Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Jan. 31, 2021 | Apr. 12, 2021 | Aug. 02, 2020 | |
Document Information Line Items | |||
Entity Registrant Name | Lovesac Co | ||
Trading Symbol | LOVE | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --01-31 | ||
Entity Common Stock, Shares Outstanding | 15,018,030 | ||
Entity Public Float | $ 347,969,675 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001701758 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Jan. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-38555 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 32-0514958 | ||
Entity Address, Address Line One | Two Landmark Square, | ||
Entity Address, Address Line Two | Suite 300 | ||
Entity Address, City or Town | Stamford, | ||
Entity Address, State or Province | CT | ||
Entity Address, Postal Zip Code | 06901 | ||
City Area Code | 888 | ||
Local Phone Number | 636-1223 | ||
Title of 12(b) Security | Common Stock, $0.00001 par value per share | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jan. 31, 2021 | Feb. 02, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 78,341,101 | $ 48,538,827 |
Trade accounts receivable | 4,513,460 | 7,188,925 |
Merchandise inventories | 50,416,712 | 36,399,862 |
Prepaid expenses and other current assets | 10,128,353 | 8,050,122 |
Total Current Assets | 143,399,626 | 100,177,736 |
Property and Equipment, Net | 25,867,980 | 23,844,261 |
Goodwill | 143,562 | 143,562 |
Intangible assets, net | 1,517,032 | 1,352,161 |
Deferred financing costs, net | 90,671 | 146,047 |
Total Other Assets | 1,751,265 | 1,641,770 |
Total Assets | 171,018,871 | 125,663,767 |
Current Liabilities | ||
Accounts payable | 24,310,972 | 19,887,611 |
Accrued expenses | 17,187,694 | 8,567,580 |
Payroll payable | 6,361,677 | 887,415 |
Customer deposits | 5,992,633 | 1,653,597 |
Sales taxes payable | 2,470,593 | 1,404,792 |
Total Current Liabilities | 56,323,569 | 32,400,995 |
Deferred rent | 6,748,747 | 3,108,245 |
Line of credit | ||
Total Liabilities | 63,072,316 | 35,509,240 |
Commitments and contingencies (see Note 6) | ||
Stockholders’ Equity | ||
Preferred Stock $0.00001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of January 31, 2021 and February 2, 2020. | ||
Common Stock $.00001 par value, 40,000,000 shares authorized, 15,011,556 shares issued and outstanding as of January 31, 2021 and 14,472,611 shares issued and outstanding as of February 2, 2020. | 150 | 145 |
Additional paid-in capital | 171,382,086 | 168,317,210 |
Accumulated deficit | (63,435,681) | (78,162,828) |
Stockholders’ Equity | 107,946,555 | 90,154,527 |
Total Liabilities and Stockholders’ Equity | $ 171,018,871 | $ 125,663,767 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Jan. 31, 2021 | Feb. 02, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 15,011,556 | 14,472,611 |
Common stock, shares outstanding | 15,011,556 | 14,472,611 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 320,737,750 | $ 233,377,379 |
Cost of merchandise sold | 145,965,935 | 116,687,055 |
Gross profit | 174,771,815 | 116,690,324 |
Operating expenses | ||
Selling, general and administration expenses | 111,354,236 | 98,146,524 |
Advertising and marketing | 41,924,487 | 29,194,289 |
Depreciation and amortization | 6,612,872 | 5,158,062 |
Total operating expenses | 159,891,595 | 132,498,875 |
Operating income (loss) | 14,880,220 | (15,808,551) |
Interest (expense) income, net | (67,384) | 646,844 |
Net income (loss) before taxes | 14,812,836 | (15,161,707) |
Provision for income taxes | (85,689) | (43,312) |
Net income (loss) | $ 14,727,147 | $ (15,205,019) |
Net income (loss) per common share: | ||
Basic (in Dollars per share) | $ 1.01 | $ (1.07) |
Diluted (in Dollars per share) | $ 0.96 | $ (1.07) |
Weighted average number of common shares outstanding: | ||
Basic (in Shares) | 14,610,617 | 14,260,395 |
Diluted (in Shares) | 15,332,998 | 14,260,395 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Shares | Preferred Shares | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Feb. 03, 2019 | $ 136 | $ 141,727,807 | $ (62,957,809) | $ 78,770,134 | |
Balance (in Shares) at Feb. 03, 2019 | 13,588,568 | ||||
Net income (loss) | (15,205,019) | (15,205,019) | |||
Equity-based compensation | $ 1 | 5,245,587 | 5,245,588 | ||
Equity-based compensation (in Shares) | 101,883 | ||||
Issuance of common shares, net | $ 8 | 25,609,992 | 25,610,000 | ||
Issuance of common shares, net (in Shares) | 750,000 | ||||
Vested restricted stock units | $ 2 | (2) | |||
Vested restricted stock units (in Shares) | 180,304 | ||||
Taxes paid for net share settlement of equity awards | (4,278,176) | (4,278,176) | |||
Exercise of warrants | 12,000 | 12,000 | |||
Exercise of warrants (in Shares) | 27,246 | ||||
Cancelation of shares | $ (2) | 2 | |||
Cancelation of shares (in Shares) | (175,390) | ||||
Balance at Feb. 02, 2020 | $ 145 | 168,317,210 | (78,162,828) | 90,154,527 | |
Balance (in Shares) at Feb. 02, 2020 | 14,472,611 | ||||
Net income (loss) | 14,727,147 | 14,727,147 | |||
Equity-based compensation | 4,681,397 | 4,681,397 | |||
Vested restricted stock units | $ 1 | (1) | |||
Vested restricted stock units (in Shares) | 99,498 | ||||
Taxes paid for net share settlement of equity awards | (1,716,516) | (1,716,516) | |||
Exercise of warrants | $ 4 | 99,996 | 100,000 | ||
Exercise of warrants (in Shares) | 439,447 | ||||
Balance at Jan. 31, 2021 | $ 150 | $ 171,382,086 | $ (63,435,681) | $ 107,946,555 | |
Balance (in Shares) at Jan. 31, 2021 | 15,011,556 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Cash Flows from Operating Activities | ||
Net income (loss) | $ 14,727,147 | $ (15,205,019) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization of property and equipment | 6,099,675 | 4,894,220 |
Amortization of other intangible assets | 513,197 | 263,842 |
Amortization of deferred financing fees | 87,730 | 73,024 |
Net loss (gain) on disposal of property and equipment | 5,091 | (166,865) |
Impairment of property and equipment | 245,170 | |
Equity-based compensation | 4,681,397 | 5,245,588 |
Deferred rent | 3,640,502 | 1,514,066 |
Accounts receivable | 2,675,465 | (3,233,801) |
Merchandise inventories | (14,016,850) | (10,245,548) |
Prepaid expenses and other current assets | (2,060,585) | (2,116,250) |
Accounts payable and accrued expenses | 19,583,538 | 7,188,736 |
Customer deposits | 4,339,036 | 593,640 |
Net Cash Provided by (Used in) Operating Activities | 40,520,513 | (11,194,367) |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | (8,373,655) | (10,276,537) |
Payments for patents and trademarks | (678,068) | (673,672) |
Proceeds from disposal of property and equipment | 300,000 | |
Net Cash Used in Investing Activities | (9,051,723) | (10,650,209) |
Cash Flows from Financing Activities | ||
Proceeds from the issuance of common shares, net | 25,610,000 | |
Taxes paid for net share settlement of equity awards | (1,716,516) | (4,278,176) |
Proceeds from the issuance of warrants, net | 100,000 | 12,000 |
Paydowns of proceeds from line of credit | (31,373) | |
Payments of deferred financing costs | (50,000) | |
Net Cash (used in) Provided by Financing Activities | (1,666,516) | 21,312,451 |
Net Change in Cash and Cash Equivalents | 29,802,274 | (532,125) |
Cash and Cash Equivalents - Beginning | 48,538,827 | 49,070,952 |
Cash and Cash Equivalents - End | 78,341,101 | 48,538,827 |
Supplemental Cash Flow Disclosures | ||
Cash paid for taxes | 85,689 | 43,312 |
Cash paid for interest | $ 85,452 | $ 62,670 |
Operations and Significant Acco
Operations and Significant Accounting Policies | 12 Months Ended |
Jan. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS AND LIQUIDITY The Company is a technology driven company that designs, manufactures and sells unique, high quality furniture derived through its proprietary Designed for Life approach which results in products that are built to last a lifetime and designed to evolve as our customers’ lives do. The Company markets and sells its products through modern and efficient showrooms and, increasingly, through online sales primarily online directly at www.lovesac.com, supported by direct-to-consumer touch-feel points in the form of our own showrooms as well as through shop-in-shops and pop-up-shops with third party retailers. As of January 31, 2021, the Company operated 108 showrooms located throughout the United States. The Company was formed as a Delaware corporation on January 3, 2017, in connection with a corporate reorganization with SAC Acquisition LLC, a Delaware limited liability company (“SAC LLC”), the predecessor entity to the Company. Prior to fiscal 2021, the Company has incurred significant operating losses and used cash in its operating activities since inception. Operating losses have resulted from inadequate sales levels for the cost structure and expenses as a result of expanding into new markets, opening new showrooms, investments into marketing and infrastructure to support increase in revenues. The Company continues to enter into new retail showrooms in larger markets to increase sales levels and invest in marketing initiatives to increase brand awareness. Of course, there can be no assurance that the anticipated sales levels will be achieved. The Company believes that based on its current sales and expense levels, cash generated from operating activities during fiscal 2021, projections for the next twelve months, and the credit facility with Wells, see Note 9, the Company will have sufficient working capital to cover operating cash needs through the twelve-month period from the financial statement issuance date. SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. FISCAL YEAR The Company’s fiscal year is determined on a 52/53 week basis ending on the Sunday closest to February 1. Hereinafter, the periods from February 3, 2020 to January 31, 2021 and February 4, 2019 through February 2, 2020 are referred to as fiscal 2021 and fiscal 2020, respectively. Both fiscal 2021 and fiscal 2020 were 52-week fiscal years. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US 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. Estimates and assumptions are reviewed periodically and the effects of the revisions are reflected in the period the change is determined. REVENUE RECOGNITION The Company implemented ASU 2015-04, Revenue from Contracts with Customers (Accounting Standards Codification Topic 606, “ASC 606”), in the first quarter of fiscal 2020 using modified retrospective method, which required the company to apply the new guidance retrospectively to revenue transactions completed on or after the effective date. Adopting this new standard had no material financial impact on our consolidated financial statements but did result in enhanced presentation and disclosures. Our revenue consists substantially of product sales. The Company reports product sales net of discounts and recognize them at the point in time when control transfers to the customer, which occurs when shipment is confirmed. Estimated refunds for returns and allowances are recorded using our historical return patterns, adjusting for any changes in returns policies. The Company records estimated refunds for net sales returns on a monthly basis as a reduction of net sales and cost of sales on the statement of operations and an increase in inventory and customers returns liability on the balance sheet. As of January 31, 2021, there was a returns allowance of $2,226,723 which was in accrued expenses and $334,896 associated with sales returns in merchandise inventories. As of February 2, 2020, there was a returns allowance of $2,177,715 which was in accrued expenses and $442,390 associated with sales returns in merchandise inventories. In some cases, deposits are received before the company transfers control, resulting in contract liabilities. These contract liabilities are reported as deposits on the Company’s balance sheet. As of January 31, 2021, and February 2, 2020, the Company recorded under customer deposit liabilities the amount of $5,992,633 and $1,653,597 respectively. During the fiscal year ended January 31, 2021, the Company recognized $1,653,597 related to its customer deposits from fiscal 2020. During the fiscal year ended February 2, 2020, the Company recognized $1,059,957 related to its customer deposits from fiscal 2019. Under ASC 606, the Company has elected the following accounting policies and practical expedients: The Company recognizes shipping and handling expense as fulfilment activities (rather than as a promised good or service) when the activities are performed even if those activities are performed after the control of the good has been transferred. Accordingly, the Company records the expenses for shipping and handling activities at the same time the Company recognizes revenue. The Company excludes from the measurement of the transaction price all taxes imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer, including sales, use, excise, value-added, and franchise taxes (collectively referred to as sales taxes). The Company does not adjust revenue for the effects of any financing components if the contract has a duration of one year or less, as the Company receives payment from the customer within one year from when it transferred control of the related goods. The Company offers its products through an inventory lean omni-channel platform that provides a seamless and meaningful experience to its customers in showrooms and through the internet. The other channel predominantly represents sales through the use of pop-up-shops that typically average ten days at a time and are staffed with associates trained to demonstrate and sell our product. The following represents sales disaggregated by channel: For the fiscal years ended January 31, 2021 February 2, 2020 Showrooms $ 146,150,307 $ 148,003,995 Internet 151,064,651 55,781,186 Other 23,522,792 29,592,198 Total net sales $ 320,737,750 $ 233,377,379 The Company has no foreign operations and its sales to foreign countries was less than .01% of total net sales in both fiscal 2021 and 2020. The Company had no customers in fiscal 2021 or 2020 that comprise more than 10% of total net sales. See Note 10 for sales disaggregated by product . CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with a maturity at purchase of three months or less to be cash equivalents. The Company has deposits with financial institutions that maintain Federal Deposit Insurance Corporation “FDIC” deposit insurance up to $250,000 per depositor. The portion of the deposit in excess of this limit represents a credit risk to the Company. Due to the high cash balance maintained by the Company, the Company does maintain depository balances in excess of the insured amounts. TRADE ACCOUNTS RECEIVABLE Trade accounts receivable are carried at their estimated realizable amount and do not bear interest. Management determines the allowance for doubtful accounts by regularly evaluating individual customer accounts, considering the customer’s financial condition, and credit history, and general and industry current economic conditions. Trade accounts receivable are reserved for when deemed uncollectible. Recoveries of amounts previously written off are recorded when received. Historically, collection losses have been immaterial as a significant portion of the Company’s receivables are related to individual credit card transactions and three wholesale customers for which the Company has no history of collection losses. Management has concluded that an allowance was not necessary at January 31, 2021 and February 2, 2020, respectively. Breakdown of accounts receivable is as follows: As of January 31, 2021 As of February 2, 2020 Credit card receivables $ 2,964,077 $ 1,073,855 Wholesale receivables 1,549,383 4,724,154 Other receivables - 1,390,916 $ 4,513,460 $ 7,188,925 The Company had two wholesale customers that comprised approximately 97% of wholesale receivables at January 31, 2021 and one wholesale customer that comprised 97% of wholesale receivables at February 2, 2020. PREPAID EXPENSES AND OTHER CURRENT ASSETS The Company recognizes payments made for goods and services to be received in the near future as prepaid expenses and other current assets. Prepaid expenses and other current assets consist primarily of payments related to insurance premiums, catalogue costs, barter credits, deposits, prepaid rent, prepaid inventory, and other costs. MERCHANDISE INVENTORIES Merchandise inventories are comprised of finished goods which are carried at the lower of cost or net realizable value. Cost is determined on a weighted-average method basis. Merchandise inventories consist primarily of foam filled furniture, sectional couches, and related accessories. The Company adjusts its inventory for obsolescence based on historical trends, aging reports, specific identification and its estimates of future retail sales prices. In addition, the Company includes capitalized freight and warehousing costs in inventory relative to the finished goods in inventory. GIFT CERTIFICATES AND MERCHANDISE CREDITS The Company sells gift certificates and issues merchandise credits to its customers in the showrooms and through its website. Revenue associated with gift certificates and merchandise credits is deferred until redemption of the gift certificate and merchandise credits. The Company did not recognize any breakage revenue in fiscal 2021 or fiscal 2020 as the Company continues to honor all outstanding gift certificates. PROPERTY AND EQUIPMENT, NET Property and equipment are stated at cost less accumulated depreciation and amortization. Office and showroom furniture and equipment, software and vehicles are depreciated using the straight-line method over their estimated useful lives. Leasehold improvements are amortized using the straight-line method over their expected useful lives or lease term, whichever is shorter. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation or amortization is removed from the accounts, and any resulting gain or loss is reflected in operations for the period. Expenditures for major betterments that extend the useful lives of property and equipment are capitalized. GOODWILL Goodwill represents the excess of the purchase price over the fair value of the identified net assets of each business acquired. Goodwill and other indefinite-lived intangible assets are tested annually for impairment in the fourth fiscal quarter and in interim periods if certain events occur indicating that the carrying amounts may be impaired. If a qualitative assessment is used and the Company determines that the fair value of a reporting unit or indefinite-lived intangible asset is more likely than not (i.e., a likelihood of more than 50%) less than its carrying amount, a quantitative impairment test will be performed. If goodwill is quantitatively assessed for impairment, a two-step approach is applied. In the first step, the Company compares the fair value of the reporting unit, generally defined as the same level as or one level below an operating segment, to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is considered not impaired and the Company is not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the second step of the impairment test must be performed in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then an impairment loss equal to the difference would be recorded. There were no impairments during either fiscal 2021 or 2020. The fair value of the Company’s reporting unit is determined by using a discounted cash flow analysis. The determination of fair value requires assumptions and estimates of many critical factors, including among others, the nature and history of the Company, financial and economic conditions affecting the Company, the industry and the general economy, past results, current operations and future prospects, sales of similar businesses or capital stock of publicly held similar businesses, as well as prices, terms and conditions affecting past sales of similar businesses. Forecasts of future operations are based, in part, on operating results and management’s expectations as to future market conditions. These types of analyses contain uncertainties because they require management to make assumptions and to apply judgments to estimate industry economic factors and the profitability of future business strategies. However, if actual results are not consistent with the Company’s estimates and assumptions, there may be exposure to future impairment losses that could be material. PATENTS AND LICENSES Patents and licenses are recorded at cost and amortized on a straight-line basis over the estimated remaining life of the patent or license. Ongoing maintenance costs are expensed as incurred. INTANGIBLE ASSETS Intangible assets with finite useful lives, including a vendor relationship, and patents and trade names, are being amortized on a straight-line basis over their estimated lives. Other intangible assets with finite useful lives are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the asset might not be recovered. If the estimates of the useful lives should change, the Company will amortize the remaining book value over the remaining useful life, or if it is deemed to be impaired a write-down of the value of the asset may be required at such time. There were no impairments during either fiscal 2021 or 2020. DEFERRED FINANCING COSTS The Company’s financing costs are capitalized and amortized over the life of the related financing. The financing costs are treated as debt discounts with the exception of revolving lines of credit. In fiscal 2021, the Company paid $50,000 in connection with an increase in its aggregate commitments under its line of credit. The Company amortized deferred financing costs to interest expense amounts totaling $87,730 in fiscal 2021 and $73,024 in fiscal 2020. IMPAIRMENT OF LONG-LIVED ASSETS The Company’s long-lived assets consist of property and equipment, which includes leasehold improvements, and other intangible assets. Long-lived assets are reviewed for potential impairment at such time that events or changes in circumstances indicate that the carrying amount of an asset might not be recovered. The Company evaluates property and equipment for impairment at the individual showroom level, which is the lowest level at which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, the Company will first compare the carrying amount of the assets to the future undiscounted cash flows for the respective long-lived asset. If the estimated future cash flows are less than the carrying amounts of the assets, an impairment loss calculation is prepared. An impairment loss is measured based upon the excess of the carrying value of the asset over its estimated fair value which is generally based on an estimated future discounted cash flow. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value. In fiscal 2021, the Company recorded impairment charges of $0.2 million, associated with the assets of an underperforming retail location. The impairment charge was calculated using a discounted cash flow model and was recorded in selling, general and administrative in the Company’s consolidated statement of operations. During fiscal 2020, the Company did not record any impairment charges associated with property and equipment. ADVERTISING AND CATALOG COSTS The Company capitalizes direct response advertising costs, which consist primarily of catalog production and mailing costs, and recognizes expense over the related revenue stream if the following conditions are met (1) the primary purpose of the advertising is to elicit sales to customers who could be shown to have responded specifically to the advertising, and (2) the direct-response advertising results in probable and estimable future benefits. For fiscal years 2021 and 2020 the Company did not have any capitalized deferred direct-response television, postcard and catalogue costs. Direct-response advertising costs, which are included in prepaid expenses and other current assets, are amortized commencing the date the catalogs and post cards are mailed and the television commercial airs through the estimated period of time for the Company has determined the related advertising impacts sales. There was no balance as of January 31, 2021 and February 2, 2020. Advertising costs not associated with direct-response advertising are expensed as incurred and were $41,924,487 in 2021 and $29,194,289 in 2020. SHOWROOM PREOPENING AND CLOSING COSTS Non-capital expenditures incurred in preparation for opening new retail showrooms are expensed as incurred and included in selling, general and administrative expenses. The Company continually evaluates the profitability of its showrooms. When the Company closes or relocates a showroom, the Company incurs unrecoverable costs, including the net book value of abandoned fixtures and leasehold improvements, lease termination payments, costs to transfer inventory and usable fixtures and other costs of vacating the leased location. Such costs are expensed as incurred and are included in selling, general and administrative expenses. PRODUCT WARRANTY Depending on the type of merchandise, the Company offers either a three-year limited warranty or a lifetime warranty. The Company’s warranties require it to repair or replace defective products at no cost to the customer. At the time product revenue is recognized, the Company reserves for estimated future costs that may be incurred under its warranties based on historical experience. The Company periodically reviews the adequacy of its recorded warranty liability. Product warranty expense was approximately $735,000 in fiscal 2021 and $933,000 in fiscal 2020. Warranty reserve was $606,000 as of January 31, 2021 and $1,180,000 as of February 2, 2020. OPERATING LEASES Minimum operating lease expenses are recognized on a straight-line basis over the terms of the leases. Tenant allowances are recorded as a receivable when lease is executed. The corresponding liability is recorded and amortized over the term of the lease. The amortization of the liability is a reduction of rent expense over the term of the lease. Our operating leases contain provisions for certain incentives. Incentives are deferred and are amortized over the underlying lease term on a straight-line basis as a reduction to rent expense. When the terms or the Company’s leases provide for free rent, concessions and/or escalations, the Company establishes a deferred rent liability or asset for the difference of the scheduled rent payments and a straight line rent expense. This liability or asset increases or decreases depending on where the Company is at any given time in the life of the lease. Percentage rent is not subject to straight-line of expense and is expensed as incurred. FAIR VALUE MEASUREMENTS The carrying amount of the Company’s financial instruments classified as current assets and current liabilities approximate fair values based on the short-term nature of the accounts. EQUITY-BASED COMPENSATION The Company’s 2017 Equity Plan provides for awards in the form of options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, cash-based awards and other stock-based awards. The plan allows for the issuance of up to 2,104,889 shares at January 31, 2021 and 1,414,889 shares at February 2, 2020. All awards shall be granted within 10 years from the effective date of the plan. The unit vesting was based on both time and performance. See Note 7 for additional disclosure. SHIPPING AND HANDLING Shipping and handling charges billed to customers are included in revenue. Shipping and handling costs incurred are included in cost of merchandise sold. Shipping and handling costs were $63,098,657 in fiscal 2021 and $47,148,918 in fiscal 2020. INCOME TAXES The Company accounts for uncertainty in income taxes using a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes. In connection with the 2017 reorganization, the intent was that the net operating losses (NOLs) of SAC Acquisition, LLC, a limited liability company that had been historically treated as a C-corporation for federal and state income tax purposes, were to be inherited by the Company. The Company filed a request for a private letter ruling requesting additional time to make a check the box election pursuant to Treas. Reg. 301.7701-3. In PLR-109713-19 dated October 22, 2019 the Company was granted an extension of time of 120 days to file form 8832 “Entity Classification Election.” The completed Form 8832 was filed with The IRS on November 11, 2019. The Company has maintained the position that the NOLs were inherited from SAC Acquisition in the 2017 reorganization and consistently maintained a full valuation allowance against its NOLs as they were part of deferred income tax assets not likely to be realized. Accordingly, the resolution of the uncertain tax position regarding the Company’s NOL carry forward during the year did not have an impact on the Company’s financial position or results of operations. As of January 31, 2021, there were no uncertain tax positions. See Note 5 for additional disclosures. Deferred income taxes are provided on temporary differences between the income tax bases of assets and liabilities and the amounts reported in the financial statements and on net operating loss and tax credit carry forwards. A valuation allowance is provided for that portion of deferred income tax assets not likely to be realized. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding and common stock equivalents outstanding during the period. Diluted net income (loss) per common share includes, in periods in which they are dilutive, the effect of those potentially dilutive securities where the average market price of the common stock exceeds the exercise prices for the respective periods. In fiscal 2021, the effects of 655,558 unvested restricted stock units and 293,973 common stock warrants were included in the diluted share calculation. In fiscal 2021, the effects of 495,366 stock options were excluded from the diluted net income per common share calculation because the effects of including these potentially dilutive shares was antidilutive. In fiscal 2020, there were 1,717,539 of potentially dilutive shares which may be issued in the future, including 183,053 unvested restricted stock units, 495,366 stock options and 1,039,120 common stock warrants. These shares were excluded in the diluted net loss per common share calculation as the effects of including theses potentially dilutive shares was antidilutive. NEW ACCOUNTING PRONOUNCEMENTS Except as described below, the Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements. The Company, as an emerging growth company, has elected to use the extended transition period for complying with new or revised financial accounting standards. The following new accounting pronouncements were adopted in fiscal 2021: In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting The following new accounting pronouncements, and related impacts on adoption are being evaluated by the Company: In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) amending lease guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU No. 2020-05 extended the effective date to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company will adopt this standard beginning with our fiscal 2022. Management has evaluated the impact ASU No. 2016-02 will have on these consolidated financial statements. Based on the initial evaluation, the Company has determined that adopting this standard will have a material impact on our consolidated balance sheet as the Company has a significant number of operating leases. While we continue to assess all of the effects of adoption, we currently believe the most significant effects relate to the recognition of new Right of Use “ROU” assets and lease liabilities on our balance sheet for our showroom and office real estate leases. We do not expect a significant change in our leasing activities between now and adoption. The Company currently has deferred rent of $7 million in long-term liabilities. On adoption, we currently expect to recognize additional liabilities of approximately $92 million, of which $14 million will be short-term and $78 million will be long-term with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The new standard also provides practical expedients for an entity’s ongoing accounting. We currently expect to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also currently expect to elect the practical expedient to not separate lease and non-lease components for all of our leases. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Jan. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 2 - PROPERTY AND EQUIPMENT, NET Property and equipment as of January 31, 2021 and February 2, 2020 consists of: Estimated Life 2021 2020 Office and store furniture, and equipment 5 Years $ 7,729,168 $ 6,674,950 Software 3 Years 3,628,108 2,652,960 Leasehold improvements Shorter of estimated useful life or lease term 33,828,176 28,071,912 Tools, Dies, Molds 5 Years 215,412 97,876 Construction in process NA 2,097,065 2,193,218 47,497,929 39,690,916 Accumulated depreciation and amortization (21,629,949 ) (15,846,655 ) $ 25,867,980 $ 23,844,261 Depreciation expense was $6,099,675 in fiscal 2021 and $4,894,220 in fiscal 2020. |
Other Intangible Assets, Net
Other Intangible Assets, Net | 12 Months Ended |
Jan. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
OTHER INTANGIBLE ASSETS, NET | NOTE 3 - OTHER INTANGIBLE ASSETS, NET A summary of other intangible assets follows: January 31, 2021 Estimated Life Gross Carrying Amount Accumulated Amortization Net carrying amount Patents 10 Years $ 2,387,328 $ (1,128,997 ) $ 1,258,331 Trademarks 3 Years 1,239,334 (980,633 ) 258,701 Other intangibles 5 Years 839,737 (839,737 ) - Total $ 4,466,399 $ (2,949,367 ) $ 1,517,032 February 2, 2020 Estimated Life Gross Carrying Amount Accumulated Amortization Net carrying amount Patents 10 Years $ 1,965,794 $ (846,898 ) $ 1,118,896 Trademarks 3 Years 982,800 (749,535 ) 233,265 Other intangibles 5 Years 839,737 (839,737 ) - Total $ 3,788,331 $ (2,436,170 ) $ 1,352,161 Amortization expense on other intangible assets was $513,197 in fiscal 2021 and $263,842 in fiscal 2020. Expected amortization expense by fiscal year for these other intangible assets follows: 2022 $ 281,527 2023 227,727 2024 190,365 2025 156,028 2026 155,027 Thereafter 506,358 $ 1,517,032 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Jan. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 4 - PREPAID EXPENSES AND OTHER CURRENT ASSETS A summary of other prepaid and other current assets follows: 2021 2020 Prepaid insurance $ 1,235,866 $ 1,174,920 Prepaid catalogue costs and related 588,305 3,067,302 Barter credits 2,521,271 374,423 Deposits 997,428 892,611 Prepaid rent 1,704,364 1,297,511 Prepaid inventory 102,263 511,100 Prepaid software licenses 967,045 580,247 Tenant allowance receivable 1,464,206 - Other 547,605 152,008 $ 10,128,353 $ 8,050,122 |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 5 - INCOME TAXES On March 27, 2020, the Federal government of the United States enacted the Coronavirus Aid Relief and Economic Security Act (“CARES Act”) which includes a number of significant changes to the existing U.S. tax laws including postponing the filing date of specific federal income tax returns and payments from April 15, 2020 to July 15, 2020, temporarily increasing the 30% limitation on the interest deduction to 50%, introduction of a capital investment deduction for Qualified Improvement Property (“QIP”), and change in the use of net operating losses. The Company’s federal net operating losses that have been incurred in tax years beginning on or before December 31, 2017 will have a 20-year carryforward limitation, a two-year carryback period and can offset 100% of future taxable income. Net operating losses incurred in tax years beginning after December 31, 2017 and before January 1, 2021 will have an indefinite life, a five-year carryback period and can offset 100% of future taxable income prior to 2021 and 80% of future taxable income after 2020. Net operating losses incurred in tax years beginning on or after January 1, 2021 will have an indefinite life, generally no carryback period and can offset 80% of future taxable income. State taxes for the fiscal years ended January 31, 2021 and February 2, 2020, were approximately $86,000 and $43,000 respectively. The components of deferred income taxes follow: 2021 2020 Deferred Income Tax Assets Federal net operating loss carryforward $ 7,762,784 $ 12,455,237 State net operating loss carryforward 1,817,622 2,485,074 Intangible assets 286,297 244,053 Accrued liabilities 4,422,738 1,833,549 Equity-based compensation 1,082,820 503,201 Property and equipment 640,581 1,748,593 Merchandise inventories 330,333 254,034 Charitable Contributions 9,615 - Total Deferred Income Tax Assets 16,352,790 19,523,741 Valuation Allowance (16,352,790 ) (19,523,741 ) Net Deferred Income Tax Asset $ - $ - The income tax provision differs from the amount obtained by applying the statutory Federal income tax rate to pre-tax income as follows: 2021 2020 Provision (benefit) at Federal Statutory rates $ 3,110,696 $ (3,183,958 ) Permanent adjustments (410,550 ) (847,531 ) State tax, net of Federal provision (benefit) 495,442 (582,572 ) Federal True-ups 61,052 (393,702 ) Uncertain tax positions- NOLS - (10,753,384 ) Change in valuation allowance (3,170,951 ) 15,804,459 Income tax provision $ 85,689 $ 43,312 The Company is subject to federal, state and local corporate income taxes. The components of the provision for income taxes reflected on the consolidated statements of operations are set forth below: 2021 2020 Current taxes: U.S. federal $ - $ - State and local 85,689 43,312 Total current tax expense $ 85,689 $ 43,312 Deferred taxes: U.S. federal $ - $ - State and local - - Total deferred tax expense (benefit) $ - $ - Total tax provision $ 85,689 $ 43,312 Differences in terms of percentages are as follows: 2021 2020 Provision (benefit) at Federal Statutory rates 21.0 % -21.0 % Permanent adjustments -2.8 % -5.6 % State tax, net of Federal provision (benefit) 3.4 % -3.8 % Federal True-ups 0.4 % -2.6 % Uncertain tax positions- NOLS 0.0 % -70.9 % Change in valuation allowance -21.4 % 104.2 % Income tax provision 0.60 % 0.30 % At January 31, 2021 and February 2, 2020, the Company has net operating loss carryforwards available for federal income tax purposes of approximately $36,966,000 and $59,311,000, respectively, which are scheduled to expire in varying amounts from fiscal 2027 to fiscal 2037. In addition, the Company has approximately $30,399,000 and $42,618,000 of state net operating loss carryforwards as of January 31, 2021 and February 2, 2020, respectively. In fiscal 2020 a reserve had been released that was previously recorded against the net operating losses in accordance with ASC 740-10 due to a Private Letter Ruling (“PLR”) that was issued by the IRS. The PLR approved the late filing of Form 8832, “Entity Classification Election”. Due to the filing of this form, the Company believes that the Federal and State NOLs will be available for future utilization. As defined in Section 382 of the Internal Revenue Code, certain ownership changes limit the annual utilization of federal net operating losses. As a result of issuance, sales and other transactions involving the Company’s stock, the Company experienced an ownership change during fiscal years ended January 31, 2011, February 3, 2019, and January 31, 2021 which have caused such federal net operating losses to be subject to limitation under Section 382. The annual base limitation from 2011, 2019, and 2021 are approximately $302,000, $5,888,000, and $7,665,000 respectively. The Company is entitled to additional limitation based on the net unrealized built-in gain computation, which results in additional limitation of approximately $40,000,000 over the next 5 years. There is no impact on the overall provision since the Company has a full valuation allowance against its deferred tax assets. During fiscal year ending January 31, 2021 and February 2, 2020, the Company increased/(decreased) the valuation allowance by approximately ($3,171,000) and $15,804,000 respectively. The changes in the amount of unrecognized tax benefits in the fiscal years ending January 31, 2021 and February 2, 2020 were as follows: 2021 2020 Beginning balance $ - $ 10,753,384 Additions for tax positions acquired - - Additions for tax positions related to current year - - Tax positions of prior years: Payments - - Settlements - - Release - (10,753,384 ) Ending balance $ - $ - The Company adopted FAS Accounting Standard 2013-11. The pronouncement requires the Company to offset its uncertain tax positions against certain deferred tax assets in the same jurisdiction. |
Commitments, Contingencies and
Commitments, Contingencies and Related Parties | 12 Months Ended |
Jan. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES AND RELATED PARTIES | NOTE 6 - COMMITMENTS, CONTINGENCIES AND RELATED PARTIES OPERATING LEASE COMMITMENTS The Company leases its office, warehouse facilities and retail showrooms under operating lease agreements which expire at various dates through November 2027. Monthly payments related to these leases range from $2,500 to $45,600. Total rent expense including common area maintenance charges sales percentage rent and deferred rent expense was $21,380,844 in fiscal 2021 and $19,676,958 in fiscal 2020. Expected future annual minimum rental payments under these leases follow: 2022 $ 14,312,251 2023 13,220,110 2024 13,038,353 2025 12,125,283 2026 10,762,696 2027 8,883,670 Thereafter 20,093,465 $ 92,435,828 The above disclosure includes lease extensions for various retail showrooms the Company entered into after year end. SEVERANCE CONTINGENCY The Company has various employment agreements with its senior level executives. A number of these agreements have severance provisions, ranging from 12 to 18 months of salary, in the event those associates are terminated without cause. The total amount of exposure to the Company under these agreements was $4,009,943 at January 31, 2021 if all executives with employment agreements were terminated without cause and the full amount of severance was payable. RELATED PARTIES Our equity sponsor Mistral Capital Management, LLC (“Mistral”) performs management services for the Company under a contractual agreement. Certain of our directors are members and principals of Mistral. Management fees incurred were approximately $400,000 in both fiscal 2021 and 2020 and are included in selling, general and administrative expenses. There was $0 payable to Mistral as of January 31, 2021 and $2,000 payable to Mistral as of February 2, 2020. The amount payable to Mistral as of February 2, 2020 is included in accrued liabilities in the accompanying consolidated balance sheet. In addition, the Company reimbursed Mistral for expenses incurred in the amount of $1,959 and $44,140 for out-of-pocket expenses for fiscal 2021 and 2020, respectively. The Company’s contractual agreement with Mistral ended on January 31, 2021. Our equity sponsor Satori Capital, LLC (“Satori”) performs management services for the Company under a contractual agreement. Management fees totaled approximately $100,000 in both fiscal 2021 and 2020 and are included in selling, general and administrative expenses. Amounts payable to Satori as of January 31, 2021 were $8,333 consisting of management fees which were included in accounts payable in the accompanying consolidated balance sheet as of January 31, 2021. Amounts payable to Satori as of February 2, 2020 were $95,000 consisting of $25,000 in management fees and $70,000 of reimbursable expenses which were included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets. In addition, the Company reimbursed Satori for expenses incurred in the amount of $51,614 and $70,000 for out-of-pocket expenses for fiscal 2021 and 2020, respectively. The Company’s contractual agreement with Satori ended on January 31, 2021. The Company engaged Blueport Commerce (“Blueport”), a company owned in part by investment vehicles affiliated with Mistral, as an ecommerce platform in February 2018. One of our directors is also a director of Blueport. There were $2,143,392 and $1,833,154 of fees incurred with Blueport that were related to sales transacted through the Blueport platform during fiscal 2021 and 2020, respectively. There was an additional $663,572 of fees incurred with Blueport during fiscal 2021 related to Lovesac’s early termination of our contract in order to launch a new enhanced ecommerce platform. There no amounts payable as of January 31, 2021. Amount payable to Blueport as of February 2, 2020 was $150,508 and is included in accounts payable in the accompanying consolidated balance sheets. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jan. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 7 - STOCKHOLDERS’ EQUITY COMMON STOCK WARRANTS In fiscal 2020, the Company issued 18,166 warrants to a third party in connection with previous equity raise. These warrants were valued using the Black-Scholes model, with similar assumptions to the June 2018 warrants. The warrants had a fair value of approximately $130,000. Of these warrants, 17,396 were exercised on May 14, 2019. The warrants may be exercised at any time following the date of issuance during the period prior to their expiration date. The fair value of each warrant is estimated on the date of grant using the Black-Scholes model. Expected volatilities are based on the Company’s historical volatility and comparable Companies’ historical volatility for periods when there is not sufficient historical pricing to base the estimate of volatility, which management believes represents the most accurate basis for estimating expected future volatility under the current circumstances. The risk-free rate is based on the U.S. treasury yield in effect at the time of the grant. May 2019 Warrants 18,166 Expected volatility 44 % Expected dividend yield 0 % Expected term (in years) 3.00 Risk-free interest rate 2.69 % Exercise price $ 16.00 Calculated fair value of warrant $ 7.16 The following represents warrant activity during fiscal 2021 and 2020: Average exercise price Number of warrants Weighted average remaining contractual life (in years) Warrants Outstanding at February 3, 2019 $ 16.83 1,067,475 2.93 Warrants issued 16.00 18,166 2.40 Expired and canceled - - - Exercised 16.00 (46,521 ) (2.15 ) Warrants outstanding at February 2, 2020 16.83 1,039,120 1.93 Warrants issued - - - Expired and canceled - - - Exercised 16.00 (745,147 ) (0.41 ) Outstanding at January 31, 2021 $ 19.07 293,973 2.57 In fiscal 2021, 738,897 warrants exercised were cashless, whereby the holders received fewer shares of common stock in lieu of a cash payment to the Company. Warrants exercised in fiscal 2021resulted in the issuance of 439,447 common shares. Warrants exercised in fiscal 2020 resulted in the issuance of 27,246 common shares. EQUITY INCENTIVE PLANS The Company adopted the 2017 Equity Plan which provides for Awards in the form of Options, Stock Appreciation rights, Restricted Stock Awards, Restricted Stock Units, Performance shares, Performance Units, Cash-Based Awards and Other Stock-Based Awards. All awards shall be granted within 10 years from the effective date of the Plan. On June 5, 2019, the stockholders approved an amendment and restatement of the 2017 Equity Plan that among other things increased the number of shares of common stock reserved for issuance from 615,066 to 1,414,889 share of common stock. In June 2019, the Company granted 495,366 Non statutory Stock options to certain officers of the Company with an option price of $38.10 per share. 100% of the stock options are subject to vesting on the first trading day after the date on which the closing price of the Company’s stock price has been at least $75 for 60 consecutive trading days so long as this goal has been attained by June 5, 2022 or the options will terminate. These options were valued using a Monte Carlo simulation model to account for the path dependent market conditions that stipulate when and whether or not the options shall vest. The 495,366 stock options were modified to extend the term of the options through June 5, 2024. This resulted in additional compensation of approximately $874,000, of which, $315,000 was recorded upon modification and the remaining expense was recognized over the remaining expected term. In December 2019, SAC LLC distributed the shares of the Company’s common stock it held. In connection with the distribution officers of the Company agreed to exchange and modify options that were held at SAC LLC for shares of vested common stock of the Company. Pursuant to the exchange SAC LLC transferred 175,478 shares of common stock to the Company and the Company immediately cancelled these shares. The Company then issued to the former option holders the number of those shares pursuant to the 2017 Equity Plan and withheld 73,507 shares to satisfy taxes associated with the issuance. In June 2020, the stockholders of the Company approved an amendment to the 2017 Equity Plan that increased the number of shares of common stock reserved for issuance under the 2017 Equity Plan by 690,000 shares of common stock. The number of shares of common stock reserved for issuance under the 2017 Equity Plan increased from 1,414,889 to 2,104,889 shares of common stock. A summary of the status of our stock options as of January 31, 2021 and February 2, 2020, and changes during fiscal years then ended, is presented below: For the years ended January 31, 2021 and February 2, 2020 Number of options Weighted average exercise price Weighted average remaining contractual life (in years) Average intrinsic value Outstanding at February 3, 2019 - $ - - - Granted 495,366 38.10 Exercised - - Expired and canceled - - Vested - - Outstanding at February 2, 2020 495,366 $ 38.10 2.34 - Granted - $ - Exercised - - Expired and canceled - - Vested - - Outstanding at January 31, 2021 495,366 $ 38.10 3.35 - Exercisable at the end of the period - - - - A summary of the status of our unvested restricted stock units as of January 31, 2021 and February 2, 2020, and changes during fiscal years then ended, is presented below: Number of shares Weighted average grant date fair value Unvested at February 3, 2019 377,286 $ 11.16 Granted 130,898 23.63 Forfeited (20,470 ) 16.21 Vested (304,661 ) 12.75 Unvested at February 2, 2020 183,053 21.34 Granted 627,940 16.94 Forfeited (5,701 ) 11.86 Vested (149,734 ) 16.24 Unvested at January 31, 2021 655,558 $ 18.86 Equity-based compensation expense was approximately $4.7 and $4.9 million for fiscal 2021 and 2020, respectively. In fiscal 2020, all the unvested restricted stock units for certain senior executives of the Company that were granted prior to the accelerated vesting trigger, vested according to the accelerated vesting trigger in their restricted stock unit agreements. The triggering event was the market capitalization of the Company post-IPO, exceeding $300 million for 60 consecutive trading days and the expiration of the lock-up period. This accelerated vesting resulted in equity based compensation in the amount of $2.9 million. In December 2019, the exchange and modification of options that were held at SAC LLC resulted in approximately $313,000 of equity-based compensation expense. The total unrecognized equity based compensation cost related to unvested stock option and restricted unit awards was approximately $5.3 million as of January 31, 2021 and will be recognized in operations over a weighted average period of 2.65 years. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Jan. 31, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLAN | NOTE 8 - EMPLOYEE BENEFIT PLAN In February 2017, the Company established the TLC 401(k) Plan (the “401(k) Plan”) with Elective Deferrals beginning May 1, 2017. The 401(k) Plan calls for Elective Deferral Contributions, Safe Harbor Matching Contributions and Profit Sharing Contributions. All associates of the Company will be eligible to participate in the 401(k) Plan as of the day of the month which is coincident with or next follows the date on which they attain age 21 and complete 1 month of service. Participants will be able to contribute up to 100% of their eligible Compensation to the 401(k) Plan subject to limitations with the IRS. The employer contributions to the 401(k) Plan for fiscal 2021 and 2020 were approximately $482,000 and $406,000, respectively. |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
Jan. 31, 2021 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | NOTE 9 - FINANCING ARRANGEMENTS CREDIT LINE On February 6, 2018, the Company established a line of credit with Wells. The line of credit with Wells allows the Company to borrow up to $25.0 million and will mature in February 2023. Borrowings are limited to 90% of eligible credit card receivables plus 85% of eligible wholesale receivables plus 85% of the net recovery percentage for the eligible inventory multiplied by the value of such eligible inventory of the Company for the period from December 16 of each year until October 14 of the immediately following year, with a seasonal increase to 90% of the net recovery percentage for the period from October 15 of each year until December 15 of such year, seasonal advance rate, minus applicable reserves established by Wells. As of January 31, 2021, the Company’s borrowing availability under the line of credit with Wells Fargo was $15.9 million. As of January 31, 2021, there was no outstanding balance on this line of credit. Under the line of credit with Wells, the Company may elect that revolving loans bear interest at a rate per annum equal to the base rate plus the applicable margin or the LIBOR rate plus the applicable margin. The applicable margin is based on tier’s relating to the quarterly average excess availability. The tiers range from 2.00% to 2.25%. The loan agreement calls for certain covenants including a timing of the financial statements threshold and a minimum excess availability threshold. |
Segment Information
Segment Information | 12 Months Ended |
Jan. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 10 - SEGMENT INFORMATION The Company operates within a single reporting segment. The chief operating decision makers of the Company are the Chief Executive Officer and President. The Company’s operating segments are aggregated for financial reporting purposes because they are similar in each of the following areas including economic characteristics, class of consumer, nature of products and distribution method and products are a singular group of products which make up over 95% of total sales. The Company’s sales by product which are considered one segment are as follows: Fiscal year ending January 31, 2021 February 2, 2020 Sactionals $ 271,018,545 $ 188,436,976 Sacs 44,974,677 39,640,676 Other 4,744,528 5,299,727 $ 320,737,750 $ 233,377,379 |
Barter Arrangements
Barter Arrangements | 12 Months Ended |
Jan. 31, 2021 | |
Barter Arrangements [Abstract] | |
BARTER ARRANGEMENTS | NOTE 11 - BARTER ARRANGEMENTS The Company has a bartering arrangement with Icon International, Inc., or “Icon”, a vendor, whereby the Company will provide inventory in exchange for media credits. During fiscal 2020, the Company exchanged $1,097,488 of inventory plus the cost of freight for certain media credits. To account for the exchange, the Company recorded the transfer of the inventory asset as a reduction of inventory and an increase to a prepaid media asset of $1,055,185 which is included in “Prepaid and other current assets” on the accompanying consolidated balance sheet. The barter credits in amount of $1,055,185 were used in full during fiscal 2021. During fiscal 2021, the Company exchanged $3,169,825 of inventory plus the cost of freight for certain media credits. To account for the exchange, the Company recorded the transfer of the inventory asset as a reduction of inventory and an increase to a prepaid media asset account of $2,937,035 which is included in “Prepaid and other current assets” on the accompanying consolidated balance sheet. The Company had $2,521,271 of unused media credits remaining as of January 31, 2021. The Company accounts for barter transactions under ASC Topic No. 845 “Nonmonetary Transactions.” Barter transactions with commercial substance are recorded at the estimated fair value of the products exchanged, unless the products received have a more readily determinable estimated fair value. Revenue associated with barter transactions is recorded at the time of the exchange of the related assets. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Jan. 31, 2021 | |
Accounting Policies [Abstract] | |
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the Company and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. |
FISCAL YEAR | FISCAL YEAR The Company’s fiscal year is determined on a 52/53 week basis ending on the Sunday closest to February 1. Hereinafter, the periods from February 3, 2020 to January 31, 2021 and February 4, 2019 through February 2, 2020 are referred to as fiscal 2021 and fiscal 2020, respectively. Both fiscal 2021 and fiscal 2020 were 52-week fiscal years. |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US 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. Estimates and assumptions are reviewed periodically and the effects of the revisions are reflected in the period the change is determined. |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company implemented ASU 2015-04, Revenue from Contracts with Customers (Accounting Standards Codification Topic 606, “ASC 606”), in the first quarter of fiscal 2020 using modified retrospective method, which required the company to apply the new guidance retrospectively to revenue transactions completed on or after the effective date. Adopting this new standard had no material financial impact on our consolidated financial statements but did result in enhanced presentation and disclosures. Our revenue consists substantially of product sales. The Company reports product sales net of discounts and recognize them at the point in time when control transfers to the customer, which occurs when shipment is confirmed. Estimated refunds for returns and allowances are recorded using our historical return patterns, adjusting for any changes in returns policies. The Company records estimated refunds for net sales returns on a monthly basis as a reduction of net sales and cost of sales on the statement of operations and an increase in inventory and customers returns liability on the balance sheet. As of January 31, 2021, there was a returns allowance of $2,226,723 which was in accrued expenses and $334,896 associated with sales returns in merchandise inventories. As of February 2, 2020, there was a returns allowance of $2,177,715 which was in accrued expenses and $442,390 associated with sales returns in merchandise inventories. In some cases, deposits are received before the company transfers control, resulting in contract liabilities. These contract liabilities are reported as deposits on the Company’s balance sheet. As of January 31, 2021, and February 2, 2020, the Company recorded under customer deposit liabilities the amount of $5,992,633 and $1,653,597 respectively. During the fiscal year ended January 31, 2021, the Company recognized $1,653,597 related to its customer deposits from fiscal 2020. During the fiscal year ended February 2, 2020, the Company recognized $1,059,957 related to its customer deposits from fiscal 2019. Under ASC 606, the Company has elected the following accounting policies and practical expedients: The Company recognizes shipping and handling expense as fulfilment activities (rather than as a promised good or service) when the activities are performed even if those activities are performed after the control of the good has been transferred. Accordingly, the Company records the expenses for shipping and handling activities at the same time the Company recognizes revenue. The Company excludes from the measurement of the transaction price all taxes imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer, including sales, use, excise, value-added, and franchise taxes (collectively referred to as sales taxes). The Company does not adjust revenue for the effects of any financing components if the contract has a duration of one year or less, as the Company receives payment from the customer within one year from when it transferred control of the related goods. The Company offers its products through an inventory lean omni-channel platform that provides a seamless and meaningful experience to its customers in showrooms and through the internet. The other channel predominantly represents sales through the use of pop-up-shops that typically average ten days at a time and are staffed with associates trained to demonstrate and sell our product. The following represents sales disaggregated by channel: For the fiscal years ended January 31, 2021 February 2, 2020 Showrooms $ 146,150,307 $ 148,003,995 Internet 151,064,651 55,781,186 Other 23,522,792 29,592,198 Total net sales $ 320,737,750 $ 233,377,379 The Company has no foreign operations and its sales to foreign countries was less than .01% of total net sales in both fiscal 2021 and 2020. The Company had no customers in fiscal 2021 or 2020 that comprise more than 10% of total net sales. See Note 10 for sales disaggregated by product . |
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with a maturity at purchase of three months or less to be cash equivalents. The Company has deposits with financial institutions that maintain Federal Deposit Insurance Corporation “FDIC” deposit insurance up to $250,000 per depositor. The portion of the deposit in excess of this limit represents a credit risk to the Company. Due to the high cash balance maintained by the Company, the Company does maintain depository balances in excess of the insured amounts. |
TRADE ACCOUNTS RECEIVABLE | TRADE ACCOUNTS RECEIVABLE Trade accounts receivable are carried at their estimated realizable amount and do not bear interest. Management determines the allowance for doubtful accounts by regularly evaluating individual customer accounts, considering the customer’s financial condition, and credit history, and general and industry current economic conditions. Trade accounts receivable are reserved for when deemed uncollectible. Recoveries of amounts previously written off are recorded when received. Historically, collection losses have been immaterial as a significant portion of the Company’s receivables are related to individual credit card transactions and three wholesale customers for which the Company has no history of collection losses. Management has concluded that an allowance was not necessary at January 31, 2021 and February 2, 2020, respectively. Breakdown of accounts receivable is as follows: As of January 31, 2021 As of February 2, 2020 Credit card receivables $ 2,964,077 $ 1,073,855 Wholesale receivables 1,549,383 4,724,154 Other receivables - 1,390,916 $ 4,513,460 $ 7,188,925 The Company had two wholesale customers that comprised approximately 97% of wholesale receivables at January 31, 2021 and one wholesale customer that comprised 97% of wholesale receivables at February 2, 2020. |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS The Company recognizes payments made for goods and services to be received in the near future as prepaid expenses and other current assets. Prepaid expenses and other current assets consist primarily of payments related to insurance premiums, catalogue costs, barter credits, deposits, prepaid rent, prepaid inventory, and other costs. |
MERCHANDISE INVENTORIES | MERCHANDISE INVENTORIES Merchandise inventories are comprised of finished goods which are carried at the lower of cost or net realizable value. Cost is determined on a weighted-average method basis. Merchandise inventories consist primarily of foam filled furniture, sectional couches, and related accessories. The Company adjusts its inventory for obsolescence based on historical trends, aging reports, specific identification and its estimates of future retail sales prices. In addition, the Company includes capitalized freight and warehousing costs in inventory relative to the finished goods in inventory. |
GIFT CERTIFICATES AND MERCHANDISE CREDITS | GIFT CERTIFICATES AND MERCHANDISE CREDITS The Company sells gift certificates and issues merchandise credits to its customers in the showrooms and through its website. Revenue associated with gift certificates and merchandise credits is deferred until redemption of the gift certificate and merchandise credits. The Company did not recognize any breakage revenue in fiscal 2021 or fiscal 2020 as the Company continues to honor all outstanding gift certificates. |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment are stated at cost less accumulated depreciation and amortization. Office and showroom furniture and equipment, software and vehicles are depreciated using the straight-line method over their estimated useful lives. Leasehold improvements are amortized using the straight-line method over their expected useful lives or lease term, whichever is shorter. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation or amortization is removed from the accounts, and any resulting gain or loss is reflected in operations for the period. Expenditures for major betterments that extend the useful lives of property and equipment are capitalized. |
GOODWILL | GOODWILL Goodwill represents the excess of the purchase price over the fair value of the identified net assets of each business acquired. Goodwill and other indefinite-lived intangible assets are tested annually for impairment in the fourth fiscal quarter and in interim periods if certain events occur indicating that the carrying amounts may be impaired. If a qualitative assessment is used and the Company determines that the fair value of a reporting unit or indefinite-lived intangible asset is more likely than not (i.e., a likelihood of more than 50%) less than its carrying amount, a quantitative impairment test will be performed. If goodwill is quantitatively assessed for impairment, a two-step approach is applied. In the first step, the Company compares the fair value of the reporting unit, generally defined as the same level as or one level below an operating segment, to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is considered not impaired and the Company is not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the second step of the impairment test must be performed in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then an impairment loss equal to the difference would be recorded. There were no impairments during either fiscal 2021 or 2020. The fair value of the Company’s reporting unit is determined by using a discounted cash flow analysis. The determination of fair value requires assumptions and estimates of many critical factors, including among others, the nature and history of the Company, financial and economic conditions affecting the Company, the industry and the general economy, past results, current operations and future prospects, sales of similar businesses or capital stock of publicly held similar businesses, as well as prices, terms and conditions affecting past sales of similar businesses. Forecasts of future operations are based, in part, on operating results and management’s expectations as to future market conditions. These types of analyses contain uncertainties because they require management to make assumptions and to apply judgments to estimate industry economic factors and the profitability of future business strategies. However, if actual results are not consistent with the Company’s estimates and assumptions, there may be exposure to future impairment losses that could be material. |
PATENTS AND LICENSES | PATENTS AND LICENSES Patents and licenses are recorded at cost and amortized on a straight-line basis over the estimated remaining life of the patent or license. Ongoing maintenance costs are expensed as incurred. |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangible assets with finite useful lives, including a vendor relationship, and patents and trade names, are being amortized on a straight-line basis over their estimated lives. Other intangible assets with finite useful lives are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the asset might not be recovered. If the estimates of the useful lives should change, the Company will amortize the remaining book value over the remaining useful life, or if it is deemed to be impaired a write-down of the value of the asset may be required at such time. There were no impairments during either fiscal 2021 or 2020. |
DEFERRED FINANCING COSTS | DEFERRED FINANCING COSTS The Company’s financing costs are capitalized and amortized over the life of the related financing. The financing costs are treated as debt discounts with the exception of revolving lines of credit. In fiscal 2021, the Company paid $50,000 in connection with an increase in its aggregate commitments under its line of credit. The Company amortized deferred financing costs to interest expense amounts totaling $87,730 in fiscal 2021 and $73,024 in fiscal 2020. |
IMPAIRMENT OF LONG-LIVED ASSETS | IMPAIRMENT OF LONG-LIVED ASSETS The Company’s long-lived assets consist of property and equipment, which includes leasehold improvements, and other intangible assets. Long-lived assets are reviewed for potential impairment at such time that events or changes in circumstances indicate that the carrying amount of an asset might not be recovered. The Company evaluates property and equipment for impairment at the individual showroom level, which is the lowest level at which individual cash flows can be identified. When evaluating long-lived assets for potential impairment, the Company will first compare the carrying amount of the assets to the future undiscounted cash flows for the respective long-lived asset. If the estimated future cash flows are less than the carrying amounts of the assets, an impairment loss calculation is prepared. An impairment loss is measured based upon the excess of the carrying value of the asset over its estimated fair value which is generally based on an estimated future discounted cash flow. If required, an impairment loss is recorded for that portion of the asset’s carrying value in excess of fair value. In fiscal 2021, the Company recorded impairment charges of $0.2 million, associated with the assets of an underperforming retail location. The impairment charge was calculated using a discounted cash flow model and was recorded in selling, general and administrative in the Company’s consolidated statement of operations. During fiscal 2020, the Company did not record any impairment charges associated with property and equipment. |
ADVERTISING AND CATALOG COSTS | ADVERTISING AND CATALOG COSTS The Company capitalizes direct response advertising costs, which consist primarily of catalog production and mailing costs, and recognizes expense over the related revenue stream if the following conditions are met (1) the primary purpose of the advertising is to elicit sales to customers who could be shown to have responded specifically to the advertising, and (2) the direct-response advertising results in probable and estimable future benefits. For fiscal years 2021 and 2020 the Company did not have any capitalized deferred direct-response television, postcard and catalogue costs. Direct-response advertising costs, which are included in prepaid expenses and other current assets, are amortized commencing the date the catalogs and post cards are mailed and the television commercial airs through the estimated period of time for the Company has determined the related advertising impacts sales. There was no balance as of January 31, 2021 and February 2, 2020. Advertising costs not associated with direct-response advertising are expensed as incurred and were $41,924,487 in 2021 and $29,194,289 in 2020. |
SHOWROOM PREOPENING AND CLOSING COSTS | SHOWROOM PREOPENING AND CLOSING COSTS Non-capital expenditures incurred in preparation for opening new retail showrooms are expensed as incurred and included in selling, general and administrative expenses. The Company continually evaluates the profitability of its showrooms. When the Company closes or relocates a showroom, the Company incurs unrecoverable costs, including the net book value of abandoned fixtures and leasehold improvements, lease termination payments, costs to transfer inventory and usable fixtures and other costs of vacating the leased location. Such costs are expensed as incurred and are included in selling, general and administrative expenses. |
PRODUCT WARRANTY | PRODUCT WARRANTY Depending on the type of merchandise, the Company offers either a three-year limited warranty or a lifetime warranty. The Company’s warranties require it to repair or replace defective products at no cost to the customer. At the time product revenue is recognized, the Company reserves for estimated future costs that may be incurred under its warranties based on historical experience. The Company periodically reviews the adequacy of its recorded warranty liability. Product warranty expense was approximately $735,000 in fiscal 2021 and $933,000 in fiscal 2020. Warranty reserve was $606,000 as of January 31, 2021 and $1,180,000 as of February 2, 2020. |
OPERATING LEASES | OPERATING LEASES Minimum operating lease expenses are recognized on a straight-line basis over the terms of the leases. Tenant allowances are recorded as a receivable when lease is executed. The corresponding liability is recorded and amortized over the term of the lease. The amortization of the liability is a reduction of rent expense over the term of the lease. Our operating leases contain provisions for certain incentives. Incentives are deferred and are amortized over the underlying lease term on a straight-line basis as a reduction to rent expense. When the terms or the Company’s leases provide for free rent, concessions and/or escalations, the Company establishes a deferred rent liability or asset for the difference of the scheduled rent payments and a straight line rent expense. This liability or asset increases or decreases depending on where the Company is at any given time in the life of the lease. Percentage rent is not subject to straight-line of expense and is expensed as incurred. |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The carrying amount of the Company’s financial instruments classified as current assets and current liabilities approximate fair values based on the short-term nature of the accounts. |
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION The Company’s 2017 Equity Plan provides for awards in the form of options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, cash-based awards and other stock-based awards. The plan allows for the issuance of up to 2,104,889 shares at January 31, 2021 and 1,414,889 shares at February 2, 2020. All awards shall be granted within 10 years from the effective date of the plan. The unit vesting was based on both time and performance. See Note 7 for additional disclosure. |
SHIPPING AND HANDLING | SHIPPING AND HANDLING Shipping and handling charges billed to customers are included in revenue. Shipping and handling costs incurred are included in cost of merchandise sold. Shipping and handling costs were $63,098,657 in fiscal 2021 and $47,148,918 in fiscal 2020. |
INCOME TAXES | INCOME TAXES The Company accounts for uncertainty in income taxes using a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes. In connection with the 2017 reorganization, the intent was that the net operating losses (NOLs) of SAC Acquisition, LLC, a limited liability company that had been historically treated as a C-corporation for federal and state income tax purposes, were to be inherited by the Company. The Company filed a request for a private letter ruling requesting additional time to make a check the box election pursuant to Treas. Reg. 301.7701-3. In PLR-109713-19 dated October 22, 2019 the Company was granted an extension of time of 120 days to file form 8832 “Entity Classification Election.” The completed Form 8832 was filed with The IRS on November 11, 2019. The Company has maintained the position that the NOLs were inherited from SAC Acquisition in the 2017 reorganization and consistently maintained a full valuation allowance against its NOLs as they were part of deferred income tax assets not likely to be realized. Accordingly, the resolution of the uncertain tax position regarding the Company’s NOL carry forward during the year did not have an impact on the Company’s financial position or results of operations. As of January 31, 2021, there were no uncertain tax positions. See Note 5 for additional disclosures. Deferred income taxes are provided on temporary differences between the income tax bases of assets and liabilities and the amounts reported in the financial statements and on net operating loss and tax credit carry forwards. A valuation allowance is provided for that portion of deferred income tax assets not likely to be realized. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. |
BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE | BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding and common stock equivalents outstanding during the period. Diluted net income (loss) per common share includes, in periods in which they are dilutive, the effect of those potentially dilutive securities where the average market price of the common stock exceeds the exercise prices for the respective periods. In fiscal 2021, the effects of 655,558 unvested restricted stock units and 293,973 common stock warrants were included in the diluted share calculation. In fiscal 2021, the effects of 495,366 stock options were excluded from the diluted net income per common share calculation because the effects of including these potentially dilutive shares was antidilutive. In fiscal 2020, there were 1,717,539 of potentially dilutive shares which may be issued in the future, including 183,053 unvested restricted stock units, 495,366 stock options and 1,039,120 common stock warrants. These shares were excluded in the diluted net loss per common share calculation as the effects of including theses potentially dilutive shares was antidilutive. |
NEW ACCOUNTING PRONOUNCEMENTS | NEW ACCOUNTING PRONOUNCEMENTS Except as described below, the Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements. The Company, as an emerging growth company, has elected to use the extended transition period for complying with new or revised financial accounting standards. The following new accounting pronouncements were adopted in fiscal 2021: In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting The following new accounting pronouncements, and related impacts on adoption are being evaluated by the Company: In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842) amending lease guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU No. 2020-05 extended the effective date to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company will adopt this standard beginning with our fiscal 2022. Management has evaluated the impact ASU No. 2016-02 will have on these consolidated financial statements. Based on the initial evaluation, the Company has determined that adopting this standard will have a material impact on our consolidated balance sheet as the Company has a significant number of operating leases. While we continue to assess all of the effects of adoption, we currently believe the most significant effects relate to the recognition of new Right of Use “ROU” assets and lease liabilities on our balance sheet for our showroom and office real estate leases. We do not expect a significant change in our leasing activities between now and adoption. The Company currently has deferred rent of $7 million in long-term liabilities. On adoption, we currently expect to recognize additional liabilities of approximately $92 million, of which $14 million will be short-term and $78 million will be long-term with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The new standard also provides practical expedients for an entity’s ongoing accounting. We currently expect to elect the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also currently expect to elect the practical expedient to not separate lease and non-lease components for all of our leases. |
Operations and Significant Ac_2
Operations and Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of net sales | For the fiscal years ended January 31, 2021 February 2, 2020 Showrooms $ 146,150,307 $ 148,003,995 Internet 151,064,651 55,781,186 Other 23,522,792 29,592,198 Total net sales $ 320,737,750 $ 233,377,379 |
Schedule of accounts receivable | As of January 31, 2021 As of February 2, 2020 Credit card receivables $ 2,964,077 $ 1,073,855 Wholesale receivables 1,549,383 4,724,154 Other receivables - 1,390,916 $ 4,513,460 $ 7,188,925 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Estimated Life 2021 2020 Office and store furniture, and equipment 5 Years $ 7,729,168 $ 6,674,950 Software 3 Years 3,628,108 2,652,960 Leasehold improvements Shorter of estimated useful life or lease term 33,828,176 28,071,912 Tools, Dies, Molds 5 Years 215,412 97,876 Construction in process NA 2,097,065 2,193,218 47,497,929 39,690,916 Accumulated depreciation and amortization (21,629,949 ) (15,846,655 ) $ 25,867,980 $ 23,844,261 |
Other Intangible Assets, Net (T
Other Intangible Assets, Net (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of other intangible assets | January 31, 2021 Estimated Life Gross Carrying Amount Accumulated Amortization Net carrying amount Patents 10 Years $ 2,387,328 $ (1,128,997 ) $ 1,258,331 Trademarks 3 Years 1,239,334 (980,633 ) 258,701 Other intangibles 5 Years 839,737 (839,737 ) - Total $ 4,466,399 $ (2,949,367 ) $ 1,517,032 February 2, 2020 Estimated Life Gross Carrying Amount Accumulated Amortization Net carrying amount Patents 10 Years $ 1,965,794 $ (846,898 ) $ 1,118,896 Trademarks 3 Years 982,800 (749,535 ) 233,265 Other intangibles 5 Years 839,737 (839,737 ) - Total $ 3,788,331 $ (2,436,170 ) $ 1,352,161 |
Schedule of expected amortization expense associated with other intangible assets | 2022 $ 281,527 2023 227,727 2024 190,365 2025 156,028 2026 155,027 Thereafter 506,358 $ 1,517,032 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other prepaid and other current assets | 2021 2020 Prepaid insurance $ 1,235,866 $ 1,174,920 Prepaid catalogue costs and related 588,305 3,067,302 Barter credits 2,521,271 374,423 Deposits 997,428 892,611 Prepaid rent 1,704,364 1,297,511 Prepaid inventory 102,263 511,100 Prepaid software licenses 967,045 580,247 Tenant allowance receivable 1,464,206 - Other 547,605 152,008 $ 10,128,353 $ 8,050,122 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred income taxes | 2021 2020 Deferred Income Tax Assets Federal net operating loss carryforward $ 7,762,784 $ 12,455,237 State net operating loss carryforward 1,817,622 2,485,074 Intangible assets 286,297 244,053 Accrued liabilities 4,422,738 1,833,549 Equity-based compensation 1,082,820 503,201 Property and equipment 640,581 1,748,593 Merchandise inventories 330,333 254,034 Charitable Contributions 9,615 - Total Deferred Income Tax Assets 16,352,790 19,523,741 Valuation Allowance (16,352,790 ) (19,523,741 ) Net Deferred Income Tax Asset $ - $ - |
Schedule of federal income tax rate to pre-tax income | 2021 2020 Provision (benefit) at Federal Statutory rates $ 3,110,696 $ (3,183,958 ) Permanent adjustments (410,550 ) (847,531 ) State tax, net of Federal provision (benefit) 495,442 (582,572 ) Federal True-ups 61,052 (393,702 ) Uncertain tax positions- NOLS - (10,753,384 ) Change in valuation allowance (3,170,951 ) 15,804,459 Income tax provision $ 85,689 $ 43,312 |
Schedule of federal, state and local corporate income taxes | 2021 2020 Current taxes: U.S. federal $ - $ - State and local 85,689 43,312 Total current tax expense $ 85,689 $ 43,312 Deferred taxes: U.S. federal $ - $ - State and local - - Total deferred tax expense (benefit) $ - $ - Total tax provision $ 85,689 $ 43,312 |
Schedule of percentage | 2021 2020 Provision (benefit) at Federal Statutory rates 21.0 % -21.0 % Permanent adjustments -2.8 % -5.6 % State tax, net of Federal provision (benefit) 3.4 % -3.8 % Federal True-ups 0.4 % -2.6 % Uncertain tax positions- NOLS 0.0 % -70.9 % Change in valuation allowance -21.4 % 104.2 % Income tax provision 0.60 % 0.30 % |
Schedule of unrecognized tax benefits | 2021 2020 Beginning balance $ - $ 10,753,384 Additions for tax positions acquired - - Additions for tax positions related to current year - - Tax positions of prior years: Payments - - Settlements - - Release - (10,753,384 ) Ending balance $ - $ - |
Commitments, Contingencies an_2
Commitments, Contingencies and Related Parties (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum payments for operating leases | 2022 $ 14,312,251 2023 13,220,110 2024 13,038,353 2025 12,125,283 2026 10,762,696 2027 8,883,670 Thereafter 20,093,465 $ 92,435,828 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Black-Scholes model assumptions | May 2019 Warrants 18,166 Expected volatility 44 % Expected dividend yield 0 % Expected term (in years) 3.00 Risk-free interest rate 2.69 % Exercise price $ 16.00 Calculated fair value of warrant $ 7.16 |
Schedule of warrant activity | Average exercise price Number of warrants Weighted average remaining contractual life (in years) Warrants Outstanding at February 3, 2019 $ 16.83 1,067,475 2.93 Warrants issued 16.00 18,166 2.40 Expired and canceled - - - Exercised 16.00 (46,521 ) (2.15 ) Warrants outstanding at February 2, 2020 16.83 1,039,120 1.93 Warrants issued - - - Expired and canceled - - - Exercised 16.00 (745,147 ) (0.41 ) Outstanding at January 31, 2021 $ 19.07 293,973 2.57 |
Schedule of stock option activity | For the years ended January 31, 2021 and February 2, 2020 Number of options Weighted average exercise price Weighted average remaining contractual life (in years) Average intrinsic value Outstanding at February 3, 2019 - $ - - - Granted 495,366 38.10 Exercised - - Expired and canceled - - Vested - - Outstanding at February 2, 2020 495,366 $ 38.10 2.34 - Granted - $ - Exercised - - Expired and canceled - - Vested - - Outstanding at January 31, 2021 495,366 $ 38.10 3.35 - Exercisable at the end of the period - - - - |
Schedule of unvested restricted stock | Number of shares Weighted average grant date fair value Unvested at February 3, 2019 377,286 $ 11.16 Granted 130,898 23.63 Forfeited (20,470 ) 16.21 Vested (304,661 ) 12.75 Unvested at February 2, 2020 183,053 21.34 Granted 627,940 16.94 Forfeited (5,701 ) 11.86 Vested (149,734 ) 16.24 Unvested at January 31, 2021 655,558 $ 18.86 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jan. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of operating segments | Fiscal year ending January 31, 2021 February 2, 2020 Sactionals $ 271,018,545 $ 188,436,976 Sacs 44,974,677 39,640,676 Other 4,744,528 5,299,727 $ 320,737,750 $ 233,377,379 |
Operations and Significant Ac_3
Operations and Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Operations and Significant Accounting Policies (Details) [Line Items] | ||
Accrued expenses | $ 2,226,723 | $ 2,177,715 |
Sales return | 334,896 | 442,390 |
Customer deposit liabilities | 5,992,633 | 1,653,597 |
Customer deposits | $ 1,653,597 | $ 1,059,957 |
Sales percentage | 10.00% | |
Deposit insurance | $ 250,000 | |
Wholesale customer, percentage | 97.00% | 97.00% |
Impairment percentage | 50.00% | |
Line of credit | $ 50,000 | |
Amortized deferred financing costs to interest expense | 87,730 | $ 73,024 |
Advertising expenses | 41,924,487 | 29,194,289 |
Warranty expense | 735,000 | 933,000 |
Warranty reserve | $ 606,000 | $ 1,180,000 |
Plan allows for issuance shares (in Shares) | 2,104,889 | 1,414,889 |
Effective date of the plan | 10 years | |
Shipping and handling costs | $ 63,098,657 | $ 47,148,918 |
Income tax rate settlement | 50.00% | |
Common stock warrants (in Shares) | 293,973 | |
Potentially dilutive shares, description | there were 1,717,539 of potentially dilutive shares which may be issued in the future, including 183,053 unvested restricted stock units, 495,366 stock options and 1,039,120 common stock warrants. | |
Deferred rent | $ 7,000,000 | |
Additional liability | 92,000,000 | |
Short term liabilities | 14,000,000 | |
Long term liabilities | $ 78,000,000 | |
Foreign countries percentage | 1.00% | 1.00% |
Stock Option [Member] | ||
Operations and Significant Accounting Policies (Details) [Line Items] | ||
Effect of stock options (in Shares) | 495,366 | |
Restricted Stock [Member] | ||
Operations and Significant Accounting Policies (Details) [Line Items] | ||
Amount of unvested restricted stock. (in Shares) | 655,558 |
Operations and Significant Ac_4
Operations and Significant Accounting Policies (Details) - Schedule of net sales - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Operations and Significant Accounting Policies (Details) - Schedule of net sales [Line Items] | ||
Total net sales | $ 320,737,750 | $ 233,377,379 |
Showrooms [Member] | ||
Operations and Significant Accounting Policies (Details) - Schedule of net sales [Line Items] | ||
Total net sales | 146,150,307 | 148,003,995 |
Internet [Member] | ||
Operations and Significant Accounting Policies (Details) - Schedule of net sales [Line Items] | ||
Total net sales | 151,064,651 | 55,781,186 |
Other [Member] | ||
Operations and Significant Accounting Policies (Details) - Schedule of net sales [Line Items] | ||
Total net sales | $ 23,522,792 | $ 29,592,198 |
Operations and Significant Ac_5
Operations and Significant Accounting Policies (Details) - Schedule of accounts receivable - USD ($) | Jan. 31, 2021 | Feb. 02, 2020 |
Schedule of accounts receivable [Abstract] | ||
Credit card receivables | $ 2,964,077 | $ 1,073,855 |
Wholesale receivables | 1,549,383 | 4,724,154 |
Other receivables | 1,390,916 | |
Trade accounts receivable | $ 4,513,460 | $ 7,188,925 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 6,099,675 | $ 4,894,220 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details) - Schedule of property and equipment - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 47,497,929 | $ 39,690,916 |
Accumulated depreciation and amortization | (21,629,949) | (15,846,655) |
Total property and equipment, net | $ 25,867,980 | 23,844,261 |
Office and store furniture, and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | 5 Years | |
Total property and equipment, gross | $ 7,729,168 | 6,674,950 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | 3 Years | |
Total property and equipment, gross | $ 3,628,108 | 2,652,960 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | Shorter of estimated useful life or lease term | |
Total property and equipment, gross | $ 33,828,176 | 28,071,912 |
Tools, Dies, Molds [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | 5 Years | |
Total property and equipment, gross | $ 215,412 | 97,876 |
Construction in process [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | NA | |
Total property and equipment, gross | $ 2,097,065 | $ 2,193,218 |
Other Intangible Assets, Net (D
Other Intangible Assets, Net (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense on other intangible assets | $ 513,197 | $ 263,842 |
Other Intangible Assets, Net _2
Other Intangible Assets, Net (Details) - Schedule of other intangible assets - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 4,466,399 | $ 3,788,331 |
Accumulated Amortization | (2,949,367) | (2,436,170) |
Net carrying amount | $ 1,517,032 | $ 1,352,161 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 10 years | 10 years |
Gross Carrying Amount | $ 2,387,328 | $ 1,965,794 |
Accumulated Amortization | (1,128,997) | (846,898) |
Net carrying amount | $ 1,258,331 | $ 1,118,896 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 3 years | 3 years |
Gross Carrying Amount | $ 1,239,334 | $ 982,800 |
Accumulated Amortization | (980,633) | (749,535) |
Net carrying amount | $ 258,701 | $ 233,265 |
Other intangibles [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Life | 5 years | 5 years |
Gross Carrying Amount | $ 839,737 | $ 839,737 |
Accumulated Amortization | (839,737) | (839,737) |
Net carrying amount |
Other Intangible Assets, Net _3
Other Intangible Assets, Net (Details) - Schedule of expected amortization expense associated with other intangible assets | Jan. 31, 2021USD ($) |
Schedule of expected amortization expense associated with other intangible assets [Abstract] | |
2022 | $ 281,527 |
2023 | 227,727 |
2024 | 190,365 |
2025 | 156,028 |
2026 | 155,027 |
Thereafter | 506,358 |
Total | $ 1,517,032 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - Schedule of other prepaid and other current assets - USD ($) | Jan. 31, 2021 | Feb. 02, 2020 |
Schedule of other prepaid and other current assets [Abstract] | ||
Prepaid insurance | $ 1,235,866 | $ 1,174,920 |
Prepaid catalogue costs and related | 588,305 | 3,067,302 |
Barter credits | 2,521,271 | 374,423 |
Deposits | 997,428 | 892,611 |
Prepaid rent | 1,704,364 | 1,297,511 |
Prepaid inventory | 102,263 | 511,100 |
Prepaid software licenses | 967,045 | 580,247 |
Tenant allowance receivable | 1,464,206 | |
Other | 547,605 | 152,008 |
Total prepaid expenses and other current assets | $ 10,128,353 | $ 8,050,122 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Mar. 27, 2020 | Jan. 31, 2021 | Feb. 02, 2020 | Dec. 31, 2019 | Dec. 31, 2011 | |
Income Taxes (Details) [Line Items] | |||||
Federal income tax rate description | the Federal government of the United States enacted the Coronavirus Aid Relief and Economic Security Act (“CARES Act”) which includes a number of significant changes to the existing U.S. tax laws including postponing the filing date of specific federal income tax returns and payments from April 15, 2020 to July 15, 2020, temporarily increasing the 30% limitation on the interest deduction to 50%, introduction of a capital investment deduction for Qualified Improvement Property (“QIP”), and change in the use of net operating losses. The Company’s federal net operating losses that have been incurred in tax years beginning on or before December 31, 2017 will have a 20-year carryforward limitation, a two-year carryback period and can offset 100% of future taxable income. Net operating losses incurred in tax years beginning after December 31, 2017 and before January 1, 2021 will have an indefinite life, a five-year carryback period and can offset 100% of future taxable income prior to 2021 and 80% of future taxable income after 2020. Net operating losses incurred in tax years beginning on or after January 1, 2021 will have an indefinite life, generally no carryback period and can offset 80% of future taxable income. | ||||
State taxes | $ 495,442 | $ (582,572) | |||
Net operating loss carryforwards available for federal income tax | 36,966,000 | 59,311,000 | |||
State net operating loss carryforwards | 30,399,000 | 42,618,000 | |||
Annual limitation value | 7,665,000 | $ 5,888,000 | $ 302,000 | ||
Additional limitation | 40,000,000 | ||||
Increased (decreased) the valuation allowance | $ (3,171,000) | 15,804,000 | |||
Operating loss carryforwards expiration, description | expire in varying amounts from fiscal 2027 to fiscal 2037 | ||||
State Taxes [Member] | |||||
Income Taxes (Details) [Line Items] | |||||
State taxes | $ 86,000 | $ 43,000 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of deferred income taxes - USD ($) | Jan. 31, 2021 | Feb. 02, 2020 |
Deferred Income Tax Assets | ||
Federal net operating loss carryforward | $ 7,762,784 | $ 12,455,237 |
State net operating loss carryforward | 1,817,622 | 2,485,074 |
Intangible assets | 286,297 | 244,053 |
Accrued liabilities | 4,422,738 | 1,833,549 |
Equity-based compensation | 1,082,820 | 503,201 |
Property and equipment | 640,581 | 1,748,593 |
Merchandise inventories | 330,333 | 254,034 |
Charitable Contributions | 9,615 | |
Total Deferred Income Tax Assets | 16,352,790 | 19,523,741 |
Valuation Allowance | (16,352,790) | (19,523,741) |
Net Deferred Income Tax Asset |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of federal income tax rate to pre-tax income - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Schedule of federal income tax rate to pre-tax income [Abstract] | ||
Provision (benefit) at Federal Statutory rates | $ 3,110,696 | $ (3,183,958) |
Permanent adjustments | (410,550) | (847,531) |
State tax, net of Federal provision (benefit) | 495,442 | (582,572) |
Federal True-ups | 61,052 | (393,702) |
Uncertain tax positions- NOLS | (10,753,384) | |
Change in valuation allowance | (3,170,951) | 15,804,459 |
Income tax provision | $ 85,689 | $ 43,312 |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of federal, state and local corporate income taxes - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Current taxes: | ||
U.S. federal | ||
State and local | 85,689 | 43,312 |
Total current tax expense | 85,689 | 43,312 |
Deferred taxes: | ||
U.S. federal | ||
State and local | ||
Total deferred tax expense (benefit) | ||
Total tax provision | $ 85,689 | $ 43,312 |
Income Taxes (Details) - Sche_4
Income Taxes (Details) - Schedule of percentage | 11 Months Ended | |
Jan. 31, 2021 | Feb. 29, 2020 | |
Schedule of percentage [Abstract] | ||
Provision (benefit) at Federal Statutory rates | 21.00% | (21.00%) |
Permanent adjustments | (2.80%) | (5.60%) |
State tax, net of Federal provision (benefit) | 3.40% | (3.80%) |
Federal True-ups | 0.40% | (2.60%) |
Uncertain tax positions- NOLS | 0.00% | (70.90%) |
Change in valuation allowance | (21.40%) | 104.20% |
Income tax provision | 0.60% | 0.30% |
Income Taxes (Details) - Sche_5
Income Taxes (Details) - Schedule of unrecognized tax benefits - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Schedule of unrecognized tax benefits [Abstract] | ||
Beginning balance | $ 10,753,384 | |
Additions for tax positions acquired | ||
Additions for tax positions related to current year | ||
Tax positions of prior years: | ||
Payments | ||
Settlements | ||
Release | (10,753,384) | |
Ending balance |
Commitments, Contingencies an_3
Commitments, Contingencies and Related Parties (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Commitments, Contingencies and Related Parties (Details) [Line Items] | ||
Rent expenses | $ 21,380,844 | $ 19,676,958 |
Severance contingency, description | A number of these agreements have severance provisions, ranging from 12 to 18 months of salary, in the event those associates are terminated without cause. The total amount of exposure to the Company under these agreements was $4,009,943 at January 31, 2021 if all executives with employment agreements were terminated without cause and the full amount of severance was payable. | |
Out of pocket expenses | $ 51,614 | 70,000 |
Minimum [Member] | ||
Commitments, Contingencies and Related Parties (Details) [Line Items] | ||
Monthly payments | 2,500 | |
Maximum [Member] | ||
Commitments, Contingencies and Related Parties (Details) [Line Items] | ||
Monthly payments | 45,600 | |
Satori Capital, LLC [Member] | ||
Commitments, Contingencies and Related Parties (Details) [Line Items] | ||
Management fees and expenses | 100,000 | 100,000 |
Expenses incurred amount | 70,000 | |
Management fees | 25,000 | |
Blueport Commerce [Member] | ||
Commitments, Contingencies and Related Parties (Details) [Line Items] | ||
Amounts payable to related parties | 150,508 | |
Expenses incurred amount | 2,143,392 | 1,833,154 |
Fee incurred | 663,572 | |
Mistral Capital Managements, LLC [Member] | ||
Commitments, Contingencies and Related Parties (Details) [Line Items] | ||
Management fees and expenses | 400,000 | 400,000 |
Amounts payable to related parties | 0 | 2,000 |
Expenses incurred amount | 1,959 | 44,140 |
Satori Capital, LLC [Member] | ||
Commitments, Contingencies and Related Parties (Details) [Line Items] | ||
Amounts payable to related parties | $ 8,333 | $ 95,000 |
Commitments, Contingencies an_4
Commitments, Contingencies and Related Parties (Details) - Schedule of future minimum payments for operating leases | Jan. 31, 2021USD ($) |
Schedule of future minimum payments for operating leases [Abstract] | |
2022 | $ 14,312,251 |
2023 | 13,220,110 |
2024 | 13,038,353 |
2025 | 12,125,283 |
2026 | 10,762,696 |
2027 | 8,883,670 |
Thereafter | 20,093,465 |
Total | $ 92,435,828 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Jan. 31, 2021 | Feb. 02, 2020 | Jun. 05, 2019 | May 14, 2019 |
Stockholders' Equity (Details) [Line Items] | |||||||
Fair value of warrants (in Dollars) | $ 130,000 | ||||||
Warrant exercised | 17,396 | ||||||
Cashless warrant exercised | 738,897 | ||||||
Stock options are subject to vesting percentage | 100.00% | ||||||
Stock price (in Dollars) | $ 75 | ||||||
Stock option modified | 495,366 | ||||||
Additional compensation (in Dollars) | $ 874,000 | ||||||
Modification and remaining expense was recognized (in Dollars) | $ 315,000 | ||||||
SAC LLC [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Equity based compensation expense (in Dollars) | $ 313,000 | ||||||
2017 Equity Incentive Plan [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Issuance of common shares | 73,507 | ||||||
Common stock reserved issuance | 690,000 | ||||||
Non statutory Stock options granted | 495,366 | ||||||
Stock option price exercise (in Dollars per share) | $ 38.10 | ||||||
Exchange of transferred shares of common stock | 175,478 | ||||||
Equity based compensation expense (in Dollars) | $ 4,700,000 | $ 4,900,000 | |||||
Equity-based compensation, description | The triggering event was the market capitalization of the Company post-IPO, exceeding $300 million for 60 consecutive trading days and the expiration of the lock-up period. This accelerated vesting resulted in equity based compensation in the amount of $2.9 million. | ||||||
Total unrecognized equity based compensation cost related to unvested stock option and restricted unit awards (in Dollars) | $ 5,300,000 | ||||||
Weighted average period | 2 years 7 months 24 days | ||||||
2017 Equity Incentive Plan [Member] | Minimum [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Common stock reserved issuance | 615,066 | ||||||
Number of shares of common stock reserved for issuance | 1,414,889 | ||||||
2017 Equity Incentive Plan [Member] | Maximum [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Common stock reserved issuance | 1,414,889 | ||||||
Number of shares of common stock reserved for issuance | 2,104,889 | ||||||
Warrant [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Warrants issued | 18,166 | ||||||
Issuance of common shares | 439,447 | 27,246 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of Black-Scholes model assumptions | 4 Months Ended |
May 31, 2019$ / sharesshares | |
Schedule of Black-Scholes model assumptions [Abstract] | |
Warrants (in Shares) | shares | 18,166 |
Expected volatility | 44.00% |
Expected dividend yield | 0.00% |
Expected term (in years) | 3 years |
Risk-free interest rate | 2.69% |
Exercise price (in Dollars per share) | $ 16 |
Calculated fair value of warrant (in Dollars per share) | $ 7.16 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of warrant activity - Warrants Activity [Member] - $ / shares | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Class of Warrant or Right [Line Items] | ||
Average exercise price, Warrants Outstanding, Beginning balance (in Dollars per share) | $ 16.83 | $ 16.83 |
Number of warrants, Outstanding, Beginning balance | 1,039,120 | 1,067,475 |
Weighted average remaining contractual life (in years), Warrants Outstanding, Beginning balance | 2 years 11 months 4 days | |
Average exercise price, Warrants issued (in Dollars per share) | $ 16 | |
Number of warrants, Warrants issued | 18,166 | |
Weighted average remaining contractual life (in years), Warrants issued | 2 years 4 months 24 days | |
Average exercise price, Expired and canceled (in Dollars per share) | ||
Number of warrants, Expired and canceled | ||
Weighted average remaining contractual life (in years), Expired and canceled | ||
Average exercise price, Exercised | 16 | 16 |
Number of warrants, Exercised | (745,147) | (46,521) |
Weighted average remaining contractual life (in years), Exercised | 4 months 28 days | 2 years 1 month 24 days |
Average exercise price, Warrants Outstanding, Ending balance (in Dollars per share) | $ 19.07 | $ 16.83 |
Number of warrants, Warrants Outstanding, Ending balance | 293,973 | 1,039,120 |
Weighted average remaining contractual life (in years), Warrants Outstanding, Ending balance | 2 years 6 months 25 days | 1 year 11 months 4 days |
Stockholders' Equity (Details_3
Stockholders' Equity (Details) - Schedule of stock option activity - Stock options [Member] - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Stockholders' Equity (Details) - Schedule of stock option activity [Line Items] | ||
Number of options, Outstanding Balance | 495,366 | |
Weighted average exercise price, Outstanding Balance (in Dollars per share) | $ 38.10 | |
Number of options, Granted | 495,366 | |
Weighted average exercise price, Granted (in Dollars per share) | $ 38.10 | |
Number of options, Exercised | ||
Weighted average exercise price, Exercised (in Dollars per share) | ||
Number of options, Expired and canceled | ||
Weighted average exercise price, Expired and canceled (in Dollars per share) | ||
Number of options, Vested | ||
Weighted average exercise price, Vested (in Dollars per share) | ||
Number of options, Outstanding Balance | 495,366 | 495,366 |
Weighted average exercise price, Outstanding Balance (in Dollars per share) | $ 38.10 | $ 38.10 |
Weighted average remaining contractual life (in years), Outstanding Balance | 3 years 4 months 6 days | 2 years 4 months 2 days |
Average intrinsic value, Outstanding Balance (in Dollars) | ||
Number of options, Exercisable at the end of the period | ||
Weighted average exercise price, Exercisable at the end of the period (in Dollars per share) | ||
Average intrinsic value, Exercisable at the end of the period (in Dollars) |
Stockholders' Equity (Details_4
Stockholders' Equity (Details) - Schedule of unvested restricted stock - Restricted stock [Member] - $ / shares | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Stockholders' Equity (Details) - Schedule of unvested restricted stock [Line Items] | ||
Number of shares, Unvested, Beginning balance | 183,053 | 377,286 |
Weighted average grant date fair value, Unvested, Beginning balance | $ 21.34 | $ 11.16 |
Number of shares, Granted | 627,940 | 130,898 |
Weighted average grant date fair value, Granted | $ 16.94 | $ 23.63 |
Number of shares, Forfeited | (5,701) | (20,470) |
Weighted average grant date fair value, Forfeited | $ 11.86 | $ 16.21 |
Number of shares, Vested | (149,734) | (304,661) |
Weighted average grant date fair value, Vested | $ 16.24 | $ 12.75 |
Number of shares, Unvested, Ending balance | 655,558 | 183,053 |
Weighted average grant date fair value, Unvested, Ending balance | $ 18.86 | $ 21.34 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Retirement Benefits [Abstract] | ||
Contributions plan, percentage | 100.00% | |
Defined contribution plan, cost | $ 482,000 | $ 406,000 |
Financing Arrangements (Details
Financing Arrangements (Details) - USD ($) $ in Millions | Feb. 06, 2018 | Jan. 31, 2021 |
Financing Arrangements (Details) [Line Items] | ||
Company borrowings (in Dollars) | $ 25 | |
Borrowing eligible credit card receivables percentage | 90.00% | |
Borrowings wholesale receivables percentage | 85.00% | |
Net recovery percentage of inventory | 85.00% | |
Increased net recovery percentage | 90.00% | |
Borrowing availability under the line of credit (in Dollars) | $ 15.9 | |
Minimum [Member] | ||
Financing Arrangements (Details) [Line Items] | ||
LIBOR rate | 2.00% | |
Maximum [Member] | ||
Financing Arrangements (Details) [Line Items] | ||
LIBOR rate | 2.25% |
Segment Information (Details)
Segment Information (Details) | 12 Months Ended |
Jan. 31, 2021 | |
Segment Reporting [Abstract] | |
Operating segments, description | The Company’s operating segments are aggregated for financial reporting purposes because they are similar in each of the following areas including economic characteristics, class of consumer, nature of products and distribution method and products are a singular group of products which make up over 95% of total sales. |
Number of reporting segment | 1 |
Segment Information (Details) -
Segment Information (Details) - Schedule of operating segments - USD ($) | 12 Months Ended | |
Jan. 31, 2021 | Feb. 02, 2020 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 320,737,750 | $ 233,377,379 |
Sactionals [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 271,018,545 | 188,436,976 |
Sacs [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 44,974,677 | 39,640,676 |
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 4,744,528 | $ 5,299,727 |
Barter Arrangements (Details)
Barter Arrangements (Details) - USD ($) | Jan. 31, 2021 | Feb. 02, 2020 |
Barter Arrangements [Abstract] | ||
Inventory | $ 3,169,825 | $ 1,097,488 |
Prepaid media asset | 2,937,035 | 1,055,185 |
Unused media credits | $ 2,521,271 | $ 1,055,185 |