The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 2016 AND
2015
Note 1: Organization and Basis of Presentation
The accompanying consolidated financial
statements include the accounts of Live Ventures, Incorporated, a Nevada corporation, and its subsidiaries (collectively the “Company”).
The Company is a holding company for diversified businesses. The Company promoted online marketing solutions to small and medium
businesses to help them boost customer awareness, gain visibility and manage their online presence. The Company also offered affordable
acquisition services to the small businesses through the Instant Agency suite of products and services. The Company continues to
actively develop, revise and evaluate its products, services and its marketing strategies in its businesses. Under the Live Ventures
brand the Company seeks opportunities to acquire profitable and well-managed companies. The Company believes that with the proper
positioning and its investment capital these companies can become very profitable. W
ith its
recent acquisition of Marquis Industries, Inc., the Company became engaged in the manufacture and sale of carpet and the sale of
vinyl and wood floorcoverings.
Effective October 7, 2015, the Company
changed its corporate name from LiveDeal, Inc. to Live Ventures, Incorporated.
The accompanying unaudited Condensed Consolidated
Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles
(“GAAP”) for audited financial statements. In the opinion of the Company’s management, this interim information
includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for
the interim periods. The results of operations for the six months ended March 31, 2016 are not necessarily indicative of the results
to be expected for the fiscal year ending September 30, 2016. The accompanying note disclosures related to the interim financial
information included herein are also unaudited. This financial information should be read in conjunction with the consolidated
financial statements and related notes thereto as of September 30, 2015 and for the fiscal year then ended included in the Company’s
Annual Report on Form 10-K filed with the SEC on January 13, 2016.
The preparation of financial statements in
accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities
at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Significant
estimates and assumptions have been made by management throughout the preparation of the condensed consolidated financial statements,
including in conjunction with establishing allowances for customer refunds, non-paying customers, dilution and fees, analyzing
the recoverability of the carrying amount of intangible assets, evaluating the merits of pending litigation, estimating forfeitures
of stock-based compensation, valuing beneficial conversion features in convertible debt, and evaluating the recoverability of deferred
tax assets. Actual results could differ from these estimates.
All data for common stock, options and warrants
have been adjusted to reflect the 3-for-1 forward stock split (which took effect on February 11, 2014) for all periods presented.
In addition, all common stock prices, and per share data for all periods presented have been adjusted to reflect the 3-for-1 forward
stock split.
Note 2: Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements
represent the consolidated financial position and results of operations of the Company and its subsidiaries as follows:
|
|
Percentage
|
|
|
Company
|
|
Owned
|
|
Parent
|
|
|
|
|
|
Telco Billing, Inc.
|
|
100%
|
|
Live Ventures Incorporated
|
Velocity Marketing Concepts, Inc.
|
|
100%
|
|
Live Ventures Incorporated
|
Velocity Local, Inc.
|
|
100%
|
|
Live Ventures Incorporated
|
Modern Everyday, Inc.
|
|
100%
|
|
Live Ventures Incorporated
|
Modern Everyday, LLC
|
|
100%
|
|
Modern Everyday, Inc.
|
Super Nova, LLC
|
|
100%
|
|
Modern Everyday, Inc.
|
Live Goods, LLC
|
|
100%
|
|
Live Ventures Incorporated
|
Marquis Affiliated Holdings, LLC*
|
|
100%
|
|
Live Ventures Incorporated
|
Marquis Industries, Inc.
|
|
100%
|
|
Marquis Affiliated Holdings, LLC
|
A-O Industries, LLC
|
|
100%
|
|
Marquis Industries, Inc.
|
Astro Carpet Mills, LLC
|
|
100%
|
|
Marquis Industries, Inc.
|
Constellation Industries, LLC
|
|
100%
|
|
Marquis Industries, Inc.
|
S F Commercial Properties, LLC
|
|
100%
|
|
Marquis Industries, Inc.
|
The results of operations for Marquis Industries,
Inc. have only been included since the date of acquisition of July 6, 2015. All intercompany transactions and balances have been
eliminated in consolidation.
* Effective November 30, 2015, the Company
acquired the remaining 20% interest.
Noncontrolling Interest
On July 6, 2015, the Company, through
MAH, acquired 80% interest in Marquis Industries, Inc. The transaction was accounted for under the acquisition method of accounting,
with the purchase price allocated based on the fair value of the individual assets acquired and liabilities assumed.
The Company follows Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, “
Consolidation
,”
which governs the accounting for and reporting of noncontrolling interests (“NCIs”) in partially owned consolidated
subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs
be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership
interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses,
and that losses of a partially owned consolidated subsidiary be allocated to the NCI even when such allocation might result in
a deficit balance. This standard also required changes to certain presentation and disclosure requirements.
The net income attributed to the
NCI is separately designated in the accompanying consolidated statements of operations. Losses attributable to the NCI in a subsidiary
may exceed the NCI’s interests in the subsidiary’s equity. The excess attributable to the NCI is attributed to those
interests. The NCI shall continue to attribute its share of losses even if that attribution results in a deficit NCI balance.
Effective November 30, 2015, the
Company purchased the remaining 20% interest in Marquis for $2,000,000. In accordance with ASC 810, the excess of the noncontrolling
interest at November 30, 2015 over the $2,000,000 purchase price of $78,038 has been recorded directly to additional paid in capital.
Inventories
Inventories are valued at the lower
of the inventory’s cost (first in, first out basis) or the current market price of the inventory. Management compares the
cost of inventory with its market value and an allowance is made to write down inventory to market value, if lower. At March 31,
2016 and September 30, 2015, the allowance for obsolete inventory was $334,028 and $402,278, respectively.
Revenue Recognition
Directory Services
Revenue is billed and recognized monthly for services subscribed
in that specific month. The Company has historically utilized outside billing companies to perform billing services through direct
ACH withdrawals.
For billings via ACH withdrawals, revenue is recognized when such billings are accepted. For billings via LECs,
the Company recognizes revenue based on net billings accepted by the LECs. Due to the periods of time for which adjustments may
be reported by the LECs and the billing companies, the Company estimates and accrues for dilution and fees reported subsequent
to year-end for initial billings related to services provided for periods within the fiscal year. Such dilution and fees are reported
in cost of services in the accompanying consolidated statements of operations. Customer refunds are recorded as an offset to gross
revenue.
Revenue for billings to certain customers that
are billed directly by the Company and not through the outside billing companies is recognized based on estimated future collections
which is reasonably assured. The Company continuously reviews this estimate for reasonableness based on its collection experience.
Deals Revenue
The Company recognizes revenue from its sales
through its strategic publishing partners of discounted goods and services offered by its merchant clients (“Deals”)
when the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the selling price is
fixed or determinable; and collectability is reasonably assured. These criteria are met when the number of customers who purchase
the daily deal exceeds the predetermined threshold, where, if applicable, the Deal has been electronically delivered to the purchaser
and a listing of Deals sold has been made available to the merchant. At that time, the Company's obligations to the merchant, for
which it is serving as an agent, are substantially complete. The Company's remaining obligations, which are limited to remitting
payment to the merchant, are inconsequential or perfunctory. The Company records as revenue an amount equal to the net amount it
retains from the sale of Deals after paying an agreed upon percentage of the purchase price to the featured merchant excluding
any applicable taxes. Revenue is recorded on a net basis because the Company is acting as an agent of the merchant in the transaction.
Deferred Revenue
In some instances, the Company receives payments
in advance of rendering services, whereupon such revenues are deferred until the related services are rendered. There is no deferred
revenue as of March 31, 2016 and September 30, 2015.
Product Revenue
The Company derives product revenue primarily
from direct revenue and fulfillment partner revenue from product sales. Product revenue is recognized when the following revenue
recognition criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or the service
has been provided; (3) the selling price or fee revenue earned is fixed or determinable; and (4) collection of the resulting
receivable is reasonably assured.
The Company evaluates the criteria outlined
in ASC Topic 605-45,
Principal Agent Considerations
, in determining whether it is appropriate to record the gross amount
of product sales and related costs or the net amount earned as commissions. When the Company is the primary obligor in a transaction,
is subject to inventory risk, has latitude in establishing prices and selecting suppliers, or has several but not all of these
indicators, revenue is recorded gross. If we are not the primary obligor in the transaction and amounts earned are determined using
a fixed percentage, revenue is recorded on a net basis. Currently, all direct revenue and fulfillment partner revenue is recorded
on a gross basis, as the Company is the primary obligor. The Company presents revenue net of sales taxes.
Manufacturing Revenue
Revenues from
the sale of carpet products, including shipping and handling amounts, are recognized when the following criteria are met: there
is persuasive evidence that a sales agreement exists, delivery has occurred or services have been rendered, the price to the buyer
is fixed or determinable, and collectability is reasonably assured. Delivery is not considered to have occurred until the customer
takes title to the goods and assumes the risks and rewards of ownership, which is generally on the date of shipment. At the time
revenue is recognized, the Company records a provision for the estimated amount of future returns based primarily on historical
experience and any known trends or conditions that exist at the time revenue is recognized. Revenues are recorded net of taxes
collected from customers.
Income Taxes
Income taxes are accounted for using the asset
and liability method. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences
attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance
would be provided for those deferred tax assets for which if it is more likely than not that the related benefit will not be realized.
The Company classifies tax-related penalties and interest as a component of income tax expense for financial statement presentation.
For the period from October 1, 2015 to November 30, 2015, Marquis Industries, Inc. and subsidiaries is required to file a separate
income tax return, and therefore, the income generated by these subsidiaries cannot be offset against the Company’s net operating
losses.
Segment Reporting
ASC Topic 280, “Segment Reporting,”
requires use of the “management approach” model for segment reporting. The management approach model is based on the
way a company’s management organizes segments within the company for making operating decisions and assessing performance. The
Company determined it has three reportable segments (See Note 15).
Derivative Financial Instruments
The Company evaluates all of its agreements
to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial
instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then
re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based
derivative financial instruments, the Company uses a weighted average Black-Scholes-Merton option pricing model to value the derivative
instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such
instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument
liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative
instrument could be required within 12 months of the balance sheet date. As of March 31, 2016 and September 30, 2015, the
Company had no financial instruments with derivative feature.
Recently Issued Accounting Pronouncements
No accounting standards or interpretations issued recently are expected
to a have a material impact on our consolidated financial position, operations or cash flows.
Note 3: Balance Sheet Information
Balance sheet information is as follows:
|
|
March 31,
|
|
|
September 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Receivables, current, net:
|
|
|
|
|
|
|
|
|
Accounts receivable, current
|
|
$
|
10,149,401
|
|
|
$
|
9,007,127
|
|
Less: Allowance for doubtful accounts
|
|
|
(760,809
|
)
|
|
|
(763,135
|
)
|
|
|
$
|
9,388,592
|
|
|
$
|
8,243,992
|
|
Receivables, long term, net:
|
|
|
|
|
|
|
|
|
Accounts receivable, long term
|
|
$
|
344,572
|
|
|
$
|
344,572
|
|
Less: Allowance for doubtful accounts
|
|
|
(344,572
|
)
|
|
|
(344,572
|
)
|
|
|
$
|
–
|
|
|
$
|
–
|
|
Total receivables, net:
|
|
|
|
|
|
|
|
|
Gross receivables
|
|
$
|
10,493,973
|
|
|
$
|
9,351,699
|
|
Less: Allowance for doubtful accounts
|
|
|
(1,105,381
|
)
|
|
|
(1,107,707
|
)
|
|
|
$
|
9,388,592
|
|
|
$
|
8,243,992
|
|
|
|
|
|
|
|
|
|
|
Components of allowance for doubtful accounts are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for dilution and fees on amounts due from billing aggregators
|
|
$
|
1,063,618
|
|
|
$
|
1,063,617
|
|
Allowance for customer refunds
|
|
|
1,508
|
|
|
|
1,715
|
|
Allowance for other trade receivables
|
|
|
40,255
|
|
|
|
42,375
|
|
|
|
$
|
1,105,381
|
|
|
$
|
1,107,707
|
|
|
|
|
|
|
|
|
|
|
Inventory
|
|
|
|
|
|
|
|
|
Raw materials
|
|
$
|
6,801,295
|
|
|
$
|
6,715,298
|
|
Work in progress
|
|
|
768,179
|
|
|
|
836,837
|
|
Finished goods
|
|
|
5,219,555
|
|
|
|
6,185,741
|
|
|
|
|
12,789,029
|
|
|
|
13,737,876
|
|
Less: Obsolescence reserve
|
|
|
(334,028
|
)
|
|
|
(402,278
|
)
|
|
|
$
|
12,455,001
|
|
|
$
|
13,335,598
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net:
|
|
|
|
|
|
|
|
|
Land and improvements
|
|
$
|
688,000
|
|
|
$
|
687,999
|
|
Building and improvements
|
|
|
4,202,000
|
|
|
|
4,202,000
|
|
Transportation equipment
|
|
|
77,419
|
|
|
|
77,419
|
|
Machinery and equipment
|
|
|
7,764,360
|
|
|
|
7,676,561
|
|
Furnishings and fixtures
|
|
|
211,700
|
|
|
|
211,701
|
|
Office, computer equipment and other
|
|
|
250,079
|
|
|
|
244,674
|
|
|
|
|
13,193,558
|
|
|
|
13,100,354
|
|
Less: Accumulated depreciation
|
|
|
(1,533,610
|
)
|
|
|
(618,453
|
)
|
|
|
$
|
11,659,948
|
|
|
$
|
12,481,901
|
|
|
|
|
|
|
|
|
|
|
Intangible assets, net:
|
|
|
|
|
|
|
|
|
Domain name and marketing related intangibles
|
|
$
|
18,957
|
|
|
$
|
18,957
|
|
Website and technology related intangibles
|
|
|
25,300
|
|
|
|
25,300
|
|
Purchased software
|
|
|
1,500,000
|
|
|
|
1,500,000
|
|
|
|
|
1,544,257
|
|
|
|
1,544,257
|
|
Less: Accumulated amortization
|
|
|
(143,188
|
)
|
|
|
(27,327
|
)
|
|
|
$
|
1,401,069
|
|
|
$
|
1,516,930
|
|
|
|
|
|
|
|
|
|
|
Accrued liabilities:
|
|
|
|
|
|
|
|
|
Accrued payroll and bonuses
|
|
$
|
713,778
|
|
|
$
|
731,782
|
|
Deferred revenue
|
|
|
243,082
|
|
|
|
243,082
|
|
Accrued software costs
|
|
|
1,500,000
|
|
|
|
1,500,000
|
|
Accrued expenses - other
|
|
|
879,567
|
|
|
|
1,186,085
|
|
|
|
$
|
3,336,427
|
|
|
$
|
3,660,949
|
|
Note 4: Intangible Assets
During the year ended September 30, 2015, the
Company purchased software for $1,500,000. This software is being amortized over 84 months which is the term that the software
is expected to produce revenue. The Company has the option to pay for the software in cash or in 800,000 shares of the Company’s
common stock. The Company has until June 30, 2016 to pay for the software either in cash or common stock. At March 31, 2016, the
Company had not made any payments towards the purchase of this software and has reflected the $1,500,000 purchase price for the
software in accrued liabilities in the accompanying condensed consolidated balance sheet.
The following summarizes estimated future amortization
expense related to intangible assets for the twelve month periods ending March 31:
2017
|
|
$
|
222,971
|
|
2018
|
|
|
215,504
|
|
2019
|
|
|
214,286
|
|
2020
|
|
|
214,286
|
|
2021
|
|
|
214,286
|
|
Thereafter
|
|
|
319,736
|
|
|
|
$
|
1,401,069
|
|
Total amortization expense related to intangible
assets was $115,861 and $299,423 for the six months ended March 31, 2016 and 2015, respectively.
Note 5: Notes Payable
Revolver Loan and Term Loan
In connection with the purchase of Marquis
Industries Inc., the Company entered into an agreement with Bank of America for a Term and Revolving Loan for approximately $7.8
million for the term component and approximately $15 million for the revolving component. As part of the Bank of America Revolving
Loan, Marquis Industries may borrow up to $15 million (based on eligibility).
The Bank of America term loan bears interest at a variable rate
based on a base rate plus a margin. The current base rate is the greater of (a) Bank of America prime rate, (b) the current federal
funds rate plus 0.50%, or (c) 30-day LIBOR plus 1.00% plus the margin, which varies, depending on the fixed coverage ratio table
below. Levels I – IV which determine the interest rate to be charge is based on the fixed charge coverage ratio.
Fixed Coverage Ratio Table
Level
|
Fixed Charge
Coverage Ratio
|
Base Rate
Revolver Loan
|
LIBOR
Revolver Loans
|
Base Rate Term
Loans
|
LIBOR Term
Loans
|
I
|
>2.00 to 1.00
|
0.50%
|
1.50%
|
0.75%
|
1.75%
|
II
|
<
2.00 to 1.00 but >1.50 to 1.00
|
0.75%
|
1.75%
|
1.00%
|
2.00%
|
III
|
<
1.50 to
1.00 but >1.20 to 1.00
|
1.00%
|
2.00%
|
1.25%
|
2.25%
|
IV
|
<
1.2 to 1.00
|
1.25%
|
2.25%
|
1.50%
|
2.5%
|
The loans are cross-collateralized
with substantially all real and personal property of Marquis Industries, Inc. As of March 31, 2016, the Company was at Level II
with the fixed coverage ratio.
Monthly payments to Bank of America are approximately $79,000 plus
accrued interest. The term component is due and payable in July 2020, which is when the revolving component terminates.
The loans contain certain covenants that require, among other things,
for the Company to maintain a fixed charge coverage ratio of at least 1.05 to 1. Since the loan was obtained on July 6, 2015, the
Company still has until July 5, 2016 to be in compliance with this ratio.
ICG Convertible Note Transaction
On January 23, 2014, the Company issued a note
to Isaac Capital Group (“ICG”), a related party, in the principal amount of $500,000. Because the conversion price
of $2.29 was less than the stock price, this gave rise to a beneficial conversion feature valued at $500,000. The Company recognized
this beneficial conversion feature as a debt discount and additional paid in capital. The debt discount is being amortized over
the one year term. On December 3, 2014, ICG converted the note into 674,370 shares of common stock, therefore the remaining debt
discount of $158,219 was written off and recognized as interest expense. In addition, upon the conversion of note, the Company
issued to ICG a warrant to acquire 674,370 additional shares of the Company’s common stock at an exercise price of $0.95
per share. The fair value of the warrants issued in connection with the conversion of note was $1,853,473 and was immediately recognized
as interest expense.
Kingston Convertible Note Transaction
($10 Million Line of Credit)
On January 7, 2014, the Company entered into
a Note Purchase Agreement (the “Kingston Purchase Agreement”) with Kingston Diversified Holdings LLC (“Kingston”),
pursuant to which the Investor agreed to purchase for cash up to $5,000,000 in aggregate principal amount of the Company’s
Convertible Notes (“Notes”). The Kingston Purchase Agreement and the Notes, which are unsecured, provide that all amounts
payable by the Company to Kingston under the Notes will be due and payable on the second (2nd) anniversary of the date of the Kingston
Purchase Agreement (the “Maturity Date”). The Kingston Purchase Agreement provides for a 5% discount to the note amount,
interest at 8% per annum and convertible into shares of the Company’s common stock equal to 70% of the lesser of: (i) the
closing bid price of the common stock on the date of the Kingston Purchase Agreement (i.e., $3.12 per share); or (ii) the 10-day
volume weighted average closing bid price for the common stock, as listed on NASDAQ for the 10 business days immediately preceding
the date of conversion (the “Average Price”); provided, however, that in no event will the Average Price per share
be less than $0.33.
On October 29, 2014, the Company entered into
an amended convertible note purchase agreement with Kingston whereby the Company and Kinston agreed to (i) i
ncrease
the maximum principal amount of the notes from $5 million to $10 million in principal amount, (ii) eliminate the original issue
discount provision of the agreement and replaces it with an execution payment equal to 5% of the maximum loan amount, and (iii)
provides certain additional adjustments to the note conversion price.
On October 16, 2014, the Company issued a Note
to Kingston in the principal amount of $100,000. Because the conversion price of $0.79 was less than the stock price on the date
of issuance, this gave rise to a beneficial conversion feature valued at $100,000. The Company recognized this beneficial conversion
feature as a debt discount and additional paid in capital. The debt discount is being amortized over the one year term. On November
17, 2014, Kingston converted the note into 127,008 shares of common stock, therefore the debt discount of $100,000 was written
off and recognized as interest expense.
In addition, as a result of the October 29,
2014 amendment, the Company was required to issue to Kingston, the
original issue discount payment
equal to 5% of the maximum loan in shares of the Company’s common stock based upon the conversion price of the first conversion
which was $0.79 per shares. The Company issued 630,252 shares of common stock that had a fair value of $2,004,202 which
was immediately recognized as interest expense.
Credit line
In connection with the purchase of Modern Everyday,
Inc., the Company assumed a credit line from a bank. The credit line is collateralized by all the assets of Modern Everyday, Inc.,
accrues interest at prime plus 2% and is due on January 1, 2024.
Notes payable as of March 31, 2016 and September
30, 2015 consisted of the following:
|
|
March 31,
|
|
|
September 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Base Rate Revolver Loan- interest rate based on prime rate adjusted for fixed coverage ratio (table above), maturity date July 6, 2020
|
|
$
|
8,042,995
|
|
|
$
|
7,225,745
|
|
Base Rate Term Loan- interest rate based on prime rate adjusted for fixed coverage ratio (table above) fixed coverage ratio, maturity date July 6, 2020
|
|
|
7,150,766
|
|
|
|
7,628,438
|
|
Note payable to individual, payable on demand, interest at 10.0% per annum, unsecured
|
|
|
97,044
|
|
|
|
92,441
|
|
Acquisition note payable, $200,000 due February 28, 2015
and $400,000 due February 28, 2016, non-interest bearing with interest imputed at 2.87% per annum (1)
|
|
|
400,000
|
|
|
|
395,251
|
|
Credit line due January 1, 2024, with interest rate of 2.75%
|
|
|
658,405
|
|
|
|
669,351
|
|
Total Debt
|
|
|
16,349,210
|
|
|
|
16,011,226
|
|
Current portion
|
|
|
1,452,388
|
|
|
|
1,443,036
|
|
Long-term portion
|
|
$
|
14,896,822
|
|
|
$
|
14,568,190
|
|
(1) per an agreement with the noteholder, $350,000
was paid on May 11, 2016 and the remaining balance of $50,000 will be paid on September 6, 2016.
Note 6: Note Payable, Related Party
In connection with the purchase of Marquis Industries Inc., the
Company entered into a mezzanine loan in an amount of up to $7,000,000 provided by Isaac Capital Fund, a private lender whose managing
member is Jon Isaac, the chief executive officer of the Company.
The Isaac Capital Fund mezzanine loan bears interest at 12.5% with
payment obligations of interest each month and all principal due in January 2021 (six months after the final payments are due under
the Bank of America Term and Revolving Loan). As of March 31, 2016 and September 30, 2015, there was $5,650,259 and $6,495,825,
respectively, outstanding on this mezzanine loan.
Note 7: Equity
Common Stock
During the six months ended March 31, 2016,
the Company issued:
|
·
|
9,693 shares of common stock for services rendered valued at $15,000. The value was based on
the market value of the Company’s common stock on the date of issuance.
|
During the six months ended March 31, 2015,
the Company issued:
|
·
|
29,927 shares of common stock for services rendered valued at $89,627.
The value was based on the market value of the Company’s common stock on the date of issuance;
|
|
·
|
155,000 shares of common stock for net
cash proceeds of $538,441;
|
|
·
|
801,378 share of common stock for the
conversion of convertible notes and accrued interest of $635,756;
|
|
·
|
630,252 shares of common stock as payment
for the original issue discount fees associated with the Kingston agreement. The value of the shares of $2,004,202 was based on
the market value of the Company’s common stock at the date of issuance.
|
Treasury Stock
During the six months ended March 31, 2016,
the Company purchased 53,510 shares of its common stock on the open market (treasury shares) for $80,292. The Company
accounted for the purchase of these treasury shares using the cost method.
2014 Omnibus Equity Incentive Plan
On January 7, 2014, our Board of Directors
adopted the 2014 Omnibus Equity Incentive Plan (the “2014 Plan”), which authorizes the issuance of distribution equivalent
rights, incentive stock options, non-qualified stock options, performance stock, performance units, restricted ordinary shares,
restricted stock units, stock appreciation rights, tandem stock appreciation rights and unrestricted ordinary shares to our officers,
employees, directors, consultants and advisors. The Company has reserved up to 1,800,000 shares of common stock for issuance under
the 2014 Plan. As required under Nasdaq Listing Rule 5635(c), the Company included a proposal at its 2014 Annual Meeting of Stockholders,
which was held on July 11, 2014, to obtain approval of the 2014 Plan. The 2014 Plan was approved.
Series E Convertible Preferred Stock
Pursuant to a tender offer, in 2002, holders
of 13,184 shares of the Company’s common stock exchanged said shares for 127,840 shares of Series E Convertible Preferred
Stock, at the then $0.85 market value of the common stock. The shares carry a $0.30 per share liquidation preference and accrue
dividends at the rate of 5% per annum on the liquidation preference per share, payable quarterly from legally available funds.
If such funds are not available, dividends shall continue to accumulate until they can be paid from legally available funds. Holders
of the preferred shares are entitled, after two years from issuance, to convert them into common shares on a one-to-one basis
together with payment of $0.45 per converted share.
Dividends
During the six months ended March 31, 2016
and 2015, the Company accrued dividends of $959 and $960, respectively, payable to holders of Series E preferred stock. At March
31, 2016 unpaid dividends were $959.
Note 8: Warrants
The Company issued several Notes in prior periods
and converted them resulting in the issuance of warrants. The following table summarizes information about the Company’s
warrants at March 31, 2016:
|
|
Number
of Units
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Weighted Average Remaining Contractual Term (in years)
|
|
|
Intrinsic
Value
|
|
Outstanding at September 30, 2015
|
|
|
3,540,876
|
|
|
$
|
0.69
|
|
|
|
2.73
|
|
|
$
|
3,498,531
|
|
Granted
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at March 31, 2016
|
|
|
3,540,876
|
|
|
$
|
0.69
|
|
|
|
2.23
|
|
|
$
|
2,471,677
|
|
Exercisable at March 31, 2016
|
|
|
3,540,876
|
|
|
$
|
0.69
|
|
|
|
2.23
|
|
|
$
|
2,471,677
|
|
Most of the above warrants were issued in connection
with conversion of convertible notes (See Note 5). When the debt is converted and warrants are issued, the Company determines the
fair value of the warrants using the Black-Scholes model and takes a charge to interest expense at the date of issuance.
The exercise price for warrants outstanding and exercisable at March
31, 2016 is as follows:
Outstanding
|
|
|
Exercisable
|
|
|
Number of
|
|
|
|
Exercise
|
|
|
|
Number of
|
|
|
|
Exercise
|
|
|
Warrants
|
|
|
|
Price
|
|
|
|
Warrants
|
|
|
|
Price
|
|
|
1,631,886
|
|
|
$
|
0.55
|
|
|
|
1,631,886
|
|
|
$
|
0.55
|
|
|
535,716
|
|
|
|
0.56
|
|
|
|
535,716
|
|
|
|
0.56
|
|
|
371,487
|
|
|
|
0.81
|
|
|
|
371,487
|
|
|
|
0.81
|
|
|
1,001,787
|
|
|
|
0.95
|
|
|
|
1,001,787
|
|
|
|
0.95
|
|
|
3,540,876
|
|
|
|
|
|
|
|
3,540,876
|
|
|
|
|
|
Note 9: Stock Options
From time to time, the Company grants stock
options and restricted stock awards to officers, directors, employees and consultants. These awards are valued based on the grant
date fair value of the instruments, net of estimated forfeitures. The value of each award is amortized on a straight-line basis
over the requisite service period.
Stock Options
The following table summarizes stock option
activity for the six months ended March 31, 2016:
|
|
|
|
|
Weighted
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
Average
|
|
|
|
|
|
|
Number of
|
|
|
Exercise
|
|
|
Remaining
|
|
|
|
|
|
|
Shares
|
|
|
Price
|
|
|
Contractual Life
|
|
|
Intrinsic Value
|
|
Outstanding at September 30, 2015
|
|
|
1,050,000
|
|
|
$
|
1.87
|
|
|
|
4.76
|
|
|
$
|
225,750
|
|
Granted
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at March 31, 2016
|
|
|
1,050,000
|
|
|
$
|
1.87
|
|
|
|
4.26
|
|
|
$
|
125,375
|
|
Exercisable at March 31, 2016
|
|
|
675,000
|
|
|
$
|
1.73
|
|
|
|
3.76
|
|
|
$
|
125,375
|
|
The Company recognized compensation expense
of $174,855 and $48,399 during the six months ended March 31, 2016 and 2015, respectively, related to stock option awards granted
to certain employees and executives based on the grant date fair value of the awards, net of estimated forfeitures.
At March 31, 2016, the Company had $84,913
of unrecognized compensation expense (net of estimated forfeitures) associated with stock option awards which the Company expects
will be recognized through June 2017.
The exercise price for options outstanding and exercisable at March
31, 2016 is as follows:
Outstanding
|
|
|
Exercisable
|
|
Number of
|
|
|
Exercise
|
|
|
Number of
|
|
|
Exercise
|
|
Options
|
|
|
Price
|
|
|
Options
|
|
|
Price
|
|
|
187,500
|
|
|
$
|
0.83
|
|
|
|
187,500
|
|
|
$
|
0.83
|
|
|
150,000
|
|
|
|
1.25
|
|
|
|
150,000
|
|
|
|
1.25
|
|
|
187,500
|
|
|
|
1.67
|
|
|
|
37,500
|
|
|
|
1.67
|
|
|
37,500
|
|
|
|
2.08
|
|
|
|
–
|
|
|
|
2.08
|
|
|
37,500
|
|
|
|
2.50
|
|
|
|
–
|
|
|
|
2.50
|
|
|
450,000
|
|
|
|
2.53
|
|
|
|
300,000
|
|
|
|
2.53
|
|
|
1,050,000
|
|
|
|
|
|
|
|
675,000
|
|
|
|
|
|
The following table summarizes information
about the Company’s non-vested shares as of March 31, 2016:
|
|
|
|
|
Weighted-
Average
|
|
|
|
Number of
|
|
|
Grant-Date
|
|
Non-vested Shares
|
|
Shares
|
|
|
Fair Value
|
|
Nonvested at September 30, 2015
|
|
|
375,000
|
|
|
$
|
1.44
|
|
Granted
|
|
|
–
|
|
|
|
|
|
Vested
|
|
|
–
|
|
|
|
|
|
Nonvested at March 31, 2016
|
|
|
375,000
|
|
|
$
|
1.44
|
|
Note 10: Earnings (Loss) Per Share
Earnings (loss) per share is calculated using
the weighted average number of shares of common stock outstanding during the applicable period. Basic weighted average common shares
outstanding is computed using the weighted average shares outstanding during the period. Diluted earnings (loss) per share is computed
using the weighted average number of common shares outstanding and if dilutive, potential common shares outstanding during the
period. Potential common shares consist of the additional common shares issuable in respect of stock options, warrants and convertible
preferred stock. The potential dilutive effect of stock options and warrants is calculated using the treasury stock method. Preferred
stock dividends are subtracted from net loss to determine the amount available to common stockholders.
The following table presents the computation
of basic and diluted earnings (loss) per share:
|
|
Three Months Ended March 31,
|
|
|
Six Months Ended March 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributed to Live Ventures Incorporated
|
|
$
|
1,218,508
|
|
|
$
|
(1,095,220
|
)
|
|
$
|
1,394,656
|
|
|
$
|
(6,042,654
|
)
|
Less: preferred stock dividends
|
|
|
(479
|
)
|
|
|
(479
|
)
|
|
|
(959
|
)
|
|
|
(962
|
)
|
Net income (loss) applicable to common stock
|
|
$
|
1,218,029
|
|
|
$
|
(1,095,699
|
)
|
|
$
|
1,393,697
|
|
|
$
|
(6,043,616
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
16,895,709
|
|
|
|
16,045,823
|
|
|
|
16,900,429
|
|
|
|
15,573,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
$
|
0.07
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.39
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) applicable to common stock
|
|
$
|
1,218,029
|
|
|
$
|
(1,095,699
|
)
|
|
$
|
1,393,697
|
|
|
$
|
(6,043,616
|
)
|
Add: preferred stock dividends
|
|
|
479
|
|
|
|
0
|
|
|
|
959
|
|
|
|
0
|
|
Net income (loss) applicable for diluted earnings (loss) per share
|
|
$
|
1,218,508
|
|
|
$
|
(1,095,699
|
)
|
|
$
|
1,394,656
|
|
|
$
|
(6,043,616
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
16,895,709
|
|
|
|
16,045,823
|
|
|
|
16,900,429
|
|
|
|
15,573,357
|
|
Add: Options
|
|
|
97,912
|
|
|
|
0
|
|
|
|
115,106
|
|
|
|
0
|
|
Add: Warrants
|
|
|
1,833,168
|
|
|
|
0
|
|
|
|
1,955,722
|
|
|
|
0
|
|
Add: preferred stock
|
|
|
127,800
|
|
|
|
0
|
|
|
|
127,800
|
|
|
|
0
|
|
Assumed weighted average common shares outstanding
|
|
|
18,954,589
|
|
|
|
16,045,823
|
|
|
|
19,099,057
|
|
|
|
15,573,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share
|
|
$
|
0.06
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.39
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following is a list of potentially dilutive
securities outstanding (prior to dilutive effect) at the respective periods:
|
|
Three Months Ended March 31,
|
|
|
Six Months Ended March 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options to purchase shares of common stock
|
|
|
1,050,000
|
|
|
|
600,000
|
|
|
|
1,050,000
|
|
|
|
600,000
|
|
Warrants to purchase shares of common stock
|
|
|
3,540,876
|
|
|
|
3,540,876
|
|
|
|
3,540,876
|
|
|
|
3,540,876
|
|
Series E convertible preferred stock
|
|
|
127,840
|
|
|
|
127,840
|
|
|
|
127,840
|
|
|
|
127,840
|
|
Total potentially dilutive shares
|
|
|
4,718,716
|
|
|
|
4,268,716
|
|
|
|
4,718,716
|
|
|
|
4,268,716
|
|
Note 11: Income Taxes
At March 31, 2016, the Company maintained a
valuation allowance against its deferred tax assets. The Company determined that a 100% valuation allowance was necessary at March
31, 2016.
For the period from October 1, 2015 to November
30, 2015, Marquis Industries, Inc. and subsidiaries is required to file a separate income return, and therefore, the income generated
by these subsidiaries cannot be offset against the Company’s net operating losses. Income tax expense for the six months
ended March 31, 2016 for Marquis Industries, Inc. was $413,980.
Note 12:
Related Party Transactions
The Company entered into a Note Purchase Agreement
with ICG, an entity owned by Jon Isaac, the Company’s President and Chief Executive Officer and a director of the Company,
and subsequently issued a series of Subordinated Convertible Notes thereunder to ICG. In connection with these transactions, the
Company received gross proceeds of $500,000 during the year ended September 30, 2014.
Because the conversion price under ICG’s
notes was less than the fair market value of the stock on the date of issuance, the Company recognized a beneficial conversion
feature which was treated as a debt discount and amortized on a straight line basis as interest expense until the date of conversion,
at which time all remaining debt discount was recognized as interest expense. Additionally, the fair value of the warrants that
were contingently issuable to ICG upon conversion were recognized as additional interest expense.
During the six months ended March 31, 2016
and 2015, the Company recognized total interest expense of $0 and $2,018,803, respectively, associated with the ICG notes.
The Company leases a building from a related
party under long-term operating lease. The building lease from a related party is $18,562 per month and expires in July 2020.
On January 12, 2016, ICG advanced $800,000
to the Company. The advance was non-interest bearing and was repaid on January 29, 2016.
Also see Note 6 and 7.
Note 13: Commitments and Contingencies
Purchase price contingency
In connection with acquisition of Modern Everyday,
Inc., the Company issued 50,000 shares of the Company’s common stock as part of the consideration for the acquisition. The
Company has guaranteed the holder of the 50,000 shares that the value of those shares will be at least $8.00 per shares 30 months
after the acquisition date. The Company has agreed to compensate the holder, if the share price is less than $8.00 at the 30 months
anniversary of the acquisition, the difference between $8.00 and the share price at the 30 month anniversary times the number of
shares still owned by the holder. The Company reached an agreement with the holder of these shares that would not require the Company
to compensate the holder if the value of the shares was under $8.00 per share; therefore the Company removed the contingent liability
as of March 31, 2016 and recorded other income of $316,000 for the six months ended March 31, 2016.
Litigation
The Company is party to certain legal proceedings
from time to time incidental to the conduct of its business. These proceedings could result in fines, penalties, compensatory or
treble damages or non-monetary relief. The nature of legal proceedings is such that the Company cannot assure the outcome of any
particular matter, and an unfavorable ruling or development could have a materially adverse effect on our consolidated financial
position, results of operations and cash flows in the period in which a ruling or settlement occurs. However, based on information
available to the Company’s management to date, the Company’s management does not expect that the outcome of any matter
pending against us is likely to have a materially adverse effect on the Company’s consolidated financial position as of March
31, 2016, results of operations, cash flows or liquidity of the Company.
Note 14: Concentration of Credit Risk
The Company maintains cash balances at banks
in California, Nevada and Georgia. Accounts are insured by the Federal Deposit Insurance Corporation up to $250,000 per institution
as of March 31, 2016. At times, balances may exceed federally insured limits.
Note 15: Segment Reporting
The Company operates in three segments which are characterized as: (1)
legacy merchant’s services, (2) online marketplace platform and (3) manufacturing. The legacy merchants’ services consists
of directory services, the online marketplace platform consists of livedeal.com and the fiscal 2014 acquisitions of consumer products
entities and the manufacturing segment consists of the 2015 acquisition of Marquis Industries.
The following tables summarize segment information for the three
and six months ended March 31, 2016 and 2015:
|
|
Three Months Ended March 31,
|
|
|
Six Months Ended March 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketplace platform
|
|
$
|
1,135,110
|
|
|
$
|
3,879,696
|
|
|
$
|
4,776,752
|
|
|
$
|
11,476,764
|
|
Manufacturing
|
|
|
18,448,094
|
|
|
|
–
|
|
|
|
34,638,124
|
|
|
|
–
|
|
Services
|
|
|
256,719
|
|
|
|
384,283
|
|
|
|
529,481
|
|
|
|
794,267
|
|
|
|
$
|
19,839,923
|
|
|
$
|
4,263,979
|
|
|
$
|
39,944,357
|
|
|
$
|
12,271,031
|
|
Gross profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketplace platform
|
|
$
|
255,204
|
|
|
$
|
1,579,215
|
|
|
$
|
1,850,459
|
|
|
$
|
4,459,138
|
|
Manufacturing
|
|
|
5,105,793
|
|
|
|
–
|
|
|
|
9,659,467
|
|
|
|
–
|
|
Services
|
|
|
245,202
|
|
|
|
355,881
|
|
|
|
506,148
|
|
|
|
712,914
|
|
|
|
$
|
5,606,199
|
|
|
$
|
1,935,096
|
|
|
$
|
12,016,074
|
|
|
$
|
5,172,052
|
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketplace platform
|
|
$
|
(1,245,829
|
)
|
|
$
|
(1,381,317
|
)
|
|
$
|
(2,149,574
|
)
|
|
$
|
(2,539,747
|
)
|
Manufacturing
|
|
|
2,199,635
|
|
|
|
–
|
|
|
|
3,891,265
|
|
|
|
–
|
|
Services
|
|
|
244,672
|
|
|
|
291,977
|
|
|
|
504,039
|
|
|
|
582,518
|
|
|
|
$
|
1,198,478
|
|
|
$
|
(1,089,340
|
)
|
|
$
|
2,245,730
|
|
|
$
|
(1,957,229
|
)
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketplace platform
|
|
$
|
67,967
|
|
|
$
|
160,932
|
|
|
$
|
136,243
|
|
|
$
|
325,454
|
|
Manufacturing
|
|
|
447,219
|
|
|
|
–
|
|
|
|
924,775
|
|
|
|
–
|
|
Services
|
|
|
–
|
|
|
|
6,693
|
|
|
|
–
|
|
|
|
6,693
|
|
|
|
$
|
515,186
|
|
|
$
|
167,625
|
|
|
$
|
1,061,018
|
|
|
$
|
332,147
|
|
Interest Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketplace platform
|
|
$
|
44,066
|
|
|
$
|
5,314
|
|
|
$
|
110,973
|
|
|
$
|
4,196,944
|
|
Manufacturing
|
|
|
290,920
|
|
|
|
–
|
|
|
|
569,496
|
|
|
|
–
|
|
Services
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
$
|
334,986
|
|
|
$
|
5,314
|
|
|
$
|
680,469
|
|
|
$
|
4,196,944
|
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketplace platform
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
Manufacturing
|
|
|
–
|
|
|
|
–
|
|
|
|
413,980
|
|
|
|
–
|
|
Services
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
413,980
|
|
|
$
|
–
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketplace platform
|
|
$
|
(935,830
|
)
|
|
$
|
(1,387,197
|
)
|
|
$
|
(1,745,298
|
)
|
|
$
|
(6,625,172
|
)
|
Manufacturing
|
|
|
1,911,769
|
|
|
|
–
|
|
|
|
2,772,552
|
|
|
|
–
|
|
Services
|
|
|
242,569
|
|
|
|
291,977
|
|
|
|
491,596
|
|
|
|
582,518
|
|
|
|
$
|
1,218,508
|
|
|
$
|
(1,095,220
|
)
|
|
$
|
1,518,850
|
|
|
$
|
(6,042,654
|
)
|
|
|
As of
|
|
|
As of
|
|
|
|
March 31,
|
|
|
September 30,
|
|
|
|
2016
|
|
|
2015
|
|
Total Assets
|
|
|
|
|
|
|
|
|
Marketplace platform
|
|
$
|
4,152,083
|
|
|
$
|
6,811,977
|
|
Manufacturing
|
|
|
35,861,555
|
|
|
|
33,714,344
|
|
Services
|
|
|
247,714
|
|
|
|
138,035
|
|
|
|
|
40,261,352
|
|
|
|
40,664,356
|
|
Intangible assets
|
|
|
|
|
|
|
|
|
Marketplace platform
|
|
$
|
1,401,069
|
|
|
$
|
1,516,930
|
|
Manufacturing
|
|
|
800,000
|
|
|
|
800,000
|
|
Services
|
|
|
–
|
|
|
|
–
|
|
|
|
$
|
2,201,069
|
|
|
|
2,316,930
|
|
Note 16: Business Combination
On July 6 and July 7, 2015, the Company entered
into a series of agreements in connection with its indirect purchase of Marquis Industries, Inc., a Georgia corporation, and its
subsidiaries. The purchase price allocation made by the Company as disclosed in the footnotes to its audited financial statements
included in Form 10K is preliminary and subject to change. The Company has not yet completed its analysis to determine the fair
value of inventory, property and equipment and a mezzanine loan on the acquisition date. Once this analysis is complete, the Company
will adjust, if necessary, the provisional amounts assigned to inventory, property and equipment and a mezzanine loan in the accounting
period in which the analysis is completed.
The unaudited pro forma information below present
statement of operations data for the six months ended March 31, 2015 as if the acquisition of Marquis Industries took place on
October 1, 2014.
|
|
Six Months Ended
|
|
|
|
March 31
|
|
|
|
2015
|
|
|
|
(unaudited)
|
|
Net revenue
|
|
$
|
43,773,603
|
|
Gross profit
|
|
|
13,268,198
|
|
Operating income
|
|
|
1,695,997
|
|
Net loss
|
|
|
(4,632,009
|
)
|
Loss per share
|
|
|
(0.30
|
)
|