Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Jun. 15, 2020 | Sep. 30, 2019 | |
Document Information Line Items | |||
Entity Registrant Name | AeroGrow International, Inc. | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Common Stock, Shares Outstanding | 34,328,036 | ||
Entity Public Float | $ 6,762,964 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001316644 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Mar. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 9,046 | $ 1,741 |
Restricted cash | 15 | 15 |
Accounts receivable, net of allowance for doubtful accounts of $376 and $89 at March 31, 2020 and 2019, respectively | 3,422 | 4,921 |
Other receivables | 257 | 207 |
Inventory, net | 4,788 | 8,440 |
Prepaid expenses and other | 1,392 | 490 |
Total current assets | 18,920 | 15,814 |
Property and equipment and intangible assets, net of accumulated depreciation of $5,467 and $4,828 at March 31, 2020 and 2019, respectively | 1,229 | 1,006 |
Operating lease right of use asset | 1,229 | 0 |
Deposits | 669 | 39 |
Total assets | 22,047 | 16,859 |
Current liabilities | ||
Accounts payable | 2,332 | 1,508 |
Accounts payable related party | 2,396 | 1,102 |
Accrued expenses | 2,308 | 1,437 |
Finance lease liability | 29 | 72 |
Operating lease liability | 58 | 0 |
Debt associated with sale of intellectual property-current portion | 17 | 25 |
Total current liabilities | 7,140 | 4,144 |
Long term liabilities | ||
Operating lease liability | 1,201 | 0 |
Notes payable related party | 900 | 0 |
Other liability | 297 | 263 |
Total liabilities | 9,538 | 4,407 |
Commitments and contingencies (Note 7) | ||
Preferred stock, $.001 par value, 20,000,000 shares authorized, 0 issued and outstanding at March 31, 2020 and 2019, respectively | 0 | 0 |
Common stock, $.001 par value, 750,000,000 shares authorized, 34,328,036 shares issued and outstanding at March 31, 2020 and 2019 | 34 | 34 |
Additional paid-in capital | 140,817 | 140,817 |
Accumulated deficit | (128,342) | (128,399) |
Total stockholders’ equity | 12,509 | 12,452 |
Total liabilities and stockholders’ equity | $ 22,047 | $ 16,859 |
BALANCE SHEETS (Parentheticals)
BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts (in Dollars) | $ 376 | $ 89 |
Accumulated depreciation (in Dollars) | $ 5,467 | $ 4,828 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 34,328,036 | 34,328,036 |
Common stock, shares outstanding | 34,328,036 | 34,328,036 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net revenue | $ 39,214 | $ 34,366 |
Cost of revenue | 25,185 | 22,395 |
Gross profit | 14,029 | 11,971 |
Operating expenses | ||
Research and development | 877 | 590 |
Sales and marketing | 8,852 | 8,462 |
General and administrative | 3,992 | 2,913 |
Total operating expenses | 13,721 | 11,965 |
Income from operations | 308 | 6 |
Other income (expense), net | ||
Interest expense – related party | (232) | (301) |
Other (expense) income, net | (19) | 4 |
Total other (expense), net | (251) | (297) |
Net income (loss) | $ 57 | $ (291) |
Net income (loss) per common share, basic and diluted (in Dollars per share) | $ 0 | $ (0.01) |
Weighted average number of common shares outstanding, basic (in Shares) | 34,328 | 34,328 |
Weighted average number of common shares outstanding, diluted (in Shares) | 34,328 | 34,328 |
STATEMENT OF CHANGES IN STOCKHO
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balances at Mar. 31, 2018 | $ 0 | $ 34 | $ 140,817 | $ (128,108) | $ 12,743 |
Balances (in Shares) at Mar. 31, 2018 | 0 | 34,328,036 | |||
Net income (loss) | (291) | (291) | |||
Balances at Mar. 31, 2019 | $ 0 | $ 34 | 140,817 | (128,399) | 12,452 |
Balances (in Shares) at Mar. 31, 2019 | 0 | 34,328,036 | |||
Net income (loss) | 57 | 57 | |||
Balances at Mar. 31, 2020 | $ 0 | $ 34 | $ 140,817 | $ (128,342) | $ 12,509 |
Balances (in Shares) at Mar. 31, 2020 | 0 | 34,328,036 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 57 | $ (291) |
Adjustments to reconcile net income (loss) to cash and cash equivalents used by operations: | ||
Depreciation and amortization expense | 639 | 443 |
Amortization of lease liability and right of use asset | 30 | 0 |
Bad debt expense | 396 | 49 |
Inventory allowance | 25 | 60 |
Accretion of debt associated with sale of intellectual property | (24) | (32) |
Change in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | 1,103 | (855) |
(Increase) decrease in other receivable | (50) | 74 |
Decrease (increase) in inventory | 3,627 | (3,453) |
(Increase) decrease in prepaid expenses and other | (802) | 3 |
(Increase) in deposits | (730) | 0 |
Increase (decrease) in accounts payable | 2,103 | (138) |
Increase (decrease) in accrued expenses and other liability | 921 | (744) |
Increase in accrued interest-related party | 15 | 0 |
Decrease (increase) in customer deposits | 0 | 18 |
Net cash and cash equivalents provided (used) by operating activities | 7,310 | (4,866) |
Cash flows from investing activities: | ||
Purchases of equipment | (862) | (854) |
Net cash and cash equivalents (used) by investing activities | (862) | (854) |
Cash flows from financing activities: | ||
Proceeds from notes payable – related party | 5,400 | 6,000 |
Repayments of notes payable – related party | (4,500) | (6,000) |
Repayments of capital lease | (43) | (21) |
Net cash provided (used) by financing activities | 857 | (21) |
Net increase (decrease) in cash and cash equivalents and restricted cash | 7,305 | (5,741) |
Cash and cash equivalents and restricted cash, beginning of period | 1,756 | 7,497 |
Cash and cash equivalents and restricted cash, end of period | 9,061 | 1,756 |
Interest paid in cash | 232 | 301 |
Income taxes paid | 0 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Property and equipment acquired through capital lease | 0 | 81 |
Initial recognition of right-of-use asset (Note 8) | 805 | 0 |
Initial lease liability arising from right-of-use asset (Note 8) | $ 805 | $ 0 |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | Note 1 – Description of the Business and Summary of Significant Accounting Policies Organization and Description of the Business AeroGrow International, Inc. (the “Company,” “we,” “AeroGrow,” or “our “) was incorporated in the State of Nevada on March 25, 2002. The Company’s principal business is developing, marketing, and distributing advanced indoor aeroponic garden systems designed and priced to appeal to the consumer gardening, cooking and small indoor appliance markets worldwide. The Company manufactures, distributes and markets four different models of its AeroGarden systems in multiple colors, as well as over 40 varieties of seed pod kits and a full line of accessory products through multiple channels including retail distribution (brick and mortar and online), catalogue and direct-to-consumer sales in the United States and Canada. Liquidity and Basis of Presentation As shown in the accompanying financial statements, we have incurred net income of $57,000 and net loss of $291,000 for the years ended March 31, 2020 and 2019, respectively, and have an accumulated deficit of $128.3 million as of March 31, 2020. As more fully discussed in the Liquidity and Capital Resources section of Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Company has developed sources of funding that management believes are sufficient to support the Company’s operating plan for one year from the date these financials were filed. The Company’s operating plan is predicated on a variety of assumptions, including, but not limited to, the level of customer and consumer demand, the effect of cost reduction programs, and the state of the general economic environment in which the Company operates. There can be no assurance that these assumptions will prove to be accurate in all material respects, or that the Company will be able to successfully execute its operating plan. We may need to seek additional debt or equity capital during the fiscal year ending March 31, 2021 to address the seasonal nature of our working capital needs, and to enable us to increase the scale of our business. Sources of funding to meet prospective cash requirements include the Company’s existing cash balances, cash flow from operations and financing from Scotts Miracle-Gro. There can be no assurance we will be able to raise this additional capital. As part of our efforts to seek additional funding of our operations, in April 2013, we entered into a strategic alliance with SMG Growing Media, Inc., a wholly owned subsidiary of Scotts Miracle-Gro Company, a worldwide marketer of branded consumer lawn and garden products (“Scotts Miracle-Gro”). As part of the strategic alliance, in April 2013 Scotts Miracle-Gro (i) acquired 2,649,007 shares of the Company’s Series B Convertible Preferred Stock and a warrant to purchase shares of the Company’s common stock for an aggregate purchase price of $4.0 million; and (ii) purchased all of the Company’s intellectual property associated with hydroponic products, other than the AeroGrow and AeroGarden trademarks, for $500,000. In November 2016, Scotts Miracle-Gro exercised the warrant and converted its Series B Convertible Preferred Stock into shares of common stock, thereby bringing Scotts Miracle-Gro’s ownership of our common stock to approximately 80%. In every year since Fiscal Year 2014, Scotts Miracle-Gro has provided term loan funding to enable us to meet prospective cash flow requirements to fund inventory demands in advance of our peak selling season. For Fiscal Year 2020, we entered into a $10.0 million Term Loan with Scotts Miracle-Gro on June 20, 2019. As of March 31, 2020, the outstanding balance of the $10.0 million Term Loan and accrued interest was repaid in full. For further information on the debt arrangement with Scotts Miracle-Gro, please see Note 2 “Notes Payable and Long Term Debt” and the strategic alliance with Scotts Miracle-Gro, please see Note 3 “Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions” to our financial statements. Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is reasonably possible that a change in the Company’s estimates will occur in the near term and such change could be material as information becomes available. Our significant estimates include the warranty and return reserves, going concern, inventory obsolescence reserves and allowances for sales and cooperative advertising. Net Income (Loss) per Share of Common Stock The Company computes net income (loss) per share of common stock in accordance with Accounting Standards Codification (“ASC”) 260. ASC 260 requires companies to present basic and diluted Earnings per Share (“EPS”). Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average shares of common stock outstanding for the period. Diluted EPS is similar to basic EPS, but presents the dilutive effect on a per share basis of common stock equivalents (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented. Potential shares of common stock that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS include the following: (i) employee stock options to purchase 11,000 shares of common stock for the period ended March 31, 2020; and (ii) employee stock options to purchase 94,000 shares for the period ended March 31, 2019. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents at March 31, 2020 and 2019. Restricted Cash The Company has secured activity related to its corporate credit card purchase account with a restricted money market account. The balance in this account as of March 31, 2020 and 2019 was $15,000. Reclassification Certain prior year figures have been reclassified to conform to current year presentation. Concentrations of Risk ASC 825-10-50-20 requires disclosure of significant concentrations of credit risk regardless of the degree of such risk. Financial instruments with significant credit risk include cash deposits. The amounts on deposit with one financial institutions exceeded the $250,000 federally insured limit as of March 31, 2020. However, management believes that the financial institution is financially sound and the risk of loss is minimal. Customers and Accounts Receivable: For the year ended March 31, 2020, the Company had one customer, Amazon.com, which represented 36.6%, of the Company’s net revenue. For the year ended March 31, 2019, the Company had one customer, Amazon.com, which represented 40.5%, of the Company’s net revenue. As of March 31, 2020, the Company had three customers, Amazon.com, Amazon.ca and Bed, Bath and Beyond, which represented 39.9%, 20.7% and 10.4%, respectively of outstanding accounts receivable. As of March 31, 2019, the Company had two customers, Amazon.com and Target, which represented 44.3% and 12.0%, respectively, of outstanding accounts receivable. Management believes that all receivables from these customers are collectible. Suppliers: For the year ended March 31, 2020, the Company purchased inventories and other inventory related items from one supplier totaling $11.9 million representing 47.4% of cost of revenue. For the year ended March 31, 2019, the Company purchased inventories and other inventory related items from one supplier totaling $17.1 million representing 76.5% of cost of revenue. The Company’s primary contract manufacturers are located in China. As a result, the Company may be subject to political, global COVID-19 pandemic, currency, regulatory, shipping, labor and weather/natural disaster risks which could impact the manufacturer’s ability to fulfill our orders and disrupt our supply of product. Although the Company believes alternate sources of manufacturing could be obtained, these risks and any potential loss of supply could have an adverse impact on operations. Fair Value of Financial Instruments The Company follows the guidance in ASC 820, Fair Value Measurements and Disclosures Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, i.e., exit price, in an orderly transaction between market participants. ASC 820 also provides a hierarchy for determining fair value, which emphasizes the use of observable market data whenever available. The three broad levels defined by the hierarchy are as follows, with the highest priority given to Level 1 as these are the most reliable, and the lowest priority given to Level 3. The three levels of the fair value hierarchy are described below: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Quoted prices for similar assets in active markets, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data, including model-derived valuations. Level 3: Unobservable inputs that are supported by little or no market activity. The carrying value of financial instruments, including cash, receivables, accounts payable and accrued expenses, approximates their fair value at March 31, 2020 and 2019 due to the relatively short-term nature of these instruments. The Company’s intellectual property liability carrying value was determined by Level 3 inputs. As discussed below in Notes 2 and 3, this liability was incurred in conjunction with the Company’s strategic alliance with Scotts Miracle-Gro. As of March 31, 2020 and 2019, the fair value of the Company’s sale of intellectual property liability was estimated using the discounted cash flow method, which is based on expected future cash flows, discounted to present value using a discount rate of 15%. The table below summarizes the fair value and carry value of each Level 3 category liability: March 31, 2020 March 31, 2019 Fair Value Carry Value Fair Value Carry Value (in thousands) Liabilities Sale of intellectual property liability $ 21 $ 24 $ 41 $ 48 Total $ 21 $ 24 $ 41 $ 48 The table below sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the periods ended March 31, 2020 and March 31, 2019. (in thousands) Sale of intellectual property liability Balance, March 31, 2018 $ 65 Amortization of intellectual property (24 ) Balance, March 31, 2019 $ 41 Amortization of intellectual property (20 ) Balance, March 31, 2020 $ 21 Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation for financial accounting purposes is computed using the straight-line method over the estimated lives of the respective assets. Computer equipment and computer software are depreciated over three years. Office equipment and manufacturing equipment are depreciated over five years. Tooling is depreciated over three years. Leasehold improvements are being amortized over the life of the lease. Property and equipment consist of the following: March 31, March 31, 2020 2019 (in thousands) Manufacturing equipment and tooling $ 5,006 $ 4,419 Computer equipment and software 1,105 857 Leasehold improvements 116 116 Other equipment and intangible assets 469 442 6,696 5,834 Less: accumulated depreciation and amortization (5,467 ) (4,828 ) Property and equipment, net $ 1,229 $ 1,006 Depreciation and amortization expense for the years ended March 31, 2020 and 2019, was $639,000, and $443,000, respectively. Inventory Inventories are valued at the lower of cost, determined on the basis of standard costing, which approximates the first-in, first-out method, or net realizable value. When the Company is the manufacturer, raw materials, labor and manufacturing overhead are included in inventory costs. The Company records the raw materials at delivered cost. Standard labor and manufacturing overhead costs are applied to the finished goods based on normal production capacity. A majority of the Company’s products are manufactured overseas and are recorded at standard cost, which includes product costs for purchased and manufactured products, and freight and transportation costs for inbound freight from manufacturers. March 31, March 31, 2020 2019 (in thousands) Finished goods $ 3,191 $ 7,071 Raw materials 1,597 1,369 $ 4,788 $ 8,440 The Company determines an inventory obsolescence reserve based on management’s historical experience and establishes reserves against inventory according to the age of the product. As of March 31, 2020 and 2019, the Company had reserved $151,000 and $126,000, respectively, for inventory obsolescence. Accounts Receivable and Allowance for Doubtful Accounts The Company sells its products to retailers and direct-to-consumer. Direct-to-consumer transactions are primarily paid by credit card. Retailer sales terms vary by customer, but are generally net 30 days to net 60 days. Accounts receivable are reported at net realizable value and net of the allowance for doubtful accounts. The Company uses the allowance method to account for uncollectible accounts receivable. The Company’s allowance estimate is based on a review of the current status of trade accounts receivable, which resulted in an allowance of $376,000 and $89,000 at March 31, 2020 and 2019, respectively. Other Receivables In conjunction with the Company’s processing of credit card transactions for its direct-to-consumer sales activities and as security with respect to the Company’s performance for required credit card refunds and charge backs, the Company is required to maintain a cash reserve with Vanity, the Company’s credit card processor. This reserve is equal to 5% of the credit card sales processed during the previous six months. As of March 31, 2020 and March 31, 2019, the balance in this reserve account was $257,000 and $207,000, respectively. Advertising and Production Costs The Company expenses all production costs related to advertising, including, print, television, and radio advertisements when the advertisement has been broadcast or otherwise distributed. In contrast, the Company records media and marketing costs related to its direct-to-consumer advertisements, inclusive of postage and printing costs incurred in conjunction with mailings of direct response catalogues, and related direct response advertising costs, in accordance ASC 340-20 Capitalized Advertising Costs. As the Company has re-entered the retail distribution channel, the Company has expanded its advertising to online gateway and portal advertising, as well as placement in third party catalogues. Advertising expenses for the years ended March 31, 2020 and March 31, 2019, were as follows: Fiscal Year Ended March 31, 2020 2019 (in thousands) Direct-to-consumer $ 797 $ 674 Retail 3,007 3,093 Other 1,190 317 Total advertising expense $ 4,994 $ 4,084 As of March 31, 2020 and March 31, 2019, the Company had deferred $84,000 and $3,000, respectively, related to such media and advertising costs, which include pay-per-click, the catalogue cost described above and commercial production costs. These costs are included in the prepaid expenses and other line of the balance sheet. Research and Development Research, development, and engineering costs are expensed as incurred. Research, development, and engineering expenses primarily include payroll and headcount related costs, contractor fees, infrastructure costs, and administrative expenses directly related to research and development support. Stock-Based Compensation The Company accounts for share-based payments in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718-10-55 Shared-Based Payment Income Taxes Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at the end of each period, based on enacted laws and statutory rates applicable to the periods in which the differences are expected to affect taxable income. Any liability for actual taxes to taxing authorities is recorded as income tax liability. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established against such assets where management is unable to conclude that it is “more likely than not” that the value of such asset will be realized. As of March 31, 2020 and 2019, the Company recognized a valuation allowance equal to 100% of the net deferred tax asset balance. Leases At lease inception, the Company determines whether an arrangement is or contains a lease. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities in the financial statements. ROU assets represent the Company’s right to use leased assets over the term of the lease. Lease liabilities represent the Company’s contractual obligation to make lease payments over the lease term. For operating leases, ROU assets and lease liabilities are recognized at the commencement date. The lease liability is measured as the present value of the lease payments over the lease term. The Company uses the rate implicit in the lease if it is determinable. When the rate implicit in the lease is not determinable, the Company uses its incremental borrowing rate at the commencement date of the lease to determine the present value of the lease payments. Operating ROU assets are calculated as the present value of the remaining lease payments, plus unamortized initial direct costs and any prepayments, less any unamortized lease incentives received. Lease terms may include renewal or extension options to the extent they are reasonably certain to be exercised. The assessment of whether renewal or extension options are reasonably certain to be exercised is made at lease commencement. Factors considered in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of any leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option were not exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company has elected not to recognize an ROU asset and obligation for leases with an initial term of twelve months or less. The expense associated with short term leases is included in lease expense in the statement of operations. For finance leases, after lease commencement the lease liability is measured on an amortized cost basis and increased to reflect interest on the liability and decreased to reflect the lease payment made during the period. Interest on the lease liability is determined each period during the lease term as the amount that results in a constant period discount rate on the remaining balance of the liability. The ROU asset is subsequently measured at cost, less any accumulated amortization and any accumulated impairment losses. Amortization on the ROU asset is recognized over the period from the commencement date to the earlier of (1) the end of the useful life of the ROU asset, or (2) the end of the lease term. The discount rate used by the Company for the finance leases is 10.0% which is the rate specified in the lease agreement or incremental borrowing rate, as appropriate, as the present value rate. To the extent a lease arrangement includes both lease and non-lease components, the components are accounted for separately. The Company has various operating leases primarily for office space and other distribution centers, some of which include escalating lease payments and options to extend or terminate the lease. The Company determines if a contract is a lease at the inception of the arrangement. The exercise of lease renewal option is at the Company’s sole discretion and options are recognized when it is reasonably certain the Company will exercise the option. The Company’s leases have remaining terms of less than one year to seven years. The Company does not have lease agreements with residual value guarantees, sale leaseback terms or material restrictive covenants. Revenue Recognition The Company currently has two operating and reportable segments: (i) the Direct-to-Consumer segment, which is composed of sales directly from our website, mail order or customer calls to our customer service department; and (ii) the Retail segment, which is comprised of all sales related to retailers, including where possession of our product is taken and sold by the retailer in store or online, and drop ship orders that process from the retailer and drop directly to our warehouse for us to ship on behalf of the retailer. The majority of the Company’s revenue is recognized at a point in time as the products are homogenous and can be sold to a variety of customers and when it satisfies a single performance obligation by transferring control of its products and the risk of loss to a customer. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms. The Company did not have any material unsatisfied performance obligations as of March 31, 2020 or March 31, 2019. The Company excludes from revenues all taxes assessed by a governmental authority that are imposed on the sale of its products and collected from customers. Promotional and other allowances (variable consideration) recorded as a reduction to net sales, primarily include consideration given to retail customers including, but not limited to the following: ● discounts granted off list prices to support price promotions to end-consumers by retailers; ● the Company’s agreed share of fees given directly to retailers for advertising, in-store marketing and promotional activities; and ● incentives given to the Company’s retailers for achieving or exceeding certain predetermined purchases (i.e., rebates). The Company’s promotional allowance programs with its retailers are executed through separate agreements in the ordinary course of business. These agreements generally provide for one or more of the arrangements described above and are of varying durations, ranging from one day to one year. The Company’s promotional and other allowances are calculated based on various programs with retail customers, and accruals are established during the year for its anticipated liabilities. These accruals are based on agreed upon terms, as well as the Company’s historical experience with similar programs, and require management’s judgment with respect to estimating consumer participation and retail customer performance levels. Differences between such estimated expense and actual expenses for promotional and other allowance costs have historically been insignificant and are recognized in earnings in the period such differences are determined. The Company records estimated reductions to revenue for customer and distributor programs and incentive offerings, including promotions, rebates, and other volume-based incentives, based on historical rates. Certain incentive programs require the Company to estimate the number of customers who will actually redeem the incentive based on historical industry experience. As of March 31, 2020 and 2019, the Company reduced accounts receivable $744,000 and $1.2 million, respectively, as an estimate for the foregoing deductions and allowances within the “accounts receivable, net” line of the balance sheets, respectively. Warranty and Return Reserves The Company records warranty liabilities at the time of sale for the estimated costs that may be incurred under its basic warranty program. The specific warranty terms and conditions vary depending upon the product sold, but generally include technical support, repair parts and labor for periods up to one year. Factors that affect the Company’s warranty liability include the number of installed units currently under warranty, historical and anticipated rates of warranty claims on those units, and cost per claim to satisfy the Company’s warranty obligation. Based upon the foregoing, the Company has recorded as of March 31, 2020 and 2019 a provision for potential future warranty costs of $226,000 and $166,000, respectively. These reserves are recorded in the accrued expenses line of the balance sheets. The Company reserves for known and potential returns from customers and associated refunds or credits related to such returns based upon historical experience. In certain cases, retail customers are provided a fixed allowance, usually in the 1% to 2% range, to cover returned goods and this allowance is deducted from payments made to us by such customers. As of March 31, 2020 and 2019, the Company has recorded a reserve for customer returns of $430,000 and $313,000, respectively. These expenses are included in the accrued expenses line of the balance sheets. Shipping and Handling Costs Shipping and handling costs associated with inbound freight are recorded in cost of revenue and are capitalized in inventory until the inventory is sold. Shipping and handling costs associated with freight out to customers are also included in cost of revenue. Shipping and handling charges paid by customers are included in net revenue. Segments of an Enterprise and Related Information GAAP utilizes a management approach based on allocating resources and assessing performance as the source of the Company’s reportable segments. GAAP also requires disclosures about products and services, geographic areas and major customers. At present, the Company operates in two segments, Direct-to-Consumer and Retail Sales. New Accounting Pronouncements Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments,” which requires entities to estimate all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The updated guidance also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument. This guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within that reporting period, and early adoption is permitted. The Company is in the process of evaluating the potential impact of this new guidance on the Company’s consolidated financial statements and related disclosures. Accounting Standards Recently Adopted In February 2016, the FASB issued ASU 2016-02, Leases (“ASC 842”), which, among other things, requires an entity to recognize a right-of-use (“ROU”) asset and a lease liability on the balance sheet for substantially all leases, including operating leases. The Company adopted ASC 842 effective April 1, 2019 utilizing the modified retrospective approach such that prior year Financial Statements were not recast under the new standard. Adoption of this standard resulted in changes to the Company’s Balance Sheets, Statements of Operations and accounting policies for leases but did not have an impact on the Statements of Cash Flows. See Note 8 for additional information regarding the new standard and its impact on the Company’s Financial Statements. |
Notes Payable and Long Term Deb
Notes Payable and Long Term Debt | 12 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Note 2 – Notes Payable and Long Term Debt We relied upon a variety of debt funding sources to meet our liquidity requirements during the fiscal years ended March 31, 2020 and 2019, as summarized below: March 31, March 31, 2020 (in thousands) 2019 (in thousands) Notes payable and debt-related party $ 915 $ - Sale of intellectual property liability (see Note 3) 24 48 Total notes payable and debt 939 48 Less current portion-long term debt 39 25 Long term debt $ 900 $ 23 Scotts Miracle-Gro Term Loan Agreement On June 20, 2019, the Company renewed a Working Capital Term Loan Agreement in the principal amount of up to $10.0 million with Scotts Miracle-Gro. The proceeds were made available as needed in increments of $500,000, the Company may pay down and reborrow during the Term Loan, not to exceed $10.0 million with a due date of March 31, 2020. The Company repaid the principal and interest in full on February 7, 2020. As a result the Company’s note payable balance was $0 on March 31, 2020. The Term Loan Agreement was secured by a lien on the assets of the Company. Interest was charged at the stated rate of 10% per annum and will be paid, in cash, quarterly in arrears at the end of each September, December and March. The funds provided under the Term Loan were used for general working capital and to acquire inventory to support anticipated growth as the Company expands its retail and its direct-to-consumer sales channels. The Term Loan permitted prepayments without penalty or premium and, the Company had borrowed $4.5 million under the Term Loan during fiscal 2020. As of March 31, 2020 the Company repaid the outstanding balance of the Term Loan and accrued interest in full. On June 20, 2019, the Company entered into a Real Estate Term Loan Agreement with Scotts Miracle-Gro in the principal amount of up to $1.5 million, with a due date of March 31, 2022. The funding provides capital to fund real estate related lease obligations in increments of $100,000. Interest will be charged at the stated rate of 10% and will be paid quarterly in arrears on each of April 30, July 31, October 31 and January 31. As of March 31, 2020, the Company had borrowed $900,000 under the Real Estate Term Loan. Liability Associated with Scotts Miracle-Gro Transaction On April 22, 2013, the Company and Scotts Miracle-Gro agreed to enter an Intellectual Property Sale Agreement, a Technology License Agreement, a Brand License Agreement, and a Supply Chain Services Agreement. The Intellectual Property Sale Agreement and the Technology License constitute an agreement of sales of future revenues. Because the Company received cash from Scotts Miracle-Gro and agreed to pay until March 2022 a specified percentage of revenue and because the Company has significant involvement in the generation of its revenue, the excess paid over net book value is classified as debt and is being amortized under the effective interest method. As of March 31, 2020 and 2019, the Company recorded a liability of $24,000 and $48,000, respectively, was recorded on the balance sheets for the Intellectual Property Sale Agreement. |
Scotts Miracle-Gro Transactions
Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions | 12 Months Ended |
Mar. 31, 2020 | |
Convertible Preferred Stock, Warrants and Other Transactions [Abstract] | |
Convertible Preferred Stock, Warrants and Other Transactions [Text Block] | Note 3 – Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions On April 22, 2013, the Company entered into a Securities Purchase Agreement with SMG Growing Media, Inc. (the “Investor”), a wholly owned subsidiary of Scotts Miracle-Gro (NYSE: “SMG”), a worldwide marketer of branded consumer lawn and garden products. Pursuant to the Securities Purchase Agreement, Scotts Miracle-Gro acquired 2,649,007 shares of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “ Upon exercise of the Warrants and demand by Scotts Miracle-Gro, the Company must use its best efforts to file a Registration Statement on Form S-3, or, if the Company is not eligible for Form S-3, on Form S-1 (collectively, the “Registration Statement”), covering the shares of the Company’s common stock covered by the Preferred Stock and the Warrant, within 120 calendar days after receipt of Scotts Miracle-Gro’s demand for registration and shall use its best efforts to cause the Registration Statement to become effective as soon as possible thereafter. The foregoing description of the Securities Purchase Agreement, the Certificates of Designations for the Series B Convertible Preferred Stock, the Warrant, and the resulting transaction is only a summary, does not purport to be complete, and is qualified in its entirety by reference to the full text of the applicable documents, each of which was included as an exhibit to the Company’s Current Report on Form 8-K, as filed with the SEC on April 23, 2013. The warrant on the Series B Convertible Preferred Stock was accounted for as a liability at its estimated fair value. The derivative warrant liability was re-measured to fair value, on a recurring basis, at the end of each reporting period until it was exercised. The Company accounted for the warrant as a liability and measured the value of the warrant using the Monte Carlo simulation model as of the end of each quarterly reporting period until the warrant was exercised. On November 29, 2016, Scotts Miracle-Gro fully exercised its warrant to purchase 80% of the Company’s outstanding stock, when the derivative warrant liability was extinguished and the Convertible Preferred Stock was converted to common stock. Under the Securities Purchase Agreement, the Company’s Board of Directors (the “Board”) is required to consist of five members, which shall be set forth in the Company’s Bylaws. Upon exercise of the Warrant, Scotts Miracle-Gro became entitled to appoint, and has appointed, three of the five members of the Board. See Part III, Item 10 “Directors, Executive Officers and Corporate Governance” of this Annual Report on Form 10-K. In conjunction with the Private Offering described above, the Company and Scotts Miracle-Gro also agreed to the following: Intellectual Property Sale Technology Licensing Agreement Brand License Collaboration Supply Chain Services Agreement |
Equity Compensation Plans and E
Equity Compensation Plans and Employee Benefit Plans | 12 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement, Disclosure [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block] | Note 4 – Equity Compensation Plans and Employee Benefit Plans In August 2005, the Company’s Board of Directors approved the 2005 Equity Compensation Plan (the “2005 Plan”) pursuant to which both qualified and nonqualified stock options as well as restricted shares of common stock are reserved for issuance to eligible employees, consultants and directors of the Company. A total of 13,505,000 shares of our common stock may be granted under the 2005 Plan. The 2005 Equity Compensation plan has expired and we currently do not anticipate a shareholder meeting to approve a new plan. The 2005 Plan was administered by the Company’s Governance, Compensation and Nominating Committee. For the years ended March 31, 2020 and 2019, the Company did not grant any options to purchase the Company’s common stock under the 2005 Equity Compensation Plan. As of March 31, 2020, the Company had a total of 11,300 options outstanding with exercise prices of $1.55 per share. No compensation expense for stock options was recognized for the years ended March 31, 2020 and 2019. A summary of option activity in the 2005 Plan is as follows: Exercise price Options Weighted- (in thousands) Low High Average Balances at April 1, 2018 175 $ 1.10 $ 5.31 $ 3.50 Granted - - - - Exercised - - - - Forfeited 70 2.20 2.20 - Balances at March 31, 2019 105 $ 1.55 $ 5.31 $ 4.90 Granted - - - - Exercised - - - - Forfeited 94 5.31 5.31 - Balances at March 31, 2020 11 $ 1.55 $ 1.55 $ 1.55 Information regarding all stock options outstanding under the 2005 Plan as of March 31, 2020 is as follows: OPTIONS OUTSTANDING AND EXERCISABLE Weighted- average Weighted- Aggregate Remaining average Intrinsic Options Contractual Exercise Value Exercise price (in thousands) Life (years) Price (in thousands) $ 1.55 11 0.38 $ 1.55 0 The aggregate intrinsic value in the preceding table represents the difference between the Company’s closing stock price and the exercise price of each in-the-money option on the last trading day of the period presented which was March 31, 2020. At March 31, 2020, there are no unvested outstanding options to purchase shares of the Company’s common stock and that will result in no additional compensation expense. We sponsor a defined contribution 401(k) plan adopted in fiscal year 2017, under which eligible associates voluntarily contribute to the plan, up to IRS maximums, through payroll deductions. We match a percentage of contributions, up to a stated limit, with all matching contributions being fully vested immediately. Our matching contributions under the 401(k) plan were $63,000 and $41,000 for the fiscal years ended March 31, 2020 and 2019, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Note 5 – Income Taxes Under the provisions of GAAP, a deferred tax asset or liability (net of valuation allowance) is provided in the financial statements by applying the provisions of applicable laws to measure the deferred tax consequences of temporary differences that will result in taxable or deductible amounts in the future years as a result of events recognized in the financial statements in the current or preceding years. Income/(loss) before provision for income taxes consisted of the following: (in thousands) For the Years Ended March 31, 2020 2019 United States $ 57 $ (291 ) Foreign - - Income(loss) before tax provision 57 $ (291 ) Income tax provision consisted of the following: (in thousands) For the Years Ended March 31, 2020 2019 Current: Federal $ - $ - Foreign - - State 1 1 1 1 Deferred: Federal - - Foreign - - State - - - - Income tax provision $ 1 $ 1 Reconciliation of effective tax rate: For the Years Ended March 31, 2020 2019 Federal taxes at statutory rate 21.00 % 21.00 % State taxes, net of federal benefit 61.09 % 5.34 % Other Permanent items 14.73 % -2.63 % Other Adjustments 56.79 % 17.73 % Valuation allowance -152.22 % -33.27 % Stock-based compensation 0.00 % -8.45 % Effective income tax rate 1.39 % -0.28 % (in thousands) As of March 31, 2020 2019 Non-Current Deferred Tax Assets and Liabilities: Net Operating Loss $ 3,491 $ 3,441 R & D credit carryforwards 597 597 Intangibles and fixed assets - 40 ASC 842 lease liability 286 - Accrued compensation 211 121 Allowance for bad debt 86 22 Reserve for customer returns 98 78 Warranty reserve 51 42 Reserve for obsolete inventory 34 32 Stock-compensation 4 44 Other 12 15 Prepaid expenses (180 ) (77 ) Fixed asset basis (143 ) - Right of use asset (279 ) - Valuation allowance (4,268 ) (4,355 ) Non-Current Deferred Tax Assets and Liabilities, Net $ - $ - ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is "more likely than not." Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carryforward period. Because of the Company's recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. Income tax expense for the years ended March 31, 2020 and 2019 is recorded within the other expense line of the statement of operations. The valuation allowance increased (decreased) by $(87,000) during 2020 and $97,000 during 2019. Net operating losses and tax credit carryforwards as of the Financial Statement Date are as follows: (in thousands) Amount Expiration Years Net operating losses, federal (Post September 30, 2019) $ 2,976 Do not Expire Net operating losses, federal (Pre September 30, 2019) 13,089 2031-2037 Tax credits, federal 597 2023-2028 ASC 740 provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Tax positions must meet a “more-likely-than-not” recognition threshold before a benefit is recognized in the financial statements. As of March 31, 2020, the Company has not recorded a liability for uncertain tax positions. Included in net deferred tax assets is $597,000 of federal research credits that may offset future taxable income through 2023. While the Company believes that the credit calculations are correct, it is possible that upon an examination by taxing authorities, the research credits available to offset future taxable income may be reduced in whole or in part. However, as the Company is not currently recognizing a benefit for the research credits, there is no impact to the financial statements pursuant to ASC 740. There have been no income tax related interest or penalties assessed or recorded and if interest and penalties were to be assessed, the Company would charge interest and penalties to income tax expense. It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date. The Company files income tax returns in the U.S. and various state jurisdictions and there are open statutes of limitations for taxing authorities to audit the Company’s tax returns from years ended March 31, 2016 through the current period. On March 27, 2020, President Trump signed into U.S. federal law the CARES Act, which is aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the COVID-19 pandemic and generally supporting the U.S. economy. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit (“AMT”) refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. In particular, the CARES Act, (i) eliminates the 80% of taxable income limitation by allowing corporate entities to fully utilize NOLs to offset taxable income in 2018, 2019 or 2020, (ii) increases the net interest expense deduction limit to 50% of adjusted taxable income from 30% for tax years beginning January 1, 2019 and 2020 and (iii) allows taxpayers with AMT credits to claim a refund in 2020 for the entire amount of the credit instead of recovering the credit through refunds over a period of years, as originally enacted by the Tax Cuts and Jobs Act in 2017. Passage of the CARES Act did not have a material impact on the Company’s income tax. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 6 – Related Party Transactions See Note 2 “Notes Payable and Long Term Debt,” and Note 8 “Stockholders’ Equity” to our financial statements for discussion related to debt and equity transactions involving our officers, directors and 5% or greater shareholders. As described therein, Scotts Miracle-Gro owns more than 80% of the Company’s common stock and has appointed three of the Company’s five directors. On June 20, 2019, the Company entered into a Working Capital Term Loan Agreement in the principal amount of up to $10.0 million with Scotts Miracle-Gro. Interest was charged at the stated rate of 10% per annum. As disclosed above in Note 2 under the caption “Scotts Miracle-Gro Term Loan,” the principal and interest due on the Working Capital Term Loan was paid in full during February 2020, leaving a $0 balance due at March 31, 2020. On June 20, 2019, the Company entered into a Real Estate Term Loan Agreement in the principal amount of up to $1.5 million with Scotts Miracle-Gro with a due date of March 31, 2022. Interest was charged at the stated rate of 10% per annum. As disclosed above in Note 2 under the caption “Scotts Miracle-Gro Term Loan,” the principal and interest balance of the Real Estate Term Loan at March 31, 2020, was $915,000 which included principal and interest. During the year ended March 31, 2020 and 2019, the Company sold product to Scotts Miracle-Gro for approximately $14,000 and $5,000, respectively. Additionally, for the year ended March 31, 2020, we paid Scotts Miracle-Gro $377,000 for charges incurred related to insurance for directors and officers, use of equipment purchased by Scotts Miracle-Gro and consulting expertise from select employees. For the year ended March 31, 2019, we paid Scotts Miracle-Gro $176,000 incurred related to insurance for directors and officers, use of equipment purchased by Scotts Miracle-Gro and consulting expertise from select employees. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 7 – Commitments and Contingencies We lease an office space in Boulder, Colorado. We lease 14,630 square feet with a current monthly rent of $21,000. We also pay our proportionate share of building taxes, insurance and operating expenses. The lease term expires September 30, 2026. The agreement contains other standard office lease provisions. During 2020, we moved our corporate office and did not renew a lease agreement to lease office space in Boulder, Colorado which expired September 30, 2019. The leased space was 11,182 square feet with a monthly rent of $12,000. We also paid our proportionate share of building taxes, insurance and operating expenses. The agreement contained other standard office lease provisions. In May 2011, the Company reached an agreement with Abacus Logistics Solutions to provide warehousing, distribution and fulfillment operations, and seed pod kit manufacturing. The agreement calls for a monthly $10,000 facility charge. The Company has extended its agreement with Wildernest Logistics Solutions effective April 17, 2014 for a two-year term with automatic one-year renewals. Future cash payments under such agreements for the remaining years are as follows: Year Ending Rent (in thousands) March 31, 2021 $ 185 March 31, 2022 266 March 31, 2023 275 March 31, 2024 285 March 31, 2025 294 Thereafter 460 $ 1,765 During Fiscal 2019, we were the target of a sophisticated external cyber-attack. The attackers gained unauthorized access to certain of our information technology systems. We have continued to implement security enhancements since this incident and are supporting federal law enforcement efforts to identify the responsible parties. Upon discovery of the cyber-attack, we took immediate action to remediate the security vulnerability and identify solutions based on the evolving landscape. We have incurred expenses subsequent to the cyber-attack to investigate and remediate this matter and expect to continue to incur expenses of this nature in the foreseeable future. We will recognize these expenses in the periods in which they are incurred and there are no material liabilities that exist as of March 31, 2020 and 2019 related to this cyber-attack. |
Leases
Leases | 12 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Lessee, Operating Leases [Text Block] | Note 8 – Leases The Company adopted ASU 2016-02, "Leases" “ASC 842” on April 1, 2019, the Company adopted using the modified retrospective approach applied to all leases with a remaining lease term greater than one year. Results for reporting periods beginning after April 1, 2019, are presented in accordance with the new guidance under ASC 842, while prior period amounts are not restated. The adoption of the new lease guidance resulted in the Company recognizing operating lease ROU assets and lease liabilities based on the present value of remaining minimum lease payments less incentives for tenant improvements. For the discount rate assumption, the implicit rate was not readily determinable in the Company’s lease agreements. Therefore, the Company used an estimated incremental borrowing rate, in determining the present value of lease payments. There was no impact to opening retained earnings. The Company elected the practical expedients available under ASC 842 and applied them consistently to all applicable leases. The Company did not apply ASC 842 to any leases with a remaining term of 12 months or less. For these leases, no asset or liability was recorded and lease expense continues to be recognized on a straight-line basis over the lease term. As allowed by the practical expedients, the Company does not reassess whether any expired or existing contracts are or contain leases, does not reassess the lease classification for any expired or existing leases and does not reassess initial direct costs for existing leases. The table below sets forth supplemental Balance Sheet information for the Company’s leases. March 31, 2020 (in thousands) Assets Operating lease ROU assets $ 1,229 Liabilities Operating lease $ 1,259 As of March 31, 2020, the weighted average remaining lease term for operating leases was 7 years, and the weighted average discount rate was 10%. The table below sets forth the future cash payments under such agreements for the remaining years are as follows: Year Ending Operating Leases Financing Leases (in thousands) (in thousands) March 31, 2021 $ 185 30 March 31, 2022 266 - March 31, 2023 275 - March 31, 2024 285 - March 31, 2025 294 - Thereafter 460 - Total lease payments $ 1,765 30 Less: amount of lease payments representing interest (506 ) (1 ) Present value of future minimum lease payments 1,259 29 Less: current obligations under leases (58 ) (29 ) Long-term lease obligations $ 1,201 - Rent expense for the year ended March 31, 2020 and 2019 was $502,000 and $331,000, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Note 9 – Segment Information The Company has determined that its reportable segments are those that are based on its method of internal reporting and the perspective of the chief operating decision maker. The Company has two reportable segments, Retail Sales and Direct-to-Consumers. The Company evaluates performance based on the primary financial measure of contribution margin (“segment profit”). Segment profit reflects the income or loss from operations before corporate expenses, non-operating income, net interest expense, and income taxes. The Company doesn’t have an individually identified assets regarding specific segments as all processes to manufacture products are not different based on segment. Fiscal Year Ended March 31, 2020 (in thousands) Direct-to-consumer Retail Corporate/Other Consolidated Net sales $ 13,322 $ 25,892 $ - $ 39,214 Cost of revenue 8,537 16,648 - 25,185 Gross profit 4,785 9,244 - 14,029 Gross profit percentage 35.9 % 35.7 % - 35.8 % Sales and marketing (1) 1,376 3,302 1,480 6,158 Segment profit 3,409 5,942 (1,480 ) 7,871 Segment profit percentage 25.6 % 22.9 % - 20.1 % (1) Sales and marketing includes advertising, trade shows, media production and promotional products, general brand marketing and other as discussed in the sales and marketing section. Fiscal Year Ended March 31, 2019 (in thousands) Direct-to-consumer Retail Corporate/Other Consolidated Net sales $ 8,091 $ 26,275 $ - $ 34,366 Cost of revenue 5,737 16,658 - 22,395 Gross profit 2,354 9,617 - 11,971 Gross profit percentage 29.1 % 36.6 % - 34.8 % Sales and marketing (1) 802 3,575 1,324 5,701 Segment profit 1,552 6,042 (1,324 ) 6,270 Segment profit percentage 19.2 % 23.0 % - 18.2 % (1) Sales and marketing includes advertising, trade shows, media production and promotional products, general brand marketing and other as discussed in the sales and marketing section. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 10 – Subsequent Events None. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is reasonably possible that a change in the Company’s estimates will occur in the near term and such change could be material as information becomes available. Our significant estimates include the warranty and return reserves, going concern, inventory obsolescence reserves and allowances for sales and cooperative advertising. |
Earnings Per Share, Policy [Policy Text Block] | Net Income (Loss) per Share of Common Stock The Company computes net income (loss) per share of common stock in accordance with Accounting Standards Codification (“ASC”) 260. ASC 260 requires companies to present basic and diluted Earnings per Share (“EPS”). Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average shares of common stock outstanding for the period. Diluted EPS is similar to basic EPS, but presents the dilutive effect on a per share basis of common stock equivalents (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented. Potential shares of common stock that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS include the following: (i) employee stock options to purchase 11,000 shares of common stock for the period ended March 31, 2020; and (ii) employee stock options to purchase 94,000 shares for the period ended March 31, 2019. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents at March 31, 2020 and 2019. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash The Company has secured activity related to its corporate credit card purchase account with a restricted money market account. The balance in this account as of March 31, 2020 and 2019 was $15,000. |
Reclassification, Comparability Adjustment [Policy Text Block] | Reclassification Certain prior year figures have been reclassified to conform to current year presentation. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentrations of Risk ASC 825-10-50-20 requires disclosure of significant concentrations of credit risk regardless of the degree of such risk. Financial instruments with significant credit risk include cash deposits. The amounts on deposit with one financial institutions exceeded the $250,000 federally insured limit as of March 31, 2020. However, management believes that the financial institution is financially sound and the risk of loss is minimal. Customers and Accounts Receivable: For the year ended March 31, 2020, the Company had one customer, Amazon.com, which represented 36.6%, of the Company’s net revenue. For the year ended March 31, 2019, the Company had one customer, Amazon.com, which represented 40.5%, of the Company’s net revenue. As of March 31, 2020, the Company had three customers, Amazon.com, Amazon.ca and Bed, Bath and Beyond, which represented 39.9%, 20.7% and 10.4%, respectively of outstanding accounts receivable. As of March 31, 2019, the Company had two customers, Amazon.com and Target, which represented 44.3% and 12.0%, respectively, of outstanding accounts receivable. Management believes that all receivables from these customers are collectible. Suppliers: For the year ended March 31, 2020, the Company purchased inventories and other inventory related items from one supplier totaling $11.9 million representing 47.4% of cost of revenue. For the year ended March 31, 2019, the Company purchased inventories and other inventory related items from one supplier totaling $17.1 million representing 76.5% of cost of revenue. The Company’s primary contract manufacturers are located in China. As a result, the Company may be subject to political, global COVID-19 pandemic, currency, regulatory, shipping, labor and weather/natural disaster risks which could impact the manufacturer’s ability to fulfill our orders and disrupt our supply of product. Although the Company believes alternate sources of manufacturing could be obtained, these risks and any potential loss of supply could have an adverse impact on operations. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments The Company follows the guidance in ASC 820, Fair Value Measurements and Disclosures Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, i.e., exit price, in an orderly transaction between market participants. ASC 820 also provides a hierarchy for determining fair value, which emphasizes the use of observable market data whenever available. The three broad levels defined by the hierarchy are as follows, with the highest priority given to Level 1 as these are the most reliable, and the lowest priority given to Level 3. The three levels of the fair value hierarchy are described below: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Quoted prices for similar assets in active markets, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data, including model-derived valuations. Level 3: Unobservable inputs that are supported by little or no market activity. The carrying value of financial instruments, including cash, receivables, accounts payable and accrued expenses, approximates their fair value at March 31, 2020 and 2019 due to the relatively short-term nature of these instruments. The Company’s intellectual property liability carrying value was determined by Level 3 inputs. As discussed below in Notes 2 and 3, this liability was incurred in conjunction with the Company’s strategic alliance with Scotts Miracle-Gro. As of March 31, 2020 and 2019, the fair value of the Company’s sale of intellectual property liability was estimated using the discounted cash flow method, which is based on expected future cash flows, discounted to present value using a discount rate of 15%. The table below summarizes the fair value and carry value of each Level 3 category liability: March 31, 2020 March 31, 2019 Fair Value Carry Value Fair Value Carry Value (in thousands) Liabilities Sale of intellectual property liability $ 21 $ 24 $ 41 $ 48 Total $ 21 $ 24 $ 41 $ 48 The table below sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the periods ended March 31, 2020 and March 31, 2019. (in thousands) Sale of intellectual property liability Balance, March 31, 2018 $ 65 Amortization of intellectual property (24 ) Balance, March 31, 2019 $ 41 Amortization of intellectual property (20 ) Balance, March 31, 2020 $ 21 |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation for financial accounting purposes is computed using the straight-line method over the estimated lives of the respective assets. Computer equipment and computer software are depreciated over three years. Office equipment and manufacturing equipment are depreciated over five years. Tooling is depreciated over three years. Leasehold improvements are being amortized over the life of the lease. Property and equipment consist of the following: March 31, March 31, 2020 2019 (in thousands) Manufacturing equipment and tooling $ 5,006 $ 4,419 Computer equipment and software 1,105 857 Leasehold improvements 116 116 Other equipment and intangible assets 469 442 6,696 5,834 Less: accumulated depreciation and amortization (5,467 ) (4,828 ) Property and equipment, net $ 1,229 $ 1,006 Depreciation and amortization expense for the years ended March 31, 2020 and 2019, was $639,000, and $443,000, respectively. |
Inventory, Policy [Policy Text Block] | Inventory Inventories are valued at the lower of cost, determined on the basis of standard costing, which approximates the first-in, first-out method, or net realizable value. When the Company is the manufacturer, raw materials, labor and manufacturing overhead are included in inventory costs. The Company records the raw materials at delivered cost. Standard labor and manufacturing overhead costs are applied to the finished goods based on normal production capacity. A majority of the Company’s products are manufactured overseas and are recorded at standard cost, which includes product costs for purchased and manufactured products, and freight and transportation costs for inbound freight from manufacturers. March 31, March 31, 2020 2019 (in thousands) Finished goods $ 3,191 $ 7,071 Raw materials 1,597 1,369 $ 4,788 $ 8,440 The Company determines an inventory obsolescence reserve based on management’s historical experience and establishes reserves against inventory according to the age of the product. As of March 31, 2020 and 2019, the Company had reserved $151,000 and $126,000, respectively, for inventory obsolescence. |
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block] | Accounts Receivable and Allowance for Doubtful Accounts The Company sells its products to retailers and direct-to-consumer. Direct-to-consumer transactions are primarily paid by credit card. Retailer sales terms vary by customer, but are generally net 30 days to net 60 days. Accounts receivable are reported at net realizable value and net of the allowance for doubtful accounts. The Company uses the allowance method to account for uncollectible accounts receivable. The Company’s allowance estimate is based on a review of the current status of trade accounts receivable, which resulted in an allowance of $376,000 and $89,000 at March 31, 2020 and 2019, respectively. |
Receivable [Policy Text Block] | Other Receivables In conjunction with the Company’s processing of credit card transactions for its direct-to-consumer sales activities and as security with respect to the Company’s performance for required credit card refunds and charge backs, the Company is required to maintain a cash reserve with Vanity, the Company’s credit card processor. This reserve is equal to 5% of the credit card sales processed during the previous six months. As of March 31, 2020 and March 31, 2019, the balance in this reserve account was $257,000 and $207,000, respectively. |
Advertising Cost [Policy Text Block] | Advertising and Production Costs The Company expenses all production costs related to advertising, including, print, television, and radio advertisements when the advertisement has been broadcast or otherwise distributed. In contrast, the Company records media and marketing costs related to its direct-to-consumer advertisements, inclusive of postage and printing costs incurred in conjunction with mailings of direct response catalogues, and related direct response advertising costs, in accordance ASC 340-20 Capitalized Advertising Costs. As the Company has re-entered the retail distribution channel, the Company has expanded its advertising to online gateway and portal advertising, as well as placement in third party catalogues. Advertising expenses for the years ended March 31, 2020 and March 31, 2019, were as follows: Fiscal Year Ended March 31, 2020 2019 (in thousands) Direct-to-consumer $ 797 $ 674 Retail 3,007 3,093 Other 1,190 317 Total advertising expense $ 4,994 $ 4,084 As of March 31, 2020 and March 31, 2019, the Company had deferred $84,000 and $3,000, respectively, related to such media and advertising costs, which include pay-per-click, the catalogue cost described above and commercial production costs. These costs are included in the prepaid expenses and other line of the balance sheet. |
Research and Development Expense, Policy [Policy Text Block] | Research and Development Research, development, and engineering costs are expensed as incurred. Research, development, and engineering expenses primarily include payroll and headcount related costs, contractor fees, infrastructure costs, and administrative expenses directly related to research and development support. |
Share-based Payment Arrangement [Policy Text Block] | Stock-Based Compensation The Company accounts for share-based payments in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718-10-55 Shared-Based Payment |
Income Tax, Policy [Policy Text Block] | Income Taxes Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at the end of each period, based on enacted laws and statutory rates applicable to the periods in which the differences are expected to affect taxable income. Any liability for actual taxes to taxing authorities is recorded as income tax liability. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established against such assets where management is unable to conclude that it is “more likely than not” that the value of such asset will be realized. As of March 31, 2020 and 2019, the Company recognized a valuation allowance equal to 100% of the net deferred tax asset balance. |
Lessee, Leases [Policy Text Block] | Leases At lease inception, the Company determines whether an arrangement is or contains a lease. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities in the financial statements. ROU assets represent the Company’s right to use leased assets over the term of the lease. Lease liabilities represent the Company’s contractual obligation to make lease payments over the lease term. For operating leases, ROU assets and lease liabilities are recognized at the commencement date. The lease liability is measured as the present value of the lease payments over the lease term. The Company uses the rate implicit in the lease if it is determinable. When the rate implicit in the lease is not determinable, the Company uses its incremental borrowing rate at the commencement date of the lease to determine the present value of the lease payments. Operating ROU assets are calculated as the present value of the remaining lease payments, plus unamortized initial direct costs and any prepayments, less any unamortized lease incentives received. Lease terms may include renewal or extension options to the extent they are reasonably certain to be exercised. The assessment of whether renewal or extension options are reasonably certain to be exercised is made at lease commencement. Factors considered in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of any leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option were not exercised. Lease expense is recognized on a straight-line basis over the lease term. The Company has elected not to recognize an ROU asset and obligation for leases with an initial term of twelve months or less. The expense associated with short term leases is included in lease expense in the statement of operations. For finance leases, after lease commencement the lease liability is measured on an amortized cost basis and increased to reflect interest on the liability and decreased to reflect the lease payment made during the period. Interest on the lease liability is determined each period during the lease term as the amount that results in a constant period discount rate on the remaining balance of the liability. The ROU asset is subsequently measured at cost, less any accumulated amortization and any accumulated impairment losses. Amortization on the ROU asset is recognized over the period from the commencement date to the earlier of (1) the end of the useful life of the ROU asset, or (2) the end of the lease term. The discount rate used by the Company for the finance leases is 10.0% which is the rate specified in the lease agreement or incremental borrowing rate, as appropriate, as the present value rate. To the extent a lease arrangement includes both lease and non-lease components, the components are accounted for separately. The Company has various operating leases primarily for office space and other distribution centers, some of which include escalating lease payments and options to extend or terminate the lease. The Company determines if a contract is a lease at the inception of the arrangement. The exercise of lease renewal option is at the Company’s sole discretion and options are recognized when it is reasonably certain the Company will exercise the option. The Company’s leases have remaining terms of less than one year to seven years. The Company does not have lease agreements with residual value guarantees, sale leaseback terms or material restrictive covenants. |
Revenue [Policy Text Block] | Revenue Recognition The Company currently has two operating and reportable segments: (i) the Direct-to-Consumer segment, which is composed of sales directly from our website, mail order or customer calls to our customer service department; and (ii) the Retail segment, which is comprised of all sales related to retailers, including where possession of our product is taken and sold by the retailer in store or online, and drop ship orders that process from the retailer and drop directly to our warehouse for us to ship on behalf of the retailer. The majority of the Company’s revenue is recognized at a point in time as the products are homogenous and can be sold to a variety of customers and when it satisfies a single performance obligation by transferring control of its products and the risk of loss to a customer. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms. The Company did not have any material unsatisfied performance obligations as of March 31, 2020 or March 31, 2019. The Company excludes from revenues all taxes assessed by a governmental authority that are imposed on the sale of its products and collected from customers. Promotional and other allowances (variable consideration) recorded as a reduction to net sales, primarily include consideration given to retail customers including, but not limited to the following: ● discounts granted off list prices to support price promotions to end-consumers by retailers; ● the Company’s agreed share of fees given directly to retailers for advertising, in-store marketing and promotional activities; and ● incentives given to the Company’s retailers for achieving or exceeding certain predetermined purchases (i.e., rebates). The Company’s promotional allowance programs with its retailers are executed through separate agreements in the ordinary course of business. These agreements generally provide for one or more of the arrangements described above and are of varying durations, ranging from one day to one year. The Company’s promotional and other allowances are calculated based on various programs with retail customers, and accruals are established during the year for its anticipated liabilities. These accruals are based on agreed upon terms, as well as the Company’s historical experience with similar programs, and require management’s judgment with respect to estimating consumer participation and retail customer performance levels. Differences between such estimated expense and actual expenses for promotional and other allowance costs have historically been insignificant and are recognized in earnings in the period such differences are determined. The Company records estimated reductions to revenue for customer and distributor programs and incentive offerings, including promotions, rebates, and other volume-based incentives, based on historical rates. Certain incentive programs require the Company to estimate the number of customers who will actually redeem the incentive based on historical industry experience. As of March 31, 2020 and 2019, the Company reduced accounts receivable $744,000 and $1.2 million, respectively, as an estimate for the foregoing deductions and allowances within the “accounts receivable, net” line of the balance sheets, respectively. |
Standard Product Warranty, Policy [Policy Text Block] | Warranty and Return Reserves The Company records warranty liabilities at the time of sale for the estimated costs that may be incurred under its basic warranty program. The specific warranty terms and conditions vary depending upon the product sold, but generally include technical support, repair parts and labor for periods up to one year. Factors that affect the Company’s warranty liability include the number of installed units currently under warranty, historical and anticipated rates of warranty claims on those units, and cost per claim to satisfy the Company’s warranty obligation. Based upon the foregoing, the Company has recorded as of March 31, 2020 and 2019 a provision for potential future warranty costs of $226,000 and $166,000, respectively. These reserves are recorded in the accrued expenses line of the balance sheets. The Company reserves for known and potential returns from customers and associated refunds or credits related to such returns based upon historical experience. In certain cases, retail customers are provided a fixed allowance, usually in the 1% to 2% range, to cover returned goods and this allowance is deducted from payments made to us by such customers. As of March 31, 2020 and 2019, the Company has recorded a reserve for customer returns of $430,000 and $313,000, respectively. These expenses are included in the accrued expenses line of the balance sheets. |
Shipping and Handling Cost, Policy [Policy Text Block] | Shipping and Handling Costs Shipping and handling costs associated with inbound freight are recorded in cost of revenue and are capitalized in inventory until the inventory is sold. Shipping and handling costs associated with freight out to customers are also included in cost of revenue. Shipping and handling charges paid by customers are included in net revenue. |
Segment Reporting, Policy [Policy Text Block] | Segments of an Enterprise and Related Information GAAP utilizes a management approach based on allocating resources and assessing performance as the source of the Company’s reportable segments. GAAP also requires disclosures about products and services, geographic areas and major customers. At present, the Company operates in two segments, Direct-to-Consumer and Retail Sales. |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments,” which requires entities to estimate all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The updated guidance also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument. This guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within that reporting period, and early adoption is permitted. The Company is in the process of evaluating the potential impact of this new guidance on the Company’s consolidated financial statements and related disclosures. Accounting Standards Recently Adopted In February 2016, the FASB issued ASU 2016-02, Leases (“ASC 842”), which, among other things, requires an entity to recognize a right-of-use (“ROU”) asset and a lease liability on the balance sheet for substantially all leases, including operating leases. The Company adopted ASC 842 effective April 1, 2019 utilizing the modified retrospective approach such that prior year Financial Statements were not recast under the new standard. Adoption of this standard resulted in changes to the Company’s Balance Sheets, Statements of Operations and accounting policies for leases but did not have an impact on the Statements of Cash Flows. See Note 8 for additional information regarding the new standard and its impact on the Company’s Financial Statements. |
Description of the Business a_2
Description of the Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The Company’s intellectual property liability carrying value was determined by Level 3 inputs. As discussed below in Notes 2 and 3, this liability was incurred in conjunction with the Company’s strategic alliance with Scotts Miracle-Gro. As of March 31, 2020 and 2019, the fair value of the Company’s sale of intellectual property liability was estimated using the discounted cash flow method, which is based on expected future cash flows, discounted to present value using a discount rate of 15%. The table below summarizes the fair value and carry value of each Level 3 category liability: March 31, 2020 March 31, 2019 Fair Value Carry Value Fair Value Carry Value (in thousands) Liabilities Sale of intellectual property liability $ 21 $ 24 $ 41 $ 48 Total $ 21 $ 24 $ 41 $ 48 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The table below sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the periods ended March 31, 2020 and March 31, 2019. (in thousands) Sale of intellectual property liability Balance, March 31, 2018 $ 65 Amortization of intellectual property (24 ) Balance, March 31, 2019 $ 41 Amortization of intellectual property (20 ) Balance, March 31, 2020 $ 21 |
Property, Plant and Equipment [Table Text Block] | Property and equipment consist of the following: March 31, March 31, 2020 2019 (in thousands) Manufacturing equipment and tooling $ 5,006 $ 4,419 Computer equipment and software 1,105 857 Leasehold improvements 116 116 Other equipment and intangible assets 469 442 6,696 5,834 Less: accumulated depreciation and amortization (5,467 ) (4,828 ) Property and equipment, net $ 1,229 $ 1,006 |
Schedule of Inventory, Current [Table Text Block] | Inventories are valued at the lower of cost, determined on the basis of standard costing, which approximates the first-in, first-out method, or net realizable value. When the Company is the manufacturer, raw materials, labor and manufacturing overhead are included in inventory costs. The Company records the raw materials at delivered cost. Standard labor and manufacturing overhead costs are applied to the finished goods based on normal production capacity. A majority of the Company’s products are manufactured overseas and are recorded at standard cost, which includes product costs for purchased and manufactured products, and freight and transportation costs for inbound freight from manufacturers. March 31, March 31, 2020 2019 (in thousands) Finished goods $ 3,191 $ 7,071 Raw materials 1,597 1,369 $ 4,788 $ 8,440 |
Schedule of Advertising Expenses [Table Text Block] | Advertising expenses for the years ended March 31, 2020 and March 31, 2019, were as follows: Fiscal Year Ended March 31, 2020 2019 (in thousands) Direct-to-consumer $ 797 $ 674 Retail 3,007 3,093 Other 1,190 317 Total advertising expense $ 4,994 $ 4,084 |
Notes Payable and Long Term D_2
Notes Payable and Long Term Debt (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | We relied upon a variety of debt funding sources to meet our liquidity requirements during the fiscal years ended March 31, 2020 and 2019, as summarized below: March 31, March 31, 2020 (in thousands) 2019 (in thousands) Notes payable and debt-related party $ 915 $ - Sale of intellectual property liability (see Note 3) 24 48 Total notes payable and debt 939 48 Less current portion-long term debt 39 25 Long term debt $ 900 $ 23 |
Equity Compensation Plans and_2
Equity Compensation Plans and Employee Benefit Plans (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement, Disclosure [Abstract] | |
Share-based Payment Arrangement, Option, Activity [Table Text Block] | A summary of option activity in the 2005 Plan is as follows: Exercise price Options Weighted- (in thousands) Low High Average Balances at April 1, 2018 175 $ 1.10 $ 5.31 $ 3.50 Granted - - - - Exercised - - - - Forfeited 70 2.20 2.20 - Balances at March 31, 2019 105 $ 1.55 $ 5.31 $ 4.90 Granted - - - - Exercised - - - - Forfeited 94 5.31 5.31 - Balances at March 31, 2020 11 $ 1.55 $ 1.55 $ 1.55 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] | Information regarding all stock options outstanding under the 2005 Plan as of March 31, 2020 is as follows: OPTIONS OUTSTANDING AND EXERCISABLE Weighted- average Weighted- Aggregate Remaining average Intrinsic Options Contractual Exercise Value Exercise price (in thousands) Life (years) Price (in thousands) $ 1.55 11 0.38 $ 1.55 0 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | Under the provisions of GAAP, a deferred tax asset or liability (net of valuation allowance) is provided in the financial statements by applying the provisions of applicable laws to measure the deferred tax consequences of temporary differences that will result in taxable or deductible amounts in the future years as a result of events recognized in the financial statements in the current or preceding years. Income/(loss) before provision for income taxes consisted of the following: (in thousands) For the Years Ended March 31, 2020 2019 United States $ 57 $ (291 ) Foreign - - Income(loss) before tax provision 57 $ (291 ) |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Income tax provision consisted of the following: (in thousands) For the Years Ended March 31, 2020 2019 Current: Federal $ - $ - Foreign - - State 1 1 1 1 Deferred: Federal - - Foreign - - State - - - - Income tax provision $ 1 $ 1 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Reconciliation of effective tax rate: For the Years Ended March 31, 2020 2019 Federal taxes at statutory rate 21.00 % 21.00 % State taxes, net of federal benefit 61.09 % 5.34 % Other Permanent items 14.73 % -2.63 % Other Adjustments 56.79 % 17.73 % Valuation allowance -152.22 % -33.27 % Stock-based compensation 0.00 % -8.45 % Effective income tax rate 1.39 % -0.28 % |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | (in thousands) As of March 31, 2020 2019 Non-Current Deferred Tax Assets and Liabilities: Net Operating Loss $ 3,491 $ 3,441 R & D credit carryforwards 597 597 Intangibles and fixed assets - 40 ASC 842 lease liability 286 - Accrued compensation 211 121 Allowance for bad debt 86 22 Reserve for customer returns 98 78 Warranty reserve 51 42 Reserve for obsolete inventory 34 32 Stock-compensation 4 44 Other 12 15 Prepaid expenses (180 ) (77 ) Fixed asset basis (143 ) - Right of use asset (279 ) - Valuation allowance (4,268 ) (4,355 ) Non-Current Deferred Tax Assets and Liabilities, Net $ - $ - |
Summary of Operating Loss Carryforwards [Table Text Block] | The valuation allowance increased (decreased) by $(87,000) during 2020 and $97,000 during 2019. Net operating losses and tax credit carryforwards as of the Financial Statement Date are as follows: (in thousands) Amount Expiration Years Net operating losses, federal (Post September 30, 2019) $ 2,976 Do not Expire Net operating losses, federal (Pre September 30, 2019) 13,089 2031-2037 Tax credits, federal 597 2023-2028 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Future cash payments under such agreements for the remaining years are as follows: Year Ending Rent (in thousands) March 31, 2021 $ 185 March 31, 2022 266 March 31, 2023 275 March 31, 2024 285 March 31, 2025 294 Thereafter 460 $ 1,765 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block [Abstract] | |
Lessee, Operating Lease, Disclosure [Table Text Block] | The table below sets forth supplemental Balance Sheet information for the Company’s leases. March 31, 2020 (in thousands) Assets Operating lease ROU assets $ 1,229 Liabilities Operating lease $ 1,259 |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | The table below sets forth the future cash payments under such agreements for the remaining years are as follows: Year Ending Operating Leases Financing Leases (in thousands) (in thousands) March 31, 2021 $ 185 30 March 31, 2022 266 - March 31, 2023 275 - March 31, 2024 285 - March 31, 2025 294 - Thereafter 460 - Total lease payments $ 1,765 30 Less: amount of lease payments representing interest (506 ) (1 ) Present value of future minimum lease payments 1,259 29 Less: current obligations under leases (58 ) (29 ) Long-term lease obligations $ 1,201 - |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The Company has determined that its reportable segments are those that are based on its method of internal reporting and the perspective of the chief operating decision maker. The Company has two reportable segments, Retail Sales and Direct-to-Consumers. The Company evaluates performance based on the primary financial measure of contribution margin (“segment profit”). Segment profit reflects the income or loss from operations before corporate expenses, non-operating income, net interest expense, and income taxes. The Company doesn’t have an individually identified assets regarding specific segments as all processes to manufacture products are not different based on segment. Fiscal Year Ended March 31, 2020 (in thousands) Direct-to-consumer Retail Corporate/Other Consolidated Net sales $ 13,322 $ 25,892 $ - $ 39,214 Cost of revenue 8,537 16,648 - 25,185 Gross profit 4,785 9,244 - 14,029 Gross profit percentage 35.9 % 35.7 % - 35.8 % Sales and marketing (1) 1,376 3,302 1,480 6,158 Segment profit 3,409 5,942 (1,480 ) 7,871 Segment profit percentage 25.6 % 22.9 % - 20.1 % Fiscal Year Ended March 31, 2019 (in thousands) Direct-to-consumer Retail Corporate/Other Consolidated Net sales $ 8,091 $ 26,275 $ - $ 34,366 Cost of revenue 5,737 16,658 - 22,395 Gross profit 2,354 9,617 - 11,971 Gross profit percentage 29.1 % 36.6 % - 34.8 % Sales and marketing (1) 802 3,575 1,324 5,701 Segment profit 1,552 6,042 (1,324 ) 6,270 Segment profit percentage 19.2 % 23.0 % - 18.2 % (1) Sales and marketing includes advertising, trade shows, media production and promotional products, general brand marketing and other as discussed in the sales and marketing section. |
Description of the Business a_3
Description of the Business and Summary of Significant Accounting Policies (Details) - USD ($) | Apr. 22, 2013 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 20, 2019 |
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Net Income (Loss) Attributable to Parent | $ 57,000 | $ (291,000) | ||
Retained Earnings (Accumulated Deficit) | (128,342,000) | (128,399,000) | ||
Debt Instrument, Face Amount | $ 1,500,000 | |||
Restricted Cash | 15,000 | |||
Cash, FDIC Insured Amount | 250,000 | |||
Depreciation | 639,000 | 443,000 | ||
Inventory Adjustments | 151,000 | 126,000 | ||
Accounts Receivable, Allowance for Credit Loss | $ 376,000 | 89,000 | ||
Other receivable, reserve percentage of credit card sales | 5.00% | |||
Other Receivables | $ 257,000 | 207,000 | ||
Prepaid Advertising | $ 84,000 | 3,000 | ||
Lessee, Finance Lease, Discount Rate | 10.00% | |||
Increase (Decrease) in Accounts and Other Receivables | $ (744,000) | (1,200,000) | ||
Provision for Future Warranty Costs | $ 226,000 | $ 166,000 | ||
Number of Operating Segments | 2 | |||
Minimum [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Lessee, Operating Lease, Term of Contract | 1 year | |||
Returns Reserves Allowance, Percentage | 1.00% | |||
Maximum [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Lessee, Operating Lease, Term of Contract | 7 years | |||
Returns Reserves Allowance, Percentage | 2.00% | |||
Working Capital Term Loan Agreement [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Debt Instrument, Face Amount | $ 10,000,000 | |||
Share-based Payment Arrangement, Option [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 11,000 | 94,000 | ||
Sales Returns and Allowances [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Customer Refund Liability, Current | $ 430,000 | $ 313,000 | ||
Computer Equipment [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Office Equipment [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 5 years | |||
Equipment [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 3 years | |||
Measurement Input, Discount Rate [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Fair Value, Option, Relation to Measurement Inputs | 15% | |||
Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | Major Supplier 1 [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 47.40% | 76.50% | ||
Payments to Suppliers | $ 11,900,000 | $ 17,100,000 | ||
Amazon.com [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 36.60% | 40.50% | ||
Amazon.com [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 39.90% | |||
Amazon.com [Member] | Credit Concentration Risk [Member] | Accounts Receivable [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 44.30% | |||
Amazon.ca [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 20.70% | |||
Bed Bath & Beyond [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 10.40% | |||
Target [Member] | Credit Concentration Risk [Member] | Accounts Receivable [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration Risk, Percentage | 12.00% | |||
Scotts Miracle-Gro Company [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Proceeds from Sale of Intangible Assets | $ 500,000 | |||
Scotts Miracle-Gro Company [Member] | Series B Preferred Stock [Member] | ||||
Description of the Business and Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Stock Issued During Period, Shares, New Issues (in Shares) | 2,649,007 | |||
Stock Issued During Period, Value, New Issues | $ 4,000,000 | |||
Proceeds from Sale of Intangible Assets | $ 500,000 |
Description of the Business a_4
Description of the Business and Summary of Significant Accounting Policies (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Liabilities | ||
Sale of intellectual property liability | $ 21 | $ 41 |
Sale of intellectual property liability | 24 | 48 |
Total | 21 | 41 |
Total | $ 24 | $ 48 |
Description of the Business a_5
Description of the Business and Summary of Significant Accounting Policies (Details) - Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | ||
Balance | $ 41 | $ 65 |
Amortization of intellectual property | (20) | (24) |
Balance | $ 21 | $ 41 |
Description of the Business a_6
Description of the Business and Summary of Significant Accounting Policies (Details) - Property, Plant and Equipment - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 6,696 | $ 5,834 |
Less: accumulated depreciation and amortization | (5,467) | (4,828) |
Property and equipment, net | 1,229 | 1,006 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,006 | 4,419 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,105 | 857 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 116 | 116 |
Other Capitalized Property Plant and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 469 | $ 442 |
Description of the Business a_7
Description of the Business and Summary of Significant Accounting Policies (Details) - Schedule of Inventory - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Schedule of Inventory [Abstract] | ||
Finished goods | $ 3,191 | $ 7,071 |
Raw materials | 1,597 | 1,369 |
Total inventory | $ 4,788 | $ 8,440 |
Description of the Business a_8
Description of the Business and Summary of Significant Accounting Policies (Details) - Schedule of Advertising Expenses - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Description of the Business and Summary of Significant Accounting Policies (Details) - Schedule of Advertising Expenses [Line Items] | ||
Advertising expense | $ 4,994 | $ 4,084 |
Direct-to-consumer [Member] | ||
Description of the Business and Summary of Significant Accounting Policies (Details) - Schedule of Advertising Expenses [Line Items] | ||
Advertising expense | 797 | 674 |
Retail [Member] | ||
Description of the Business and Summary of Significant Accounting Policies (Details) - Schedule of Advertising Expenses [Line Items] | ||
Advertising expense | 3,007 | 3,093 |
Other Advertising [Member] | ||
Description of the Business and Summary of Significant Accounting Policies (Details) - Schedule of Advertising Expenses [Line Items] | ||
Advertising expense | $ 1,190 | $ 317 |
Notes Payable and Long Term D_3
Notes Payable and Long Term Debt (Details) - USD ($) | Jun. 20, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Notes Payable and Long Term Debt (Details) [Line Items] | |||
Notes Payable | $ 0 | ||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||
Debt Instrument, Face Amount | $ 1,500,000 | ||
Proceeds from Related Party Debt | 5,400,000 | $ 6,000,000 | |
Debt, Current | 24,000 | 48,000 | |
Working Capital Term Loan Agreement [Member] | |||
Notes Payable and Long Term Debt (Details) [Line Items] | |||
Debt Instrument, Face Amount | 10,000,000 | ||
Scotts Miracle-Gro Company [Member] | |||
Notes Payable and Long Term Debt (Details) [Line Items] | |||
Debt, Current | 24,000,000 | $ 48,000,000 | |
Scotts Miracle-Gro Company [Member] | Working Capital Term Loan Agreement [Member] | |||
Notes Payable and Long Term Debt (Details) [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 10,000,000 | ||
Debt Instrument, Description | The proceeds were made available as needed in increments of $500,000, the Company may pay down and reborrow during the Term Loan, not to exceed $10.0 million | ||
Debt Instrument, Maturity Date | Mar. 31, 2020 | ||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||
Line of Credit, Current | 4,500 | ||
Repayments of Long-term Lines of Credit | 2,020,000,000 | ||
Scotts Miracle-Gro Company [Member] | Real Estate Term Loan Agreement [Member] | |||
Notes Payable and Long Term Debt (Details) [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||
Debt Instrument, Face Amount | $ 1,500,000 | ||
Proceeds from Related Party Debt | $ 900,000 |
Notes Payable and Long Term D_4
Notes Payable and Long Term Debt (Details) - Schedule of Debt - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Schedule of Debt [Abstract] | ||
Notes payable and debt-related party | $ 915,000 | $ 0 |
Sale of intellectual property liability (see Note 3) | 24,000 | 48,000 |
Total notes payable and debt | 939,000 | 48,000 |
Less current portion-long term debt | 39,000 | 25,000 |
Long term debt | $ 900,000 | $ 23,000 |
Scotts Miracle-Gro Transactio_2
Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions (Details) - USD ($) | Apr. 22, 2013 | Mar. 31, 2020 | Mar. 31, 2019 |
Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions (Details) [Line Items] | |||
Debt, Current | $ 24,000 | $ 48,000 | |
Accrued Liabilities, Current | 2,308,000 | 1,437,000 | |
Scotts Miracle-Gro Company [Member] | |||
Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions (Details) [Line Items] | |||
Proceeds from Sale of Intangible Assets | $ 500,000 | ||
Licensing Agreement Payment Terms | annual fee equal to 7% of the cost of goods of all products that Scotts Miracle-Gro purchases from the Company or a vendor, in exploiting the Hydroponic IP internationally (outside of the Company Markets) over the course of each contract year during the term of the Securities Purchase Agreement | ||
Series B Preferred Stock [Member] | Scotts Miracle-Gro Company [Member] | |||
Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions (Details) [Line Items] | |||
Stock Issued During Period, Shares, New Issues (in Shares) | 2,649,007 | ||
Shares Issued, Price Per Share (in Dollars per share) | $ 0.001 | ||
Stock Issued During Period, Value, New Issues | $ 4,000,000 | ||
Convertible Preferred Stock, Terms of Conversion | On November 29, 2016 Scotts Miracle-Gro fully exercised the Warrant and upon exercise of the Warrant the Series B Preferred Stock converted into shares of common stock. | ||
Proceeds from Sale of Intangible Assets | $ 500,000 | ||
Technology License Agreement [Member] | Scotts Miracle-Gro Company [Member] | |||
Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions (Details) [Line Items] | |||
Royalty, Percentage | 2.00% | ||
Accrued Liabilities, Current | 1,500,000 | 680,000 | |
Royalty Expense | $ 784,000 | 680,000 | |
Licensing Agreement Term | 5 years | ||
Brand License Agreement [Member] | Scotts Miracle-Gro Company [Member] | |||
Scotts Miracle-Gro Transactions – Convertible Preferred Stock, Warrants and Other Transactions (Details) [Line Items] | |||
Accrued Liabilities, Current | $ 932,000 | 422,000 | |
Royalty Expense | $ 510,000 | $ 422,000 | |
Licensing Agreement Term | 5 years |
Equity Compensation Plans and_3
Equity Compensation Plans and Employee Benefit Plans (Details) - USD ($) | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 30, 2018 | |
Equity Compensation Plans and Employee Benefit Plans (Details) [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 13,505,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 11,300 | 105,000 | 175,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 1,550 | $ 4,900 | $ 3,500 | |
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 63,000 | $ 41,000 | ||
Equity Compensation Plan (2005 Plan) [Member] | ||||
Equity Compensation Plans and Employee Benefit Plans (Details) [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 1.55 |
Equity Compensation Plans and_4
Equity Compensation Plans and Employee Benefit Plans (Details) - Share-based Payment Arrangement, Option, Activity - $ / shares | Mar. 31, 2018 | Mar. 31, 2020 | Mar. 31, 2019 |
Share-based Payment Arrangement, Option, Activity [Abstract] | |||
Options Outstanding (in Shares) | 175,000 | 105,000 | |
Options Outstanding, Exercise Price Range, Low Range | $ 1,100 | $ 1,550 | $ 1,550 |
Options Outstanding, Exercise Price Range, High Range | 5,310 | 1,550 | 5,310 |
Options Outstanding, Weighted Average Exercise Price | $ 3,500 | $ 1,550 | $ 4,900 |
Options Granted (in Shares) | 0 | 0 | |
Options Exercised (in Shares) | 0 | 0 | |
Options Forfeited (in Shares) | 94,000 | 70,000 | |
Options Forfeited, Exercise Price Range, Low Range | $ 5,310 | $ 2,200 | |
Options Forfeited, Exercise Price Range, High Range | $ 5,310 | $ 2,200 | |
Options Outstanding (in Shares) | 11,300 | 105,000 |
Equity Compensation Plans and_5
Equity Compensation Plans and Employee Benefit Plans (Details) - Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable - Options Exercise Price $5.31 [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Equity Compensation Plans and Employee Benefit Plans (Details) - Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Line Items] | |
Exercise Price | $ 1.55 |
Options Outstanding (in Shares) | shares | 11 |
Options Outstanding, Weighted-average Remaining Contractual Life | 138 days |
Options Outstanding, Weighted-average Exercise Price | $ 1.55 |
Options Outstanding, Aggregate Intrinsic Value (in Dollars) | $ | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ (87,000) | $ 97,000 |
Deferred Tax Assets, Tax Credit Carryforwards, Research | $ 597,000 | $ 597,000 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of Income before Income Tax, Domestic and Foreign - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Schedule of Income before Income Tax, Domestic and Foreign [Abstract] | ||
United States | $ 57 | $ (291) |
Foreign | 0 | 0 |
Income(loss) before tax provision | $ 57 | $ (291) |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of Components of Income Tax Expense (Benefit) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Schedule of Components of Income Tax Expense (Benefit) [Abstract] | ||
Federal | $ 0 | $ 0 |
Foreign | 0 | 0 |
State | 1 | 1 |
1 | 1 | |
Federal | 0 | 0 |
Foreign | 0 | 0 |
State | 0 | 0 |
0 | 0 | |
Income tax provision | $ 1 | $ 1 |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of Effective Income Tax Rate Reconciliation | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
Federal taxes at statutory rate | 21.00% | 21.00% |
State taxes, net of federal benefit | 61.09% | 5.34% |
Other Permanent items | 14.73% | (2.63%) |
Other Adjustments | 56.79% | 17.73% |
Valuation allowance | (152.22%) | (33.27%) |
Stock-based compensation | 0.00% | (8.45%) |
Effective income tax rate | 1.39% | (0.28%) |
Income Taxes (Details) - Sche_4
Income Taxes (Details) - Schedule of Deferred Tax Assets and Liabilities - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Non-Current Deferred Tax Assets and Liabilities: | ||
Net Operating Loss | $ 3,491,000 | $ 3,441,000 |
R & D credit carryforwards | 597,000 | 597,000 |
Intangibles and fixed assets | 0 | 40,000 |
ASC 842 lease liability | 286,000 | 0 |
Accrued compensation | 211,000 | 121,000 |
Allowance for bad debt | 86,000 | 22,000 |
Reserve for customer returns | 98,000 | 78,000 |
Warranty reserve | 51,000 | 42,000 |
Reserve for obsolete inventory | 34,000 | 32,000 |
Stock-compensation | 4,000 | 44,000 |
Other | 12,000 | 15,000 |
Prepaid expenses | (180,000) | (77,000) |
Fixed asset basis | (143,000) | 0 |
Right of use asset | (279,000) | 0 |
Valuation allowance | (4,268,000) | (4,355,000) |
Non-Current Deferred Tax Assets and Liabilities, Net | $ 0 | $ 0 |
Income Taxes (Details) - Summar
Income Taxes (Details) - Summary of Operating Loss Carryforwards - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2020 | |
Summary of Operating Loss Carryforwards [Abstract] | |||
Net operating losses, federal (Post September 30, 2019) | $ 2,976 | $ 2,976 | |
Net operating losses, federal (Post September 30, 2019) | Do not Expire | 2031-2037 | 2023-2028 |
Net operating losses, federal (Pre September 30, 2019) | $ 13,089 | ||
Net operating losses, federal (Pre September 30, 2019) | Do not Expire | 2031-2037 | 2023-2028 |
Tax credits, federal | $ 597 | $ 597 | |
Tax credits, federal | Do not Expire | 2031-2037 | 2023-2028 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Jun. 20, 2019 | |
Related Party Transactions (Details) [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||
Notes Payable, Related Parties | $ 915,000 | $ 0 | |
Debt Instrument, Face Amount | $ 1,500,000 | ||
Revenue from Related Parties | 14,000 | 5,000 | |
Costs and Expenses, Related Party | 377,000 | $ 176,000 | |
Working Capital Term Loan Agreement [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Debt Instrument, Face Amount | 10,000,000 | ||
Scotts Miracle-Gro Company [Member] | Working Capital Term Loan Agreement [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 10,000,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||
Scotts Miracle-Gro Company [Member] | Real Estate Term Loan Agreement [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||
Debt Instrument, Face Amount | $ 1,500,000 | ||
Scotts Miracle-Gro Company [Member] | Real Estate Term Loan Agreement [Member] | Notes Payable, Other Payables [Member] | |||
Related Party Transactions (Details) [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||
Notes Payable, Related Parties | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | 12 Months Ended | |
Mar. 31, 2020USD ($)ft² | Mar. 31, 2019USD ($)ft² | |
Building [Member] | ||
Commitments and Contingencies (Details) [Line Items] | ||
Area of Real Estate Property | ft² | 14,630 | 11,182 |
Operating Leases, Rent Expense, Minimum Rentals | $ 21,000 | $ 12,000 |
Lease Expiration Date | Sep. 30, 2026 | Sep. 30, 2019 |
Warehousing, Distribution and Fulfillment Operations, and Seed Pod Kit Manufacturing [Member] | ||
Commitments and Contingencies (Details) [Line Items] | ||
Operating Leases, Rent Expense, Minimum Rentals | $ 10,000 | |
Description of Lessee Leasing Arrangements, Operating Leases | The Company has extended its agreement with Wildernest Logistics Solutions effective April 17, 2014 for a two-year term with automatic one-year renewals. |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of Future Minimum Rental Payments for Operating Leases $ in Thousands | Mar. 31, 2020USD ($) |
Schedule of Future Minimum Rental Payments for Operating Leases [Abstract] | |
March 31, 2021 | $ 185 |
March 31, 2022 | 266 |
March 31, 2023 | 275 |
March 31, 2024 | 285 |
March 31, 2025 | 294 |
Thereafter | 460 |
$ 1,765 |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disclosure Text Block [Abstract] | ||
Operating Lease, Weighted Average Discount Rate, Percent | 10.00% | |
Operating Leases, Rent Expense | $ 502,000 | $ 331,000 |
Leases (Details) - Lessee, Oper
Leases (Details) - Lessee, Operating Lease, Disclosure - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Assets | ||
Operating lease right-of-use assets | $ 1,229 | $ 0 |
Liabilities | ||
Operating lease | $ 1,259 |
Leases (Details) - Lessee, Op_2
Leases (Details) - Lessee, Operating Lease, Liability, Maturity - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Lessee, Operating Lease, Liability, Maturity [Abstract] | ||
Operating Leases due March 31, 2021 | $ 185 | |
Finance Leases due March 31, 2021 | 30 | |
Operating Leases due March 31, 2022 | 266 | |
Finance Leases due March 31, 2022 | 0 | |
Operating Leases due March 31, 2023 | 275 | |
Finance Leases due March 31, 2023 | 0 | |
Operating Leases due March 31, 2024 | 285 | |
Finance Leases due March 31, 2024 | 0 | |
Operating Leases due March 31, 2025 | 294 | |
Finance Leases due March 31, 2025 | 0 | |
Operating Leases due Thereafter | 460 | |
Finance Leases due Thereafter | 0 | |
Operating Leases, Total lease payments | 1,765 | |
Finance Leases, Total lease payments | 30 | |
Operating Leases, amount of lease payments representing interest | (506) | |
Finance Leases, amount of lease payments representing interest | (1) | |
Operating Leases, Present value of future minimum lease payments | 1,259 | |
Finance Leases, Present value of future minimum lease payments | 29 | |
Operating Leases, current obligations under leases | (58) | $ 0 |
Finance Leases, current obligations under leases | (29) | (72) |
Operating Leases, Long-term lease obligations | 1,201 | $ 0 |
Finance Leases, Long-term lease obligations | $ 0 |
Segment Information (Details)
Segment Information (Details) | 12 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
Segment Information (Details) -
Segment Information (Details) - Schedule of Segment Reporting Information, by Segment - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Segment Reporting Information [Line Items] | |||
Net sales | $ 39,214 | $ 34,366 | |
Cost of revenue | 25,185 | 22,395 | |
Gross profit | 14,029 | 11,971 | |
Sales and marketing | 8,852 | 8,462 | |
Direct-to-consumer [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 13,322 | 8,091 | |
Cost of revenue | 8,537 | 5,737 | |
Gross profit | $ 4,785 | $ 2,354 | |
Gross profit percentage | 35.90% | 29.10% | |
Sales and marketing | [1] | $ 1,376 | $ 802 |
Segment profit margin | $ 3,409 | $ 1,552 | |
Segment profit margin percentage | 25.60% | 19.20% | |
Retail [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 25,892 | $ 26,275 | |
Cost of revenue | 16,648 | 16,658 | |
Gross profit | $ 9,244 | $ 9,617 | |
Gross profit percentage | 35.70% | 36.60% | |
Sales and marketing | [1] | $ 3,302 | $ 3,575 |
Segment profit margin | $ 5,942 | $ 6,042 | |
Segment profit margin percentage | 22.90% | 23.00% | |
Corporate and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 0 | $ 0 | |
Cost of revenue | 0 | 0 | |
Gross profit | $ 0 | $ 0 | |
Gross profit percentage | 0.00% | 0.00% | |
Sales and marketing | [1] | $ 1,480 | $ 1,324 |
Segment profit margin | $ (1,480) | $ (1,324) | |
Segment profit margin percentage | 0.00% | 0.00% | |
Consolidated Entity [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 39,214 | $ 34,366 | |
Cost of revenue | 25,185 | 22,395 | |
Gross profit | $ 14,029 | $ 11,971 | |
Gross profit percentage | 35.80% | 34.80% | |
Sales and marketing | [1] | $ 6,158 | $ 5,701 |
Segment profit margin | $ 7,871 | $ 6,270 | |
Segment profit margin percentage | 20.10% | 18.20% | |
[1] | Sales and marketing includes advertising, trade shows, media production and promotional products, general brand marketing and other as discussed in the sales and marketing section. |