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New words:
awaiting, burn, card, create, cure, difficulty, diminished, discontinue, efficient, Elmsford, forced, headcount, hearing, instance, Job, lucrative, managerial, micro, monetary, motivate, motivating, necessitate, notified, Ojima, political, poorly, profile, pursue, reallocate, regain, relationship, RSU, run, satisfactory, shift, skilled, stipulated, strong, suffer, suite, superior, supplier, talented, Tsukasa, undue, unforeseen, unwinding, unwound, variety, Vietnam
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assuming, released
Financial report summary
?Risks
- An active, liquid trading market for our securities may not be sustained.
- We rely on the performance of members of management and highly skilled personnel, and if we are unable to attract, develop, motivate and retain well-qualified employees, including due to evolving labor dynamics, our business could be harmed.
Management Discussion
- Total net revenue for the year ended December 31, 2021 decreased by $9.9 million, or -5.3%, to $177.3 million as compared to $187.2 million for the year ended December 31, 2020. The total $9.9 million decrease was attributable to a $20.3 million increase in Software & Services revenue, more than offset by a $30.2 million decrease in Retail revenue.
- The $30.2 million decrease in Retail revenue was primarily driven by a $27.9 million decline in merchandise sales generated through our e-commerce platform, including related shipping revenue, combined with a $2.8 million increase in mark-downs (including refunds, promotions, and price discounts) during the period. This decrease in merchandising sales resulted from a decline in Active Customers in the year ended December 31, 2021 compared to the year ended December 31, 2020. As discussed above, the Active Customer decline resulted from the temporary impact of unique customer acquisition trends occurring during the COVID-19 pandemic, which impacted the fiscal 2020 results. The decline in Active Customers was partially offset by a 4% increase in Retail revenue per Active Customer as we saw improved engagement from our customer base.
- The Software & Services revenue increase of $20.3 million for the year ended December 31, 2021 was the result of the recognition of license fees related to our satisfaction of specific performance obligations for our software licensing agreement with AEON, which had its initial go-live date in the third quarter of 2021. The software licensing agreement with AEON, a related party, was signed in the first quarter of 2021 and is further discussed below under “—Application of Critical Accounting Policies.”