LiveXLive’s refusal to pay vendors and keep its promises to investors is becoming a drag on the company and could lead to a potential bankruptcy, the company will report tomorrow in SEC filings, according to several sources.
On Monday, the livestream and media company was sued again, this time by a company called Predictive Pop, which claims that LiveXLive chief executive Robert Ellin agreed to pay $100,000 to license software from a subsidiary known as Audigent. The lawsuit, filed in Los Angeles Superior Court by attorney Todd Haines, says the unpaid bill is for work done in January 2019.
With the new Audigent lawsuit, LiveXLive is now facing 14 lawsuits concurrently. The company is currently being sued by two former executives and one investor for fraud, two previous vendors who say they weren’t paid for their work and by one client — Youtuber Austin McBroom – over the disastrous Social Gloves Battle of the Platforms Boxing match. LiveXLive is also suing McBroom in its own lawsuit.
The company is also being sued for patent infringement and is locked in a long term contractual dispute with automaker Tesla, a case that has dragged on for more than a year. Furthermore, LiveXLive is being pursued for unpaid judgements by two law firms who said LiveXLive didn’t pay its legal bills, as well as a festival producer still waiting to be paid ticket proceeds it claims to be owed by the now defunct LiveXLive Tickets.
The growing number of lawsuits will likely have a “material adverse effect” on the company, according to a July 14 SEC filing.
Last year, LiveXLive lost $41 million, the most yet for a single year, amounting to total lifetime losses of $169 million to date. If the company cannot raise more money soon, it risks bankruptcy.
“We may be required to cease operations which could result in our stockholders losing all or almost all of their investment,” the company warned in the SEC filing.
Thursday’s first quarter earnings report is expected to show continued losses and worsening financial picture.
LiveXLive did not respond to a request for comment at time of publishing.
