Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Jun. 08, 2018 | Sep. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | Castle Brands Inc | ||
Entity Central Index Key | 1,311,538 | ||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --03-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 99,826,917 | ||
Entity Common Stock, Shares Outstanding | 167,694,801 | ||
Trading Symbol | ROX | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 376,987 | $ 611,048 |
Accounts receivable - net of allowance for doubtful accounts of $390,939 and $302,275 at March 31, 2018 and 2017, respectively | 13,083,487 | 11,460,432 |
Inventories- net of allowance for obsolete and slow-moving inventory of $346,344 and $312,711 at March 31, 2018 and 2017, respectively | 34,555,553 | 28,952,562 |
Prepaid expenses and other current assets | 3,724,759 | 3,674,923 |
Total Current Assets | 51,740,786 | 44,698,965 |
Equipment - net | 839,409 | 909,780 |
Intangible assets - net of accumulated amortization of $8,485,253 and $8,035,018 at March 31, 2018 and 2017, respectively | 5,968,945 | 6,387,330 |
Goodwill | 496,226 | 496,226 |
Investment in non-consolidated affiliate, at equity | 813,926 | 570,097 |
Restricted cash | 382,279 | 331,455 |
Other assets | 91,789 | 99,773 |
Total Assets | 60,333,360 | 53,493,626 |
Current Liabilities | ||
Current maturities of notes payable | 176,148 | |
Accounts payable | 7,674,858 | 7,549,944 |
Accrued expenses | 2,497,001 | 4,668,706 |
Due to shareholders and affiliates | 2,785,910 | 2,158,318 |
Total Current Liabilities | 13,133,917 | 14,376,968 |
Long-Term Liabilities | ||
Credit facility, net (including $576,546 and $412,269 of related-party participation at March 31, 2018 and 2017, respectively) | 18,505,897 | 13,033,075 |
Note payable - 11% Subordinated note | 20,000,000 | 20,000,000 |
Notes payable - 5% Convertible notes (including $1,100,000 of related party participation at March 31, 2017) | 1,675,000 | |
Notes payable - GCP Note | 211,580 | 211,580 |
Deferred tax liability | 485,484 | 558,766 |
Other | 6,778 | 20,666 |
Total Liabilities | 52,343,656 | 49,876,055 |
Commitments and Contingencies (Note 11) | ||
Equity | ||
Preferred stock, $.01 par value, 25,000,000 shares authorized, no shares issued and outstanding at March 31, 2018 and 2017 | ||
Common stock, $.01 par value, 300,000,000 shares authorized at March 31, 2018 and 2017, 166,330,733 and 162,945,805 shares issued and outstanding at March 31, 2018 and 2017, respectively | 1,663,307 | 1,629,458 |
Additional paid-in capital | 154,731,044 | 150,889,613 |
Accumulated deficit | (149,891,272) | (149,072,340) |
Accumulated other comprehensive loss | (2,082,011) | (2,308,672) |
Total controlling shareholders' equity | 4,421,068 | 1,138,059 |
Noncontrolling interests | 3,568,636 | 2,479,512 |
Total Equity, including noncontrolling interests | 7,989,704 | 3,617,571 |
Total Liabilities and Equity | $ 60,333,360 | $ 53,493,626 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 390,939 | $ 302,275 |
Allowance for obsolete and slow moving inventory | 346,344 | 312,711 |
Accumulated amortization of intangible assets | 8,485,253 | 8,035,018 |
Due to related-party participation | $ 576,546 | $ 412,269 |
Subordinated note payable, percent | 11.00% | 11.00% |
Convertible notes payable related parties, noncurrent | $ 1,100,000 | |
Conversion of convertible notes, percent | 5.00% | 5.00% |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 166,330,733 | 162,945,805 |
Common stock, shares outstanding | 166,330,733 | 162,945,805 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | ||
Income Statement [Abstract] | ||||
Sales, net | [1] | $ 89,897,517 | $ 77,269,131 | $ 72,220,368 |
Cost of sales | [1] | 53,690,565 | 45,568,774 | 43,666,798 |
Gross profit | 36,206,952 | 31,700,357 | 28,553,570 | |
Selling expense | 21,780,495 | 20,122,490 | 19,222,659 | |
General and administrative expense | 9,422,845 | 8,642,775 | 7,385,851 | |
Depreciation and amortization | 809,395 | 1,030,093 | 939,513 | |
Income from operations | 4,194,217 | 1,904,999 | 1,005,547 | |
Other expense, net | (215) | (10,660) | (666) | |
Income from equity investment in non-consolidated affiliate | 87,829 | 51,430 | 18,667 | |
Foreign exchange (loss) gain | (77,125) | 83,706 | (190,867) | |
Interest expense, net | (3,794,144) | (1,335,241) | (1,088,539) | |
Income (loss) before provision for income taxes | 410,562 | 694,234 | (255,858) | |
Income tax expense, net | (140,370) | (187,702) | (1,450,848) | |
Net income (loss) | 270,192 | 506,532 | (1,706,706) | |
Net income attributable to noncontrolling interests | (1,089,124) | (1,359,145) | (809,662) | |
Net loss attributable to common shareholders | $ (818,932) | $ (852,613) | $ (2,516,368) | |
Net loss per common share, basic and diluted, attributable to common shareholders | $ (0.01) | $ (0.01) | $ (0.02) | |
Weighted average shares used in computation, basic and diluted, attributable to common shareholders | 163,661,927 | 160,811,957 | 159,380,223 | |
[1] | Sales, net and Cost of sales include excise taxes of $7,648,626, $7,645,789 and $7,451,569 for the years ended March 31, 2018, 2017 and 2016, respectively. |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | |||
Excise taxes | $ 7,648,626 | $ 7,645,789 | $ 7,451,569 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 270,192 | $ 506,532 | $ (1,706,706) |
Other comprehensive income (loss) | |||
Foreign currency translation adjustment | 226,661 | (114,878) | 92,131 |
Total other comprehensive income (loss) | 226,661 | (114,878) | 92,131 |
Comprehensive income (loss) | $ 496,853 | $ 391,654 | $ (1,614,575) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Comprehensive (Loss) Income [Member] | Accumulated Other Noncontrolling Interests [Member] | Total |
Balance at Mar. 31, 2015 | $ 1,571,877 | $ 162,626,893 | $ (143,361,711) | $ (2,285,925) | $ 2,543,529 | $ 21,094,663 |
Balance, shares at Mar. 31, 2015 | 157,187,658 | |||||
Prior-period revision to inventory | (2,341,648) | (2,341,648) | ||||
Net (loss) income | (2,516,368) | 809,662 | (1,706,706) | |||
Foreign currency translation adjustment | 92,131 | 92,131 | ||||
Issuance of common stock, net of issuance costs of $124,876 | $ 21,193 | 3,105,920 | 3,127,113 | |||
Issuance of common stock, net of issuance costs of $124,876, shares | 2,119,282 | |||||
Exercise of common stock options | $ 10,796 | 364,184 | 374,980 | |||
Exercise of common stock options, shares | 1,079,602 | |||||
Common stock issued under 2013 incentive compensation plan | $ 882 | 119,118 | 120,000 | |||
Common stock issued under 2013 incentive compensation plan, shares | 88,235 | |||||
Subsidiary dividend paid to non-controlling interests | (600,000) | (600,000) | ||||
Stock-based compensation | 1,250,556 | 1,250,556 | ||||
Common stock issued in connection with the acquisition of an additional 20.1% of noncontrolling interests | ||||||
Balance at Mar. 31, 2016 | $ 1,604,748 | 166,866,671 | (148,219,727) | (2,193,794) | 3,353,191 | 21,411,089 |
Balance, shares at Mar. 31, 2016 | 160,474,777 | |||||
Net (loss) income | (852,613) | 1,359,145 | 506,532 | |||
Foreign currency translation adjustment | (114,878) | (114,878) | ||||
Issuance of common stock, net of issuance costs of $124,876 | (14,355) | (14,355) | ||||
Exercise of common stock options | $ 6,710 | 244,479 | 251,189 | |||
Exercise of common stock options, shares | 671,028 | |||||
Stock-based compensation | 1,577,994 | 1,577,994 | ||||
Common stock issued in connection with the acquisition of an additional 20.1% of noncontrolling interests | $ 18,000 | 2,430,000 | 2,448,000 | |||
Common stock issued in connection with the acquisition of an additional 20.1% of noncontrolling interests, shares | 1,800,000 | |||||
Effect of acquisition of an additional 20.1% of noncontrolling interests | (20,215,176) | (2,232,824) | (22,448,000) | |||
Balance at Mar. 31, 2017 | $ 1,629,458 | 150,889,613 | (149,072,340) | (2,308,672) | 2,479,512 | 3,617,571 |
Balance, shares at Mar. 31, 2017 | 162,945,805 | |||||
Net (loss) income | (818,932) | 1,089,124 | 270,192 | |||
Foreign currency translation adjustment | 226,661 | 226,661 | ||||
Exercise of common stock options | $ 3,567 | 231,696 | 235,263 | |||
Exercise of common stock options, shares | 356,700 | |||||
Common stock issued under 2013 incentive compensation plan | $ 329 | 32,943 | 33,272 | |||
Common stock issued under 2013 incentive compensation plan, shares | 32,894 | |||||
Stock-based compensation | 1,974,745 | 1,974,745 | ||||
Common stock issued in connection with the acquisition of an additional 20.1% of noncontrolling interests | ||||||
Restricted share grants | $ 11,820 | (11,820) | ||||
Restricted share grants, shares | 1,182,000 | |||||
Conversion of 5% Convertible Notes to common stock | $ 18,133 | 1,613,867 | $ 1,632,000 | |||
Conversion of 5% Convertible Notes to common stock, shares | 1,813,334 | 1,813,334 | ||||
Balance at Mar. 31, 2018 | $ 1,663,307 | $ 154,731,044 | $ (149,891,272) | $ (2,082,011) | $ 3,568,636 | $ 7,989,704 |
Balance, shares at Mar. 31, 2018 | 166,330,733 |
Consolidated Statements of Cha8
Consolidated Statements of Changes in Equity (Parenthetical) - USD ($) | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||
Payments of stock issuance cost | $ 124,876 | |
Acquisition of noncontrolling interests, percent | 20.10% | |
Acquisition of additional noncontrolling interests, percent | 20.10% | |
Convertible notes payable, percent | 5.00% |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 270,192 | $ 506,532 | $ (1,706,706) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Depreciation and amortization | 809,395 | 1,030,093 | 939,513 |
Provision for doubtful accounts | 59,012 | 123,200 | 61,000 |
Amortization of deferred financing costs | 112,696 | 160,681 | 177,127 |
Deferred income tax (benefit) expense, net | (73,282) | (645,235) | (129,152) |
Net income from equity investment in non-consolidated affiliate | (87,829) | (51,430) | (18,667) |
Effect of changes in foreign currency translation | 77,125 | (83,706) | 190,867 |
Stock-based compensation expense | 1,974,745 | 1,577,994 | 1,370,556 |
Addition to provision for obsolete inventories | 376,611 | 240,000 | 200,000 |
Changes in operations, assets and liabilities: | |||
Accounts receivable | (1,656,482) | (1,182,011) | 85,040 |
Due from affiliates | 3,279 | 135,471 | |
Inventory | (5,898,746) | (4,344,791) | (6,498,338) |
Prepaid expenses and supplies | (39,297) | (2,066,856) | (117,258) |
Other assets | (103,728) | (60,117) | (92,260) |
Accounts payable and accrued expenses | (2,085,822) | 2,217,652 | 3,163,818 |
Accrued interest | 10,579 | 10,579 | 10,579 |
Due to related parties | 627,591 | 820,247 | (625,812) |
Other liabilities | (13,888) | 20,666 | |
Total adjustments | (5,911,320) | (2,229,755) | (1,147,516) |
NET CASH USED IN OPERATING ACTIVITIES | (5,641,128) | (1,723,223) | (2,854,222) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of equipment | (294,304) | (364,740) | (466,462) |
Acquisition of intangible assets | (14,602) | (2,740) | (23,885) |
Investment in consolidated entity | (20,000,000) | ||
Investment in non-consolidated affiliate, at equity | (156,000) | (500,000) | |
Change in restricted cash | (22) | (7,040) | (257) |
NET CASH USED IN INVESTING ACTIVITIES | (464,928) | (20,374,520) | (990,604) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Net proceeds from (payments on) credit facility | 5,471,837 | 1,044,531 | 1,965,050 |
Proceeds from 11% Subordinated note | 20,000,000 | ||
Payments on Bourbon term loan | (744,900) | ||
Net proceeds from (payments on) foreign revolving credit facility | 119,835 | (34,743) | |
Proceeds from issuance of common stock | 3,251,989 | ||
Proceeds from issuance of common stock under employee stock purchase plan | 33,272 | ||
Payments for costs of stock issuance | (14,355) | (124,876) | |
Subsidiary dividend paid to non-controlling interests | (600,000) | ||
Proceeds from exercise of common stock options | 235,263 | 251,189 | 374,980 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 5,860,207 | 21,281,365 | 4,087,500 |
EFFECTS OF FOREIGN CURRENCY TRANSLATION | 11,788 | (3,106) | (3,745) |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (234,061) | (819,484) | 238,929 |
CASH AND CASH EQUIVALENTS - BEGINNING | 611,048 | 1,430,532 | 1,191,603 |
CASH AND CASH EQUIVALENTS - ENDING | 376,987 | 611,048 | 1,430,532 |
Schedule of non-cash investing and financing activities: | |||
Conversion of 5% convertible note to common stock | 1,632,000 | ||
Issuance of common stock in connection with acquisition of additional 20.1% of noncontrolling interests | 2,448,000 | ||
Interest paid | 3,554,030 | 1,159,667 | 894,099 |
Income taxes paid | $ 1,904,211 | $ 1,553,377 | $ 1,079,387 |
Consolidated Statements of Ca10
Consolidated Statements of Cash Flows (Parenthetical) | Mar. 31, 2018 |
Common stock conversion, percent | 5.00% |
Acquisition noncontrolling interests, percent | 20.10% |
Subordinated Note [Member] | |
Common stock conversion, percent | 11.00% |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Description of business B. Organization and operations C. Prior Period Adjustment D. Liquidity E. Brands Rum and Ginger Beer ® Whiskey Liqueur Vodka F. Cash and cash equivalents G. Equity investments H. Trade accounts receivable I. Revenue recognition J. Inventories During the years ended March 31, 2018, 2017 and 2016, the Company recorded an addition to allowances for obsolete and slow-moving inventory of $376,611, $240,000 and $200,000, respectively. The Company recorded these allowances and write-offs on both raw materials and finished goods, primarily in connection with spoilage and slow-moving inventory, label and packaging changes made to certain brands, as well as adjustments to estimated freight costs and excise taxes and certain cost variances. The charges have been recorded as increases to Cost of Sales in the respective years. K. Equipment L. Goodwill and other intangible assets Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, “Intangibles - Goodwill and Other”, impairment of goodwill must be tested at least annually by comparing the fair values of the applicable reporting units with the carrying amount of their net assets, including goodwill. An entity may first assess qualitative factors to determine whether it is necessary to perform the two-step goodwill impairment test. If determined to be necessary, the two-step impairment test shall be used. The required two-step approach uses accounting judgments and estimates of future operating results. Changes in estimates or the application of alternative assumptions could produce significantly different results. The estimates that most significantly affect the fair value calculation are related to revenue growth, cost of sales, selling and marketing expenses and discount rates. Impairment testing is done at the reporting level. If the carrying amount of the reporting unit’s net assets exceeds the unit’s fair value, an impairment loss is recognized in an amount equal to the excess of the carrying amount of goodwill over its implied fair value. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination with the fair value of the reporting unit deemed to be the purchase price paid. Rights, trademarks, trade names and formulations are indefinite lived intangible assets not subject to amortization and are tested for impairment at least annually. The impairment test consists of a comparison of the fair value of the asset group allocated to each reporting unit with its allocated carrying amount. Under the goodwill qualitative assessment at March 31, 2018 and 2017, various events and circumstances that would affect the estimated fair value of each reporting unit were identified, including, but not limited to: prior years’ impairment testing results, budget to actual results, Company-specific facts and circumstances, industry developments, and the economic environment. Based on this assessment, the Company determined that no quantitative assessment was required. M. Impairment and disposal of long-lived assets N Shipping and handling O. Excise taxes and duty P. Distributor charges and promotional goods Q. Foreign currency R. Fair value of financial instruments The Company’s investments are reported at fair value in accordance with authoritative guidance, which accomplishes the following key objectives: - Defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; - Establishes a three-level hierarchy (“valuation hierarchy”) for fair value measurements; - Requires consideration of the Company’s creditworthiness when valuing liabilities; and - Expands disclosures about instruments measured at fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of the valuation hierarchy are as follows: - Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. - Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are directly or indirectly observable for the asset or liability for substantially the full term of the financial instrument. - Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. S. Income taxes The Company recognized the income tax effects of the 2017 Tax Act in its current financial statements in accordance with Staff Accounting Bulletin No. 118, which provides SEC staff guidance for the application of ASC Topic 740, “Income Taxes”, (“ASC 740”) in the reporting period in which the 2017 Tax Act was signed into law. As such, the Company’s financial results reflect the income tax effects of the 2017 Tax Act for which the accounting under ASC 740 is complete. The Company did not identify items for which the income tax effects of the 2017 Tax Act have not been completed and a reasonable estimate could not be determined as of March 31, 2018. The 2017 Tax Act reduced the U.S. federal corporate tax rate from 35.0% to 21.0% for all corporations effective January 1, 2018. For fiscal year companies, the change in law requires the application of a blended rate for each quarter of the fiscal year, which in the Company’s case is 30.79% for the fiscal year ended March 31, 2018. Thereafter, the applicable statutory rate is 21.0%. ASC 740 requires all companies to reflect the effects of the 2017 Tax Act in the period in which the 2017 Tax Act was enacted. Accordingly, the Company reduced the statutory rate that applies to its year-to-date fiscal 2018 earnings from 34.0% to 30.79%. In addition, the Company remeasured its deferred tax assets and liabilities based on the new rate. The combined result of the 2017 Tax Act resulted in a tax benefit of $40,485 during the three months ended December 31, 2017. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is provided to the extent a deferred tax asset is not considered recoverable. The Company has adopted the provisions of ASC 740 and as of March 31, 2018, the Company had reserves for uncertain tax positions (including related interest and penalties) for various state and local tax issues of $6,778. The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expense. T. Research and development costs U. Advertising V. Use of estimates W. Recent accounting pronouncements In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This guidance is effective for the Company as of April 1, 2018, with early adoption permitted. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In February 2017, the FASB issued ASU 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” ASU 2017-05 clarifies the scope and accounting of a financial asset that meets the definition of an “in-substance nonfinancial asset” and defines the term “in-substance nonfinancial asset.” ASU 2017-05 also adds guidance for partial sales of nonfinancial assets. This guidance is effective for the Company as of April 1, 2018, with early adoption permitted. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment (Topic 350).” ASU 2017-04 removes Step 2 from the goodwill impairment test. This guidance is effective for the Company as of April 1, 2020, with early adoption permitted. The Company is currently evaluating the new guidance to determine the impact the adoption of this guidance will have on the Company’s results of operations, cash flows and financial condition. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” This ASU, which must be applied prospectively, provides a narrower framework to be used to determine if a set of assets and activities constitutes a business than under current guidance and is generally expected to result in greater consistency in the application of ASC Topic 805, Business Combinations. This guidance is effective for the Company as of April 1, 2018, with early adoption permitted. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash, a consensus of the FASB’s Emerging Issues Task Force (the “Task Force”).” The new standard requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. This guidance is effective for the Company as of April 1, 2018, with early adoption permitted. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In October 2016, the FASB issued ASU 2016-16, “Income Taxes: Intra-Entity Transfers of Assets Other than Inventory.” This ASU removes the prohibition against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. This guidance is effective for the Company as of April 1, 2018, with early adoption permitted. Entities must apply a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments”, which provides guidance on eight cash flow classification issues with the objective of reducing differences in practice. The new standard is effective for the Company as of April 1, 2018, with early adoption permitted. Adoption is required to be on a retrospective basis, unless impracticable for any of the amendments, in which case a prospective application is permitted. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”). ASU 2016-08 does not change the core principle of the guidance stated in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASU 2014-9”), instead, the amendments in this ASU are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. ASU 2016-08 will have the same effective date and transition requirements as the new revenue standard issued in ASU 2014-09. In May 2014, the FASB issued ASU 2014-09. The new revenue standard outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new revenue standard contains principles to determine the measurement of revenue and timing of when it is recognized. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This guidance is effective for the Company as of April 1, 2018. The Company expects to transition to ASU 2016-08 using the Modified-Retrospective Method, under which the prior years’ data is not recast; instead, a single adjustment is made to equity at the beginning of the initial year of application. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In February 2016, the FASB issued ASU 2016-02, “Leases.” The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for the Company as of April 1, 2019. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the new guidance to determine the impact the adoption of this guidance will have on the Company’s results of operations, cash flows and financial condition. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. Also, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for the Company as of April 1, 2018, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. The Company does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying condensed consolidated financial statements X Accounting standards adopted In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance became effective for the Company beginning April 1, 2017. The Company determined that the adoption of this guidance did not have a material effect on the Company’s results of operations, cash flows and financial condition. In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The new guidance has been applied on a prospective basis and became effective for the Company as of April 1, 2017. The Company determined that the adoption of this guidance did not have a material effect on the Company’s results of operations, cash flows and financial condition. |
Basic and Diluted Net Loss Per
Basic and Diluted Net Loss Per Common Share | 12 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss Per Common Share | NOTE 2 - BASIC AND DILUTED NET LOSS PER COMMON SHARE Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed giving effect to all potentially dilutive common shares that were outstanding during the period that are not anti-dilutive. Potentially dilutive common shares consist of incremental shares issuable upon exercise of stock options, vesting of restricted shares or conversion of convertible notes outstanding. In computing diluted net income per share for the years ended March 31, 2018, 2017 and 2016, no adjustment has been made to the weighted average outstanding common shares for the assumed conversion of convertible notes as assumed conversion of these securities is anti-dilutive. Potential common shares not included in calculating diluted net loss per share are as follows: Years ended March 31, 2018 2017 2016 Stock options 15,346,608 15,798,558 13,508,086 Unvested restricted shares 1,182,000 - - 5% Convertible notes 55,556 1,861,111 1,861,111 Total 16,584,164 17,659,669 15,369,197 |
Inventories
Inventories | 12 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 3 - INVENTORIES March 31, 2018 2017 Raw materials – net $ 21,015,172 $ 16,714,225 Finished goods – net 13,540,381 13,086,855 As of each of March 31, 2018 and 2017, 9% of raw materials and 3% and 7%, respectively, of finished goods were located outside of the United States. In the years ended March 31, 2018, 2017 and 2016, the Company acquired $7,945,841, $6,900,819 and $5,441,432 of aged bourbon whiskey, respectively, in support of its anticipated near and mid-term needs. The Company estimates the allowance for obsolete and slow-moving inventory based on analyses and assumptions including, but not limited to, historical usage, expected future demand and market requirements. Inventories are stated at the lower of weighted average cost or net realizable value. |
Investments
Investments | 12 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | NOTE 4 - INVESTMENTS Investment in Gosling-Castle Partners Inc., consolidated In March 2017, the Company acquired an additional 201,000 shares (the “GCP Share Acquisition”) of the common stock of GCP, representing a 20.1% equity interest in GCP. GCP is a strategic global export venture between the Company and the Gosling family. As a result of the completion of the GCP Share Acquisition, the Company’s total equity interest in GCP increased to 80.1%. The consideration for the GCP Share Acquisition was (i) $20,000,000 in cash and (ii) 1,800,000 shares of common stock of the Company. The Company accounted for this transaction in accordance with ASC 810 “Consolidation,” and in particular section 810-10-45. Under the relevant guidance, a parent accounts for such changes in its ownership interest in a subsidiary as equity transactions. The parent cannot recognize a gain or loss in consolidated net income or comprehensive income for such transactions and is not permitted to step up a portion of the subsidiary’s net assets to fair value for the additional interests acquired. Any difference between the fair value of the consideration paid and the amount by which the noncontrolling interest is adjusted shall be recognized in equity attributable to the parent. As a result, the Company reduced the carrying amount of the noncontrolling interest by $2,232,824, with the $20,215,176 excess of the cash and stock paid over the adjustment to the carrying amount of the noncontrolling interest recognized as a decrease in the Company’s additional paid-in capital. For the years ended March 31, 2018, 2017 and 2016, GCP had pretax net income on a stand-alone basis of $5,613,355, $3,762,130 and $3,475,006, respectively. The Company allocated a portion of this net income, or $1,104,608, $1,359,145 and $809,662, to non-controlling interest for the years ended March 31, 2018, 2017 and 2016, respectively. The cumulative balance allocated to noncontrolling interests in GCP was $3,568,636 and $2,479,512 at March 31, 2018 and 2017, respectively, as shown on the accompanying condensed consolidated balance sheets. In September 2015, GCP declared and paid a $1,500,000 cash dividend to its shareholders. The Company recorded 60% of this dividend, or $900,000, as a return of capital and a reduction of its investment in GCP, and allocated 40% of this dividend, or $600,000, to noncontrolling interests and a reduction in the additional paid-in capital of GCP. GCP did not pay a dividend in the years ended March 31, 2018 and 2017. Investment in Copperhead Distillery Company, equity method In June 2015, CB-USA purchased 20% of Copperhead Distillery Company (“Copperhead”) for $500,000. Copperhead owns and operates the Kentucky Artisan Distillery. The investment was part of an agreement to build a new warehouse to store Jefferson’s bourbons, provide distilling capabilities using special mash-bills made from locally grown grains and create a visitor center and store to enhance the consumer experience for the Jefferson’s brand. The investment has been used for the construction of a new warehouse in Crestwood, Kentucky dedicated to the storage of Jefferson’s whiskeys. In September 2017, CB-USA purchased an additional 5% of Copperhead for $156,000 from an existing shareholder. The Company has accounted for this investment under the equity method of accounting. For the years ended March 31, 2018 and 2017, the Company recognized $87,829 and $51,430 of income from this investment, respectively; for the initial period ended March 31, 2016, the Company recognized $18,667 of income from this investment. The investment balance was $813,926 and $570,097 at March 31, 2018 and 2017, respectively. |
Equipment, Net
Equipment, Net | 12 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Equipment, Net | NOTE 5 - EQUIPMENT, NET Equipment consists of the following: March 31, 2018 2017 Equipment and software $ 2,837,036 $ 2,536,064 Furniture and fixtures 112,397 112,397 Leasehold improvements 42,730 42,730 2,992,163 2,691,191 Less: accumulated depreciation 2,152,754 1,781,411 Balance $ 839,409 $ 909,780 Depreciation expense for the years ended March 31, 2018, 2017 and 2016 totaled $359,161, $366,381 and $280,702, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 6 - GOODWILL AND INTANGIBLE ASSETS The carrying amount of goodwill was $496,226 at each of March 31, 2018 and 2017. Intangible assets consist of the following: March 31, 2018 2017 Definite life brands $ 170,000 $ 170,000 Trademarks 641,693 631,693 Rights 8,271,555 8,271,555 Product development 208,518 186,668 Patents 994,000 994,000 Other 55,460 55,460 10,341,226 10,309,376 Less: accumulated amortization 8,485,253 8,035,018 Net 1,855,973 2,274,358 Other identifiable intangible assets - indefinite lived* 4,112,972 4,112,972 $ 5,968,945 $ 6,387,330 * Other identifiable intangible assets - indefinite lived consists of product formulations and the Company’s relationships with its distillers. Accumulated amortization consists of the following: March 31, 2018 2017 Definite life brands $ 170,000 $ 170,000 Trademarks 403,617 367,294 Rights 6,954,303 6,617,062 Product development 47,880 37,478 Patents 909,453 843,184 Accumulated amortization $ 8,485,253 $ 8,035,018 Amortization expense for the years ended March 31, 2018, 2017 and 2016 totaled $450,234, $663,712 and $658,811, respectively. Estimated aggregate amortization expense for each of the next five fiscal years is as follows: Years ending March 31, Amount 2019 $ 231,596 2020 193,431 2021 191,289 2022 186,806 2023 166,823 Total $ 969,945 |
Restricted Cash
Restricted Cash | 12 Months Ended |
Mar. 31, 2018 | |
Restricted Cash | |
Restricted Cash | NOTE 7 - RESTRICTED CASH At March 31, 2018 and 2017, the Company had €310,324 or $382,279 (translated at the March 31, 2017 exchange rate) and €310,305 or $331,455 (translated at the March 31, 2017 exchange rate), respectively, of cash restricted from withdrawal and held by a bank in Ireland as collateral for overdraft coverage, creditors’ insurance, customs and excise guaranty and a revolving credit facility as described in Note 8A below. |
Notes Payable and Capital Lease
Notes Payable and Capital Lease | 12 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable and Capital Lease | NOTE 8 - NOTES PAYABLE AND CAPITAL LEASE March 31, 2018 2017 Notes payable consist of the following: Foreign revolving credit facilities (A) $ 126,148 $ - Note payable - GCP note (B) 211,580 211,580 Credit facility (C) 18,505,897 13,033,075 5% Convertible notes (D) 50,000 1,675,000 11% Subordinated Note (E) 20,000,000 20,000,000 Total $ 38,893,625 $ 34,919,655 A. The Company has arranged various credit facilities aggregating €310,324 or $382,279 (translated at the March 31, 2018 exchange rate) with an Irish bank, including overdraft coverage, creditors’ insurance, customs and excise guaranty, a revolving credit facility and Company credit cards. These credit facilities are payable on demand, continue until terminated by either party, are subject to annual review, and call for interest at the lender’s AA1 Rate minus 1.70%. At March 31, 2018, there was €102,404 or $126,148 (translated at the March 31, 2018 exchange rate) of principal due on the foreign revolving credit facilities include in current maturities of notes payable and no balance on the credit facilities included in notes payable at March 31, 2017. B. In December 2009, GCP issued a promissory note (the “GCP Note”) in the aggregate principal amount of $211,580 to Gosling’s Export (Bermuda) Limited in exchange for credits issued on certain inventory purchases. The GCP Note matures on April 1, 2020, is payable at maturity, subject to certain acceleration events, and calls for annual interest of 5%, to be accrued and paid at maturity. At each of March 31, 2018 and 2017, $10,579 of accrued interest was converted to amounts due to affiliates. At each of March 31, 2018 and 2017, $211,580 of principal due on the GCP Note was included in long-term liabilities. C. In August 2011, the Company and CB-USA entered into a loan and security agreement (as amended and restated, and further amended, the “Amended Agreement”) with Keltic Financial Partners II, LP (“Keltic, succeeded to be ACF FinCo I LP (“ACF”), which, as amended, through March 31, 2018, provided for availability (subject to certain terms and conditions) of a facility of up to $21.0 million (the “Credit Facility”) for the purpose of providing the Company with working capital., including a sublimit in the maximum principal amount of $7,000,000 to permit the Company to acquire aged whiskey inventory (the “Purchased Inventory Sublimit”) subject to certain conditions set forth in the Amended Agreement. The Company and CB-USA are referred to individually and collectively as the Borrower. Pursuant to the Loan Agreement Amendment, the Company and CB-USA may borrow up to the lesser of (x) $21,000,000 and (y) the sum of the borrowing base calculated in accordance with the Amended Agreement and the Purchased Inventory Sublimit. The Credit Facility interest rate is the rate that, when annualized, is the greatest of (a) the Prime Rate plus 3.00%, (b) the LIBOR Rate plus 5.50% and (c) 6.00%. As of March 31, 2018, the Credit Facility interest rate was 7.00625%. The Purchased Inventory Sublimit replaces the Bourbon Term Loan, which was paid in full in the normal course of business. The Purchased Inventory Sublimit interest rate is the rate that, when annualized, is the greatest of (a) the Prime Rate plus 4.25%, (b) the LIBOR Rate plus 6.75% and (c) 7.50%. As of March 31, 2018, the interest rate applicable to the Purchased Inventory Sublimit was 8.75625%. The monthly facility fee is 0.75% per annum of the maximum Credit Facility. Also, the Company must pay a monthly facility fee of $2,000 with respect to the Purchased Inventory Sublimit until all obligations with respect thereof are fully paid and performed. The Amended Agreement contains EBITDA targets allowing for further interest rate reductions in the future. The Company and CB-USA are permitted to prepay the Credit Facility in whole or the Purchased Inventory Sublimit, in whole or in part, subject to certain prepayment penalties as set forth in the Loan Agreement Amendment. For the year ended March 31, 2018, the Company paid interest at 6.5% through June 14, 2018, then 6.75% through December 13, 2017, then 7.0% through February 28, 2018, and then 7.06250% through March 31, 2018 on the Amended Agreement. For the year ended March 31, 2017, the Company paid interest at 6% through December 14, 2016, then 6.25% through March 15, 2017, then 6.5% through March 31, 2017 on the Amended Agreement. For the year ended March 31, 2016, the Company paid interest at 6% through August 9, 2015, then 5.75% through December 15, 2015, then 6% through March 31, 2016 on the Amended Agreement. For the year ended March 31, 2018, the Company paid interest at 8.25% through June 14, 2018, then at 8.5% through December 13, 2017, then 8.75% through February 28, 2018, and then 8.75625% through March 31, 2018 on the Purchased Inventory Sublimit For the year ended March 31, 2017, the Company paid interest at 7.75% through December 14, 2016, and then at 8.0% through March 15, 2017, then 8.25% through March 31, 2017 on the Purchased Inventory Sublimit. For the year ended March 31, 2016, the Company paid interest at 7.5% through December 15, 2015, and then at 7.75% through March 31, 2016 on the Purchased Inventory Sublimit. Interest is payable monthly in arrears, on the first day of every month on the average daily unpaid principal amount of the Credit Facility. After the occurrence and during the continuance of any “Default” or “Event of Default” (as defined under the Amended Agreement), the Borrower is required to pay interest at a rate that is 3.25% per annum above the then applicable Credit Facility interest rate. There have been no Events of Default under the Credit Facility. ACF also receives a collateral management fee of $1,000 per month (increased to $2,000 after the occurrence of and during the continuance of an Event of Default) in addition to the facility fee with respect to the Purchased Inventory Sublimit. The Amended Agreement contains standard borrower representations and warranties for asset-based borrowing and a number of reporting obligations and affirmative and negative covenants. The Amended Agreement includes negative covenants that, among other things, restrict the Borrower’s ability to create additional indebtedness, dispose of properties, incur liens and make distributions or cash dividends. The obligations of the Borrower under the Amended Amendment are secured by the grant of a pledge and security interest in all of the assets of the Borrower. At March 31, 2018, the Company was in compliance, in all respects, with the covenants under the Amended Agreement. The Credit Facility matures on July 31, 2019. ACF required as a condition to entering into an amendment to the Amended Agreement in August 2015 that ACF enter into a participation agreement with certain related parties of the Company, including Frost Gamma Investments Trust, an entity affiliated with Phillip Frost, M.D., a director and principal shareholder of the Company, Mark E. Andrews, III, a director of the Company and the Company’s Chairman, Richard J. Lampen, a director of the Company and the Company’s President and Chief Executive Officer, Brian L. Heller, the Company’s General Counsel and Assistant Secretary, and Alfred J. Small, the Company’s Senior Vice President, Chief Financial Officer, Treasurer and Secretary, to allow for the sale of participation interests in the Purchased Inventory Sublimit and the inventory purchased with the proceeds thereof. The participation agreement provides that ACF’s commitment to fund each advance of the Purchased Inventory Sublimit shall be limited to seventy percent (70%), up to an aggregate maximum principal amount for all advances equal to $4,900,000. Neither the Company nor CB-USA is a party to the participation agreement. However, the Company and CB-USA are party to a fee letter with the junior participants (including the related party junior participants) pursuant to which the Company and CB-USA were obligated to pay the junior participants a closing fee of $18,000 on the effective date of the Loan Agreement Amendment and are obligated to pay a commitment fee of $18,000 on each anniversary of the effective date until the junior participants’ obligations are terminated pursuant to the participation agreement. In August 2015, the Company used $3,000,000 of the Purchased Inventory Sublimit to acquire aged bourbon inventory. Frost Gamma Investments Trust ($150,000), Mark E. Andrews, III ($50,000), Richard J. Lampen ($100,000), Brian L. Heller ($42,500) and Alfred J. Small ($15,000) each acquired participation interests in the Purchased Inventory Sublimit and the inventory purchased with the proceeds thereof. In January 2017, the Company acquired $1,030,000 in aged bulk bourbon under the Purchased Inventory Sublimit with additional borrowings from certain related parties of the Company, including Frost Gamma Investments Trust ($51,500), Richard J. Lampen ($34,333), Mark E. Andrews, III ($17,167), Brian L. Heller ($14,592), and Alfred J. Small ($5,150), as junior participants in the Purchased Inventory Sublimit with respect to such purchase. In October 2017, the Company acquired $1,308,125 in aged bulk bourbon under the Purchased Inventory Sublimit with additional borrowings from certain related parties of the Company, including Frost Gamma Investments Trust ($65,406), Richard J. Lampen ($43,604), Mark E. Andrews, III ($21,802), Brian L. Heller ($18,532), and Alfred J. Small ($6,541), as junior participants in the Purchased Inventory Sublimit with respect to such purchase. In December 2017, the Company acquired $900,425 in aged bulk bourbon under the Purchased Inventory Sublimit with additional borrowings from certain related parties of the Company, including Frost Gamma Investments Trust ($45,021), Richard J. Lampen ($30,014), Mark E. Andrews, III ($15,007), Brian L. Heller ($12,756), and Alfred J. Small ($4,502), as junior participants in the Purchased Inventory Sublimit with respect to such purchase. Under the terms of the participation agreement, the participants receive interest at the rate of 11% per annum. In May 2018, the Company and CB-USA entered into a Fourth Amendment (the “Fourth Amendment”) to the Amended Agreement to amend certain terms of the Credit Facility. Among other changes, the Fourth Amendment increased the maximum amount of the Credit Facility from $21,000,000 to $23,000,000, and amended the definition of borrowing base to increase the amount of borrowing that can be collateralized by inventory. At March 31, 2018 and 2017, $18,604,962 and $13,133,124, respectively, due on the Credit Facility was included in long-term liabilities. At March 31, 2018 and 2017, there was $2,395,038 and $5,866,876, respectively, in potential availability under the Credit Facility. In connection with the adoption of ASU 2015-03, the Company included $99,065 and $94,109 of debt issuance costs at March 31, 2018 and 2017, respectively, as direct deductions from the carrying amount of the related debt liability. D. In October 2013, the Company entered into a 5% Convertible Subordinated Note Purchase Agreement (the “Note Purchase Agreement”) with the purchasers party thereto, under which the Company issued an aggregate initial principal amount of $2,125,000 of unsecured subordinated notes (the “Convertible Notes”). The Convertible Notes bear interest at a rate of 5% per annum, payable quarterly, until their maturity date of December 15, 2018. The Convertible Notes, and accrued but unpaid interest thereon, are convertible in whole or in part from time to time at the option of the holders thereof into shares of the Company’s common stock at a conversion price of $0.90 per share (the “Conversion Price”). The Convertible Notes may be prepaid in whole or in part at any time without penalty or premium, but with payment of accrued interest to the date of prepayment. The Convertible Notes contain customary events of default, which, if uncured, entitle each note holder to accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, the Convertible Notes. The purchasers of the Convertible Notes included related parties of the Company, including an affiliate of Dr. Phillip Frost ($500,000), Mark E. Andrews, III ($50,000), an affiliate of Richard J. Lampen ($50,000), an affiliate of Glenn Halpryn ($200,000), Dennis Scholl ($100,000), and Vector Group Ltd., a more than 5% shareholder of ours, of which Richard Lampen is an executive officer, Henry Beinstein, a director of ours, is a director and Phillip Frost, M.D. is a principal shareholder ($200,000). The Company may forcibly convert all or any part of the Convertible Notes and all accrued but unpaid interest thereon if (i) the average daily volume of the Company’s common stock (as reported on the principal market or exchange on which the common stock is listed or quoted for trading) exceeds $50,000 per trading day and (ii) the volume weighted average price of the common stock for at least twenty (20) trading days during any thirty (30) consecutive trading day period exceeds 250% of the then-current Conversion Price. Any forced conversion will be applied ratably to the holders of all Convertible Notes issued pursuant to the Note Purchase Agreement based on each holder’s then-current note holdings. In connection with the Note Purchase Agreement, each purchaser of the Convertible Notes was required to execute a joinder to the subordination agreement, by and among ACF and certain other junior lenders to the Company; the Company is not a party to the subordination agreement. During the year ended March 31, 2018, certain holders of the Convertible Notes converted an aggregate $1,632,000 of the outstanding principal and interest balances of their Convertible Notes into 1,813,334 shares of the Company’s common stock, pursuant to the terms of the Convertible Notes. The converting holders included an affiliate of Dr. Phillip Frost, Mark E. Andrews, III an affiliate of Richard J. Lampen, and Vector Group Ltd. At March 31, 2018, $50,000 of principal due on the Convertible Notes was included in current maturities of notes payable, and at March 31, 2017, $1,675,000 of principal due on the Convertible Notes was included in long-term liabilities, respectively E. In March 2017, the Company issued a promissory note to Frost Nevada Investments Trust (the “Holder”), an entity affiliated with Phillip Frost, M.D., in the aggregate principal amount of $20,000,000 (the “Subordinated Note”). The purpose of Company’s issuance of the Subordinated Note was to finance the GCP Share Acquisition. The Subordinated Note bears interest quarterly at the rate of 11% per annum. The principal and interest incurred thereon were due and payable in full on March 15, 2019. All claims of the Holder to principal, interest and any other amounts owed under the Subordinated Note are subordinated in right of payment to all indebtedness of the Company existing as of the date of the Subordinated Note. The Subordinated Note contains customary events of default and may be prepaid by the Company, in whole or in part, without penalty, at any time. In April 2018, the Company entered into a First Amendment to the Subordinated Note to extend the maturity date on the Subordinated Note from March 15, 2019 until September 15, 2020. No other provisions of the Subordinated Note were amended. Payments due on notes payable after giving effect to the extensions and modifications noted above are as follows: Years ending March 31, Amount 2019 $ 176,148 2020 38,604,962 2021 211,580 Total $ 38,992,690 |
Equity
Equity | 12 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Equity | NOTE 9 - EQUITY Employee Stock Purchase Plan Convertible Notes conversion Subsidiary dividend GCP Acquisition |
Foreign Currency Forward Contra
Foreign Currency Forward Contracts | 12 Months Ended |
Mar. 31, 2018 | |
Foreign Currency [Abstract] | |
Foreign Currency Forward Contracts | NOTE 10 - FOREIGN CURRENCY FORWARD CONTRACTS The Company enters into forward contracts from time to time to reduce its exposure to foreign currency fluctuations. The Company recognizes in the balance sheet derivative contracts at fair value, and reflects any net gains and losses currently in earnings. At March 31, 2018 and 2017, the Company had no forward contracts outstanding. Gain or loss on foreign currency forward contracts, which was de minimis during the periods presented, is included in other income and expense. |
Provision for Income Taxes
Provision for Income Taxes | 12 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | NOTE 11 - PROVISION FOR INCOME TAXES The Company accounts for taxes in accordance with ASC 740, “Income Taxes”, which requires the recognition of tax benefits or expense on the temporary differences between the tax basis and book basis of its assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled. The Company’s income tax expense for the years ended March 31, 2018, 2017 and 2016 consists primarily of federal and state and local taxes. Effective with the acquisition of the additional 20.1% of GCP as described in Note 4, GCP will file as part of the U.S. federal consolidated income tax group beginning in the year-ended March 31, 2018. The components of income before the provision (benefit) for income taxes are as follows: Year Ended March 31, 2018 Year Ended March 31, 2017 Year Ended March 31, 2016 Domestic Operations $ 577,902 $ 945,985 $ (385,672 ) Foreign Operations (169,527 ) (251,661 ) 129,814 Total $ 408,375 $ 694,324 $ (255,858 ) The provision (benefit) for income taxes is comprised of the following: Year Ended March 31, 2018 Year Ended March 31, 2017 Year Ended March 31, 2016 Current provision (benefit) Federal $ 182,891 $ 1,617,000 $ 1,183,000 State 30,761 (784,000 ) 397,000 Foreign - - - Total current provision (benefit) $ 213,652 $ 833,000 $ 1,580,000 Deferred provision (benefit) Federal $ (74,135 ) $ (540,000 ) $ (148,152 ) State 853 9,702 19,000 Foreign - (115,000 ) - Total deferred provision (benefit) $ (73,282 ) $ (645,298 ) $ (129,152 ) Total provision (benefit) Federal $ 108,756 $ 1,077,000 $ 1,034,848 State 31,614 (774,298 ) 416,000 Foreign - (115,000 ) - Total provision (benefit) $ 140,370 $ 187,702 $ 1,450,848 The effective income tax rate varies from the current blended statutory federal income tax rate of 30.79% for the year ended March 31, 2018 and the statutory rate of 34% for the years ended March 31, 2017 and 2016 as follows: Years ended March 31, 2018 2017 2016 % % % Computed expected tax benefit, at federal statutory rate (30.79 ) (34.00 ) (34.00 ) Permanent items (32.58 ) (29.70 ) 176.00 Share based compensation (52.93 ) (48.46 ) 0.00 Impact of 2017 Tax Act (2,714.39 ) 0.00 0.00 Change in valuation allowance 2,776.47 73.68 371.5 Effect of foreign operations 51.90 (67.87 ) 12.20 Increase in unrecognized tax benefit 2.88 (1.65 ) 0.00 Intercompany profit 0.00 0.00 13.90 Other (1.98 ) (2.34 ) 0.00 State and local taxes, net of federal benefit (32.94 ) 83.31 27.5 Effective tax rate (34.37 )% (27.03 )% 567.10 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: March 31, 2018 2017 Deferred income tax assets: Accounts receivable $ 99,000 $ 112,000 Inventory 988,000 1,204,000 Share based compensation 669,000 665,000 U.S. federal and state net operating losses 18,134,000 29,374,000 Foreign net operating losses 1,776,000 1,511,000 Other 73,000 245,000 Total gross assets 21,739,000 33,111,000 Less: Valuation allowance (21,341,000 ) (32,621,000 ) Total deferred tax asset $ 398,000 $ 490,000 Deferred income tax liability: Intangible assets $ (790,000 ) $ (994,000 ) Fixed assets (56,000 ) (6,000 ) Other (37,484 ) (48,766 ) Total deferred tax liability (883,484 ) (1,048,766 ) Net deferred tax liability $ (485,484 ) $ (558,766 ) In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those periods in which temporary differences become deductible and/or net operating loss carryforwards can be utilized. The Company considers the level of historical taxable income, scheduled reversal of temporary differences, tax planning strategies and projected future taxable income in determining whether a valuation allowance is warranted. Based on historic operating losses and projected future income, the Company concluded that its net deferred tax assets are not realizable on a more-likely-than-not basis. As such, the Company maintained a full valuation allowance against its net deferred tax assets. The Company’s valuation allowance decreased by $11,280,000 during fiscal 2018 primarily related to the remeasurement of its U.S. deferred tax assets and liabilities at the reduced federal corporate tax rate of 21% enacted with the 2017 Tax Act. In accordance with ASC 350-10, the Company does not amortize indefinite lived-intangible assets for financial reporting purposes. The deferred tax liability of $485,000 relates to the tax effects of differences between the financial reporting and tax basis of intangible assets. As of March 31, 2018, the Company had U.S. federal net operating loss carryforwards of approximately $80,818,000 for U.S. tax purposes, which expire in fiscal 2023 through 2036, if not utilized. The annual utilization of the net operating loss carryforwards may be limited in future years due to the “change in ownership provisions” set forth in Section 382 of the Internal Revenue Code. The Company also has Irish net operating loss carryforwards of approximately $14,205,000, which have an indefinite life. As of March 31, 2018, the Company has not provided for U.S. federal and foreign withholding taxes on any excess of financial reporting over the tax basis of investments in foreign subsidiaries, as such earnings are indefinitely reinvested overseas. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. Due to the complexities of the tax laws and assumptions that would have to be made, it is not practicable to estimate the amounts of income tax provisions that may be required. A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows: Balance at March 31, 2016 $ - Additions based on tax positions taken in the current and prior years 18,000 Settlements - Decreases based on tax positions taken in prior years - Other - Balance at March 31, 2017 $ 18,000 Additions based on tax positions taken in the current and prior years 6,000 Settlements - Decreases based on tax positions taken in prior years (18,000 ) Other - Balance at March 31, 2018 $ 6,000 Of the amounts reflected above at March 31, 2018, the entire amount would reduce the Company’s effective tax rate if recognized. The Company records accrued interest and penalties related to income tax matters in general and administrative expenses. For the year ended March 31, 2018 and 2017, interest and penalties on unrecognized tax benefits were $1,000 and $2,000, respectively. The Company does not believe that the amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months. Tax years 2014 through 2018 remain open to examination by federal and state tax jurisdictions. The Company has various foreign subsidiaries for which tax years 2012 through 2018 remain open to examination in certain foreign tax jurisdictions. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | NOTE 12 - STOCK-BASED COMPENSATION Stock Incentive Plan As established, there were 2,000,000 shares of common stock available for distribution under the 2003 Plan. In January 2009, the Company’s shareholders approved an amendment to the 2003 Plan to increase the number of shares available under the 2003 Plan from 2,000,000 to 12,000,000 and to establish the maximum number of shares issuable to any one individual in any particular year. As of August 2013, no new awards may be issued under the 2003 Plan. In October 2012, the Company’s shareholders approved the 2013 Incentive Compensation Plan (“2013 Plan”) which provides for an aggregate of 10,000,000 shares of the Company’s stock for awards of incentive and non-qualified stock options, restricted stock and stock appreciation rights for its officers, employees, consultants and directors to attract and retain such individuals. In February 2017, the Company’s shareholders approved an amendment to the 2013 Plan to increase the number of shares available under the 2013 Plan from 10,000,000 to 20,000,000. As of March 31, 2018, 9,277,500 shares had been issued under the 2013 Plan, with 10,722,500 shares remaining available for issuance. Stock-based compensation expense for the years ended March 31, 2018, 2017 and 2016 amounted to $1,974,745, $1,577,994 and $1,370,556, respectively, of which $704,772, $495,775 and $493,666, respectively, is included in selling expense and $1,269,973, $1,082,219 and $876,890, respectively, is included in general and administrative expense for the years ended March 31, 2018, 2017 and 2016, respectively. At March 31, 2018, total unrecognized compensation cost amounted to approximately $3,311,178, representing 4,021,500 unvested options and 1,182,000 unvested restricted shares. This cost is expected to be recognized over a weighted-average period of 1.63 years for the unvested options and 2.98 years for the unvested restricted shares. There were 356,700, 671,028 and 1,079,602 options exercised during the years ended March 31, 2018, 2017 and 2016, respectively. The Company did not recognize any related tax benefit for the years ended March 31, 2018, 2017 and 2016, as the effects were de minimis. Stock Options Years ended March 31, 2018 2017 2016 Weighted Weighted Weighted Average Average Average Exercise Exercise Exercise Shares Price Shares Price Shares Price Outstanding at beginning of year 15,798,558 $ 0.78 13,508,086 $ 0.79 11,988,188 $ 0.58 Granted - - 3,280,000 0.91 2,622,500 1.63 Exercised (356,700 ) 0.66 (671,028 ) 0.37 (1,079,602 ) 0.35 Forfeited (95,250 ) 2.01 (318,500 ) 3.44 (23,000 ) 4.30 Outstanding and expected to vest at end of period 15,346,608 $ 0.78 15,798,558 $ 0.78 13,508,086 $ 0.79 Exercisable at period end 11,325,108 $ 0.65 9,285,121 $ 0.55 7,931,813 $ 0.53 Weighted average fair value of grants during the period $ - $ 0.57 $ 1.07 The following table summarizes activity pertaining to options outstanding and exercisable at March 31, 2018: Options Outstanding Options Exercisable Weighted Average Weighted Remaining Average Aggregate Range of Life in Exercise Intrinsic Exercise Prices Shares Years Shares Price Value $0.01 - $0.25 273,200 0.51 273,200 $ 0.22 $ 278,596 $0.26 - $0.40 6,977,908 3.32 6,977,908 0.34 6,276,104 $0.41 - $1.00 5,153,500 7.42 2,348,000 0.96 660,076 $1.01 - $1.50 560,000 6.99 535,000 1.21 61,400 $1.51 - $2.00 2,382,000 7.18 1,191,000 1.67 - 15,346,608 5.38 11,325,108 $ 0.65 $ 7,276,177 Total stock options exercisable as of March 31, 2018 were 11,325,108. The weighted average exercise price of these options was $0.65. The weighted average remaining life of the options outstanding was 5.38 years and of the options exercisable was 4.58 years. The following summarizes activity pertaining to the Company’s unvested options for the years ended March 31, 2018, 2017 and 2016: Weighted Average Exercise Shares Price Unvested at March 31, 2015 4,924,055 $ 0.70 Granted 2,622,500 1.63 Canceled or expired (12,000 ) 0.97 Vested (1,958,282 ) 0.70 Unvested at March 31, 2016 5,576,273 $ 1.17 Granted 3,280,000 0.91 Canceled or expired (138,250 ) 0.55 Vested (2,171,648 ) 0.94 Unvested at March 31, 2017 6,546,375 $ 1.11 Granted - - Canceled or expired (56,000 ) 0.94 Vested (2,433,875 ) 1.05 Unvested at March 31, 2018 4,056,500 $ 1.14 Restricted Share Grants A summary of the restricted stock outstanding under the 2013 Plan is as follows: Shares Restricted stock outstanding at March 31, 2017 — Granted 1,182,000 Canceled or expired — Restricted stock outstanding at March 31, 2018 1,182,000 Weighted average fair value per restricted share at grant date $ 1.65 Weighted average share price at grant date $ 1.65 The fair value of each option award under the 2003 and 2013 Plans was estimated on the grant date using the Black-Scholes option pricing model and is affected by assumptions regarding a number of complex and subjective variables. The use of an option pricing model also requires the use of a number of complex assumptions including expected volatility, risk-free interest rate, expected dividends, and expected term. Expected volatility is based on the Company’s historical volatility and the volatility of a peer group of companies over the expected life of the option. The expected term and vesting of the options represents the estimated period of time until exercise. The expected term was determined using the simplified method available under current guidance. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company has not paid dividends on its common stock in the past and does not plan to pay any dividends on its common stock in the near future. Current authoritative guidance also requires the Company to estimate forfeitures at the time of grant and revise these estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates forfeitures based on its expectation of future experience while considering its historical experience. The fair value of options at grant date was estimated using the Black-Scholes option pricing model utilizing the following weighted average assumptions: March 31, 2017 March 31, 2016 Risk-free interest rate 1.37% - 1.89 % 1.39% - 1.81 % Expected option life in years 5.5 - 6.25 5.5 - 6.25 Expected stock price volatility 68% - 69 % 70% - 73 % Expected dividend yield 0 % 0 % |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 13 - RELATED PARTY TRANSACTIONS A. In November 2008, the Company entered into a management services agreement with Vector Group Ltd., a more than 5% shareholder, under which Vector Group agreed to make available to the Company the services of Richard J. Lampen, Vector Group’s executive vice president, effective October 11, 2008 to serve as the Company’s president and chief executive officer and to provide certain other financial and accounting services, including assistance with complying with Section 404 of the Sarbanes-Oxley Act of 2002. In consideration for such services, the Company agreed to pay Vector Group an annual fee of $100,000, plus any direct, out-of-pocket costs, fees and other expenses incurred by Vector Group or Mr. Lampen in connection with providing such services, and to indemnify Vector Group for any liabilities arising out of the provision of the services. The agreement is terminable by either party upon 30 days’ prior written notice. For the years ended March 31, 2018, 2017 and 2016, Vector Group was paid $108,928, $110,846 and $85,396, respectively, under this agreement. These charges have been included in general and administrative expense. B. In November 2008, the Company entered into an agreement to reimburse Ladenburg Thalmann Financial Services Inc. (“LTS”) for its costs in providing certain administrative, legal and financial services to the Company. For the years ended March 31, 2018, 2017 and 2016, LTS was paid $182,875, $128,625 and $131,054, respectively, under this agreement. Mr. Lampen, the Company’s president and chief executive officer and a director, is the president and chief executive officer and a director of LTS and four other directors of the Company serve as directors of LTS, including Phillip Frost, M.D. who is the Chairman and principal shareholder of LTS. C. As described in Note 8C, in March 2013, the Company entered into a Participation Agreement with certain related parties. As described in Notes 8D and 8E, in October 2013 and March 2017, the Company entered into various notes with certain related parties. D. As described in Note 4 in March 2017, the Company issued 1,800,000 shares of common stock to the Sellers and paid $20,000,000 to the Sellers in connection with the GCP Acquisition. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 14 - COMMITMENTS AND CONTINGENCIES A. The Company has entered into a supply agreement with an Irish distiller (“Irish Distillery”), which provides for the production of blended Irish whiskeys for the Company until the contract is terminated by either party in accordance with the terms of the agreement. The Irish Distillery may terminate the contract if it provides at least six years prior notice to the Company, except for breach. Under this agreement, the Company provides the Irish Distillery with a forecast of the estimated amount of liters of pure alcohol it requires for the next four fiscal contract years and agrees to purchase 90% of that amount, subject to certain annual adjustments. For the contract year ending June 30, 2018, the Company has contracted to purchase approximately €1,017,189 or $1,253,044 (translated at the March 31, 2018 exchange rate) in bulk Irish whiskey, of which €694,043, or $854,971, has been purchased as of March 31, 2018. For the contract year ending June 30, 2019, the Company has contracted to purchase approximately €1,105,572 or $1,361,921 (translated at the March 31, 2018 exchange rate) in bulk Irish whiskey. The Company is not obligated to pay the Irish Distillery for any product not yet received. During the term of this supply agreement, the Irish Distillery has the right to limit additional purchases above the commitment amount. B. The Company has also entered into a supply agreement with the Irish Distillery, which provides for the production of single malt Irish whiskeys for the Company until the contract is terminated by either party in accordance with the terms of the agreement. The Irish Distillery may terminate the contract if it provides at least thirteen years prior notice to the Company, except for breach. Under this agreement, the Company provides the Irish Distillery with a forecast of the estimated amount of liters of pure alcohol it requires for the next twelve fiscal contract years and agrees to purchase 80% of that amount, subject to certain annual adjustments. For the contract year ending June 30, 2018, the Company has contracted to purchase approximately €442,274 or $544,825 (translated at the March 31, 2018 exchange rate) in bulk Irish whiskey, of which €338,632, or $417,151, has been purchased as of March 31, 2018. For the year ending June 30, 2019, the Company has contracted to purchase approximately €575,791 or $709,300 (translated at the March 31, 2018 exchange rate) in bulk Irish whiskey. The Company is not obligated to pay the Irish Distillery for any product not yet received. During the term of this supply agreement, the Irish Distillery has the right to limit additional purchases above the commitment amount. C. The Company entered into a supply agreement with a bourbon distiller, which provided for the production of newly-distilled bourbon whiskey through December 31, 2019. Under this agreement, the distiller was to provide the Company with an agreed upon amount of original proof gallons of newly distilled bourbon whiskey, subject to certain annual adjustments. For the contract year ended December 31, 2016, the Company contracted and purchased approximately $2,053,750 in newly distilled bourbon. For the contract year ended December 31, 2017, the Company originally contracted to purchase approximately $2,464,500 in newly distilled bourbon, $1,959,801 of which had been purchased as of December 31, 2017. The Company is not obligated to pay the distiller for any product not yet received. During the term of this supply agreement, the distiller had the right to limit additional purchases to ten percent above the commitment amount. In March 2017, the distiller notified the Company of its intent to terminate the contract under its terms after the 2017 contract year, and to limit the purchase amount for the 2017 contract year to no more than the 2016 contract year amount. In October 2017, the Company entered into a new supply agreement with a different bourbon distiller. Under this agreement, the distiller will provide the Company with an agreed upon amount of original proof gallons of newly-distilled bourbon whiskey, subject to certain annual adjustments. For the contract year ending December 31, 2018, the Company has contracted to purchase approximately $3,900,000 in newly distilled bourbon, none of which had been purchased as of March 31, 2018. The Company is not obligated to pay the distiller for any product not yet received. D. The Company has a distribution agreement with an international supplier to be the sole-producer of Celtic Honey, one of the Company’s products, for an indefinite period. E. The Company leases office space in New York, NY, Dublin, Ireland and Houston, TX. The New York, NY lease began on May 1, 2010 and expires on February 29, 2020 and provides for monthly payments of $26,255. The Dublin lease commenced on March 1, 2009 and extends through October 31, 2019 and provides for monthly payments of €1,500 or $1,848 (translated at the March 31, 2018 exchange rate). The Houston, TX lease commenced on April 27, 2015 and extends through June 26, 2018 and provides for monthly payments of $3,440. In May 2018, the Houston lease was extended through June 26, 2021 The Company has also entered into non-cancelable operating leases for certain office equipment. Future minimum lease payments for leases with initial or remaining terms in excess of one year are as follows: Years ending March 31, Amount 2019 $ 406,896 2020 385,395 2021 44,231 2022 11,163 Total $ 847,685 In addition to the above annual rental payments, the Company is obligated to pay its pro-rata share of utility and maintenance expenses on the leased premises. Rent expense under operating leases amounted to approximately $444,117, $477,460 and $335,047 for the years ended March 31, 2018, 2017 and 2016, respectively, and is included in general and administrative expense. F. As described in Note 8C, in August 2011, the Company and CB-USA entered into the Credit Facility, as amended in July 2012, March 2013, August 2013, November 2013, August 2014, September 2014, August 2015, October 2017 and May 2018. G. Except as set forth below, the Company believes that neither it nor any of its subsidiaries is currently subject to litigation which, in the opinion of management after consultation with counsel, is likely to have a material adverse effect on the Company. The Company may become involved in litigation from time to time relating to claims arising in the ordinary course of its business. These claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources. |
Concentrations
Concentrations | 12 Months Ended |
Mar. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentrations | NOTE 15 - CONCENTRATIONS A. Credit Risk B. Customers |
Geographic Information
Geographic Information | 12 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Geographic Information | NOTE 16 - GEOGRAPHIC INFORMATION The Company operates in one reportable segment - the sale of premium beverage alcohol. The Company’s product categories are rum, whiskeys, liqueurs, vodka, tequila and ginger beer, a related non-alcoholic beverage product. The Company reports its operations in two geographic areas: International and United States. The consolidated financial statements include revenues and assets generated in or held in the U.S. and foreign countries. The following table sets forth the amounts and percentage of consolidated sales, net, consolidated income from operations, consolidated net income (loss) attributable to common shareholders, consolidated income tax expense and consolidated assets from the U.S. and foreign countries and consolidated sales, net by category. Years ended March 31, 2018 2017 2016 Consolidated Sales, net: International $ 8,926,378 9.9 % $ 7,528,766 9.7 % $ 9,302,134 12.9 % United States 80,971,139 90.1 % 69,740,365 90.3 % 62,918,234 87.1 % Total Consolidated Sales, net $ 89,897,517 100.0 % $ 77,269,131 100.0 % $ 72,220,368 100.0 % Consolidated Income (Loss) from Operations: International $ (94,066 ) (2.2 )% $ (210,100 ) (11.0 )% $ (34,268 ) (3.4 )% United States 4,288,283 102.2 % 2,115,099 111.0 % 1,039,815 103.4 % Total Consolidated Income (Loss) from Operations $ 4,194,217 100.0 % $ 1,904,999 100.0 % $ 1,005,547 100.0 % Consolidated Net Loss Attributable to Common Shareholders: International $ 35,272 (4.3 )% $ (109,164 ) 12.8 % $ 11,490 (0.5 )% United States (854,204 ) 104.3 % (743,449 ) 87.2 % (2,527,858 ) 100.5 % Total Consolidated Net Loss Attributable to Common Shareholders $ (818,932 ) 100.0 % $ (852,613 ) 100.0 % $ (2,516,368 ) 100.0 % Income tax expense, net: United States $ (140,370 ) 100.0 % $ (187,702 ) 100.0 % $ (1,450,848 ) 100.0 % Consolidated Sales, net by category: Whiskey $ 33,931,832 37.8 % $ 28,339,770 36.7 % $ 26,009,839 36.0 % Rum 18,518,450 20.6 % 18,759,610 24.3 % 18,858,554 26.1 % Liqueurs 9,339,246 10.4 % 8,386,705 10.9 % 8,567,121 11.9 % Vodka 1,365,764 1.5 % 1,569,004 2.0 % 2,364,429 3.3 % Tequila 202,215 0.2 % 210,012 0.3 % 198,330 0.3 % Ginger beer 26,540,010 29.5 % 20,004,029 25.9 % 16,222,095 22.5 % Total Consolidated Sales, net $ 89,897,517 100.0 % $ 77,269,131 100.0 % $ 72,220,368 100.0 % As of March 31, 2018 2017 Consolidated Assets: International $ 2,886,735 4.8 % $ 3,234,536 6.0 % United States 57,446,625 95.2 % 51,107,608 94.0 % Total Consolidated Assets $ 60,333,360 100.0 % $ 54,342,144 100.0 % |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Mar. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | NOTE 17 - QUARTERLY FINANCIAL DATA 1st 2nd 3rd 4th Fiscal 2018: Sales, net $ 20,852,287 $ 20,894,150 $ 24,079,623 $ 24,071,457 Gross profit 8,578,619 8,534,249 9,677,937 9,407,147 Net (loss) income $ (865,218 ) $ 280,622 $ 664,603 $ 190,185 Net (income) attributable to noncontrolling interests (81,178 ) (282,304 ) (199,023 ) (526,619 ) Net (loss) income attributable to common Stockholders $ (946,396 ) $ (1,682 ) $ 465,580 $ (336,434 ) Net (loss) income per common share, basic, attributable to common shareholders $ (0.01 ) $ (0.00 ) $ 0.00 $ (0.00 ) Net (loss) income per common share, diluted, attributable to common shareholders $ (0.01 ) $ (0.00 ) $ 0.00 $ (0.00 ) Weighted average shares used in computation, basic, attributable to common shareholders 163,072,642 163,209,562 163,470,150 164,899,255 Weighted average shares used in computation, diluted, attributable to common shareholders 163,072,642 163,209,562 171,121,927 164,899,255 1st 2nd 3rd 4th Fiscal 2017: Sales, net $ 16,750,925 $ 19,627,791 $ 18,309,539 $ 22,580,876 Gross profit 6,716,115 7,727,260 7,670,240 9,586,742 Net (loss) income $ (595,703 ) $ (489,854 ) $ 892,364 $ 699,725 Net (income) loss attributable to noncontrolling interests (170,116 ) (210,856 ) (469,798 ) (508,375 ) Net (loss) income attributable to common stockholders $ (765,819 ) $ (700,710 ) $ 422,566 $ 191,350 Net (loss) income per common share, basic, attributable to common shareholders $ (0.00 ) $ (0.00 ) $ 0.00 $ 0.00 Net (loss) income per common share, diluted, attributable to common shareholders $ (0.00 ) $ (0.00 ) $ 0.00 $ 0.00 Weighted average shares used in computation, basic, attributable to common shareholders 160,521,947 160,698,696 160,963,862 161,065,685 Weighted average shares used in computation, diluted, attributable to common shareholders 160,521,947 160,698,696 165,245,935 165,878,218 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18 – SUBSEQUENT EVENTS Subordinated Note Amendment Credit Facility Amendment |
Organization and Summary of S29
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Description of Business | A. Description of business |
Organization and Operations | B. Organization and operations |
Prior Period Adjustment | C. Prior Period Adjustment |
Liquidity | D. Liquidity |
Brands - Rum and Ginger Beer | E. Brands Rum and Ginger Beer ® Whiskey Liqueur Vodka |
Cash and Cash Equivalents | F. Cash and cash equivalents |
Equity Investments | G. Equity investments |
Trade Accounts Receivable | H. Trade accounts receivable |
Revenue Recognition | I. Revenue recognition |
Inventories | J. Inventories During the years ended March 31, 2018, 2017 and 2016, the Company recorded an addition to allowances for obsolete and slow-moving inventory of $376,611, $240,000 and $200,000, respectively. The Company recorded these allowances and write-offs on both raw materials and finished goods, primarily in connection with spoilage and slow-moving inventory, label and packaging changes made to certain brands, as well as adjustments to estimated freight costs and excise taxes and certain cost variances. The charges have been recorded as increases to Cost of Sales in the respective years. |
Equipment | K. Equipment |
Goodwill and Other Intangible Assets | L. Goodwill and other intangible assets Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, “Intangibles - Goodwill and Other”, impairment of goodwill must be tested at least annually by comparing the fair values of the applicable reporting units with the carrying amount of their net assets, including goodwill. An entity may first assess qualitative factors to determine whether it is necessary to perform the two-step goodwill impairment test. If determined to be necessary, the two-step impairment test shall be used. The required two-step approach uses accounting judgments and estimates of future operating results. Changes in estimates or the application of alternative assumptions could produce significantly different results. The estimates that most significantly affect the fair value calculation are related to revenue growth, cost of sales, selling and marketing expenses and discount rates. Impairment testing is done at the reporting level. If the carrying amount of the reporting unit’s net assets exceeds the unit’s fair value, an impairment loss is recognized in an amount equal to the excess of the carrying amount of goodwill over its implied fair value. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination with the fair value of the reporting unit deemed to be the purchase price paid. Rights, trademarks, trade names and formulations are indefinite lived intangible assets not subject to amortization and are tested for impairment at least annually. The impairment test consists of a comparison of the fair value of the asset group allocated to each reporting unit with its allocated carrying amount. Under the goodwill qualitative assessment at March 31, 2018 and 2017, various events and circumstances that would affect the estimated fair value of each reporting unit were identified, including, but not limited to: prior years’ impairment testing results, budget to actual results, Company-specific facts and circumstances, industry developments, and the economic environment. Based on this assessment, the Company determined that no quantitative assessment was required. |
Impairment and Disposal of Long-lived Assets | M. Impairment and disposal of long-lived assets |
Shipping and Handling | N Shipping and handling |
Excise Taxes and Duty | O. Excise taxes and duty |
Distributor Charges and Promotional Goods | P. Distributor charges and promotional goods |
Foreign Currency | Q. Foreign currency |
Fair Value of Financial Instruments | R. Fair value of financial instruments The Company’s investments are reported at fair value in accordance with authoritative guidance, which accomplishes the following key objectives: - Defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; - Establishes a three-level hierarchy (“valuation hierarchy”) for fair value measurements; - Requires consideration of the Company’s creditworthiness when valuing liabilities; and - Expands disclosures about instruments measured at fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of the valuation hierarchy are as follows: - Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. - Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are directly or indirectly observable for the asset or liability for substantially the full term of the financial instrument. - Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
Income Taxes | S. Income taxes The Company recognized the income tax effects of the 2017 Tax Act in its current financial statements in accordance with Staff Accounting Bulletin No. 118, which provides SEC staff guidance for the application of ASC Topic 740, “Income Taxes”, (“ASC 740”) in the reporting period in which the 2017 Tax Act was signed into law. As such, the Company’s financial results reflect the income tax effects of the 2017 Tax Act for which the accounting under ASC 740 is complete. The Company did not identify items for which the income tax effects of the 2017 Tax Act have not been completed and a reasonable estimate could not be determined as of March 31, 2018. The 2017 Tax Act reduced the U.S. federal corporate tax rate from 35.0% to 21.0% for all corporations effective January 1, 2018. For fiscal year companies, the change in law requires the application of a blended rate for each quarter of the fiscal year, which in the Company’s case is 30.79% for the fiscal year ended March 31, 2018. Thereafter, the applicable statutory rate is 21.0%. ASC 740 requires all companies to reflect the effects of the 2017 Tax Act in the period in which the 2017 Tax Act was enacted. Accordingly, the Company reduced the statutory rate that applies to its year-to-date fiscal 2018 earnings from 34.0% to 30.79%. In addition, the Company remeasured its deferred tax assets and liabilities based on the new rate. The combined result of the 2017 Tax Act resulted in a tax benefit of $40,485 during the three months ended December 31, 2017. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is provided to the extent a deferred tax asset is not considered recoverable. The Company has adopted the provisions of ASC 740 and as of March 31, 2018, the Company had reserves for uncertain tax positions (including related interest and penalties) for various state and local tax issues of $6,778. The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expense. |
Research and Development Costs | T. Research and development costs |
Advertising | U. Advertising |
Use of Estimates | V. Use of estimates |
Recent Accounting Pronouncements | W. Recent accounting pronouncements In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This guidance is effective for the Company as of April 1, 2018, with early adoption permitted. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In February 2017, the FASB issued ASU 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” ASU 2017-05 clarifies the scope and accounting of a financial asset that meets the definition of an “in-substance nonfinancial asset” and defines the term “in-substance nonfinancial asset.” ASU 2017-05 also adds guidance for partial sales of nonfinancial assets. This guidance is effective for the Company as of April 1, 2018, with early adoption permitted. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment (Topic 350).” ASU 2017-04 removes Step 2 from the goodwill impairment test. This guidance is effective for the Company as of April 1, 2020, with early adoption permitted. The Company is currently evaluating the new guidance to determine the impact the adoption of this guidance will have on the Company’s results of operations, cash flows and financial condition. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” This ASU, which must be applied prospectively, provides a narrower framework to be used to determine if a set of assets and activities constitutes a business than under current guidance and is generally expected to result in greater consistency in the application of ASC Topic 805, Business Combinations. This guidance is effective for the Company as of April 1, 2018, with early adoption permitted. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash, a consensus of the FASB’s Emerging Issues Task Force (the “Task Force”).” The new standard requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. This guidance is effective for the Company as of April 1, 2018, with early adoption permitted. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In October 2016, the FASB issued ASU 2016-16, “Income Taxes: Intra-Entity Transfers of Assets Other than Inventory.” This ASU removes the prohibition against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. This guidance is effective for the Company as of April 1, 2018, with early adoption permitted. Entities must apply a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments”, which provides guidance on eight cash flow classification issues with the objective of reducing differences in practice. The new standard is effective for the Company as of April 1, 2018, with early adoption permitted. Adoption is required to be on a retrospective basis, unless impracticable for any of the amendments, in which case a prospective application is permitted. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-08”). ASU 2016-08 does not change the core principle of the guidance stated in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (“ASU 2014-9”), instead, the amendments in this ASU are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. ASU 2016-08 will have the same effective date and transition requirements as the new revenue standard issued in ASU 2014-09. In May 2014, the FASB issued ASU 2014-09. The new revenue standard outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new revenue standard contains principles to determine the measurement of revenue and timing of when it is recognized. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This guidance is effective for the Company as of April 1, 2018. The Company expects to transition to ASU 2016-08 using the Modified-Retrospective Method, under which the prior years’ data is not recast; instead, a single adjustment is made to equity at the beginning of the initial year of application. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. In February 2016, the FASB issued ASU 2016-02, “Leases.” The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for the Company as of April 1, 2019. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the new guidance to determine the impact the adoption of this guidance will have on the Company’s results of operations, cash flows and financial condition. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. Also, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for the Company as of April 1, 2018, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company has evaluated the new guidance and has determined that the adoption of this guidance will not have a material impact on the Company’s results of operations, cash flows and financial condition. The Company does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying condensed consolidated financial statements |
Accounting Standards Adopted | X Accounting standards adopted In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance became effective for the Company beginning April 1, 2017. The Company determined that the adoption of this guidance did not have a material effect on the Company’s results of operations, cash flows and financial condition. In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. Net realizable value is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The new guidance has been applied on a prospective basis and became effective for the Company as of April 1, 2017. The Company determined that the adoption of this guidance did not have a material effect on the Company’s results of operations, cash flows and financial condition. |
Basic and Diluted Net Loss Pe30
Basic and Diluted Net Loss Per Common Share (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Potential common shares not included in calculating diluted net loss per share are as follows: Years ended March 31, 2018 2017 2016 Stock options 15,346,608 15,798,558 13,508,086 Unvested restricted shares 1,182,000 - - 5% Convertible notes 55,556 1,861,111 1,861,111 Total 16,584,164 17,659,669 15,369,197 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | March 31, 2018 2017 Raw materials – net $ 21,015,172 $ 16,714,225 Finished goods – net 13,540,381 13,086,855 |
Equipment, Net (Tables)
Equipment, Net (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Equipment consists of the following: March 31, 2018 2017 Equipment and software $ 2,837,036 $ 2,536,064 Furniture and fixtures 112,397 112,397 Leasehold improvements 42,730 42,730 2,992,163 2,691,191 Less: accumulated depreciation 2,152,754 1,781,411 Balance $ 839,409 $ 909,780 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets consist of the following: March 31, 2018 2017 Definite life brands $ 170,000 $ 170,000 Trademarks 641,693 631,693 Rights 8,271,555 8,271,555 Product development 208,518 186,668 Patents 994,000 994,000 Other 55,460 55,460 10,341,226 10,309,376 Less: accumulated amortization 8,485,253 8,035,018 Net 1,855,973 2,274,358 Other identifiable intangible assets - indefinite lived* 4,112,972 4,112,972 $ 5,968,945 $ 6,387,330 * Other identifiable intangible assets - indefinite lived consists of product formulations and the Company’s relationships with its distillers. |
Schedule of Accumulated Amortization | Accumulated amortization consists of the following: March 31, 2018 2017 Definite life brands $ 170,000 $ 170,000 Trademarks 403,617 367,294 Rights 6,954,303 6,617,062 Product development 47,880 37,478 Patents 909,453 843,184 Accumulated amortization $ 8,485,253 $ 8,035,018 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated aggregate amortization expense for each of the next five fiscal years is as follows: Years ending March 31, Amount 2019 $ 231,596 2020 193,431 2021 191,289 2022 186,806 2023 166,823 Total $ 969,945 |
Notes Payable and Capital Lea34
Notes Payable and Capital Lease (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable and Credit Facility | March 31, 2018 2017 Notes payable consist of the following: Foreign revolving credit facilities (A) $ 126,148 $ - Note payable - GCP note (B) 211,580 211,580 Credit facility (C) 18,505,897 13,033,075 5% Convertible notes (D) 50,000 1,675,000 11% Subordinated Note (E) 20,000,000 20,000,000 Total $ 38,893,625 $ 34,919,655 A. The Company has arranged various credit facilities aggregating €310,324 or $382,279 (translated at the March 31, 2018 exchange rate) with an Irish bank, including overdraft coverage, creditors’ insurance, customs and excise guaranty, a revolving credit facility and Company credit cards. These credit facilities are payable on demand, continue until terminated by either party, are subject to annual review, and call for interest at the lender’s AA1 Rate minus 1.70%. At March 31, 2018, there was €102,404 or $126,148 (translated at the March 31, 2018 exchange rate) of principal due on the foreign revolving credit facilities include in current maturities of notes payable and no balance on the credit facilities included in notes payable at March 31, 2017. B. In December 2009, GCP issued a promissory note (the “GCP Note”) in the aggregate principal amount of $211,580 to Gosling’s Export (Bermuda) Limited in exchange for credits issued on certain inventory purchases. The GCP Note matures on April 1, 2020, is payable at maturity, subject to certain acceleration events, and calls for annual interest of 5%, to be accrued and paid at maturity. At each of March 31, 2018 and 2017, $10,579 of accrued interest was converted to amounts due to affiliates. At each of March 31, 2018 and 2017, $211,580 of principal due on the GCP Note was included in long-term liabilities. C. In August 2011, the Company and CB-USA entered into a loan and security agreement (as amended and restated, and further amended, the “Amended Agreement”) with Keltic Financial Partners II, LP (“Keltic, succeeded to be ACF FinCo I LP (“ACF”), which, as amended, through March 31, 2018, provided for availability (subject to certain terms and conditions) of a facility of up to $21.0 million (the “Credit Facility”) for the purpose of providing the Company with working capital., including a sublimit in the maximum principal amount of $7,000,000 to permit the Company to acquire aged whiskey inventory (the “Purchased Inventory Sublimit”) subject to certain conditions set forth in the Amended Agreement. The Company and CB-USA are referred to individually and collectively as the Borrower. Pursuant to the Loan Agreement Amendment, the Company and CB-USA may borrow up to the lesser of (x) $21,000,000 and (y) the sum of the borrowing base calculated in accordance with the Amended Agreement and the Purchased Inventory Sublimit. The Credit Facility interest rate is the rate that, when annualized, is the greatest of (a) the Prime Rate plus 3.00%, (b) the LIBOR Rate plus 5.50% and (c) 6.00%. As of March 31, 2018, the Credit Facility interest rate was 7.00625%. The Purchased Inventory Sublimit replaces the Bourbon Term Loan, which was paid in full in the normal course of business. The Purchased Inventory Sublimit interest rate is the rate that, when annualized, is the greatest of (a) the Prime Rate plus 4.25%, (b) the LIBOR Rate plus 6.75% and (c) 7.50%. As of March 31, 2018, the interest rate applicable to the Purchased Inventory Sublimit was 8.75625%. The monthly facility fee is 0.75% per annum of the maximum Credit Facility. Also, the Company must pay a monthly facility fee of $2,000 with respect to the Purchased Inventory Sublimit until all obligations with respect thereof are fully paid and performed. The Amended Agreement contains EBITDA targets allowing for further interest rate reductions in the future. The Company and CB-USA are permitted to prepay the Credit Facility in whole or the Purchased Inventory Sublimit, in whole or in part, subject to certain prepayment penalties as set forth in the Loan Agreement Amendment. For the year ended March 31, 2018, the Company paid interest at 6.5% through June 14, 2018, then 6.75% through December 13, 2017, then 7.0% through February 28, 2018, and then 7.06250% through March 31, 2018 on the Amended Agreement. For the year ended March 31, 2017, the Company paid interest at 6% through December 14, 2016, then 6.25% through March 15, 2017, then 6.5% through March 31, 2017 on the Amended Agreement. For the year ended March 31, 2016, the Company paid interest at 6% through August 9, 2015, then 5.75% through December 15, 2015, then 6% through March 31, 2016 on the Amended Agreement. For the year ended March 31, 2018, the Company paid interest at 8.25% through June 14, 2018, then at 8.5% through December 13, 2017, then 8.75% through February 28, 2018, and then 8.75625% through March 31, 2018 on the Purchased Inventory Sublimit For the year ended March 31, 2017, the Company paid interest at 7.75% through December 14, 2016, and then at 8.0% through March 15, 2017, then 8.25% through March 31, 2017 on the Purchased Inventory Sublimit. For the year ended March 31, 2016, the Company paid interest at 7.5% through December 15, 2015, and then at 7.75% through March 31, 2016 on the Purchased Inventory Sublimit. Interest is payable monthly in arrears, on the first day of every month on the average daily unpaid principal amount of the Credit Facility. After the occurrence and during the continuance of any “Default” or “Event of Default” (as defined under the Amended Agreement), the Borrower is required to pay interest at a rate that is 3.25% per annum above the then applicable Credit Facility interest rate. There have been no Events of Default under the Credit Facility. ACF also receives a collateral management fee of $1,000 per month (increased to $2,000 after the occurrence of and during the continuance of an Event of Default) in addition to the facility fee with respect to the Purchased Inventory Sublimit. The Amended Agreement contains standard borrower representations and warranties for asset-based borrowing and a number of reporting obligations and affirmative and negative covenants. The Amended Agreement includes negative covenants that, among other things, restrict the Borrower’s ability to create additional indebtedness, dispose of properties, incur liens and make distributions or cash dividends. The obligations of the Borrower under the Amended Amendment are secured by the grant of a pledge and security interest in all of the assets of the Borrower. At March 31, 2018, the Company was in compliance, in all respects, with the covenants under the Amended Agreement. The Credit Facility matures on July 31, 2019. ACF required as a condition to entering into an amendment to the Amended Agreement in August 2015 that ACF enter into a participation agreement with certain related parties of the Company, including Frost Gamma Investments Trust, an entity affiliated with Phillip Frost, M.D., a director and principal shareholder of the Company, Mark E. Andrews, III, a director of the Company and the Company’s Chairman, Richard J. Lampen, a director of the Company and the Company’s President and Chief Executive Officer, Brian L. Heller, the Company’s General Counsel and Assistant Secretary, and Alfred J. Small, the Company’s Senior Vice President, Chief Financial Officer, Treasurer and Secretary, to allow for the sale of participation interests in the Purchased Inventory Sublimit and the inventory purchased with the proceeds thereof. The participation agreement provides that ACF’s commitment to fund each advance of the Purchased Inventory Sublimit shall be limited to seventy percent (70%), up to an aggregate maximum principal amount for all advances equal to $4,900,000. Neither the Company nor CB-USA is a party to the participation agreement. However, the Company and CB-USA are party to a fee letter with the junior participants (including the related party junior participants) pursuant to which the Company and CB-USA were obligated to pay the junior participants a closing fee of $18,000 on the effective date of the Loan Agreement Amendment and are obligated to pay a commitment fee of $18,000 on each anniversary of the effective date until the junior participants’ obligations are terminated pursuant to the participation agreement. In August 2015, the Company used $3,000,000 of the Purchased Inventory Sublimit to acquire aged bourbon inventory. Frost Gamma Investments Trust ($150,000), Mark E. Andrews, III ($50,000), Richard J. Lampen ($100,000), Brian L. Heller ($42,500) and Alfred J. Small ($15,000) each acquired participation interests in the Purchased Inventory Sublimit and the inventory purchased with the proceeds thereof. In January 2017, the Company acquired $1,030,000 in aged bulk bourbon under the Purchased Inventory Sublimit with additional borrowings from certain related parties of the Company, including Frost Gamma Investments Trust ($51,500), Richard J. Lampen ($34,333), Mark E. Andrews, III ($17,167), Brian L. Heller ($14,592), and Alfred J. Small ($5,150), as junior participants in the Purchased Inventory Sublimit with respect to such purchase. In October 2017, the Company acquired $1,308,125 in aged bulk bourbon under the Purchased Inventory Sublimit with additional borrowings from certain related parties of the Company, including Frost Gamma Investments Trust ($65,406), Richard J. Lampen ($43,604), Mark E. Andrews, III ($21,802), Brian L. Heller ($18,532), and Alfred J. Small ($6,541), as junior participants in the Purchased Inventory Sublimit with respect to such purchase. In December 2017, the Company acquired $900,425 in aged bulk bourbon under the Purchased Inventory Sublimit with additional borrowings from certain related parties of the Company, including Frost Gamma Investments Trust ($45,021), Richard J. Lampen ($30,014), Mark E. Andrews, III ($15,007), Brian L. Heller ($12,756), and Alfred J. Small ($4,502), as junior participants in the Purchased Inventory Sublimit with respect to such purchase. Under the terms of the participation agreement, the participants receive interest at the rate of 11% per annum. In May 2018, the Company and CB-USA entered into a Fourth Amendment (the “Fourth Amendment”) to the Amended Agreement to amend certain terms of the Credit Facility. Among other changes, the Fourth Amendment increased the maximum amount of the Credit Facility from $21,000,000 to $23,000,000, and amended the definition of borrowing base to increase the amount of borrowing that can be collateralized by inventory. At March 31, 2018 and 2017, $18,604,962 and $13,133,124, respectively, due on the Credit Facility was included in long-term liabilities. At March 31, 2018 and 2017, there was $2,395,038 and $5,866,876, respectively, in potential availability under the Credit Facility. In connection with the adoption of ASU 2015-03, the Company included $99,065 and $94,109 of debt issuance costs at March 31, 2018 and 2017, respectively, as direct deductions from the carrying amount of the related debt liability. D. In October 2013, the Company entered into a 5% Convertible Subordinated Note Purchase Agreement (the “Note Purchase Agreement”) with the purchasers party thereto, under which the Company issued an aggregate initial principal amount of $2,125,000 of unsecured subordinated notes (the “Convertible Notes”). The Convertible Notes bear interest at a rate of 5% per annum, payable quarterly, until their maturity date of December 15, 2018. The Convertible Notes, and accrued but unpaid interest thereon, are convertible in whole or in part from time to time at the option of the holders thereof into shares of the Company’s common stock at a conversion price of $0.90 per share (the “Conversion Price”). The Convertible Notes may be prepaid in whole or in part at any time without penalty or premium, but with payment of accrued interest to the date of prepayment. The Convertible Notes contain customary events of default, which, if uncured, entitle each note holder to accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, the Convertible Notes. The purchasers of the Convertible Notes included related parties of the Company, including an affiliate of Dr. Phillip Frost ($500,000), Mark E. Andrews, III ($50,000), an affiliate of Richard J. Lampen ($50,000), an affiliate of Glenn Halpryn ($200,000), Dennis Scholl ($100,000), and Vector Group Ltd., a more than 5% shareholder of ours, of which Richard Lampen is an executive officer, Henry Beinstein, a director of ours, is a director and Phillip Frost, M.D. is a principal shareholder ($200,000). The Company may forcibly convert all or any part of the Convertible Notes and all accrued but unpaid interest thereon if (i) the average daily volume of the Company’s common stock (as reported on the principal market or exchange on which the common stock is listed or quoted for trading) exceeds $50,000 per trading day and (ii) the volume weighted average price of the common stock for at least twenty (20) trading days during any thirty (30) consecutive trading day period exceeds 250% of the then-current Conversion Price. Any forced conversion will be applied ratably to the holders of all Convertible Notes issued pursuant to the Note Purchase Agreement based on each holder’s then-current note holdings. In connection with the Note Purchase Agreement, each purchaser of the Convertible Notes was required to execute a joinder to the subordination agreement, by and among ACF and certain other junior lenders to the Company; the Company is not a party to the subordination agreement. During the year ended March 31, 2018, certain holders of the Convertible Notes converted an aggregate $1,632,000 of the outstanding principal and interest balances of their Convertible Notes into 1,813,334 shares of the Company’s common stock, pursuant to the terms of the Convertible Notes. The converting holders included an affiliate of Dr. Phillip Frost, Mark E. Andrews, III an affiliate of Richard J. Lampen, and Vector Group Ltd. At March 31, 2018, $50,000 of principal due on the Convertible Notes was included in current maturities of notes payable, and at March 31, 2017, $1,675,000 of principal due on the Convertible Notes was included in long-term liabilities, respectively E. In March 2017, the Company issued a promissory note to Frost Nevada Investments Trust (the “Holder”), an entity affiliated with Phillip Frost, M.D., in the aggregate principal amount of $20,000,000 (the “Subordinated Note”). The purpose of Company’s issuance of the Subordinated Note was to finance the GCP Share Acquisition. The Subordinated Note bears interest quarterly at the rate of 11% per annum. The principal and interest incurred thereon were due and payable in full on March 15, 2019. All claims of the Holder to principal, interest and any other amounts owed under the Subordinated Note are subordinated in right of payment to all indebtedness of the Company existing as of the date of the Subordinated Note. The Subordinated Note contains customary events of default and may be prepaid by the Company, in whole or in part, without penalty, at any time. In April 2018, the Company entered into a First Amendment to the Subordinated Note to extend the maturity date on the Subordinated Note from March 15, 2019 until September 15, 2020. No other provisions of the Subordinated Note were amended. |
Schedule of Payment Due | Payments due on notes payable after giving effect to the extensions and modifications noted above are as follows: Years ending March 31, Amount 2019 $ 176,148 2020 38,604,962 2021 211,580 Total $ 38,992,690 |
Provision for Income Taxes (Tab
Provision for Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Tax Domestic and Foreign | The components of income before the provision (benefit) for income taxes are as follows: Year Ended March 31, 2018 Year Ended March 31, 2017 Year Ended March 31, 2016 Domestic Operations $ 577,902 $ 945,985 $ (385,672 ) Foreign Operations (169,527 ) (251,661 ) 129,814 Total $ 408,375 $ 694,324 $ (255,858 ) |
Schedule of Provision for (Benefit From) Income Taxes | The provision (benefit) for income taxes is comprised of the following: Year Ended March 31, 2018 Year Ended March 31, 2017 Year Ended March 31, 2016 Current provision (benefit) Federal $ 182,891 $ 1,617,000 $ 1,183,000 State 30,761 (784,000 ) 397,000 Foreign - - - Total current provision (benefit) $ 213,652 $ 833,000 $ 1,580,000 Deferred provision (benefit) Federal $ (74,135 ) $ (540,000 ) $ (148,152 ) State 853 9,702 19,000 Foreign - (115,000 ) - Total deferred provision (benefit) $ (73,282 ) $ (645,298 ) $ (129,152 ) Total provision (benefit) Federal $ 108,756 $ 1,077,000 $ 1,034,848 State 31,614 (774,298 ) 416,000 Foreign - (115,000 ) - Total provision (benefit) $ 140,370 $ 187,702 $ 1,450,848 |
Schedule of Effective Income Tax Rate Reconciliation | The effective income tax rate varies from the current blended statutory federal income tax rate of 30.79% for the year ended March 31, 2018 and the statutory rate of 34% for the years ended March 31, 2017 and 2016 as follows: Years ended March 31, 2018 2017 2016 % % % Computed expected tax benefit, at federal statutory rate (30.79 ) (34.00 ) (34.00 ) Permanent items (32.58 ) (29.70 ) 176.00 Share based compensation (52.93 ) (48.46 ) 0.00 Impact of 2017 Tax Act (2,714.39 ) 0.00 0.00 Change in valuation allowance 2,776.47 73.68 371.5 Effect of foreign operations 51.90 (67.87 ) 12.20 Increase in unrecognized tax benefit 2.88 (1.65 ) 0.00 Intercompany profit 0.00 0.00 13.90 Other (1.98 ) (2.34 ) 0.00 State and local taxes, net of federal benefit (32.94 ) 83.31 27.5 Effective tax rate (34.37 )% (27.03 )% 567.10 % |
Schedule of Deferred Tax Assets and Liabilities | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: March 31, 2018 2017 Deferred income tax assets: Accounts receivable $ 99,000 $ 112,000 Inventory 988,000 1,204,000 Share based compensation 669,000 665,000 U.S. federal and state net operating losses 18,134,000 29,374,000 Foreign net operating losses 1,776,000 1,511,000 Other 73,000 245,000 Total gross assets 21,739,000 33,111,000 Less: Valuation allowance (21,341,000 ) (32,621,000 ) Total deferred tax asset $ 398,000 $ 490,000 Deferred income tax liability: Intangible assets $ (790,000 ) $ (994,000 ) Fixed assets (56,000 ) (6,000 ) Other (37,484 ) (48,766 ) Total deferred tax liability (883,484 ) (1,048,766 ) Net deferred tax liability $ (485,484 ) $ (558,766 ) |
Schedule of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows: Balance at March 31, 2016 $ - Additions based on tax positions taken in the current and prior years 18,000 Settlements - Decreases based on tax positions taken in prior years - Other - Balance at March 31, 2017 $ 18,000 Additions based on tax positions taken in the current and prior years 6,000 Settlements - Decreases based on tax positions taken in prior years (18,000 ) Other - Balance at March 31, 2018 $ 6,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options Outstanding | A summary of the options outstanding under the 2003 and 2013 Plans is as follows: Years ended March 31, 2018 2017 2016 Weighted Weighted Weighted Average Average Average Exercise Exercise Exercise Shares Price Shares Price Shares Price Outstanding at beginning of year 15,798,558 $ 0.78 13,508,086 $ 0.79 11,988,188 $ 0.58 Granted - - 3,280,000 0.91 2,622,500 1.63 Exercised (356,700 ) 0.66 (671,028 ) 0.37 (1,079,602 ) 0.35 Forfeited (95,250 ) 2.01 (318,500 ) 3.44 (23,000 ) 4.30 Outstanding and expected to vest at end of period 15,346,608 $ 0.78 15,798,558 $ 0.78 13,508,086 $ 0.79 Exercisable at period end 11,325,108 $ 0.65 9,285,121 $ 0.55 7,931,813 $ 0.53 Weighted average fair value of grants during the period $ - $ 0.57 $ 1.07 |
Schedule of Options Outstanding and Exercisable | The following table summarizes activity pertaining to options outstanding and exercisable at March 31, 2018: Options Outstanding Options Exercisable Weighted Average Weighted Remaining Average Aggregate Range of Life in Exercise Intrinsic Exercise Prices Shares Years Shares Price Value $0.01 - $0.25 273,200 0.51 273,200 $ 0.22 $ 278,596 $0.26 - $0.40 6,977,908 3.32 6,977,908 0.34 6,276,104 $0.41 - $1.00 5,153,500 7.42 2,348,000 0.96 660,076 $1.01 - $1.50 560,000 6.99 535,000 1.21 61,400 $1.51 - $2.00 2,382,000 7.18 1,191,000 1.67 - 15,346,608 5.38 11,325,108 $ 0.65 $ 7,276,177 |
Summarizes Activity Pertaining to Unvested Options | The following summarizes activity pertaining to the Company’s unvested options for the years ended March 31, 2018, 2017 and 2016: Weighted Average Exercise Shares Price Unvested at March 31, 2015 4,924,055 $ 0.70 Granted 2,622,500 1.63 Canceled or expired (12,000 ) 0.97 Vested (1,958,282 ) 0.70 Unvested at March 31, 2016 5,576,273 $ 1.17 Granted 3,280,000 0.91 Canceled or expired (138,250 ) 0.55 Vested (2,171,648 ) 0.94 Unvested at March 31, 2017 6,546,375 $ 1.11 Granted - - Canceled or expired (56,000 ) 0.94 Vested (2,433,875 ) 1.05 Unvested at March 31, 2018 4,056,500 $ 1.14 |
Summary of Restricted Stock Outstanding | A summary of the restricted stock outstanding under the 2013 Plan is as follows: Shares Restricted stock outstanding at March 31, 2017 — Granted 1,182,000 Canceled or expired — Restricted stock outstanding at March 31, 2018 1,182,000 Weighted average fair value per restricted share at grant date $ 1.65 Weighted average share price at grant date $ 1.65 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of options at grant date was estimated using the Black-Scholes option pricing model utilizing the following weighted average assumptions: March 31, 2017 March 31, 2016 Risk-free interest rate 1.37% - 1.89 % 1.39% - 1.81 % Expected option life in years 5.5 - 6.25 5.5 - 6.25 Expected stock price volatility 68% - 69 % 70% - 73 % Expected dividend yield 0 % 0 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments for leases with initial or remaining terms in excess of one year are as follows: Years ending March 31, Amount 2019 $ 406,896 2020 385,395 2021 44,231 2022 11,163 Total $ 847,685 |
Geographic Information (Tables)
Geographic Information (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table sets forth the amounts and percentage of consolidated sales, net, consolidated income from operations, consolidated net income (loss) attributable to common shareholders, consolidated income tax expense and consolidated assets from the U.S. and foreign countries and consolidated sales, net by category. Years ended March 31, 2018 2017 2016 Consolidated Sales, net: International $ 8,926,378 9.9 % $ 7,528,766 9.7 % $ 9,302,134 12.9 % United States 80,971,139 90.1 % 69,740,365 90.3 % 62,918,234 87.1 % Total Consolidated Sales, net $ 89,897,517 100.0 % $ 77,269,131 100.0 % $ 72,220,368 100.0 % Consolidated Income (Loss) from Operations: International $ (94,066 ) (2.2 )% $ (210,100 ) (11.0 )% $ (34,268 ) (3.4 )% United States 4,288,283 102.2 % 2,115,099 111.0 % 1,039,815 103.4 % Total Consolidated Income (Loss) from Operations $ 4,194,217 100.0 % $ 1,904,999 100.0 % $ 1,005,547 100.0 % Consolidated Net Loss Attributable to Common Shareholders: International $ 35,272 (4.3 )% $ (109,164 ) 12.8 % $ 11,490 (0.5 )% United States (854,204 ) 104.3 % (743,449 ) 87.2 % (2,527,858 ) 100.5 % Total Consolidated Net Loss Attributable to Common Shareholders $ (818,932 ) 100.0 % $ (852,613 ) 100.0 % $ (2,516,368 ) 100.0 % Income tax expense, net: United States $ (140,370 ) 100.0 % $ (187,702 ) 100.0 % $ (1,450,848 ) 100.0 % Consolidated Sales, net by category: Whiskey $ 33,931,832 37.8 % $ 28,339,770 36.7 % $ 26,009,839 36.0 % Rum 18,518,450 20.6 % 18,759,610 24.3 % 18,858,554 26.1 % Liqueurs 9,339,246 10.4 % 8,386,705 10.9 % 8,567,121 11.9 % Vodka 1,365,764 1.5 % 1,569,004 2.0 % 2,364,429 3.3 % Tequila 202,215 0.2 % 210,012 0.3 % 198,330 0.3 % Ginger beer 26,540,010 29.5 % 20,004,029 25.9 % 16,222,095 22.5 % Total Consolidated Sales, net $ 89,897,517 100.0 % $ 77,269,131 100.0 % $ 72,220,368 100.0 % As of March 31, 2018 2017 Consolidated Assets: International $ 2,886,735 4.8 % $ 3,234,536 6.0 % United States 57,446,625 95.2 % 51,107,608 94.0 % Total Consolidated Assets $ 60,333,360 100.0 % $ 54,342,144 100.0 % |
Quarterly Financial Data (Una39
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | 1st 2nd 3rd 4th Fiscal 2018: Sales, net $ 20,852,287 $ 20,894,150 $ 24,079,623 $ 24,071,457 Gross profit 8,578,619 8,534,249 9,677,937 9,407,147 Net (loss) income $ (865,218 ) $ 280,622 $ 664,603 $ 190,185 Net (income) attributable to noncontrolling interests (81,178 ) (282,304 ) (199,023 ) (526,619 ) Net (loss) income attributable to common Stockholders $ (946,396 ) $ (1,682 ) $ 465,580 $ (336,434 ) Net (loss) income per common share, basic, attributable to common shareholders $ (0.01 ) $ (0.00 ) $ 0.00 $ (0.00 ) Net (loss) income per common share, diluted, attributable to common shareholders $ (0.01 ) $ (0.00 ) $ 0.00 $ (0.00 ) Weighted average shares used in computation, basic, attributable to common shareholders 163,072,642 163,209,562 163,470,150 164,899,255 Weighted average shares used in computation, diluted, attributable to common shareholders 163,072,642 163,209,562 171,121,927 164,899,255 1st 2nd 3rd 4th Fiscal 2017: Sales, net $ 16,750,925 $ 19,627,791 $ 18,309,539 $ 22,580,876 Gross profit 6,716,115 7,727,260 7,670,240 9,586,742 Net (loss) income $ (595,703 ) $ (489,854 ) $ 892,364 $ 699,725 Net (income) loss attributable to noncontrolling interests (170,116 ) (210,856 ) (469,798 ) (508,375 ) Net (loss) income attributable to common stockholders $ (765,819 ) $ (700,710 ) $ 422,566 $ 191,350 Net (loss) income per common share, basic, attributable to common shareholders $ (0.00 ) $ (0.00 ) $ 0.00 $ 0.00 Net (loss) income per common share, diluted, attributable to common shareholders $ (0.00 ) $ (0.00 ) $ 0.00 $ 0.00 Weighted average shares used in computation, basic, attributable to common shareholders 160,521,947 160,698,696 160,963,862 161,065,685 Weighted average shares used in computation, diluted, attributable to common shareholders 160,521,947 160,698,696 165,245,935 165,878,218 |
Organization and Summary of S40
Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 | |
Inventory value overstated | $ 2,341,648 | |||||
Change in inventory accumulated deficit | 2,341,648 | |||||
Change in inventory value | $ 2,341,648 | |||||
Current maturities of notes payable | $ 176,148 | $ 176,148 | ||||
Common stock conversion, percent | 5.00% | 5.00% | 5.00% | |||
Allowance for doubtful accounts receivable | $ 59,012 | $ 59,012 | $ 123,200 | $ 61,000 | ||
Allowances for obsolete and slow moving inventory | 376,611 | 240,000 | 200,000 | |||
Inventory adjustment | $ 346,344 | $ 346,344 | 312,711 | 1,493,130 | ||
Equipment, depreciation methods | Straight-line method | |||||
Shipping charges | $ 2,797,701 | $ 2,347,121 | $ 2,635,430 | |||
Income tax reconciliation description | The Company reduced the statutory rate that applies to its year-to-date fiscal 2018 earnings from 34.0% to 30.79%. | |||||
Effective income tax rate | 21.00% | (34.37%) | (27.03%) | 567.10% | ||
Income tax expense, net | $ 40,485 | $ 140,370 | $ 187,702 | $ 1,450,848 | ||
Uncertain tax related to interest and penalties | $ 6,778 | 6,778 | ||||
Advertising expense | $ 5,013,523 | $ 4,486,796 | $ 4,960,301 | |||
U.S. Federal Corporate Tax [Member] | ||||||
Income tax reconciliation description | For fiscal year companies, the change in law requires the application of a blended rate for each quarter of the fiscal year, which in the Company’s case is 30.79% for the fiscal year ended March 31, 2018. Thereafter, the applicable statutory rate is 21.0%. | |||||
Effective income tax rate | 30.79% | |||||
2017 Tax Act [Member] | ||||||
Income tax reconciliation description | The 2017 Tax Act reduced the U.S. federal corporate tax rate from 35.0% to 21.0% for all corporations effective January 1, 2018. | |||||
Minimum [Member] | ||||||
Equipment, estimated useful lives | 3 years | |||||
Maximum [Member] | ||||||
Equipment, estimated useful lives | 5 years | |||||
11% Subordinated Note [Member] | April 2018 [Member] | ||||||
Current maturities of notes payable | $ 20,000,000 | $ 20,000,000 | ||||
Common stock conversion, percent | 11.00% | 11.00% | ||||
Debt maturity date | Sep. 15, 2020 | |||||
Gosling-Castle Partners Inc [Member] | ||||||
Equity method investee, cumulative percentage of ownership interest | 80.10% | |||||
Effective income tax rate | 20.10% |
Basic and Diluted Net Loss Pe41
Basic and Diluted Net Loss Per Common Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Common shares not included in calculating diluted net loss per share | 16,584,164 | 17,659,669 | 15,369,197 |
Stock Options [Member] | |||
Common shares not included in calculating diluted net loss per share | 15,346,608 | 15,798,558 | 13,508,086 |
Unvested Restricted Shares [Member] | |||
Common shares not included in calculating diluted net loss per share | 1,182,000 | ||
5% Convertible Notes [Member] | |||
Common shares not included in calculating diluted net loss per share | 55,556 | 1,861,111 | 1,861,111 |
Basic and Diluted Net Loss Pe42
Basic and Diluted Net Loss Per Common Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) (Parenthetical) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Conversion of convertible notes, percent | 5.00% | 5.00% | 5.00% |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 |
Inventory Disclosure [Abstract] | |||
Percentage of raw materials located outside united states | 9.00% | 9.00% | |
Percentage of finished goods located outside united states | 3.00% | 7.00% | |
Payments to acquire inventory | $ 7,945,841 | $ 6,900,819 | $ 5,441,432 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials - net | $ 21,015,172 | $ 16,714,225 |
Finished goods - net | 13,540,381 | 13,086,855 |
Total | $ 34,555,553 | $ 28,952,562 |
Investments (Details Narrative)
Investments (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Effect of acquisition of an additional of noncontrolling interests | $ 22,448,000 | ||||||||||||
Net income (loss) attributable to noncontrolling interest | $ (526,619) | $ (199,023) | $ (282,304) | $ (81,178) | $ (508,375) | $ (469,798) | $ (210,856) | $ (170,116) | $ 1,089,124 | 1,359,145 | $ 809,662 | ||
Stockholders equity attributable to noncontrolling interest | 3,568,636 | 2,479,512 | 3,568,636 | 2,479,512 | |||||||||
Payments of ordinary dividends, noncontrolling interest | 600,000 | ||||||||||||
Income loss from equity method investments | 87,829 | 51,430 | 18,667 | ||||||||||
Investment in non-consolidated affiliate equity | 813,926 | $ 570,097 | 813,926 | $ 570,097 | |||||||||
Gosling-Castle Partners Inc [Member] | |||||||||||||
Number of stock issued during period acquisitions, shares | 201,000 | ||||||||||||
Equity method interest, percentage | 20.10% | 20.10% | |||||||||||
Payments to acquire businesses, cash | $ 20,000,000 | ||||||||||||
Number of common stock shares issued | 1,800,000 | ||||||||||||
Effect of acquisition of an additional of noncontrolling interests | 2,232,824 | ||||||||||||
Excess of cash | 20,215,176 | ||||||||||||
Income (loss) from subsidiaries, before tax | 5,613,355 | $ 3,762,130 | 3,475,006 | ||||||||||
Net income (loss) attributable to noncontrolling interest | 1,104,608 | 1,359,145 | 809,662 | ||||||||||
Stockholders equity attributable to noncontrolling interest | 3,568,636 | $ 2,479,512 | 3,568,636 | $ 2,479,512 | |||||||||
Subsidiary dividend | $ 1,500,000 | ||||||||||||
Percentage of subsidiary dividend allocated | 60.00% | ||||||||||||
Investment income, dividend | $ 900,000 | ||||||||||||
Percentage of subsidiary dividend allocated to noncontrolling interests | 40.00% | ||||||||||||
Payments of ordinary dividends, noncontrolling interest | $ 600,000 | ||||||||||||
Gosling-Castle Partners Inc [Member] | Maximum [Member] | |||||||||||||
Equity method interest, percentage | 80.10% | 80.10% | |||||||||||
Copperhead Distillery Company [Member] | |||||||||||||
Equity method interest, percentage | 20.00% | 5.00% | |||||||||||
Payment to acquire finished goods | $ 500,000 | ||||||||||||
Income loss from equity method investments | 87,829 | $ 51,430 | $ 18,667 | ||||||||||
Investment in non-consolidated affiliate equity | $ 813,926 | $ 570,097 | $ 813,926 | $ 570,097 | |||||||||
Copperhead Distillery Company [Member] | Existing Shareholder [Member] | |||||||||||||
Due from related parties | $ 156,000 |
Equipment, Net (Details Narrati
Equipment, Net (Details Narrative) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 359,161 | $ 366,381 | $ 280,702 |
Equipment, Net - Schedule of Pr
Equipment, Net - Schedule of Property, Plant and Equipment (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Equipment and software | $ 2,837,036 | $ 2,536,064 |
Furniture and fixtures | 112,397 | 112,397 |
Leasehold improvements | 42,730 | 42,730 |
Property, Plant and Equipment, Gross | 2,992,163 | 2,691,191 |
Less: accumulated depreciation | 2,152,754 | 1,781,411 |
Balance | $ 839,409 | $ 909,780 |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 496,226 | $ 496,226 | |
Amortization expense of intangible assets | $ 450,234 | $ 663,712 | $ 658,811 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Definite life brands | $ 170,000 | $ 170,000 | |
Trademarks | 641,693 | 631,693 | |
Rights | 8,271,555 | 8,271,555 | |
Product development | 208,518 | 186,668 | |
Patents | 994,000 | 994,000 | |
Other | 55,460 | 55,460 | |
Finite-Lived Intangible Assets, Gross | 10,341,226 | 10,309,376 | |
Less: accumulated amortization | 8,485,253 | 8,035,018 | |
Net | 1,855,973 | 2,274,358 | |
Other identifiable intangible assets - indefinite lived | [1] | 4,112,972 | 4,112,972 |
Total intangible assets, net | $ 5,968,945 | $ 6,387,330 | |
[1] | Other identifiable intangible assets - indefinite lived consists of product formulations and the Company’s relationships with its distillers. |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets - Schedule of Accumulated Amortization (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Accumulated amortization | $ 8,485,253 | $ 8,035,018 |
Definite Life Brands [Member] | ||
Accumulated amortization | 170,000 | 170,000 |
Trademarks [Member] | ||
Accumulated amortization | 403,617 | 367,294 |
Rights [Member] | ||
Accumulated amortization | 6,954,303 | 6,617,062 |
Product Development [Member] | ||
Accumulated amortization | 47,880 | 37,478 |
Patents [Member] | ||
Accumulated amortization | $ 909,453 | $ 843,184 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Total | $ 1,855,973 | $ 2,274,358 |
Finite-Lived Intangible Assets [Member] | ||
2,019 | 231,596 | |
2,020 | 193,431 | |
2,021 | 191,289 | |
2,022 | 186,806 | |
2,023 | 166,823 | |
Total | $ 969,945 |
Restricted Cash (Details Narrat
Restricted Cash (Details Narrative) | Mar. 31, 2018USD ($) | Mar. 31, 2018EUR (€) | Mar. 31, 2017USD ($) | Mar. 31, 2017EUR (€) |
Restricted cash | $ | $ 382,279 | $ 331,455 | ||
Euro [Member] | ||||
Restricted cash | € | € 310,324 | € 310,305 |
Notes Payable and Capital Lea53
Notes Payable and Capital Lease - Schedule of Notes Payable and Credit Facility (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 | |
Notes payable and credit facility | $ 38,893,625 | $ 34,919,655 | |
Foreign Revolving Credit Facilities [Member] | |||
Notes payable and credit facility | [1] | 126,148 | |
Note Payable - GCP Note [Member] | |||
Notes payable and credit facility | [2] | 211,580 | 211,580 |
Credit Facility [Member] | |||
Notes payable and credit facility | [3] | 18,505,897 | 13,033,075 |
5% Convertible Notes [Member] | |||
Notes payable and credit facility | [4] | 50,000 | 1,675,000 |
11% Subordinated Note [Member] | |||
Notes payable and credit facility | [5] | $ 20,000,000 | $ 20,000,000 |
[1] | The Company has arranged various credit facilities aggregating €310,324 or $382,279 (translated at the March 31, 2018 exchange rate) with an Irish bank, including overdraft coverage, creditors’ insurance, customs and excise guaranty, a revolving credit facility and Company credit cards. These credit facilities are payable on demand, continue until terminated by either party, are subject to annual review, and call for interest at the lender’s AA1 Rate minus 1.70%. At March 31, 2018, there was €102,404 or $126,148 (translated at the March 31, 2018 exchange rate) of principal due on the foreign revolving credit facilities include in current maturities of notes payable and no balance on the credit facilities included in notes payable at March 31, 2017. | ||
[2] | In December 2009, GCP issued a promissory note (the “GCP Note”) in the aggregate principal amount of $211,580 to Gosling’s Export (Bermuda) Limited in exchange for credits issued on certain inventory purchases. The GCP Note matures on April 1, 2020, is payable at maturity, subject to certain acceleration events, and calls for annual interest of 5%, to be accrued and paid at maturity. At each of March 31, 2018 and 2017, $10,579 of accrued interest was converted to amounts due to affiliates. At each of March 31, 2018 and 2017, $211,580 of principal due on the GCP Note was included in long-term liabilities. | ||
[3] | In August 2011, the Company and CB-USA entered into a loan and security agreement (as amended and restated, and further amended, the “Amended Agreement”) with Keltic Financial Partners II, LP (“Keltic, succeeded to be ACF FinCo I LP (“ACF”), which, as amended, through March 31, 2018, provided for availability (subject to certain terms and conditions) of a facility of up to $21.0 million (the “Credit Facility”) for the purpose of providing the Company with working capital., including a sublimit in the maximum principal amount of $7,000,000 to permit the Company to acquire aged whiskey inventory (the “Purchased Inventory Sublimit”) subject to certain conditions set forth in the Amended Agreement. The Company and CB-USA are referred to individually and collectively as the Borrower. Pursuant to the Loan Agreement Amendment, the Company and CB-USA may borrow up to the lesser of (x) $21,000,000 and (y) the sum of the borrowing base calculated in accordance with the Amended Agreement and the Purchased Inventory Sublimit. The Credit Facility interest rate is the rate that, when annualized, is the greatest of (a) the Prime Rate plus 3.00%, (b) the LIBOR Rate plus 5.50% and (c) 6.00%. As of March 31, 2018, the Credit Facility interest rate was 7.00625%. The Purchased Inventory Sublimit replaces the Bourbon Term Loan, which was paid in full in the normal course of business. The Purchased Inventory Sublimit interest rate is the rate that, when annualized, is the greatest of (a) the Prime Rate plus 4.25%, (b) the LIBOR Rate plus 6.75% and (c) 7.50%. As of March 31, 2018, the interest rate applicable to the Purchased Inventory Sublimit was 8.75625%. The monthly facility fee is 0.75% per annum of the maximum Credit Facility. Also, the Company must pay a monthly facility fee of $2,000 with respect to the Purchased Inventory Sublimit until all obligations with respect thereof are fully paid and performed. The Amended Agreement contains EBITDA targets allowing for further interest rate reductions in the future. The Company and CB-USA are permitted to prepay the Credit Facility in whole or the Purchased Inventory Sublimit, in whole or in part, subject to certain prepayment penalties as set forth in the Loan Agreement Amendment. For the year ended March 31, 2018, the Company paid interest at 6.5% through June 14, 2018, then 6.75% through December 13, 2017, then 7.0% through February 28, 2018, and then 7.06250% through March 31, 2018 on the Amended Agreement. For the year ended March 31, 2017, the Company paid interest at 6% through December 14, 2016, then 6.25% through March 15, 2017, then 6.5% through March 31, 2017 on the Amended Agreement. For the year ended March 31, 2016, the Company paid interest at 6% through August 9, 2015, then 5.75% through December 15, 2015, then 6% through March 31, 2016 on the Amended Agreement. For the year ended March 31, 2018, the Company paid interest at 8.25% through June 14, 2018, then at 8.5% through December 13, 2017, then 8.75% through February 28, 2018, and then 8.75625% through March 31, 2018 on the Purchased Inventory Sublimit For the year ended March 31, 2017, the Company paid interest at 7.75% through December 14, 2016, and then at 8.0% through March 15, 2017, then 8.25% through March 31, 2017 on the Purchased Inventory Sublimit. For the year ended March 31, 2016, the Company paid interest at 7.5% through December 15, 2015, and then at 7.75% through March 31, 2016 on the Purchased Inventory Sublimit. Interest is payable monthly in arrears, on the first day of every month on the average daily unpaid principal amount of the Credit Facility. After the occurrence and during the continuance of any “Default” or “Event of Default” (as defined under the Amended Agreement), the Borrower is required to pay interest at a rate that is 3.25% per annum above the then applicable Credit Facility interest rate. There have been no Events of Default under the Credit Facility. ACF also receives a collateral management fee of $1,000 per month (increased to $2,000 after the occurrence of and during the continuance of an Event of Default) in addition to the facility fee with respect to the Purchased Inventory Sublimit. The Amended Agreement contains standard borrower representations and warranties for asset-based borrowing and a number of reporting obligations and affirmative and negative covenants. The Amended Agreement includes negative covenants that, among other things, restrict the Borrower’s ability to create additional indebtedness, dispose of properties, incur liens and make distributions or cash dividends. The obligations of the Borrower under the Amended Amendment are secured by the grant of a pledge and security interest in all of the assets of the Borrower. At March 31, 2018, the Company was in compliance, in all respects, with the covenants under the Amended Agreement. The Credit Facility matures on July 31, 2019. ACF required as a condition to entering into an amendment to the Amended Agreement in August 2015 that ACF enter into a participation agreement with certain related parties of the Company, including Frost Gamma Investments Trust, an entity affiliated with Phillip Frost, M.D., a director and principal shareholder of the Company, Mark E. Andrews, III, a director of the Company and the Company’s Chairman, Richard J. Lampen, a director of the Company and the Company’s President and Chief Executive Officer, Brian L. Heller, the Company’s General Counsel and Assistant Secretary, and Alfred J. Small, the Company’s Senior Vice President, Chief Financial Officer, Treasurer and Secretary, to allow for the sale of participation interests in the Purchased Inventory Sublimit and the inventory purchased with the proceeds thereof. The participation agreement provides that ACF’s commitment to fund each advance of the Purchased Inventory Sublimit shall be limited to seventy percent (70%), up to an aggregate maximum principal amount for all advances equal to $4,900,000. Neither the Company nor CB-USA is a party to the participation agreement. However, the Company and CB-USA are party to a fee letter with the junior participants (including the related party junior participants) pursuant to which the Company and CB-USA were obligated to pay the junior participants a closing fee of $18,000 on the effective date of the Loan Agreement Amendment and are obligated to pay a commitment fee of $18,000 on each anniversary of the effective date until the junior participants’ obligations are terminated pursuant to the participation agreement. In August 2015, the Company used $3,000,000 of the Purchased Inventory Sublimit to acquire aged bourbon inventory. Frost Gamma Investments Trust ($150,000), Mark E. Andrews, III ($50,000), Richard J. Lampen ($100,000), Brian L. Heller ($42,500) and Alfred J. Small ($15,000) each acquired participation interests in the Purchased Inventory Sublimit and the inventory purchased with the proceeds thereof. In January 2017, the Company acquired $1,030,000 in aged bulk bourbon under the Purchased Inventory Sublimit with additional borrowings from certain related parties of the Company, including Frost Gamma Investments Trust ($51,500), Richard J. Lampen ($34,333), Mark E. Andrews, III ($17,167), Brian L. Heller ($14,592), and Alfred J. Small ($5,150), as junior participants in the Purchased Inventory Sublimit with respect to such purchase. In October 2017, the Company acquired $1,308,125 in aged bulk bourbon under the Purchased Inventory Sublimit with additional borrowings from certain related parties of the Company, including Frost Gamma Investments Trust ($65,406), Richard J. Lampen ($43,604), Mark E. Andrews, III ($21,802), Brian L. Heller ($18,532), and Alfred J. Small ($6,541), as junior participants in the Purchased Inventory Sublimit with respect to such purchase. In December 2017, the Company acquired $900,425 in aged bulk bourbon under the Purchased Inventory Sublimit with additional borrowings from certain related parties of the Company, including Frost Gamma Investments Trust ($45,021), Richard J. Lampen ($30,014), Mark E. Andrews, III ($15,007), Brian L. Heller ($12,756), and Alfred J. Small ($4,502), as junior participants in the Purchased Inventory Sublimit with respect to such purchase. Under the terms of the participation agreement, the participants receive interest at the rate of 11% per annum. In May 2018, the Company and CB-USA entered into a Fourth Amendment (the “Fourth Amendment”) to the Amended Agreement to amend certain terms of the Credit Facility. Among other changes, the Fourth Amendment increased the maximum amount of the Credit Facility from $21,000,000 to $23,000,000, and amended the definition of borrowing base to increase the amount of borrowing that can be collateralized by inventory. At March 31, 2018 and 2017, $18,604,962 and $13,133,124, respectively, due on the Credit Facility was included in long-term liabilities. At March 31, 2018 and 2017, there was $2,395,038 and $5,866,876, respectively, in potential availability under the Credit Facility. In connection with the adoption of ASU 2015-03, the Company included $99,065 and $94,109 of debt issuance costs at March 31, 2018 and 2017, respectively, as direct deductions from the carrying amount of the related debt liability. | ||
[4] | In October 2013, the Company entered into a 5% Convertible Subordinated Note Purchase Agreement (the “Note Purchase Agreement”) with the purchasers party thereto, under which the Company issued an aggregate initial principal amount of $2,125,000 of unsecured subordinated notes (the “Convertible Notes”). The Convertible Notes bear interest at a rate of 5% per annum, payable quarterly, until their maturity date of December 15, 2018. The Convertible Notes, and accrued but unpaid interest thereon, are convertible in whole or in part from time to time at the option of the holders thereof into shares of the Company’s common stock at a conversion price of $0.90 per share (the “Conversion Price”). The Convertible Notes may be prepaid in whole or in part at any time without penalty or premium, but with payment of accrued interest to the date of prepayment. The Convertible Notes contain customary events of default, which, if uncured, entitle each note holder to accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, the Convertible Notes. The purchasers of the Convertible Notes included related parties of the Company, including an affiliate of Dr. Phillip Frost ($500,000), Mark E. Andrews, III ($50,000), an affiliate of Richard J. Lampen ($50,000), an affiliate of Glenn Halpryn ($200,000), Dennis Scholl ($100,000), and Vector Group Ltd., a more than 5% shareholder of ours, of which Richard Lampen is an executive officer, Henry Beinstein, a director of ours, is a director and Phillip Frost, M.D. is a principal shareholder ($200,000). The Company may forcibly convert all or any part of the Convertible Notes and all accrued but unpaid interest thereon if (i) the average daily volume of the Company’s common stock (as reported on the principal market or exchange on which the common stock is listed or quoted for trading) exceeds $50,000 per trading day and (ii) the volume weighted average price of the common stock for at least twenty (20) trading days during any thirty (30) consecutive trading day period exceeds 250% of the then-current Conversion Price. Any forced conversion will be applied ratably to the holders of all Convertible Notes issued pursuant to the Note Purchase Agreement based on each holder’s then-current note holdings. In connection with the Note Purchase Agreement, each purchaser of the Convertible Notes was required to execute a joinder to the subordination agreement, by and among ACF and certain other junior lenders to the Company; the Company is not a party to the subordination agreement. During the year ended March 31, 2018, certain holders of the Convertible Notes converted an aggregate $1,632,000 of the outstanding principal and interest balances of their Convertible Notes into 1,813,334 shares of the Company’s common stock, pursuant to the terms of the Convertible Notes. The converting holders included an affiliate of Dr. Phillip Frost, Mark E. Andrews, III an affiliate of Richard J. Lampen, and Vector Group Ltd. At March 31, 2018, $50,000 of principal due on the Convertible Notes was included in current maturities of notes payable, and at March 31, 2017, $1,675,000 of principal due on the Convertible Notes was included in long-term liabilities, respectively | ||
[5] | In March 2017, the Company issued a promissory note to Frost Nevada Investments Trust (the “Holder”), an entity affiliated with Phillip Frost, M.D., in the aggregate principal amount of $20,000,000 (the “Subordinated Note”). The purpose of Company’s issuance of the Subordinated Note was to finance the GCP Share Acquisition. The Subordinated Note bears interest quarterly at the rate of 11% per annum. The principal and interest incurred thereon were due and payable in full on March 15, 2019. All claims of the Holder to principal, interest and any other amounts owed under the Subordinated Note are subordinated in right of payment to all indebtedness of the Company existing as of the date of the Subordinated Note. The Subordinated Note contains customary events of default and may be prepaid by the Company, in whole or in part, without penalty, at any time. In April 2018, the Company entered into a First Amendment to the Subordinated Note to extend the maturity date on the Subordinated Note from March 15, 2019 until September 15, 2020. No other provisions of the Subordinated Note were amended. |
Notes Payable and Capital Lea54
Notes Payable and Capital Lease - Schedule of Notes Payable and Credit Facility (Details) (Parenthetical) | Dec. 31, 2009USD ($) | Aug. 31, 2015USD ($) | Oct. 31, 2013USD ($)$ / shares | Aug. 31, 2011USD ($) | Mar. 31, 2018USD ($)shares | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2018EUR (€) | Dec. 31, 2017USD ($) | Oct. 31, 2017USD ($) | Jan. 31, 2017USD ($) |
Notes payable, current | $ 176,148 | ||||||||||
Notes payable, noncurrent | $ 211,580 | $ 211,580 | |||||||||
Debt instrument, interest rate | 5.00% | 5.00% | 5.00% | ||||||||
Accrued interest | $ 10,579 | $ 10,579 | $ 10,579 | ||||||||
Purchased inventory sublimit amount to acquire inventory | $ 3,000,000 | ||||||||||
Due to other related parties, current | 576,546 | 412,269 | |||||||||
Payments to acquire inventory | 7,945,841 | 6,900,819 | $ 5,441,432 | ||||||||
Line of credit facility, remaining borrowing capacity | 2,395,038 | 5,866,876 | |||||||||
Debt issuance costs, net | $ 99,065 | $ 94,109 | |||||||||
Debt conversion price percentage | 5.00% | 5.00% | 5.00% | ||||||||
Debt converted into shares | $ 1,632,000 | ||||||||||
Debt converted into shares, shares | shares | 1,813,334 | ||||||||||
Convertible notes payable, noncurrent | $ 1,675,000 | ||||||||||
Debt maturity description | In April 2018, the Company entered into a First Amendment to the Subordinated Note to extend the maturity date on the Subordinated Note from March 15, 2019 until September 15, 2020. | ||||||||||
Convertible Notes [Member] | |||||||||||
Debt instrument, convertible, if-converted value in excess of principal | $ 50,000 | ||||||||||
Debt conversion price percentage | 250.00% | ||||||||||
Debt converted into shares | $ 1,632,000 | ||||||||||
Debt converted into shares, shares | shares | 1,813,334 | ||||||||||
Convertible promisory note principal amount | $ 50,000 | ||||||||||
Frost Gamma Investments Trust [Member] | |||||||||||
Due to other related parties, current | 150,000 | $ 45,021 | $ 65,406 | $ 51,500 | |||||||
Frost Gamma Investments Trust [Member] | Phillip Frost [Member] | |||||||||||
Debt instrument, maturity date | Mar. 15, 2019 | ||||||||||
Debt instrument, interest rate | 11.00% | ||||||||||
Convertible notes payable, noncurrent | $ 20,000,000 | ||||||||||
Mark E. Andrews, III [Member] | |||||||||||
Notes payable, noncurrent | 50,000 | ||||||||||
Due to other related parties, current | 50,000 | 15,007 | 21,802 | 17,167 | |||||||
Richard J. Lampen [Member] | |||||||||||
Notes payable, noncurrent | 50,000 | ||||||||||
Due to other related parties, current | 100,000 | 30,014 | 43,604 | 34,333 | |||||||
Brian L. Heller [Member] | |||||||||||
Due to other related parties, current | 42,500 | 12,756 | 18,532 | 14,592 | |||||||
Alfred J. Small [Member] | |||||||||||
Due to other related parties, current | $ 15,000 | 4,502 | 6,541 | 5,150 | |||||||
Dr. Phillip Frost [Member] | |||||||||||
Notes payable, noncurrent | 500,000 | ||||||||||
Glenn Halpryn [Member] | |||||||||||
Notes payable, noncurrent | 200,000 | ||||||||||
Dennis Scholl [Member] | |||||||||||
Notes payable, noncurrent | 100,000 | ||||||||||
Vector Group Ltd [Member] | |||||||||||
Notes payable, noncurrent | $ 200,000 | ||||||||||
Equity method interest, percentage | 5.00% | 5.00% | |||||||||
Loan and Security Agreement [Member] | Maximum [Member] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 21,000,000 | ||||||||||
Loan and Security Agreement [Member] | Credit Facility [Member] | |||||||||||
Line of credit facility, interest rate during period | 7.0062% | ||||||||||
Line of credit facility, interest rate description | (a) the Prime Rate plus 3.00%, (b) the LIBOR Rate plus 5.50% and (c) 6.00%. | ||||||||||
Loan and Security Agreement [Member] | Credit Facility [Member] | Maximum [Member] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 21,000,000 | ||||||||||
Purchased Inventory Sublimit [Member] | |||||||||||
Line of credit facility, interest rate during period | 8.7562% | ||||||||||
Line of credit facility, interest rate description | (a) the Prime Rate plus 4.25%, (b) the LIBOR Rate plus 6.75% and (c) 7.50%. | The monthly facility fee is 0.75% per annum of the maximum Credit Facility | |||||||||
Percentage of monthly fee | 0.75% | ||||||||||
Monthly facility fee | $ 2,000 | ||||||||||
Debt instrument, interest rate during period | 8.7562% | 8.25% | 7.75% | ||||||||
Payments to acquire inventory | $ 900,425 | $ 1,308,125 | $ 1,030,000 | ||||||||
Purchased Inventory Sublimit [Member] | December 13, 2017 [Member] | |||||||||||
Debt instrument, interest rate during period | 8.50% | ||||||||||
Purchased Inventory Sublimit [Member] | February 28, 2018 [Member] | |||||||||||
Debt instrument, interest rate during period | 8.75% | ||||||||||
Purchased Inventory Sublimit [Member] | December 14, 2016 [Member] | |||||||||||
Debt instrument, interest rate during period | 7.75% | ||||||||||
Purchased Inventory Sublimit [Member] | March 15, 2017 [Member] | |||||||||||
Debt instrument, interest rate during period | 8.00% | ||||||||||
Purchased Inventory Sublimit [Member] | December 15, 2015 [Member] | |||||||||||
Debt instrument, interest rate during period | 7.50% | ||||||||||
Purchased Inventory Sublimit [Member] | June 14, 2018 [Member] | |||||||||||
Debt instrument, interest rate during period | 8.25% | ||||||||||
Purchased Inventory Sublimit [Member] | Maximum [Member] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 7,000,000 | ||||||||||
Amended Agreement [Member] | |||||||||||
Debt instrument, interest rate during period | 7.0625% | 6.50% | 6.00% | ||||||||
Purchased inventory sublimit | Purchased Inventory Sublimit shall be limited to seventy percent (70%) | ||||||||||
Proceeds from related party debt | $ 4,900,000 | ||||||||||
Closing fee payable | 18,000 | ||||||||||
Commitment fee | $ 18,000 | ||||||||||
Amended Agreement [Member] | June 14, 2018 [Member] | |||||||||||
Debt instrument, interest rate during period | 6.50% | ||||||||||
Amended Agreement [Member] | December 13, 2017 [Member] | |||||||||||
Debt instrument, interest rate during period | 6.75% | ||||||||||
Amended Agreement [Member] | February 28, 2018 [Member] | |||||||||||
Debt instrument, interest rate during period | 7.00% | ||||||||||
Amended Agreement [Member] | December 14, 2016 [Member] | |||||||||||
Debt instrument, interest rate during period | 6.00% | ||||||||||
Amended Agreement [Member] | March 15, 2017 [Member] | |||||||||||
Debt instrument, interest rate during period | 6.25% | ||||||||||
Amended Agreement [Member] | August 9, 2015 [Member] | |||||||||||
Debt instrument, interest rate during period | 6.00% | ||||||||||
Amended Agreement [Member] | December 15, 2015 [Member] | |||||||||||
Debt instrument, interest rate during period | 5.75% | ||||||||||
Participation Agreement [Member] | |||||||||||
Debt instrument, interest rate | 11.00% | 11.00% | |||||||||
Fourth Amendment [Member] | Maximum [Member] | May 2018 [Member] | |||||||||||
Long-term line of credit | $ 23,000,000 | ||||||||||
Fourth Amendment [Member] | Minimum [Member] | May 2018 [Member] | |||||||||||
Long-term line of credit | 21,000,000 | ||||||||||
Note Purchase Agreement [Member] | 5% Convertible Notes [Member] | |||||||||||
Debt instrument, maturity date | Dec. 15, 2018 | ||||||||||
Debt instrument, interest rate | 5.00% | ||||||||||
Unsecured debt | $ 2,125,000 | ||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 0.90 | ||||||||||
GCP Note [Member] | |||||||||||
Notes payable, noncurrent | $ 211,580 | 211,580 | $ 211,580 | ||||||||
Debt instrument, maturity date | Apr. 1, 2020 | ||||||||||
Debt instrument, interest rate | 5.00% | ||||||||||
Accrued interest | 10,579 | 10,579 | |||||||||
Irish Bank [Member] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 382,279 | ||||||||||
Line of credit facility, interest rate during period | 1.70% | ||||||||||
Notes payable, current | $ 126,148 | ||||||||||
Irish Bank [Member] | Euro [Member] | |||||||||||
Line of credit facility, maximum borrowing capacity | € | € 310,324 | ||||||||||
Notes payable, current | € | € 102,404 | ||||||||||
Credit Facility [Member] | |||||||||||
Debt instrument, interest rate during period | 3.25% | ||||||||||
Annual facility fee receivables description | ACF also receives a collateral management fee of $1,000 per month (increased to $2,000 after the occurrence of and during the continuance of an Event of Default) | ||||||||||
Line of credit facility, expiration date | Jul. 31, 2019 | ||||||||||
Long-term debt, gross | $ 18,604,962 | $ 13,133,124 |
Notes Payable and Capital Lea55
Notes Payable and Capital Lease - Schedule of Payment Due (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Debt Disclosure [Abstract] | ||
2,019 | $ 176,148 | |
2,020 | 38,604,962 | |
2,021 | 211,580 | |
Total | $ 38,893,625 | $ 34,919,655 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Mar. 31, 2017 | Sep. 30, 2015 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | Feb. 28, 2017 | |
Stock issued during period, value, conversion of convertible securities | $ 1,632,000 | |||||
Stock issued during period, shares, conversion of convertible securities | 1,813,334 | |||||
Payments of ordinary dividends, noncontrolling interest | $ 600,000 | |||||
GCP Acquisition [Member] | ||||||
Sale of stock issued during period, shares | 1,800,000 | 1,800,000 | ||||
Gosling-Castle Partners Inc [Member] | ||||||
Subsidiary dividend | $ 1,500,000 | |||||
Percentage of subsidiary dividend allocated to noncontrolling interests | 40.00% | |||||
Payments of ordinary dividends, noncontrolling interest | $ 600,000 | |||||
2017 Employee Stock Purchase Plan [Member] | ||||||
Common stock reserved for issuance | 3,000,000 | |||||
Number of shares acquired during period | 32,894 |
Provision for Income Taxes (Det
Provision for Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Effective income tax benefit percentage | 21.00% | (34.37%) | (27.03%) | 567.10% |
Federal corporate tax rate | (30.79%) | (34.00%) | (34.00%) | |
Valuation of deferred tax assets | $ 11,280,000 | $ 11,280,000 | ||
Deferred tax liabilities, financial arrangements | 485,000 | 485,000 | ||
Income tax, interest and penalties | $ 1,000 | $ 2,000 | ||
2017 Tax Act [Member] | ||||
Federal corporate tax rate | 21.00% | |||
United States [Member] | ||||
Net, operating loss carryforwards | 80,818,000 | $ 80,818,000 | ||
Operating loss carryforwards expiration period | expire in Fiscal 2023 through 2036 | |||
Irish [Member] | ||||
Net, operating loss carryforwards | $ 14,205,000 | $ 14,205,000 | ||
Gosling-Castle Partners Inc [Member] | ||||
Effective income tax benefit percentage | 20.10% |
Provision for Income Taxes - Sc
Provision for Income Taxes - Schedule of Income Before Income Tax Domestic and Foreign (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Domestic Operations | $ 577,902 | $ 945,985 | $ (385,672) |
Foreign Operations | (169,527) | (251,661) | 129,814 |
Total | $ 408,375 | $ 694,324 | $ (255,858) |
Provision for Income Taxes - 59
Provision for Income Taxes - Schedule of Provision for (Benefit From) Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Federal, Current | $ 182,891 | $ 1,617,000 | $ 1,183,000 | |
State, Current | 30,761 | (784,000) | 397,000 | |
Foreign, Current | ||||
Total, Current | 213,652 | 833,000 | 1,580,000 | |
Federal, Deferred | (74,135) | (540,000) | (148,152) | |
State, Deferred | 853 | 9,702 | 19,000 | |
Foreign, Deferred | (115,000) | |||
Total, Deferred | (73,282) | (645,235) | (129,152) | |
Federal, Total | 108,756 | 1,077,000 | 1,034,848 | |
State, Total | 31,614 | (774,298) | 416,000 | |
Foreign, Total | (115,000) | |||
Income tax expense, net | $ (40,485) | $ (140,370) | $ (187,702) | $ (1,450,848) |
Provision for Income Taxes - 60
Provision for Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Computed expected tax benefit, at 34% | (30.79%) | (34.00%) | (34.00%) | |
Permanent items | (32.58%) | (29.70%) | 176.00% | |
Share based compensation | (52.93%) | (48.46%) | 0.00% | |
Impact of 2017 Tax Act | (271439.00%) | 0.00% | 0.00% | |
Change in valuation allowance | 277647.00% | 73.68% | 371.50% | |
Effect of foreign rate differential | 51.90% | (67.87%) | 12.20% | |
Increase in unrecognized tax benefit | 2.88% | (1.65%) | 0.00% | |
Intercompany profit | 0.00% | 0.00% | 13.90% | |
Other | (1.98%) | (2.34%) | 0.00% | |
State and local taxes, net of federal benefit | (32.94%) | 83.31% | 27.50% | |
Income tax expense (benefit) | 21.00% | (34.37%) | (27.03%) | 567.10% |
Provision for Income Taxes - 61
Provision for Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Accounts receivable | $ 99,000 | $ 112,000 |
Inventory | 988,000 | 1,204,000 |
Share based compensation | 669,000 | 665,000 |
U.S. federal and state net operating losses | 18,134,000 | 29,374,000 |
Foreign net operating losses | 1,776,000 | 1,511,000 |
Other | 73,000 | 245,000 |
Total gross assets | 21,739,000 | 33,111,000 |
Less: Valuation allowance | (21,341,000) | (32,621,000) |
Total deferred asset | 398,000 | 490,000 |
Intangible assets | (790,000) | (994,000) |
Fixed assets | (56,000) | (6,000) |
Other | (37,484) | (48,766) |
Total deferred tax liability | (883,484) | (1,048,766) |
Net deferred income tax liability | $ (485,484) | $ (558,766) |
Provision for Income Taxes - 62
Provision for Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Balance at Beginning | $ 18,000 | |
Additions based on tax positions taken in the current and prior years | 6,000 | 18,000 |
Settlements | ||
Decreases based on tax positions taken in prior years | (18,000) | |
Other | ||
Balance at Ending | $ 6,000 | $ 18,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | Oct. 31, 2012 | Jul. 31, 2003 | |
Share-based compensation | $ 1,974,745 | $ 1,577,994 | $ 1,370,556 | |||
Unrecognized compensation cost | $ 3,311,178 | |||||
Number of unvested options | 4,056,500 | |||||
Expected weighted average vesting period | 1 year 7 months 17 days | |||||
Number of stock options shares exercisable | 11,325,108 | |||||
Weighted average exercise price of exercisable stock option | $ 0.65 | |||||
Weighted average remaining life of options outstanding | 5 years 4 months 17 days | |||||
Weighted average remaining life of options outstanding, exercisable | 4 years 6 months 29 days | |||||
Common Stock [Member] | ||||||
Number of common stock shares issued | 2,119,282 | |||||
Number of stock option shares exercised during the period | 356,700 | 671,028 | 1,079,602 | |||
Selling Expense [Member] | ||||||
Share-based compensation | $ 704,772 | $ 495,775 | $ 493,666 | |||
General and Administrative Expense [Member] | ||||||
Share-based compensation | $ 1,269,973 | $ 1,082,219 | $ 876,890 | |||
2003 Stock Incentive Plan [Member] | ||||||
Number of common stock shares available for distribution | 2,000,000 | |||||
2003 Stock Incentive Plan [Member] | Minimum [Member] | ||||||
Number of common stock shares available for distribution | 2,000,000 | |||||
2003 Stock Incentive Plan [Member] | Maximum [Member] | ||||||
Number of common stock shares available for distribution | 12,000,000 | |||||
2013 Incentive Compensation Plan [Member] | ||||||
Number of common stock shares available for distribution | 10,722,500 | |||||
Share-based compensation arrangement by share-based payment award, number of shares authorized | 10,000,000 | |||||
Number of common stock shares issued | 9,277,500 | |||||
Weighted average remaining life of options outstanding | 5 years 4 months 17 days | |||||
2013 Incentive Compensation Plan [Member] | Minimum [Member] | ||||||
Number of common stock shares available for distribution | 10,000,000 | |||||
2013 Incentive Compensation Plan [Member] | Maximum [Member] | ||||||
Number of common stock shares available for distribution | 20,000,000 | |||||
Restricted Stock [Member] | ||||||
Unrecognized compensation cost | $ 4,021,500 | |||||
Restricted Stock [Member] | Directors Officers and Employees, [Member] | ||||||
Number of stock option shares of common stock granted | 1,092,000 | |||||
Restricted Stock [Member] | Directors [Member] | ||||||
Number of stock option shares of common stock granted | 90,000 | |||||
Unvested Restricted Stock [Member] | ||||||
Unrecognized compensation cost | $ 1,182,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Share-based Compensation, Stock Options Outstanding (Details) - $ / shares | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Shares, Outstanding and expected to vest at end of period | 15,346,608 | ||
Shares, Exercisable at period end | 11,325,108 | ||
Weighted Average Exercise Price, Exercisable at period end | $ 0.65 | ||
Stock Options [Member] | |||
Shares, Outstanding at beginning of year | 15,798,558 | 13,508,086 | 11,988,188 |
Shares, Granted | 3,280,000 | 2,622,500 | |
Shares, Exercised | (356,700) | (671,028) | (1,079,602) |
Shares, Forfeited | (95,250) | (318,500) | (23,000) |
Shares, Outstanding and expected to vest at end of period | 15,346,608 | 15,798,558 | 13,508,086 |
Shares, Exercisable at period end | 11,325,108 | 9,285,121 | 7,931,813 |
Weighted Average Exercise Price, Outstanding at beginning of year | $ 0.78 | $ 0.79 | $ 0.58 |
Weighted Average Exercise Price, Granted | 0.91 | 1.63 | |
Weighted Average Exercise Price, Exercised | 0.66 | 0.37 | 0.35 |
Weighted Average Exercise Price, Forfeited | 2.01 | 3.44 | 4.30 |
Weighted Average Exercise Price, Outstanding and expected to vest at end of period | 0.78 | 0.78 | 0.79 |
Weighted Average Exercise Price, Exercisable at period end | 0.65 | 0.55 | 0.53 |
Weighted average fair value of grants during the period | $ 0.57 | $ 1.07 |
Stock-Based Compensation - Sc65
Stock-Based Compensation - Schedule of Options Outstanding and Exercisable (Details) | 12 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Options outstanding, shares | shares | 15,346,608 |
Options outstanding, weighted average remaining life in years | 5 years 4 months 17 days |
Options exercisable, shares | shares | 11,325,108 |
Options exercisable, weighted average exercise price | $ 0.65 |
Aggregate intrinsic value | $ | $ 7,276,177 |
Stock Option 1 [Member] | |
Range of exercise prices, lower limit | $ 0.01 |
Range of exercise prices, upper limit | $ 0.25 |
Options outstanding, shares | shares | 273,200 |
Options outstanding, weighted average remaining life in years | 6 months 3 days |
Options exercisable, shares | shares | 273,200 |
Options exercisable, weighted average exercise price | $ 0.22 |
Aggregate intrinsic value | $ | $ 278,596 |
Stock Option 2 [Member] | |
Range of exercise prices, lower limit | $ 0.26 |
Range of exercise prices, upper limit | $ 0.40 |
Options outstanding, shares | shares | 6,977,908 |
Options outstanding, weighted average remaining life in years | 3 years 3 months 26 days |
Options exercisable, shares | shares | 6,977,908 |
Options exercisable, weighted average exercise price | $ 0.34 |
Aggregate intrinsic value | $ | $ 6,276,104 |
Stock Option 3 [Member] | |
Range of exercise prices, lower limit | $ 0.41 |
Range of exercise prices, upper limit | $ 1 |
Options outstanding, shares | shares | 5,153,500 |
Options outstanding, weighted average remaining life in years | 7 years 5 months 1 day |
Options exercisable, shares | shares | 2,348,000 |
Options exercisable, weighted average exercise price | $ 0.96 |
Aggregate intrinsic value | $ | $ 660,076 |
Stock Option 4 [Member] | |
Range of exercise prices, lower limit | $ 1.01 |
Range of exercise prices, upper limit | $ 1.50 |
Options outstanding, shares | shares | 560,000 |
Options outstanding, weighted average remaining life in years | 6 years 11 months 26 days |
Options exercisable, shares | shares | 535,000 |
Options exercisable, weighted average exercise price | $ 1.21 |
Aggregate intrinsic value | $ | $ 61,400 |
Stock Option 5 [Member] | |
Range of exercise prices, lower limit | $ 1.51 |
Range of exercise prices, upper limit | $ 2 |
Options outstanding, shares | shares | 2,382,000 |
Options outstanding, weighted average remaining life in years | 7 years 2 months 5 days |
Options exercisable, shares | shares | 1,191,000 |
Options exercisable, weighted average exercise price | $ 1.67 |
Aggregate intrinsic value | $ |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summarizes Activity Pertaining to Unvested Options (Details) - $ / shares | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Shares, Unvested at beginning of the year | 6,546,375 | 5,576,273 | 4,924,055 |
Shares, Granted | 3,280,000 | 2,622,500 | |
Shares, Canceled or expired | (56,000) | (138,250) | (12,000) |
Shares, Vested | (2,433,875) | (2,171,648) | (1,958,282) |
Shares, Unvested at end of the year | 4,056,500 | 6,546,375 | 5,576,273 |
Weighted Average Exercise Price, Unvested at beginning of the year | $ 1.11 | $ 1.17 | $ 0.70 |
Weighted Average Exercise Price, Granted | 0.91 | 1.63 | |
Weighted Average Exercise Price, Canceled or expired | 0.94 | 0.55 | 0.97 |
Weighted Average Exercise Price, Vested | 1.05 | 0.94 | 0.70 |
Weighted Average Exercise Price, Unvested at end of the year | $ 1.14 | $ 1.11 | $ 1.17 |
Stock-Based Compensation - Su67
Stock-Based Compensation - Summary of Restricted Stock Outstanding (Details) - 2013 Plan [Member] - Restricted Stock [Member] | 12 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Restricted stock outstanding at Beginning | |
Granted | 1,182,000 |
Restricted stock outstanding at Ending | 1,182,000 |
Weighted average fair value per restricted share at grant date | $ / shares | $ 1.65 |
Weighted average share price at grant date | $ / shares | $ 1.65 |
Stock-Based Compensation - Sc68
Stock-Based Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Risk-free interest rate | 1.37% | 1.39% |
Expected option life in years | 5 years 6 months | 5 years 6 months |
Expected stock price volatility | 68.00% | 70.00% |
Maximum [Member] | ||
Risk-free interest rate | 1.89% | 1.81% |
Expected option life in years | 6 years 2 months 30 days | 6 years 2 months 30 days |
Expected stock price volatility | 69.00% | 73.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Number of common stock value issued | $ (14,355) | $ 3,127,113 | ||
Vector Group [Member] | ||||
Annual fees for services related party | $ 100,000 | |||
Vector Group [Member] | General and Administrative Expense [Member] | ||||
Related party transaction, expenses from transactions with related party | 108,928 | 110,846 | 85,396 | |
Ladenburg Thalmann Financial Services Inc [Member] | ||||
Related party transaction, expenses from transactions with related party | $ 182,875 | $ 128,625 | $ 131,054 | |
GCP Acquisition [Member] | ||||
Number of common stock shares issued | 1,800,000 | 1,800,000 | ||
Number of common stock value issued | $ 20,000,000 |
Commitments and Contingencies70
Commitments and Contingencies (Details Narrative) | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2018EUR (€) | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Operating leases, rent expense | $ 444,117 | $ 477,460 | $ 335,047 | |||
New York [Member] | ||||||
Operating leases, rent expense | $ 26,255 | |||||
Lease expiration date | Feb. 29, 2020 | Feb. 29, 2020 | ||||
Dublin [Member] | ||||||
Operating leases, rent expense | $ 1,848 | |||||
Lease expiration date | Oct. 31, 2019 | Oct. 31, 2019 | ||||
Houston, TX [Member] | ||||||
Operating leases, rent expense | $ 3,440 | |||||
Lease expiration date | Jun. 26, 2018 | Jun. 26, 2018 | ||||
Newly Distilled Bourbon [Member] | ||||||
Long-term purchase commitment, amount | $ 1,959,801 | |||||
Long term purchased amount | $ 2,464,500 | $ 2,053,750 | ||||
December 31, 2018 [Member] | Newly Distilled Bourbon [Member] | ||||||
Long term purchased amount | $ 3,900,000 | |||||
May 2018 [Member] | Houston, TX [Member] | ||||||
Lease expiration date | Jun. 26, 2021 | Jun. 26, 2021 | ||||
Euro [Member] | Dublin [Member] | ||||||
Operating leases, rent expense | € | € 1,500 | |||||
Irish Whiskeys [Member] | Four Contract Year [Member] | ||||||
Long term purchase commitment percentage agreed to purchase | 90.00% | 90.00% | ||||
Contract year ending | Jun. 30, 2018 | Jun. 30, 2018 | ||||
Long-term purchase commitment, amount | $ 854,971 | |||||
Irish Whiskeys [Member] | Contract Year [Member] | June 30, 2018 [Member] | ||||||
Long-term purchase commitment, amount | 1,253,044 | |||||
Irish Whiskeys [Member] | Contract Year [Member] | June 30, 2019 [Member] | ||||||
Long-term purchase commitment, amount | $ 1,361,921 | |||||
Irish Whiskeys [Member] | Contract Year [Member] | Euro [Member] | ||||||
Long-term purchase commitment, amount | € | € 694,043 | |||||
Irish Whiskeys [Member] | Contract Year [Member] | Euro [Member] | June 30, 2018 [Member] | ||||||
Long-term purchase commitment, amount | € | 1,017,189 | |||||
Irish Whiskeys [Member] | Contract Year [Member] | Euro [Member] | June 30, 2019 [Member] | ||||||
Long-term purchase commitment, amount | € | € 1,105,572 | |||||
Irish Whiskeys [Member] | Twelve Contract Year [Member] | ||||||
Long term purchase commitment percentage agreed to purchase | 80.00% | 80.00% | ||||
Contract year ending | Jun. 30, 2018 | Jun. 30, 2018 | ||||
Long-term purchase commitment, amount | $ 417,151 | |||||
Irish Whiskeys [Member] | Twelve Contract Year [Member] | June 30, 2018 [Member] | ||||||
Long-term purchase commitment, amount | 544,825 | |||||
Irish Whiskeys [Member] | Twelve Contract Year [Member] | June 30, 2019 [Member] | ||||||
Long-term purchase commitment, amount | $ 709,300 | |||||
Irish Whiskeys [Member] | Twelve Contract Year [Member] | Euro [Member] | ||||||
Long-term purchase commitment, amount | € | € 338,632 | |||||
Irish Whiskeys [Member] | Twelve Contract Year [Member] | Euro [Member] | June 30, 2018 [Member] | ||||||
Long-term purchase commitment, amount | € | 442,274 | |||||
Irish Whiskeys [Member] | Twelve Contract Year [Member] | Euro [Member] | June 30, 2019 [Member] | ||||||
Long-term purchase commitment, amount | € | € 575,791 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Mar. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 406,896 |
2,020 | 385,395 |
2,021 | 44,231 |
2,022 | 11,163 |
Total | $ 847,685 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Concentration risk, percentage | 100.00% | 100.00% | 100.00% |
Sales Revenue, Net [Member] | |||
Concentration risk, percentage | 100.00% | 100.00% | 100.00% |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | |||
Concentration risk, percentage | 37.20% | 36.60% | 39.90% |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
Concentration risk, percentage | 28.60% | 29.30% |
Geographic Information (Details
Geographic Information (Details Narrative) | 12 Months Ended |
Mar. 31, 2018Number | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 1 |
Geographic Information - Schedu
Geographic Information - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Total Consolidated Sales, net | $ 24,071,457 | $ 24,079,623 | $ 20,894,150 | $ 20,852,287 | $ 22,580,876 | $ 18,309,539 | $ 19,627,791 | $ 16,750,925 | $ 89,897,517 | [1] | $ 77,269,131 | [1] | $ 72,220,368 | [1] |
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | |||||||||||
Total Consolidated Income (Loss) from Operations | $ 4,194,217 | $ 1,904,999 | $ 1,005,547 | |||||||||||
Consolidated Income (Loss) from Operations, Percentage | 100.00% | 100.00% | 100.00% | |||||||||||
Total Consolidated Net Income Attributable to Common Shareholders | (336,434) | 465,580 | $ (1,682) | $ (946,396) | 191,350 | $ 422,566 | $ (700,710) | $ (765,819) | $ (818,932) | $ (852,613) | $ (2,516,368) | |||
Consolidated Net Income Attributable to Common Shareholders, Percentage | 100.00% | 100.00% | 100.00% | |||||||||||
Income tax (expense) benefit, net | $ (40,485) | $ (140,370) | $ (187,702) | $ (1,450,848) | ||||||||||
Total Consolidated Assets | $ 60,333,360 | $ 53,493,626 | $ 60,333,360 | $ 53,493,626 | ||||||||||
Consolidated Assets Percentage | 100.00% | 100.00% | 100.00% | 100.00% | ||||||||||
Whiskey [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Total Consolidated Sales, net | $ 33,931,832 | $ 28,339,770 | 26,009,839 | |||||||||||
Rum [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Total Consolidated Sales, net | 18,518,450 | 18,759,610 | 18,858,554 | |||||||||||
Liqueur [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Total Consolidated Sales, net | 9,339,246 | 8,386,705 | 8,567,121 | |||||||||||
Vodka [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Total Consolidated Sales, net | 1,365,764 | 1,569,004 | 2,364,429 | |||||||||||
Tequila [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Total Consolidated Sales, net | 202,215 | 210,012 | 198,330 | |||||||||||
Ginger Beer [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Total Consolidated Sales, net | 26,540,010 | 20,004,029 | 16,222,095 | |||||||||||
Sales Revenue, Net [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Total Consolidated Sales, net | $ 89,897,517 | $ 77,269,131 | $ 72,220,368 | |||||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% | |||||||||||
Sales Revenue, Net [Member] | Whiskey [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Concentration Risk, Percentage | 37.80% | 36.70% | 36.00% | |||||||||||
Sales Revenue, Net [Member] | Rum [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Concentration Risk, Percentage | 20.60% | 24.30% | 26.10% | |||||||||||
Sales Revenue, Net [Member] | Liqueur [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Concentration Risk, Percentage | 10.40% | 10.90% | 11.90% | |||||||||||
Sales Revenue, Net [Member] | Vodka [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Concentration Risk, Percentage | 1.50% | 2.00% | 3.30% | |||||||||||
Sales Revenue, Net [Member] | Tequila [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Concentration Risk, Percentage | 0.20% | 0.30% | 0.30% | |||||||||||
Sales Revenue, Net [Member] | Ginger Beer [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Concentration Risk, Percentage | 29.50% | 25.90% | 22.50% | |||||||||||
International [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Total Consolidated Sales, net | $ 8,926,378 | $ 7,528,766 | $ 9,302,134 | |||||||||||
Concentration Risk, Percentage | 9.90% | 9.70% | 12.90% | |||||||||||
Total Consolidated Income (Loss) from Operations | $ (94,066) | $ (210,100) | $ (34,268) | |||||||||||
Consolidated Income (Loss) from Operations, Percentage | (2.20%) | (11.00%) | (3.40%) | |||||||||||
Total Consolidated Net Income Attributable to Common Shareholders | $ 35,272 | $ (109,164) | $ 11,490 | |||||||||||
Consolidated Net Income Attributable to Common Shareholders, Percentage | (4.30%) | 12.80% | (0.50%) | |||||||||||
Total Consolidated Assets | $ 2,886,735 | $ 3,234,536 | $ 2,886,735 | $ 3,234,536 | ||||||||||
Consolidated Assets Percentage | 4.80% | 6.00% | 4.80% | 6.00% | ||||||||||
United States [Member] | ||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||
Total Consolidated Sales, net | $ 80,971,139 | $ 69,740,365 | $ 62,918,234 | |||||||||||
Concentration Risk, Percentage | 90.10% | 90.30% | 87.10% | |||||||||||
Total Consolidated Income (Loss) from Operations | $ 4,288,283 | $ 2,115,099 | $ 1,039,815 | |||||||||||
Consolidated Income (Loss) from Operations, Percentage | 102.20% | 111.00% | 103.40% | |||||||||||
Total Consolidated Net Income Attributable to Common Shareholders | $ (854,204) | $ (743,449) | $ (2,527,858) | |||||||||||
Consolidated Net Income Attributable to Common Shareholders, Percentage | 104.30% | 87.20% | 100.50% | |||||||||||
Income tax (expense) benefit, net | $ (140,370) | $ (187,702) | $ (1,450,848) | |||||||||||
Income tax (expense) benefit, net Percentage | 100.00% | 100.00% | 100.00% | |||||||||||
Total Consolidated Assets | $ 57,446,625 | $ 51,107,608 | $ 57,446,625 | $ 51,107,608 | ||||||||||
Consolidated Assets Percentage | 95.20% | 94.00% | 95.20% | 94.00% | ||||||||||
[1] | Sales, net and Cost of sales include excise taxes of $7,648,626, $7,645,789 and $7,451,569 for the years ended March 31, 2018, 2017 and 2016, respectively. |
Quarterly Financial Data (Una75
Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | ||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Sales, net | $ 24,071,457 | $ 24,079,623 | $ 20,894,150 | $ 20,852,287 | $ 22,580,876 | $ 18,309,539 | $ 19,627,791 | $ 16,750,925 | $ 89,897,517 | [1] | $ 77,269,131 | [1] | $ 72,220,368 | [1] |
Gross profit | 9,407,147 | 9,677,937 | 8,534,249 | 8,578,619 | 9,586,742 | 7,670,240 | 7,727,260 | 6,716,115 | 36,206,952 | 31,700,357 | 28,553,570 | |||
Net (loss) income | 190,185 | 664,603 | 280,622 | (865,218) | 699,725 | 892,364 | (489,854) | (595,703) | 270,192 | 506,532 | (1,706,706) | |||
Net (income) attributable to noncontrolling interests | (526,619) | (199,023) | (282,304) | (81,178) | (508,375) | (469,798) | (210,856) | (170,116) | 1,089,124 | 1,359,145 | 809,662 | |||
Net (loss) income attributable to common Stockholders | $ (336,434) | $ 465,580 | $ (1,682) | $ (946,396) | $ 191,350 | $ 422,566 | $ (700,710) | $ (765,819) | $ (818,932) | $ (852,613) | $ (2,516,368) | |||
Net (loss) income per common share, basic, attributable to common shareholders | $ 0 | $ 0 | $ 0 | $ (0.01) | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Net (loss) income per common share, diluted, attributable to common shareholders | $ 0 | $ 0 | $ 0 | $ (0.01) | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Weighted average shares used in computation, basic, attributable to common shareholders | 164,899,255 | 163,470,150 | 163,209,562 | 163,072,642 | 161,065,685 | 160,963,862 | 160,698,696 | 160,521,947 | ||||||
Weighted average shares used in computation, diluted, attributable to common shareholders | 164,899,255 | 171,121,927 | 163,209,562 | 163,072,642 | 165,878,218 | 165,245,935 | 160,698,696 | 160,521,947 | ||||||
[1] | Sales, net and Cost of sales include excise taxes of $7,648,626, $7,645,789 and $7,451,569 for the years ended March 31, 2018, 2017 and 2016, respectively. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | 1 Months Ended |
May 31, 2018USD ($) | |
Line of credit commitment fee paid | $ 20,000 |
Minimum [Member] | |
Line of credit maximum amount | 21,000,000 |
Maximum [Member] | |
Line of credit maximum amount | $ 23,000,000 |