LIVE VENTURES Inc 10-Q

Item 1. Financial Statements LIVE VENTURES INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share amounts) March 31, 2021 September 30, 2020 (Unaudited) Assets Cash $ 11,928 $ 8,984 Trade receivables, net 21,962 20,121 Inventories, net 61,826 64,525 Prepaid expenses and other current assets 1,254 1,778 Debtor in possession assets 200 520 Total current assets 97,170 95,928 Property and equipment, net 31,660 30,376 Right of use asset - operating leases 28,378 30,894 Deposits and other assets 459 223 Deferred taxes — 1,021 Intangible assets, net 850 1,063 Goodwill 37,754 37,754 Total assets $ 196,271 $ 197,259 Liabilities and Stockholders' Equity Liabilities: Accounts payable $ 10,661 $ 9,117 Accrued liabilities 12,260 14,822 Income taxes payable 3,498 736 Current portion of lease obligations - operating leases 7,104 7,176 Current portion of long-term debt 9,878 11,986 Current portion of notes payable related parties — 1,297 Debtor-in-possession liabilities 11,842 12,228 Total current liabilities 55,243 57,362 Long-term debt, net of current portion 52,979 63,390 Lease obligation long term - operating leases 25,782 28,101 Notes payable related parties, net of current portion 4,000 4,000 Deferred taxes 312 — Other non-current obligations 405 734 Total liabilities 138,721 153,587 Commitments and contingencies Stockholders' equity: Series B convertible preferred stock, $0.001 par value, 1,000,000 shares authorized, 315,790 and 214,244 shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively — — Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 47,840 shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively, with a liquidation preference of $0.30 per share outstanding — — Common stock, $0.001 par value, 200,000,000 shares authorized, 1,555,175 and 1,589,101 shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively 2 2 Paid in capital 64,759 64,472 Treasury stock common 533,011 shares as of March 31, 2021 and 499,805 shares as of September 30, 2020 (4,481 ) (4,098 ) Treasury stock Series E preferred 50,000 shares as of March 31, 2021 and of September 30, 2020 (7 ) (7 ) Accumulated deficit (2,282 ) (16,429 ) Equity attributable to Live stockholders 57,991 43,940 Non-controlling interest (441 ) (268 ) Total stockholders' equity 57,550 43,672 Total liabilities and stockholders' equity $ 196,271 $ 197,259 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 LIVE VENTURES, INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in thousands, except per share) For the Three Months Ended March 31, For the Six Months Ended March 31, 2021 2020 2021 2020 Revenues $ 70,890 $ 46,431 $ 133,344 $ 88,432 Cost of revenues 44,400 28,655 84,585 54,030 Gross profit 26,490 17,776 48,759 34,402 Operating expenses: General and administrative expenses 12,565 11,701 24,844 22,510 Sales and marketing expenses 2,800 3,007 5,499 5,337 Total operating expenses 15,365 14,708 30,343 27,847 Operating income 11,125 3,068 18,416 6,555 Other (expense) income: Interest expense, net (1,649 ) (1,270 ) (3,119 ) (2,627 ) Gain on lease settlement, net — 837 — 223 Gain on Payroll Protection Program loan forgiveness 1,382 — 1,382 — Gain on disposal of fixed assets (129 ) — — — Gain on bankruptcy settlement 1,115 — 1,115 — Other income (expense) 79 (125 ) 858 (306 ) Total other (expense) income, net 798 (558 ) 236 (2,710 ) Income before provision for income taxes 11,923 2,510 18,652 3,845 Provision for income taxes 3,228 629 4,678 979 Net income 8,695 1,881 13,974 2,866 Net loss attributable to non-controlling interest 39 — 173 — Net income attributable to Live stockholders $ 8,734 $ 1,881 $ 14,147 $ 2,866 Income per share: Basic $ 5.62 $ 1.07 $ 9.22 $ 1.61 Diluted $ 2.66 $ 0.54 $ 4.34 $ 0.82 Weighted average common shares outstanding: Basic 1,555,175 1,752,908 1,534,287 1,779,706 Diluted 3,284,133 3,462,115 3,263,245 3,488,913 Dividends declared - series B convertible preferred stock $ — $ — $ — $ — Dividends declared - series E convertible preferred stock $ — $ — $ — $ — Dividends declared - common stock $ — $ — $ — $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 4 LIVE VENTURES INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (dollars in thousands) For the Six Months Ended March 31, 2021 2020 OPERATING ACTIVITIES: Net income $ 13,974 $ 2,866 Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition: Depreciation and amortization 3,420 2,477 Gain on lease settlement, net — (223 ) Gain or loss on disposal of property and equipment (23 ) 106 Gain on Payroll Protection Program loan forgiveness (1,382 ) — Gain on bankruptcy settlement (1,115 ) — Amortization of debt issuance cost 612 212 Stock based compensation expense 287 48 Warrant extension fair value adjustment — 368 Amortization of right-to-use assets 125 463 Change in reserve for uncollectible accounts 658 421 Change in reserve for obsolete inventory 964 (139 ) Change in deferred income taxes 1,334 839 Change in other (148 ) (218 ) Changes in assets and liabilities: Trade receivables (2,499 ) 117 Inventories 1,935 4,691 Income taxes 2,763 88 Prepaid expenses and other current assets 529 1,228 Deposits and other assets (235 ) 128 Accounts payable 2,594 (5,918 ) Accrued liabilities (2,882 ) (983 ) Net cash provided by operating activities 20,911 6,571 INVESTING ACTIVITIES: Purchase of intangible assets — (4 ) Lonesome Oak acquisition — (550 ) Purchase of property and equipment (5,469 ) (1,858 ) Net cash provided by (used in) investing activities (5,469 ) (2,412 ) FINANCING ACTIVITIES: Net borrowings (payments) under revolver loans (4,554 ) 2,640 Purchase of series E preferred treasury stock — (3 ) Proceeds from issuance of notes payable 2,258 5,000 Purchase of common treasury stock (383 ) (759 ) Payments on related party notes payable (2,000 ) — Debtor-in-possession cash 112 (187 ) Payments on notes payable (7,931 ) (12,035 ) Net cash used in financing activities (12,498 ) (5,344 ) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,944 (1,185 ) CASH AND CASH EQUIVALENTS, beginning of period 8,984 2,681 CASH AND CASH EQUIVALENTS, end of period $ 11,928 $ 1,496 Supplemental cash flow disclosures: Interest paid $ 2,516 $ 1,187 Income taxes paid $ 369 $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 5 LIVE VENTURES INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (dollars in thousands) Series B Preferred Stock Series E Preferred Stock Common Stock Series E Preferred Stock Common Stock Shares Amount Shares Amount Shares Amount Paid-In Capital Treasury Stock Treasury Stock Accumulated Deficit Non-controlling Interest Total Equity Balance, December 31, 2020 214,244 $ — 47,840 $ — 1,555,175 $ 2 $ 64,489 $ (7 ) $ (4,481 ) $ (11,016 ) $ (402 ) $ 48,585 Stock based compensation — — — — — — 270 — — — — 270 Warrant exercise 101,546 — — — — — — — — — — Net income — — — — — — — — — 8,734 (39 ) 8,695 Balance, March 31, 2021 315,790 $ — 47,840 $ — 1,555,175 $ 2 $ 64,759 $ (7 ) $ (4,481 ) $ (2,282 ) $ (441 ) $ 57,550 Series B Preferred Stock Series E Preferred Stock Common Stock Series E Preferred Stock Common Stock Shares Amount Shares Amount Shares Amount Paid-In Capital Treasury Stock Treasury Stock Accumulated Deficit Total Equity Balance, December 31, 2019 214,244 $ — 47,840 $ — 1,784,310 $ 2 $ 64,219 $ (7 ) $ (2,781 ) $ (26,370 ) $ 35,063 Stock based compensation — — — — — — 19 — — — 19 Warrant extension fair value adjustment — — — — — — 102 — — — 102 Purchase of common treasury stock — — — — (64,868 ) — — — (416 ) — (416 ) Net income — — — — — — — — — 1,881 1,881 Balance, March 31, 2020 214,244 $ — 47,840 $ — 1,719,442 $ 2 $ 64,340 $ (7 ) $ (3,197 ) $ (24,489 ) $ 36,649 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 LIVE VENTURES INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (dollars in thousands) Series B Preferred Stock Series E Preferred Stock Common Stock Series E Preferred Stock Common Stock Shares Amount Shares Amount Shares Amount Paid-In Capital Treasury Stock Treasury Stock Accumulated Deficit Non-controlling Interest Total Equity Balance, September 30, 2020 214,244 $ — 47,840 $ — 1,589,101 $ 2 $ 64,472 $ (7 ) $ (4,098 ) $ (16,429 ) $ (268 ) $ 43,672 Stock based compensation — — — — — — 287 — — — — 287 Warrant exercise 101,546 — — — — — — — — — — Purchase of common treasury stock — — — — (33,926 ) — — — (383 ) — — (383 ) Net income — — — — — — — — — 14,147 (173 ) 13,974 Balance, March 31, 2021 315,790 $ — 47,840 $ — 1,555,175 $ 2 $ 64,759 $ (7 ) $ (4,481 ) $ (2,282 ) $ (441 ) $ 57,550 Series B Preferred Stock Series E Preferred Stock Common Stock Series E Preferred Stock Common Stock Shares Amount Shares Amount Shares Amount Paid-In Capital Treasury Stock Treasury Stock Accumulated Deficit Total Equity Balance, September 30, 2019 214,244 $ — 77,840 $ — 1,826,009 $ 2 $ 63,924 $ (4 ) $ (2,438 ) $ (27,355 ) $ 34,129 Stock based compensation — — — — — — 48 — — — 48 Warrant extension fair value adjustment — — — — — — 368 — — — 368 Purchase of common treasury stock — — — — (106,567 ) — — — (759 ) — (759 ) Purchase of Series E preferred stock — — (30,000 ) — — — — (3 ) — — (3 ) Net income — — — — — — — — — 2,866 2,866 Balance, March 31, 2020 214,244 $ — 47,840 $ — 1,719,442 $ 2 $ 64,340 $ (7 ) $ (3,197 ) $ (24,489 ) $ 36,649 The accompanying notes are an integral part of these condensed consolidated financial statements. 7 LIVE VENTURES INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021 AND 2020 (dollars in thousands, except per share) Note 1: Background and Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Live Ventures Incorporated, a Nevada corporation, and its subsidiaries (collectively, the “Company”). Commencing in fiscal year 2015, the Company began a strategic shift in its business plan away from providing online marketing solutions for small and medium sized business to acquiring profitable companies in various industries that have demonstrated a strong history of earnings power. The Company continues to actively develop, revise and evaluate its products, services and its marketing strategies in its businesses. The Company has three operating segments: Retail, Flooring Manufacturing, and Steel Manufacturing. Included in the Retail segment: (i) Vintage Stock, Inc. (“Vintage Stock”), through which the Company is engaged in the retail sale of new and used movies, music, collectibles, comics, books, games, game systems and components and (ii) ApplianceSmart, Inc. (“ApplianceSmart”), through which the Company is engaged in the sale of new major appliances through a retail store. Included in the Flooring Manufacturing segment is Marquis Industries, Inc. (“Marquis”), which is engaged in the manufacture and sale of carpet and the sale of vinyl and wood floorcoverings. Included in the Steel Manufacturing Segment is Precision Industries, Inc. (“Precision Marshall”), which is engaged in the manufacture and sale of alloy and steel plates, ground flat stock, and drill rods . The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of the Company’s management, this interim information includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results of operations for three and six months ended March 31, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2021. This financial information should be read in conjunction with the consolidated financial statements and related notes thereto as of September 30, 2020 and for the fiscal year then ended included in the Company’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on January 13, 2021 (the “2020 10-K”). Going concern Based on our current operating plans, we believe that available cash balances, cash generated from our operating activities and funds available under our asset-based revolver lines of credit will provide sufficient liquidity to fund our operations, pay our scheduled loan payments, continue to repurchase shares, and pay dividends on our shares of Series E Preferred Stock as declared by the Board of Directors, for at least the next 12 months. Coronavirus In March 2020, there was a global outbreak of COVID-19 (Coronavirus) which continues to create challenges and unprecedented conditions. Although there are effective vaccines for COVID-19 that have been approved for use, distribution of the vaccines did not begin until late 2020, and a majority of the public will likely not have access to a vaccination until sometime in 2021. Accordingly, there remains significant uncertainty about the duration and the extent of the impact of the COVID-19 pandemic. These uncertainties include, but are not limited to, the potential adverse effect of the pandemic on the Company’s supply chain partners, its employees and customers, customer sentiment in general, and traffic within shopping centers, and, where applicable, malls, containing its stores. Recommendations and/or mandates from federal, state, and local authorities to avoid large gatherings of people or self-quarantine have previously affected, and may continue to affect, traffic to the stores. As of March 31, 2020, Vintage Stock had closed all of its retail locations in response to the crisis. Beginning May 1, 2020, Vintage Stock began to reopen certain locations in compliance with government regulations and, at June 30, 2020, all Vintage Stock retail locations were reopened while maintaining compliance with government mandates. The Company is unable to predict if additional periods of store closures will be needed or mandated. During March and April 2020, Marquis conducted rolling layoffs for certain employees, however, during May 2020, most employees have returned to their respective locations. Continued impacts of the pandemic could materially adversely affect the near-term and long-term revenues, earnings, liquidity, and cash flows, and may require significant actions in response, including but not limited to, employee furloughs, reduced store hours, store closings, expense reductions or discounting of pricing of products, all in an effort to mitigate such impacts. The extent of the impact of the pandemic on the business and financial results will depend largely on future developments, including the duration of the spread of the outbreak within the U.S. and the effect of the vaccines, the impact on capital and financial markets and the related impact on consumer confidence and spending, all of which are highly uncertain and cannot be predicted. This situation is changing rapidly, and additional impacts may arise that the Company is not aware of currently. Note 2: Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements represent the consolidated financial position, results of operations and cash flows for Live Ventures and its wholly-owned subsidiaries. Additionally, the Company records noncontrolling interest for entities 8 which the Company has determined itself to be the primarily beneficiary of the variable interest entity but does not have 100% ownership. All intercompany transactions and balances have been eliminated in consolidation . Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in connection with the accompanying consolidated financial statements include the estimate of dilution and fees associated with billings, the estimated reserve for doubtful current and long-term trade and other receivables, the estimated reserve for excess and obsolete inventory, estimated warranty reserve, estimated fair value and forfeiture rates for stock-based compensation, fair values in connection with the analysis of goodwill, other intangibles and long-lived assets for impairment, current portion of notes payable, valuation allowance against deferred tax assets, lease terminations, and estimated useful lives for intangible assets and property and equipment . Reclassifications Certain amounts in the prior period have been reclassified to conform to the current period presentation. Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which introduces a new approach to estimate credit losses on certain types of financial instruments based on expected losses instead of incurred losses. It also modifies the impairment model for available-for-sale debt securities and provides a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU No. 2016-13 is effective for smaller reporting companies for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact of adopting this new accounting standard on its consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU No. 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 is part of the FASB’s overall simplification initiative and seeks to simplify the accounting for income taxes by updating certain guidance and removing certain exceptions. The updated guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact of adopting this new accounting standard on its consolidated financial statements and related disclosures . In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848), codified as ASC 848 (“ASC 848”). The purpose of ASC 848 is to provide optional guidance to ease the potential effects on financial reporting of the market-wide migration away from Interbank Offered Rates to alternative reference rates. ASC 848 applies only to contracts, hedging relationships, and other transactions that reference a reference rate expected to be discontinued because of reference rate reform. The guidance may be applied upon issuance of ASC 848 through December 31, 2022. The Company is currently assessing the impact of adopting this new accounting standard on its consolidated financial statements and related disclosures. Note 3: Leases The Company leases retail stores, warehouse facilities, and office space. These assets and properties are generally leased under noncancelable agreements that expire at various dates through 2040 with various renewal options for additional periods. The agreements, which have been classified as operating leases, generally provide for minimum and, in some cases percentage rent, and require us to pay all insurance, taxes, and other maintenance costs. As a result, the Company recognizes assets and liabilities for all leases with lease terms greater than 12 months. The amounts recognized reflect the present value of remaining lease payments for all leases. The discount rate used is an estimate of the Company’s blended incremental borrowing rate based on information available associated with each subsidiary’s debt outstanding at lease commencement. In considering the lease asset value, the Company considers fixed and variable payment terms, prepayments and options to extend, terminate or purchase. Renewal, termination or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised. The weighted average remaining lease term is 12.4 years. Our weighted average discount rate is 8.9%. Total cash payments for the six months ended March 31, 2021 and 2020 were $1,705 and $3,872, respectively Additionally, we obtained right-of-use assets in exchange for lease liabilities of approximately $7,600 upon commencement of operating leases during the the six months ended March 31, 2021 . 9 The following table details our right of use assets and lease liabilities as of March 31, 2021: March 31, 2021 Right of use asset - operating leases $ 28,378 Operating lease liabilities: Current 7,104 Long term 25,782 Total present value of future lease payments as of March 31, 2021: Twelve months ended March 31, 2022 $ 7,747 2023 6,382 2024 4,852 2025 3,566 2026 2,508 Thereafter 13,175 Total 38,230 Less implied interest (5,344 ) Present value of payments $ 32,886 During the six months ended March 31, 2020, the Company recorded a net gain on lease settlement of $223 which consisted of impairment charges of $614 related to the decision to close additional ApplianceSmart retail locations resulting in a decrease to the associated right of use asset related to these leases, offset by a gain on lease settlement of $837 resulting from the extinguishment of the lease liability associated with the closed retail locations. There were no similar charges for the six months ended March 31, 2021. 10 Note 4 : Balance Sheet Detail Information March 31, 2021 September 30, 2020 Trade receivables, current, net: Accounts receivable, current $ 22,024 $ 20,197 Less: Reserve for doubtful accounts (62 ) (76 ) $ 21,962 $ 20,121 Trade receivables , long term, net: Accounts receivable, long term $ — $ 196 Less: Reserve for doubtful accounts — (196 ) $ — $ — Total trade receivables, net: Gross trade receivables $ 22,024 $ 20,393 Less: Reserve for doubtful accounts (62 ) (272 ) $ 21,962 $ 20,121 Inventory, net Raw materials $ 13,849 $ 13,175 Work in progress 11,217 11,747 Finished goods 23,045 25,009 Merchandise 15,785 17,729 63,896 67,660 Less: Inventory reserves (2,070 ) (3,135 ) $ 61,826 $ 64,525 Property and equipment, net: Building and improvements $ 11,574 $ 9,908 Transportation equipment 121 480 Machinery and equipment 31,713 27,217 Furnishings and fixtures 3,806 2,908 Office, computer equipment and other 2,712 3,445 49,926 43,958 Less: Accumulated depreciation (18,266 ) (13,582 ) $ 31,660 $ 30,376 Intangible assets, net: Domain name and marketing related intangibles $ 90 $ 90 Customer relationship intangibles 2,689 2,689 Purchased software 120 121 2,899 2,900 Less: Accumulated amortization (2,049 ) (1,837 ) $ 850 $ 1,063 Accrued liabilities: Compensation and benefits $ 2,861 $ 4,178 Accrued sales and use taxes 1,590 1,251 Accrued property taxes 160 270 Accrued gift card and escheatment liability 1,561 1,534 Accrued interest payable 258 280 Accrued accounts payable and bank overdrafts 1,729 3,818 Accrued professional fees 1,910 2,191 Customer deposits 220 169 Accrued expenses - other 1,971 1,131 $ 12,260 $ 14,822 11 Note 5 : Long Term Debt Long-term debt as of March 31, 2021 and September 30, 2020 consisted of the following: March 31, 2021 September 30, 2020 Bank of America Revolver Loan $ — $ — Encina Business Credit Revolver Loan 12,227 14,886 Texas Capital Bank Revolver Loan 5,486 7,115 Crossroads Financial Revolver Loan 618 883 Encina Business Credit Term Loan 1,491 1,663 Note Payable Comvest Term Loan — 5,554 Note Payable to the Sellers of Vintage Stock 8,000 10,000 Note #1 Payable to Banc of America Leasing & Capital LLC 803 1,229 Note #3 Payable to Banc of America Leasing & Capital LLC 1,594 1,862 Note #4 Payable to Banc of America Leasing & Capital LLC 490 572 Note #5 Payable to Banc of America Leasing & Capital LLC 2,264 2,538 Note #6 Payable to Banc of America Leasing & Capital LLC 689 758 Note #7 Payable to Banc of America Leasing & Capital LLC 4,403 4,681 Note #8 Payable to Banc of America Leasing & Capital LLC 3,158 3,091 Note Payable to Extruded Fibers 1,300 2,900 Note Payable to JCM Holdings 1,918 — Note Payable to the Sellers of Precision Marshall 2,500 2,500 Note Payable to Store Capital Acquisitions, LLC 9,226 9,243 Payroll Protection Program 4,768 6,151 JanOne Inc. (Note 11) — — Isaac Capital Group 2,000 2,000 Spriggs Investments, LLC 2,000 2,000 Sellers of Lonesome Oak 1,254 1,297 Note payable to individuals, interest at 10-11% per annum, payable on a 90 day written notice, unsecured 707 707 Note payable to individuals, interest at 7% per annum, unsecured 259 — Note payable to individual, noninterest bearing, monthly payments of $19 through March 2023 633 810 Total notes payable 67,788 82,440 Less unamortized debt issuance costs (931 ) (1,767 ) Net amount 66,857 80,673 Less current portion (9,878 ) (13,283 ) Long-term portion $ 56,979 $ 67,390 Future maturities of long-term debt at March 31, 2021, are as follows which does not include related party debt separately stated: Twelve months ending March 31, 2022 $ 9,878 2023 15,762 2024 24,251 2025 2,091 2026 3,472 Thereafter 12,334 Total $ 67,788 Bank of America Revolver Loan On July 6, 2015 (as amended), Marquis entered into a $25,000 revolving credit agreement (“BofA Revolver”) with Bank of America Corporation (“BofA”). The BofA Revolver is an asset-based facility that matures on January 31, 2025 and is secured by substantially all of Marquis’ assets. Availability under the BofA Revolver is subject to a monthly borrowing base calculation. Marquis’ ability to borrow under the BofA Revolver is subject to the satisfaction of certain conditions, including satisfying all loan covenants under the credit agreement with BofA. 12 The following tables summarize the BofA Revolver for the six months ended March 31, 2021 and 2020 and as of March 31, 2021 and September 30, 2020 : During the six months ended March 31, 2021 2020 Cumulative borrowing during the period $ 62,263 $ 60,479 Cumulative repayment during the period 66,973 55,035 Maximum borrowed during the period — 11,347 Weighted average interest for the period 0.00 % 3.52 % March 31, 2021 September 30, 2020 Total availability $ 29,207 $ 21,732 Total outstanding — — Loans with Encina Business Credit, LLC On July 14, 2020, Precision entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC, as Agent (the “Agent”). The Loan Agreement provides for secured revolving loans (the “Encina Revolver Loans”) in a principal amount not to exceed the lesser of (i) $23,500 and (ii) a borrowing base equal to the sum of Precision’s (a) 85% of eligible accounts receivable, plus (b) 85% of eligible inventory, subject to an eligible inventory sublimit that begins at $14,000 and declines to $12,000 during the term of the Loan Agreement, minus (c) customary reserves. The following tables summarize the Encina Revolver Loans for the for the six months ended March 31, 2021 and 2020 and as of March 31, 2021 and September 30, 2020: During the six months ended March 31, 2021 2020 Cumulative borrowing during the period $ 19,525 $ — Cumulative repayment during the period 22,185 — Maximum borrowed during the period 1,100 — Weighted average interest for the period 6.50 % 0.00 % March 31, 2021 September 30, 2020 Total availability $ 1,606 $ 421 Total outstanding 12,227 14,886 Texas Capital Bank Revolver Loan On November 3, 2016, Vintage Stock entered into a $12,000 credit agreement ( as amended on January 23, 2017, amended on September 20, 2017, June 7, 2018, September 24, 2019 and September 30, 2020 ) with Texas Capital Bank (“TCB Revolver”) . The TCB Revolver is a five-year, asset-based facility that is secured by substantially all of Vintage Stock’s assets. Availability under the TCB Revolver is subject to a monthly borrowing base calculation. The TCB Revolver matures November 3, 2023. The following tables summarize the TCB Revolver for the six months ended March 31, 2021 and 2020 and as of March 31, 2021 and September 30, 2020: During the six months ended March 31, 2021 2020 Cumulative borrowing during the period $ 44,915 $ 35,808 Cumulative repayment during the period 46,544 37,831 Maximum borrowed during the period 8,930 11,798 Weighted average interest for the period 2.38 % 4.02 % March 31, 2021 September 30, 2020 Total availability $ 6,514 $ 5,520 Total outstanding 5,486 7,115 13 Crossroads Revolver On March 15, 2019, ApplianceSmart, Inc. (the “Borrower”), entered into a Loan and Security Agreement (the “Crossroads Revolver”) with Crossroads Financing, LLC (“Crossroads”), providing for a $4,000 revolving credit facility, subject to a borrowing base limitation (the “ABL Facility”). The borrowing base for the ABL Facility at any time equals the lower of (i) up to 75% of inventory cost or (ii) up to 85% of net orderly liquidation value, in each case as further described in the Loan Agreement. On March 3, 2020, the Company executed a guaranty agreement to Crossroads to induce Crossroads to continue to extend financial accommodations and consent to use of cash collateral to ApplianceSmart. The amount of the guaranty is $1,200. The guaranty terminates at such time as ApplianceSmart has paid in full all amounts owed by it to Crossroads. The Company expects the guaranty to continue in effect until August 2021. In addition, certain executive officers of the Borrower have agreed to provide validity guarantees. On December 9, 2019, ApplianceSmart filed a voluntary petition in the United States Bankruptcy Court for the Southern District of New York seeking relief under Chapter 11 of Title 11 of the United States Code. See Note 11 for a complete discussion . Note payable to JCM Holdings During October 2020, Marquis purchased a manufacturing facility for $2,500. Marquis had previously been leasing this facility. Additionally, Marquis entered into a $2,000 loan agreement with the seller of the facility, which is secured by the facility, in order to complete the purchase of the facility. The loan bears interest at 6% due monthly and matures January 2030. Comvest Loan During January 2021, the Company paid the Comvest loan in full and, as a result, the loan agreement and the related instruments, documents, and agreements, were terminated. Precision PPP Loan During February 2021, Precision received notice that its $1,382 payroll protection program loan has been forgiven and no amounts are owed. Loan Covenant Compliance We were in compliance as of March 31, 2021 with all covenants under our existing revolving and other loan agreements, with the exception of covenants related to the Crossroads Revolver . Note 6 : Stockholders’ Equity Series E Convertible Preferred Stock As of March 31, 2021, and September 30, 2020, there were 47,840 and 47,840 shares outstanding of Series a Preferred Stock, respectively. During the six months ended March 31, 2020, the Company repurchased 30,000 shares of Series E Convertible Preferred Stock for an aggregate purchase price of $3. Treasury Stock For the six months ended March 31, 2021 and 2020, the Company purchased 33,926 and 106,567 shares of its common stock on the open market for $383 and $759, respectively. Note 7 : Warrants As of September 30, 2020 the Company had 118,029 warrants to purchase shares of Series B Convertible Preferred Stock outstanding with a weighted average exercise price of $20.80 expiring at various timeframes over the next two years. The Company and ICG have entered into agreements whereby if the warrants are not exercised on or before the applicable expiration date, the applicable expiration date is deemed automatically extended for successive two-year periods, immediately prior to such expiration. During the three and six months ended March 31, 2020, the Company recorded a fair value adjustment of $102 and $368, respectively, related to the extension of warrants that expired during this period. There was no such adjustment during the three and six months ended March 31, 2021. In January 2021, all of the warrants were exercised (via cashless exercise) for shares of Series B Convertible Preferred Stock. 14 Note 8 : Stock-Based Compensation Our 2014 Omnibus Equity Incentive Plan (the “2014 Plan”) authorizes the issuance of distribution equivalent rights, incentive stock options, non-qualified stock options, performance stock, performance units, restricted ordinary shares, restricted stock units, stock appreciation rights, tandem stock appreciation rights and unrestricted ordinary shares to our directors, officer, employees, consultants and advisors. The Company has reserved up to 300,000 shares of common stock for issuance under the 2014 Plan. From time to time, the Company grants stock options to directors, officers, and employees. These awards are valued at the grant date by determining the fair value of the instruments, net of estimated forfeitures. The value of each award is amortized on a straight-line basis over the requisite service period. The following table summarizes stock option activity for the twelve months ended September 30, 2020 and the six months ended March 31, 2021: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Intrinsic Value Outstanding at September 30, 2019 200,418 $ 16.37 2.40 $ 27 Forfeited (81,250 ) Outstanding at September 30, 2020 119,168 $ 19.07 2.71 $ — Exercisable at September 30, 2020 95,001 $ 15.50 1.55 $ — Outstanding at September 30, 2020 119,168 $ 19.07 2.71 $ — Granted 1,250 Exercised — Forfeited — Outstanding at March 31, 2021 120,418 $ 19.12 2.87 $ 564 Exercisable at March 31, 2021 107,168 $ 16.71 2.19 $ 564 The Company recognized compensation expense of $270 and $19 during the three months ended March 31, 2021 and 2020, respectively, and $287 and $48 during the six months ended March 31, 2021 and 2020, respectively, related to stock option awards granted to certain employees and officers based on the grant date fair value of the awards, net of estimated forfeitures and the revaluation for existing options whereby the expiration date was extended. At March 31, 2021, the Company had $55 of unrecognized compensation expense (net of estimated forfeitures) associated with stock option awards which the Company expects to recognize as compensation expense through December 2021. The exercise price for stock options outstanding and exercisable outstanding at March 31, 2021 is as follows: Outstanding Exercisable Number of Options Exercise Price ($) Number of Options Exercise Price ($) 25,000 10.00 25,000 10.00 16,668 10.86 16,668 10.86 6,250 12.50 6,250 12.50 6,250 15.00 6,250 15.00 25,000 15.18 25,000 15.18 8,000 23.41 8,000 23.41 1,250 23.89 — — 8,000 27.60 8,000 27.60 8,000 31.74 8,000 31.74 8,000 36.50 4,000 36.50 8,000 41.98 — — 120,418 107,168 15 The following table summarizes information about the Company’s non-vested shares outstanding as of March 31, 2021: Non-vested Shares Number of Shares Average Grant-Date Fair Value Non-vested at September 30, 2020 24,167 $ 33.10 Granted 1,250 $ 23.89 Vested (12,167 ) $ 26.15 Non-vested at March 31, 2021 13,250 $ 38.62 The following table depicts the Black-Scholes model valuation assumptions for the stock options granted during the six months ended March 31, 2021. There were no stock option grants during the six months ended March 31, 2020. Risk-free interest rate 1.15% Expected life of the options 6 years Expected volatility 99% Expected dividend yield 0% Note 9 : Earnings Per Share Net earnings per share is calculated using the weighted average number of shares of common stock outstanding during the applicable period. Diluted net earnings per share is computed using the weighted average number of shares of common stock outstanding and if dilutive, potential shares of common stock outstanding during the period. Potential shares of common stock consist of the additional shares of common stock issuable in respect of restricted share awards, stock options and convertible preferred stock. Preferred stock dividends are subtracted from net earnings to determine the amount available to common stockholders. The following table presents the computation of basic and diluted net earnings per share: Three Months Ended March 31, Six Months Ended March 31, 2021 2020 2021 2020 Basic Net income $ 8,734 $ 1,881 $ 14,147 $ 2,866 Less: preferred stock dividends — — — — Net income applicable to common stock $ 8,734 $ 1,881 $ 14,147 $ 2,866 Weighted average common shares outstanding 1,555,175 1,752,908 1,534,287 1,779,706 Basic earnings per share $ 5.62 $ 1.07 $ 9.22 $ 1.61 Diluted Net income applicable to common stock $ 8,734 $ 1,881 $ 14,147 $ 2,866 Add: preferred stock dividends — — — — Net income applicable for diluted earnings per share $ 8,734 $ 1,881 $ 14,147 $ 2,866 Weighted average common shares outstanding 1,555,175 1,752,908 1,534,287 1,779,706 Add: Options 87,168 — 87,168 — Add: Series B Preferred Stock 1,593,950 1,071,220 1,593,950 1,071,220 Add: Series B Preferred Stock Warrants — 590,147 — 590,147 Add: Series E Preferred Stock 47,840 47,840 47,840 47,840 Assumed weighted average common shares outstanding 3,284,133 3,462,115 3,263,245 3,488,913 Diluted earnings per share $ 2.66 $ 0.54 $ 4.34 $ 0.82 There are 33,250 and 200,418 options to purchase shares of common stock that are anti-dilutive that are not included in the three and six months ended March 31, 2021, diluted earnings per share computations, respectively. 16 Note 1 0 : Related Party Transactions Transactions with Isaac Capital Fund and Capital Group LLC As of March 31, 2021, Isaac Capital Group LLC (“ICG”) owned 259,902 shares of Series B Preferred Stock that are convertible into 1,299,510 shares of common stock. Jon Isaac is the President and sole member of ICG and accordingly has sole voting and dispositive power with respect to such shares. ICG beneficially owns 45.5% of the Company’s outstanding capital stock. The holders of shares of the Series B Stock have agreed not to sell transfer, assign, hypothecate, pledge, margin, hedge, trade, or otherwise obtain or attempt to obtain any economic value from any of such shares or any shares into which they may be converted (e.g., common stock) or for which they may be exchanged. This “lockup” agreement expires on December 31, 2021. Jon Isaac , the Company’s President and Chief Executive Officer, and manager and sole member of ICG, 193,677 shares of common stock and holds options to purchase up to 25,000 shares of common stock at an exercise price of $10.00 per share, all of which are currently exercisable . ICG Term Loan During 2015, Marquis entered into a mezzanine loan in the amount of up to $7,000 (the “ICF Loan”) with Isaac Capital Fund I, LLC (“ICF”), a private lender whose managing member is Jon Isaac, our President and Chief Executive Officer. On July 10, 2020, (i) ICF released and discharged Marquis from all obligations under the loan, (ii) ICF assigned all of its rights and obligations under the instruments, documents, and agreements with respect to the ICG Loan to ICG, of which Jon Isaac, our President and Chief Executive Officer, is the sole member, and (iii) Live Ventures borrowed $2.0 million (the “ICG Loan”) from ICG using substantially the documentation from the ICF Loan. The ICG Loan matures on May 1, 2025 and bears interest at a rate of 12.5% Interest is payable in arrears on the last day of each month, commencing July 31, 2020. As of March 31, 2021, and September 30, 2020, there was $2,000 outstanding on this loan. ICG Revolving Promissory Note On April 9, 2020, the Company entered into an unsecured revolving line of credit promissory note whereby ICG agreed to provide the Company with a $1,000 revolving credit facility (the “ICG Revolver”) . The ICG Revolver bears interest at 10.0% per annum and provides for the payment of interest monthly in arrears and matures April 2023. As of March 31, 2021, the Company has not drawn on the revolving promissory note. Series B Preferred Stock Warrants As discussed in Note 7, the warrants were set to expire at various times over the next two years, subject to the automatic extension discussed in Note 7. All of these warrants were exercised by cashless exercise during January 2021. Transactions with JanOne Inc. Lease agreement Customer Connexx LLC, a wholly-owned subsidiary of JanOne Inc. (“JanOne”), rents approximately 9,900 square feet of office space from the Company at its Las Vegas office which totals 16,500 square feet. JanOne paid the Company $50 and $89 in rent and other reimbursed expenses for the three months ended March 31, 2021 and 2020, respectively. JanOne paid the Company $88 and $181 in rent and other reimbursed expenses for the six months ended March 31, 2021 and 2020, respectively. Tony Isaac and Virland Johnson are President and Chief Executive Officer and Board of Directors member, and the Chief Financial Officer of JanOne, respectively. Note payable On December 30, 2017, ApplianceSmart Holdings Inc. (“ASH”) entered into a Stock Purchase Agreement (the “Agreement”) with Appliance Recycling Centers of America, Inc. (now JanOne Inc.) (the “Seller”) and ApplianceSmart, Inc. (“ApplianceSmart”), a subsidiary of the Seller. Pursuant to the Agreement, ASH purchased (the “Transaction”) from the Seller all of the issued and outstanding shares of capital stock of ApplianceSmart in exchange for $6,500 (the “Purchase Price”). ASH was required to deliver the Purchase Price, and a portion of the Purchase Price was delivered, to the Seller prior to March 31, 2018. Between March 31, 2018 and April 24, 2018, ASH and the Seller negotiated in good faith the method of payment of the remaining outstanding balance of the Purchase Price. On April 25, 2018, ASH delivered to the Seller that certain Promissory Note (the “ApplianceSmart Note”) in the original principal amount of $3,919 (the “Original Principal Amount”), as such amount may be adjusted per the terms of the ApplianceSmart Note. The ApplianceSmart Note is effective as of April 1, 2018 and matures on April 1, 2021 (the “Maturity Date”). The ApplianceSmart Note bears interest at 5% per annum with interest payable monthly in arrears. Ten percent of the outstanding principal amount will be repaid annually on a quarterly basis, with the accrued and unpaid principal due on the Maturity Date. ApplianceSmart has agreed to guaranty repayment of the ApplianceSmart Note . The remaining $2,581 of the Purchase Price was 17 paid in cash by ASH to the Seller. ASH may reborrow funds, and pay interest on such re-borrowings, from the Seller up to the Original Principal Amount. As of March 31, 2021 , and September 30, 2020, there was $ 2,826 principal outstanding on the ApplianceSmart Note. On December 26, 2018, ASH and the Seller amended and restated the ApplianceSmart Note to, among other things, grant the Seller a security interest in the assets of ASH and ApplianceSmart in accordance with the terms of separate security agreements entered into between ASH and ApplianceSmart, respectively, and the Seller. On December 9, 2019, ApplianceSmart filed a voluntary petition in the United States Bankruptcy Court for the Southern District of New York seeking relief under Chapter 11 of Title 11 of the United States Code. See Note 11 for a complete discussion. Transactions with Vintage Stock CEO Note Payable to the Sellers of Vintage Stock In connection with the purchase of Vintage Stock, on November 3, 2016, Vintage Stock entered into a seller financed mezzanine loan in the amount of $10,000 (as amended, the “Sellers Subordinated Acquisition Note”) with the previous owners of Vintage Stock, one of whom was Rodney Spriggs, the President and Chief Executive Officer of Vintage Stock, Inc., a wholly-owned subsidiary of the Company. The Sellers Subordinated Acquisition Note bears interest at 8% per annum, with interest payable monthly in arrears. The Sellers Subordinated Acquisition Note, has a maturity date of September 23, 2023. Mr. Spriggs holds a 41% interest in the Sellers Subordinated Acquisition Note. As of March 31, 2021, the amount owed was $8,000. Spriggs Promissory Note On July 10, 2020, the Company executed a promissory note (the “Spriggs Promissory Note”) in favor of Spriggs Investments LLC (“Spriggs Investments”), a limited liability company whose sole member is Mr. Spriggs. The Spriggs Promissory Note memorializes a loan by Spriggs Investments to the Company in the initial principal amount of $2,000 (the “Spriggs Loan”). The Spriggs Loan matures on July 10, 2022 and bears simple interest at a rate of 10.0% per annum. Interest is payable in arrears on the last day of each month, commencing July 31, 2020. the Company may prepay the Spriggs Loan in whole or in part at any time or from time to time without penalty or premium by paying the principal amount to be prepaid, together with accrued interest thereon to the date of prepayment. The Company used the proceeds from the Spriggs Loan to finance, in part, the acquisition of Precision Marshall. The Spriggs Promissory Note contains events of default and other provisions customary for a loan of this type. The Spriggs Loan was guaranteed by Jon Isaac, Live Ventures’ President and Chief Executive Officer, and by ICG. Note 1 1 : Commitments and Contingencies Litigation SEC Investigation On February 21, 2018, the Company received a subpoena from the Securities and Exchange Commission (“SEC”) and a letter from the SEC stating that it is conducting an investigation. The subpoena requested documents and information concerning, among other things, the restatement of the Company’s financial statements for the quarterly periods ended December 31, 2016, March 31, 2017, and June 30, 2017, the acquisition of Marquis Industries, Inc., Vintage Stock, Inc., and ApplianceSmart, Inc., and the change in auditors. On August 12, 2020, three of the Company’s corporate executive officers (together, the “Executives”) each received a “Wells Notice” from the Staff of the SEC relating to the Company’s SEC investigation. On October 7, 2020, the Company received a “Wells Notice” from the Staff of the SEC relating to the Company’s previously-disclosed SEC investigation. The Wells Notices relate to, among other things, the Company’s reporting of its financial performance for its fiscal year ended September 30, 2016, certain disclosures related to executive compensation, and its previous acquisition of ApplianceSmart. A Wells Notice is neither a formal charge of wrongdoing nor a final determination that the recipient has violated any law. The Wells Notices informed the Company and the Executives that the SEC Staff has made a preliminary determination to recommend that the SEC file an enforcement action against the Company and each of the Executives that would allege certain violations of the federal securities laws. The Company and the Executives maintain that their actions were appropriate, and the Company and the Executives have engaged Orrick Herrington & Sutcliffe LLP, among others, to defend themselves, and intend to vigorously defend against any and all allegations brought forth. On October 1, 2018, the Company received a letter from the SEC requesting information regarding a potential violation of Section 13(a) of the Securities Exchange Act of 1934, based upon the timing of the Company’s Form 8-K filed on February 14, 2018. The Company provided a response to the SEC on October 26, 2018. The Company is cooperating with the SEC in its inquiry . 18 ApplianceSmart Bankruptcy and Other ApplianceSmart Related Litigation Matters On August 4, 2020, Valassis Communications, Inc. and Valassis Digital Corp. (collectively, “Valassis”) filed suit against ApplianceSmart Holdings LLC in the State of Michigan, Third Judicial Circuit, Wayne County, alleging, among other things, breach of contract and account stated and seeking damages of approximately $700. This matter has since been removed to United States District Court, Eastern District of Michigan, Southern Division. The Company believes that ApplianceSmart, Inc., not ApplianceSmart Holdings LLC, is the responsible party. On December 9, 2019, ApplianceSmart filed a Chapter 11 Case in the Bankruptcy Court seeking relief under Chapter 11 of the Bankruptcy Code. The bankruptcy affects Live Ventures’ indirect subsidiary ApplianceSmart only and does not affect any other subsidiary of Live Ventures, including, but not limited to ASH, or Live Ventures itself On December 12, 2019, Crossroads Center LLC served a lawsuit against ApplianceSmart in the District Court for the State of Minnesota, County of Olmsted, alleging, among other things, breach of contract and seeking damages in excess of $64. This matter has been stayed as a result of the Chapter 11 Case. On December 9, 2019, ApplianceSmart filed a voluntary petition (the “Chapter 11 Case”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) seeking relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). The bankruptcy affects Live Ventures’ indirect subsidiary ApplianceSmart only and does not affect any other subsidiary of Live Ventures, or Live Ventures itself. ApplianceSmart expects to continue to operate its business in the ordinary course of business as debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. In addition, the Company reserves its right to file a motion seeking authority to use cash collateral of the lenders under ApplianceSmart’s reserve-based revolving credit facility. The case is being administrated under the caption In re: ApplianceSmart, Inc . (case number 19-13887). Court filings and other information related to the Chapter 11 Case are available at the PACER Case Locator website for those registered to do so or at the Courthouse located at One Bowling Green, Manhattan, New York 10004. ApplianceSmart’s balance sheet as of March 31, 2021 is below. The debtor in possession assets and liabilities are primarily related to assets and liabilities incurred pre-petition and are subject to compromise. March 31, 2021 (Unaudited) Assets Cash $ 19 Inventories, net 181 Total debtor in possession assets 200 Right of use asset - operating leases 665 Other 13 Total assets $ 878 Liabilities and Stockholders' Equity Liabilities: Accounts payable $ 5,879 Accrued liabilities 3,137 Notes payable related parties, including current portion 2,826 Total debtor in possession liabilities 11,842 Accounts payable 136 Accrued liabilities 706 Lease obligation long term - operating leases 691 Crossroads Financial Revolver Loan 618 Taxes payable 904 Total liabilities 14,897 Stockholders' equity: Intercompany 1,555 Accumulated deficit (15,574 ) Total stockholders' equity (14,019 ) Total liabilities and stockholders' equity $ 878 19 ApplianceSmart’s statement of operations for the period of October 1, 2020 through March 31, 2021 is below: Six months ended March 31, 2021 Revenues $ 648 Cost of revenues 360 Gross profit 288 Operating expenses: General and administrative expenses 408 Total operating expenses 408 Operating income (120 ) Other (expense) income: Interest expense, net (83 ) Accounts payable settlement 44 Other income (expense) 279 Total other (expense) income, net 240 Income before provision for income taxes 120 On November 22, 2019, Haier US Appliance Solutions, Inc. d/b/a GE Appliances filed suit against ApplianceSmart in the District Court for the State of Minnesota, County of Hennepin (the “Hennepin Court”) alleging, among other things, breach of contract and seeking damages in excess of $250. This matter has been stayed as a result of the Chapter 11 Case. On October 16, 2019, VanMile, LLC filed a lawsuit against ApplianceSmart in the Magistrate Court of Gwinnett County, State of Georgia alleging unpaid invoices and seeking damages therefor. Plaintiff is seeking damages of $15. This matter has been stayed as a result of the Chapter 11 Case. On September 12, 2019, Fisher & Paykel Appliances, Inc. initiated an arbitration against ApplianceSmart in San Diego alleging breach of contract and seeking damages in excess of $100. This matter has been stayed as a result of the Chapter 11 Case. On July 22, 2019, Trustee Main/270, LLC (the “Reynoldsburg Landlord”) filed a lawsuit against ApplianceSmart and JanOne Inc. (formerly known as Appliance Recycling Centers of America, Inc.) (“JanOne”) in the Franklin County Common Pleas Court in Columbus, Ohio, alleging, with respect to ApplianceSmart, default under a lease agreement and, with respect to JanOne, guaranty of lease. The complaint sought damages of $1,530 attorney fees, and other charges. On or about September 27, 2019 , the parties entered into a second lease modification agreement and ratification of agreement (the “Second Lease Modification Agreement”) whereby the Reynoldsburg Landlord restored ApplianceSmart’s access to the property. Pursuant to the terms of the Second Lease Modification Agreement, in exchange for such restored access, ApplianceSmart paid the Reynoldsburg Landlord $141 in partial satisfaction of past due rent and costs and the Reynoldsburg Landlord agreed to dismiss the lawsuit with prejudice. In addition, the Reynoldsburg Landlord agreed to reduced minimum annual rent for the remainder of the term and waived the rent due for October 2019, December 2019, and January 2020. In addition, JanOne ratified its guaranty under the lease. On August 29, 2019, Martin Drive, LLC filed suit against ApplianceSmart in the Hennepin Court, alleging, among other things, breach of contract and failure to pay rent under the terms of a lease agreement. The plaintiff was awarded a default judgment in the aggregate amount of $265. This matter has been stayed as a result of the Chapter 11 Case. On August 27, 2019, CH Robinson Worldwide, Inc. served a lawsuit against ApplianceSmart in the District Court for the State of Minnesota, County of Carver, alleging, among other things, breach of contract and seeking damages in excess of $140. This matter has been stayed as a result of the Chapter 11 Case. On June 19, 2019, Graceland Retail 2017 LLC filed suit against ApplianceSmart in the Court of Common Pleas in Franklin County, Ohio, alleging, among other things, breach of contract and failure to pay rent under the terms of a lease agreement. The plaintiff was seeking damages of approximately $940. This matter has been stayed as a result of the Chapter 11 Case. 20 Generally We are involved in various claims and lawsuits arising in the normal course of business. The ultimate results of claims and litigation cannot be predicted with certainty. We currently believe that the ultimate outcome of such lawsuits and proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows. Operating Leases and Service Contracts The Company leases its office, retail and warehouse space under long-term operating leases expiring through fiscal year 2040. During fiscal 2019, as a result of our decision to close certain ApplianceSmart retail locations, we recorded a liability for the estimated remaining lease payments and early termination charges, as applicable, of $724. As of March 31, 2021, this amount has been reduced to $405. Warranties During 2019, the Company became the principal for certain extended warranties, as a result, warranty reserves are included in accrued liabilities in our consolidated balance sheet. The following table summarizes the warranty reserve activity for the six months ended March 31, 2021: Beginning balance, September 30, 2020 $ 206 Warranties issued/accrued — Warranty settlements (35 ) Ending balance, March 31, 2021 $ 171 Note 1 2 : Segment Reporting The Company operates in three segments which are characterized as: (1) Retail, (2) Flooring Manufacturing, and (3) Steel Manufacturing. The Retail segment consists of Vintage Stock and ApplianceSmart, the Flooring Manufacturing Segment consists of Marquis, and the Steel Manufacturing Segment consists of Precision Marshall. 21 The following tables summarize segment information for the three and six months ended March 31, 2021 and 2020 : For the Three Months Ended March 31, For the Six Months Ended March 31, 2021 2020 2021 2020 Revenues Retail $ 24,003 $ 18,986 $ 46,373 $ 40,474 Flooring Manufacturing 32,972 27,301 63,194 47,668 Steel Manufacturing 13,793 — 23,528 — Corporate & other 122 144 249 290 $ 70,890 $ 46,431 $ 133,344 $ 88,432 Gross profit Retail $ 12,970 $ 10,330 $ 25,017 $ 21,455 Flooring Manufacturing 10,022 7,313 18,347 12,676 Steel Manufacturing 3,380 — 5,156 — Corporate & other 118 133 239 271 $ 26,490 $ 17,776 $ 48,759 $ 34,402 Operating income (loss) Retail $ 5,071 $ 1,331 $ 9,564 $ 3,195 Flooring Manufacturing 6,011 2,703 10,161 5,101 Steel Manufacturing 1,742 — 1,886 — Corporate & other (1,699 ) (966 ) (3,195 ) (1,741 ) $ 11,125 $ 3,068 $ 18,416 $ 6,555 Depreciation and amortization Retail $ 391 $ 479 $ 738 $ 949 Flooring Manufacturing 907 887 1,872 1,492 Steel Manufacturing 396 — 789 — Corporate & other 11 27 20 37 $ 1,706 $ 1,392 $ 3,420 $ 2,477 Interest expenses Retail $ 582 $ 815 $ 1,242 $ 1,764 Flooring Manufacturing 648 440 1,058 830 Steel Manufacturing 288 — 556 — Corporate & other 131 15 263 33 $ 1,649 $ 1,270 $ 3,119 $ 2,627 Net income (loss) before provision for income taxes Retail $ 4,485 $ 1,205 $ 8,658 $ 1,450 Flooring Manufacturing 5,171 2,111 8,893 3,991 Steel Manufacturing 2,460 — 2,296 — Corporate & other (193 ) (806 ) (1,195 ) (1,596 ) $ 11,923 $ 2,510 $ 18,652 $ 3,845 Note 1 3 : Subsequent Events The Company evaluated subsequent events through the date of this Quarterly Report noting no reportable events. 22