,330 $ 5,284,851 $ 14,042,094 Manufacturing 19,243,019 – 53,881,143 – Services 243,245 374,075 772,726 1,168,342 $ 19,994,363 $ 2,939,405 $ 59,938,720 $ 15,210,436 Gross profit Marketplace platform $ (616,754 ) $ 809,253 $ 1,233,705 $ 5,268,391 Manufacturing 5,483,896 – 15,143,363 – Services 232,272 333,793 738,420 1,046,707 $ 5,099,414 $ 1,143,046 $ 17,115,488 $ 6,315,098 Operating income (loss) Marketplace platform $ (2,228,857 ) $ (4,414,858 ) $ (4,378,431 ) $ (6,954,605 ) Manufacturing 3,055,516 – 6,946,781 – Services 230,559 271,221 734,598 853,739 $ 1,057,218 $ (4,143,637 ) $ 3,302,948 $ (6,100,866 ) Depreciation and amortization Marketplace platform $ 65,404 $ 165,205 $ 201,647 $ 490,659 Manufacturing 496,591 – 1,421,366 – Services – 3,347 – 10,040 $ 561,995 $ 168,552 $ 1,623,013 $ 500,699 Interest Expenses Marketplace platform $ 10,346 $ 5,678 $ 121,319 $ 4,202,622 Manufacturing 259,661 – 829,157 – Services – – – – $ 270,007 $ 5,678 $ 950,476 $ 4,202,622 Provision for income taxes Marketplace platform $ (12,254,278 ) $ – $ (12,254,278 ) $ – Manufacturing – – 413,980 – Services – – – – $ (12,254,278 ) $ – $ (11,840,298 ) $ – Net income (loss) Marketplace platform $ 10,680,437 $ (4,479,612 ) $ 8,935,139 $ (11,104,784 ) Manufacturing 2,457,201 – 5,229,753 – Services 230,559 271,221 722,155 853,739 $ 13,368,197 $ (4,208,391 ) $ 14,887,047 $ (10,251,045 ) As of As of June 30, September 30, 2016 2015 Total Assets Marketplace platform $ 15,140,362 $ 6,811,977 Manufacturing 36,823,082 33,714,344 Services 108,869 138,035 $ 52,072,313 $ 40,664,356 Intangible assets Marketplace platform $ 1,343,138 $ 1,516,930 Manufacturing 800,000 800,000 Services – – $ 2,143,138 $ 2,316,930 |
2. Summary of Significant Acc31
2. Summary of Significant Accounting Policies (Details - List of subsidiaries) | Jun. 30, 2016 |
Live Ventures, Inc. [Member] | Telco Billing, Inc. [Member] | |
Percentage owned in subsidiary | 100.00% |
Live Ventures, Inc. [Member] | Velocity Marketing Concepts, Inc. [Member] | |
Percentage owned in subsidiary | 100.00% |
Live Ventures, Inc. [Member] | Velocity Local, Inc. [Member] | |
Percentage owned in subsidiary | 100.00% |
Live Ventures, Inc. [Member] | Modern Everyday, Inc. [Member] | |
Percentage owned in subsidiary | 100.00% |
Live Ventures, Inc. [Member] | Live Goods, LLC [Member] | |
Percentage owned in subsidiary | 100.00% |
Live Ventures, Inc. [Member] | Marquis Affiliated Holdings, LLC [Member] | |
Percentage owned in subsidiary | 100.00% |
Modern Everyday, Inc. [Member] | Modern Everyday, LLC [Member] | |
Percentage owned in subsidiary | 100.00% |
Modern Everyday, Inc. [Member] | Super Nova, LLC [Member] | |
Percentage owned in subsidiary | 100.00% |
Marquis Affiliated Holdings, LLC [Member] | Marquis Industries, Inc. [Member] | |
Percentage owned in subsidiary | 100.00% |
Marquis Industries, Inc. [Member] | A-O Industries, LLC [Member] | |
Percentage owned in subsidiary | 100.00% |
Marquis Industries, Inc. [Member] | Astro Carpet Mills, LLC [Member] | |
Percentage owned in subsidiary | 100.00% |
Marquis Industries, Inc. [Member] | Constellation Industries, LLC [Member] | |
Percentage owned in subsidiary | 100.00% |
Marquis Industries, Inc. [Member] | S F Commercial Properties, LLC [Member] | |
Percentage owned in subsidiary | 100.00% |
Marquis Industries, Inc. [Member] | Marquis Real Estate Holdings, LLC [Member] | |
Percentage owned in subsidiary | 100.00% |
2. Summary of Significant Acc32
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2016 | Sep. 30, 2015 | |
Allowance for obsolete inventory | $ 1,105,810 | $ 402,278 |
Deferred Revenue | 0 | $ 0 |
Marquis Affiliated Holdings, LLC [Member] | Marquis Industries, Inc. [Member] | ||
Cash paid for equity interest | 2,000,000 | |
Excess of interest over purchase price | $ 78,038 |
3. Balance Sheet Information (D
3. Balance Sheet Information (Details) - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Receivables, current, net: | ||
Accounts receivable, current | $ 9,433,871 | $ 9,007,127 |
Less: Allowance for doubtful accounts | (793,208) | (763,135) |
Receivables, current, net | 8,640,663 | 8,243,992 |
Receivables, long term, net: | ||
Accounts receivable, long term | 344,572 | 344,572 |
Less: Allowance for doubtful accounts | (344,572) | (344,572) |
Receivables, long term, net | 0 | 0 |
Total receivables, net: | ||
Gross receivables | 9,778,443 | 9,351,699 |
Less: Allowance for doubtful accounts | (1,137,780) | (1,107,707) |
Total receivables, net | 8,640,663 | 8,243,992 |
Allowance for dilution and fees on amounts due from billing aggregators | 1,063,617 | 1,063,617 |
Allowance for customer refunds | 1,225 | 1,715 |
Allowance for other trade receivables | 72,938 | 42,375 |
Total allowances | 1,137,780 | 1,107,707 |
Inventory | ||
Raw materials | 6,543,795 | 6,715,298 |
Work in progress | 900,054 | 836,837 |
Finished goods | 4,425,684 | 6,185,741 |
Total inventory, gross | 11,869,533 | 13,737,876 |
Less: obsolescence reserve | (1,105,810) | (402,278) |
Total inventory, net | 10,763,723 | 13,335,598 |
Property and equipment, net: | ||
Land and improvements | 0 | 687,999 |
Building and improvements | 5,699,489 | 4,202,000 |
Transportation equipment | 77,419 | 77,419 |
Machinery and equipment | 9,483,125 | 7,676,561 |
Furnishings and fixtures | 192,757 | 211,701 |
Office, computer equipment and other | 216,793 | 244,674 |
Plant Property and Equipment,Gross | 15,669,583 | 13,100,354 |
Less: Accumulated depreciation | (2,018,437) | (618,453) |
Property and equipment, net | 13,651,146 | 12,481,901 |
Intangible assets, net: | ||
Domain name and marketing related intangibles | 18,957 | 18,957 |
Website and technology related intangibles | 25,300 | 25,300 |
Purchased software | 1,500,000 | 1,500,000 |
Intangible assets, gross | 1,544,257 | 1,544,257 |
Less: Accumulated amortization | (201,119) | (27,327) |
Intangible assets, net | 1,343,138 | 1,516,930 |
Accrued liabilities: | ||
Accrued payroll and bonuses | 681,110 | 731,782 |
Accrued software costs | 1,500,000 | 1,500,000 |
Accrued expenses - other | 1,814,192 | 1,429,167 |
Total accrued liabilities | $ 3,995,302 | $ 3,660,949 |
4. Intangible Assets (Details)
4. Intangible Assets (Details) - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense, 2017 | $ 219,221 | |
Amortization expense, 2018 | 214,286 | |
Amortization expense, 2019 | 214,286 | |
Amortization expense, 2020 | 214,286 | |
Amortization expense, 2021 | 214,286 | |
Amortization expense, thereafter | 266,773 | |
Total future amortization expense | $ 1,343,138 | $ 1,516,930 |
4. Intangible Assets (Details N
4. Intangible Assets (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2015 | |
Software purchased | $ 1,500,000 | ||
Software useful life term | 84 months | ||
Accrued liabilities | $ 3,995,302 | $ 3,660,949 | |
Amortization expense | 173,791 | $ 451,024 | |
Software | |||
Accrued liabilities | $ 1,500,000 |
5. Notes Payable (Details)
5. Notes Payable (Details) - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Total Debt | $ 19,180,836 | $ 16,011,226 |
Current portion | 1,811,701 | 1,443,036 |
Long-term portion | 16,953,378 | 14,568,190 |
Credit line [Member] | ||
Total Debt | 453,588 | 669,351 |
Term Loan [Member] | ||
Total Debt | 3,580,617 | 7,628,438 |
Note payable to individual [Member] | ||
Total Debt | 90,148 | 92,441 |
Acquisition note payable [Member] | ||
Total Debt | 50,000 | 395,251 |
Note Payable - Store Capital [Member] | ||
Total Debt | 9,355,521 | 0 |
Note Payable - Individual [Member] | ||
Total Debt | 495,000 | 0 |
Note Payable - Individual [Member] | ||
Total Debt | 200,000 | 0 |
Revolver Loan [Member] | ||
Total Debt | $ 4,955,962 | $ 7,225,745 |
5. Notes Payable (Details Notes
5. Notes Payable (Details Notes Payable) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2016USD ($) | Jun. 30, 2016USD ($) | |
Credit line [Member] | ||
Debt maturity date | Jan. 1, 2024 | |
Debt stated interest rate | 2.75% | 2.75% |
Term Loan [Member] | ||
Debt maturity date | Jul. 6, 2020 | |
Debt interest rate description | Prime rate adjusted for fixed coverage ratio | |
Monthly principal and interest payments | $ 79,000 | |
Note payable to individual [Member] | ||
Debt stated interest rate | 10.00% | 10.00% |
Acquisition note payable [Member] | ||
Debt maturity date | Sep. 6, 2016 | |
Debt interest rate description | non-interest bearing | |
Note Payable - Store Capital [Member] | ||
Debt maturity date | Jun. 13, 2056 | |
Debt stated interest rate | 9.25% | 9.25% |
Monthly principal and interest payments | $ 73,970 | |
Note Payable - Individual [Member] | ||
Debt stated interest rate | 10.00% | 10.00% |
Note Payable - Individual [Member] | ||
Debt stated interest rate | 10.00% | 10.00% |
Revolver Loan [Member] | ||
Debt maturity date | Jul. 6, 2020 | |
Debt interest rate description | Adjusted for fixed coverage ratio |
5. Notes Payable (Details Narr
5. Notes Payable (Details Narrative) - USD ($) | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | |
Proceeds from note payable | $ 10,050,521 | $ 0 | |
Loss on sale of property | (71,614) | $ (48,534) | |
Revolver Loan [Member] | |||
Credit line maximum | $ 15,000,000 | 15,000,000 | |
Term Loan [Member] | |||
Credit line maximum | 7,800,000 | $ 7,800,000 | |
Credit line maturity date | Jul. 31, 2020 | ||
Monthly payments | $ 79,000 | ||
Store Capital Acquisitions, LLC [Member] | |||
Proceeds from sale of land | 644,479 | ||
Proceeds from note payable | 9,355,521 | ||
Loss on sale of property | (43,520) | ||
Debt issuance costs | $ 415,757 | $ 415,757 |
6. Note Payable, Related Party
6. Note Payable, Related Party (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2016 | Sep. 30, 2015 | |
Loan outstanding | $ 1,989,846 | $ 6,495,825 |
Mezzanine Loan [Member] | ||
Loan maximum borrowing amount | 7,000,000 | |
Loan outstanding | $ 1,989,846 | $ 6,495,825 |
Maturity date | Jan. 31, 2021 | |
Interest rate | 12.50% |
7. Equity (Details Narrative)
7. Equity (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Issuance of common stock for services, shares | 14,392 | 787,358 | ||
Issuance of common stock for services, value | $ 22,500 | $ 2,008,559 | ||
Issuance of common stock for cash, shares | 155,000 | |||
Issuance of common stock for cash, value | $ 538,441 | |||
Issuance of common stock for conversion of debt, shares | 801,378 | |||
Issuance of common stock for conversion of debt, value | $ 635,756 | |||
Issuance of common stock for loan fees, shares | 630,252 | |||
Issuance of common stock for loan fees, value | $ 2,004,202 | |||
Treasury stock purchased, shares | 123,663 | |||
Payment for treasury stock | $ 202,005 | |||
Accrrued dividends | $ 479 | 479 | ||
Dividends accrued | $ 479 | $ 480 | $ 1,438 | $ 1,442 |
Stock reserved for future issuance | 1,800,000 | 1,800,000 | ||
2014 Plan [Member] | ||||
Stock reserved for issuance under stock plan | 1,800,000 | 1,800,000 | ||
Common Stock | ||||
Common stock converted into Series E Convertible Preferred stock, common shares exchanged | 13,184 | |||
Series E Convertible Preferred Stock [Member] | ||||
Common stock converted into Series E Convertible Preferred stock, preferred shares issued | 127,840 |
8. Warrants (Details - Warrants
8. Warrants (Details - Warrants Outstanding) - Warrants [Member] | 9 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Number of units | |
Outstanding, beginning of period | 3,540,876 |
Granted | 0 |
Exercised | 0 |
Outstanding, end of period | 3,540,876 |
Exercisable, end of period | 3,540,876 |
Weighted Average Exercise Price | |
Outstanding, beginning of period | $ / shares | $ 0.69 |
Granted | $ / shares | |
Outstanding, end of period | $ / shares | 0.69 |
Exercisable, end of period | $ / shares | $ 0.69 |
Weighted Average Remaining Contractual Term (in years) | |
Outstanding, beginning of period | 2 years 8 months 23 days |
Outstanding, end of period | 1 year 11 months 23 days |
Exercisable, end of period | 1 year 11 months 23 days |
Intrinsic value outstanding, beginning of period | $ | $ 3,498,531 |
Intrinsic value outstanding, end of period | $ | $ 2,861,174 |
Exercisable, end of period | 2,861,174 |
8. Warrants (Details - Exercise
8. Warrants (Details - Exercise price) - Warrants [Member] - $ / shares | Jun. 30, 2016 | Sep. 30, 2015 |
Number of warrants outstanding | 3,540,876 | 3,540,876 |
Warrants exercise price, outstanding | $ 0.69 | $ 0.69 |
Number of warrants exercisable | 3,540,876 | |
$0.55 [Member] | ||
Number of warrants outstanding | 1,631,886 | |
Warrants exercise price, outstanding | $ 0.55 | |
Number of warrants exercisable | 1,631,886 | |
Warrants exercise price, exercisable | $ 0.55 | |
$0.56 [Member] | ||
Number of warrants outstanding | 535,716 | |
Warrants exercise price, outstanding | $ 0.56 | |
Number of warrants exercisable | 535,716 | |
Warrants exercise price, exercisable | $ 0.56 | |
$0.81 [Member] | ||
Number of warrants outstanding | 371,487 | |
Warrants exercise price, outstanding | $ 0.81 | |
Number of warrants exercisable | 371,487 | |
Warrants exercise price, exercisable | $ 0.81 | |
$0.95 [Member] | ||
Number of warrants outstanding | 1,001,787 | |
Warrants exercise price, outstanding | $ 0.95 | |
Number of warrants exercisable | 1,001,787 | |
Warrants exercise price, exercisable | $ 0.95 |
9. Stock Options (Details - Opt
9. Stock Options (Details - Option activity) - Stock Options [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Sep. 30, 2015 | |
Number of Shares | ||
Outstanding, beginning balance | 1,050,000 | |
Granted | ||
Exercised | ||
Forfeited | ||
Outstanding, ending balance | 1,050,000 | 1,050,000 |
Exercisable | 1,012,500 | |
Weighted Average Exercise Price | ||
Outstanding, beginning balance | $ 1.87 | |
Granted | ||
Exercised | ||
Forfeited | ||
Outstanding, ending balance | 1.87 | $ 1.87 |
Exercisable | $ 1.73 | |
Weighed Average Remaining Contractual Life | ||
Outstanding, ending balance | 4 years 9 months 15 days | 4 years 9 months 15 days |
Exercisable | 1 year 10 months 6 days | |
Intrinsic value outstanding, beginning balance | $ 225,750 | |
Intrinsic value outstanding, ending balance | 162,500 | |
Exercisable | $ 162,500 |
9. Stock Options (Details - O44
9. Stock Options (Details - Option price) - Stock Options [Member] - $ / shares | Jun. 30, 2016 | Sep. 30, 2015 |
Number of options outstanding | 1,050,000 | 1,050,000 |
Option exercise price outstanding | $ 1.87 | $ 1.87 |
Number of options exercisable | 1,012,500 | |
Option exercise price exercisable | $ 1.73 | |
$0.83 [Member] | ||
Number of options outstanding | 187,500 | |
Option exercise price outstanding | $ 0.83 | |
Number of options exercisable | 187,500 | |
Option exercise price exercisable | $ 0.83 | |
$1.25 [Member] | ||
Number of options outstanding | 150,000 | |
Option exercise price outstanding | $ 1.25 | |
Number of options exercisable | 150,000 | |
Option exercise price exercisable | $ 1.25 | |
$1.67 [Member] | ||
Number of options outstanding | 187,500 | |
Option exercise price outstanding | $ 1.67 | |
Number of options exercisable | 187,500 | |
Option exercise price exercisable | $ 1.67 | |
$2.08 [Member] | ||
Number of options outstanding | 37,500 | |
Option exercise price outstanding | $ 2.08 | |
Number of options exercisable | 37,500 | |
Option exercise price exercisable | $ 2.08 | |
$2.50 [Member] | ||
Number of options outstanding | 37,500 | |
Option exercise price outstanding | $ 2.50 | |
Number of options exercisable | 0 | |
Option exercise price exercisable | $ 2.50 | |
$2.53 [Member] | ||
Number of options outstanding | 450,000 | |
Option exercise price outstanding | $ 2.53 | |
Number of options exercisable | 450,000 | |
Option exercise price exercisable | $ 2.53 |
9. Stock Options (Details - Non
9. Stock Options (Details - Non vested) - Stock Options [Member] | 9 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Number of shares | |
Outstanding, beginning balance | 375,000 |
Granted | |
Vested | (337,500) |
Outstanding, ending balance | 37,500 |
Weighted-Average Grant-Date Fair Value | |
Per share price nonvested options outstanding, beginning of period | $ / shares | $ 1.44 |
Per share price nonvested options outstanding, end of period | $ / shares | $ 1.44 |
9. Stock Options (Details Narra
9. Stock Options (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation [Abstract] | ||
Stock-based compensation expense | $ 254,710 | $ 621,311 |
Unrecognized compensation expense | $ 5,089 |
10. Earnings (Loss) Per Share47
10. Earnings (Loss) Per Share (Details - Computation of loss per share) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Basic | ||||
Net income (loss) attributed to Live Ventures Incorporated | $ 13,368,197 | $ (4,208,391) | $ 14,762,853 | $ (10,251,045) |
Less: preferred stock dividends | (479) | (480) | (1,438) | (1,442) |
Net income (loss) applicable to common stock | $ 13,367,718 | $ (4,208,871) | $ 14,761,415 | $ (10,252,487) |
Weighted average common shares outstanding | 16,836,361 | 16,151,289 | 16,879,151 | 15,766,001 |
Basic earnings (loss) per share | $ 0.79 | $ (0.26) | $ 0.87 | $ (0.65) |
Diluted | ||||
Net income (loss) applicable to common stock | $ 13,367,718 | $ (4,208,871) | $ 14,761,415 | $ (10,252,487) |
Add: preferred stock dividends | 479 | 0 | 1,438 | 0 |
Net income (loss) applicable for diluted earnings (loss) per share | $ 13,368,197 | $ (4,208,391) | $ 14,762,853 | $ (10,252,487) |
Weighted average common shares outstanding | 16,836,361 | 16,151,289 | 16,879,151 | 15,766,001 |
Add: Options | 128,375 | 0 | 119,784 | 0 |
Add: Warrants | 2,050,296 | 0 | 1,989,063 | 0 |
Add: preferred stock | 127,800 | 0 | 127,800 | 0 |
Assumed weighted average common shares outstanding | 19,142,832 | 16,151,289 | 19,115,798 | 15,766,001 |
Diluted earnings (loss) per share | $ 0.7 | $ (0.26) | $ 0.77 | $ (0.65) |
10. Earnings (Loss) Per Share48
10. Earnings (Loss) Per Share (Details - Antidilutive securities) - shares | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount | 4,718,716 | 4,718,716 | 4,718,716 | 4,718,716 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount | 1,050,000 | 1,050,000 | 1,050,000 | 1,050,000 |
Warrants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount | 3,540,876 | 3,540,876 | 3,540,876 | 3,540,876 |
Series E Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount | 127,840 | 127,840 | 127,840 | 127,840 |
11. Income Taxes (Details Narra
11. Income Taxes (Details Narrative) | 9 Months Ended |
Jun. 30, 2016USD ($) | |
Income Tax Disclosure [Abstract] | |
Change in valuation allowance | $ 12,254,278 |
12. Related Party Transactions
12. Related Party Transactions (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
IGC [Member] | ||
Interest expense | $ 0 | $ 2,018,803 |
13. Commitments and Contingen51
13. Commitments and Contingencies (Details Narrative) | 9 Months Ended |
Jun. 30, 2016USD ($) | |
Modern Everyday, Inc. [Member] | |
Other income | $ 316,000 |
15. Segment Reporting (Details)
15. Segment Reporting (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2015 | |
Net revenues | $ 19,994,363 | $ 2,939,405 | $ 59,938,720 | $ 15,210,436 | |
Gross profit | 5,099,414 | 1,143,046 | 17,115,488 | 6,315,098 | |
Operating income (loss) | 1,057,218 | (4,143,637) | 3,302,948 | (6,100,866) | |
Depreciation and amortization | 561,995 | 168,552 | 1,623,013 | 500,699 | |
Interest expenses | 270,007 | 5,678 | 950,476 | 4,202,622 | |
Provision for income taxes | (12,254,278) | 0 | (11,840,298) | 0 | |
Net income (loss) | 13,368,197 | (4,208,391) | 14,887,047 | (10,251,045) | |
Total Assets | 52,072,313 | 52,072,313 | $ 40,664,356 | ||
Intangible assets (including goodwill) | 2,143,138 | 2,143,138 | 2,316,930 | ||
Marketplace Platform [Member] | |||||
Net revenues | 508,099 | 2,565,330 | 5,284,851 | 14,042,094 | |
Gross profit | (616,754) | 809,253 | 1,233,705 | 5,268,391 | |
Operating income (loss) | (2,228,857) | (4,414,858) | (4,378,431) | (6,954,605) | |
Depreciation and amortization | 65,404 | 165,205 | 201,647 | 490,659 | |
Interest expenses | 10,346 | 5,678 | 121,319 | 4,202,622 | |
Provision for income taxes | (12,254,278) | 0 | (12,254,278) | 0 | |
Net income (loss) | 10,680,437 | (4,479,612) | 8,935,139 | (11,104,784) | |
Total Assets | 15,140,362 | 15,140,362 | 6,811,977 | ||
Intangible assets (including goodwill) | 1,343,138 | 1,343,138 | 1,516,930 | ||
Manufacturing [Member] | |||||
Net revenues | 19,243,019 | 0 | 53,881,143 | 0 | |
Gross profit | 5,483,896 | 0 | 15,143,363 | 0 | |
Operating income (loss) | 3,055,516 | 0 | 6,946,781 | 0 | |
Depreciation and amortization | 496,591 | 0 | 1,421,366 | 0 | |
Interest expenses | 259,661 | 0 | 829,157 | 0 | |
Provision for income taxes | 0 | 0 | 413,980 | 0 | |
Net income (loss) | 2,457,201 | 0 | 5,229,753 | 0 | |
Total Assets | 36,823,082 | 36,823,082 | 33,714,344 | ||
Intangible assets (including goodwill) | 800,000 | 800,000 | 800,000 | ||
Services [Member] | |||||
Net revenues | 243,245 | 374,075 | 772,726 | 1,168,342 | |
Gross profit | 232,272 | 333,793 | 738,420 | 1,046,707 | |
Operating income (loss) | 230,559 | 271,221 | 734,598 | 853,739 | |
Depreciation and amortization | 0 | 6,693 | 0 | 10,040 | |
Interest expenses | 0 | 0 | 0 | 0 | |
Provision for income taxes | 0 | 0 | 0 | 0 | |
Net income (loss) | 230,559 | $ 271,221 | 722,155 | $ 853,739 | |
Total Assets | 108,869 | 108,869 | 138,035 | ||
Intangible assets (including goodwill) | $ 0 | $ 0 | $ 0 |
16. Business Combinations (Deta
16. Business Combinations (Details - Proforma) - Marquis Industries, Inc. [Member] | 9 Months Ended |
Jun. 30, 2015USD ($)$ / shares | |
Proforma information | |
Net revenue | $ 63,163,294 |
Gross profit | 18,866,546 |
Operating loss | (469,659) |
Net loss | $ (5,668,192) |
Loss per share | $ / shares | $ (.36) |