UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): April 25, 2018

 

 

Live Ventures Incorporated

(Exact name of registrant as specified in its charter)

 

         
Nevada   001-33937   85-0206668

(State or other jurisdiction of

incorporation or organization)

  (Commission File Number)  

(I.R.S. Employer

Identification Number)

 

325 E. Warm Springs Road, Suite 102

Las Vegas, Nevada 89119

(Address of principal executive office, including zip code)

 

(702) 939-0231

(Registrant’s telephone number, including area code)

 

Not applicable 

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR240.14a-12)

[  ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR240.14d-2(b))

[  ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company   o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   o

 

 

 
 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

As previously announced by Live Ventures Incorporated (the “Company”), on December 30, 2017, ApplianceSmart Holdings LLC, a wholly-owned subsidiary of the Company (the “Purchaser”), entered into a Stock Purchase Agreement (the “Agreement”) with Appliance Recycling Centers of America, Inc. (the “Seller”) and ApplianceSmart, Inc. (“ApplianceSmart”), a subsidiary of the Seller. Pursuant to the Agreement, the Purchaser purchased (the “Transaction”) from the Seller all of the issued and outstanding shares of capital stock of ApplianceSmart in exchange for $6,500,000 (the “Purchase Price”). The Purchaser was required to deliver the Purchase Price, and a portion of the Purchase Price was delivered, to the Seller prior to March 31, 2018. Between March 31, 2018 and April 24, 2018, the Purchaser and the Seller negotiated in good faith the method of payment of the remaining outstanding balance of the Purchase Price. On April 25, 2018, the Purchaser delivered to the Seller that certain Promissory Note (the “ApplianceSmart Note”) in the original principal amount of $3,919,494.46 (the “Original Principal Amount”), as such amount may be adjusted per the terms of the ApplianceSmart Note. The ApplianceSmart Note is effective as of April 1, 2018 and matures on April 1, 2021 (the “Maturity Date”). The ApplianceSmart Note bears interest at 5% per annum with interest payable monthly in arrears. Ten percent of the outstanding principal amount will be repaid annually on a quarterly basis, with the accrued and unpaid principal due on the Maturity Date. ApplianceSmart has agreed to guaranty repayment of the ApplianceSmart Note. The remaining $2,580,505.54 of the Purchase Price was paid in cash by the Purchaser to the Seller. The Purchaser may reborrow funds, and pay interest on such reborrowings, from the Seller up to the Original Principal Amount. The foregoing description of the ApplianceSmart Note does not purport to be complete and is qualified in its entirety by reference to the full text of the ApplianceSmart Note, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

 

On April 26, 2018, the Company issued a press release providing an update regarding the Transaction, a copy of which is attached hereto as Exhibit 99.1.

 

Prior to the signing of the Agreement, the Company formed a special committee composed entirely of an independent and distinterested director (the “Special Committee”) to evaluate the Transaction. The Special Committee also evaluated the terms of the ApplianceSmart Note. Jon Isaac, the Company’s President and Chief Executive Officer, is the CEO, Manager and sole member of Isaac Capital Group, LLC, which, as of October 6, 2017, was the beneficial owner of 8.6% of the outstanding capital stock of the Seller. Jon Isaac is also the son to Tony Isaac, the Chief Executive Officer of the Seller and formerly the Chief Executive Officer of ApplianceSmart.

 

Item 9.01 Exhibits

 

(d) Exhibits

 

Exhibit No.   Description
10.1   Promissory Note, effective April 1, 2018, issued by ApplianceSmart Holdings LLC
99.1   Press Release dated April 26, 2018

  

 

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

  LIVE VENTURES INCORPORATED
   
Dated: April 26, 2018 By:  /s/ Jon Isaac
    Jon Isaac, Chief Executive Officer and President

 

 

 

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Exhibit 10.1

 

PROMISSORY NOTE

 

Effective Date:     April 1, 2018
     
Maker:      ApplianceSmart Holdings LLC, a Nevada limited liability company
     
Maker’s Mailing Address (including county):   325 E. Warm Springs Road, Suite 102, Las Vegas, NV 89119 (Clark County)
     
Payee:      Appliance Recycling Centers of America, Inc.
     
Place for Payment:   175 Jackson Avenue North, Suite 102, Minneapolis, MN 55343
     
Principal Amount:    $3,919,494.46
     
Maturity Date:     April 1, 2021
     
Annual Interest Rate:     5.0% (Based on a 365-day year)
     

Terms of Payment:

Interest . Beginning on September 30, 2018 and continuing through and including the Maturity Date, Maker shall make monthly payments of interest, in arrears on the first day of every calendar month.

 

Principal . Beginning on September 30, 2018 and continuing through and including the Maturity Date, Maker shall make quarterly payments of principal in an amount equal to $97,987.36, with all accrued and unpaid principal due and payable on the Maturity Date. The aggregate principal amount outstanding shall be increased or decreased, as the case may be, at any time and from time to time based on advances, credits, payments, and other amounts paid or owed, as the case may be, by and between ApplianceSmart, Inc., a Minnesota corporation and wholly-owned subsidiary of Maker, and Payee.

 

Reborrowing . Upon Maker’s written request, Payee will make revolving credit loans to Maker from time to time in such amounts as Maker may request, and Maker may make prepayments and reborrowings; provided, however, the aggregate principal amount of the aggregate amount owed by Maker to Payee at any time shall not exceed the principal amount. Interest on any such borrowings shall accrue at the annual interest rate and be payable in accordance with the terms hereof.

 

Prepayment. Maker may prepay all outstanding principal and interest at any time and from time to time without penalty.

 

Costs of Collection . If this note is given to an attorney for collection or enforcement, or if suit is brought for collection or enforcement, or if it is collected or enforced through probate, bankruptcy, or other judicial proceeding, then Maker shall pay Payee all costs of collection and enforcement, including reasonable attorney's fees and court costs, in addition to other amounts due.

 

(Remainder of this page intentionally left blank; signatures begin on the next page.)

 

 

 

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Executed on this 25 th day of April, 2018, the parties intending that the Promissory Note be effective as of April 1, 2018.

 

 

APPLIANCESMART HOLDINGS LLC

 

 

By: Live Ventures Incorporated, its sole member

 

 

 

By:    /s/ Jon Isaac                                                         

Name: Jon Isaac

Title: President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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AGREEMENT AND GUARANTY

 

For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of ApplianceSmart Holdings LLC, a Nevada limited liability company (“ Holdings ”), parent of ApplianceSmart, Inc., a Minnesota corporation (“ Guarantor ”), having agreed to the terms of the outstanding amount owed by Holdings to Appliance Recycling Centers of America, Inc., a Nevada corporation (“ ARCA ”) in connection with the sale of Guarantor from ARCA to Holdings, as documented by that certain Promissory Note, effective as of April 1, 2018, issued by Holdings in the original principal amount of $3,919,494.46 for the benefit of ARCA (the “ Note ”), Guarantor does hereby unconditionally guarantee to ARCA full and prompt payment and performance of all obligations of Holdings to ARCA under the Note. Guarantor also agrees to pay in addition thereto all costs, expenses and reasonable attorney’s fees at any time paid or incurred by ARCA in endeavoring to enforce this Guaranty.

 

Upon any default by Holdings with respect to any of the obligations herein guaranteed, the liability of the Guarantor hereunder shall be deemed to have become immediately due and payable, without demand, presentment, protest or notice of any kind, all of which are hereby waived, and without any suit or action against Holdings or the Guarantor and without further steps to be taken or further conditions to be performed by ARCA. Failure of ARCA to make any demand or otherwise to proceed against the Guarantor in respect to any default by Holdings or the Guarantor, or any delay by ARCA in doing so, shall not constitute a waiver of ARCA right to proceed in respect to any or all other defaults by the Company or the Guarantor.

 

Guarantor further acknowledges and agrees that until such time as the Note has been paid in full, it shall not create, incur, assume, or suffer to exist any indebtedness secured by a material amount of Guarantor’s assets without the prior written consent of ARCA, which consent shall not be unreasonably withheld, conditioned, or delayed.

 

This Guaranty and Agreement shall be governed by and construed in accordance with the laws of the State of Nevada (without reference to the conflicts of law provisions thereof). The invalidity or unenforceability of any provision hereof shall not limit the validity or enforceability of any other provision hereof. This Guaranty and Agreement may not be amended except by an instrument in writing signed by the party to be charged.

Executed on this 25 th day of April, 2018, the parties intending that the Promissory Note be effective as of April 1, 2018.

 

APPLIANCESMART, INC.

 

 

By:    /s/ Jon Isaac                                            

Name: Jon Isaac

Title: Chief Executive Officer

 

 

 

 

 

 

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Exhibit 99.1

 

Live Ventures Provides Update on Acquisition of
ApplianceSmart

 

LAS VEGAS, April 26, 2018 (GLOBE NEWSWIRE) -- Live Ventures Incorporated (Nasdaq:LIVE), a diversified holding company, today provides investors with an update on its acquisition of ApplianceSmart.

 

As previously announced, on December 30, 2017, the company acquired the retailer of major household appliances for $6.5 million. Live Ventures paid approximately $2.5 million of the purchase price in cash. The remaining approximately $4.0 million was paid by a promissory note bearing interest at five percent per annum and maturing on April 1, 2021. The acquisition is expected to bring Live Ventures’ total annualized revenues to in excess of $200 million. The company has filed a Current Report on Form 8-K with further details and can be accessed via the Securities and Exchange Commission’s website at www.sec.gov.

 

“ApplianceSmart easily fits into our portfolio as a company with a proven track record of sales, with the added bonus of providing consumers with environmentally friendly appliances at an affordable cost. Further, we believe that synergies exist between ApplianceSmart and current subsidiary, Vintage Stock,” said Jon Isaac, Live Ventures’ president and CEO. “We look forward to combining the company’s successes with those of our current portfolio companies, and providing our shareholders with additional value.”

 

ApplianceSmart is a 17-store chain specializing in sales and service of new and out-of-the-box appliances with annualized revenues of approximately $65 million. The retailer maintains stores in Minnesota, Ohio, Texas and Georgia.

 

About Live Ventures

 

Live Ventures Incorporated, originally incorporated in 1968, is a diversified holding company with several wholly owned subsidiaries and a strategic focus on acquiring profitable companies that have demonstrated a strong history of earnings power. Through its subsidiary, Marquis Industries, the company operates as a specialty, high-performance yarns manufacturer and hard-surfaces re-seller. Marquis Industries, which is a top-10 high-end residential carpet manufacturer in the United States, utilizes its state-of-the-art yarn extrusion capacity to market monofilament textured yarn products to the artificial turf industry. Marquis is the only manufacturer in the world that can produce certain types of yarn prized by the industry. Through its subsidiary Vintage Stock, an award-winning entertainment retailer, the company sells new and pre-owned movies, classic and current generation video games and systems, music on CD & LP, collectible comics, books, toys, and more. Vintage Stock, through its stores and website, ships product worldwide directly to the customer's doorstep.  Through its subsidiary ApplianceSmart, the company sells new major household appliances in the United States through a chain of 17 company-owned retail stores operating under the name ApplianceSmart®.

 

 

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Forward-Looking and Cautionary Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In accordance with the safe harbor provisions of this Act, statements contained herein that look forward in time that include everything other than historical information, involve risks and uncertainties that may affect the company’s actual results. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Live Ventures may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on Forms 10-K, 10-Q and 8-K, in its annual report to stockholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. There can be no assurance that such statements will prove to be accurate and there are a number of important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by the company, including, but not limited to, plans and objectives of management for future operations or products, the market acceptance or future success of our products, and our future financial performance. The company cautions that these forward-looking statements are further qualified by other factors including, but not limited to, those set forth in the company’s Annual Report on Form 10-K, as amended, for the fiscal year ended September 30, 2017 (available at  http://www.sec.gov ). Live Ventures undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events, or otherwise.

 

 

Contact:

Live Ventures Incorporated
Tim Matula, Investor Relations
(425) 836-9035
tmatula@live-ventures.com
http://live-ventures.com
Source:  Live Ventures Incorporated

 

 

 

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