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Acquisitions | 12 Months Ended
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Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisitions | Note 4: Acquisitions Acquisition of Midwest Grinding On June 10, 2024, pursuant to an Asset Purchase Agreement, Kinetic acquired certain assets and assumed certain liabilities of Midwest Grinding, a Milwaukee grinding house dedicated to precision Blanchard and specialty surface grinding of small to extra-large capacity. Total consideration for the acquisition was $0.6 million. In connection with the acquisition, Kinetic also acquired the building being used in the business for $0.4 million. Total consideration for both the business and building acquisition was $1.0 million, paid in cash at close. The fair value of the assets acquired and liabilities assumed are based on their estimates of fair value available as of June 10, 2024, as calculated by management. The table below outlines the purchase price allocation of the purchase for Midwest Grinding to the acquired identifiable assets and liabilities assumed as of September 30, 2024 (in $000’s):
Total purchase price |  |  | $ | 1,000 |
Accounts payable |  |  | 1 |
Total consideration |  |  | 1,001 |
Accounts receivable |  |  | 152 |
Other current assets |  |  | 71 |
Property and equipment |  |  | 738 |
Intangible Assets |  |  |
Customer relationships |  | $ | 16 |  |
Trade names |  | 15 |  |
Non-compete agreement |  | 9 |  |
Intangible assets |  |  | 40 |
Total assets acquired |  |  | 1,001 |
Total goodwill |  |  | $ | — |
Acquisition of Central Steel On May 15, 2024, Precision Marshall acquired Central Steel Fabricators (“Central Steel”), a Chicago-based manufacturer of specialized fabricated metal products primarily for data centers and the communications industry. Total consideration for the acquisition was approximately $13.9 million, comprised of $10.7 million paid at closing, a seller note of $1.1 million, a holdback, originally in the amount of $0.3 million, which was reduced to approximately $0.1 million due to a working capital adjustment of approximately $0.2 million, and contingent consideration of $2.0 million paid in the form of a five-year earn-out. The consideration paid at close was funded in part by borrowings under Precision Marshall's credit facility of approximately $3.3 million, and proceeds from a sale and leaseback transaction, discussed below. The acquisition involved no issuance of stock of the Company. Simultaneous to the acquisition, the Company entered into a sales and leaseback transaction with Legacy West Partners, LLC, an unrelated party, for one of Central Steel's properties located in Broadview, Illinois. The sales price for the real property subject to the sale and leaseback transaction was approximately $8.3 million, with total proceeds received by the Company of approximately $7.9 million, net of approximately $0.4 in seller's fees. The lease agreement includes a 20-year lease term with two five-year renewal options. The base rent under the lease agreement is $58,795 per month for the first year of the term and a 2.0% per annum escalator thereafter. The lease agreement is a “net lease,” such that Central Steel is also obligated to pay all taxes, insurance, assessments, and other costs, expenses, and obligations of ownership of the real property incurred by Central Steel. Due to the highly specialized nature of the leased property, the Company currently believes it is more likely than not that each of the two five-year options will be exercised. Consequently, because the aggregate term of the lease at its conclusion will represent approximately 75% of the economic life of the building, the Company concluded that the lease is a financing transaction and a failed sale and leaseback transaction, as defined under ASC 842. The proceeds, net of closing fees, from the failed sale and leaseback transaction were used to assist in funding the acquisition of Central Steel. No gain was recognized as a result of the sale. The fair value of the purchase price components was approximately $13.9, as detailed below (in $000's):
Purchase price |  | $ | 11,758 |
Fair value of contingent consideration |  | 2,000 |
Holdback |  | 122 |
Net purchase price |  | $ | 13,880 |
Under the preliminary purchase price allocation, the Company recognized goodwill of approximately $2.9 million, which is calculated as the excess of both the consideration exchanged and liabilities assumed over the fair value of the identifiable assets acquired. The Company anticipates all of the goodwill arising from the acquisition to be fully deductible for tax purposes. The table below outlines the purchase price allocation, as revised, for the purchase of Central Steel to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):
Total purchase price |  |  | $ | 13,880 |
Accounts payable |  |  | 464 |
Accrued liabilities |  |  | 969 |
Total liabilities assumed |  |  | 1,433 |
Total purchase price plus liabilities assumed |  |  | 15,313 |
Cash |  |  | 184 |
Accounts receivable |  |  | 2,418 |
Inventory |  |  | 2,171 |
Property and equipment |  |  | 5,034 |
Intangible assets |  |  |
Trade names |  | 400 |  |
Customer relationships |  | 900 |  |
Non-compete |  | 825 |  |
Subtotal intangible assets |  |  | 2,125 |
Other assets |  |  | 475 |
Total assets acquired |  |  | 12,407 |
Total goodwill |  |  | $ | 2,906 |
Acquisition of CRO On October 13, 2023, Flooring Liquidators acquired certain assets and assumed certain liabilities of Carpet Remnant Outlet, Inc. (“CRO”), a floor covering retailer and installer serving residential and commercial customers throughout Northwest Arkansas. Total consideration for the acquisition was approximately $1.4 million and was comprised of cash at close of approximately $1.0 million, an indemnification holdback amount of $0.3 million, and additional consideration valued at $89,000. The fair value of the purchase price components was $1.4 million, as detailed below (in $000's):
Cash |  | $ | 1,034 |
Additional consideration |  | 89 |
Holdback |  | 300 |
Purchase price |  | $ | 1,423 |
Under the preliminary purchase price allocation, the Company recognized goodwill of $89,000, which is calculated as the excess of both the consideration exchanged and liabilities assumed as compared to the fair value of the identifiable assets acquired. The values assigned to the assets acquired and liabilities assumed are based on their estimates of fair value available as of October 13, 2023, as calculated by an independent third-party firm. The value of the additional consideration was calculated by management. During the year ended September 30, 2024, the Company recorded a noncash fair value adjustment related to the value of the additional consideration in the amount of approximately $336,000. The Company anticipates the $89,000 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 September 30, 2024 (in $000’s):
Total purchase price |  |  | $ | 1,423 |
Accounts payable |  |  | 770 |
Accrued liabilities |  |  | 1,298 |
Total liabilities assumed |  |  | 2,068 |
Total consideration |  |  | 3,491 |
Accounts receivable |  |  | 259 |
Inventory |  |  | 1,406 |
Property and equipment |  |  | 261 |
Intangible assets |  |  | 1,190 |
Other assets |  |  | 286 |
Total assets acquired |  |  | 3,402 |
Total goodwill |  |  | $ | 89 |
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 $0.5 million, 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 $0.3 million. The deferred consideration is payable in three $0.4 million installments due annually on the first three anniversary dates following the closing date. Each installment will accrue interest at 6.0% per annum until paid. The fair value of the purchase price components outlined above was approximately $2.0 million, as detailed below (in $000's):
Cash |  | $ | 500 |
Deferred consideration |  | 1,200 |
Earnout |  | 301 |
Purchase price |  | $ | 2,001 |
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 and liabilities assumed as of September 30, 2024 (in $000’s):
Total purchase price |  |  | $ | 2,001 |
Accounts payable |  |  | 1,017 |
Accrued liabilities |  |  | 1,141 |
Total liabilities assumed |  |  | 2,158 |
Total consideration |  |  | 4,159 |
Accounts receivable |  |  | 1,252 |
Inventory |  |  | 1,127 |
Property and equipment |  |  | 157 |
Intangible assets |  |  |
Customer relationships |  | $ | 1,301 |  |
Non-compete agreement |  | 306 |  |
Subtotal intangible assets |  |  | 1,607 |
Other assets |  |  | 16 |
Total assets acquired |  |  | 4,159 |
Total goodwill |  |  | $ | — |
On May 24, 2024, CRO entered into an asset purchase agreement with the original seller of Johnson under which the original seller agreed to purchase certain assets and assume certain obligations acquired by CRO under the original asset purchase agreement. Consequently, CRO recorded a loss on disposition of Johnson’s assets and liabilities of approximately $0.3 million, as detailed in the table below (in $000's):
Accounts payable and accrued liabilities |  |  | $ | 475 |
Earnout |  |  | 307 |
Seller note |  |  | 1,230 |
Lease liabilities |  |  | 2,703 |
Total deconsolidation of liabilities |  |  | 4,715 |
Inventory |  |  | 613 |
Property and equipment |  |  | 206 |
ROU assets |  |  | 2,692 |
Intangible assets |  |  |
Customer relationships |  | 1,224 |  |
Non-compete agreement |  | 281 |  |
Subtotal intangible assets |  |  | 1,505 |
Total deconsolidation of assets |  |  | 5,016 |
Total loss on disposition |  |  | $ | (301) |
Acquisition of Harris Flooring Group® Brands On September 20, 2023, Marquis acquired the Harris Flooring Group® brands from Q.E.P., a designer, manufacturer, and distributor of a broad range of best-in-class flooring and installation solutions for commercial and home improvement projects. Specifically, Marquis acquired the Harris Flooring Group brands, inventory, and book of business and intends to retain all sales representatives. The purchase price was $10.1 million, consisting of $3.0 million in cash at close, and the recording of a deferred payment of $5.1 million and holdback of $2.0 million. The acquisition was determined to be an asset acquisition for accounting purposes. The entirety of the purchase was allocated to inventory. Acquisition of PMW On July 20, 2023 (“Effective Date”), the Company acquired PMW, a Kentucky-based Metal Stamping and Value-Added Manufacturing Company. PMW was acquired for total consideration of approximately $28 million, comprised of a $25 million purchase price, plus closing cash, and subject to working capital adjustments, with additional consideration of up to $3 million paid in the form of an earn-out. The purchase price was funded in part by a $2.5 million seller note, borrowings under a credit facility of $14.4 million, and proceeds under a sale and leaseback transaction of approximately $8.6 million. The acquisition involved no issuance of stock of the Company. As of the Effective Date, the Company entered into a sales and leaseback transaction for two properties acquired, one located in Frankfort, Kentucky, and the other located in Louisville, Kentucky, with Legacy West Kentucky Portfolio, LLC (“Lessor”). 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 the Acquired Company 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. The base rent under the Frankfort lease agreement is $34,977 per month for the first year of the term and a 2% per annum escalator thereafter. The base rent under the Louisville lease agreement is $63,493 per month for the first year of the term and a 2% per annum escalator thereafter. Both Lease Agreements are “net leases,” such that the lessees are also obligated to pay all taxes, insurance, assessments, and other costs, expenses, and obligations of ownership of the Real Property incurred by the lessor. Due to the highly specialized nature of the leased assets, the Company currently believes it is more likely than not that each of the two five-year options will be exercised. The proceeds of $14.5 million, net of closing fees, from the sale-leaseback were used to assist in funding the acquisition of PMW. The fair value of the purchase price components outlined above was $26.8 million due to fair value adjustments for the contingent consideration, cash acquired, and working capital adjustments, as detailed below (in $000's):
Purchase price |  | $ | 25,000 |
Fair value of earnout |  | 2,675 |
Cash from balance sheet |  | 1,602 |
Working capital adjustment |  | (2,500) |
Net purchase price |  | $ | 26,777 |
Under the preliminary purchase price allocation, the Company recognized goodwill of approximately $4.7 million, which is calculated as the excess of both the consideration exchanged and liabilities assumed as compared to the fair value of the identifiable assets acquired. The values assigned to the assets acquired and liabilities assumed are based on their estimates of fair value available as of July 20, 2023, as calculated by an independent third-party firm. Because the transaction was considered a stock purchase for tax purposes, none of the goodwill arising from the acquisition will be deductible for tax purposes. During the year ended September 30, 2024, the Company recorded noncash fair value adjustments related to inventory and other liabilities assumed, as well as an adjustment to deferred tax liabilities in the aggregate amount of $652,000. During the year ended September 30, 2023, the Company recorded a noncash fair value adjustment related to deferred tax liabilities in the aggregate amount of $312,000. The table below outlines the purchase price allocation of the purchase for PMW to the acquired identifiable assets, liabilities assumed, and goodwill (in $000’s):
Net purchase price |  | $ | 26,777 |
Accounts payable |  | 10,788 |
Accrued liabilities |  | 5,771 |
Total liabilities assumed |  | 16,559 |
Total consideration |  | 43,336 |
Cash |  | 1,602 |
Accounts receivable |  | 12,613 |
Inventory |  | 6,390 |
Property, plant and equipment |  | 13,616 |
Intangible assets |  | 3,600 |
Other assets |  | 849 |
Total assets acquired |  | 38,670 |
Total goodwill |  | $ | 4,666 |
Proforma Information The table below presents selected proforma information for the Company for the year ended September 30, 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. 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 (in $000’s).
Year Ended September 30, 2023 | As Reported |  | Adjustments |  | Proforma
| Live (1) |  | PMW (2) |  | Adjustments (3) |  | Total
Net revenue | $ | 355,171 |  |  | $ | 63,136 |  |  |  |  | $ | 418,307 |
Net income | $ | (102) |  |  | $ | 462 |  |  | $ | (2,623) |  |  | $ | (2,263) |
Earnings per basic common share | $ | (0.03) |  |  |  |  |  |  | $ | (0.72) |
Earnings per basic diluted share | $ | (0.03) |  |  |  |  |  |  | $ | (0.72) |
(1)Live for the year ended September 30, 2023. Includes PMW from July 20, 2023 through September 30, 2023. (2)PMW from October 1, 2022 through the acquisition date of July 19, 2023. (3)Reflects adjustments for (a) amortization expense of definite-lived intangible assets based on the preliminary fair value at the acquisition date, and (b) interest expense to include proforma interest expense that would have been incurred as a result of the acquisition financing obtained by the Company. Acquisition of Cal Coast Carpets On June 2, 2023, Flooring Liquidators acquired certain fixed assets and other intangible assets of Cal Coast Carpets, Inc. (“Cal Coast”), and its shareholders, which was effected through two Asset Purchase Agreements (“Agreement”, or collectively, “Agreements”). No liabilities were assumed as part of either transaction. The purchase price for the fixed assets acquired from Cal Coast was $35,000, and the intangible assets acquired from the shareholders was approximately $1.265 million, for a total combined purchase price of $1.3 million. The intangible assets acquired were comprised of customer relationships, trade name, and non-compete agreements. The acquisition was determined to be an asset acquisition for accounting purposes and, as such, no goodwill was recorded as part of the transaction. The values assigned to the assets acquired are based on their estimates of fair value available as of June 2, 2023, as calculated by management. The table below outlines the purchase price allocation of the purchase for Cal Coast to the acquired identifiable assets (in $000’s):
Property, plant and equipment |  | $ | 35 |
Intangible assets |  |
Customer relationships |  | 785 |
Trade name |  | 425 |
Non-compete agreement |  | 55 |
Total intangible assets |  | 1,265 |
Total assets acquired |  | $ | 1,300 |
Acquisition of Flooring Liquidators On January 18, 2023, Live Ventures acquired 100% of the issued and outstanding equity interests (the “Equity Interests”) of Flooring Liquidators, Inc., Elite Builder Services, Inc., 7 Day Stone, Inc., Floorable, LLC, K2L Leasing, LLC, and SJ & K Equipment, Inc. (collectively, the “Acquired Companies”). The Acquired Companies are leading retailers and installers of floors, carpets, and countertops to consumers, builders, and contractors in California and Nevada. The acquisition was effected pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with an effective date of January 18, 2023 by and among the Company, and Stephen J. Kellogg, as the seller representative of the equity holders of the Acquired Companies and individually in his capacity as an equity holder of the Acquired Companies, and the other equity holders of the Acquired Companies (collectively, the “Seller”). The purchase price for the Equity Interests was $83.8 million before any fair value considerations, and is comprised of the following: •$41.8 million in cash to the Seller; •$34.0 million (the “Note Amount”) to certain trusts for the benefit of Kellogg and members of his family (the “Kellogg Trusts”) pursuant to the issuance by the Company of a subordinated promissory note (the “Note”) in favor of the Kellogg Trusts; •$4.0 million to the Kellogg 2022 Family Irrevocable Nevada Trust by issuance of 116,441 shares of Company Common Stock (as defined in the Purchase Agreement) (the “Share Amount”), calculated in the manner described in the Purchase Agreement; •$2.0 million holdback; and •$2.0 million of contingent consideration, comprised of $1.0 million in cash and $1.0 million in restricted stock units. The fair value the purchase price components outlined above was $78.7 million due to fair value adjustments for the Note and restricted stock, as detailed below (in $000's):
Purchase price |  | $ | 83,800 |
Fair value adjustment, sellers note |  | (3,300) |
Fair value adjustment, restricted stock |  | (1,800) |
Net purchase price |  | $ | 78,700 |
Under the purchase price allocation, the Company recognized goodwill of approximately $30.4 million, which is calculated as the excess of both the consideration exchanged and liabilities assumed as compared to the fair value of the identifiable assets acquired. The values assigned to the assets acquired and liabilities assumed are based on their estimates of fair value available as of January 18, 2023, as calculated by an independent third-party firm. During the year ended September 30, 2024, the Company recorded a fair value adjustment related to its contingent consideration of $1.0 million. The Company anticipates the balance of the goodwill arising from the acquisition to be fully deductible for tax purposes. The table below outlines the purchase price allocation of the purchase for Flooring Liquidators to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):
Net purchase price |  |  | $ | 78,700 |
Accounts payable |  |  | 5,189 |
Accrued liabilities |  |  | 9,700 |
Debt |  |  | 60 |
Total liabilities assumed |  |  | 14,949 |
Total consideration |  |  | 93,649 |
Cash |  |  | 9,131 |
Accounts receivable |  |  | 4,824 |
Inventory |  |  | 19,402 |
Property, plant and equipment |  |  | 4,643 |
Intangible assets |  |  |
Trade names |  | 13,275 |  |
Customer relationships |  | 7,700 |  |
Non-compete agreements |  | 1,625 |  |
Other |  | 49 |  |
Subtotal intangible assets |  |  | 22,649 |
Other |  |  | 2,581 |
Total assets acquired |  |  | 63,230 |
Total goodwill |  |  | $ | 30,419 |
Proforma Information The table below presents selected proforma information for the Company for the year ended September 30, 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. 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 (in $000’s).
Year Ended September 30, 2023 | As Reported |  | Adjustments |  | Proforma
| Live (1) |  | Flooring Liquidators (2) |  | Adjustments (3) |  | Total
Net revenue | $ | 355,171 |  |  | $ | 37,702 |  |  |  |  | $ | 392,873 |
Net income | $ | (102) |  |  | $ | (1,033) |  |  | $ | (2,226) |  |  | $ | (3,361) |
Earnings per basic common share | $ | (0.03) |  |  |  |  |  |  | $ | (1.07) |
Earnings per basic diluted share | $ | (0.03) |  |  |  |  |  |  | $ | (1.07) |
(1)Live for the year ended September 30, 2023. Includes Flooring Liquidators from January 18, 2023 through September 30, 2023. (2)Flooring Liquidators for the period of October 1, 2022 through January 17, 2023. (3)Reflects adjustments for (a) amortization expense of definite-lived intangible assets based on the preliminary fair value at the acquisition date, (b) interest expense to include proforma interest expense that would have been incurred as a result of the acquisition financing obtained by the Company, and (c) Elimination of revenues and costs of revenues associated with sales between Flooring Liquidators and the Company prior to acquisition.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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