Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Nov. 01, 2020 | Dec. 08, 2020 | |
Document Information Line Items | ||
Entity Registrant Name | Lovesac Co | |
Trading Symbol | LOVE | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --02-02 | |
Entity Common Stock, Shares Outstanding | 14,683,138 | |
Amendment Flag | false | |
Entity Central Index Key | 0001701758 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Nov. 1, 2020 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38555 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 32-0514958 | |
Entity Address, Address Line One | Two Landmark Square, | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Stamford, | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06901 | |
City Area Code | 888 | |
Local Phone Number | 636-1223 | |
Title of 12(b) Security | Common Stock, $0.00001 par value per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Nov. 01, 2020 | Feb. 02, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 47,686,348 | $ 48,538,827 |
Trade accounts receivable | 7,231,414 | 7,188,925 |
Merchandise inventories | 57,758,331 | 36,399,862 |
Prepaid expenses and other current assets | 10,869,620 | 8,050,122 |
Total Current Assets | 123,545,713 | 100,177,736 |
Property and Equipment, Net | 25,906,210 | 23,844,261 |
Other Assets | ||
Goodwill | 143,562 | 143,562 |
Intangible assets, net | 1,419,527 | 1,352,161 |
Deferred financing costs, net | 113,338 | 146,047 |
Total Other Assets | 1,676,427 | 1,641,770 |
Total Assets | 151,128,350 | 125,663,767 |
Current Liabilities | ||
Accounts payable | 25,223,308 | 19,887,611 |
Accrued expenses | 16,900,124 | 8,567,580 |
Payroll payable | 4,561,285 | 887,415 |
Customer deposits | 11,668,451 | 1,653,597 |
Sales taxes payable | 1,134,883 | 1,404,792 |
Total Current Liabilities | 59,488,051 | 32,400,995 |
Deferred rent | 6,387,801 | 3,108,245 |
Line of credit | ||
Total Liabilities | 65,875,852 | 35,509,240 |
Stockholders’ Equity | ||
Preferred Stock $0.00001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of November 1, 2020 and February 2, 2020. | ||
Common Stock $.00001 par value, 40,000,000 shares authorized, 14,683,138 shares issued and outstanding as of November 1, 2020 and 14,472,611 shares issued and outstanding as of February 2, 2020. | 147 | 145 |
Additional paid-in capital | 170,391,395 | 168,317,210 |
Accumulated deficit | (85,139,044) | (78,162,828) |
Stockholders’ Equity | 85,252,498 | 90,154,527 |
Total Liabilities and Stockholders’ Equity | $ 151,128,350 | $ 125,663,767 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Nov. 01, 2020 | Feb. 02, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 14,683,138 | 14,472,611 |
Common stock, shares outstanding | 14,683,138 | 14,472,611 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 74,742,200 | $ 52,097,232 | $ 191,060,017 | $ 141,202,010 |
Cost of merchandise sold | 33,434,372 | 25,843,532 | 91,413,080 | 69,670,642 |
Gross profit | 41,307,828 | 26,253,700 | 99,646,937 | 71,531,368 |
Operating expenses | ||||
Selling, general and administration expenses | 25,945,632 | 24,484,791 | 75,160,559 | 70,302,779 |
Advertising and marketing | 10,975,176 | 7,258,284 | 26,337,298 | 18,717,517 |
Depreciation and amortization | 1,853,922 | 1,377,659 | 5,033,484 | 3,649,072 |
Total operating expenses | 38,774,730 | 33,120,734 | 106,531,341 | 92,669,368 |
Operating income (loss) | 2,533,098 | (6,867,034) | (6,884,404) | (21,138,000) |
Interest (expense) income, net | (43,860) | 134,416 | (22,233) | 538,306 |
Net income (loss) before taxes | 2,489,238 | (6,732,618) | (6,906,637) | (20,599,694) |
Provision for income taxes | (10,779) | (15,692) | (69,579) | (21,392) |
Net income (loss) | $ 2,478,459 | $ (6,748,310) | $ (6,976,216) | $ (20,621,086) |
Net income (loss) per common share: | ||||
Basic (in Dollars per share) | $ 0.17 | $ (0.46) | $ (0.48) | $ (1.45) |
Diluted (in Dollars per share) | $ 0.16 | $ (0.46) | $ (0.48) | $ (1.45) |
Weighted average number of common shares outstanding: | ||||
Basic (in Shares) | 14,561,835 | 14,538,586 | 14,520,282 | 14,179,995 |
Diluted (in Shares) | 15,581,487 | 14,538,586 | 14,520,282 | 14,179,995 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (unaudited) - USD ($) | Common Shares | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Feb. 03, 2019 | $ 136 | $ 141,727,807 | $ (62,957,809) | $ 78,770,134 |
Balance (in Shares) at Feb. 03, 2019 | 13,588,568 | |||
Net income (loss) | (9,101,777) | (9,101,777) | ||
Equity based compensation | 3,222,563 | 3,222,563 | ||
Vested restricted stock units | $ 2 | (3,164,134) | (3,164,132) | |
Vested restricted stock units (in Shares) | 158,329 | |||
Exercise of warrants | 4,000 | 4,000 | ||
Exercise of warrants (in Shares) | 5,138 | |||
Balance at May. 05, 2019 | $ 138 | 141,790,236 | (72,059,586) | 69,730,788 |
Balance (in Shares) at May. 05, 2019 | 13,752,035 | |||
Net income (loss) | (4,770,999) | (4,770,999) | ||
Equity based compensation | 170,536 | 170,536 | ||
Vested restricted stock units | (179,086) | (179,086) | ||
Vested restricted stock units (in Shares) | 14,443 | |||
Issuance of common shares, net | $ 7 | 25,609,993 | 25,610,000 | |
Issuance of common shares, net (in Shares) | 750,000 | |||
Exercise of warrants | 8,000 | 8,000 | ||
Exercise of warrants (in Shares) | 22,108 | |||
Balance at Aug. 04, 2019 | $ 145 | 167,399,679 | (76,830,585) | 90,569,239 |
Balance (in Shares) at Aug. 04, 2019 | 14,538,586 | |||
Net income (loss) | (6,748,310) | (6,748,310) | ||
Equity based compensation | 627,879 | 627,879 | ||
Tax payments received on vested restricted stock units | 914 | 914 | ||
Balance at Nov. 03, 2019 | $ 145 | 168,028,472 | (83,578,895) | 84,449,722 |
Balance (in Shares) at Nov. 03, 2019 | 14,538,586 | |||
Balance at Feb. 02, 2020 | $ 145 | 168,317,210 | (78,162,828) | 90,154,527 |
Balance (in Shares) at Feb. 02, 2020 | 14,472,611 | |||
Net income (loss) | (8,347,751) | (8,347,751) | ||
Equity based compensation | 898,077 | 898,077 | ||
Vested restricted stock units | ||||
Vested restricted stock units (in Shares) | 35,776 | |||
Taxes paid for net share settlement of equity awards | (149,512) | (149,512) | ||
Balance at May. 03, 2020 | $ 145 | 169,065,775 | (86,510,579) | 82,555,341 |
Balance (in Shares) at May. 03, 2020 | 14,508,387 | |||
Balance at Feb. 02, 2020 | $ 145 | 168,317,210 | (78,162,828) | 90,154,527 |
Balance (in Shares) at Feb. 02, 2020 | 14,472,611 | |||
Balance at Nov. 01, 2020 | $ 147 | 170,391,395 | (85,139,044) | 85,252,498 |
Balance (in Shares) at Nov. 01, 2020 | 14,683,138 | |||
Balance at May. 03, 2020 | $ 145 | 169,065,775 | (86,510,579) | 82,555,341 |
Balance (in Shares) at May. 03, 2020 | 14,508,387 | |||
Net income (loss) | (1,106,924) | (1,106,924) | ||
Equity based compensation | 677,106 | 677,106 | ||
Vested restricted stock units | ||||
Vested restricted stock units (in Shares) | 19,192 | |||
Taxes paid for net share settlement of equity awards | (305,908) | (305,908) | ||
Balance at Aug. 02, 2020 | $ 145 | 169,436,973 | (87,617,503) | 81,819,615 |
Balance (in Shares) at Aug. 02, 2020 | 14,527,579 | |||
Net income (loss) | 2,478,459 | 2,478,459 | ||
Equity based compensation | 1,063,445 | 1,063,445 | ||
Vested restricted stock units (in Shares) | 18,725 | |||
Taxes paid for net share settlement of equity awards | (109,021) | (109,021) | ||
Exercise of warrants | $ 2 | (2) | ||
Exercise of warrants (in Shares) | 136,834 | |||
Balance at Nov. 01, 2020 | $ 147 | $ 170,391,395 | $ (85,139,044) | $ 85,252,498 |
Balance (in Shares) at Nov. 01, 2020 | 14,683,138 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Cash Flows (unaudited) - USD ($) | 9 Months Ended | |
Nov. 01, 2020 | Nov. 03, 2019 | |
Cash Flows from Operating Activities | ||
Net loss | $ (6,976,216) | $ (20,621,086) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization of property and equipment | 4,603,971 | 3,457,737 |
Amortization of other intangible assets | 429,513 | 191,335 |
Amortization of deferred financing fees | 65,062 | 54,768 |
Net loss (gain) on disposal of property and equipment | 5,487 | (166,865) |
Equity based compensation | 2,638,628 | 4,020,978 |
Deferred rent | 3,279,556 | 903,945 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (42,489) | (4,625,978) |
Merchandise inventories | (21,358,469) | (24,052,012) |
Prepaid expenses and other current assets | (2,801,852) | (2,781,766) |
Accounts payable and accrued expenses | 17,072,202 | 4,812,508 |
Customer deposits | 10,014,855 | 2,367,227 |
Net Cash Provided by (Used in) Operating Activities | 6,930,248 | (36,439,209) |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | (6,671,407) | (6,834,382) |
Payments for patents and trademarks | (496,879) | (449,278) |
Proceeds from disposal of property and equipment | 300,000 | |
Net Cash Used in Investing Activities | (7,168,286) | (6,983,660) |
Cash Flows from Financing Activities | ||
Proceeds from the issuance of common shares, net | 25,610,000 | |
Taxes paid for net share settlement of equity awards | (564,441) | (3,342,304) |
Proceeds from the issuance of warrants, net | 12,000 | |
Paydowns of line of credit | (31,373) | |
Payment of deferred financing costs | (50,000) | |
Net Cash (Used in) Provided by Financing Activities | (614,441) | 22,248,323 |
Net Change in Cash and Cash Equivalents | (852,479) | (21,174,546) |
Cash and Cash Equivalents - Beginning | 48,538,827 | 49,070,952 |
Cash and Cash Equivalents - Ending | 47,686,348 | 27,896,406 |
Supplemental Cash Flow Disclosures | ||
Cash paid for taxes | 69,579 | 6,706 |
Cash paid for interest | $ 61,685 | $ 38,632 |
Basis of Presentation, Operatio
Basis of Presentation, Operations and Liquidity | 9 Months Ended |
Nov. 01, 2020 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION, OPERATIONS AND LIQUIDITY | NOTE 1 - BASIS OF PRESENTATION, OPERATIONS AND LIQUIDITY The condensed consolidated balance sheet of The Lovesac Company (the “Company”) as of February 2, 2020, which has been derived from our audited financial statements as of and for the 52-week year ended February 2, 2020, and the accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. Certain information and note disclosures normally included in annual financial statements, prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), have been condensed or omitted pursuant to those rules and regulations. The financial information presented herein, which is not necessarily indicative of results to be expected for the full current fiscal year, reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the interim unaudited condensed consolidated financial statements. Such adjustments are of a normal, recurring nature. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements filed in its Annual Report on Form 10-K for the fiscal year ended February 2, 2020. Due to the seasonality of the Company’s business, with the majority of our activity occurring in the fourth quarter of each fiscal year, the results of operations for the thirteen and thirty-nine weeks ended November 1, 2020 and November 3, 2019 are not necessarily indicative of results to be expected for the full fiscal year. The Company is a technology driven company that designs, manufactures and sells unique, high quality furniture derived through its proprietary “Designed for Life” approach which results in products that are built to last a lifetime and designed to evolve as our customers’ lives do. The Company markets and sells its products through modern and efficient showrooms and, increasingly, through online sales primarily online directly at www.lovesac.com, supported by direct-to-consumer touch-feel points in the form of our own showrooms as well as through shop-in-shops and pop-up-shops with third party retailers. The Company was formed as a Delaware corporation on January 3, 2017, in connection with a corporate reorganization with SAC Acquisition LLC, a Delaware limited liability company (“SAC LLC”), the predecessor entity to the Company. In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, and, in the following weeks, many U.S. states and localities issued lockdown orders impacting consumer demand. Since then, the COVID-19 situation within the U.S. has rapidly escalated. On March 18, 2020, the Company closed all showroom locations. All showrooms have since fully reopened to the walk-in phase. The Company has and will continue to follow the guidance of federal, state, and local governments, as well as health organizations, to determine the operating status of its showrooms. Additionally, the Company implemented a reduction in workforce of approximately 447 part time employees (representing 57% of our total headcount) as well as a temporary reduction in executive cash compensation. Cash compensation was reduced by 20% for Shawn Nelson, Chief Executive Officer, Jack Krause, President and Chief Operating Officer, and Donna Dellomo, Executive Vice President and Chief Financial Officer. The base salaries of all other senior management and full-time headquarter team members has been temporarily reduced by graduated amounts.The Company’s Board of Directors has also agreed to a temporary reduction of its retainer and monitoring fees and an extension of the associated payment timeline. The Company continues to monitor the situation closely and it is possible that the Company will implement further measures. As of November 1, 2020, we have re-hired 348 part time showroom associates to assist with showroom sales. As of October 1, 2020, we restored cash compensation for all headquarter associates other then senior management. The Company has incurred significant operating losses and used cash in its operating activities since inception. Operating losses have resulted from inadequate sales levels for the cost structure and expenses as a result of expanding into new markets, opening new showrooms, and investments into advertising, marketing and infrastructure to support increases in revenues. The Company plans to continue to open new retail showrooms in larger markets and increase its shop-in-shop relationships to increase sales levels and invest in advertising and marketing initiatives to increase brand awareness. Of course, there can be no assurance that anticipated sales levels will be achieved. The Company believes that based on its current sales and expense levels, projections for the next twelve months, current cash on hand and the credit facility with Wells Fargo Bank, see Note 7, the Company will have sufficient working capital to cover operating cash needs through the twelve month period from the financial statement issuance date. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Nov. 01, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS Except as described below, the Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements. The Company, as an emerging growth company, has elected to use the extended transition period for complying with new or revised financial accounting standards. The following new accounting pronouncements, and related impacts on adoption are being evaluated by the Company: In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) While we continue to assess all of the effects of adoption, we currently believe the most significant effects relate to the recognition of new Right of Use “ROU” assets and lease liabilities on our balance sheet for our showroom and office real estate leases. We do not expect a significant change in our leasing activities between now and adoption. On adoption, we currently expect to recognize additional liabilities of approximately $91 million, of which $14 million will be short-term and $77 million will be long-term with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The new standard also provides practical expedients for an entity’s ongoing accounting. We currently expect to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also currently expect to elect the practical expedient to not separate lease and non-lease components for all of our leases. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Nov. 01, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 3 – INTANGIBLE ASSETS, NET A summary of intangible assets follows: November 1, 2020 Estimated Life Gross Carrying Amount Accumulated Amortization Net carrying amount Patents 10 Years $ 2,265,157 $ (1,083,303 ) $ 1,181,854 Trademarks 3 Years 1,180,316 (942,643 ) 237,673 Other intangibles 5 Years 839,737 (839,737 ) - Total $ 4,285,210 $ (2,865,683 ) $ 1,419,527 February 2, 2020 Estimated Life Gross Carrying Amount Accumulated Amortization Net carrying amount Patents 10 Years $ 1,965,794 $ (846,898 ) $ 1,118,896 Trademarks 3 Years 982,800 (749,535 ) 233,265 Other intangibles 5 Years 839,737 (839,737 ) - Total $ 3,788,331 $ (2,436,170 ) $ 1,352,161 Amortization expense associated with intangible assets subject to amortization is included in depreciation and amortization expense on the accompanying condensed consolidated statements of operations. Amortization expense on other intangible assets was $264,963 and $67,665 and $429,513 and $191,335 for the thirteen and thirty-nine weeks ended November 1, 2020 and November 3, 2019, respectively. As of November 1, 2020, estimated future amortization expense associated with intangible assets subject to amortization is as follows: Remainder of Fiscal 2021 $ 73,676 2022 247,358 2023 199,067 2024 163,860 2025 145,107 2026 143,647 Thereafter 446,812 $ 1,419,527 |
Income Taxes
Income Taxes | 9 Months Ended |
Nov. 01, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 4 – INCOME TAXES The Company continues to provide a full valuation allowance against its net deferred tax assets due to the uncertainty as to when business conditions will improve sufficiently to enable it to utilize its deferred tax assets. As a result, the Company did not record a federal or state tax benefit on its operating losses for the thirteen and thirty-nine weeks ended November 1, 2020 and November 3, 2019. The Company does not anticipate any material adjustments relating to unrecognized tax benefits within the next twelve months; however, the ultimate outcome of tax matters is uncertain and unforeseen results can occur. We had no material interest or penalties during the thirteen and thirty-nine weeks ended November 1, 2020 and November 3, 2019, respectively, and we do not anticipate any such items during the next twelve months. Our policy is to record interest and penalties directly related to uncertain tax positions as income tax expense in the condensed consolidated statements of operations. |
Basic and Diluted Net Income (L
Basic and Diluted Net Income (Loss) Per Common Share | 9 Months Ended |
Nov. 01, 2020 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE | NOTE 5 – BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE Basic earnings per share is computed as net earnings divided by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed as net earnings divided by the weighted average number of common shares outstanding and common stock equivalents outstanding for the period. Diluted net income(loss) per common share includes, in periods in which they are dilutive, the effect of those potentially dilutive securities where the average market price of the common stock exceeds the exercise prices for the respective periods. For the thirteen weeks ended November 1, 2020, there were 495,366 shares of common stock underlying stock options of potentially dilutive shares which may be issued in the future that were excluded from the diluted net income per share calculation because the effect of including these potentially dilutive shares was antidilutive. For the thirty-nine weeks ended November 1, 2020, there were 1,973,607 of potentially dilutive shares which may be issued in the future, including 685,743 shares of common stock related to restricted stock units, 495,366 shares of common stock underlying stock options and warrants to purchase 792,498 shares of common stock. For the thirteen and thirty-nine weeks ended November 3, 2019, there were 1,729,331 of potentially dilutive shares which may be issued in the future, including 194,845 shares of common stock related to restricted stock units, 495,366 shares of common stock underlying stock options and warrants to purchase 1,039,120 shares of common stock. These were excluded from the diluted loss per share calculation because the effect of including these potentially dilutive shares was antidilutive. |
Commitments, Contingency and Re
Commitments, Contingency and Related Parties | 9 Months Ended |
Nov. 01, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCY AND RELATED PARTIES | NOTE 6 – COMMITMENTS, CONTINGENCY AND RELATED PARTIES Operating Lease Commitments The Company leases its office, warehouse facilities and retail showrooms under operating lease agreements which expire at various dates through September 2031. Monthly payments related to these leases range from $2,040 to $45,600. Expected future annual minimum rental payments under these leases follow: Remainder 2021 $ 2,300,868 2022 13,459,948 2023 12,490,576 2024 12,315,871 2025 11,586,640 2026 10,153,556 Thereafter 27,467,238 $ 89,774,697 Severance Contingency The Company has various employment agreements with its senior level executives. A number of these agreements have severance provisions, ranging from 12 to 18 months of salary, in the event those employees are terminated without cause. The total amount of exposure to the Company under these agreements was $3,165,978 at November 1, 2020 if all executives with employment agreements were terminated without cause and the full amount of severance was payable. Legal Contingency The Company is involved in various legal proceedings in the ordinary course of business. Management cannot presently predict the outcome of these matters, although management believes, based in part on the advice of counsel, that the ultimate resolution of these matters will not have a materially adverse effect on the Company’s condensed consolidated financial position, results of operations or cash flows. Related Parties Our equity sponsor Mistral Capital Management, LLC (“Mistral”) performs management services for the Company under a contractual agreement. Certain of our directors are members and principals of Mistral. Management fees incurred were approximately $100,000 and $300,000 for the thirteen and thirty-nine weeks ended November 1, 2020 and November 3, 2019, respectively and are included in selling, general and administrative expenses. There were $40,000 and $2,000 amounts payable and accrued expenses to Mistral as of November 1, 2020 and February 2, 2020 respectively and are included in accrued expenses in the accompanying condensed consolidated balance sheets. The Company also reimbursed Mistral for out of pocket expenses incurred in the amount of $0 and $16,113 during the thirteen weeks ended November 1, 2020 and November 3, 2019, respectively. The Company reimbursed Mistral for expenses incurred in the amount of $0 and $39,000 for out of pocket expenses for the thirty-nine weeks ended November 1, 2020 and November 3, 2019, respectively. Our equity sponsor Satori Capital, LLC (“Satori”) performs management services for the Company under a contractual agreement. One of our directors is a principal of Satori. Management fees incurred were approximately $25,000 and $75,000 for the thirteen and thirty-nine weeks ended November 1, 2020 and November 3, 2019, respectively, and are included in selling, general and administrative expenses. Amounts payable to Satori as of November 1, 2020 was $30,000 and is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets. Amounts payable to Satori as of February 2, 2020 were $95,000 consisting of $25,000 in management fees and $70,000 of reimbursable expenses which were included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets. There were no such reimbursements during the thirteen and thirty-nine weeks ended November 1, 2020 and November 3, 2019, respectively. The Company engaged Blueport Commerce (“Blueport”), a company owned in part by investment vehicles affiliated with Mistral, as an ecommerce platform in February 2018. One of our directors is also a director of Blueport. There were $442,267 and $435,000 of fees incurred with Blueport sales transacted through the Blueport platform during the thirteen weeks ended November 1, 2020 and November 3, 2019, respectively, and $2,143,392 and $1,202,831 during the thirty-nine weeks ended November 1, 2020 and November 3, 2019, respectively. There was an additional $663,572 of fees incurred with Blueport during the thirteen weeks ended November 1, 2020 related to Lovesac’s early termination of our contract in order to launch a new enhanced ecommerce platform. The amount payable to Blueport as of November 1, 2020 was $331,786 related to the early termination fee and is included in accrued expenses in the accompanying condensed consolidated balance sheets. The amount payable to Blueport as of February 2, 2020 was $150,508 and is included in accrued expenses in the accompanying condensed consolidated balance sheets. |
Financing Arrangements
Financing Arrangements | 9 Months Ended |
Nov. 01, 2020 | |
Financing Arrangements [Abstract] | |
FINANCING ARRANGEMENTS | NOTE 7 – FINANCING ARRANGEMENTS On February 6, 2018, the Company established a line of credit with Wells Fargo Bank, National Association (“Wells”). The line of credit with Wells allows the Company to borrow up to $25.0 million and will mature in February 2023. Borrowings are limited to 90% of eligible credit card receivables plus 85% of eligible wholesale receivables plus 85% of the net recovery percentage for the eligible inventory multiplied by the value of such eligible inventory of the Company for the period from December 16 of each year until October 14 of the immediately following year, with a seasonal increase to 90% of the net recovery percentage for the period from October 15 of each year until December 15 of such year, seasonal advance rate, minus applicable reserves established by Wells. As of November 1, 2020, and February 2, 2020, the Company’s borrowing availability under the line of credit with Wells Fargo was $19.2 million and $13.5 million, respectively. As of November 1, 2020, and February 2, 2020, there were no borrowings outstanding on this line of credit. Under the line of credit with Wells, the Company may elect that revolving loans bear interest at a rate per annum equal to the base rate plus the applicable margin or the LIBOR rate plus the applicable margin. The applicable margin is based on tier’s relating to the quarterly average excess availability. The tiers range from 2.00% to 2.25%. As of November 1, 2020, the rate was 2.00%. The loan agreement calls for certain covenants including a timing of the financial statement’s threshold and a minimum excess availability threshold. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Nov. 01, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 8 – STOCKHOLDERS’ EQUITY Common Stock Warrants In fiscal 2020, the Company issued 18,166 warrants to a third party in connection with previous equity raise. These warrants were valued using the Black-Scholes model. The warrants had a fair value of approximately $130,000. Of these warrants, 17,396 were exercised on May 14, 2019. The warrants may be exercised at any time following the date of issuance during the period prior to their expiration date. The fair value of each warrant is estimated on the date of grant using the Black-Scholes model. Expected volatilities are based on comparable companies’ historical volatility, with consideration of the Company’s volatility, which management believes represents the most accurate basis for estimating expected future volatility under the current circumstances. The risk-free rate is based on the U.S. treasury yield in effect at the time of the grant. May 2019 Warrants 18,166 Expected volatility 44 % Expected dividend yield 0 % Expected term (in years) 3.00 Risk-free interest rate 2.69 % Exercise price $ 16.00 Calculated fair value of warrant $ 7.16 The following represents warrant activity during the thirty-nine weeks ended November 1, 2020 and November 3, 2019: Average Number of warrants Weighted Warrants Outstanding at February 3, 2019 $ 16.83 1,067,475 2.93 Warrants issued 16.00 18,166 2.40 Expired and canceled - - - Exercised 16.00 (46,521 ) (2.15 ) Warrants Outstanding at November 3, 2019 $ 16.83 1,039,120 2.18 Warrants Outstanding at February 2, 2020 $ 16.83 1,039,120 1.93 Warrants issued - - - Expired and canceled - - - Exercised 16.00 (246,622 ) 0.71 Outstanding at November 1, 2020 $ 17.14 792,498 1.37 The majority of the 46,521 warrants exercised in fiscal 2020 and all of the 246,622 warrants exercised in fiscal 2021 were cashless, whereby the holders received fewer shares of common stock in lieu of a cash payment to the Company, which resulted in the issuance of 27,246 and 136,834 common shares in fiscals 2020 and 2021, respectively. Equity Incentive Plans The Company adopted the 2017 Equity Incentive Plan (the “Plan”) which provides for Awards in the form of Options, Stock Appreciation rights, Restricted Stock Awards, Restricted Stock Units, Performance shares, Performance Units, Cash-Based Awards and Other Stock-Based Awards. All awards shall be granted within 10 years from the effective date of the Plan. In June 2019, the Company granted 495,366 non-statutory stock options to certain officers of the Company with an option price of $38.10 per share. 100% of the stock options are subject to vesting on the first trading day after the date on which the closing price of the Company’s stock price has been at least $75 for 60 consecutive trading days so long as this goal has been attained by June 5, 2022 or the options will terminate. These options were valued using a Monte Carlo simulation model to account for the path dependent market conditions that stipulate when and whether or not the options shall vest. The 495,366 stock options were modified to extend the term of the options through June 5, 2024. The modification of the option term resulted in approximately $0.4 million in additional equity compensation expense recorded during the thirteen weeks ended November 1, 2020. In December 2019, SAC LLC distributed the shares of the Company’s common stock it held. In connection with the distribution, officers of the Company agreed to exchange and modify options that were held at SAC LLC for shares of vested common stock of the Company. Pursuant to the exchange, SAC LLC transferred 175,478 shares of common stock to the Company and the Company immediately cancelled these shares. The Company then issued to the former option holders an equivalent number of shares under the Plan and withheld 73,507 shares to satisfy taxes associated with the issuance. In June 2020, the stockholders of the Company approved an amendment to the Plan that increased the number of shares of common stock reserved for issuance under the Plan by 690,000 shares of common stock. The number of shares of common stock reserved for issuance under the Plan increased from 1,414,889 to 2,104,889 shares of common stock. A summary of the status of our stock options as of November 1, 2020, and the changes during the thirty-nine weeks ended November 1, 2020 is presented below: Number of Weighted Weighted Average Outstanding at February 2, 2020 495,366 $ 38.10 2.34 - Exercised - Expired and canceled - Vested - Outstanding at November 1, 2020 495,366 $ 38.10 3.59 - Exercisable at the end of the period - - - - A summary of the status of our unvested restricted stock units as of November 1, 2020, and changes during the thirty-nine weeks then ended, is presented below: Number of Weighted Unvested at February 3, 2019 377,286 $ 11.16 Granted 130,898 23.63 Forfeited (19,154 ) 16.93 Vested (294,185 ) 12.59 Unvested at November 3, 2019 194,845 $ 20.94 Number of Weighted Unvested at February 2, 2020 183,053 $ 21.34 Granted 611,086 17.83 Forfeited (3,078 ) 15.27 Vested (105,318 ) 15.83 Unvested at November 1, 2020 685,743 $ 19.19 Equity based compensation expense was approximately $1.1 million and $2.6 million and for the thirteen and thirty-nine weeks ended November 1, 2020 and $0.6 million and $4.0 million and for the thirteen and thirty-nine weeks ended November 3, 2019, respectively. In the thirty-nine weeks ended November 3, 2019, all the unvested restricted stock units for certain senior executives of the Company vested according to the accelerated vesting trigger in their restricted stock unit agreements. The triggering event was the market capitalization of the Company post-IPO, exceeding $300 million for 60 consecutive trading days and the expiration of the lockup period. This accelerated vesting resulted in equity-based compensation in the amount of $2.9 million. The total unrecognized restricted stock unit compensation cost related to non-vested awards was approximately $5.5 million as of November 1, 2020 and will be recognized in operations over a weighted average period of 2.41 years. |
Employee Benefit Plan
Employee Benefit Plan | 9 Months Ended |
Nov. 01, 2020 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLAN | NOTE 9 – EMPLOYEE BENEFIT PLAN In February 2017, the Company established TLC 401(k) Plan (the “401(k) Plan”) with Elective Deferrals beginning May 1, 2017. The 401(k) Plan calls for Elective Deferral Contributions, Safe Harbor Matching Contributions and Profit-Sharing Contributions. All employees of the Company (except for union employees and nonresident aliens) will be eligible to participate in the 401(k) Plan as of the day of the month which is coincident with or next follows the date on which they attain age 21 and complete one month of service. Participants will be able to contribute up to 100% of their eligible compensation to the 401(k) Plan subject to limitations with the IRS. The employer contributions to the 401(k) Plan were $$111,905 and $89,708 for the thirteen weeks ended November 1, 2020 and November 3, 2019 and $346,376 and $280,820 for the thirty-nine weeks ended November 1, 2020 and November 3, 2019, respectively. Amounts payable to the 401(k) Plan as of November 1, 2020 and February 2, 2020 were $247,112 and $0, respectively, and are included in accrued expenses in the accompanying condensed consolidated balance sheets |
Segment Information
Segment Information | 9 Months Ended |
Nov. 01, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 10 – SEGMENT INFORMATION The Company has determined that the Company operates within a single reporting segment. The chief operating decision makers of the Company are the Chief Executive Officer and President. The Company’s operating segments are aggregated for financial reporting purposes because they are similar in each of the following areas including economic characteristics, class of consumer, nature of products and distribution method and products are a singular group of products which make up over 95% of net sales. Thirteen weeks ended Thirty-nine weeks ended November 1, November 3, November 1, November 3, Sactionals $ 63,303,012 $ 43,118,496 $ 160,655,033 $ 114,290,733 Sacs 10,196,739 7,808,417 27,722,572 23,357,660 Other 1,242,449 1,170,319 2,682,412 3,553,617 $ 74,742,200 $ 52,097,232 $ 191,060,017 $ 141,202,010 |
Barter Arrangements
Barter Arrangements | 9 Months Ended |
Nov. 01, 2020 | |
Debt Disclosure [Abstract] | |
BARTER ARRANGEMENTS | NOTE 11 – BARTER ARRANGEMENTS During fiscal 2020, the Company exchanged $1,097,488 of inventory plus the cost of freight for certain media credits. To account for the exchange, the Company recorded the transfer of the inventory asset as a reduction of inventory and an increase to a prepaid media asset of $1,055,185 which is included in “Prepaid and other current assets” on the accompanying condensed consolidated balance sheet. During the thirty-nine weeks ended November 1, 2020, the Company used $374,423 in media credits. There was an additional barter arrangement entered into during the thirteen weeks ended November 1 2020. During the thirteen weeks ended November 1, 2020, the Company exchanged $432,630 of inventory plus the cost of freight for certain media credits, related to the recent barter arrangement. These costs are included in “Prepaid and other current assets” on the accompanying condensed consolidated balance sheet. The Company had $432,630 and $374,423 of unused media credits remaining as of November 1, 2020 and February 2, 2020, respectively. The Company accounts for barter transactions under ASC Topic No. 845 “Nonmonetary Transactions.” Barter transactions with commercial substance are recorded at the estimated fair value of the products exchanged, unless the products received have a more readily determinable estimated fair value. Revenue associated with barter transactions is recorded at the time of the exchange of the related assets. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Nov. 01, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | NOTE 12 – REVENUE RECOGNITION The Company implemented ASU 2015-04, Revenue from Contracts with Customers (Accounting Standards Codification Topic 606 The Company’s revenue consists substantially of product sales. The Company reports product sales net of discounts and recognizes them at the point in time when control transfers to the customer, which occurs when shipment is confirmed. Estimated refunds for returns and allowances are recorded using our historical return patterns, adjusting for any changes in returns policies. The Company records estimated refunds for net sales returns on a monthly basis as a reduction of net sales and cost of sales on the condensed consolidated statement of operations and an increase in inventory and customers returns liability on the condensed consolidated balance sheet. As of November 1, 2020 and February 2, 2020, there was a returns allowance recorded on the condensed consolidated balance sheet in the amount of $1,593,840 and $2,177,715, respectively, which was included in accrued expenses and $192,856 and $442,390, respectively, associated with sales returns included in merchandise inventories. In some cases, deposits are received before the Company transfers control, resulting in contract liabilities. These contract liabilities are reported as deposits on the Company’s condensed consolidated balance sheet. As of November 1, 2020 and February 2, 2020, the Company recorded under customer deposit liabilities the amount of $11,668,452 and $1,653,597, respectively. During the thirty-nine weeks ended November 1, 2020 and November 3, 2019, the Company recognized approximately $1,653,597 and $1,059,957, respectively, related to our customer deposits. Upon adoption of ASC 606, we have elected the following accounting policies and practical expedients: The Company recognizes shipping and handling expense as fulfilment activities (rather than as a promised good or service) when the activities are performed even if those activities are performed after the control of the good has been transferred. Accordingly, we record the expenses for shipping and handling activities at the same time we recognize revenue. The Company excludes from the measurement of the transaction price all taxes imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer, including sales, use, excise, value-added, and franchise taxes (collectively referred to as sales taxes). The Company does not adjust revenue for the effects of any financing components if the contract has a duration of one year or less, as the Company receives payment from the customer within one year from when it transferred control of the related goods. The Company offers its products through an inventory lean omni-channel platform that provides a seamless and meaningful experience to its customers in showrooms and through the internet. The other channel predominantly represents sales through the use of pop-up shops that typically average ten days at a time and shop-in-shops that are staffed with associates trained to demonstrate and sell our product. The following represents sales disaggregated by channel: Thirteen weeks ended Thirty-nine weeks ended November 1, November 3, November 1, November 3, Showrooms $ 41,538,063 $ 32,473,878 $ 72,506,769 $ 90,660,653 Internet 25,709,964 11,415,819 101,848,016 29,331,302 Other 7,494,173 8,207,535 16,705,232 21,210,055 $ 74,742,200 $ 52,097,232 $ 191,060,017 $ 141,202,010 See Note 10 for sales disaggregated by product . |
Subsequent Events
Subsequent Events | 9 Months Ended |
Nov. 01, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS The Company has evaluated events and transactions subsequent to November 1, 2020 through the date the condensed consolidated financial statements were issued. |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Nov. 01, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | November 1, 2020 Estimated Life Gross Carrying Amount Accumulated Amortization Net carrying amount Patents 10 Years $ 2,265,157 $ (1,083,303 ) $ 1,181,854 Trademarks 3 Years 1,180,316 (942,643 ) 237,673 Other intangibles 5 Years 839,737 (839,737 ) - Total $ 4,285,210 $ (2,865,683 ) $ 1,419,527 February 2, 2020 Estimated Life Gross Carrying Amount Accumulated Amortization Net carrying amount Patents 10 Years $ 1,965,794 $ (846,898 ) $ 1,118,896 Trademarks 3 Years 982,800 (749,535 ) 233,265 Other intangibles 5 Years 839,737 (839,737 ) - Total $ 3,788,331 $ (2,436,170 ) $ 1,352,161 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Remainder of Fiscal 2021 $ 73,676 2022 247,358 2023 199,067 2024 163,860 2025 145,107 2026 143,647 Thereafter 446,812 $ 1,419,527 |
Commitments, Contingency and _2
Commitments, Contingency and Related Parties (Tables) | 9 Months Ended |
Nov. 01, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Remainder 2021 $ 2,300,868 2022 13,459,948 2023 12,490,576 2024 12,315,871 2025 11,586,640 2026 10,153,556 Thereafter 27,467,238 $ 89,774,697 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Nov. 01, 2020 | |
Stockholders' Equity Note [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block] | May 2019 Warrants 18,166 Expected volatility 44 % Expected dividend yield 0 % Expected term (in years) 3.00 Risk-free interest rate 2.69 % Exercise price $ 16.00 Calculated fair value of warrant $ 7.16 |
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | Average Number of warrants Weighted Warrants Outstanding at February 3, 2019 $ 16.83 1,067,475 2.93 Warrants issued 16.00 18,166 2.40 Expired and canceled - - - Exercised 16.00 (46,521 ) (2.15 ) Warrants Outstanding at November 3, 2019 $ 16.83 1,039,120 2.18 Warrants Outstanding at February 2, 2020 $ 16.83 1,039,120 1.93 Warrants issued - - - Expired and canceled - - - Exercised 16.00 (246,622 ) 0.71 Outstanding at November 1, 2020 $ 17.14 792,498 1.37 |
Share-based Payment Arrangement, Option, Activity [Table Text Block] | Number of Weighted Weighted Average Outstanding at February 2, 2020 495,366 $ 38.10 2.34 - Exercised - Expired and canceled - Vested - Outstanding at November 1, 2020 495,366 $ 38.10 3.59 - Exercisable at the end of the period - - - - |
Share-based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block] | Number of Weighted Unvested at February 3, 2019 377,286 $ 11.16 Granted 130,898 23.63 Forfeited (19,154 ) 16.93 Vested (294,185 ) 12.59 Unvested at November 3, 2019 194,845 $ 20.94 Number of Weighted Unvested at February 2, 2020 183,053 $ 21.34 Granted 611,086 17.83 Forfeited (3,078 ) 15.27 Vested (105,318 ) 15.83 Unvested at November 1, 2020 685,743 $ 19.19 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Nov. 01, 2020 | |
Segment Reporting [Abstract] | |
Schedule of operating segments | Thirteen weeks ended Thirty-nine weeks ended November 1, November 3, November 1, November 3, Sactionals $ 63,303,012 $ 43,118,496 $ 160,655,033 $ 114,290,733 Sacs 10,196,739 7,808,417 27,722,572 23,357,660 Other 1,242,449 1,170,319 2,682,412 3,553,617 $ 74,742,200 $ 52,097,232 $ 191,060,017 $ 141,202,010 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Nov. 01, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of sales disaggregated by product | Thirteen weeks ended Thirty-nine weeks ended November 1, November 3, November 1, November 3, Showrooms $ 41,538,063 $ 32,473,878 $ 72,506,769 $ 90,660,653 Internet 25,709,964 11,415,819 101,848,016 29,331,302 Other 7,494,173 8,207,535 16,705,232 21,210,055 $ 74,742,200 $ 52,097,232 $ 191,060,017 $ 141,202,010 |
Basis of Presentation, Operat_2
Basis of Presentation, Operations and Liquidity (Details) | Nov. 01, 2020 | Mar. 18, 2020 |
Accounting Policies [Abstract] | ||
Business acquisition acquired, description | The Company has and will continue to follow the guidance of federal, state, and local governments, as well as health organizations, to determine the operating status of its showrooms. Additionally, the Company implemented a reduction in workforce of approximately 447 part time employees (representing 57% of our total headcount) as well as a temporary reduction in executive cash compensation. Cash compensation was reduced by 20% for Shawn Nelson, Chief Executive Officer, Jack Krause, President and Chief Operating Officer, and Donna Dellomo, Executive Vice President and Chief Financial Officer. | |
Part time showroom associates | 348 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details) $ in Millions | Nov. 01, 2020USD ($) |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recognize additional liabilities | $ 91 |
Short-term value | 14 |
Long-term value | $ 77 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense on other intangible assets | $ 264,963 | $ 67,665 | $ 429,513 | $ 191,335 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of intangible assets - USD ($) | 6 Months Ended | 9 Months Ended |
Feb. 02, 2020 | Nov. 01, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,788,331 | $ 4,285,210 |
Accumulated Amortization | (2,436,170) | (2,865,683) |
Net carrying amount | $ 1,352,161 | $ 1,419,527 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 10 years | 10 years |
Gross Carrying Amount | $ 1,965,794 | $ 2,265,157 |
Accumulated Amortization | (846,898) | (1,083,303) |
Net carrying amount | $ 1,118,896 | $ 1,181,854 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 3 years | 3 years |
Gross Carrying Amount | $ 982,800 | $ 1,180,316 |
Accumulated Amortization | (749,535) | (942,643) |
Net carrying amount | $ 233,265 | $ 237,673 |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 5 years | 5 years |
Gross Carrying Amount | $ 839,737 | $ 839,737 |
Accumulated Amortization | (839,737) | (839,737) |
Net carrying amount |
Intangible Assets, Net (Detai_3
Intangible Assets, Net (Details) - Schedule of estimated future amortization expense associated with intangible assets | Nov. 01, 2020USD ($) |
Schedule of estimated future amortization expense associated with intangible assets [Abstract] | |
Remainder of Fiscal 2021 | $ 73,676 |
2022 | 247,358 |
2023 | 199,067 |
2024 | 163,860 |
2025 | 145,107 |
2026 | 143,647 |
Thereafter | 446,812 |
Total | $ 1,419,527 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Material interest or penalties | $ 0 | $ 0 | $ 0 | $ 0 |
Basic and Diluted Net Income _2
Basic and Diluted Net Income (Loss) Per Common Share (Details) - shares | 9 Months Ended | |
Nov. 01, 2020 | Nov. 03, 2019 | |
Basic and Diluted Net Income (Loss) Per Common Share (Details) [Line Items] | ||
common stock underlying stock options | 495,366 | |
Potentially dilutive shares | 1,973,607 | 1,729,331 |
Restricted stock units [Member] | ||
Basic and Diluted Net Income (Loss) Per Common Share (Details) [Line Items] | ||
Potentially dilutive shares | 685,743 | 194,845 |
Stock options [Member] | ||
Basic and Diluted Net Income (Loss) Per Common Share (Details) [Line Items] | ||
Potentially dilutive shares | 495,366 | 495,366 |
Warrants to purchase shares of common stock [Member] | ||
Basic and Diluted Net Income (Loss) Per Common Share (Details) [Line Items] | ||
Potentially dilutive shares | 792,498 | 1,039,120 |
Commitments, Contingency and _3
Commitments, Contingency and Related Parties (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Nov. 01, 2020 | Feb. 02, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | |
Commitments, Contingency and Related Parties (Details) [Line Items] | |||||
Severance contingency, description | A number of these agreements have severance provisions, ranging from 12 to 18 months of salary, in the event those employees are terminated without cause. The total amount of exposure to the Company under these agreements was $3,165,978 at November 1, 2020 if all executives with employment agreements were terminated without cause and the full amount of severance was payable. | ||||
Pocket expenses | $ 0 | $ 16,113 | |||
Minimum [Member] | |||||
Commitments, Contingency and Related Parties (Details) [Line Items] | |||||
Monthly payments | $ 2,040 | ||||
Maximum [Member] | |||||
Commitments, Contingency and Related Parties (Details) [Line Items] | |||||
Monthly payments | 45,600 | ||||
Satori Capital, LLC [Member] | |||||
Commitments, Contingency and Related Parties (Details) [Line Items] | |||||
Management fees and expenses | 25,000 | $ 25,000 | 75,000 | 25,000 | $ 75,000 |
Expenses incurred amount | 70,000 | ||||
Blueport commerce [Member] | |||||
Commitments, Contingency and Related Parties (Details) [Line Items] | |||||
Amounts payable to related parties | 150,508 | ||||
Expenses incurred amount | 442,267 | 435,000 | 2,143,392 | 1,202,831 | |
Fee incurred | 663,572 | ||||
Termination fee | 331,786 | 331,786 | |||
Mistral Capital Managements, LLC [Member] | |||||
Commitments, Contingency and Related Parties (Details) [Line Items] | |||||
Management fees and expenses | 100,000 | $ 300,000 | 100,000 | 300,000 | |
Amounts payable to related parties | 40,000 | 2,000 | 40,000 | ||
Expenses incurred amount | 0 | $ 39,000 | |||
Satori Capital, LLC [Member] | |||||
Commitments, Contingency and Related Parties (Details) [Line Items] | |||||
Amounts payable to related parties | $ 30,000 | $ 95,000 | $ 30,000 |
Commitments, Contingency and _4
Commitments, Contingency and Related Parties (Details) - Schedule of future minimum payments for operating leases | Nov. 01, 2020USD ($) |
Schedule of future minimum payments for operating leases [Abstract] | |
Remainder 2021 | $ 2,300,868 |
2022 | 13,459,948 |
2023 | 12,490,576 |
2024 | 12,315,871 |
2025 | 11,586,640 |
2026 | 10,153,556 |
Thereafter | 27,467,238 |
Total | $ 89,774,697 |
Financing Arrangements (Details
Financing Arrangements (Details) - USD ($) | Feb. 06, 2018 | Nov. 01, 2020 | Feb. 02, 2020 |
Financing Arrangements (Details) [Line Items] | |||
Line of credit borrowings outstanding | $ 0 | $ 0 | |
Wells Fargo Bank, National Association [Member] | |||
Financing Arrangements (Details) [Line Items] | |||
Line of credit with Siena Lending Group, LLC | $ 25,000,000 | ||
Line of credit, description | Borrowings are limited to 90% of eligible credit card receivables plus 85% of eligible wholesale receivables plus 85% of the net recovery percentage for the eligible inventory multiplied by the value of such eligible inventory of the Company for the period from December 16 of each year until October 14 of the immediately following year, with a seasonal increase to 90% of the net recovery percentage for the period from October 15 of each year until December 15 of such year, seasonal advance rate, minus applicable reserves established by Wells. | ||
Line of credit, borrowing availability | $ 19,200,000 | $ 13,500,000 | |
Revolving Loan [Member] | |||
Financing Arrangements (Details) [Line Items] | |||
LIBOR rate | 2.00% | ||
Revolving Loan [Member] | Minimum [Member] | |||
Financing Arrangements (Details) [Line Items] | |||
LIBOR rate | 2.00% | ||
Revolving Loan [Member] | Maximum [Member] | |||
Financing Arrangements (Details) [Line Items] | |||
LIBOR rate | 2.25% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 |
Stockholders' Equity (Details) [Line Items] | |||||||
Stock options, description | The 495,366 stock options were modified to extend the term of the options through June 5, 2024. The modification of the option term resulted in approximately $0.4 million in additional equity compensation expense recorded during the thirteen weeks ended November 1, 2020. | ||||||
Issuance of common shares | 690,000 | ||||||
Debt and Equity Securities, Gain (Loss), Excluding Other-than-temporary Impairment Loss (in Dollars) | $ 0.6 | $ 4 | |||||
2017 Equity incentive plan [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Option award term | 10 years | ||||||
Non statutory stock option, description | the Company granted 495,366 non-statutory stock options to certain officers of the Company with an option price of $38.10 per share. 100% of the stock options are subject to vesting on the first trading day after the date on which the closing price of the Company’s stock price has been at least $75 for 60 consecutive trading days so long as this goal has been attained by June 5, 2022 or the options will terminate. | ||||||
Exchange of transferred shares of common stock | 175,478 | ||||||
Withheld shares to satisfy taxes with issuance | 73,507 | ||||||
Equity based compensation expense (in Dollars) | $ 1.1 | $ 2.6 | |||||
Equity-based compensation, description | The triggering event was the market capitalization of the Company post-IPO, exceeding $300 million for 60 consecutive trading days and the expiration of the lockup period. This accelerated vesting resulted in equity-based compensation in the amount of $2.9 million. | ||||||
Total unrecognized restricted stock (in Dollars) | $ 5.5 | $ 5.5 | |||||
Weighted average period | 2 years 4 months 28 days | ||||||
2017 Equity incentive plan [Member] | Minimum [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Number of shares of common stock reserved for issuance | 1,414,889 | ||||||
2017 Equity incentive plan [Member] | Maximum [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Number of shares of common stock reserved for issuance | 2,104,889 | ||||||
Warrant [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Warrants, description | the Company issued 18,166 warrants to a third party in connection with previous equity raise. These warrants were valued using the Black-Scholes model. The warrants had a fair value of approximately $130,000. Of these warrants, 17,396 were exercised on May 14, 2019. | ||||||
Warrants issued | 18,166 | ||||||
Stock options, description | The majority of the 46,521 warrants exercised in fiscal 2020 and all of the 246,622 warrants exercised in fiscal 2021 were cashless, whereby the holders received fewer shares of common stock in lieu of a cash payment to the Company, which resulted in the issuance of 27,246 and 136,834 common shares in fiscals 2020 and 2021, respectively. |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of Black-Scholes model assumptions | 3 Months Ended |
May 05, 2019$ / sharesshares | |
Schedule of Black-Scholes model assumptions [Abstract] | |
Warrants (in Shares) | shares | 18,166 |
Expected volatility | 44.00% |
Expected dividend yield | 0.00% |
Expected term (in years) | 3 years |
Risk-free interest rate | 2.69% |
Exercise price (in Dollars per share) | $ 16 |
Calculated fair value of warrant (in Dollars per share) | $ 7.16 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of warrant activity - Warrants Activity [Member] - $ / shares | 9 Months Ended | |
Nov. 01, 2020 | Nov. 03, 2019 | |
Class of Warrant or Right [Line Items] | ||
Average exercise price, Warrants Outstanding, Beginning balance (in Dollars per share) | $ 16.83 | $ 16.83 |
Number of warrants, Outstanding, Beginning balance | 1,039,120 | 1,067,475 |
Weighted average remaining contractual life (in years), Warrants Outstanding, Beginning balance | 1 year 11 months 4 days | 2 years 11 months 4 days |
Average exercise price, Warrants issued (in Dollars per share) | $ 16 | |
Number of warrants, Warrants issued | 18,166 | |
Weighted average remaining contractual life (in years), Warrants issued | 2 years 4 months 24 days | |
Average exercise price, Expired and canceled (in Dollars per share) | ||
Number of warrants, Expired and canceled | ||
Weighted average remaining contractual life (in years), Expired and canceled | ||
Average exercise price, Exercised | 16 | 16 |
Number of warrants, Exercised | (246,622) | (46,521) |
Weighted average remaining contractual life (in years), Exercised | 8 months 15 days | 2 years 1 month 24 days |
Average exercise price, Warrants Outstanding, Ending balance (in Dollars per share) | $ 17.14 | $ 16.83 |
Number of warrants, Warrants Outstanding, Ending balance | 792,498 | 1,039,120 |
Weighted average remaining contractual life (in years), Warrants Outstanding, Ending balance | 1 year 4 months 13 days | 2 years 2 months 4 days |
Stockholders' Equity (Details_3
Stockholders' Equity (Details) - Schedule of stock option activity - Stock options [Member] - USD ($) | 9 Months Ended |
Nov. 01, 2020 | |
Stockholders' Equity (Details) - Schedule of stock option activity [Line Items] | |
Number of options, Outstanding Balance | 495,366 |
Weighted average exercise price, Outstanding Balance (in Dollars per share) | $ 38.10 |
Weighted average remaining contractual life (in years), Outstanding Balance | 2 years 4 months 2 days |
Average intrinsic value, Outstanding Balance | |
Number of options, Exercised | |
Number of options, Expired and canceled | |
Number of options, Vested | |
Number of options, Outstanding Balance | 495,366 |
Weighted average exercise price, Outstanding Balance (in Dollars per share) | $ 38.10 |
Weighted average remaining contractual life (in years), Outstanding Balance | 3 years 7 months 2 days |
Number of options, Exercisable at the end of the period | |
Weighted average exercise price, Exercisable at the end of the period (in Dollars per share) | |
Weighted average remaining contractual life (in years), Exercisable at the end of the period | |
Average intrinsic value, Exercisable at the end of the period (in Dollars) |
Stockholders' Equity (Details_4
Stockholders' Equity (Details) - Schedule of unvested restricted stock - Restricted stock [Member] - $ / shares | 9 Months Ended | |
Nov. 01, 2020 | Nov. 03, 2019 | |
Stockholders' Equity (Details) - Schedule of unvested restricted stock [Line Items] | ||
Number of shares, Unvested, Beginning balance | 183,053 | 377,286 |
Weighted average grant date fair value, Unvested, Beginning balance | $ 21.34 | $ 11.16 |
Number of shares, Granted | 611,086 | 130,898 |
Weighted average grant date fair value, Granted | $ 17.83 | $ 23.63 |
Number of shares, Forfeited | (3,078) | (19,154) |
Weighted average grant date fair value, Forfeited | $ 15.27 | $ 16.93 |
Number of shares, Vested | (105,318) | (294,185) |
Weighted average grant date fair value, Vested | $ 15.83 | $ 12.59 |
Number of shares, Unvested, Ending balance | 685,743 | 194,845 |
Weighted average grant date fair value, Unvested, Ending balance | $ 19.19 | $ 20.94 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Feb. 02, 2020 | Nov. 01, 2020 | Nov. 03, 2019 | |
Retirement Benefits [Abstract] | |||||
Contributions plan, percentage | 100.00% | ||||
Defined contribution plan, cost | $ 111,905 | $ 89,708 | $ 346,376 | $ 280,820 | |
Amounts payable | $ 0 | $ 247,112 |
Segment Information (Details)
Segment Information (Details) | 9 Months Ended |
Nov. 01, 2020 | |
Segment Reporting [Abstract] | |
Operating segments, description | The Company’s operating segments are aggregated for financial reporting purposes because they are similar in each of the following areas including economic characteristics, class of consumer, nature of products and distribution method and products are a singular group of products which make up over 95% of net sales. |
Segment Information (Details) -
Segment Information (Details) - Schedule of operating segments - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 74,742,200 | $ 52,097,232 | $ 191,060,017 | $ 141,202,010 |
Sactionals [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 63,303,012 | 43,118,496 | 160,655,033 | 114,290,733 |
Sacs [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 10,196,739 | 7,808,417 | 27,722,572 | 23,357,660 |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 1,242,449 | $ 1,170,319 | $ 2,682,412 | $ 3,553,617 |
Barter Arrangements (Details)
Barter Arrangements (Details) - USD ($) | Nov. 01, 2020 | Feb. 02, 2020 |
Debt Disclosure [Abstract] | ||
Inventory | $ 1,097,488 | |
Prepaid media asset | 1,055,185 | |
Media credit | 374,423 | |
Inventory plus | 432,630 | |
Unused media credits | $ 432,630 | $ 374,423 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | Nov. 01, 2020 | Feb. 02, 2020 | Nov. 03, 2019 |
Revenue from Contract with Customer [Abstract] | |||
Allowance return | $ 1,593,840 | $ 2,177,715 | |
Accrued expenses | 192,856 | 442,390 | |
Customer deposit liability | 11,668,452 | $ 1,653,597 | |
Customer deposits | $ 1,653,597 | $ 1,059,957 |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Schedule of sales disaggregated by product - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Sales disaggregated by product | $ 74,742,200 | $ 52,097,232 | $ 191,060,017 | $ 141,202,010 |
Showrooms [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales disaggregated by product | 41,538,063 | 32,473,878 | 72,506,769 | 90,660,653 |
Internet [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales disaggregated by product | 25,709,964 | 11,415,819 | 101,848,016 | 29,331,302 |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales disaggregated by product | $ 7,494,173 | $ 8,207,535 | $ 16,705,232 | $ 21,210,055 |