Item 1A. Risk Factors
ITEM 1A. Risk Factors
We have disclosed under the heading “Risk Factors” in the 2025 Form 10-K risk factors that materially affect our business, financial condition or results of operations, and disclosed more recent events relevant to our business under Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should carefully consider the risk factors set forth in the 2025 Form 10-K and the other information set forth under Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this quarterly report. You should be aware that these risk factors and other information may not describe every risk facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
Since the filing of our 2025 Form 10-K, the following additions have been made to the risk factors previously disclosed.
Risks Related to Indebtedness of Our Subsidiary, Precision Metal Works
Precision Metal Works, Inc. (“PMW”), our wholly-owned subsidiary, is party to a Credit and Security Agreement (the “Credit Agreement”) with Fifth Third Bank, National Association (“Fifth Third”), pursuant to which approximately $10.6 million in principal is currently outstanding. The maturity date of the loan was July 19, 2026. During the three months ended March 31, 2026, the Company determined that PMW was in default of the Fixed Charge Coverage Ratio (“FCCR”) covenant under the Credit Agreement, at which time Fifth Third agreed to forbear from exercising its rights and remedies through June 15, 2026, which forbearance subsequently was extended through August 19, 2026. The FCCR default was not a default on any payment obligations to Fifth Third under the Credit Agreement, as PMW has made, and continues to make, all payments on the Fifth Third Facility.
The default does not (and cannot) trigger any cross-default or cross-acceleration provision under any other credit facility of the Company or any of its other subsidiaries. Accordingly, Fifth Third’s potentially available rights and remedies — including any potential right to declare the outstanding balance immediately due and payable or to foreclose on PMW’s assets — are limited solely to PMW and its assets. Fifth Third has no contractual recourse to the assets of Live Ventures or any of its other subsidiaries.
The forbearance period has been extended through August 19, 2026, and PMW has not refinanced the obligations. PMW and the Company are currently evaluating financing terms with a prospective replacement lender; however, there can be no assurance that a definitive agreement on acceptable terms will be entered. During the term of the in-place forbearance agreement, Fifth Third is contractually precluded from exercising any of its potential contractual rights and remedies against PMW, including declaring all of PMW’s outstanding obligations immediately due and payable, foreclosing upon PMW’s collateral securing the Credit Agreement, which includes substantially all of PMW’s assets, or pursuing any other remedies available under the Credit Agreement or applicable law.
If Fifth Third elects not to extend the in-place forbearance agreement, it could accelerate the indebtedness or enforce remedies against PMW’s assets. Were that to occur and PMW not to refinance its obligations to Fifth Third under the Credit Agreement, PMW may be unable to continue operations, which could result in a non-cash impairment of our investment in PMW. However, given PMW's current operating losses, the elimination of PMW's operations would not be expected to have a material adverse effect on the Company's consolidated net earnings. . Alternatively, we could determine to continue to provide financial support to PMW, which provision of support could adversely affect our liquidity. There can be no assurance that PMW will be able to negotiate a further forbearance (if required), obtain replacement financing on acceptable terms or at all, or otherwise resolve its default status with Fifth Third, and the failure to do so could have an adverse effect on the business, financial condition, and results of operations of PMW, but not a material adverse effect on the Company, on a consolidated basis .
Our subsidiary, Precision Metal Works, Inc., is currently in default under its credit facility, and the lender’s forbearance period has expired, which could result in acceleration of the outstanding indebtedness or enforcement of remedies against PMW’s assets.
Precision Metal Works, Inc. (“PMW”), our wholly-owned subsidiary, is party to a Credit and Security Agreement with Fifth Third Bank, National Association (“Fifth Third”), pursuant to which approximately $10.6 million in principal is outstanding as of June 30, 2026. The maturity date of the loan was July 19, 2026. During the three months ended March 31, 2026, the Company determined that PMW was in default of the Fixed Charge Coverage Ratio (“FCCR”) covenant under the credit agreement governing its Credit Agreement, at which time Fifth Third agreed to forbear from exercising its rights and remedies through June 15, 2026, which forbearance subsequently was extended through August 19, 2026. The FCCR default was not a default on any payment obligations to Fifth Third under the Credit Agreement, as PMW has made, and continues to make, all payments on the Fifth Third Facility.
The default does not (and cannot) trigger any cross-default or cross-acceleration provision under any other credit facility of the Company or any of its other subsidiaries. Accordingly, Fifth Third’s potentially available rights and remedies — including any potential right to declare the outstanding balance immediately due and payable or to foreclose on PMW’s assets — are limited solely to PMW and its assets. Fifth Third has no contractual recourse to the assets of Live Ventures or any of its other subsidiaries.
The forbearance period has been extended through August 19, 2026, and PMW has not refinanced the obligations. PMW and the Company are currently evaluating financing terms with a prospective replacement lender; however, there can be no assurance that a definitive agreement on acceptable terms will be entered. During the term of the in-place forbearance agreement, Fifth Third is contractually precluded from exercising any of its potential contractual rights and remedies against PMW, including declaring all of PMW’s outstanding obligations immediately due and payable, foreclosing upon PMW’s collateral securing the Credit Agreement, which includes substantially all of PMW’s assets, or pursuing any other remedies available under the Credit and Security Agreement or applicable law.
If Fifth Third elects not to extend the in-place forbearance agreement, it could accelerate the indebtedness or enforce remedies against PMW’s assets. Were that to occur and PMW not to refinance its obligations to Fifth Third under the Credit Agreement, PMW may be unable to continue operations, which could result in a non-cash impairment of our investment in PMW. However, given PMW's current operating losses, the elimination of PMW's operations would not be expected to have a material adverse effect on the Company's consolidated net earnings. Alternatively, we could determine to continue to provide financial support to PMW, which provision of support could adversely affect our liquidity. There can be no assurance that PMW will be able to negotiate a further forbearance, obtain replacement financing on acceptable terms or at all, or otherwise resolve its default status with Fifth Third, and the failure to do so could have an adverse effect on the business, financial condition, and results of operations of PMW, but not a material adverse effect on the Company, on a consolidated basis.
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