Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Jun. 30, 2020 | Aug. 04, 2020 | |
Document Information Line Items | ||
Entity Registrant Name | AeroGrow International, Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --03-31 | |
Entity Common Stock, Shares Outstanding | 34,328,036 | |
Amendment Flag | false | |
Entity Central Index Key | 0001316644 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Current assets | ||
Cash | $ 10,304 | $ 9,046 |
Restricted cash | 15 | 15 |
Accounts receivable, net of allowance for doubtful accounts of $540 and $376 at June 30, 2020 and March 31, 2020, respectively | 3,869 | 3,422 |
Other receivables | 334 | 257 |
Inventory, net | 6,328 | 4,788 |
Prepaid expenses and other | 2,684 | 1,392 |
Total current assets | 23,534 | 18,920 |
Property and equipment and intangible assets, net of accumulated depreciation of $5,624 and $5,467 at June 30, 2020 and March 31, 2020, respectively | 1,219 | 1,229 |
Operating lease right of use | 1,193 | 1,229 |
Deposits | 655 | 669 |
Total assets | 26,601 | 22,047 |
Current liabilities | ||
Accounts payable | 2,962 | 2,332 |
Accounts payable related party | 3,019 | 2,396 |
Accrued expenses | 3,234 | 2,308 |
Debt associated with sale of intellectual property | 19 | 17 |
Finance lease liability | 18 | 29 |
Operating lease liability-current portion | 126 | 58 |
Total current liabilities | 9,378 | 7,140 |
Long term liabilities | ||
Notes payable related party | 900 | 900 |
Operating lease liability | 1,166 | 1,201 |
Other liability | 0 | 297 |
Total liabilities | 11,444 | 9,538 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock, $.001 par value, 750,000,000 shares authorized, 34,328,036 shares issued and outstanding at June 30, 2020 and March 31, 2020 | 34 | 34 |
Additional paid-in capital | 140,817 | 140,817 |
Accumulated deficit | (125,694) | (128,342) |
Total stockholders' equity | 15,157 | 12,509 |
Total liabilities and stockholders' equity | $ 26,601 | $ 22,047 |
BALANCE SHEETS (Parentheticals)
BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts (in Dollars) | $ 540 | $ 376 |
Accumulated depreciation (in Dollars) | $ 5,624 | $ 5,467 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 34,328,036 | 34,328,036 |
Common stock, shares outstanding | 34,328,036 | 34,328,036 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||
Net revenue | $ 16,411 | $ 4,475 |
Cost of revenue | 9,054 | 3,020 |
Gross profit | 7,357 | 1,455 |
Operating expenses | ||
Research and development | 301 | 210 |
Sales and marketing | 2,815 | 1,404 |
General and administrative | 1,574 | 894 |
Total operating expenses | 4,690 | 2,508 |
Income (loss) from operations | 2,667 | (1,053) |
Other (expense) income, net | ||
Interest expense-related party | (23) | (2) |
Other (expense) income, net | 4 | (3) |
Total other (expense) income, net | (19) | (5) |
Net income (loss) | $ 2,648 | $ (1,058) |
Net income (loss) per common share, basic and diluted (in Dollars per share) | $ 0.08 | $ (0.03) |
Weighted average number of common shares outstanding, basic (in Shares) | 34,328 | 34,328 |
Weighted average number of common shares outstanding, diluted (in Shares) | 34,339 | 34,328 |
STATEMENT OF CHANGES IN STOCKHO
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balances at Mar. 31, 2019 | $ 0 | $ 34 | $ 140,817 | $ (128,399) | $ 12,452 |
Balances (in Shares) at Mar. 31, 2019 | 0 | 34,328,036 | |||
Net income (loss) | (1,058) | (1,058) | |||
Balances at Jun. 30, 2019 | $ 34 | 140,817 | (129,457) | 11,394 | |
Balances (in Shares) at Jun. 30, 2019 | 34,328,036 | ||||
Balances at Mar. 31, 2020 | $ 0 | $ 34 | 140,817 | (128,342) | 12,509 |
Balances (in Shares) at Mar. 31, 2020 | 0 | 34,328,036 | |||
Net income (loss) | 2,648 | 2,648 | |||
Balances at Jun. 30, 2020 | $ 0 | $ 34 | $ 140,817 | $ (125,694) | $ 15,157 |
Balances (in Shares) at Jun. 30, 2020 | 0 | 34,328,036 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 2,648 | $ (1,058) |
Adjustments to reconcile net loss to net cash used by operations: | ||
Depreciation and amortization expense | 157 | 131 |
Amortization of lease liability | 69 | 16 |
Bad debt expense | 164 | 11 |
Inventory allowance increase (decrease) | 60 | (15) |
Accretion of debt associated with sale of intellectual property | (5) | (6) |
Change in operating assets and liabilities: | ||
(Increase) decrease in accounts receivable | (611) | 1,989 |
(Increase) decrease in other receivable | (77) | 63 |
(Increase) decrease in inventory | (1,600) | 1,071 |
(Increase) in prepaid expense and other | (1,292) | (913) |
Decrease (increase) in deposits | 14 | (700) |
Increase (decrease) in accounts payable and accounts payable related party | 1,253 | (517) |
Increase (decrease) in accrued expenses and other liability | 636 | (324) |
(Decrease) in customer deposits | 0 | (57) |
Net cash provided (used) by operating activities | 1,416 | (309) |
Cash flows from investing activities: | ||
Purchases of equipment | (147) | (31) |
Net cash (used) by investing activities | (147) | (31) |
Cash flows from financing activities: | ||
Repayment of finance lease | (11) | (12) |
Net cash (used) by financing activities | (11) | (12) |
Net increase (decrease) in cash | 1,258 | (352) |
Cash and cash equivalents and restricted cash, beginning of period | 9,061 | 1,756 |
Cash and cash equivalents and restricted cash, end of period | 10,319 | 1,404 |
Cash paid during the year for: | ||
Interest-related party | 22 | 0 |
Income taxes | 0 | 0 |
Initial recognition of right-of-use asset (Note 8) | 0 | 805 |
Initial lease liability arising from right-of-use asset (Note 8) | $ 0 | $ 805 |
Description of the Business
Description of the Business | 3 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Business Description and Basis of Presentation [Text Block] | 1. Description of the Business AeroGrow International, Inc. (collectively, the “Company,” “AeroGrow,” “we,” “our” or “us”) was incorporated in the State of Nevada on March 25, 2002. The Company’s principal business is developing, marketing, and distributing advanced indoor aeroponic garden systems designed and priced to appeal to the consumer gardening, cooking and small indoor appliance markets worldwide. The Company manufactures, distributes and markets ten different models of its AeroGarden systems in multiple colors, as well as over 40 varieties of seed pod kits and a full line of accessory products through multiple channels, including retail distribution (via online retail outlets an brick-and-mortar) storefronts, catalogue and direct-to-consumer sales primarily in the United States and Canada, as well as selected countries in Europe. |
Basis of Presentation, Liquidit
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies | 3 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | 2. Basis of Presentation, Liquidity and Summary of Significant Accounting Policies Basis of Presentation The unaudited interim financial statements of the Company included herein have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These condensed statements do not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for annual audited financial statements and should be read in conjunction with the Company’s audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2020 (“Fiscal 2020”), as filed with the SEC on June 23, 2020. In the opinion of management, the accompanying unaudited interim financial statements reflect all adjustments, including recurring adjustments, necessary to present fairly the financial position of the Company at June 30, 2020, the results of operations for the three months ended June 30, 2020 and 2019, and the cash flows for the three months ended June 30, 2020 and 2019. Although our results of operations for the three months ended June 30, 2020 represent a substantial improvement over the prior year period, they are not necessarily indicative of the expected results of operations for the fiscal year 2021 (“Fiscal 2021”) or any future period. In this regard, the Company’s business is highly seasonal, with approximately 60.6% of revenues in Fiscal 2020 occurring in the five consecutive calendar months from September through January. During the three-month period ended June 30, 2020, the Company has further expanded its distribution channels and invested in necessary overhead in anticipation of the Fiscal 2021 peak sales season. The balance sheet as of March 31, 2020 is derived from the Company’s audited financial statements. Liquidity Sources of funding to meet prospective cash requirements during Fiscal 2021 include the Company’s existing cash balances, cash flow from operations, and borrowings under the Company’s debt arrangements as discussed in Note 3. We may need to seek additional debt or equity capital, however, to address the seasonal nature of our working capital needs, enable us to increase the scale of our business and provide a cash reserve against contingencies. There can be no assurance we will be able to raise this additional capital. See Note 10 for subsequent events. Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is reasonably possible that a change in the Company’s estimates could occur in the near term as additional or new information becomes available. Net Income (Loss) per Share of Common Stock The Company computes net income (loss) per share of common stock in accordance with Accounting Standards Codification (“ASC”) 260. ASC 260 requires companies with complex capital structures to present basic and diluted earnings per share (“EPS”). Basic EPS is measured as the income or loss available to common stockholders divided by the weighted average shares of common stock outstanding for the period. Diluted EPS is similar to basic EPS, but presents the dilutive effect on a per share basis of potential common stock equivalents (e.g., convertible securities, options, and warrants) as if such securities had been converted into common stock at the beginning of the periods presented. Securities that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS include employee stock options to purchase 94,000 shares of common stock three months ended June 30, 2019. Concentrations of Risk ASC 825-10-50-20 Reclassifications Certain prior year amounts have been reclassified to conform to current year presentation. Cash The Company maintains cash depository accounts with financial institutions. The amount on deposit with several financial institutions exceeded the $250,000 federally insured limit as of June 30, 2020. The Company has not historically incurred any losses related to these deposits. The financial institutions are highly rated, financially sound and the risk of loss is minimal. Customers and Accounts Receivable For the three months ended June 30, 2020 and 2019, one customer, Amazon.com, represented 28.2% and 33.8%, respectively, of the Company’s net revenue. As of June 30, 2020, two customers, Amazon.com and Amazon.ca, represented 63.4% and 12.0%, respectively, of the Company’s outstanding accounts receivable. As of March 31, 2020, three customers, Amazon.com, Amazon.ca and Bed, Bath and Beyond, represented 39.9%, 20.7% and 10.4%, respectively, of outstanding accounts receivable. The Company believes that all receivables from these customers are collectible. Suppliers For the three months ended June 30, 2020, the Company purchased inventories and other inventory-related items from one supplier totaling $5.8 million. For the three months ended June 30, 2019, the Company purchased inventories and other inventory-related items from one supplier totaling $1.3 million. The purchase of inventories and other inventory-related items is tied to the anticipated timing and amount of sales for our highly seasonal business and payment terms with our suppliers. The Company’s primary contract manufacturers are located in China. As a result, the Company may be subject to political, currency, regulatory, transportation/shipping, third-party labor, spread and virulence of diseases such as the global COVID-19 pandemic and weather/natural disaster risks. Although the Company believes alternate sources of manufacturing could be obtained, these risks and any potential loss of supply could have an adverse impact on operations, especially in the short term. Fair Value of Financial Instruments The Company follows the guidance in ASC 820, Fair Value Measurements and Disclosures Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants. ASC 820 also provides a hierarchy for determining fair value, which emphasizes the use of observable market data whenever available. The three broad levels defined by the hierarchy are as follows, with the highest priority given to Level 1 as these are the most reliable, and the lowest priority given to Level 3: ● Level 1 – Quoted prices in active markets for identical assets. ● Level 2 – Quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, or other inputs that are observable or can be corroborated by observable market data, including model-derived valuations. ● Level 3 – Unobservable inputs that are supported by little or no market activity. The carrying value of financial instruments including cash, receivables and accounts payable and accrued expenses, approximates their fair value at June 30, 2020 and March 31, 2020 due to the relatively short-term nature of these instruments. The Company’s intellectual property liability carrying value was determined utilizing Level 3 inputs. As discussed below in Notes 3 and 4, this liability was incurred in conjunction with the Company’s strategic alliance with Scotts Miracle-Gro. As of June 30, 2020 and March 31, 2020, the fair value of the Company's sale of the intellectual property liability was estimated using the discounted cash flow method, which is based on expected future cash flows, discounted to present value using a discount rate of 15%. As of June 30, 2020, the Company did not have any financial assets or liabilities that were measured at fair value on a recurring basis, subsequent to initial recognition. Accounts Receivable and Allowance for Doubtful Accounts The Company sells its products to retailers and directly to consumers. Direct-to-consumer transactions are primarily paid by credit card. Retailer sales terms vary by customer, but generally range from net 30 days to net 60 days. Accounts receivable are reported at net realizable value and net of the allowance for doubtful accounts. The Company uses the allowance method to account for uncollectible accounts receivable. The Company's allowance estimate is based on a review of the current status of trade accounts receivable, which resulted in an allowance of $540,000 and $376,000 at June 30, 2020 and March 31, 2020, respectively. Other Receivables In conjunction with the Company’s processing of credit card transactions for its direct-to-consumer sales activities and as security with respect to the Company’s performance for credit card refunds and charge backs, the Company is required to maintain a cash reserve with Fidelity Information Services, the Company’s credit card processor. This reserve is equal to 5% of the credit card sales processed during the previous six months. As of June 30, 2020 and March 31, 2020, the balance in this reserve account was $334,000 and $257,000, respectively. Advertising and Production Costs The Company expenses all production costs related to advertising, including print, television, and radio advertisements when the advertisement has been broadcast or otherwise distributed. In contrast, the Company records media and marketing costs related to its direct-to-consumer advertisements and catalogues, inclusive of postage and printing costs and related direct-response advertising costs, in accordance with ASC 340-20 Capitalized Advertising Costs As the Company has continued to expand its retail distribution channel, the Company has expanded its advertising to include online gateway and portal advertising, as well as placement in third party catalogues. Advertising expense for the three months ended June 30, 2020 and June 30, 2019, were as follows: Three Months Ended June 30, (in thousands) 2020 2019 Direct-to-consumer $ 1,014 $ 83 Retail 317 416 Other - 13 Total advertising expense $ 1,331 $ 512 As of June 30, 2020 and March 31, 2020, the Company had deferred $5,000 and $84,000, respectively, related to media and advertising costs, including the catalogue costs described above. The costs are included within the “prepaid expenses and other” line of the balance sheets. Inventory Inventories are valued at the lower of cost, determined on the basis of standard costing, which approximates the first-in, first-out method, or net realizable value. When the Company is the manufacturer, raw materials, labor and manufacturing overhead are included in inventory costs. The Company records the raw materials at delivered cost. Standard labor and manufacturing overhead costs are applied to the finished goods based on normal production capacity. A majority of the Company’s products are manufactured overseas and are recorded at standard cost, which includes product costs for purchased and manufactured products, and freight and transportation costs for inbound freight from manufacturers. Inventory values at June 30, 2020 and March 31, 2020 were as follows: June 30, 2020 March 31, 2020 (in thousands) (in thousands) Finished goods $ 4,441 $ 3,191 Raw materials 1,887 1,597 Total Inventory $ 6,328 $ 4,788 The Company determines an inventory obsolescence reserve based on management’s historical experience and establishes reserves against inventory according to the age of the product. As of June 30, 2020 and March 31, 2020, the Company had reserved $211,000 and $151,000, respectively, for inventory obsolescence. The inventory values are shown net of these reserves. Leases At lease inception, the Company determines whether an arrangement is or contains a lease. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities in the financial statements. ROU assets represent the Company’s right to use leased assets over the term of the lease. Lease liabilities represent the Company’s contractual obligation to make lease payments over the lease term. For operating leases, ROU assets and lease liabilities are recognized at the commencement date. The lease liability is measured as the present value of the lease payments over the lease term, using: (i) the rate implicit in the lease if it is determinable, or (ii) alternatively, if the rate is not determinable from the lease, the Company’s incremental borrowing rate at the commencement date of the lease. Operating ROU assets are calculated as the present value of the remaining lease payments, plus unamortized initial direct costs and any prepayments, less any unamortized lease incentives received. Lease terms may include renewal or extension options to the extent they are reasonably certain to be exercised. The assessment of whether renewal or extension options are reasonably certain to be exercised is made at lease commencement. Factors considered in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of any leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option were not exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company has elected not to recognize an ROU asset and obligation for leases with an initial term of twelve months or less. The expense associated with short-term leases is included in lease expense in the statement of operations. For finance leases, after lease commencement the lease liability is measured on an amortized cost basis and increased to reflect interest on the liability and decreased to reflect the lease payment made during the period. Interest on the lease liability is determined each period during the lease term as the amount that results in a constant period discount rate on the remaining balance of the liability. The ROU asset is subsequently measured at cost, less any accumulated amortization and any accumulated impairment losses. Amortization on the ROU asset is recognized over the period from the commencement date to the earlier of: (1) the end of the useful life of the ROU asset; or (2) the end of the lease term. To determine the present value of finance leases, the Company uses a 10% discount rate, which is the rate specified in the lease agreement or incremental borrowing rate, as appropriate. To the extent a lease arrangement includes both lease and non-lease components, the components are accounted for separately. The Company has various operating leases, primarily for office space and other distribution centers, some of which include escalating lease payments and options to extend or terminate the lease. The Company determines if a contract is a lease at the inception of the arrangement. The exercise of lease renewal option is at the Company’s sole discretion and options are recognized when it is reasonably certain the Company will exercise the option. The Company’s leases have remaining terms of less than one year to seven years. The Company does not have lease agreements with residual value guarantees, sale leaseback terms or material restrictive covenants. Operating lease ROU assets and liabilities are recognized at commencement date of lease agreements greater than one year based on the present value of lease payments over the lease term. Lease expense is recognized on a straight-line basis over the lease term and variable lease costs are expensed as incurred. Revenue Recognition The Company currently has two operating and reportable segments: (i) the Direct-to-Consumer segment, which is composed of sales directly from our website, mail order or customer calls to our customer service department; and (ii) the Retail segment, which is comprised of all sales related to retailers, including where possession of our product is taken and sold by the retailer in store or online, and drop ship orders that process from the retailer and drop directly to our warehouse for us to ship on behalf of the retailer. The majority of the Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products and the risk of loss to a customer. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms. The Company did not have any material unsatisfied performance obligations as of June 30, 2020 or March 31, 2020. The Company excludes from revenues all taxes assessed by a governmental authority that are imposed on the sale of its products and collected from customers. There were no changes to the Company’s accounting for variable consideration under ASC 606. However, the classification from a liability to a contra asset to show net realizable accounts receivable results in a change in presentation on the balance sheet. Promotional and other allowances (variable consideration) recorded as a reduction to net sales, primarily include consideration given to retail customers including, but not limited to the following: ● discounts granted off list prices to support price promotions to end-consumers by retailers; ● the Company’s agreed share of fees given directly to retailers for advertising, in-store marketing and promotional activities; and ● incentives given to the Company’s retailers for achieving or exceeding certain predetermined purchases (i.e., rebates). The Company executes promotional allowance programs with retailers through separate agreements in the ordinary course of business. These agreements generally provide for one or more of the arrangements described above and are of varying durations, ranging from one day to one year. The Company’s promotional and other allowances are calculated based on various programs with retail customers, and accruals are established during the year for its anticipated liabilities. These accruals are based on agreed upon terms, as well as the Company’s historical experience with similar programs, and require management’s judgment with respect to estimating consumer participation and retail customer performance levels. Differences between estimated and actual expenses for promotional and other allowance costs have historically been insignificant and are recognized in earnings in the period such differences are determined. The Company records estimated reductions to revenue for customer and distributor programs and incentive offerings, including promotions, rebates, and other volume-based incentives, based on historical rates. Certain incentive programs require the Company to estimate the number of customers who will actually redeem the incentive based on our historical industry experience. As of June 30, 2020 and March 31, 2020, the Company reduced accounts receivable $934,000 and $744,000, respectively, as an estimate for the foregoing deductions and allowances within the “accounts receivable, net” and “accrued expenses” lines of the balance sheets, respectively. Warranty and Return Reserves The Company records warranty liabilities at the time of sale for the estimated costs that may be incurred under its basic warranty program. The specific warranty terms and conditions vary depending upon the product sold, but generally include technical support, repair parts, and labor for periods up to one year. Factors that affect the Company’s warranty liability include the number of installed units currently under warranty, historical and anticipated rates of warranty claims on those units, and cost per claim to satisfy the Company’s warranty obligation. Based upon the foregoing, the Company has recorded a provision for potential future warranty costs of $241,000 and $226,000 as of June 30, 2020 and March 31, 2020, respectively. These expenses are recorded in the accrued expenses line of the condensed balance sheets. The Company reserves for known and potential returns from customers and associated refunds or credits related to such returns based upon historical experience. In certain cases, retail customers are provided a fixed allowance, usually in a range of 1% to 2%, to cover returned goods and this allowance is deducted from payments made to us by such customers. As of June 30, 2020 and March 31, 2020, the Company has recorded a reserve for customer returns of $425,000 and $430,000, respectively. Additionally, the Company calculates specific returns for any customers that are deemed to have a right of return and the customer specific calculation is reviewed for reasonableness at the end of each period. These expenses are recorded as an offset to the accounts receivable line of the condensed balance sheets. Segments of an Enterprise and Related Information U.S. GAAP utilizes a management approach based on allocating resources and assessing performance as the source of the Company's reportable segments. U.S. GAAP also requires disclosures about products and services, geographic areas and major customers. At present, the Company operates in two segments, Direct-to-Consumer and Retail Sales. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13 , , Accounting Standards Recently Adopted In February 2016, the FASB issued ASU 2016-02, Leases (“ASC 842”), which, among other things, requires an entity to recognize a ROU and a lease liability on the balance sheet for substantially all leases, including operating leases. The Company adopted ASC 842 effective April 1, 2019 utilizing the modified retrospective approach such that prior year financial statements were not recast under the new standard. Adoption of this standard resulted in changes to the Company’s condensed balance sheets and accounting policies for leases but did not have an impact on the condensed statements of operations or cash flows. See Note 8 for additional information regarding the new standard and its impact on the Company’s financial statements. In addition, the Company elected the package of practical expedients permitted under the transition guidance to not reassess (1) whether any expired or existing contracts are, or contain, leases; (2) the lease classification for expired or existing leases; and (3) initial direct costs for existing leases. The adoption of the guidance effective as of April 1, 2019 resulted in the recognition of: (i) ROU assets of $805,000 which amortization of the ROU began the quarter ended June 30, 2019; and (ii) additional lease liabilities for operating leases of $805,000. The guidance did not have an impact on the Company's condensed statements of operations from the adoption date forward based on amortization of the asset and liability. See Note 8 for disclosures related to the Company's leases. |
Notes Payable and Long Term Deb
Notes Payable and Long Term Debt | 3 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | 3. Notes Payable and Long Term Debt The following represents the changes to our Notes Payable and Long Term Debt for the periods presented. For a more detailed discussion on our previously outstanding Notes Payable and Long Term Debt, refer to the Company’s Annual Report on Form 10-K for the year ended March 31, 2020, as filed with the SEC on June 23, 2020. As of June 30, 2020 and March 31, 2020, the outstanding balance of the Company’s notes payable and debt, including accrued interest, is as follows: June 30, 2020 March 31, 2020 (in thousands) (in thousands) Notes payable and debt-related party $ 915 $ 915 Sale of intellectual property liability (see Note 4) 19 24 Total notes payable and debt 934 939 Less current portion - long term debt 34 39 Long term debt $ 900 $ 900 Scotts Miracle-Gro Term Loan Agreements On June 20, 2019, the Company entered into a Real Estate Term Loan Agreement in the principal amount of up to $1.5 million with Scotts Miracle-Gro. The funding provided capital to fund real estate related lease obligations. The proceeds were made available as needed in increments of $100,000 not to exceed $1.5 million, with a due date of March 31, 2022. Interest is charged at the stated rate of 10% and is paid quarterly in arrears on each of April 30, July 31, October 31 and January 31. As of June 30, 2020, the Company had borrowed $900,000 under the Real Estate Term Loan. See Note 10 for subsequent events. Liability Associated with Scotts Miracle-Gro Transaction On April 22, 2013, the Company and Scotts Miracle-Gro, the owner of approximately 80.5% of the Company’s outstanding common stock, have entered into an Intellectual Property Sale Agreement, a Technology License Agreement, a Brand License Agreement, and a Supply Chain Services Agreement, each of which has been filed with the SEC. The Intellectual Property Sale Agreement and the Technology License constitute an agreement of sales of future revenues. Because the Company received cash from Scotts Miracle-Gro and agreed to pay for a defined period a specified percentage of its revenue, and because the Company has significant involvement in the generation of its revenue, the excess paid over net book value is classified as debt and is being amortized under the effective interest method. As of June 30, 2020 and March 31, 2020, a liability of $19,000 and $24,000, respectively, was recorded on the balance sheets for the Intellectual Property Sale Agreement. As of June 30, 2020 and March 31, 2020, the Company has accrued $1.8 million and $1.5 million, respectively, as a liability for the Technology Licensing Agreement, and has expensed $332,000 and $87,000 for the quarters ended June 30, 2020 and June 30, 2019, respectively. The accrual is calculated as 2% of the annual net sales and recorded as a liability. The accrued liability for the Brand License Agreement, which is calculated at an amount equal to 5% of all seed pod kit and seed pod kit related sales, amounts to $1.2 million and $922,000 as of June 30, 2020 and March 31, 2020, respectively, and the Company has expensed $291,000 and $67,000 for the quarters ended June 30, 2020 and June 30, 2019, respectively. |
Scotts Miracle-Gro Transactions
Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions | 3 Months Ended |
Jun. 30, 2020 | |
Convertible Preferred Stock, Warrants and Other Transactions [Abstract] | |
Convertible Preferred Stock, Warrants and Other Transactions [Text Block] | 4. Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions Series B Convertible Preferred Stock and Related Transactions On April 22, 2013, the Company entered into a Securities Purchase Agreement with SMG Growing Media, Inc., a wholly owned subsidiary of Scotts Miracle-Gro (NYSE: “SMG”), a worldwide marketer of branded consumer lawn and garden products. Pursuant to the Securities Purchase Agreement, Scotts Miracle-Gro acquired 2,649,007 shares of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “ Upon demand by Scotts Miracle-Gro, the Company must use its best efforts to file a Registration Statement on Form S-3, or, if the Company is not eligible for Form S-3, on Form S-1 (collectively, the “Registration Statement”), within 120 calendar days after receipt of Scotts Miracle-Gro’s demand for registration. The Company must use its best efforts to cause the Registration Statement to become effective as soon as possible thereafter. In conjunction with the private offering described above, the Company and Scotts Miracle-Gro also agreed to enter an Intellectual Property Sale Agreement, a Technology License Agreement, a Brand License Agreement, and a Supply Chain Services Agreement. The Intellectual Property Sale Agreement and the Technology License constitute an agreement of sales of future revenues. For more details regarding these agreements, please refer to Note 3 “Scotts Miracle-Gro Transactions” to the financial statements included in the Company’s Annual Report on Form 10-K, as filed with the SEC on June 23, 2020. See also Note 10 for subsequent events. |
Equity Compensation Plans and E
Equity Compensation Plans and Employee Benefit Plans | 3 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement, Disclosure [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block] | 5. Equity Compensation Plans and Employee Benefit Plans For the three months ended June 30, 2020 and June 30, 2019, the Company did not grant any options to purchase the Company’s common stock under the Company’s 2005 Equity Compensation Plan (the “2005 Plan”) and no new options will be granted under this plan until a new plan is adopted. During the three months ended June 30, 2020 and June 30 2019, no options to purchase shares of common stock were cancelled or expired, and no shares of common stock were issued upon exercise of outstanding stock options under the 2005 Plan. As of June 30, 2020, the Company had no unvested outstanding options to purchase shares of the Company’s common stock and therefore, no additional compensation expense will be attributable to such stock options. Information regarding all stock options outstanding under the Company’s 2005 Plan as of June 30, 2020 is as follows: OPTIONS OUTSTANDING AND EXERCISABLE Weighted- Average Weighted- Aggregate Remaining Average Intrinsic Exercise Options Contractual Exercise Value price (in thousands) Life (years) Price (in thousands) $ 1.55 11 0.13 $ 1.55 $ 18 The aggregate intrinsic value in the preceding table represents the difference between the Company’s closing stock price and the exercise price of each in-the-money option on the last trading day of the period presented, which was June 30, 2020. |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 6. Income Taxes The Company follows the guidance in ASC 740, Accounting for Uncertainty in Income Taxes Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at the end of each period, based on enacted laws and statutory rates applicable to the periods in which the differences are expected to affect taxable income. Any liability for actual taxes to taxing authorities is recorded as income tax liability. A valuation allowance is established against such assets where management is unable to conclude more likely than not that such asset will be realized. As of June 30, 2020 and March 31, 2020, the Company recognized a valuation allowance equal to 100% of the net deferred tax asset balance and the Company has no unrecognized tax benefits related to uncertain tax positions. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 7. Related Party Transactions See Note 6 “Related Party Transactions” of Form 10-K for the year ended March 31, 2020, as filed with the SEC on June 23, 2020 for a detailed discussion of related party transactions. Additionally, see Note 10 “Subsequent Events” to our financial statements for discussion related to transactions involving our officers, directors and 5% or greater shareholders. |
Leases
Leases | 3 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Lessee, Operating Leases [Text Block] | 8. Leases The Company recognized operating lease ROU assets and lease liabilities based on the present value of remaining minimum lease payments. For the discount rate assumption, the implicit rate was not readily determinable in the Company’s lease agreements. Therefore, the Company used an estimated incremental borrowing rate in determining the present value of lease payments. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right-of-use asset and lease liability. The Company elected the practical expedients available under ASC 842 and applied them consistently to all applicable leases. The Company did not apply ASC 842 to any leases with a remaining term of 12 months or less. For these leases, no asset or liability was recorded and lease expense continues to be recognized on a straight-line basis over the lease term. As allowed by the practical expedients, the Company does not reassess whether any expired or existing contracts are or contain leases, does not reassess the lease classification for any expired or existing leases and does not reassess initial direct costs for existing leases. The table below sets forth supplemental Balance Sheet information for the Company’s leases. June 30, 2020 (in thousands) Assets Operating lease ROU assets $ 1,193 Liabilities Operating lease 1,292 As of June 30, 2020, the weighted average remaining lease term for operating leases was 6 years, and the weighted average discount rate was 10%. The table below sets forth the future cash payments under such agreements for the remaining years are as follows: Year Ending Operating Leases Financing Leases (in thousands) (in thousands) March 31, 2021 $ 185 $ 19 March 31, 2022 266 - March 31, 2023 275 - March 31, 2024 285 - March 31, 2025 294 - Thereafter 460 - Total lease payments $ 1,765 $ 19 Less: amount of lease payments representing interest (473 ) (1 ) Present value of future minimum lease payments 1,292 18 Less: current obligations under leases (126 ) (18 ) Long-term lease obligations $ 1,166 $ - Rent expense for the three months ended June 30, 2020 and 2019 was $144,000 and $128,000, respectively. |
Segment Information
Segment Information | 3 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 9. Segment Information The Company has determined that its reportable segments are those that are based on its method of internal reporting and the perspective of the chief operating decision maker. The Company has two reportable segments, Retail Sales and Direct-to-Consumers. The Company evaluates performance based on the primary financial measure of contribution margin (“segment profit”). Segment profit reflects the income or loss from operations before corporate expenses, non-operating income, net interest expense, and income taxes. The Company does not have any individually identified assets regarding specific segments as all processes to manufacture products are not different based on segment. Three Months Ended June 30, 2020 (dollar amounts in thousands) Direct-to-consumer Retail Corporate/Other Consolidated Net sales $ 9,056 $ 7,355 $ - $ 16,411 Cost of revenue 4,854 4,200 - 9,054 Gross profit 4,202 3,155 - 7,357 Gross profit percentage 46.4 % 42.9 % - 44.8 % Sales and marketing (1) 1,073 351 214 1,638 Segment profit 3,129 2,804 (214 ) 5,719 Segment profit percentage 34.6 % 38.1 % - 34.8 % (1) Sales and marketing expense includes advertising, trade shows, media production and promotional products and other as discussed in the sales and marketing section of the MD&A. See Item 2 below. Three Months Ended June 30, 2019 (dollar amounts in thousands) Direct-to-consumer Retail Corporate/Other Consolidated Net sales $ 1,902 $ 2,573 $ - $ 4,475 Cost of revenue 1,389 1,631 - 3,020 Gross profit 513 942 - 1,455 Gross profit percentage 27.0 % 36.6 % - 32.5 % Sales and marketing (1) 109 521 176 806 Segment profit 404 421 (176 ) 649 Segment profit percentage 21.2 % 16.4 % - 14.5 % (1) Sales and marketing expense includes advertising, trade shows, media production and promotional products and other as discussed in the sales and marketing section of the MD&A. See Item 2 below. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 10. Subsequent Events On July 28, 2020, AeroGrow paid the Technology Licensing and Brand Licensing Agreements balances of $2.3 million as discussed in Note 3 for amounts owed through March 31, 2020. On August 3, 2020, AeroGrow entered into a Term Loan Agreement (“Term Loan”) in the principal amount of up to $7.5 million with Scotts Miracle-Gro. The proceeds will be made available as needed in increments of $500,000, the Company may reborrow and pay down during the Term Loan, not to exceed $6.0 million with a due date of June 30, 2021. The funding will provide general working capital and will be used for the purpose of acquiring inventory to support anticipated growth as the Company expands its retail and its direct-to-consumer sales channels. Advances under the Term Loan Agreement will be secured by a lien on the assets of the Company. Interest will be charged at the stated rate of 10% per annum and will be paid quarterly in arrears on each of September 30, 2020, December 30, 2020, March 31, 2021 and June 30, 2021. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is reasonably possible that a change in the Company’s estimates could occur in the near term as additional or new information becomes available. |
Earnings Per Share, Policy [Policy Text Block] | Net Income (Loss) per Share of Common Stock The Company computes net income (loss) per share of common stock in accordance with Accounting Standards Codification (“ASC”) 260. ASC 260 requires companies with complex capital structures to present basic and diluted earnings per share (“EPS”). Basic EPS is measured as the income or loss available to common stockholders divided by the weighted average shares of common stock outstanding for the period. Diluted EPS is similar to basic EPS, but presents the dilutive effect on a per share basis of potential common stock equivalents (e.g., convertible securities, options, and warrants) as if such securities had been converted into common stock at the beginning of the periods presented. Securities that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS include employee stock options to purchase 94,000 shares of common stock three months ended June 30, 2019. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of Risk ASC 825-10-50-20 Reclassifications Certain prior year amounts have been reclassified to conform to current year presentation. Cash The Company maintains cash depository accounts with financial institutions. The amount on deposit with several financial institutions exceeded the $250,000 federally insured limit as of June 30, 2020. The Company has not historically incurred any losses related to these deposits. The financial institutions are highly rated, financially sound and the risk of loss is minimal. Customers and Accounts Receivable For the three months ended June 30, 2020 and 2019, one customer, Amazon.com, represented 28.2% and 33.8%, respectively, of the Company’s net revenue. As of June 30, 2020, two customers, Amazon.com and Amazon.ca, represented 63.4% and 12.0%, respectively, of the Company’s outstanding accounts receivable. As of March 31, 2020, three customers, Amazon.com, Amazon.ca and Bed, Bath and Beyond, represented 39.9%, 20.7% and 10.4%, respectively, of outstanding accounts receivable. The Company believes that all receivables from these customers are collectible. Suppliers For the three months ended June 30, 2020, the Company purchased inventories and other inventory-related items from one supplier totaling $5.8 million. For the three months ended June 30, 2019, the Company purchased inventories and other inventory-related items from one supplier totaling $1.3 million. The purchase of inventories and other inventory-related items is tied to the anticipated timing and amount of sales for our highly seasonal business and payment terms with our suppliers. The Company’s primary contract manufacturers are located in China. As a result, the Company may be subject to political, currency, regulatory, transportation/shipping, third-party labor, spread and virulence of diseases such as the global COVID-19 pandemic and weather/natural disaster risks. Although the Company believes alternate sources of manufacturing could be obtained, these risks and any potential loss of supply could have an adverse impact on operations, especially in the short term. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments The Company follows the guidance in ASC 820, Fair Value Measurements and Disclosures Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants. ASC 820 also provides a hierarchy for determining fair value, which emphasizes the use of observable market data whenever available. The three broad levels defined by the hierarchy are as follows, with the highest priority given to Level 1 as these are the most reliable, and the lowest priority given to Level 3: ● Level 1 – Quoted prices in active markets for identical assets. ● Level 2 – Quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, or other inputs that are observable or can be corroborated by observable market data, including model-derived valuations. ● Level 3 – Unobservable inputs that are supported by little or no market activity. The carrying value of financial instruments including cash, receivables and accounts payable and accrued expenses, approximates their fair value at June 30, 2020 and March 31, 2020 due to the relatively short-term nature of these instruments. The Company’s intellectual property liability carrying value was determined utilizing Level 3 inputs. As discussed below in Notes 3 and 4, this liability was incurred in conjunction with the Company’s strategic alliance with Scotts Miracle-Gro. As of June 30, 2020 and March 31, 2020, the fair value of the Company's sale of the intellectual property liability was estimated using the discounted cash flow method, which is based on expected future cash flows, discounted to present value using a discount rate of 15%. As of June 30, 2020, the Company did not have any financial assets or liabilities that were measured at fair value on a recurring basis, subsequent to initial recognition. |
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block] | Accounts Receivable and Allowance for Doubtful Accounts The Company sells its products to retailers and directly to consumers. Direct-to-consumer transactions are primarily paid by credit card. Retailer sales terms vary by customer, but generally range from net 30 days to net 60 days. Accounts receivable are reported at net realizable value and net of the allowance for doubtful accounts. The Company uses the allowance method to account for uncollectible accounts receivable. The Company's allowance estimate is based on a review of the current status of trade accounts receivable, which resulted in an allowance of $540,000 and $376,000 at June 30, 2020 and March 31, 2020, respectively. |
Receivable [Policy Text Block] | Other Receivables In conjunction with the Company’s processing of credit card transactions for its direct-to-consumer sales activities and as security with respect to the Company’s performance for credit card refunds and charge backs, the Company is required to maintain a cash reserve with Fidelity Information Services, the Company’s credit card processor. This reserve is equal to 5% of the credit card sales processed during the previous six months. As of June 30, 2020 and March 31, 2020, the balance in this reserve account was $334,000 and $257,000, respectively. |
Advertising Cost [Policy Text Block] | Advertising and Production Costs The Company expenses all production costs related to advertising, including print, television, and radio advertisements when the advertisement has been broadcast or otherwise distributed. In contrast, the Company records media and marketing costs related to its direct-to-consumer advertisements and catalogues, inclusive of postage and printing costs and related direct-response advertising costs, in accordance with ASC 340-20 Capitalized Advertising Costs As the Company has continued to expand its retail distribution channel, the Company has expanded its advertising to include online gateway and portal advertising, as well as placement in third party catalogues. Advertising expense for the three months ended June 30, 2020 and June 30, 2019, were as follows: Three Months Ended June 30, (in thousands) 2020 2019 Direct-to-consumer $ 1,014 $ 83 Retail 317 416 Other - 13 Total advertising expense $ 1,331 $ 512 As of June 30, 2020 and March 31, 2020, the Company had deferred $5,000 and $84,000, respectively, related to media and advertising costs, including the catalogue costs described above. The costs are included within the “prepaid expenses and other” line of the balance sheets. |
Inventory, Policy [Policy Text Block] | Inventory Inventories are valued at the lower of cost, determined on the basis of standard costing, which approximates the first-in, first-out method, or net realizable value. When the Company is the manufacturer, raw materials, labor and manufacturing overhead are included in inventory costs. The Company records the raw materials at delivered cost. Standard labor and manufacturing overhead costs are applied to the finished goods based on normal production capacity. A majority of the Company’s products are manufactured overseas and are recorded at standard cost, which includes product costs for purchased and manufactured products, and freight and transportation costs for inbound freight from manufacturers. Inventory values at June 30, 2020 and March 31, 2020 were as follows: June 30, 2020 March 31, 2020 (in thousands) (in thousands) Finished goods $ 4,441 $ 3,191 Raw materials 1,887 1,597 Total Inventory $ 6,328 $ 4,788 The Company determines an inventory obsolescence reserve based on management’s historical experience and establishes reserves against inventory according to the age of the product. As of June 30, 2020 and March 31, 2020, the Company had reserved $211,000 and $151,000, respectively, for inventory obsolescence. The inventory values are shown net of these reserves. |
Lessee, Leases [Policy Text Block] | Leases At lease inception, the Company determines whether an arrangement is or contains a lease. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities in the financial statements. ROU assets represent the Company’s right to use leased assets over the term of the lease. Lease liabilities represent the Company’s contractual obligation to make lease payments over the lease term. For operating leases, ROU assets and lease liabilities are recognized at the commencement date. The lease liability is measured as the present value of the lease payments over the lease term, using: (i) the rate implicit in the lease if it is determinable, or (ii) alternatively, if the rate is not determinable from the lease, the Company’s incremental borrowing rate at the commencement date of the lease. Operating ROU assets are calculated as the present value of the remaining lease payments, plus unamortized initial direct costs and any prepayments, less any unamortized lease incentives received. Lease terms may include renewal or extension options to the extent they are reasonably certain to be exercised. The assessment of whether renewal or extension options are reasonably certain to be exercised is made at lease commencement. Factors considered in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of any leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option were not exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company has elected not to recognize an ROU asset and obligation for leases with an initial term of twelve months or less. The expense associated with short-term leases is included in lease expense in the statement of operations. For finance leases, after lease commencement the lease liability is measured on an amortized cost basis and increased to reflect interest on the liability and decreased to reflect the lease payment made during the period. Interest on the lease liability is determined each period during the lease term as the amount that results in a constant period discount rate on the remaining balance of the liability. The ROU asset is subsequently measured at cost, less any accumulated amortization and any accumulated impairment losses. Amortization on the ROU asset is recognized over the period from the commencement date to the earlier of: (1) the end of the useful life of the ROU asset; or (2) the end of the lease term. To determine the present value of finance leases, the Company uses a 10% discount rate, which is the rate specified in the lease agreement or incremental borrowing rate, as appropriate. To the extent a lease arrangement includes both lease and non-lease components, the components are accounted for separately. The Company has various operating leases, primarily for office space and other distribution centers, some of which include escalating lease payments and options to extend or terminate the lease. The Company determines if a contract is a lease at the inception of the arrangement. The exercise of lease renewal option is at the Company’s sole discretion and options are recognized when it is reasonably certain the Company will exercise the option. The Company’s leases have remaining terms of less than one year to seven years. The Company does not have lease agreements with residual value guarantees, sale leaseback terms or material restrictive covenants. Operating lease ROU assets and liabilities are recognized at commencement date of lease agreements greater than one year based on the present value of lease payments over the lease term. Lease expense is recognized on a straight-line basis over the lease term and variable lease costs are expensed as incurred. |
Revenue [Policy Text Block] | Revenue Recognition The Company currently has two operating and reportable segments: (i) the Direct-to-Consumer segment, which is composed of sales directly from our website, mail order or customer calls to our customer service department; and (ii) the Retail segment, which is comprised of all sales related to retailers, including where possession of our product is taken and sold by the retailer in store or online, and drop ship orders that process from the retailer and drop directly to our warehouse for us to ship on behalf of the retailer. The majority of the Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products and the risk of loss to a customer. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms. The Company did not have any material unsatisfied performance obligations as of June 30, 2020 or March 31, 2020. The Company excludes from revenues all taxes assessed by a governmental authority that are imposed on the sale of its products and collected from customers. There were no changes to the Company’s accounting for variable consideration under ASC 606. However, the classification from a liability to a contra asset to show net realizable accounts receivable results in a change in presentation on the balance sheet. Promotional and other allowances (variable consideration) recorded as a reduction to net sales, primarily include consideration given to retail customers including, but not limited to the following: ● discounts granted off list prices to support price promotions to end-consumers by retailers; ● the Company’s agreed share of fees given directly to retailers for advertising, in-store marketing and promotional activities; and ● incentives given to the Company’s retailers for achieving or exceeding certain predetermined purchases (i.e., rebates). The Company executes promotional allowance programs with retailers through separate agreements in the ordinary course of business. These agreements generally provide for one or more of the arrangements described above and are of varying durations, ranging from one day to one year. The Company’s promotional and other allowances are calculated based on various programs with retail customers, and accruals are established during the year for its anticipated liabilities. These accruals are based on agreed upon terms, as well as the Company’s historical experience with similar programs, and require management’s judgment with respect to estimating consumer participation and retail customer performance levels. Differences between estimated and actual expenses for promotional and other allowance costs have historically been insignificant and are recognized in earnings in the period such differences are determined. The Company records estimated reductions to revenue for customer and distributor programs and incentive offerings, including promotions, rebates, and other volume-based incentives, based on historical rates. Certain incentive programs require the Company to estimate the number of customers who will actually redeem the incentive based on our historical industry experience. As of June 30, 2020 and March 31, 2020, the Company reduced accounts receivable $934,000 and $744,000, respectively, as an estimate for the foregoing deductions and allowances within the “accounts receivable, net” and “accrued expenses” lines of the balance sheets, respectively |
Standard Product Warranty, Policy [Policy Text Block] | Warranty and Return Reserves The Company records warranty liabilities at the time of sale for the estimated costs that may be incurred under its basic warranty program. The specific warranty terms and conditions vary depending upon the product sold, but generally include technical support, repair parts, and labor for periods up to one year. Factors that affect the Company’s warranty liability include the number of installed units currently under warranty, historical and anticipated rates of warranty claims on those units, and cost per claim to satisfy the Company’s warranty obligation. Based upon the foregoing, the Company has recorded a provision for potential future warranty costs of $241,000 and $226,000 as of June 30, 2020 and March 31, 2020, respectively. These expenses are recorded in the accrued expenses line of the condensed balance sheets. The Company reserves for known and potential returns from customers and associated refunds or credits related to such returns based upon historical experience. In certain cases, retail customers are provided a fixed allowance, usually in a range of 1% to 2%, to cover returned goods and this allowance is deducted from payments made to us by such customers. As of June 30, 2020 and March 31, 2020, the Company has recorded a reserve for customer returns of $425,000 and $430,000, respectively. Additionally, the Company calculates specific returns for any customers that are deemed to have a right of return and the customer specific calculation is reviewed for reasonableness at the end of each period. These expenses are recorded as an offset to the accounts receivable line of the condensed balance sheets. |
Segment Reporting, Policy [Policy Text Block] | Segments of an Enterprise and Related Information U.S. GAAP utilizes a management approach based on allocating resources and assessing performance as the source of the Company's reportable segments. U.S. GAAP also requires disclosures about products and services, geographic areas and major customers. At present, the Company operates in two segments, Direct-to-Consumer and Retail Sales. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13 , , Accounting Standards Recently Adopted In February 2016, the FASB issued ASU 2016-02, Leases (“ASC 842”), which, among other things, requires an entity to recognize a ROU and a lease liability on the balance sheet for substantially all leases, including operating leases. The Company adopted ASC 842 effective April 1, 2019 utilizing the modified retrospective approach such that prior year financial statements were not recast under the new standard. Adoption of this standard resulted in changes to the Company’s condensed balance sheets and accounting policies for leases but did not have an impact on the condensed statements of operations or cash flows. See Note 8 for additional information regarding the new standard and its impact on the Company’s financial statements. In addition, the Company elected the package of practical expedients permitted under the transition guidance to not reassess (1) whether any expired or existing contracts are, or contain, leases; (2) the lease classification for expired or existing leases; and (3) initial direct costs for existing leases. The adoption of the guidance effective as of April 1, 2019 resulted in the recognition of: (i) ROU assets of $805,000 which amortization of the ROU began the quarter ended June 30, 2019; and (ii) additional lease liabilities for operating leases of $805,000. The guidance did not have an impact on the Company's condensed statements of operations from the adoption date forward based on amortization of the asset and liability. See Note 8 for disclosures related to the Company's leases. |
Basis of Presentation, Liquid_2
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Advertising Expenses [Table Text Block] | Advertising expense for the three months ended June 30, 2020 and June 30, 2019, were as follows: Three Months Ended June 30, (in thousands) 2020 2019 Direct-to-consumer $ 1,014 $ 83 Retail 317 416 Other - 13 Total advertising expense $ 1,331 $ 512 |
Schedule of Inventory, Current [Table Text Block] | Inventory values at June 30, 2020 and March 31, 2020 were as follows: June 30, 2020 March 31, 2020 (in thousands) (in thousands) Finished goods $ 4,441 $ 3,191 Raw materials 1,887 1,597 Total Inventory $ 6,328 $ 4,788 |
Notes Payable and Long Term D_2
Notes Payable and Long Term Debt (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | As of June 30, 2020 and March 31, 2020, the outstanding balance of the Company’s notes payable and debt, including accrued interest, is as follows: June 30, 2020 March 31, 2020 (in thousands) (in thousands) Notes payable and debt-related party $ 915 $ 915 Sale of intellectual property liability (see Note 4) 19 24 Total notes payable and debt 934 939 Less current portion - long term debt 34 39 Long term debt $ 900 $ 900 |
Equity Compensation Plans and_2
Equity Compensation Plans and Employee Benefit Plans (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement, Disclosure [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] | Information regarding all stock options outstanding under the Company’s 2005 Plan as of June 30, 2020 is as follows: OPTIONS OUTSTANDING AND EXERCISABLE Weighted- Average Weighted- Aggregate Remaining Average Intrinsic Exercise Options Contractual Exercise Value price (in thousands) Life (years) Price (in thousands) $ 1.55 11 0.13 $ 1.55 $ 18 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Lessee, Operating Lease, Disclosure [Table Text Block] | The table below sets forth supplemental Balance Sheet information for the Company’s leases. June 30, 2020 (in thousands) Assets Operating lease ROU assets $ 1,193 Liabilities Operating lease 1,292 |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | The table below sets forth the future cash payments under such agreements for the remaining years are as follows: Year Ending Operating Leases Financing Leases (in thousands) (in thousands) March 31, 2021 $ 185 $ 19 March 31, 2022 266 - March 31, 2023 275 - March 31, 2024 285 - March 31, 2025 294 - Thereafter 460 - Total lease payments $ 1,765 $ 19 Less: amount of lease payments representing interest (473 ) (1 ) Present value of future minimum lease payments 1,292 18 Less: current obligations under leases (126 ) (18 ) Long-term lease obligations $ 1,166 $ - |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The Company has determined that its reportable segments are those that are based on its method of internal reporting and the perspective of the chief operating decision maker. The Company has two reportable segments, Retail Sales and Direct-to-Consumers. The Company evaluates performance based on the primary financial measure of contribution margin (“segment profit”). Segment profit reflects the income or loss from operations before corporate expenses, non-operating income, net interest expense, and income taxes. The Company does not have any individually identified assets regarding specific segments as all processes to manufacture products are not different based on segment. Three Months Ended June 30, 2020 (dollar amounts in thousands) Direct-to-consumer Retail Corporate/Other Consolidated Net sales $ 9,056 $ 7,355 $ - $ 16,411 Cost of revenue 4,854 4,200 - 9,054 Gross profit 4,202 3,155 - 7,357 Gross profit percentage 46.4 % 42.9 % - 44.8 % Sales and marketing (1) 1,073 351 214 1,638 Segment profit 3,129 2,804 (214 ) 5,719 Segment profit percentage 34.6 % 38.1 % - 34.8 % Three Months Ended June 30, 2019 (dollar amounts in thousands) Direct-to-consumer Retail Corporate/Other Consolidated Net sales $ 1,902 $ 2,573 $ - $ 4,475 Cost of revenue 1,389 1,631 - 3,020 Gross profit 513 942 - 1,455 Gross profit percentage 27.0 % 36.6 % - 32.5 % Sales and marketing (1) 109 521 176 806 Segment profit 404 421 (176 ) 649 Segment profit percentage 21.2 % 16.4 % - 14.5 % (1) Sales and marketing expense includes advertising, trade shows, media production and promotional products and other as discussed in the sales and marketing section of the MD&A. See Item 2 below. |
Basis of Presentation, Liquid_3
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | Apr. 01, 2019 | |
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Cash, FDIC Insured Amount | $ 250,000 | |||
Accounts Receivable, Allowance for Credit Loss | $ 540,000 | $ 376,000 | ||
Other receivable, reserve percentage of credit card sales | 5.00% | |||
Other Receivables | $ 334,000 | 257,000 | ||
Prepaid Advertising | 5,000 | 84,000 | ||
Inventory Adjustments | $ 211,000 | 151,000 | ||
Lessee, Finance Lease, Discount Rate | 10.00% | |||
Increase (Decrease) in Accounts and Other Receivables | $ (934,000) | (744,000) | ||
Provision for Future Warranty Costs | $ 241 | 226,000 | ||
Number of Operating Segments | 2 | |||
Operating Lease, Right-of-Use Asset | $ 1,193,000 | 1,229,000 | $ 805,000 | |
Operating Lease, Liability | $ 1,292,000 | $ 805,000 | ||
Minimum [Member] | ||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Lessee, Operating Lease, Term of Contract | 1 year | |||
Returns Reserves Allowance, Percentage | 1.00% | |||
Maximum [Member] | ||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Lessee, Operating Lease, Term of Contract | 7 years | |||
Returns Reserves Allowance, Percentage | 2.00% | |||
Measurement Input, Discount Rate [Member] | ||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Fair Value, Option, Relation to Measurement Inputs | 15% | |||
Share-based Payment Arrangement, Option [Member] | ||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 94,000 | |||
Seasonal Revenue [Member] | Revenue Benchmark [Member] | ||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 60.60% | |||
Major Supplier 1 [Member] | Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | ||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Payments to Suppliers | $ 5,800,000 | $ 1,300,000 | ||
Sales Returns and Allowances [Member] | ||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Customer Refund Liability, Current | $ 425,000 | $ 430,000 | ||
Amazon.com [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 28.20% | 33.80% | ||
Amazon.com [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 63.40% | |||
Amazon.com [Member] | Credit Concentration Risk [Member] | Accounts Receivable [Member] | ||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 39.90% | |||
Amazon.ca [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 12.00% | |||
Amazon.ca [Member] | Credit Concentration Risk [Member] | Accounts Receivable [Member] | ||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 20.70% | |||
Bed Bath & Beyond [Member] | Credit Concentration Risk [Member] | Accounts Receivable [Member] | ||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 10.40% |
Basis of Presentation, Liquid_4
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) - Schedule of Advertising Expenses - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) - Schedule of Advertising Expenses [Line Items] | ||
Advertising expense | $ 1,331 | $ 512 |
Direct-to-consumer [Member] | ||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) - Schedule of Advertising Expenses [Line Items] | ||
Advertising expense | 1,014 | 83 |
Retail [Member] | ||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) - Schedule of Advertising Expenses [Line Items] | ||
Advertising expense | 317 | 416 |
Other Advertising [Member] | ||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) - Schedule of Advertising Expenses [Line Items] | ||
Advertising expense | $ 0 | $ 13 |
Basis of Presentation, Liquid_5
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) - Schedule of Inventory - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Schedule of Inventory [Abstract] | ||
Finished goods | $ 4,441 | $ 3,191 |
Raw materials | 1,887 | 1,597 |
Total inventory | $ 6,328 | $ 4,788 |
Notes Payable and Long Term D_3
Notes Payable and Long Term Debt (Details) - USD ($) | Jun. 20, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | Apr. 22, 2013 |
Notes Payable and Long Term Debt (Details) [Line Items] | |||||
Accrued Liabilities, Current | $ 3,234,000 | $ 2,308,000 | |||
Scotts Miracle-Gro Company [Member] | |||||
Notes Payable and Long Term Debt (Details) [Line Items] | |||||
Debt, Current | 19,000,000 | 24,000,000 | |||
Other Notes Payable | 1,800,000 | 1,500,000 | |||
Scotts Miracle-Gro Company [Member] | Working Capital Term Loan Agreement [Member] | |||||
Notes Payable and Long Term Debt (Details) [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,500,000 | ||||
Debt Instrument, Description | The proceeds were made available as needed in increments of $100,000 not to exceed $1.5 million | ||||
Scotts Miracle-Gro Company [Member] | Real Estate Term Loan Agreement [Member] | |||||
Notes Payable and Long Term Debt (Details) [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||
Proceeds from Related Party Debt | $ 900,000 | ||||
Scotts Miracle-Gro Company [Member] | |||||
Notes Payable and Long Term Debt (Details) [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 80.50% | 80.50% | |||
Technology License Agreement [Member] | Scotts Miracle-Gro Company [Member] | |||||
Notes Payable and Long Term Debt (Details) [Line Items] | |||||
Amortization of Debt Issuance Costs and Discounts | $ 332,000 | $ 87,000 | |||
Royalty, Percentage | 2.00% | ||||
Brand License Agreement [Member] | Scotts Miracle-Gro Company [Member] | |||||
Notes Payable and Long Term Debt (Details) [Line Items] | |||||
Amortization of Debt Issuance Costs and Discounts | $ 291,000 | $ 67,000 | |||
Royalty, Percentage | 5.00% | ||||
Accrued Liabilities, Current | $ 1,200,000 | $ 922,000 |
Notes Payable and Long Term D_4
Notes Payable and Long Term Debt (Details) - Schedule of Debt - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Schedule of Debt [Abstract] | ||
Notes payable and debt-related party | $ 915 | $ 915 |
Sale of intellectual property liability (see Note 4) | 19 | 24 |
Total notes payable and debt | 934 | 939 |
Less current portion - long term debt | 34 | 39 |
Long term debt | $ 900 | $ 900 |
Scotts Miracle-Gro Transactio_2
Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 22, 2013 | Jun. 30, 2020 |
Scotts Miracle-Gro Company [Member] | ||
Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions (Details) [Line Items] | ||
Equity Method Investment, Ownership Percentage | 80.50% | 80.50% |
Series B Preferred Stock [Member] | Scotts Miracle-Gro Company [Member] | ||
Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions (Details) [Line Items] | ||
Stock Issued During Period, Shares, New Issues | 2,649,007 | |
Shares Issued, Price Per Share | $ 0.001 | |
Stock Issued During Period, Value, New Issues | $ 4 | |
Convertible Preferred Stock, Terms of Conversion | On November 29, 2016, Scotts Miracle-Gro fully exercised the Warrant and, by its terms, the Series B Preferred Stock automatically converted into the Company’s common stock. |
Equity Compensation Plans and_3
Equity Compensation Plans and Employee Benefit Plans (Details) - Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable - Options Exercise Price $1.55 [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Equity Compensation Plans and Employee Benefit Plans (Details) - Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Line Items] | |
Exercise Price | $ 1.55 |
Options Outstanding (in Shares) | shares | 11 |
Options Outstanding, Weighted-average Remaining Contractual Life | 47 days |
Options Outstanding, Weighted-average Exercise Price | $ 1.55 |
Options Outstanding, Aggregate Intrinsic Value (in Dollars) | $ | $ 18 |
Leases (Details)
Leases (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Disclosure Text Block [Abstract] | ||
Operating Lease, Weighted Average Remaining Lease Term | 6 years | |
Operating Lease, Weighted Average Discount Rate, Percent | 10.00% | |
Operating Leases, Rent Expense | $ 144,000 | $ 128,000 |
Leases (Details) - Lessee, Oper
Leases (Details) - Lessee, Operating Lease, Disclosure - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Apr. 01, 2019 |
Assets | |||
Operating lease ROU assets | $ 1,193 | $ 1,229 | $ 805 |
Liabilities | |||
Operating lease | $ 1,292 | $ 805 |
Leases (Details) - Lessee, Op_2
Leases (Details) - Lessee, Operating Lease, Liability, Maturity - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Apr. 01, 2019 |
Lessee, Operating Lease, Liability, Maturity [Abstract] | |||
Operating Leases due March 31, 2021 | $ 185 | ||
Finance Leases due March 31, 2021 | 19 | ||
Operating Leases due March 31, 2022 | 266 | ||
Finance Leases due March 31, 2022 | 0 | ||
Operating Leases due March 31, 2023 | 275 | ||
Finance Leases due March 31, 2023 | 0 | ||
Operating Leases due March 31, 2024 | 285 | ||
Finance Leases due March 31, 2024 | 0 | ||
Operating Leases due March 31, 2025 | 294 | ||
Finance Leases due March 31, 2025 | 0 | ||
Operating Leases due Thereafter | 460 | ||
Finance Leases due Thereafter | 0 | ||
Operating Leases, Total lease payments | 1,765 | ||
Finance Leases, Total lease payments | 19 | ||
Operating Leases, amount of lease payments representing interest | (473) | ||
Finance Leases, amount of lease payments representing interest | (1) | ||
Operating Leases, Present value of future minimum lease payments | 1,292 | $ 805 | |
Finance Leases, Present value of future minimum lease payments | 18 | ||
Operating Leases, current obligations under leases | (126) | $ (58) | |
Finance Leases, current obligations under leases | (18) | (29) | |
Operating Leases, Long-term lease obligations | 1,166 | $ 1,201 | |
Finance Leases, Long-term lease obligations | $ 0 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
Segment Information (Details) -
Segment Information (Details) - Schedule of Segment Reporting Information, by Segment - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | ||
Segment Reporting Information [Line Items] | |||
Net sales | $ 16,411 | $ 4,475 | |
Cost of revenue | 9,054 | 3,020 | |
Gross profit | 7,357 | 1,455 | |
Sales and marketing | 2,815 | 1,404 | |
Direct-to-consumer [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 9,056 | 1,902 | |
Cost of revenue | 4,854 | 1,389 | |
Gross profit | $ 4,202 | $ 513 | |
Gross profit percentage | 46.40% | 27.00% | |
Sales and marketing | [1] | $ 1,073 | $ 109 |
Segment profit margin | $ 3,129 | $ 404 | |
Segment profit margin percentage | 34.60% | 21.20% | |
Retail [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 7,355 | $ 2,573 | |
Cost of revenue | 4,200 | 1,631 | |
Gross profit | $ 3,155 | $ 942 | |
Gross profit percentage | 42.90% | 36.60% | |
Sales and marketing | [1] | $ 351 | $ 521 |
Segment profit margin | $ 2,804 | $ 421 | |
Segment profit margin percentage | 38.10% | 16.40% | |
Corporate and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 0 | $ 0 | |
Cost of revenue | 0 | 0 | |
Gross profit | $ 0 | $ 0 | |
Gross profit percentage | 0.00% | 0.00% | |
Sales and marketing | [1] | $ 214 | $ 176 |
Segment profit margin | $ (214) | $ (176) | |
Segment profit margin percentage | 0.00% | 0.00% | |
Consolidated Entity [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 16,411 | $ 4,475 | |
Cost of revenue | 9,054 | 3,020 | |
Gross profit | $ 7,357 | $ 1,455 | |
Gross profit percentage | 44.80% | 32.50% | |
Sales and marketing | [1] | $ 1,638 | $ 806 |
Segment profit margin | $ 5,719 | $ 649 | |
Segment profit margin percentage | 34.80% | 14.50% | |
[1] | Sales and marketing expense includes advertising, trade shows, media production and promotional products and other as discussed in the sales and marketing section of the MD&A. See Item 2 below. |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) $ in Millions | Aug. 03, 2020 | Jul. 28, 2020 |
Subsequent Events (Details) [Line Items] | ||
Repayments of Debt | $ 2.3 | |
Debt Instrument, Face Amount | $ 7.5 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 6 | |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |
Debt Instrument, Description | The proceeds will be made available as needed in increments of $500,000, the Company may reborrow and pay down during the Term Loan, not to exceed $6.0 million | |
Debt Instrument, Maturity Date | Jun. 30, 2021 |