What changed in this filing

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Item 1. Financial Statements

2024-05-14 compared with 2024-02-08 · 199 added, 150 removed, 698 unchanged (33% of the section changed)

3 unchanged sentences

(dollars in thousands, except per-share amounts)

December 31, 2023 September 30, 2023

March 31, 2024 September 30, 2023

Cash $ 4,489 $ 4,309

Trade receivables, net of allowance for doubtful accounts of $ 1.5 million at December 31, 2023 and $ 1.6 million at September 30, 2023

Trade receivables, net of allowance for doubtful accounts of $ 1.1 million at March 31, 2024 and $ 1.6 million at September 30, 2023

45,510 41,194

28 unchanged sentences

Stockholders' equity:

Series E convertible preferred stock, $ 0.001 par value, 200,000 shares authorized, 47,840 shares issued and outstanding at December 31, 2023 and September 30, 2023, respectively, with a liquidation preference of $ 0.30 per share outstanding

Common stock, $ 0.001 par value, 10,000,000 shares authorized, 3,159,984 and 3,164,330 shares issued and outstanding at December 31, 2023 and September 30, 2023, respectively

Series E convertible preferred stock, $ 0.001 par value, 200,000 shares authorized, 47,840 shares issued and outstanding at March 31, 2024 and September 30, 2023, respectively, with a liquidation preference of $ 0.30 per share outstanding

Common stock, $ 0.001 par value, 10,000,000 shares authorized, 3,148,135 and 3,164,330 shares issued and outstanding at March 31, 2024 and September 30, 2023, respectively

Paid in capital 69,487 69,387

Treasury stock common 664,409 and 660,063 shares as of December 31, 2023 and September 30, 2023, respectively

Treasury stock common 676,258 and 660,063 shares as of March 31, 2024 and September 30, 2023, respectively

( 8,610 ) ( 8,206 )

Treasury stock Series E preferred 80,000 shares as of December 31, 2023 and September 30, 2023, respectively

Treasury stock Series E preferred 80,000 shares as of March 31, 2024 and September 30, 2023, respectively

Retained earnings 34,996 38,959

5 unchanged sentences

(dollars in thousands, except per-share amounts)

For the Three Months Ended December 31,

Revenues $ 117,593 $ 68,986

Cost of revenues 81,266 47,042

For the Three Months Ended March 31, For the Six Months Ended March 31,

2024 2023 2024 2023

Revenue $ 118,626 $ 91,122 $ 236,219 $ 160,108

Cost of revenue 83,159 59,514 164,425 106,556

Gross profit 35,467 31,608 71,794 53,552

3 unchanged sentences

Total operating expenses 36,305 26,656 69,091 44,033

Operating income 3,541 4,567

Operating income (loss) ( 838 ) 4,952 2,703 9,519

Other expense:

Interest expense, net ( 4,167 ) ( 3,235 ) ( 8,330 ) ( 5,282 )

Other expense ( 284 ) ( 61 )

Other Income 507 391 223 330

Total other expense, net ( 3,660 ) ( 2,844 ) ( 8,107 ) ( 4,952 )

12 unchanged sentences

(dollars in thousands)

For the Three Months Ended December 31,

For the Six Months Ended March 31,

Operating Activities:

2 unchanged sentences

Depreciation and amortization 8,483 6,297

Gain on disposal of fixed assets — ( 7 )

Amortization of seller note discount 1,355 —

18 unchanged sentences

Acquisition of Johnson ( 500 ) —

Acquisition of Flooring Liquidators, net of cash received — ( 33,929 )

Purchase of property and equipment ( 3,373 ) ( 2,900 )

1 unchanged sentence

Financing Activities:

Net payments under revolver loans ( 756 ) ( 51 )

Net borrowings under revolver loans 7,731 12,312

Proceeds from issuance of notes payable 227 8,449

Payments on notes payable ( 3,359 ) ( 3,679 )

Proceeds from issuance of related party notes payable 1,000 7,000

Payments on related party notes payable ( 600 ) —

Payments for debt acquisition costs — ( 96 )

Purchase of common treasury stock ( 405 ) ( 639 )

Payments on financing leases ( 1,638 ) ( 1,077 )

Net cash (used in) provided by financing activities ( 3,423 ) 3,193

Increase in cash 1,260 8,165

Payments on seller finance arrangements — ( 51 )

Net cash provided by financing activities 2,956 22,219

Change in cash 180 ( 432 )

Cash, beginning of period 4,309 4,600

2 unchanged sentences

Interest paid $ 6,665 $ 4,602

Income taxes received $ 346 $ —

Income taxes received, net $ 106 $ —

Income taxes paid, net $ — $ 43

Noncash financing and investing activities:

Kinetic goodwill adjustment $ — $ 312

Noncash items related to Flooring Liquidators acquisition $ — $ 36,900

PMW goodwill adjustment $ 233 $ —

17 unchanged sentences

Balance, December 31, 2023 47,840 $ — 3,159,984 $ 2 $ 69,437 $ ( 7 ) $ ( 8,312 ) $ 38,277 $ — $ 99,397

Stock based compensation — — — 50 — — — — 50

Purchase of common treasury stock — — ( 11,849 ) — — — ( 298 ) — — ( 298 )

Net loss — — — — — — — ( 3,281 ) — ( 3,281 )

Balance, March 31, 2024 47,840 $ — 3,148,135 $ 2 $ 69,487 $ ( 7 ) $ ( 8,610 ) $ 34,996 $ — $ 95,868

Preferred Stock Common Stock Series E

9 unchanged sentences

Balance, December 31, 2022 47,840 $ — 3,050,123 $ 2 $ 65,321 $ ( 7 ) $ ( 7,836 ) $ 41,353 $ ( 448 ) $ 98,385

Purchase of common treasury stock — — ( 674 ) — — — ( 17 ) — — ( 17 )

Stock based compensation — — — — 109 — — — — 109

Issuance of common stock — — 116,441 — 3,200 — — — — 3,200

Net income — — — — — — — 1,558 — 1,558

Balance, March 31, 2023 47,840 $ — 3,165,890 $ 2 $ 68,630 $ ( 7 ) $ ( 7,853 ) $ 42,911 $ ( 448 ) $ 103,235

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

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE THREE MONTHS ENDED DECEMBER 31, 2023 AND 2022

FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2024 AND 2023

(dollars in thousands, except per-share amounts)

22 unchanged sentences

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 three months ended December 31, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2024.

The results of operations for the three and six months ended March 31, 2024 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2024.

The financial information included in these statements should be read in conjunction with the condensed consolidated financial statements and related notes thereto as of September 30, 2023 and for the fiscal year then ended included in the Company’s Annual Report on Form 10-K, filed with the U.S.

7 unchanged sentences

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S.

GAAP requires the Company’s 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 condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

4 unchanged sentences

ASU 2023-07 requires, among other updates, enhanced disclosures about significant segment expenses that are regularly

provided to the CODM, as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss.

provided to the Chief Operating Decision Maker, as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective adoption.

18 unchanged sentences

The Company anticipates the $ 425,000 of goodwill arising from the acquisition to be fully deductible for tax purposes.

The table below outlines the purchase price allocation of the purchase for CRO to the acquired identifiable assets, liabilities assumed and goodwill as of December 31, 2023 (in $000’s):

The table below outlines the purchase price allocation of the purchase for CRO to the acquired identifiable assets, liabilities assumed and goodwill as of March 31, 2024 (in $000’s):

Total purchase price $ 1,759

7 unchanged sentences

Intangible assets 1,190

Non-compete agreement 1,190

Subtotal intangible assets 1,190

Other assets 286

2 unchanged sentences

Acquisition of Johnson

On November 30, 2023, CRO acquired certain assets and assumed certain liabilities of Johnson Floor & Home (“Johnson”), a floor covering retailer and installer serving residential and commercial customers through four locations in

the Tulsa, Oklahoma area, and one in Joplin, Missouri.

Total consideration for the acquisition was $ 2.0 million, comprised of cash at close of $ 500,000 , deferred consideration of $ 1.2 million, with additional consideration paid in the form of an earnout valued at approximately $ 300,000 .

Total consideration for the acquisition was $ 2.0 million, comprised of cash at close of $ 500,000 , deferred consideration in the form of a seller note of $ 1.2 million, with additional

consideration paid in the form of an earnout valued at approximately $ 300,000 .

The deferred consideration is payable in three $ 400,000 installments due annually on the first three anniversary dates following the closing date.

4 unchanged sentences

The values assigned to the assets acquired and liabilities assumed are based on their estimates of fair value available as of November 30, 2023, as calculated by management.

The table below outlines the purchase price allocation of the purchase for Johnson to the acquired identifiable assets, liabilities assumed and goodwill as of December 31, 2023 (in $000’s):

The table below outlines the purchase price allocation of the purchase for Johnson to the acquired identifiable assets, liabilities assumed and goodwill as of March 31, 2024 (in $000’s):

Total purchase price $ 2,001

18 unchanged sentences

The acquisition was determined to be an asset acquisition for accounting purposes.

The entirety of the purchase was allocated to inventory.

The entirety of the purchase price was allocated to inventory.

Acquisition of PMW

5 unchanged sentences

The aggregate sales price of the real estate was approximately $ 14.5 million.

The Louisville, Kentucky

property was acquired on the Effective Date for $ 5.1 million in connection with an option of PMW to purchase that property.

The Louisville, Kentucky property was acquired on the Effective Date for $ 5.1 million in connection with an option of PMW to purchase that property.

The provisions of each of the two lease agreements include a 20-year lease term with two five-year renewal options.

82 unchanged sentences

Total goodwill $ 31,419

The following table details the Company's inventory as of December 31, 2023 and September 30, 2023 (in $000's):

Inventory, net December 31, 2023 September 30, 2023

Pro Forma Information

The table below presents selected proforma information for the Company for the three and six-month periods ended March 31, 2023, assuming that the acquisition had occurred on October 1, 2022 (the beginning of the Company’s 2023 fiscal year), pursuant to ASC 805-10-50 (in $000's).

This proforma information does not purport to represent what the actual results of operations of the Company would have been had the acquisition occurred on that date, nor does it purport to predict the results of operations for future periods.

As Reported Adjustments Proforma

Live Unaudited Three Months Ended March 31, 2023 Flooring Liquidators Unaudited Three Months Ended March 31, 2023 Adjustments (1)

Live for the Three Months Ended March 31, 2023

Net revenue $ 91,122 $ 4,222 $ 95,344

Net income $ 1,558 $ ( 2,188 ) $ ( 300 ) $ ( 930 )

Earnings per basic common share $ 0.50 $ ( 0.30 )

Earnings per basic diluted share $ 0.49 $ ( 0.29 )

As Reported Adjustments Proforma

Live Unaudited Six Months Ended March 31, 2023 Flooring Liquidators Unaudited Six Months Ended March 31, 2023 Adjustments (1)

Live for the Six Months Ended March 31, 2023

Net revenue $ 160,108 $ 37,702 $ 197,810

Net income $ 3,402 $ ( 1,033 ) $ ( 2,226 ) $ 143

Earnings per basic common share $ 1.10 $ 0.05

Earnings per basic diluted share $ 1.08 $ 0.05

(1) Adjustments are related to adjustments made for the following:

• Amortization expense of definite-lived intangible assets has been adjusted based on the preliminary fair value at the acquisition date.

• Interest expense has been adjusted to include proforma interest expense that would have been incurred as a result of the acquisition financing obtained by the Company.

• Elimination of revenue and costs of revenue associated with sales between Flooring Liquidators and the Company prior to acquisition.

The following table details the Company's inventory as of March 31, 2024 and September 30, 2023 (in $000's):

Inventory, net March 31, 2024 September 30, 2023

Raw materials $ 28,695 $ 32,590

6 unchanged sentences

Property and Equipment

The following table details the Company's property and equipment as of December 31, 2023 and September 30, 2023 (in $000's):

December 31, 2023 September 30, 2023

The following table details the Company's property and equipment as of March 31, 2024 and September 30, 2023 (in $000's):

March 31, 2024 September 30, 2023

Property and equipment, net:

8 unchanged sentences

Total property and equipment, net $ 78,432 $ 80,703

Depreciation expense was $ 3.1 million and $ 2.4 million for the three months ended December 31, 2023 and 2022, respectively.

Depreciation expense was $ 3.0 million and $ 2.7 million for the three months ended March 31, 2024 and 2023, respectively, and $ 6.1 million and $ 5.1 million for the six months ended March 31, 2024 and 2023, respectively.

The Company leases retail stores, warehouse facilities, and office space.

These assets and properties are generally leased under noncancelable agreements that expire at various future dates with many agreements containing renewal options for additional periods.

The agreements, which have been classified as either operating or finance leases, generally provide for minimum and, in some cases, percentage rent, and require the Company to pay all insurance, taxes, and other maintenance costs.

The agreements, which have been classified as either operating or finance leases, generally provide for minimum rent and, in some cases, percentage rent, and require the Company 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.

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 following table details the Company's right of use assets and lease liabilities as of December 31, 2023 and September 30, 2023 (in $000's):

December 31, 2023 September 30, 2023

The following table details the Company's right of use assets and lease liabilities as of March 31, 2024 and September 30, 2023 (in $000's):

March 31, 2024 September 30, 2023

Right of use asset - operating leases $ 64,867 $ 54,544

4 unchanged sentences

Long term - finance 33,023 32,942

As of December 31, 2023, the weighted average remaining lease term for operating leases is 10.3 years.

As of March 31, 2024, the weighted average remaining lease term for operating leases is 10.0 years.

The Company's weighted average discount rate for operating leases is 9.8 %.

Total cash payments for operating leases for the three months ended December 31, 2023 and 2022 were approximately $ 4.3 million and $ 2.4 million, respectively.

Additionally, the Company recognized approximately $ 14.9 million in right of use assets and liabilities upon commencement of operating leases during the three months ended December 31, 2023.

As of December 31, 2023, the weighted average remaining lease term for finance leases is 27.4 years.

Total cash payments for operating leases for the six months ended March 31, 2024 and 2023 were approximately $ 8.8 million and $ 3.9 million, respectively.

Additionally, the Company recognized approximately $ 17.4 million in right of use assets and liabilities upon commencement of operating leases during the six months ended March 31, 2024.

As of March 31, 2024, the weighted average remaining lease term for finance leases is 27.3 years.

The Company's weighted average discount rate for finance leases is 11.7 %.

Total cash payments for finance leases for the three months

ended December 31, 2023 and 2022 were approximately $ 793,000 and $ 481,000 , respectively.

No finance right-of-use assets or liabilities were recognized during the three months ended December 31, 2023.

Total cash payments for finance leases for the six months ended March 31, 2024 and 2023 were approximately $ 1.6 million and $ 1.1 million, respectively.

No finance right-of-use assets or liabilities were recognized during the six months ended March 31, 2024.

The Company records finance lease right-of-use assets as property and equipment.

The balance, as of December 31, 2023 and September 30, 2023 is as follows (in $000’s):

December 31, 2023 September 30, 2023

The balance, as of March 31, 2024 and September 30, 2023 is as follows (in $000’s):

March 31, 2024 September 30, 2023

Property and equipment, at cost $ 22,526 $ 22,526

1 unchanged sentence

Property and equipment, net $ 21,478 $ 21,824

Total present value of future lease payments of operating leases as of December 31, 2023 (in $000's):

Twelve months ended December 31,

Total present value of future lease payments of operating leases as of March 31, 2024 (in $000's):

Twelve months ended March 31,

2025 $ 18,466

Thereafter 31,421

Total 106,599

Less implied interest ( 27,991 )

Present value of payments $ 70,137

Total present value of future lease payments of finance leases as of December 31, 2023 (in $000's):

Twelve months ended December 31,

Total present value of future lease payments of finance leases as of March 31, 2024 (in $000's):

Twelve months ended March 31,

Thereafter 103,196

2 unchanged sentences

Present value of payments $ 33,384

During the three months ended December 31, 2023 and 2022, the Company recorded no impairment charges relating to any of its leases.

The following table details the Company's intangibles as of December 31, 2023 and September 30, 2023 (in $000's):

December 31, 2023 September 30, 2023

During the six months ended March 31, 2024 and 2023, the Company recorded no impairment charges relating to any of its leases.

The following table details the Company's intangibles as of March 31, 2024 and September 30, 2023 (in $000's):

March 31, 2024 September 30, 2023

Intangible assets, net:

5 unchanged sentences

Total intangibles, net $ 26,942 $ 26,568

Amortization expense was $ 1.2 million and $ 253,000 for the three months ended December 31, 2023 and 2022, respectively.

Amortization expense was $ 1.2 million and $ 992,000 for the three months ended March 31, 2024 and 2023, respectively, and $ 2.4 million and $ 1.2 million for the six months ended March 31, 2024 and 2023, respectively.

The following table summarizes estimated future amortization expense related to intangible assets that have net balances (in $000’s):

Twelve months ending December 31,

Twelve months ending March 31,

Thereafter 3,119

The following table details the Company's goodwill as of September 30, 2023 and December 31, 2023 (in $000's):

The following table details the Company's goodwill as of September 30, 2023 and March 31, 2024 (in $000's):

Retail - Entertainment Retail - Flooring Flooring Manufacturing Steel Manufacturing Total

3 unchanged sentences

Flooring Liquidators adjustment — 1,000 — — 1,000

December 31, 2023 $ 36,947 $ 31,844 $ 807 $ 7,041 $ 76,639

During the three months ended December 31, 2023, the Company made fair value adjustments, in the amount of approximately $ 652,000 , related to the acquisition of PMW, and $ 1.0 million related to the acquisition of Flooring Liquidators (see Note 3).

As of December 31, 2023, the Company did not identify any triggering events that would require impairment testing.

March 31, 2024 $ 36,947 $ 31,844 $ 807 $ 7,041 $ 76,639

During the six months ended March 31, 2024, the Company made fair value adjustments, in the amount of approximately ($ 652,000 ) related to the acquisition of PMW, $ 425,000 related to the CRO acquisition, and $ 1.0 million related to the acquisition of Flooring Liquidators (see Note 3).

As of March 31, 2024, the Company did not identify any triggering events that would require impairment testing.

Accrued Liabilities

The following table details the Company's accrued liabilities as of December 31, 2023 and September 30, 2023, respectively (in $000's):

December 31, 2023 September 30, 2023

The following table details the Company's accrued liabilities as of March 31, 2024 and September 30, 2023 (in $000's):

March 31, 2024 September 30, 2023

Accrued liabilities:

9 unchanged sentences

Long-Term Debt

Long-term debt as of December 31, 2023 and September 30, 2023 consisted of the following (in $000's):

December 31, 2023 September 30, 2023

Long-term debt as of March 31, 2024 and September 30, 2023 consisted of the following (in $000's):

March 31, 2024 September 30, 2023

Revolver loans $ 64,510 $ 56,779

7 unchanged sentences

Total long-term debt $ 75,322 $ 78,710

Future maturities of long-term debt at December 31, 2023, are as follows which does not include related party debt separately stated (in $000's):

Twelve months ending December 31,

Future maturities of long-term debt at March 31, 2024, are as follows which does not include related party debt separately stated (in $000's):

Twelve months ending March 31,

2024 $ 31,396

Thereafter 10,196

Total future maturities of long-term debt $ 106,718

2 unchanged sentences

The BofA Revolver is a five-year , asset-based facility that is secured by substantially all of Marquis’ assets.

Availability under the BofA Revolver is subject to a monthly borrowing base

Availability under the BofA Revolver is subject to a monthly borrowing base calculation.

Marquis’ ability to borrow under the BofA Revolver is subject to the satisfaction of certain conditions, including meeting all loan covenants under the credit agreement with BofA.

The BofA Revolver has a variable interest rate and matures in January 2025.

As of December 31, 2023 and September 30, 2023, the outstanding balance was approximately $ 6.5 million and $ 6.1 million, respectively.

As of March 31, 2024 and September 30, 2023, the outstanding balance was approximately $ 16.4 million and $ 6.1 million, respectively.

Loan with Fifth Third Bank (Precision Marshall)

9 unchanged sentences

The $ 1.0 million term loan (“Kinetic Term Loan #2”), which matures on June 28, 2025 , is a “Special Advance Term Loan”, and bears interest at SOFR plus 375 basis points.

As of December 31, 2023 and September 30, 2023, the outstanding balance on the revolving loan was approximately $ 26.0 million and $ 23.0 million, respectively, and the outstanding balance on the original M&E lending, which is documented as a term note, was approximately $ 2.2 million and $ 2.3 million, respectively.

As of March 31, 2024 and September 30, 2023, the outstanding balance on the revolving loan was approximately $ 25.0 million and $ 23.0 million, respectively, and the outstanding balance on the original M&E lending, which is documented as a term note, was approximately $ 2.1 million and $ 2.3 million, respectively.

The revolving loan has a variable interest rate and matures in January 2027.

As of December 31, 2023 and September 30, 2023, the outstanding balance on Kinetic Term Loan #1 was approximately $ 3.1 million and $ 3.3 million, respectively.

As of March 31, 2024 and September 30, 2023, the outstanding balance on Kinetic Term Loan #1 was approximately $ 3.0 million and $ 3.3 million, respectively.

As of September 30, 2023, the Kinetic Term Loan #2 was fully repaid.

2 unchanged sentences

The first payment under this loan is due in February 2024.

The outstanding balance on the Capex loan was $ 1.4 million as of each of December 31, 2023 and September 30, 2023.

As of March 31, 2024 and September 30, 2023, the outstanding balance on the Capex loan was approximately $ 1.3 million and 1.4 million, respectively.

Eclipse Business Capital Loans

3 unchanged sentences

Availability under the Eclipse Revolver is subject to a monthly borrowing base calculation.

Flooring Liquidators’ ability to borrow under the Eclipse Revolver is subject to the satisfaction of certain conditions, including meeting all loan covenants under the credit agreement with Eclipse.

Flooring Liquidators’ ability to borrow under the Eclipse

Revolver is subject to the satisfaction of certain conditions, including meeting all loan covenants under the credit agreement with Eclipse.

The Eclipse Revolver bears interest at 4.5 % per annum in excess of Adjusted Term SOFR prior to April 1, 2023, and 3.5 % per annum in excess of Adjusted Term SOFR after April 1, 2023.

1 unchanged sentence

The credit facility matures in January 2026.

As of December 31, 2023 and September 30, 2023, the outstanding balance on the Eclipse Revolver was approximately $ 8.8 million and $ 8.2 million, respectively, and the outstanding balance on the Eclipse M&E loan was approximately $ 2.3 million and $ 2.4 million, respectively.

As of March 31, 2024 and September 30, 2023, the outstanding balance on the Eclipse Revolver was approximately $ 9.0 million and $ 8.2 million, respectively, and the outstanding balance on the Eclipse M&E loan was approximately $ 2.1 million and $ 2.4 million, respectively.

Loan with Fifth Third Bank (PMW)

In connection with the acquisition of PMW (see Note 3), on July 20, 2023, PMW entered into a revolving credit facility with Fifth Third Bank.

The facility consists of $ 15.0 million in revolving credit and approximately $ 5.0 million in M&E lending.

In connection with the acquisition of PMW (see Note 3), on July 20, 2023, PMW entered into a revolving credit facility with Fifth Third Bank (the "Revolving Credit Facility").

The facility consists of $ 15.0 million in revolving credit ("Fifth-Third Revolver") and approximately $ 5.0 million in M&E lending (the "Fifth-Third M&E Loan").

The Fifth-Third Revolver is a three-year , asset-based facility that is secured by substantially all of PMW's assets.

2 unchanged sentences

Loans made under the Revolving Credit Facility are considered Reference Rate Loans, and bear interest at a rate equal to the sum of the Reference Rate plus the Applicable Margin.

Reference Rate means the greater of (a) 3.0 % or (b) the Lender’s publicly announced prime rate (which is not intended to be Lender’s

lowest or most favorable rate in effect at any time) in effect from time to time.

Reference Rate means the greater of (a) 3.0 % or (b) the Lender’s publicly announced prime rate (which is not intended to be Lender’s lowest or most favorable rate in effect at any time) in effect from time to time.

The Applicable Margin for revolving loans is zero , while for the M&E Term Loan or any Capital Expenditure Term Loan, it is 50 basis points ( 0.5 %).

The credit facility matures in July 2026.

As of December 31, 2023 and September 30, 2023, the outstanding balance on the Fifth-Third Revolver was approximately $ 10.2 million and $ 11.0 million, respectively, and the balance on the Fifth-Third M&E loan was approximately $ 4.7 million and $ 4.8 million, respectively.

As of March 31, 2024 and September 30, 2023, the outstanding balance on the Fifth-Third Revolver was approximately $ 10.8 million and $ 11.0 million, respectively, and the balance on the Fifth-Third M&E loan was approximately $ 4.4 million and $ 4.8 million, respectively.

Bank Midwest Revolver Loan

2 unchanged sentences

The Bank Midwest Revolver interest accrues daily on the outstanding principal at a rate of the greater of (a) the one-month forward-looking term rate based on SOFR, plus 2.36 % per annum, or (b) 6.5 % per annum, and matures on October 17, 2024.

As of December 31, 2023, the outstanding balance on the Bank Midwest Revolver was approximately $ 4.5 million.

As of March 31, 2024, the outstanding balance on the Bank Midwest Revolver was approximately $ 3.4 million.

As of September 30, 2023, the outstanding balance on the TCB Revolver was approximately $ 5.3 million.

Equipment Loans

On June 20, 2016 and August 5, 2016, Marquis entered into a transaction that provided for a master agreement and separate loan schedules (the “Equipment Loans”) with Banc of America Leasing & Capital, LLC that provided for the following as of December 31, 2023:

Note #3 is for approximately $ 3.7 million, secured by equipment.

The Equipment Loan #3 matured in December 2023, payable in 84 monthly payments of $ 52,000 beginning January 2017, bearing interest rate at 4.8 % per annum.

As of December 31, 2023 and September 30, 2023, the balance was $ 0 and $ 154,000 , respectively.

Note #4 is for approximately $ 1.1 million, secured by equipment.

The Equipment Loan #4 matured in December 2023, payable in 81 monthly payments of $ 16,000 beginning April 2017, bearing interest at 4.9 % per annum.

As of December 31, 2023 and September 30, 2023, the balance was $ 0 and $ 47,000 , respectively.

Note #3 was for approximately $ 3.7 million, secured by equipment.

The Equipment Loan #3 matured in December 2023.

As of March 31, 2024 and September 30, 2023, the balance was $ 0 and $ 154,000 , respectively.

Note #4 was for approximately $ 1.1 million, secured by equipment.

The Equipment Loan #4 matured in December 2023.

As of March 31, 2024 and September 30, 2023, the balance was $ 0 and $ 47,000 , respectively.

Note #5 is for approximately $ 4.0 million, secured by equipment.

The Equipment Loan #5 is due December 2024, payable in 84 monthly payments of $ 55,000 beginning January 2018, bearing interest at 4.7 % per annum.

As of December 31, 2023 and September 30, 2023, the balance was approximately $ 643,000 and $ 799,000 , respectively.

As of March 31, 2024 and September 30, 2023, the balance was approximately $ 485,000 and $ 799,000 , respectively.

Note #6 is for $ 913,000 , secured by equipment.

The Equipment Loan #6 is due July 2024, payable in 60 monthly payments of $ 14,000 beginning August 2019, with a final payment of $ 197,000 , bearing interest at 4.7 % per annum.

As of December 31, 2023 and September 30, 2023, the balance was approximately $ 277,000 and $ 317,000 , respectively.

As of March 31, 2024 and September 30, 2023, the balance was approximately $ 237,000 and $ 317,000 , respectively.

Note #7 is for $ 5.0 million, secured by equipment.

The Equipment Loan #7 is due February 2027, payable in 84 monthly payments of $ 59,000 beginning March 2020, with the final payment of $ 809,000 , bearing interest at 3.2 % per annum.

As of December 31, 2023 and September 30, 2023, the balance was approximately $ 2.8 million and $ 2.9 million, respectively.

As of March 31, 2024 and September 30, 2023, the balance was approximately $ 2.6 million and $ 2.9 million, respectively.

Note #8 is for approximately $ 3.4 million, secured by equipment.

The Equipment Loan #8 is due September 2027, payable in 84 monthly payments of $ 46,000 beginning October 2020, bearing interest at 4.0 %.

As of December 31, 2023 and September 30, 2023, the balance was approximately $ 1.9 million and $ 2.0 million, respectively.

As of March 31, 2024 and September 30, 2023, the balance was approximately $ 1.8 million and $ 2.0 million, respectively.

In December 2021, Marquis funded the acquisition of $ 5.5 million of new equipment under Note #9 of its master agreement.

The Equipment Loan #9, which is secured by the equipment, matures December 2026, and is payable in 60 monthly payments of $ 92,000 beginning January 2022, with the final payment in the amount of approximately $ 642,000 , bearing interest at 3.75 % per annum.

As of December 31, 2023 and September 30, 2023, the balance was approximately $ 3.6 million and $ 3.9 million, respectively.

As of March 31, 2024 and September 30, 2023, the balance was approximately $ 3.4 million and $ 3.9 million, respectively.

In December 2022, Marquis funded the acquisition of $ 5.7 million of new equipment under Note #10 of its master agreement.

The Equipment Loan #10, which is secured by the equipment, matures December 2029, and is payable in 84 monthly payments of $ 79,000 , beginning January 2023, with the final payment in the amount of approximately $ 650,000 , bearing interest at 6.50 %.

As of December 31, 2023 and September 30, 2023, the balance was approximately $ 5.1 million and $ 5.3 million.

As of March 31, 2024 and September 30, 2023, the balance was approximately $ 5.0 million and $ 5.3 million.

Loan Covenant Compliance

As of December 31, 2023, the Company was in compliance with all covenants under its existing revolving and other loan agreements.

As of March 31, 2024, the Company was in compliance with all covenants under its existing revolving and other loan agreements.

Notes Payable-Related Parties

Long-term debt payable to related parties (see Note 16) as of December 31, 2023 and September 30, 2023 consisted of the following (in $000's):

December 31, 2023 September 30, 2023

Long-term debt payable to related parties (see Note 16) as of March 31, 2024 and September 30, 2023 consisted of the following (in $000's):

March 31, 2024 September 30, 2023

Isaac Capital Group, LLC, 12.5 % interest rate, matures May 2025

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Total long-term portion, related parties $ 10,124 $ 6,914

Twelve months ending December 31,

Twelve months ending March 31,

Total future maturities of long-term debt, related parties $ 11,324

Related Party Seller Notes

Seller notes as of December 31, 2023 and September 30, 2023 consisted of the following (in $000’s):

Seller notes as of March 31, 2024 and September 30, 2023 consisted of the following (in $000’s):

2024 September 30,

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Long-term portion of Related party seller notes payable $ 40,354 $ 38,998

Future maturities of seller notes at December 31, 2023 are as follows (in $000’s):

Twelve months ending December 31,

Future maturities of seller notes at March 31, 2024 are as follows (in $000’s):

Twelve months ending March 31,

Total $ 40,354

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Series E Convertible Preferred Stock

As of December 31, 2023 and September 30, 2023, there were 47,840 shares of Series E Convertible Preferred Stock issued and outstanding, respectively.

As of March 31, 2024 and September 30, 2023, there were 47,840 shares of Series E Convertible Preferred Stock issued and outstanding, respectively.

Treasury Stock

As of December 31, 2023 and September 30, 2023, the Company had 664,409 and 660,063 shares of Treasury Stock, respectively.

During the three months ended December 31, 2023 and 2022, the Company repurchased 4,346 and 24,710 shares of its common stock for approximately $ 106,532 and $ 622,000 , respectively.

During the three months ended December 31, 2023 and 2022, the average price paid per share was $ 24.51 and $ 25.16 , respectively.

As of March 31, 2024 and September 30, 2023, the Company had 676,258 and 660,063 shares of Treasury Stock, respectively.

During the six months ended March 31, 2024 and 2023, the Company repurchased 16,195 and 25,384 shares of its common stock for approximately $ 404,000 and $ 639,000 , respectively.

During the six months ended March 31, 2024 and 2023, the average price paid per share was $ 24.99 and $ 25.16 , respectively.

Stock-Based Compensation

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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 fiscal year ended September 30, 2023 and the three months ended December 31, 2023:

The following table summarizes stock option activity for the fiscal year ended September 30, 2023 and the six months ended March 31, 2024:

Shares Weighted

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Outstanding at September 30, 2022 87,500 $ 18.81 0.78 $ 771

Outstanding at December 31, 2022 87,500 $ 18.81 0.52 $ 1,201

Exercisable at December 31, 2022 87,500 $ 18.81 0.52 $ 1,201

Outstanding at March 31, 2023 87,500 $ 18.81 0.85 $ 1,160

Exercisable at March 31, 2023 87,500 $ 18.81 0.85 $ 1,160

Outstanding at September 30, 2023 53,750 $ 21.51 1.54 $ 540

Outstanding at December 31, 2023 53,750 $ 21.51 1.29 $ 450

Exercisable at December 31, 2023 53,750 $ 21.51 1.29 $ 450

The Company recognized compensation expense of approximately $ 50,000 and $ 0 during the three months ended December 31, 2023 and 2022, respectively, related to stock option awards and restricted stock awards granted to certain employees and officers based on the grant date fair value of the awards, and the revaluation for existing options whereby the expiration date was extended.

As of December 31, 2023, the Company had no unrecognized compensation expense associated with stock option awards.

Outstanding at March 31, 2024 53,750 $ 21.51 1.04 $ 499

Exercisable at March 31, 2024 53,750 $ 21.51 1.04 $ 499

The Company recognized compensation expense of approximately $ 50,000 and $ 109,000 during the three months ended March 31, 2024 and 2023, respectively, and approximately $ 100,000 and $ 109,000 during the six months ended March 31, 2024 and 2023, respectively, related to stock option awards and restricted stock awards granted to certain employees and officers based on the grant date fair value of the awards, and the revaluation for existing options whereby the expiration date was extended.

As of March 31, 2024, the Company had no unrecognized compensation expense associated with stock option awards.

Earnings Per Share

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

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2024 2023 2024 2023

Net (loss) income $ ( 3,281 ) $ 1,558 $ ( 3,963 ) $ 3,402

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preferred stock dividends — — — —

Net (loss) income applicable for diluted earnings per share $ ( 682 ) $ 1,844

Net (loss) income applicable to diluted earnings per share $ ( 3,281 ) $ 1,558 $ ( 3,963 ) $ 3,402

Weighted average common shares outstanding 3,154,771 3,143,911 3,159,180 3,101,007

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Diluted EPS is computed by dividing net income by the sum of the weighted average number of shares of Common Stock outstanding and the effect of dilutive securities.

No diluted EPS computation was made for the three months ended December 31, 2023, as the Company recorded a net loss.

Had the Company calculated diluted EPS for the three months ended December 31, 2023, the total assumed weighted average common shares outstanding would have been 3,182,083 .

For the three months ended December 31, 2022, there were 17,000 options to purchase shares of common stock that were anti-dilutive, and not included in the diluted EPS computation.

No diluted EPS computation was made for the three and six months ended March 31, 2024, as the Company recorded a net loss.

Had the Company calculated diluted EPS for the three and six months ended March 31, 2024, the total assumed weighted average common shares outstanding would have been 3,173,021 and 3,177,549 , respectively, and there would have been 22,500 options to purchase shares of common stock that were anti-dilutive.

For the three and six months ended March 31, 2023, there were 17,000 options to purchase shares of common stock that were anti-dilutive, and not included in the diluted EPS computation.

Related Party Transactions

Transactions with Isaac Capital Group, LLC

As of December 31, 2023, Isaac Capital Group, LLC (“ICG”) beneficially owns 48.9 % of the Company’s issued and outstanding capital stock.

As of March 31, 2024, Isaac Capital Group, LLC (“ICG”) beneficially owns 49.0 % of the Company’s issued and outstanding capital stock.

Jon Isaac, the Company's President and Chief Executive Officer, is the President and sole member of ICG, and, accordingly, has sole voting and dispositive power with respect to these shares.

Isaac also personally owns 219,177 shares of common stock and holds options to purchase up to 25,000 shares of common stock at an exercise price of $ 10.00 per share, all of which are currently exercisable.

Isaac's options to purchase 25,000 shares of common stock were originally scheduled to expire on January 15, 2023, but, as amended on January 13, 2023, the expiration date was extended to January 15, 2025.

Isaac's options expire on January 15, 2025.

ICG Term Loan

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The ICG Loan bears interest at 12.5 % and matures in May 2025.

As of December 31, 2023 and September 30, 2023, the outstanding balance on this note was $ 2.0 million.

As of March 31, 2024 and September 30, 2023, the outstanding balance on this note was $ 2.0 million.

ICG Revolving Promissory Note

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No other terms of the Note were changed.

On April 1, 2023, the Company entered into the First Amendment of the ICG Revolver that extended the maturity date to April 8, 2024 and increased the interest rate from 10 % to 12 % per annum.

As of each of December 31, 2023 and September 30, 2023, the the ICG Revolver was $ 1.0 million.

On April 1, 2023, the Company entered into the Second Amendment of the ICG Revolver that extended the maturity date to April 8, 2024, increased the interest rate from 10 % to 12 % per annum, and decreased the amount of available revolving credit under the facility to $ 1.0 million.

On January 11, 2024, the Company entered into the Third Amendment of the ICG Revolver that extended the maturity date to April 8, 2025 and increased the amount of available revolving credit under the facility to $ 5.0 million.

As of March 31, 2024 and September 30, 2023, the outstanding balance on the ICG Revolver was $ 2.0 million and 1.0 million, respectively.

ICG Flooring Liquidators Note

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The note is fully guaranteed by the Company.

As of December 31, 2023, the outstanding balance on this loan was $ 5.0 million.

As of March 31, 2024, the outstanding balance on this loan was $ 5.0 million.

Transactions with JanOne Inc.

Tony Isaac, a member of the Company's board of directors, and father of the Company's CEO, Jon Isaac, is the Chief Executive Officer and a director of JanOne Inc.(“JanOne”).

Tony Isaac, a member of the Company's board of directors, and father of the Company's Chief Executive Officer, Jon Isaac, is the Chief Executive Officer and a director of JanOne Inc.

Richard Butler, a member of the Company's board of directors, is a director of JanOne.

Lease Agreement

Customer Connexx LLC, formerly a subsidiary of 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 $ 36,000 and $ 52,000 in rent and other reimbursed expenses for three months ended December 31, 2023 and 2022, respectively.

Customer Connexx LLC, formerly a subsidiary of JanOne, previously rented 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 $ 39,000 and $ 112,000 in rent and other reimbursed expenses for three months ended March 31, 2024 and 2023, respectively, and $ 75,000 and $ 256,000 for the six months ended March 31, 2024 and 2023, respectively.

Purchase Agreement with ARCA Recycling

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All purchases made by the Company shall be paid back by ARCA in full plus an additional five percent surcharge or broker-type fee.

As of December 31, 2023, the Company has a full allowance of approximately $ 690,000 recorded in the reserve for doubtful accounts for the amount due.

As of March 31, 2024, the Company had a full allowance of approximately $ 690,000 recorded in the reserve for doubtful accounts for the amount due.

On February 7, 2024, the Company converted outstanding receivables from JanOne and amounts due under the Purchase Agreement with ARCA Recycling into a promissory note with JanOne.

On March 6, 2024, the Company entered into a Note Sale Agreement (“NSA”) with an unaffiliated third party under which the third party acquired the promissory note for approximately $ 700,000 .

The NSA requires payment of 50 % of the amount due upon execution, and the balance due no later than three days following 60 days after the date of execution.

On March 11, 2024, the Company received payment of approximately $ 350,000 , which was recorded as other income, and recorded a receivable for the deferred payment, which was subsequently received.

In connection with the execution of the NSA, the Company recognized a gain of approximately $ 0.6 million in the second quarter.

Transactions with Vintage Stock CEO

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The Spriggs Loan I originally matured on July 10, 2022;

however, the maturity date was extended to July 10, 2023, pursuant to unanimous written consent of the Board of Directors.

however, the maturity date was extended

to July 10, 2023, pursuant to unanimous written consent of the Board of Directors.

The Spriggs Promissory Note I bears simple interest at a rate of 10.0 % per annum.

On January 19, 2023, the Company entered into a modification agreement of the Spriggs Loan I.

Consequently, the Spriggs Promissory Note I will bear interest at a rate of 12 % per annum, and the maturity date was extended to July 31, 2024.

As of December 31, 2023 and September 30, 2023, the amount owed was $ 2.0 million.

Under the modification agreement, the Spriggs Promissory Note I will bear interest at a rate of 12 % per annum, and the maturity date was extended to July 31, 2024.

On February 29, 2024, the Company entered into a loan modification agreement of the Spriggs Loan I.

Under the loan modification agreement, the Company was required to make a principal payment of $ 600,000 to Spriggs Investments within five business days following the effective date of the loan modification agreement, and make principal payments of not less than $ 300,000 each 90 -day period thereafter, beginning on April 1, 2024, until the Spriggs Promissory Note I is fully repaid.

Further, under the loan modification agreement, the maturity date of the Spriggs Promissory Note I was extended to July 31, 2025 .

All monthly payments under the original Spriggs Promissory Note I remain in effect through the maturity date as amended.

As of March 31, 2024 and September 30, 2023, the principal amount owed was $ 1.4 million and $ 2.0 million, respectively.

Spriggs Promissory Note II

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The Spriggs Loan II matures on July 31, 2024, and bears interest at a rate of 12 % per annum.

As of December 31, 2023 and September 30, 2023, the amount owed was $ 1.0 million.

On February 29, 2024, the Company entered into a loan modification agreement of the Spriggs Loan II.

Under the loan modification agreement, upon full principal repayment of the Spriggs Promissory Note I (see above), the Company will make principal payments of not less than $ 300,000 , per each 90 -day period, until the Spriggs Loan II is fully repaid.

Further, under the loan modification agreement, the maturity date of the Spriggs Loan II was extended to July 31, 2025 .

All monthly payments under the original Spriggs Loan II remain in effect through the maturity date as amended.

As of March 31, 2024 and September 30, 2023, the principal amount owed was $ 1.0 million.

Transactions with Spyglass Estate Planning, LLC

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Building Leases

On July 1, 2022, in connection with its acquisition of Better Backers, Marquis entered into two building leases with Spyglass.

On July 1, 2022, in connection with its acquisition of certain assets and intellectual property of Better Backers, Inc., Marquis entered into two building leases with Spyglass.

The building leases are for 20 years with two options to renew for an additional five years each.

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Transactions with Flooring Liquidators CEO

Stephen Kellogg is the Chief Executive Officer of Flooring Liquidators, Inc., a wholly owned subsidiary of the Company.

Stephen Kellogg is the Chief Executive Officer of Flooring Liquidators, a wholly owned subsidiary of the Company.

Flooring Liquidators leases five properties from K2L Property Management, and one from Railroad Investments, each of which Mr.

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The Sellers Subordinated Acquisition Note has a maturity date of September 27, 2027.

As of December 31, 2023 and September 30, 2023, the remaining principal balance was $ 3.0 million.

As of March 31, 2024 and September 30, 2023, the remaining principal balance was $ 3.0 million.

Note Payable to the Seller of Flooring Liquidators

In connection with the purchase of Flooring Liquidators (see Note 3), on January 18, 2023, the Company entered into an employment agreement with the previous owner of Flooring Liquidators to serve as its Chief Executive Officer.

The employment agreement is for an initial term of five years and shall be automatically extended in 90-day increments unless either party provides notice as required under the agreement.

employment agreement is for an initial term of five years and shall be automatically extended in 90-day increments unless either party provides notice as required under the agreement.

Additionally, the Company entered into a seller financed mezzanine loan, which is fully guaranteed by the Company, in the amount of $ 34.0 million with the previous owners of Flooring Liquidators.

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The $ 2.3 million discount is being accreted to interest expense, using the effective interest rate method, as required by GAAP, over the term of the Sellers Note.

As of December 31, 2023 and September 30, 2023, the carrying value of the Sellers Note was approximately $ 34.2 million and $ 33.5 million, respectively.

As of March 31, 2024 and September 30, 2023, the carrying value of the Sellers Note was approximately $ 34.9 million and $ 33.5 million, respectively.

Note Payable to the Seller of PMW

In connection with the purchase of PMW (see Note 3), on July 20, 2023, the Company entered into an consulting agreement with the previous owner of PMW to serve as part-time President and Chief Executive Officer .

In connection with the purchase of PMW (see Note 3), on July 20, 2023, the Company entered into a consulting agreement with the previous owner of PMW to serve as part-time President and Chief Executive Officer .

The consulting agreement commenced on the Effective Date and shall terminate upon the later of (i) Sellers’ receipt of earn-out payments in an aggregate amount equal to $ 3.0 million and (ii) the full satisfaction and payment of all amounts due and to that are to become due under the seller note, unless earlier terminated in accordance with the terms set forth in the consulting agreement .

2 unchanged sentences

The seller financed loans have a maturity date of July 18, 2028.

As of December 31, 2023 and September 30, 2023, the carrying value of the seller financed loans was approximately $ 2.5 million.

As of March 31, 2024 and September 30, 2023, the carrying value of the seller financed loans was approximately $ 2.5 million.

Procedures for Approval of Related Party Transactions

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and Section 17(a) of the Securities Act of 1933.

The SEC seeks permanent injunctions against the Company Defendants, permanent officer-and-director bars, disgorgement of profits, and civil penalties.

SEC seeks permanent injunctions against the Company Defendants, permanent officer-and-director bars, disgorgement of profits, and civil penalties.

The foregoing is only a general summary of the SEC Complaint, which may be accessed on the SEC’s website at https://www.sec.gov/litigation/litreleases/2021/lr25155.htm.

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and Virland Johnson moved to withdraw on August 18, 2023, which motion the court granted on October 2, 2023.

Since that time, JanOne Inc.

and Virland Johnson have obtained new counsel who have appeared in the case.

In light of the new counsel in this case, the Court approved a stipulated order to extend the discovery period approximately 45 days.

In light of this, the Court approved a stipulated order to extend the discovery period approximately 45 days.

Fact discovery is now set to be completed by May 20, 2024.

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Among other sought relief, the complaint seeks damages in connection with the purchases and sales of the Company’s securities between December 28, 2016 and August 3, 2021.

of December 17, 2021, the judge granted a stipulation to stay proceedings pending the resolutions of the motions to dismiss in the SEC Complaint.

As of December 17, 2021, the judge granted a stipulation to stay proceedings pending the resolutions of the motions to dismiss in the SEC Complaint.

On February 1, 2023, the final motion to dismiss relating to the SEC Complaint was denied, which was subsequently noticed in the Sieggreen action on February 2, 2023.

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On October 26, 2023, the Company counterclaimed against the representative and all represented shareholders for fraudulently misrepresenting the seller’s inventory and accounting methodology and asserting damages in excess of $ 4,500,000 .

Several of the individual shareholders have moved to dismiss the counterclaim.

On April 10, 2024, the District Court dismissed the individual shareholders, leaving intact the company's misrepresentation claims against the shareholder representative.

The Company expects discovery to last for approximately one year .

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The complaint was later amended as a matter of right on October 4, 2022.

Sanchez has put the Labor & Workforce Development Agency on notice to exhaust administrative remedies and enable her to bring an additional claim under the California Labor Code Private Attorneys General Act, which permits an employee to assert a claim for violations of certain California Labor Code provisions on behalf of all aggrieved employees to recover statutory penalties.

Sanchez put the Labor & Workforce Development Agency on notice to exhaust administrative remedies and enable her to bring an additional claim under the California Labor Code Private Attorneys General Act, which permits an employee to assert a claim for violations of certain California Labor Code provisions on behalf of all aggrieved employees to recover statutory penalties.

The Court has set this for a Case Management Conference on September 30, 2024, after the parties have had a chance to exchange discovery regarding the claims.

Elite Builders maintains that Ms.

Sanchez’s claims lack merit and intends to defend this action vigorously.

The Company is currently unable to estimate the range of possible losses associated with this proceeding as we are in the early stages of discovery and the scope of class is not yet known.

Sanchez’s claims lack merit.

Elite Builders has received early round discovery from the plaintiff and plans to engage in further discovery to establish the extent, if any, of exposure.

The parties have also discussed attending mediation with the intent to minimize litigation costs.

The Company is involved in various claims and lawsuits arising in the normal course of business.

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The following tables summarize segment information (in $000's):

For the Three Months Ended December 31,

For the Three Months Ended March 31, For the Six Months Ended March 31,

2024 2023 2024 2023

Retail-Entertainment $ 16,842 $ 19,188 $ 37,428 $ 42,461

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements