LIVE VENTURES Inc

Previous wording

For a description of our significant accounting policies and an understanding of the significant factors that influenced our performance during the three months ended December 31, 2025, this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (hereafter referred to as “MD&A”) should be read in conjunction with the condensed consolidated financial statements, including the related notes, appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (the “2025 Form 10-K”).

Current wording

For a description of our significant accounting policies and an understanding of the significant factors that influenced our performance during the three and six months ended March 31, 2026, this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (hereafter referred to as “MD&A”) should be read in conjunction with the condensed consolidated financial statements, including the related notes, appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (the “2025 Form 10-K”).

Previous wording

Our principal offices are located at 8548 Rozita Lee Ave., Suite 305, Las Vegas, Nevada 89113, our telephone number is (702) 939-0231, and our corporate website (which does not form part of this Quarterly Report on Form 10-Q) is located at www.liveventures.com. Our common stock trades on the Nasdaq Capital Market under the symbol “LIVE”.

Current wording

Our principal offices are located at 8548 Rozita Lee Ave., Suite 305, Las Vegas, Nevada 89113, our telephone number is (702) 997-5968, and our corporate website (which does not form part of this Quarterly Report on Form 10-Q) is located at www.liveventures.com. Our common stock trades on the Nasdaq Capital Market under the symbol “LIVE”.

Previous wording

Flooring Liquidators is a leading retailer and installer of flooring, carpeting, and countertops to consumers, builders, and contractors in California and Nevada, operating 25 warehouse-format stores and a design center. Over the years, the company has established a strong reputation for innovation, efficiency, and service in the home renovation and improvement market. Flooring Liquidators serves retail and builder customers through two businesses: retail customers through its Flooring Liquidators retail stores, and builder and contractor customers through Elite Builder Services, Inc.

Current wording

Flooring Liquidators is a leading retailer and installer of flooring, carpeting, and countertops to consumers, builders, and contractors in California and Nevada, operating 28 warehouse-format stores and a design center. Over the years, the company has established a strong reputation for innovation, efficiency, and service in the home renovation and improvement market. Flooring Liquidators serves retail and builder customers through two businesses: retail customers through its Flooring Liquidators retail stores, and builder and contractor customers through Elite Builder Services, Inc.

Previous wording

Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Preparation of these statements requires us to make judgments and estimates. Some accounting policies have a significant and material impact on amounts reported in these financial statements. Estimates and assumptions are based on management's experience and other information available prior to the issuance of our financial statements. Our actual realized results may differ materially from management’s initial estimates as reported. Our critical and significant accounting policies include Trade Receivables, Inventories, Goodwill, Revenue Recognition, Fair Value Measurements, and Income Taxes. For a summary of our significant accounting policies and the means by which we develop estimates thereon, see Part II, Item 8 – Financial Statement and Supplementary Data - Notes to Consolidated Financial Statements Note 2 – Summary of Significant Accounting Policies in our 2025 Form 10-K.

Current wording

Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Preparation of these statements requires us to make judgments and estimates. Some accounting policies have a significant and material impact on amounts reported in these financial statements. Estimates and assumptions are based on management's experience and other information available prior to the issuance of our financial statements. Our actual realized results may differ materially from management’s initial estimates as reported. Our critical and significant accounting policies include Trade Receivables, Inventories, Goodwill, Revenue Recognition, Fair Value Measurements, and Income Taxes. For a summary of our significant accounting policies and the means by which we develop estimates thereon, see Part II, Item 8 – Financial Statement and Supplementary Data - Notes to Consolidated Financial Statements Note 2 – Summary of Significant Accounting Policies in our 2025 Form 10-K.

Previous wording

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

Current wording

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

Previous wording

Results of Operations Three Months Ended December 31, 2025 and 2024 (In $000’s)

Current wording

Results of Operations Three Months Ended March 31, 2026 and 2025

Previous wording

(a)See reconciliation of net income to Adjusted EBITDA below.

Current wording

(a) See reconciliation of net income to Adjusted EBITDA below.

Previous wording

General and Administrative expenses decreased by 7.4% to approximately $27.8 million for the three months ended December 31, 2025, as compared to the three months ended December 31, 2024. The decrease was driven primarily by targeted cost‑reduction initiatives in our Retail‑Flooring segment, including lower compensation expense and reduced professional fees.

Current wording

General and Administrative expenses decreased by 2.3% to approximately $27.7 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The decrease was driven primarily by targeted cost‑reduction initiatives in our Retail‑Flooring and Flooring Manufacturing segments, including lower compensation expense and reduced professional fees, partially offset by increased compensation and occupancy costs in our Retail-Entertainment segment.

Previous wording

Revenue decreased approximately $3.0 million, or 2.7%, to approximately $108.5 million for the three months ended December 31, 2025, compared to revenue of approximately $111.5 million for the three months ended December 31, 2024. The decrease primarily reflects an approximately $7.1 million decline in the Retail-Flooring and Steel Manufacturing segments, partially offset by an approximately $4.1 million aggregate increase in the Retail-Entertainment and Flooring Manufacturing segments, net of intercompany sales eliminations.

Current wording

Revenue decreased approximately $7.1 million, or 3.2%, to $211.4 million for the six months ended March 31, 2026, compared to revenue of $218.5 million in the prior-year period. Net of intercompany sales eliminations, the decrease primarily reflects a decline of approximately $12.2 million in the Retail-Flooring, Flooring Manufacturing, and Steel Manufacturing segments, partially offset by an increase of approximately $5.1 million in the Retail-Entertainment segment.

Previous wording

Sales and marketing expense decreased by 10.4% to approximately $4.1 million for the three months ended December 31, 2025, as compared to the three months ended December 31, 2024, primarily due to reduced sales and marketing activities in our Flooring Manufacturing segment.

Current wording

Sales and marketing expense decreased by 3.3% to approximately $9.0 million for the six months ended March 31, 2026, as compared to the prior-year period, primarily due to reduced sales and marketing activities in our Flooring Manufacturing segment.

Previous wording

Interest expense, net, decreased by approximately $0.6 million for the three months ended December 31, 2025 as compared to the three months ended December 31, 2024 due to lower average debt balances.

Current wording

Interest expense, net, decreased by approximately $0.6 million for the six months ended March 31, 2026 as compared to the six months ended March 31, 2025 due to lower average debt balances.

Previous wording

The Retail-Entertainment segment revenue for the quarter ended December 31, 2025, was approximately $23.6 million, an increase of approximately $2.3 million, or 11.0%, compared to approximately $21.3 million in the prior-year period. The revenue growth was driven by strong consumer demand across all product lines. Gross margin for the quarter increased to 57.5%, compared to 56.6% in the prior-year period, reflecting a shift in sales mix toward higher‑margin product lines. Operating income for the quarter ended December 31, 2025, was approximately $4.7 million compared to approximately $3.4 million in the prior-year period. Strong revenue growth and disciplined management of general and administrative expenses have driven the continued improvement in operating results.

Current wording

Retail-Entertainment segment revenue for the quarter ended March 31, 2026 was $21.2 million, an increase of approximately $2.7 million, or 14.8%, compared to $18.5 million in the prior-year period. The revenue growth was driven by strong consumer demand across all product lines. Gross margin for the quarter decreased to 57.9%, from 59.1% in the prior-year period, reflecting a shift in the sales mix toward new products, which typically have lower margins. Operating income for the quarter ended March 31, 2026 was $3.3 million compared to y $2.5 million in the prior-year period. Strong revenue growth and disciplined management of general and administrative expenses drove the improvement in operating results.

Previous wording

The Flooring Manufacturing segment revenue for the quarter ended December 31, 2025, was approximately $28.9 million, a decrease of approximately $0.3 million, or 1.1%, compared to approximately $29.2 million in the prior-year period. The decrease in revenue was primarily due to lower sales to the Retail-Flooring segment. Net of intercompany sales eliminations, revenue increased approximately $2.0 million compared to the prior-year period. Gross margin for the quarter increased to 25.0%, compared to 21.4% for the prior-year period. The increase in gross margin is primarily due to a change in product mix toward carpet, which typically has higher gross margins, combined with improved operational efficiencies. Operating income for the quarter ended December 31, 2025, was approximately $2.3 million, compared to an operating income of approximately $0.7 million for the prior-year period. The increase in operating income was primarily due to improved gross margins and lower operating expenses resulting from cost-reduction initiatives.

Current wording

Flooring Manufacturing segment revenue for the quarter ended March 31, 2026 was $30.3 million, a decrease of approximately $1.0 million, or 3.2%, compared to $31.3 million in the prior-year period. The decline was primarily attributable to reduced demand in the new-home construction and home-refurbishment markets. Net of intercompany eliminations, revenue decreased approximately $0.6 million compared to the prior-year period. Gross margin for the quarter increased to 26.9%, compared to 26.5% in the prior-year period. The increase in gross margin was primarily due to improved manufacturing efficiency. Operating income for the quarter ended March 31, 2026 was $2.0 million, compared to $1.6 million for the prior-year period. The increase in operating income was primarily due to improved gross margins and lower operating expenses resulting from cost-reduction initiatives.

Previous wording

The Corporate and Other segment operating loss was approximately $1.2 million and $1.6 million for the quarters ended December 31, 2025, and 2024, respectively. The decrease in operating loss is primarily due to a reduction in corporate expenses, including compensation and professional fees.

Current wording

Corporate and Other segment operating loss was $0.9 million and $1.3 million for the quarters ended March 31, 2026, and 2025, respectively. The reduction in operating loss was primarily attributable to lower corporate expenses, including compensation and professional fees.

Previous wording

Retail Flooring segment revenue for the quarter ended December 31, 2025, was approximately $25.3 million, representing a decrease of approximately $6.4 million, or 20.2%, compared to approximately $31.7 million in the prior-year period. The decrease in revenue is primarily due to changes in store locations from the prior-year period, including two store closures and three new store openings late in the fiscal first quarter of 2026 that had not yet materially contributed to revenue, as well as continued softness in the housing market. Gross margin for the quarter was 31.7%, compared to 37.2% in the prior-year period. The decrease in gross margin is primarily due to a greater mix of aged inventory sold during the seasonally slower period and a less favorable overall product mix. Operating loss for the quarter ended December 31, 2025, was approximately $3.7 million, compared to an operating loss of approximately $2.2 million in the prior-year period. The increased loss was driven mainly by lower revenue and gross margin, partially offset by reduced operating expenses resulting from cost-reduction initiatives implemented in fiscal year 2025.

Current wording

Retail Flooring segment revenue for the six months ended March 31, 2026 was $45.5 million, a decrease of approximately $13.6 million, or 23.0%, compared to $59.1 million in the prior-year period. The decline was primarily driven by lower retail and contractor sales due to the continued headwinds in the new-home construction and home-refurbishment markets. Gross margin for the six months ended March 31, 2026 was 33.1%, compared to 35.9% in the prior-year period. The decrease in gross margin was primarily due to a less favorable overall product mix. Operating loss for the six months ended March 31, 2026 was $8.3 million, compared to an operating loss of $4.9 million in the prior-year period. The increase in operating loss was driven mainly by lower revenue and gross margin, partially offset by reduced operating expenses resulting from cost-reduction initiatives implemented during fiscal year 2025.

Previous wording

The following table presents a reconciliation of net income to Adjusted EBITDA for the three months ended December 31, 2025 and 2024 (in $000’s):

Current wording

The following table presents a reconciliation of net income to Adjusted EBITDA for the three and six months ended March 31, 2026 and 2025 (in 000's):

Previous wording

As of December 31, 2025, we had total cash on hand of approximately $15.1 million and approximately $23.6 million of available borrowing under our revolving credit facilities. As we continue to pursue acquisitions and other strategic transactions to expand and grow our business, we regularly monitor capital market conditions and may raise additional funds through borrowings or public or private sales of debt or equity securities. The amount, nature, and timing of any borrowings or sales of debt or equity securities will depend on our operating performance and other circumstances; our then-current commitments and obligations; the amount, nature and timing of our capital requirements; any limitations imposed by our current credit arrangements; and overall market conditions.

Current wording

As of March 31, 2026, we had total cash on hand of approximately $15.2 million and approximately $24.6 million of available borrowing under our revolving credit facilities. As we continue to pursue acquisitions and other strategic transactions to expand and grow our business, we regularly monitor capital market conditions and may raise additional funds through borrowings or public or private sales of debt or equity securities. The amount, nature, and timing of any borrowings or sales of debt or equity securities will depend on our operating performance and other circumstances; our then-current commitments and obligations; the amount, nature and timing of our capital requirements; any limitations imposed by our current credit arrangements; and overall market conditions.

Previous wording

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

Current wording

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

Previous wording

We had working capital of approximately $69.1 million as of December 31, 2025, compared to working capital of approximately $62.1 million as of September 30, 2025, an increase of approximately $7.0 million. The increase was primarily driven by an aggregate decrease in current liabilities of approximately $9.2 million, reflecting reductions in the current portion of long‑term debt, the current portion of lease obligations, and accrued liabilities, as well as an increase in accounts payable. These changes were partially offset by an aggregate decrease in current assets of approximately $2.2 million, driven by decreases in trade receivables and inventories.

Current wording

We had working capital of approximately $74.4 million as of March 31, 2026, as compared to working capital of approximately $62.1 million as of September 30, 2025; an increase of approximately $12.3 million. The increase was primarily driven by an aggregate decrease in current liabilities of approximately $6.0 million, reflecting reductions in the current portion of long‑term debt and income taxes payable. These changes were partially offset by an aggregate increase in current assets of approximately $6.3 million, driven by increases in cash and inventories.

Previous wording

Our cash flows used in investing activities of approximately $1.3 million for the three months ended December 31, 2025, and approximately $1.8 million for the three months ended December 31, 2024, consisted of the purchases of property and equipment.

Current wording

Our cash flows used in investing activities of approximately $3.3 million for the six months ended March 31, 2026 consisted of purchases of property and equipment. Our cash flows used in investing activities of approximately $4.3 million for the six months ended March 31, 2025 consisted of the acquisitions of CRO by Flooring Liquidators, and Johnson by CRO, and purchases of property and equipment.

Previous wording

Our cash flows used in financing activities of approximately $2.2 million during the three months ended December 31, 2025 consisted of payments on notes payable of approximately $6.6 million, net borrowings under revolver loans of approximately $3.9 million, payments for finance leases of approximately $1.1 million, payments for debt issuance costs of approximately $0.7 million, and payments on seller notes of approximately $70,000, partially offset by proceeds from the issuance of notes payable of approximately $9.8 million, and net borrowings under related party revolver loans of approximately $0.4 million.

Current wording

Our cash flows provided by financing activities of approximately $2.5 million during the six months ended March 31, 2026 consisted of proceeds from the issuance of notes payable of approximately $9.8 million and net borrowings under revolver loans, partially offset by payments on notes payable of approximately $8.3 million, payments for finance leases of approximately $2.1 million, payments for debt issuance costs of approximately $0.9 million, and payments on related party seller notes of approximately $140,000.

Previous wording

Our cash flows used in financing activities of approximately $4.8 million during the three months ended December 31, 2024 consisted of net borrowings under revolver loans of approximately $3.1 million, cash paid for the settlement of seller notes of $1.9 million, payments on notes payable of approximately $1.8 million, payments for finance leases of approximately $1.0 million, payments on related party notes payable of approximately $0.3 million, and purchases of treasury stock of approximately $0.2 million, partially offset by proceeds from the issuance of related party notes payable of approximately $1.9 million, and net borrowings under related party revolver loans of approximately $1.6 million.

Current wording

Our cash flows used in financing activities of approximately $3.0 million during the six months ended March 31, 2025 consisted of payments on notes payable of approximately $3.4 million, payments for finance leases of approximately $2.0 million, cash paid for the settlement of seller notes of approximately $1.9 million, net borrowings under revolver loans of approximately $1.3 million, payments of related party notes payable of $0.6 million, and purchases of treasury stock of approximately $0.4 million, partially offset by net borrowings under related party revolver loans of approximately $4.3 million, proceeds from the issuance related party notes payable of approximately $1.9 million, and proceeds from the issuance of notes payable of approximately $0.5 million.