Document And Entity Information
Document And Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Jul. 26, 2023 | Jun. 30, 2022 | |
Document Information Line Items | |||
Entity Registrant Name | Polished.com Inc. | ||
Document Type | 10-K/A | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 105,386,867 | ||
Entity Public Float | $ 47.3 | ||
Amendment Flag | true | ||
Amendment Description | EXPLANATORY NOTE REGARDING THE AMENDMENTThis Amendment No. 2 to the Annual Report on Form 10-K of Polished.com Inc. is being filed solely to correct certain executive compensation information for Maria Johnson and Albert Fouerti in the Summary Compensation Table in Item 11 “Executive Compensation”.EXPLANATORY NOTE REGARDING THE RESTATEMENTPolished.com Inc. (the “Company”) is filing this comprehensive annual report on Form 10-K for the fiscal years ended December 31, 2022 and 2021 and the quarterly periods ended March 31, 2022, June 30, 2022, September 30, 2022 and March 31, 2023 (the “Comprehensive Form 10-K”) as part of its efforts to become current in its filing obligations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Although we have regularly made filings through current reports on Form 8-K when deemed appropriate, this Comprehensive Form 10-K is our first periodic filing with the Securities and Exchange Commission (the “SEC”) since the filing of our quarterly report on Form 10-Q for the quarter ended March 31, 2022 as a result of the matters related to investigation described in this Annual Report under the heading “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operation – Investigation”. As a result of the foregoing, our former auditor withdrew its previously issued audit opinion on our December 31, 2021 consolidated financial statements, issued on March 31, 2022, and declined to be associated with the quarterly financial statements for the periods ended June 30, 2021, September 30, 2021, and March 31, 2022, filed on August 8, 2021, November 16, 2021 and May 12, 2022, respectively. Included in this Comprehensive Form 10-K are our audited financial statements for the fiscal year ended December 31, 2022, and our select, unaudited quarterly financial information for the periods ended June 30, 2022, September 30, 2022 and March 31, 2023, in each case which have not been previously filed with the SEC.In addition, the Comprehensive Form 10-K also restates the Company’s previously issued consolidated financial statements as of and for the fiscal year ended December 31, 2021 (see Note 2, “Summary of Significant Accounting Policies – Restatement,” in “Item 8 Financial Statements and Supplementary Data”, for additional information), which have been re-audited by our new independent registered public accounting firm, Sadler, Gibb & Associates, LLC. See Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure. The relevant unaudited interim financial information for the period ended March 31, 2022 has also been restated. See Note 2, “Summary of Significant Accounting Policies – Restatement,” in “Item 8 Financial Statements and Supplementary Data”, for such restated information.The impact of the restatement is discussed in detail in this Annual Report under the headings “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operation – Investigation.” | ||
Entity Central Index Key | 0001810140 | ||
Entity Current Reporting Status | No | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-39418 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 83-3713938 | ||
Entity Address, Address Line One | 1870 Bath Avenue | ||
Entity Address, City or Town | Brooklyn | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 11214 | ||
City Area Code | 800 | ||
Local Phone Number | 299-9470 | ||
Entity Interactive Data Current | No | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Firm ID | 3627 | ||
Auditor Name | Sadler, Gibb & Associates, LLC | ||
Auditor Location | Draper, UT | ||
Common Stock, par value $0.0001 per share | |||
Document Information Line Items | |||
Trading Symbol | POL | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Security Exchange Name | NYSE | ||
Warrants to Purchase Common Stock | |||
Document Information Line Items | |||
Trading Symbol | POL WS | ||
Title of 12(b) Security | Warrants to Purchase Common Stock | ||
Security Exchange Name | NYSE |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||||||
Cash and cash equivalents | $ 25,615 | $ 19,549 | $ 25,983 | $ 47,386 | $ 28,433 | $ 25,724 |
Restricted cash | 950 | 950 | 2,583 | 1,733 | 1,733 | 8,067 |
Receivables, net | 16,693 | 26,650 | 22,411 | 25,657 | 24,892 | 23,531 |
Vendor deposits | 30,078 | 25,022 | 18,067 | 18,130 | 24,785 | 12,200 |
Merchandise inventory, net | 36,350 | 41,766 | 46,203 | 56,750 | 44,488 | 52,393 |
Prepaid expenses and other current assets | 10,920 | 11,217 | 5,540 | 6,335 | 9,825 | 5,980 |
Total Current Assets | 120,606 | 125,154 | 120,787 | 155,991 | 134,156 | 127,895 |
Property and equipment, net | 4,975 | 5,075 | 4,666 | 4,551 | 5,287 | 4,585 |
Operating lease right-of-use assets | 10,857 | 11,688 | 14,135 | 13,327 | 12,512 | 14,937 |
Derivative instruments | 1,853 | 3,178 | 3,540 | |||
Goodwill | 106,173 | 106,173 | 191,614 | 191,614 | 191,614 | 191,614 |
Intangible assets, net | 9,542 | 10,296 | 41,658 | 39,103 | 36,549 | 44,212 |
Deferred tax asset, net | 3 | 1 | ||||
Other long-term assets | 349 | 349 | 349 | 349 | 349 | 349 |
TOTAL ASSETS | 254,358 | 261,914 | 373,209 | 404,935 | 384,007 | 383,592 |
Current Liabilities | ||||||
Accounts payable and accrued expenses | 80,938 | 81,537 | 84,717 | 72,093 | 70,602 | 82,799 |
Due to related party | 2,413 | 2,413 | ||||
Customer deposits | 5,090 | 7,292 | 12,590 | 16,750 | 7,955 | 28,815 |
Current portion of notes payable, net | 7,264 | 6,628 | 7,907 | 5,395 | 6,009 | 7,910 |
Current portion of finance lease liabilities | 107 | 112 | 120 | 118 | 115 | 65 |
Current portion of operating lease liabilities | 3,353 | 3,726 | 3,688 | 3,747 | 3,808 | 3,874 |
Contingent note payable | 200 | 200 | 200 | 198 | ||
Total Current Liabilities | 96,752 | 99,295 | 109,222 | 100,716 | 91,102 | 123,661 |
Notes payable, net of current portion | 88,972 | 90,816 | 47,180 | 94,645 | 92,727 | 48,559 |
Finance lease liabilities, net of current portion | 199 | 225 | 306 | 279 | 252 | 121 |
Operating lease liabilities, net of current portion | 8,443 | 9,013 | 11,796 | 10,838 | 9,865 | 12,493 |
Derivative instrument, net of current Portion | 936 | |||||
Deferred tax liability, net | 8,382 | 7,470 | 5,174 | 8,407 | ||
TOTAL LIABILITIES | 194,366 | 199,349 | 176,886 | 214,884 | 199,120 | 193,241 |
Stockholders’ Equity | ||||||
Preferred stock value | ||||||
Common stock value | 11 | 11 | 11 | 11 | 11 | 11 |
Treasury stock, at cost | (2,000) | (2,000) | ||||
Additional paid-in capital | 223,015 | 222,827 | 224,801 | 224,821 | 224,841 | 224,648 |
Accumulated deficit | (163,034) | (160,273) | (28,489) | (32,781) | (37,965) | (34,308) |
TOTAL STOCKHOLDERS’ EQUITY | 59,992 | 62,565 | 196,323 | 190,051 | 184,887 | 190,351 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 254,358 | $ 261,914 | $ 373,209 | $ 404,935 | 384,007 | 383,592 |
As Restated | ||||||
Current Assets | ||||||
Cash and cash equivalents | 25,724 | |||||
Restricted cash | 8,067 | |||||
Receivables, net | 23,531 | |||||
Vendor deposits | 12,200 | |||||
Merchandise inventory, net | 52,393 | |||||
Prepaid expenses and other current assets | 5,980 | |||||
Total Current Assets | 127,895 | |||||
Property and equipment, net | 4,585 | |||||
Operating lease right-of-use assets | $ 14,135 | 14,937 | ||||
Derivative instruments | ||||||
Goodwill | 191,614 | |||||
Intangible assets, net | 44,212 | |||||
Deferred tax asset, net | ||||||
Other long-term assets | 349 | |||||
TOTAL ASSETS | 383,592 | |||||
Current Liabilities | ||||||
Accounts payable and accrued expenses | 82,799 | |||||
Customer deposits | 28,815 | |||||
Current portion of notes payable, net | 7,910 | |||||
Current portion of finance lease liabilities | 65 | |||||
Current portion of operating lease liabilities | 3,874 | |||||
Contingent note payable | 198 | |||||
Total Current Liabilities | 123,661 | |||||
Notes payable, net of current portion | 48,559 | |||||
Finance lease liabilities, net of current portion | 121 | |||||
Operating lease liabilities, net of current portion | 12,493 | |||||
Deferred tax liability, net | 8,407 | |||||
TOTAL LIABILITIES | 193,241 | |||||
Stockholders’ Equity | ||||||
Preferred stock value | ||||||
Common stock value | 11 | |||||
Additional paid-in capital | 224,648 | |||||
Accumulated deficit | (34,308) | |||||
TOTAL STOCKHOLDERS’ EQUITY | 190,351 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 383,592 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||||||
Preferred stock, shares outstanding | ||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 |
Common stock, shares issued | 105,469,878 | 105,227,876 | 105,227,876 | 105,227,876 | 106,457,098 | 106,387,332 |
Common stock, shares outstanding | 105,469,878 | 105,227,876 | 105,227,876 | 105,227,876 | 106,457,098 | 106,387,332 |
As Restated | ||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | |||||
Preferred stock, shares authorized | 20,000,000 | |||||
Preferred stock, shares issued | ||||||
Preferred stock, shares outstanding | ||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | |||||
Common stock, shares authorized | 200,000,000 | |||||
Common stock, shares issued | 106,387,332 | |||||
Common stock, shares outstanding | 106,387,332 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product sales, net | $ 95,439 | $ 143,566 | $ 138,463 | $ 148,681 | $ 141,867 | $ 64,072 | $ 287,144 | $ 77,769 | $ 430,710 | $ 219,637 | $ 534,474 | |
Cost of goods sold | 74,292 | 122,431 | 115,438 | 117,919 | 110,495 | 51,017 | 233,357 | 62,085 | 355,788 | 172,581 | 444,957 | |
Gross profit | 21,147 | 21,135 | 23,025 | 30,762 | 31,372 | 13,055 | 53,787 | 15,684 | 74,922 | 47,056 | 89,517 | |
Operating Expenses | ||||||||||||
Personnel | 6,484 | 8,348 | 7,402 | 6,646 | 8,547 | 4,821 | 14,048 | 6,753 | 22,396 | 15,300 | 28,800 | |
Advertising | 5,121 | 7,534 | 5,363 | 5,578 | 3,715 | 2,932 | 10,941 | 4,015 | 18,475 | 7,730 | 25,461 | |
Bank and credit card fees | 3,373 | 5,932 | 4,600 | 4,589 | 4,918 | 2,095 | 9,189 | 2,628 | 15,121 | 7,546 | 18,776 | |
Depreciation and amortization | 1,070 | 2,882 | 2,887 | 2,819 | 3,610 | 175 | 5,706 | 297 | 8,588 | 3,908 | 11,456 | |
Impairment of goodwill and intangible assets | 109,140 | |||||||||||
Loss on abandonment of right-of-use asset | 1,437 | 1,437 | 1,437 | |||||||||
General and administrative | 4,987 | 7,260 | 3,563 | 4,255 | 4,080 | 2,858 | 7,818 | 5,097 | 15,078 | 9,176 | 24,226 | |
Total Operating Expenses | 21,035 | 31,956 | 23,815 | 23,887 | 24,870 | 14,318 | 47,702 | 20,227 | 79,658 | 45,097 | 217,859 | |
INCOME (LOSS) FROM OPERATIONS | 112 | (10,821) | (790) | 6,875 | 6,502 | (1,263) | 6,085 | (4,543) | (4,736) | 1,959 | (128,342) | |
Loss on settlement of debt | (3,241) | (1,748) | (3,241) | (1,748) | ||||||||
Other income | (90) | 11 | (140) | 19 | ||||||||
Other Income (Expenses) | ||||||||||||
Interest income | 357 | 174 | 64 | 44 | 34 | 12 | 108 | 22 | 282 | 57 | 518 | |
Financing costs | ||||||||||||
Adjustment in value of contingency | (2) | (2) | (2) | (2) | ||||||||
Interest expense | (1,882) | (1,351) | (302) | (941) | (1,099) | (1,017) | (1,243) | (1,251) | (2,594) | (2,350) | (3,940) | |
Gain on change in fair value of derivative instruments | (1,325) | 4,476 | (936) | (936) | 3,540 | 3,178 | ||||||
Loss on settlement of debt | (3,241) | (1,748) | (3,240) | |||||||||
Other income | 81 | (50) | (41) | (49) | 8 | (2,546) | ||||||
Total Other Expenses | (2,769) | 3,249 | (4,456) | (948) | (1,057) | (2,753) | (5,404) | (2,966) | (2,155) | (4,022) | (6,032) | |
NET INCOME (LOSS) BEFORE INCOME TAXES | (2,657) | (7,572) | (5,246) | 5,927 | 5,445 | (4,016) | 681 | (7,509) | (6,891) | (2,063) | (134,374) | |
INCOME TAX (EXPENSE) BENEFIT | (104) | 2,388 | 954 | (108) | (2,129) | 8,049 | 846 | 8,048 | 3,234 | 5,919 | 8,409 | |
NET INCOME (LOSS) | $ (2,761) | $ (5,184) | $ (4,292) | $ 5,819 | $ 3,316 | $ 4,033 | $ 1,527 | $ 539 | $ (3,657) | $ 3,856 | $ (125,965) | $ (7,582) |
Income per common share | ||||||||||||
DILUTED NET LOSS PER COMMON SHARE (in Dollars per share) | $ (0.03) | $ (0.05) | $ (0.04) | $ 0.05 | $ 0.03 | $ 0.09 | $ 0.01 | $ 0.02 | $ (0.03) | $ 0.06 | $ (1.18) | $ (0.12) |
NET LOSS PER COMMON SHARE – BASIC (in Dollars per share) | $ (0.03) | $ (0.05) | $ (0.04) | $ 0.05 | $ 0.03 | $ 0.11 | $ 0.01 | $ 0.03 | $ (0.03) | $ 0.08 | $ (1.18) | $ (0.12) |
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||||||||||||
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC (in Shares) | 105,380,910 | 105,227,876 | 105,774,197 | 106,386,548 | 106,387,331 | 36,540,827 | 106,080,764 | 21,410,073 | 105,792,287 | 50,047,045 | 106,436,719 | 64,528,299 |
DILUTED WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (in Shares) | 105,380,910 | 105,227,876 | 105,774,197 | 106,386,548 | 131,787,293 | 46,448,892 | 106,080,764 | 26,364,106 | 105,792,287 | 61,816,085 | 106,436,719 | 64,528,299 |
As Restated [Member] | ||||||||||||
Product sales, net | $ 345,725 | |||||||||||
Cost of goods sold | 275,922 | |||||||||||
Gross profit | 69,803 | |||||||||||
Operating Expenses | ||||||||||||
Personnel | 21,745 | |||||||||||
Advertising | 11,961 | |||||||||||
Bank and credit card fees | 13,599 | |||||||||||
Depreciation and amortization | 6,557 | |||||||||||
Impairment of goodwill and intangible assets | ||||||||||||
Loss on abandonment of right-of-use asset | 1,437 | |||||||||||
General and administrative | 16,958 | |||||||||||
Total Operating Expenses | 72,257 | |||||||||||
INCOME (LOSS) FROM OPERATIONS | (2,454) | |||||||||||
Other Income (Expenses) | ||||||||||||
Interest income | 95 | |||||||||||
Adjustment in value of contingency | (9) | |||||||||||
Interest expense | (3,682) | |||||||||||
Loss on settlement of debt | (1,748) | |||||||||||
Other income | 318 | |||||||||||
Total Other Expenses | (5,026) | |||||||||||
NET INCOME (LOSS) BEFORE INCOME TAXES | (7,480) | |||||||||||
INCOME TAX (EXPENSE) BENEFIT | (102) | |||||||||||
NET INCOME (LOSS) | $ (7,582) | |||||||||||
Income per common share | ||||||||||||
DILUTED NET LOSS PER COMMON SHARE (in Dollars per share) | $ (0.12) | |||||||||||
NET LOSS PER COMMON SHARE – BASIC (in Dollars per share) | $ (0.12) | |||||||||||
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||||||||||||
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC (in Shares) | 64,528,299 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parentheticals) | 12 Months Ended |
Dec. 31, 2021 $ / shares shares | |
DILUTED NET LOSS PER COMMON SHARE | $ (0.12) |
DILUTED WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | shares | 64,528,299 |
As Restated [Member] | |
DILUTED NET LOSS PER COMMON SHARE | $ (0.12) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | As Restated Common Stock | As Restated Additonal Paid-in Capital | As Restated Accumulated Deficit | As Restated | Common Stock | Additonal Paid-in Capital | Accumulated Deficit | Treasury Stock At Cost | Total |
Balance at Dec. 31, 2020 | $ 1 | $ 13,409 | $ (26,726) | $ (13,316) | |||||
Balance (in Shares) at Dec. 31, 2020 | 6,111,200 | ||||||||
Issuance of warrants with debt | 1,340 | 1,340 | |||||||
Issuance of common stock in the acquisition of Appliances Connection | $ 1 | 12,263 | 12,264 | ||||||
Issuance of common stock in the acquisition of Appliances Connection (in Shares) | 5,895,973 | ||||||||
Issuance of common stock and warrants in connection with a public offering | $ 9 | 194,389 | 194,398 | ||||||
Issuance of common stock and warrants in connection with a public offering (in Shares) | 93,111,111 | ||||||||
Issuance of common stock through equity incentive awards | 555 | 555 | |||||||
Issuance of common stock through equity incentive awards (in Shares) | 216,800 | ||||||||
Issuance of common stock in connection with exercise of warrants | 2,368 | 2,368 | |||||||
Issuance of common stock in connection with exercise of warrants (in Shares) | 1,052,248 | ||||||||
Stock-based compensation | 324 | 324 | |||||||
Net loss | $ (7,582) | (7,582) | (7,582) | ||||||
Balance at Dec. 31, 2021 | $ 11 | $ 224,648 | $ (34,308) | 190,351 | $ 11 | 224,648 | (34,308) | 190,351 | |
Balance (in Shares) at Dec. 31, 2021 | 106,387,332 | 106,387,332 | |||||||
Issuance of common stock through equity incentive awards | 120 | 120 | |||||||
Issuance of common stock through equity incentive awards (in Shares) | 69,766 | ||||||||
Stock compensation expense | 33 | 33 | |||||||
Net loss | 5,819 | 5,819 | |||||||
Balance at Mar. 31, 2022 | $ 11 | 224,801 | (28,489) | 196,323 | |||||
Balance (in Shares) at Mar. 31, 2022 | 106,457,098 | ||||||||
Balance at Dec. 31, 2021 | $ 11 | 224,648 | (34,308) | 190,351 | $ 11 | 224,648 | (34,308) | 190,351 | |
Balance (in Shares) at Dec. 31, 2021 | 106,387,332 | 106,387,332 | |||||||
Net loss | 1,527 | ||||||||
Balance at Jun. 30, 2022 | $ 11 | 224,821 | (32,781) | (2,000) | 190,051 | ||||
Balance (in Shares) at Jun. 30, 2022 | 105,227,876 | ||||||||
Balance at Dec. 31, 2021 | $ 11 | 224,648 | (34,308) | 190,351 | $ 11 | 224,648 | (34,308) | 190,351 | |
Balance (in Shares) at Dec. 31, 2021 | 106,387,332 | 106,387,332 | |||||||
Net loss | (3,657) | ||||||||
Balance at Sep. 30, 2022 | $ 11 | 224,841 | (37,965) | (2,000) | 184,887 | ||||
Balance (in Shares) at Sep. 30, 2022 | 105,227,876 | ||||||||
Balance at Dec. 31, 2021 | $ 11 | $ 224,648 | $ (34,308) | $ 190,351 | $ 11 | 224,648 | (34,308) | 190,351 | |
Balance (in Shares) at Dec. 31, 2021 | 106,387,332 | 106,387,332 | |||||||
Stock-based compensation | 179 | 179 | |||||||
Net loss | (125,965) | (125,965) | |||||||
Balance at Dec. 31, 2022 | $ 11 | 222,827 | (160,273) | 62,565 | |||||
Balance (in Shares) at Dec. 31, 2022 | 105,227,876 | ||||||||
Issuance of common stock to directors | |||||||||
Issuance of common stock to directors (in Shares) | 69,766 | ||||||||
Purchase of and subsequent retirement of treasury stock | (2,000) | (2,000) | |||||||
Purchase of and subsequent retirement of treasury stock (in Shares) | 1,229,222 | ||||||||
Balance at Mar. 31, 2022 | $ 11 | 224,801 | (28,489) | 196,323 | |||||
Balance (in Shares) at Mar. 31, 2022 | 106,457,098 | ||||||||
Stock compensation expense | 20 | 20 | |||||||
Net loss | (4,292) | (4,292) | |||||||
Balance at Jun. 30, 2022 | $ 11 | 224,821 | (32,781) | (2,000) | 190,051 | ||||
Balance (in Shares) at Jun. 30, 2022 | 105,227,876 | ||||||||
Purchase of treasury stock | (2,000) | (2,000) | |||||||
Purchase of treasury stock (in Shares) | (1,229,222) | ||||||||
Stock compensation expense | 20 | 20 | |||||||
Net loss | (5,184) | (5,184) | |||||||
Balance at Sep. 30, 2022 | $ 11 | 224,841 | (37,965) | (2,000) | 184,887 | ||||
Balance (in Shares) at Sep. 30, 2022 | 105,227,876 | ||||||||
Stock compensation expense | (14) | (14) | |||||||
Net loss | (122,308) | (122,308) | |||||||
Balance at Dec. 31, 2022 | $ 11 | 222,827 | (160,273) | 62,565 | |||||
Balance (in Shares) at Dec. 31, 2022 | 105,227,876 | ||||||||
Retire treasury stock | (2,000) | 2,000 | |||||||
Issuance of common stock through equity incentive awards | 60 | 60 | |||||||
Issuance of common stock through equity incentive awards (in Shares) | 83,011 | ||||||||
Issuance of common stock in connection with employment agreements | 120 | 120 | |||||||
Issuance of common stock in connection with employment agreements (in Shares) | 158,991 | ||||||||
Stock compensation expense | 8 | 8 | |||||||
Net loss | (2,761) | (2,761) | |||||||
Balance at Mar. 31, 2023 | $ 11 | $ 223,015 | $ (163,034) | $ 59,992 | |||||
Balance (in Shares) at Mar. 31, 2023 | 105,469,878 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net income (loss) | $ (2,761) | $ 5,819 | $ 1,527 | $ (3,657) | $ (125,965) | $ (7,582) |
Impairment of goodwill and intangible assets | 109,140 | |||||
Loss (Gain) on change in fair value of derivative instruments | 1,325 | 936 | (3,540) | (3,178) | ||
Depreciation and amortization | 1,070 | 2,819 | 5,706 | 8,588 | 11,456 | |
Amortization of debt discount | 54 | 185 | 406 | 460 | 515 | |
Stock-based compensation | 68 | 153 | 173 | 193 | 179 | |
Inventory reserve | 57 | 157 | 557 | 946 | ||
Bad debt expense | 121 | 175 | 411 | 415 | ||
Loss on settlement of debt | 3,241 | 3,241 | 3,240 | |||
Loss on abandonment of right-of-use asset | ||||||
Adjustment in value of contingency | 2 | 2 | 2 | 2 | ||
Deferred tax benefit | (1) | (25) | (938) | (3,234) | (8,409) | |
Non-cash lease expense | 831 | 801 | 1,610 | 2,425 | 3,249 | |
Changes in operating assets and liabilities: | ||||||
Due to related party | 2,413 | 2,413 | ||||
Receivables | 9,957 | 999 | (2,301) | (1,772) | (3,533) | |
Vendor deposits | (5,055) | (5,867) | (5,931) | (12,586) | (12,823) | |
Merchandise inventory | 5,416 | 6,134 | (4,513) | 7,349 | 9,681 | |
Prepaid expenses and other assets | 297 | 439 | (355) | (3,846) | (5,238) | |
Accounts payable and accrued expenses | (478) | 1,918 | (10,652) | (12,143) | (1,208) | |
Customer deposits | (2,202) | (16,225) | (12,065) | (20,860) | (21,523) | |
Operating lease liabilities | (944) | (884) | (1,781) | (2,694) | (3,627) | |
Net cash used in operating activities | 7,577 | (3,554) | (22,190) | (38,693) | (46,681) | |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
Purchases of property and equipment | (124) | (37) | (256) | (1,318) | (1,420) | |
Net cash used in investing activities | (124) | (37) | (256) | (1,318) | (1,420) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
Net proceeds from public equity offering | ||||||
Proceeds from exercise of warrants | ||||||
Proceeds from notes payable | 43,045 | 43,044 | 43,045 | |||
Repayments of notes payable | (1,356) | (1,615) | (3,223) | (4,580) | (5,927) | |
Repayments of convertible notes payable | (200) | |||||
Repayments of finance lease liabilities | (31) | (19) | (48) | (78) | (109) | |
Purchase of treasury stock | (2,000) | (2,000) | (2,000) | |||
Net cash provided by financing activities | (1,387) | (1,634) | 37,774 | 36,386 | 34,809 | |
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 6,066 | (5,225) | 15,328 | (3,625) | (13,292) | |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR | 20,499 | 33,791 | 33,791 | 33,791 | 33,791 | |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF YEAR | 25,565 | 28,566 | 49,119 | 30,167 | 20,499 | 33,791 |
End of the period | ||||||
Cash, cash equivalents, and restricted cash consist of the following Ending | 25,565 | 28,566 | 49,119 | 30,166 | 20,499 | 33,791 |
Beginning of the period | ||||||
Cash, cash equivalents, and restricted cash consist of the following Beginning | 20,499 | 33,791 | 33,791 | 33,791 | 33,791 | |
End of the year | ||||||
Cash and cash equivalents | 25,615 | 25,983 | 47,386 | 28,433 | 19,549 | |
Restricted cash | 950 | 2,583 | 1,733 | 1,733 | 950 | |
Cash and cash equivalents and restricted cash total, End of the period | 20,499 | 33,791 | ||||
Beginning of the year | ||||||
Cash and cash equivalents | 19,549 | 25,724 | 25,724 | 25,724 | 25,724 | |
Restricted cash | 950 | 8,067 | 8,067 | 8,067 | 8,067 | |
Cash and cash equivalents and restricted cash total, Beginning of the period | 20,499 | 33,791 | 33,791 | 33,791 | 33,791 | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||
Cash paid for interest | 1,634 | 639 | 1,531 | 2,731 | 4,161 | |
Cash paid for income taxes | 3,905 | 5,073 | ||||
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||
Common stock issued in vesting of RSUs | ||||||
Financed purchases of property and equipment | 94 | 308 | 308 | 308 | 308 | |
Common stock issued in connection with employment agreements | 121 | |||||
Debt discount on notes payable | 1,104 | 1,104 | ||||
Settlement of notes payable and interest in issuance of new note | 55,851 | 55,851 | 55,851 | |||
Debt discount on notes payable from OID | 1,104 | |||||
As Restated [Member] | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net income (loss) | 5,819 | (7,582) | ||||
Impairment of goodwill and intangible assets | ||||||
Loss (Gain) on change in fair value of derivative instruments | ||||||
Depreciation and amortization | 6,557 | |||||
Amortization of debt discount | 1,042 | |||||
Stock-based compensation | 879 | |||||
Inventory reserve | 418 | |||||
Bad debt expense | 767 | |||||
Loss on settlement of debt | 1,748 | |||||
Loss on abandonment of right-of-use asset | 1,437 | |||||
Adjustment in value of contingency | 9 | |||||
Deferred tax benefit | (368) | |||||
Non-cash lease expense | 1,639 | |||||
Changes in operating assets and liabilities: | ||||||
Receivables | (5,159) | |||||
Vendor deposits | (1,652) | |||||
Merchandise inventory | (26,580) | |||||
Prepaid expenses and other assets | (3,448) | |||||
Accounts payable and accrued expenses | 24,385 | |||||
Customer deposits | (10,855) | |||||
Operating lease liabilities | (1,565) | |||||
Net cash used in operating activities | (18,328) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
Purchases of property and equipment | (1,899) | |||||
Cash paid to sellers in acquisition of Appliances Connection, net of cash acquired | (201,515) | |||||
Cash paid to sellers in acquisition of Appliance Gallery | (1,420) | |||||
Net cash used in investing activities | (204,834) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
Net proceeds from public equity offering | 194,398 | |||||
Proceeds from exercise of warrants | 2,368 | |||||
Proceeds from notes payable | 60,833 | |||||
Repayments of notes payable | (10,528) | |||||
Repayments of convertible notes payable | ||||||
Repayments of finance lease liabilities | (30) | |||||
Purchase of treasury stock | ||||||
Net cash provided by financing activities | 247,041 | |||||
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 23,879 | |||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF YEAR | 33,791 | 33,791 | 33,791 | 33,791 | 9,912 | |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF YEAR | 33,791 | |||||
End of the year | ||||||
Cash and cash equivalents | 25,724 | |||||
Restricted cash | 8,067 | |||||
Cash and cash equivalents and restricted cash total, End of the period | 33,791 | |||||
Beginning of the year | ||||||
Cash and cash equivalents | 935 | |||||
Restricted cash | 8,977 | |||||
Cash and cash equivalents and restricted cash total, Beginning of the period | $ 33,791 | $ 33,791 | $ 33,791 | $ 33,791 | 9,912 | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||
Cash paid for interest | 1,795 | |||||
Cash paid for income taxes | 2,483 | |||||
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||
Operating lease right-of-use assets and liabilities assumed | 14,520 | |||||
Financed purchases of property and equipment | ||||||
Settlement of notes payable and interest in issuance of new note | ||||||
Debt discount on notes payable from OID | 2,310 | |||||
Debt discount on notes payable from warrants | 1,340 | |||||
Stock issued in the acquisition of Appliances Connection | 12,264 | |||||
Due to seller (consideration) settled by vendor deposits | 5,000 | |||||
Net assets acquired in the acquisition of Appliances Connection | 38,955 | |||||
Net assets acquired in the acquisition of Appliance Gallery | $ 252 |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Organization and Nature of Business [Abstract] | ||
ORGANIZATION AND NATURE OF BUSINESS | NOTE 1—ORGANIZATION AND NATURE OF BUSINESS 1847 Goedeker Inc. (“1847 Goedeker”) was formed under the laws of the State of Delaware on January 10, 2019 for the sole purpose of acquiring the business of Goedeker Television Co., a Missouri corporation (“Goedeker Television”) Prior to the acquisition, the Company did not have any operations other than operations relating to its incorporation and organization. On July 20, 2022, the 1847 Goedeker amended the Certificate of Incorporation changing its name to Polished.com Inc. (“Polished.com”). On October 20, 2020, 1847 Goedeker formed Appliances Connection Inc. (“ACI”) as a wholly owned subsidiary in the State of Delaware. On June 2, 2021, ACI acquired all of the issued and outstanding capital stock or other equity securities of 1 Stop Electronics Center, Inc., a New York corporation (“1 Stop”), Gold Coast Appliances, Inc., a New York corporation (“Gold Coast”), Superior Deals Inc., a New York corporation (“Superior Deals”), Joe’s Appliances LLC, a New York limited liability company (“Joe’s Appliances”) and YF Logistics LLC, a New Jersey limited liability company (“YF Logistics,” and collectively with 1 Stop, Gold Coast, Superior Deals, and Joe’s Appliances, “Appliances Connection”). On July 6, 2021, 1847 Goedeker formed AC Gallery Inc. (“AC Gallery”) as a wholly owned subsidiary in the State of Delaware. On July 29, 2021, AC Gallery acquired substantially all the assets and assumed substantially all the liabilities of Appliance Gallery, Inc., a retail appliance store in Largo, Florida (“Appliance Gallery”). As a result of this transaction, AC Gallery acquired the former business of Appliance Gallery and continues to operate this business. Polished.com and its consolidated subsidiaries (collectively, the “Company,” “we,” “us,” or “our”) operate a content-driven and technology-enabled shopping destination for appliances, furniture and home goods. With warehouse fulfillment centers in the Northeast and Midwest, as well as showrooms in Brooklyn, New York, and Largo, Florida, the Company offers one-stop shopping for national and global brands. The Company carries many household name-brands, including Bosch, I, Frigidaire Pro, Whirlpool, LG, and Samsung, and also carries many major luxury appliance brands such as Miele, Thermador, La Cornue, Dacor, Ilve, Jenn-Air and Viking, among others. The Company also sells furniture, fitness equipment, plumbing fixtures, televisions, outdoor appliances, and patio furniture, as well as commercial appliances for builder and business clients. | NOTE 1—BASIS OF PRESENTATION In the opinion of management, the accompanying unaudited condensed consolidated financial statements of Polished.com, Inc. (the “Company,” “Polished.com,” “1847 Goedeker,” “we,” “us,” or “our”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting and reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the results of the interim periods presented. Certain information and note disclosures normally included in the audited financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The information included in the Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2022. Furthermore, interim results for the three months ended March 31, 2022 (As Restated), June 30, 2022, September 30, 2022, and March 31, 2023 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022 or future periods. Furthermore, interim results for the six months ended June 30, 2022 and the nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022 or future periods. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Accounting Policies [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and are presented in US dollars. Principles of Consolidation The consolidated financial statements include our wholly owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The Company does not have a majority or minority interest in any other company, either consolidated or unconsolidated. Use of Estimates The preparation of these consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of and during the reported period of the consolidated financial statements. Actual results could differ from those estimates. We evaluate our estimates and assumptions on an ongoing basis. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and marketable securities with original maturities of three months or less. The Company maintains deposits in several financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses related to amounts in excess of FDIC limits. Cash and cash equivalents include: (1) currency on hand, (2) demand deposits with banks or financial institutions, (3) other kinds of accounts that have the general characteristics of demand deposits, and (4) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The majority of payments due from financial institutions for the settlement of credit card and debit card transactions process within two business days and are, therefore, classified as cash and cash equivalents. Other payment methods that take more time to settle are classified as receivables. At December 31, 2022, restricted cash includes $0.2 million to secure a vendor letter of credit and $0.75 million withheld by credit card processors as security for the Company’s customer refund claims and credit card chargebacks. The cash pledged to secure the letter of credit will be released when the vendor offers the Company credit terms, and the cash held by credit card processors will be released at the discretion of the credit card companies. Revenue Recognition and Cost of Revenue The Company records revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers.” Substantially all the Company’s sales are to individual retail consumers (homeowners), builders and designers. The Company’s performance obligation is to deliver the customer’s order. Each customer order generally contains only one performance obligation based on the merchandise sale to be delivered, at which time revenue is recognized. Control of the delivery transfers to customers when the customer can direct the use of, and obtain substantially all the benefits from, the Company’s products, which generally occurs when the customer assumes the risk of loss. The risk of loss shifts to the customer at different times depending on the method of delivery. The Company delivers products to its customers in three possible ways. The first way is through a shipment of the products through a third-party carrier from the Company’s warehouse to the customer (a “Company Shipment”). The second way is through a shipment of the products through a third-party carrier from a warehouse other than the Company’s warehouse to the customer (a “Drop Shipment”) and the third way is where the Company itself delivers the products to the customer and often also installs the product (a “Local Delivery”). In the case of a Local Delivery, the Company loads the product on its own or contracted trucks and delivers and installs the product at the customer’s location. When a product is delivered through a Local Delivery, risk of loss passes to the customer at the time of installation and revenue is recognized upon installation at the customer’s location. In the case of a Company Shipment and a Drop Shipment, the delivery to the customer is made free on board, or FOB, shipping point (whether from the Company’s warehouse or a third party’s warehouse). Therefore, risk of loss and title transfers to the customer once the products are shipped (i.e., leaves the Company’s warehouse or a third-party’s warehouse). After shipment and prior to delivery, the customer is able to redirect the product to a different destination, which demonstrates the customer’s control over the product once shipped. Once the risk of loss has shifted to the customer, the Company has satisfied its performance obligation and the Company recognizes revenue. The Company agrees with customers on the selling price of each transaction. This transaction price is generally based on the agreed upon sales price. In the Company’s contracts with customers, it allocates the entire transaction price to the sales price, which is the basis for the determination of the relative standalone selling price allocated to each performance obligation. Any sales tax, value added tax, and other tax the Company collects concurrently with revenue-producing activities are excluded from revenue. We offer promotional financing and credit cards issued by third-party banks that manage and directly extend credit to our customers. The banks are the sole owners of the accounts receivable generated under the program and, accordingly, we do not hold any customer receivables related to these programs and act as an agent in the financing transactions with customers. We frequently offer sales incentives that entitle our customers to discounts at the time of purchase (if 3 rd The Company also sells extended warranty contracts, acting as an agent for the warranty company and earns a commission on the warranty contracts purchased by customers; therefore, the cost of the warranty contracts is netted against warranty revenue in the accompanying consolidated statements of operations. The Company assumes no liability for repairs to products on which it has sold a warranty contract or products for which no warranty is sold, as the warranty obligations associated with the sale of our products are assurance-type warranties that are a guarantee of the product’s intended functionality and, therefore, do not represent a distinct performance obligation within the context of the contract. Sales returns are estimated based on historical return levels and our expectation of future returns. We also recognize a return asset, and corresponding adjustment to cost of sales, for our right to recover the goods returned by the customer, measured at the former carrying amount of the goods, less any expected recovery cost. At each financial reporting date, we assess our estimates of expected returns, refund liabilities, and return assets. Customer deposits ‒ Includes amounts collected from customers when an order is placed. The deposits are recognized as revenue when the order is shipped to the customer, or they are refunded by the Company in the event of an order cancellation. As of December 31, 2022, and 2021, customer deposits amounted to $7.3 million and $28.8 million, respectively. Cost of revenue ‒ Includes the cost of purchased merchandise plus the cost of shipping merchandise and where applicable installation, net of promotional rebates and other incentives received from vendors. Vendor allowances primarily consist of volume rebates that are earned as a result of attaining certain purchase levels and advertising allowances for the promotion of vendors’ products that are typically based on guaranteed minimum amounts with additional amounts being earned for attaining certain purchase levels. These vendor allowances are accrued as earned, with those allowances received as a result of attaining certain purchase levels accrued over the incentive period based on estimates of purchases. Volume rebates and certain advertising allowances reduce the carrying cost of inventory and are recognized in cost of sales when earned. Shipping and Handling ‒ The Company invoices its customers for shipping and handling charges associated with luxury appliance sales and premium services like “white glove” delivery. For standard delivery, also known as “curb” delivery, the cost of shipping and handling is already included in the quoted price provided to the customer. Irrespective of the delivery option chosen by the customer, the cost of shipping and handling is included in cost of sales. Advertising ‒ Costs for advertising are expensed as incurred and include direct response performance marketing costs, such as paid search advertising, social media advertising, and search engine optimization. For the years ended December 31, 2022 and 2021, advertising expenses amounted to $25.5 million and $12.0 million, respectively. Receivables Receivables consists of customer’s balance payments for which the Company extends credit to certain homebuilders and designers based on prior business relationships, and vendor rebate receivables. Vendor rebate receivables represent amounts due from manufacturers from whom the Company purchases products. Rebate receivables are stated at the amount that management expects to collect from manufacturers (vendors). Rebates are calculated on product and model sales programs from specific vendors. The rebates are paid at intermittent periods either in cash or through issuance of vendor credit memos, which can be applied against vendor accounts payable. Based on the Company’s assessment of the credit history with its manufacturers, it has concluded that there should be no allowance for uncollectible accounts for vendor rebates. The Company maintains an allowance for doubtful accounts, which is established based on estimated losses expected to be incurred in the collection of accounts receivable. As of December 31, 2022 and 2021, the balance of the allowance was $1.5 million and $1.0 million, respectively. The Company had no significant concentrations of receivables balances as of December 31, 2022, and 2021. Merchandise Inventory Inventory consists of finished products acquired for resale and is stated at the lower of cost (on an average cost basis) or net realizable value. The Company conducts regular evaluations of the inventory value and performs write-downs based on its estimates of market conditions. As of December 31, 2022 and 2021, the Company determined that an obsolescence allowance of $1.8 million and $0.8 million, respectively, was necessary. Property and Equipment Property and equipment are stated at their historical cost. Maintenance and repair expenses of property and equipment are expensed in operations as incurred. Leasehold improvements are amortized over the lesser of the base term of the lease or estimated life of the leasehold improvements. Depreciation is computed using the straight-line method over estimated useful lives as follows: Useful Life (Years) Equipment 5 Warehouse equipment 2-7 Furniture and fixtures 1-3 Transportation equipment 1-5 Leasehold improvements 2-5 Showroom inventory 5 Intangible Assets The Company’s definite-lived intangible assets primarily consisted of marketing-related and customer relationships which are being amortized over their estimated useful lives, or 5 years. The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. The Company has no intangibles with indefinite lives. Goodwill Goodwill represents the excess of consideration transferred over the fair value of tangible and identifiable intangible net assets acquired and the liabilities assumed in a business combination. Substantially all of the Company’s goodwill was recognized in the purchase price allocations when the Company was acquired in 2019 and when ACI was acquired in June 2021. Goodwill is not subject to amortization; instead, it is tested for impairment at the reporting unit level annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. In conducting the impairment test, the Company first reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. We currently operate as a single reporting unit. When testing goodwill for impairment, the Company has the option of first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that carrying value exceeds its fair value, we perform a quantitative goodwill impairment test. Under the quantitative goodwill impairment test, if our reporting unit’s carrying amount exceeds its fair value, we will record an impairment charge based on that difference. The Company conducts its annual goodwill impairment test on December 31 or whenever an indicator of impairment exists. As a result of the quantitative impairment assessment, the carrying value of the single reporting unit exceeded its fair value, and the Company recorded $85.4 million of non-cash goodwill impairment charge during the year ended December 31, 2022. At December 31, 2021, there was no impairment of goodwill. Impairment of Long-Lived Assets The Company reviews the carrying value of long-lived assets such property and equipment, right-of-use (“ROU”) assets, and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of the assets might not be recoverable. These events and circumstances may include significant decreases in the market price of an asset or asset group, significant changes in the extent or manner in which an asset or asset group is being used by the Company or in its physical condition, a significant change in legal factors or in the business climate, a history or forecast of future operating or cash flow losses, significant disposal activity, a significant decline in the Company’s share price, a significant decline in revenue or adverse changes in the economic environment. If such facts indicate a potential impairment, the Company would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, the Company will estimate the fair value of the asset group using appropriate valuation methodologies, which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset group’s carrying amount and its estimated fair value. During the fourth quarter of 2022, the Company recognized an impairment charge of $23.7 million related to our marketing-related and customer relationships intangible assets, which is primarily composed of intangible assets recognized in the acquisition of ACI. During 2021, we identified changes in events and circumstances relating to a certain ROU operating lease asset, that was abandoned as a result of the Company closing its warehouse and retail showroom in anticipation of relocating to a new facility that was acquired in the acquisition of ACI. Consequently, the lease facility was abandoned and we recorded an impairment loss during the year ended December 31, 2021 of $1.4 million. Leases The Company accounts for leases in accordance with ASC Topic 842, “Leases Operating lease payments are recognized as an expense on a straight-line basis over the lease term in equal amounts of rent expense attributed to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in later years. The difference between rent expense recognized and actual rental payments is typically represented as the spread between the ROU asset and lease liability. When calculating the present value of minimum lease payments, we account for leases as one single lease component if a lease has both lease and non-lease fixed cost components. Variable lease and non-lease cost components are expensed as incurred. We do not recognize ROU assets and lease liabilities for short-term leases that have an initial lease term of 12 months or less. We recognize the lease payments associated with short-term leases as an expense on a straight-line basis over the lease term. Fair Value of Financial Instruments The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined in the following three categories: Level 1: Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date. Level 2: Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly. Level 3: Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. Cash, restricted cash, receivables, inventory, vendor deposits, prepaid expenses, accounts payable, accrued expenses, and customer deposits approximate fair value, due to their short-term nature. The carrying value of notes payable and short and long-term debt also approximates fair value since these instruments bear market rates of interest. Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to long-lived assets and goodwill, which are remeasured when the derived fair value is below carrying value in the consolidated balance sheets. Derivative Instruments – Interest Rate Swaps The Company uses interest rate swap agreements to manage interest rate exposures. The Company recognizes interest rate swap agreements as either a derivative asset or liability on the balance sheet at fair value. The fair value of an interest rate swap agreement is determined using widely accepted valuation techniques, including discounted cash flow analyses on the expected cash flows of each derivative. These analyses reflect the contractual terms of the derivative, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities. The fair value of interest rate swap agreements is determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. Included in the following table are the Company’s major categories of assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 (in thousands): Fair Value Measurement at December 31, 2022 Description Level 1 Level 2 Level 3 Total Assets: Derivative instruments Interest rate swap $ - $ 3,178 $ - $ 3,178 Income Taxes Income taxes are accounted for under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are recorded with respect to temporary differences in the accounting treatment of items for financial reporting purposes and for income tax purposes. Where, based on the weight of available evidence, it is more likely than not that some amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management’s judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized. A tax position must meet a minimum probability threshold before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Sales Tax Liability On June 21, 2018, the U.S. Supreme Court issued an opinion in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018) Quill Corp v. North Dakota Between August 2022 and November 2022, the Company experienced delays in filing sales tax returns. The Company is in the process of paying these taxes to become current with all sales tax filings. In connection with the late filings, the Company has accrued penalties and interest that may be due upon payment of past-due taxes. Earnings (Loss) Per Share Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is calculated by adjusting the weighted average number of shares of common stock outstanding for the dilutive effect, if any, of common stock equivalents. Common stock equivalents whose effect would be antidilutive are not included in diluted earnings (loss) per share. The Company uses the treasury stock method to determine the dilutive effect, which assumes that all common stock equivalents have been exercised at the beginning of the period and that the funds obtained from those exercises were used to repurchase shares of common stock of the Company at the average closing market price during the period (see Note 16). Stock-Based Compensation We recognize the fair value compensation cost relating to stock-based payment transactions in accordance with ASC Topic 718, “Share-Based Payments,” Impact of COVID-19 In 2022, we experienced only minor impact to our operations, primarily due to staffing challenges brought on by COVID-19. We continue to monitor the current COVID-19 situation in each market in which we operate and will react accordingly. In May 2023, the US Government declared an end to the pandemic. Liquidity and Going Concern Assessment Management assesses liquidity and going concern uncertainty in the Company’s consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors. Based on this assessment, as necessary or applicable, management makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations can be achieved and management has the proper authority to execute them within the look-forward period. As of December 31, 2022, we had cash and cash equivalents of $19.5 million, restricted cash of $1.0 million, and vendor deposits of $25.0 million, and total working capital of $25.9 million. For the year ended December 31, 2022, the Company incurred an operating loss of $134.4 million, and cash flows used in operations of $46.7 million. The operating loss for 2022 included $11.5 million in non-cash charges for depreciation and amortization, as well as an impairment charge of $109.1 million. The Company performed an assessment to determine whether there were conditions or events that, considered in the aggregate, raised substantial doubt about the Company’s ability to continue as a going concern within one year after the filing date of this report, when the accompanying financial statements are being issued. Initially, this assessment did not consider the potential mitigating effect of management’s plans that had not been fully implemented. The Company considered several conditions and events including (1) financial results and operations, (2) the investigation of certain allegations made by certain former employees related to the Company’s business operations, (3) technical non-compliance with certain loan covenants of our term loan with Bank of America, based in part due to our failure to timely deliver financial statements, and (4) the Company not being in compliance with the continued listing standards of NYSE American LLC (the “Exchange”) since the Company failed to timely file certain required filings, which if not successfully remediated could lead to the potential delisting of the Company from the Exchange Based on the circumstances discussed above in the initial assessment, substantial doubt exists regarding our ability to continue as a going concern. Management then assessed the mitigating effect of its plans to determine if it is probable that the plans (1) would be effectively implemented within one year after the filing date of this report, when the accompanying financial statements are being issued and (2) when implemented, would mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern. As discussed below, the Company has implemented plans which encompass short-term cash preservation initiatives to provide the Company with adequate liquidity to meet its obligations for at least the 12-month period following the date its fiscal year 2022 financial statements are issued, in addition to creating sustained cash flow generation thereafter. The Company has either taken or intends to take, the following actions, among others, to improve its liquidity position and to address uncertainty about its ability to continue as a going concern: ● As described in Note 19, the Company entered into a loan amendment of their term loan and revolver loan agreement with Bank of America, in which Bank of America waived specific technical defaults and re-established a revolver loan commitment balance of $10 million. ● We are taking concrete steps to improve efficiency and profitability through headcount reductions and consolidation of operations including the imminent consolidation of two existing New Jersey warehouses into one new warehouse. ● We hired an internationally recognized firm of digital advertising consultants to help us improve our return on advertising spend, which we believe when completed will result in more sales per dollar of advertising expense. ● We are implementing new financing initiatives for our customers, including a new store-branded credit card and a leasing alternative for customers who do not qualify for conventional credit, and we have added a new payment processor which will provide additional liquidity compared to our incumbent processor. ● We have changed our sales focus to emphasizing the sale of high-margin luxury products, as opposed to mass-market appliances, began becoming dealers for higher-margin small appliances and promoting them on our website, and have begun actively negotiating improved terms with several of our largest appliance vendors. Management has prepared estimates of operations for fiscal years 2023 and 2024 and believes that sufficient funds will be generated from operations to fund its operations, and to service its debt obligations for one year from the date of the filing of these consolidated financial statements in the Company’s 10-K. The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. Management believes that based on relevant conditions and events that are known and reasonably knowable that its forecasts, for one year from the date of the filing of these consolidated financial statements, indicate improved operations and the Company’s ability to continue operations as a going concern. Recent Accounting Pronouncements Recently Adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts In An Entity’s Own Equity. ASU 2020-06 simplifies the accounting for certain convertible instruments by removing the separation models for convertible debt with a cash conversion feature and for convertible instruments with a beneficial conversion feature. As a result, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. Additionally, ASU 2020-06 amends the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method. The treasury stock method is no longer available. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2022. The Company’s adoption of this update did not have a material impact on the consolidated financial statements and related disclosures. Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2019. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. The Company has elected this extension and the effective date for the Company to adopt this standard will be for fiscal years beginning after December 15, 2022. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU amends ASC 805 to require acquiring entities to apply ASC 606 to recognize and measure contract assets and contract liabilities in business combinations. The ASU is effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Co | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Derivative Instruments – Interest Rate Swaps The Company uses interest rate swap agreements to manage interest rate exposures. The Company recognizes interest rate swap agreements as either a derivative asset or liability on the balance sheet at fair value. The fair value of an interest rate swap agreement is determined using widely accepted valuation techniques, including discounted cash flow analyses on the expected cash flows of each derivative. These analyses reflect the contractual terms of the derivative, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities. The fair value of interest rate swap agreements is determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. Recent Accounting Pronouncements Recently Adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts In An Entity’s Own Equity. ASU 2020-06 simplifies the accounting for certain convertible instruments by removing the separation models for convertible debt with a cash conversion feature and for convertible instruments with a beneficial conversion feature. As a result, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. Additionally, ASU 2020-06 amends the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method. The treasury stock method is no longer available. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2022. The Company’s adoption of this update did not have a material impact on the consolidated financial statements and related disclosures. Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2019. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. The Company has elected this extension and the effective date for the Company to adopt this standard will be for fiscal years beginning after December 15, 2022. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU amends ASC 805 to require acquiring entities to apply ASC 606 to recognize and measure contract assets and contract liabilities in business combinations. The ASU is effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on our consolidated financial statements. In March 2022, the FASB issued ASU 2022-02, Troubled Debt Restructurings (“TDRs”) and Vintage Disclosures (Topic 326): Financial Instruments – Credit Losses. This amended guidance will eliminate the accounting designation of a loan modification as a TDR, including eliminating the measurement guidance for TDRs. The amendments also enhance existing disclosure requirements and introduce new requirements related to modifications of receivables made to borrowers experiencing financial difficulty. Additionally, this guidance requires entities to disclose gross write-offs by year of origination for financing receivables, such as loans and interest receivable. The ASU is effective January 1, 2023, and is required to be applied prospectively, except for the recognition and measurement of TDRs which can be applied on a modified retrospective basis. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on our consolidated financial statements. The Company currently believes that all other issued and not yet effective accounting standards are not relevant to the Company’s consolidated financial statements. Restatement The Company restated its previously issued financial statements as of and for the three months ended March 31, 2022, to reflect the following adjustments: Consolidated Statements of Operations 1. Revenue declined by $4.1 million because of an understatement of a returns allowance and revenue cutoff issues. 2. Cost of goods sold increased $1.0 million, net by reclassification of expenses from operating expenses to cost of goods sold offset by the reduction in product cost associated with the reduction in revenue. 3. Operating expense declined by $1.9 million primarily by reclassification of operating expense to cost of goods sold 4. Other income (expense) various miscellaneous adjustments totaling $0.2 million. 5. Income tax expense declined by $3.3 million. 6. As a result of the above adjustments, net income declined by $0.1 million. Consolidated Balance Sheet 7. Current assets declined by $13.2 million from a $3.8 million reduction in vendor rebate accrual, inventory declined by $6.7 million, net from changes to sales returns allowance and revenue cutoff adjustments, and prepaid expenses declined by $2.7 million by to adjust for charging some items to expense, rather than prepaid expense. 8. Reclassification of showroom inventory to property and equipment. 9. Eliminate a right-of-use asset on a property that was not occupied. 10. Reflect the issuance of shares granted to two directors. 11. Reflect adjustments made to 2021 accumulated deficit and adjustment to net income for the three months ended March 31, 2022. As Reported Adjustments As Restated Current assets $ 134,010 (7) $ (13,223 ) $ 120,787 Property and equipment 3,688 (8) 978 4,666 Operating lease right-of-use assets 15,262 (9) (1,127 ) 14,135 Total assets $ 386,581 $ (13,372 ) $ 373,209 Total liabilities $ 175,037 1,849 $ 176,886 Common stock and additional paid in capital 224,678 (10) 134 224,812 Accumulated deficit (13,134 ) (11) (15,354 ) (28,489 ) Total liabilities and stockholders’ equity $ 386,581 $ (13,371 ) $ 373,209 As Reported Adjustments As Restated Product sales, net $ 152,752 (1) $ (4,071 ) $ 148,681 Cost of goods sold 116,883 (2) 1,036 117,919 Operating expense 25,802 (3) (1,915 ) 23,887 Other income (expense) (762 ) (4) (186 ) (948 ) Income taxes (3,383 ) (5) 3,275 (109 ) Net income (loss) $ 5,922 (6) $ (103 ) $ 5,819 Net income (loss) per common share BASIC $ 0.06 $ 0.05 DILUTED $ 0.06 $ 0.05 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING BASIC 106,387,332 106,387,332 DILUTED 106,387,332 106,387,332 Additional Total Common Stock Paid-Inc Accumulated Stockholders’ Shares Amount Capital Deficit Equity Balance March 31, 2022 as originally filed 106,386,332 $ 11 $ 224,667 $ (13,134 ) $ 211,544 Adjustment to reflect issuance of vested stock 69,766 - 134 - 134 Adjustments to results of operations for the year ended December 31, 2022 (15,252 ) (15,252 ) Adjustments to results of operations for the three months ended March 31, 2022 - - - (103 ) (103 ) Balance March 31, 2022, as restated 106,456,098 $ 11 $ 224,801 $ (28,489 ) $ 196,323 As Filed Adjustments As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) Adjustments to reconcile net income (loss) to net cash used in by operating activities: $ 5,922 $ (103 ) $ 5,819 Deferred tax (liability) asset 1,785 (1,810 ) (25 ) Changes in operating assets and liabilities: Receivables (1,694 ) 2,693 999 Merchandise inventory (8,209 ) 14,343 6,134 Prepaid expenses and other assets (2,312 ) 2,751 439 Accounts payable and accrued expenses 11,368 (9,450 ) 1,918 Customer deposits (7,622 ) (8,603 ) (16,225 ) Various other changes (2,985 ) 372 (2,612 ) Net cash used in operating activities (3,747 ) 193 (3,554 ) CASH FLOWS FROM INVESTING ACTIVITIES Net cash used in investing activities (6 ) (31 ) (37 ) CASH FLOWS FROM FINANCING ACTIVITIES Net cash used in financing activities (1,634 ) - (1,634 ) NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (5,387 ) 162 (5,225 ) CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD 33,791 - 33,791 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD $ 28,404 $ 162 $ 28,566 Cash, cash equivalents, and restricted cash consist of the following: End of the period Cash and cash equivalents $ 25,821 162 25,983 Restricted cash 2,583 - 2,583 $ 28,404 $ 28,404 $ 28,404 |
Revenues
Revenues | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Revenues [Abstract] | ||
REVENUES | NOTE 3—REVENUES Disaggregated Revenue ‒ The Company disaggregates revenue from contracts with customers by product type, as it believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Company’s disaggregated revenue by product type is as follows (in thousands): For the Years Ended December 31, December 31, 2022 2021 Appliance sales $ 500,506 $ 313,456 Furniture and other sales 33,878 32,269 Total $ 534,474 $ 345,725 | NOTE 3—REVENUES Disaggregated Revenue ‒ The Company disaggregates revenue from contracts with customers by product type, as it believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Company’s disaggregated revenue by product type is as follows (in thousands): For the Three Months Ended March 31, March 31, June 30, September 30, 2023 2022 2022 2022 Appliance sales $ 90,464 $ 138,549 $ 128,242 $ 136,044 Furniture sales and other sales 4,975 10,132 10,221 7,522 Total $ 95,439 $ 148,681 $ 138,463 $ 141,566 |
Receivables
Receivables | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Receivables [Abstract] | ||
RECEIVABLES | NOTE 4—RECEIVABLES Receivables at December 31, 2022 and 2021, consisted of the following (in thousands): December 31, December 31, 2022 2021 Trade accounts receivable $ 13,691 $ 10,693 Vendor rebates receivable 8,514 11,189 Other receivables 5,951 2,660 Total receivables 28,156 24,542 Less allowance for doubtful accounts (1,506 ) (1,011 ) Total receivables, net $ 26,650 $ 23,531 | NOTE 4—RECEIVABLES Receivables consisted of the following (in thousands): March 31, March 31, June 30, September 30, 2023 2022 2022 2022 Trade accounts receivable $ 11,576 $ 15,831 $ 15,367 $ 17,160 Vendor rebates receivable 4,393 5,462 6,902 11,633 Other receivables 2,230 2,251 2,251 2,251 Total receivables 18,199 23,544 26,844 26,314 Less allowance for doubtful accounts (1,507 ) (1,133 ) (1,507 ) (1,422 ) Total receivables, net $ 16,693 $ 22,411 $ 25,657 $ 24,892 |
Vendor Deposits
Vendor Deposits | 12 Months Ended |
Dec. 31, 2022 | |
Vendor Deposits [Abstract] | |
VENDOR DEPOSITS | NOTE 5—VENDOR DEPOSITS Deposits with vendors represent cash on deposit with one vendor arising from accumulated rebates paid by the vendor. The deposits are used by the vendor to seek to secure the Company’s purchases. The deposit can be withdrawn at any time up to the amount of the Company’s credit line with the vendor. Alternatively, the Company could secure their credit line with a floor plan line from a lender and withdraw all its deposits. The Company has elected to leave the deposits with the vendor on which it earns interest income and serves as collateral for the Company’s accounts payable with the vendor (see Note 14). Vendor deposits as of December 31, 2022 and 2021, were $25.0 million and $12.2 million, respectively. |
Merchandise Inventory
Merchandise Inventory | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Merchandise Inventory [Abstract] | ||
MERCHANDISE INVENTORY | NOTE 6—MERCHANDISE INVENTORY Merchandise inventory at December 31, 2022 and 2021, consisted of the following (in thousands): December 31, December 31, 2022 2021 Appliances $ 39,702 $ 49,631 Furniture and other 3,853 3,605 Total merchandise inventory 43,555 53,236 Less reserve for obsolescence (1,789 ) (843 ) Total merchandise inventory, net $ 41,766 $ 52,393 | NOTE 5—MERCHANDISE INVENTORY Merchandise inventory at March 31, 2023, March 31, 2022, June 30, 2022 and September 30, 2022 consisted of the following (in thousands): March 31, March 31, June 30, September 30, 2023 2022 2022 2022 Appliances $ 35,109 $ 44,626 $ 54,216 $ 42,593 Furniture 721 714 925 826 Other 2,309 1,763 2,609 2,469 Total merchandise inventory 38,139 47,103 57,750 45,888 Less reserve for obsolescence (1,789 ) (900 ) (1,000 ) (1,400 ) Total merchandise inventory, net $ 36,350 $ 46,203 $ 56,750 $ 44,488 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 7—PROPERTY AND EQUIPMENT Property and equipment at December 31, 2021 and 2020, consisted of the following (in thousands): December 31, December 31, 2022 2021 Warehouse equipment $ 291 290 Financed warehouse equipment 515 256 Office furniture and equipment 324 226 Transportation equipment 1,466 1,417 Leasehold improvements 3,131 1,814 Showroom inventory 1,037 1,032 Total property and equipment 6,764 5,035 Less: accumulated depreciation (1,689 ) (450 ) Property and equipment, net $ 5,075 $ 4,585 Depreciation expense for the years ended December 31, 2022 and 2021 was $1.2 million and $0.4 million, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Intangible Assets and Goodwill [Abstract] | ||
INTANGIBLE ASSETS AND GOODWILL | NOTE 8—INTANGIBLE ASSETS AND GOODWILL Intangible assets at December 31, 2022 and 2021, consisted of the following (in thousands): December 31, December 31, 2022 2021 Customer relationships $ 3,461 $ 24,148 Marketing-related 6,835 26,935 Total intangible assets 10,296 51,083 Less: accumulated amortization - (6,871 ) Intangible assets, net $ 10,296 $ 44,212 In connection with the acquisition of Goedeker Television, the Company identified intangible assets of $2.1 million, representing marketing-related and customer relationships. For the Appliances Connection acquisition, the Company identified intangible assets of $49.0 million, representing marketing-related and customer relationships. During the year-ended December 31, 2022, the Company recognized an impairment charge of $23.7 million related to our marketing-related and customer relationships intangible assets. These assets are being amortized on a straight-line basis over their average estimated remaining useful life of 41 months. Amortization expense for the years ended December 31, 2022 and 2021 was $10.2 million and $6.1 million, respectively. Following is the estimated amortization expense for the customer relationship and marketing-related intangible assets for the next five years as of December 31, 2021 (in thousands): Year Ending December 31, Amount 2023 $ 3,013 2024 3,013 2025 3,013 2026 1,257 Total $ 10,296 The changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021, are as follows (in thousands): Balance January 1, 2021 $ 4,726 Goodwill from acquisition of Appliances Connection 185,720 Goodwill from acquisition of Appliances Gallery 1,168 Balance at December 31, 2021 $ 191,614 Impairment charge for the year-ended December 31, 2022 (85,441 ) Balance December 31, 2022 $ 106,173 At December 31, 2022, the Company recognized an impairment charge of $85.4 million to goodwill. At December 31, 2021, there was no impairment of goodwill. | NOTE 6—INTANGIBLE ASSETS Intangible assets consisted of the following (in thousands): March 31, March 31, June 30, September 30, 2023 2022 2022 2022 Customer relationships $ 3,461 $ 24,148 $ 24,148 $ 24,148 Marketing-related 6,835 26,935 26,935 26,935 Total intangible assets 20,296 51,083 51,083 51,083 Less: accumulated amortization (753 ) (9,425 ) (11,979 ) (14,534 ) Intangible assets, net $ 9,543 $ 41,658 $ 39,104 $ 36,549 In connection with the acquisition of Goedeker Television, the Company identified intangible assets of $2.1 million, representing marketing-related and customer relationships. For the Appliances Connection acquisition, the Company identified intangible assets of $49.0 million, representing marketing-related and customer relationships. During the fourth quarter of 2022, the Company recognized an impairment charge of $23.7 million related to our marketing-related and customer relationships intangible assets. These assets are being amortized on a straight-line basis over their average estimated remaining useful life of 41 months. Amortization expense for the three months ended March 31, 2023 was $0.8 million and $2.55 million for each of the three month periods ended March 31, June 30, and September 30, 2022. Following is the estimated amortization expense for the customer relationship and marketing-related intangible assets for the next five years as of March 31, 2023 (in thousands): Year Ending December 31, Amount 2023, remainder of year $ 2,260 2024 3,013 2025 3,013 2026 1,256 2027 - Total $ 9,543 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Payable and Accrued Expenses [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 9—ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses at December 31, 2022 and 2021, consisted of the following (in thousands): December 31, December 31, 2022 2021 Trade accounts payable $ 34,345 $ 42,659 Accrued sales tax 36,196 24,980 Accrued payroll liabilities 680 984 Accrued interest 37 794 Accrued liability for sales returns 3,916 7,624 Accrued income taxes - 274 Credit cards payable 32 1,004 Accrued insurance 1,180 955 Accrued severance - 496 Other accrued liabilities 5,151 3,029 Total accounts payable and accrued expenses $ 81,537 $ 82,799 |
Business Combinations
Business Combinations | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Business Combinations [Abstract] | ||
BUSINESS COMBINATIONS | NOTE 10—BUSINESS COMBINATIONS Appliances Connection On October 20, 2020, the Company entered into a securities purchase agreement, which was amended on December 8, 2020 and April 6, 2021 (as amended, the “AC Purchase Agreement”), with ACI, Appliances Connection and the sellers (the “Sellers”), pursuant to which ACI agreed to acquire all of the issued and outstanding capital stock or other equity securities of Appliances Connection from the Sellers (the “AC Acquisition”). The AC Acquisition was completed on June 2, 2021. AC is one of the leading e-commerce retailers of household appliances and carries many household name brands, including Bosch, Cafe, Frigidaire Pro, Whirlpool, LG, and Samsung, and also carries many major luxury appliance brands such as Miele, Thermador, La Cornue, Dacor, Ilve, Wolf, Jenn-Air, Viking among others. The completion of the AC acquisition accelerates the Company’s long-term vision that changes the way Americans shop for appliances. The aggregate purchase price was $224.7 million, consisting of (i) $180.0 million in cash, (ii) 5,895,973 shares of the Company’s common stock valued at $12.3 million, and (iii) $32.4 million as a result of the post-closing net working capital adjustment provision. The Company recorded $0.9 million in acquisition-related expenses. The Company accounted for the AC Acquisition using the acquisition method of accounting in accordance with ASC Topic 805, “Business Combinations” The purchase price was allocated as follows (in thousands): Purchase consideration at fair value: Cash consideration $ 180,000 Common stock 12,264 Working capital adjustment 32,411 Total consideration $ 224,675 Assets acquired and liabilities assumed at fair value: Cash $ 5,897 Receivables 17,141 Vendor deposits 15,000 Merchandise inventory 21,634 Prepaid expenses and other current assets 2,194 Property and equipment 1,891 Right-of-use operating lease assets 1,834 Customer relationships 23,399 Tradenames 25,567 Goodwill 185,720 Accounts payable and accrued expenses (45,715 ) Customer deposits (17,536 ) Notes payable (1,527 ) Finance lease liabilities (215 ) Right-of-use operating lease liabilities (1,834 ) Net deferred tax liabilities (8,775 ) Net assets acquired $ 224,675 The adjustments to the initial allocation are based on more detailed information obtained about the specific assets acquired and liabilities assumed. The adjustments made to the initial allocation did not result in material changes to the amortization expense recorded in the previous quarters. We are amortizing the customer relationship and tradename intangible assets acquired over 5 years. The goodwill consists largely of the synergies expected from combining operations and is not deductible for tax purposes. From the date of acquisition until December 31, 2021, Appliances Connection contributed net sales of $297.9 million and net income from continuing operations of $14.9 million, which are included in our consolidated statements of operations. Appliance Gallery On July 6, 2021, AC Gallery entered into an asset purchase agreement, which was amended on July 21, 2021 and July 29, 2021 (as amended, the “AG Purchase Agreement”), with Appliance Gallery, pursuant to which AC Gallery agreed to acquire substantially all the assets and assumed substantially all the liabilities of Appliance Gallery (the “AG Acquisition”). The AG Acquisition was completed on July 29, 2021. Pursuant to the AG Purchase Agreement, the purchase price paid at closing was $1.4 million. The Company accounted for the Gallery Acquisition using the acquisition method of accounting in accordance with ASC Topic 805, “Business Combinations” The purchase price was allocated as follows (in thousands): Purchase consideration at fair value: Cash consideration $ 1,420 Total consideration $ 1,420 Assets acquired and liabilities assumed at fair value: Merchandise inventory $ 483 Prepaid expenses and other current assets 6 Property and equipment 19 Goodwill 1,168 Customer deposits (256 ) Net assets acquired $ 1,420 Goodwill recognized for this transaction is deductible for tax purposes. From the date of acquisition until December 31, 2021, Appliance Gallery contributed net sales of $0.2 million and net income from continuing operations of $0.2 million, which are included in our consolidated statements of operations. Pro Forma Information The following unaudited pro forma results presented below (in thousands) include the effects of the AC and AG Acquisitions as if they had been consummated as of January 1, 2021, with adjustments to give effect to pro forma events that are directly attributable to the acquisitions. December 31, 2021 Net sales $ 525,152 Net income $ 12,658 Earnings per share: Basic and diluted $ 0.20 These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations would have been if the acquisitions had occurred at the beginning of the period presented, nor are they indicative of future results of operations. | NOTE 7—BUSINESS COMBINATIONS Appliances Connection On October 20, 2020, the Company entered into a securities purchase agreement, which was amended on December 8, 2020 and April 6, 2021 (as amended, the “AC Purchase Agreement”), with ACI, Appliances Connection and the sellers (the “Sellers”), pursuant to which ACI agreed to acquire all of the issued and outstanding capital stock or other equity securities of Appliances Connection from the Sellers (the “AC Acquisition”). The AC Acquisition was completed on June 2, 2021. AC is one of the leading e-commerce retailers of household appliances and carries many household name brands, including Bosch, Cafe, Frigidaire Pro, Whirlpool, LG, and Samsung, and also carries many major luxury appliance brands such as Miele, Thermador, La Cornue, Dacor, Ilve, Wolf, Jenn-Air, Viking among others. The completion of the AC acquisition accelerates the Company’s long-term vision that changes the way Americans shop for appliances. The aggregate purchase price was $224.7 million, consisting of (i) $180.0 million in cash, (ii) 5,895,973 shares of the Company’s common stock valued at $12.3 million, and (iii) $32.4 million as a result of the post-closing net working capital adjustment provision. The Company recorded $0.9 million in acquisition-related expenses. The Company accounted for the AC Acquisition using the acquisition method of accounting in accordance with ASC Topic 805, “Business Combinations” The purchase price was allocated as follows (in thousands): Purchase consideration at fair value: Cash consideration $ 180,000 Common stock 12,264 Working capital adjustment 32,411 Total consideration $ 224,675 Assets acquired and liabilities assumed at fair value: Cash $ 5,897 Receivables 17,141 Vendor deposits 15,000 Merchandise inventory 21,634 Prepaid expenses and other current assets 2,194 Property and equipment 1,891 Right-of-use operating lease assets 1,834 Customer relationships 23,399 Tradenames 25,567 Goodwill 185,720 Accounts payable and accrued expenses (45,715 ) Customer deposits (17,536 ) Notes payable (1,527 ) Finance lease liabilities (215 ) Right-of-use operating lease liabilities (1,834 ) Net deferred tax liabilities (8,775 ) Net assets acquired $ 224,675 The adjustments to the initial allocation are based on more detailed information obtained about the specific assets acquired and liabilities assumed. The adjustments made to the initial allocation did not result in material changes to the amortization expense recorded in the previous quarters. We are amortizing the customer relationship and tradename intangible assets acquired over 5 years. The goodwill consists largely of the synergies expected from combining operations and is not deductible for tax purposes. From the date of acquisition until December 31, 2021, Appliances Connection contributed net sales of $297.9 million and net income from continuing operations of $14.9 million, which are included in our consolidated statements of operations. |
Notes Payable
Notes Payable | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Notes Payable [Abstract] | ||
NOTES PAYABLE | NOTE 11—NOTES PAYABLE Arvest Loan On August 25, 2020, the Company entered into a promissory note and security agreement with Arvest Bank for a loan in the principal amount of $3.5 million. On May 10, 2021, the Company repaid this loan. Credit Facilities M&T Credit Agreement On June 2, 2021, the Company entered into a credit and guaranty agreement (the “M&T Credit Agreement”) with the financial institutions party thereto from time to time (“M&T Lenders”), and Manufacturers and Traders Trust Company, as sole lead arranger, sole book runner, administrative agent and collateral agent (“M&T”), pursuant to which the M&T Lenders agreed to make available to the Company and ACI senior secured credit facilities in the aggregate initial amount of $70.0 million, including (i) a $60.0 million term loan (the “M&T Term Loan”) and (ii) a $10.0 million revolving credit facility (the “M&T Revolving Loan”). The M&T Loans bear interest on the unpaid principal amount at a rate determined by the Base Rate (as defined in the Credit Agreement), then at the Base Rate plus the Applicable Margin. Each of the M&T Loans were set to mature on June 2, 2026. On June 2, 2021, the Company borrowed the entire amount of the Term Loan and issued term loan notes to the M&T Lenders in the aggregate principal amount of $60.0 million. As of December 31, 2021, the carrying value of the M&T Term Loan was $55.2 million, comprised of principal of $58.5 million, net of unamortized loan costs of $3.3 million. Loan costs before amortization included $3.5 million of lender and placement agent fees and $0.3 million of legal other fees. The Company did not borrow any amounts under the M&T Revolving Loan. On May 9, 2022, the Company repaid the M&T Term Loan, through the proceeds of a new loan issuance. As a result, the obligations under the M&T Credit Agreement were terminated. Bank of America Credit Agreement On May 9, 2022, the Company entered into a Credit Agreement (the “Credit Agreement”) with the lenders identified therein (the “Lenders”) and Bank of America, N.A., as administrative agent, swingline lender and letter of credit issuer (the “Agent”), pursuant to which the Lenders agreed to make available to the Borrowers senior secured credit facilities in the aggregate initial amount of $140.0 million, including (i) a $100.0 million term loan (the “Term Loan”) and (ii) a $40.0 million revolving credit facility (the “Revolving Loan”), which revolving credit facility included a $2.00 million swingline sublimit (the “Swing Line Loan” and together with the Term Loan and the Revolving Loan, the “Loans”) and, separately, a $10.0 million letter of credit commitment, in each case, on the terms and conditions contained in the Credit Agreement. On May 9, 2022, the Company borrowed the entire amount of the Term Loan in the aggregate principal amount of $100.0 million. A portion of the proceeds of the Term Loan were to repay and terminate the M&T Credit Agreement. Commencing on September 30, 2022, through and including June 30, 2023, the Borrowers repaid the principal amount of the Term Loan in quarterly installments of $1,250,000 each, payable on the last business day of each March, June, September and December. As of December 31, 2022, the carrying value of the Term Loan was $96.5 million, comprised of principal of $97.5 million, net of unamortized loan costs of $1.0 million. Loan costs before amortization included $1.1 million of lender and other fees. As a result of our technical non-compliance with specified loan covenants for both the Bank of America Term Loan and Revolving loan, based in part due to our failure to timely deliver financial statements, Bank of America froze the $40.0 million Revolving Loan before any borrowings had been made against the facility. Subsequent to year-end, on July 25, 2023, the Company and Bank of America amended the Credit Agreement (the “Amendment”), in part, to waive events of defaults on its existing credit agreement. The Amendment requires the Company to pay the existing Term Facility and Revolving Facility by August 31, 2024 (the “Maturity Date”). The Revolving Loan decreased to $10,000,000 from and after July 25, 2023. The Letter of Credit commitments decreased to $2,000,000 and the Swing Line Loan was eliminated. The amendment also establishes a new EBITDA covenant and requires the Company to maintain minimum liquidity of $8 million including restricted cash and $5 million excluding restricted cash. Liquidity as defined in the Amendment includes Cash and certain qualifying customer and credit card accounts receivable. The Term Loan and Revolving Loan will bear interest on the unpaid principal amount thereof as follows: (i) if it is a loan bearing interest at a rate determined by the Base Rate, then at the Base Rate plus the Applicable Rate for such loan and (ii) if it is a loan bearing interest at a rate determined by Term SOFR, then at Term SOFR plus the Applicable Rate for such loan. The Company may elect to continue or convert the existing interest rate benchmark for the Term Loan from Term SOFR to Base Rate, and may elect the interest rate benchmark for future revolving loans as either Term SOFR or Base Rate (and, with respect to any loan made using Term SOFR, may also select the interest period applicable to any such loan), by notifying the Agent and the Lenders from time to time in accordance with the provisions of the Amendment and Credit Agreement. The Applicable Rate increased from a high of 1.95% and 0.95%, respectively, for Term SOFR and Base Rate in the Credit Agreement to 4.00% for each of Term SOFR and Base Rate as a result of the Amendment. Interest is payable in arrears on each Interest Payment Date (as defined in the Credit Agreement). Notwithstanding the foregoing, following an event of default, the loans under the Credit Facilities will bear interest at a rate that is 2% per annum higher than the interest rate then in effect for the applicable loan. Commencing on September 30, 2023, through and including June 30, 2024, the Borrowers must repay the principal amount of the Term Loan in quarterly installments of $1,875,000 each, payable on the last business day of each March, June, September and December. Revolving Loans may be repaid and reborrowed at any time until the Maturity Date, subject to the terms and conditions set forth in the Credit Agreement. Mandatory prepayments of Revolving Loans are required if the amount borrowed at any time exceeds the commitment amount. The Company may voluntarily prepay the Loans from time to time in accordance with the provisions of the Credit Agreement, and will be required to prepay the Loans under certain limited circumstances as set forth in the Credit Agreement, including upon receipt of cash proceeds in connection with certain specified asset sales, receipt of loss or condemnation proceeds or other cash proceeds received other than in the ordinary course of business or upon receipt of cash proceeds from the incurrence of indebtedness that is not permitted under the Credit Agreement, all as more specifically set forth in the Credit Agreement. The Loans may from time to time be further evidenced by separate promissory notes issued by the Borrowers. As a result of the reduced term, the Company has begun discussions with investment bankers to place financing to replace the existing credit agreement by August 31, 2024. Northpoint Loan On June 3, 2021, the Company entered into a loan and security agreement with Northpoint Commercial Finance LLC (“Northpoint”), pursuant to which Northpoint may from time-to-time advance funds for the acquisition, financing and/or refinancing by the Company of inventory purchased from Samsung Electronics America, Inc. and/or affiliates and for such other purposes as are acceptable Northpoint. The loan and security agreement provides that Northpoint may establish a credit limit and may adjust such credit limit from time to time; provided that such credit limit does not constitute a commitment or committed line of credit to Northpoint. As of December 31, 2021, such credit limit is $2.0 million, of which $0.2 million was owed and included in accounts payable. The applicable per annum interest rates for a loan, including any default rates, will be determined at the time of the loan. The loan and security agreement contains customary events of default and is secured by a security interest in all of the Company’s inventory (i) that is manufactured, distributed, or sold by Samsung Electronics America, Inc. and/or its affiliates and/or (ii) that bears any trade names, trademarks, or logos of Samsung Electronics America, Inc. and/or its affiliates; all returns, repossessions, exchanges, substitutions, replacements, attachments, parts, accessories and accessions of any of the foregoing; all price protection payments, discounts, rebates, credits, factory holdbacks and incentive payments related to any of the foregoing; supporting obligations to any of the foregoing; and products and proceeds in whatever form of any of the foregoing. 10% OID Senior Promissory Notes On March 19, 2021, the Company entered into a securities purchase agreement with two institutional investors, pursuant to which the Company issued to each investor (i) a 10% OID senior secured promissory note in the principal amount of $2.8 million and (ii) a four-year warrant to purchase 200,000 shares of the Company’s common stock at an exercise price of $12.00 (subject to adjustments), which may be exercised on a cashless basis, for a purchase price of $2.5 million each, or $5.0 million in the aggregate, the relative fair value of which is $1.3 million and was recorded as debt discount. After deducting a placement fee and other expenses, the Company received net proceeds of $4.6 million. The original issue discount and warrant expense were amortized as interest expense. On June 2, 2021, the Company repaid these notes from the proceeds of the Term Loan. At the time of repayment, the Company wrote off the balance of the debt discount of $1.7 million, as a loss on early settlement of debt. Vehicle Loans The Company has financed purchases of transportation vehicles with notes payable, which are secured by the vehicles purchased. These notes have five-year terms and interest rates ranging from 3.8% to 5.7%. As of December 31, 2022, the outstanding balance of these vehicle loans is $0.9 million. Future minimum principal payments on our total notes payable as of December 31, 2022, are as follows (in thousands): Year Ending December 31, Amount 2023 $ 6,628 2024 91,576 2025 182 2026 9 2027 8 Total future minimum payments 98,403 Less: debt discount (959 ) Total 97,444 Total current portion of notes payable, net $ 6,628 Total notes payable, net of current portion $ 90,816 | NOTE 8—NOTES PAYABLE Credit Facilities M&T Credit Agreement On June 2, 2021, the Company entered into a credit and guaranty agreement (the “M&T Credit Agreement”) with the financial institutions party thereto from time to time (“M&T Lenders”), and Manufacturers and Traders Trust Company, as sole lead arranger, sole book runner, administrative agent and collateral agent (“M&T”), pursuant to which the M&T Lenders agreed to make available to the Company and ACI senior secured credit facilities in the aggregate initial amount of $70.0 million, including (i) a $60.0 million term loan (the “M&T Term Loan”) and (ii) a $10.0 million revolving credit facility (the “M&T Revolving Loan”). The M&T Loans bear interest on the unpaid principal amount at a rate determined by the Base Rate (as defined in the Credit Agreement), then at the Base Rate plus the Applicable Margin. Each of the M&T Loans were set to mature on June 2, 2026. On June 2, 2021, the Company borrowed the entire amount of the Term Loan and issued term loan notes to the M&T Lenders in the aggregate principal amount of $60.0 million. As of December 31, 2021, the carrying value of the M&T Term Loan was $55.2 million, comprised of principal of $58.5 million, net of unamortized loan costs of $3.3 million. Loan costs before amortization included $3.5 million of lender and placement agent fees and $0.3 million of legal other fees. The Company did not borrow any amounts under the M&T Revolving Loan. On May 9, 2022, the Company repaid the M&T Term Loan, through the proceeds of a new loan issuance. As a result, the obligations under the M&T Credit Agreement were terminated. Bank of America Credit Agreement On May 9, 2022, the Company entered into a Credit Agreement (the “Credit Agreement”) with the lenders identified therein (the “Lenders”) and Bank of America, N.A., as administrative agent, swingline lender and letter of credit issuer (the “Agent”), pursuant to which the Lenders agreed to make available to the Borrowers senior secured credit facilities in the aggregate initial amount of $140.0 million, including (i) a $100.0 million term loan (the “Term Loan”) and (ii) a $40.0 million revolving credit facility (the “Revolving Loan”), which revolving credit facility included a $2.00 million swingline sublimit (the “Swing Line Loan” and together with the Term Loan and the Revolving Loan, the “Loans”) and, separately, a $10.0 million letter of credit commitment, in each case, on the terms and conditions contained in the Credit Agreement. On May 9, 2022, the Company borrowed the entire amount of the Term Loan in the aggregate principal amount of $100.0 million. A portion of the proceeds of the Term Loan were to repay and terminate the M&T Credit Agreement. Commencing on September 30, 2022, through and including June 30, 2023, the Borrowers repaid the principal amount of the Bank of America Term Loan in quarterly installments of $1,250,000 each, payable on the last business day of each March, June, September and December. As of December 31, 2022, the carrying value of the Term Loan was $96.5 million, comprised of principal of $97.5 million, net of unamortized loan costs of $1.0 million. Loan costs before amortization included $1.1 million of lender and other fees. As a result of our technical non-compliance with specified loan covenants for both the Bank of America Term Loan and Revolving loan, based in part due to our failure to timely deliver financial statements, Bank of America froze the $40.0 million Revolving Loan before any borrowings had been made against the facility. The Term Loan and Revolving Loan will bear interest on the unpaid principal amount thereof as follows: (i) if it is a loan bearing interest at a rate determined by the Base Rate, then at the Base Rate plus the Applicable Rate for such loan and (ii) if it is a loan bearing interest at a rate determined by Term SOFR, then at Term SOFR plus the Applicable Rate for such loan. The Company may elect to continue or convert the existing interest rate benchmark for the Term Loan from Term SOFR to Base Rate, and may elect the interest rate benchmark for future revolving loans as either Term SOFR or Base Rate (and, with respect to any loan made using Term SOFR, may also select the interest period applicable to any such loan), by notifying the Agent and the Lenders from time to time in accordance with the provisions of the Amendment and Credit Agreement. The Applicable Rate increased from a high of 1.95% and 0.95%, respectively, for Term SOFR and Base Rate in the Credit Agreement to 4.00% for each of Term SOFR and Base Rate as a result of the Amendment. Interest is payable in arrears on each Interest Payment Date (as defined in the Credit Agreement). Notwithstanding the foregoing, following an event of default, the loans under the Credit Facilities will bear interest at a rate that is 2% per annum higher than the interest rate then in effect for the applicable loan. Commencing on September 30, 2023, through and including June 30, 2024, the Borrowers must repay the principal amount of the Term Loan in quarterly installments of $1,875,000 each, payable on the last business day of each March, June, September and December. Revolving Loans may be repaid and reborrowed at any time until the Maturity Date, subject to the terms and conditions set forth in the Credit Agreement. Mandatory prepayments of Revolving Loans are required if the amount borrowed at any time exceeds the commitment amount. The Company may voluntarily prepay the Loans from time to time in accordance with the provisions of the Credit Agreement, and will be required to prepay the Loans under certain limited circumstances as set forth in the Credit Agreement, including upon receipt of cash proceeds in connection with certain specified asset sales, receipt of loss or condemnation proceeds or other cash proceeds received other than in the ordinary course of business or upon receipt of cash proceeds from the incurrence of indebtedness that is not permitted under the Credit Agreement, all as more specifically set forth in the Credit Agreement. The Loans may from time to time be further evidenced by separate promissory notes issued by the Borrowers. As a result of the reduced term, the Company has begun discussions with investment bankers to place financing to replace the existing credit agreement by August 31, 2024. Future minimum principal payments on our total notes payable as of March 31, 2023, are as follows (in thousands): Year Ending December 31, Amount 2023 Remainder of year $ 5,296 2024 91,594 2025 201 2026 29 2027 21 Total future minimum payments 97,141 Less: debt discount (905 ) Total $ 96,236 Total current portion of notes payable, net $ 7,264 Total notes payable, net of current portion $ 88,972 |
Leases
Leases | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Leases [Abstract] | ||
LEASES | NOTE 12— LEASES Operating Leases On April 5, 2019, the Company entered into a lease agreement with S.H.J., L.L.C for its prior principal office in Ballwin, Missouri. The lease is for a term of five years and provides for a base rent of $45,000 per month. In addition, the Company is responsible for all taxes and insurance premiums during the lease term. The lease agreement contains customary events of default, representations, warranties, and covenants. In June 2021, the Company abandoned the building leased from S.H.J., L.L.C. In connection with the abandonment of this Right of Use asset, the Company recognized an abandonment loss of $1.4 million. The Company remains obligated on the lease until April 4, 2024. On May 31, 2019, YF Logistics entered into a sublease agreement with Dynamic Marketing, Inc. (“DMI”) for its warehouse space in Hamilton, NJ. The initial term of the sublease was for a period commencing on June 1, 2019 and terminating on April 30, 2020, with automatic renewals for successive one year terms until the earlier of (i) termination by either upon thirty days’ prior written notice or (ii) April 30, 2024. The sublease provides for a base rent equal to 71.43% of the base rent paid by DMI under its lease for the premises, plus 71.43% of any taxes, operating expenses, additional charges or any other amounts due by DMI, for a total of $56,250 per month. The initial ROU asset and liability associated with this lease is $3.0 million. On January 13, 2021, the Company entered into a lease agreement with Westgate 200, LLC, which was amended on March 31, 2021, for its new principal office and showroom in St. Charles, Missouri. The lease terminates on April 30, 2027, with two options to renew for additional five year periods. The base rent is $20,977 per month until September 30, 2021, and increases to $31,465 per month until April 30, 2022, after which time the base rent increases at approximately 2.5% per year thereafter. The Company must also pay its 43.4% pro rata portion of the property taxes, operating expenses and insurance costs and is also responsible to pay for the utilities used on the premises. The lease contains customary events of default. The initial ROU asset and liability associated with this lease is $2.0 million. On June 2, 2021, 1 Stop entered into a new lease agreement with 1870 Bath Ave. LLC, a related party, for the premises located at 1870 Bath Avenue, Brooklyn, NY. The lease is for a term of ten years and provides for a base rent of $74,263 per month during the first year with annual increases to $96,896 during the last year of the term. 1 Stop is also responsible for all property taxes, insurance costs and the utilities used on the premises. The lease contains customary events of default. This lease replaces the prior lease entered into between the parties on September 1, 2018. The initial ROU asset and liability associated with this lease is $8.4 million. On June 2, 2021, Joe’s Appliances entered into a new lease agreement with 7812 5th Ave Realty LLC, a related party, for the premises located at 7812 5th Avenue, Brooklyn, NY. The lease is for a term of ten years and provides for a base rent of $6,365 per month during the first year with annual increases to $8,305 during the last year of the term. Joe’s Appliances is also responsible for all property taxes, insurance costs and the utilities used on the premises. The lease contains customary events of default. This lease replaces the prior lease entered into between the parties on September 1, 2018. The initial ROU asset and liability associated with this lease is $0.7 million. On July 29, 2021, AC Gallery entered into a lease agreement with Tom’s Flooring, LLC for the showroom and warehouse located in Largo, Florida. The lease is for a term of four months commencing on September 1, 2021 and ending on December 31, 2021 and provides for a case rent of $6,500 per month. AC Gallery must also pay its one-third pro rata portion of the common area maintenance charges, utilities and sales taxes. The lease contains customary events of default. The lease is short term and therefore not recorded as a right of use asset and liability. On September 9, 2021, the Company entered into a warehouse agreement for a new warehouse in Somerset, NJ. The warehouse agreement is for a term of 26 months commencing on October 1, 2021 and ending November 29, 2023, unless the master lease for the premises is terminated earlier. The monthly storage fee is $136,274 for the first year, $140,362 for the second year, and $144,573 for the last two months. The Company also paid a security deposit of $272,549. The lease agreement contains customary events of default, representations, warranties, and covenants. The initial ROU and liability associated with this operating lease is $3.4 million. The following was included in our consolidated balance sheet as of December 31, 2022 and 2021 (in thousands): December 31, December 31, 2022 2021 Operating lease right-of-use assets $ 11,688 $ 14,937 Lease liabilities, current portion 3,726 3,628 Lease liabilities, long-term 9,013 12,739 Total operating lease liabilities $ 12,739 $ 16,367 Weighted-average remaining lease term (months) 73 77 Weighted average discount rate 3.9 % 4.0 % Operating lease expense was $3.8 million and $1.8 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, maturities of operating lease liabilities were as follows, in thousands: Year Ending December 31, Amount 2023 $ 4,175 2024 1,808 2025 1,489 2026 1,531 2027 1,284 Thereafter 4,159 Total 14,446 Less: imputed interest (1,707 ) Total operating lease liabilities $ 12,739 Finance Leases The Company has three finance leases, acquired in the acquisition of Appliances Connection. At December 31, 2022, the total amount due on these leases was $0.34 million. Future minimum principal payments on our finance leases payable as of December 31, 2022, are as follows (in thousands): Year Ending December 31, Amount 2023 $ 125 2024 109 2025 107 2026 21 Total future minimum payments 362 Less: debt discount (25 ) Total 337 Total current portion of finance leases, net $ 112 Total finance leases, net of current portion $ 225 | NOTE 9— LEASES Operating Leases The following was included in our consolidated balance sheet as of December 31, 2022 and 2021 (in thousands): March 31, December 31, 2023 2022 Operating lease right-of-use assets $ 10,857 $ 11,688 Lease liabilities, current portion 3,353 3,726 Lease liabilities, long-term 8,443 9,014 Total operating lease liabilities $ 11,796 $ 12,740 Weighted-average remaining lease term (months) 70 73 Weighted average discount rate 3.9 % 3.9 % Operating lease expense was expense was $1.1 million for the three months ended March 31, 2023 and $3.8 million and $1.8 million for the years ended December 31, 2022 and 2021, respectively. As of March 31, 2023, maturities of operating lease liabilities were as follows, in thousands: Year Ending December 31, Amount 2023 Remainder of year $ 4,175 2024 1,808 2025 1,489 2026 1,532 2027 1,284 Thereafter 4,159 Total 14,447 Less: imputed interest (1,707 ) Total operating lease liabilities $ 12,740 Finance Leases The Company has three finance leases, acquired in the acquisition of Appliances Connection. At March 31, 2023, the total amount due on these leases was $0.34 million. Future minimum principal payments on our finance leases payable as of March 31, 2023, are as follows (in thousands): Year Ending December 31, Amount 2023 Remainder of year $ 90 2024 109 2025 107 2026 21 2027 - Total future minimum payments 362 Less: debt discount (21 ) Total 306 Total current portion of finance leases, net $ 108 Total finance leases, net of current portion $ 198 |
Supplier Concentration
Supplier Concentration | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Risks and Uncertainties [Abstract] | ||
SUPPLIER CONCENTRATION | NOTE 13—SUPPLIER CONCENTRATION For the years ended December 31, 2022 and 2021, the Company purchased a substantial portion of finished goods from one vendor (DMI – see Note 14), representing 69% and 72%, respectively. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive. | NOTE 10—SUPPLIER CONCENTRATION For the three months ended March 31, 2023 and the years ended December 31, 2022 and 2021, the Company purchased a substantial portion of finished goods from one vendor (DMI – see Note 14), representing 69%, 69% and 72.%, respectively. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive. |
Related Parties
Related Parties | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Related Party Transactions [Abstract] | ||
RELATED PARTIES | NOTE 14—RELATED PARTIES Management Services Agreement On April 5, 2019, the Company entered into a management services agreement with 1847 Partners LLC (the “Manager”), a company owned and controlled by Ellery W. Roberts, the Company’s executive chairman and prior significant stockholder, which was amended effective on August 4, 2020. Pursuant to the offsetting management services agreement, as amended, the Company appointed the Manager to provide certain services to it for a quarterly management fee equal to $62,500; provided, however, that under certain circumstances specified in the management services agreement, the quarterly fee may be reduced if similar fees payable to the Manager by subsidiaries of the Company’s former parent company, 1847 Holdings LLC, exceed a threshold amount. The Company shall also reimburse the Manager for all costs and expenses of the Company which are specifically approved by the board of directors of the Company, including all out-of-pocket costs and expenses, that are actually incurred by the Manager or its affiliates on behalf of the Company in connection with performing services under the management services agreement. The Company did not pay any expenses for the years ended December 31, 2021 and 2020. The Company expensed management fees of $0.3 million for each of the years ended December 31, 2022 and 2021 respectively. DMI The Company is a member of DMI, an appliance purchasing cooperative. DMI purchases consumer electronics and appliances at wholesale prices from various vendors, and then makes such products available to its members, including the Company, who sell such products to end consumers. DMI’s purchasing group arrangement provides its members, including the Company, with leverage and purchasing power with appliance vendors, and increases the Company’s ability to compete with competitors, including big box appliance and electronics retailers. The Company owns an approximate 1.6% interest in DMI. Additionally, Albert Fouerti, the Company’s former Chief Executive Officer, director, and a former significant stockholder of Appliances Connection prior to the AC Acquisition, was on the board of DMI until November 2022. As such, DMI is deemed to be a related party for 2022 and 2021. During the years ended December 31, 2022 and 2021, total purchases from DMI, net of holdbacks, were $255.9 million and $177.8 million, respectively. At December 31, 2022, deposits at DMI totaled $25.0 million and the vendor rebate due from DMI were $5.8 million. At December 31, 2021, vendor rebate deposits, net, due from DMI were $12.2 million and vendor rebates receivable were $5.8 million. Lease Agreements As described above, 1 Stop and Joe’s Appliances entered into lease agreements with 1870 Bath Ave. LLC and 7812 5 th On March 15, 2022, the Company entered into a lease for additional office space with 8780 19 th | NOTE 11—RELATED PARTIES Management Services Agreement On April 5, 2019, the Company entered into a management services agreement with 1847 Partners LLC (the “Manager”), a company owned and controlled by Ellery W. Roberts, the Company’s executive chairman and prior significant stockholder, which was amended effective on August 4, 2020. Pursuant to the offsetting management services agreement, as amended, the Company appointed the Manager to provide certain services to it for a quarterly management fee equal to $62,500; provided, however, that under certain circumstances specified in the management services agreement, the quarterly fee may be reduced if similar fees payable to the Manager by subsidiaries of the Company’s former parent company, 1847 Holdings LLC, exceed a threshold amount. The Company shall also reimburse the Manager for all costs and expenses of the Company which are specifically approved by the board of directors of the Company, including all out-of-pocket costs and expenses, that are actually incurred by the Manager or its affiliates on behalf of the Company in connection with performing services under the management services agreement. The Company did not pay any expenses for the years ended December 31, 2021 and 2020. The Company expensed management fees of $0.3 million for each of the years ended December 31, 2022 and 2021 respectively. DMI The Company is a member of DMI, an appliance purchasing cooperative. DMI purchases consumer electronics and appliances at wholesale prices from various vendors, and then makes such products available to its members, including the Company, who sell such products to end consumers. DMI’s purchasing group arrangement provides its members, including the Company, with leverage and purchasing power with appliance vendors, and increases the Company’s ability to compete with competitors, including big box appliance and electronics retailers. The Company owns an approximate 1.6% interest in DMI. As such, DMI is deemed to be a related party for 2022 and 2021. During the three months ended March 31, 2023 and 2022 , total purchases from DMI, were $48.4 million and $73.4 million, respectively. At March 31, 2023, deposits at DMI totaled 30.0 million and vendor rebates due from DMI were $4.4 million. Lease Agreements As described above, 1 Stop and Joe’s Appliances entered into lease agreements with 1870 Bath Ave. LLC a nd On March 15, 2022, the Company entered into a lease for additional office space with 8780 19 th |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Stockholders' Equity [Abstract] | ||
STOCKHOLDERS' EQUITY | NOTE 15—STOCKHOLDERS’ EQUITY As of December 31, 2022 and 2021, the Company was authorized to issue 200,000,000 shares of common stock, $0.0001 par value per share, and 20,000,000 shares of “blank check” preferred stock, 0.0001 par value per share. To date, the Company has not designated or issued any shares of preferred stock. On December 17, 2021, the Company approved a new share repurchase program under which the Company may repurchase up to $25.0 million of its outstanding shares of common stock in the open market, in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The Company’s decision to repurchase its shares, as well as the timing of such repurchases, will depend on a variety of factors that include ongoing assessments of the Company’s capital needs, obtaining requisite senior lender consent, market conditions and the price of the Company’s common stock, and other corporate considerations, as determined by management. During 2022, the Company purchased 1,229,222 shares of common stock for a total purchase price of $2,000,000. Effective December 31, 2022, the board authorized that the shares purchased be retired. Common Stock As of December 31, 2022 and 2021, the Company had 105,227,876 and 106,387,332 shares of common stock issued and outstanding, respectively. Each share entitles the holder thereof to one vote per share on all matters coming before the stockholders of the Company for a vote. On June 2, 2021, the Company sold 91,111,111 units, consisting of one share of common stock and a warrant to purchase one share of common stock, at a public offering price of $2.25 per unit to ThinkEquity, a division of Fordham Financial Management, Inc. (the “Underwriter”), pursuant to an underwriting agreement dated May 27, 2021, for total gross proceeds of $205.0 million. Under the underwriting agreement, the Company granted the Underwriter a 30-day option to purchase up to 2,000,000 additional shares of common stock, at a purchase price of $2.0832 per share, and/or warrants to purchase up to 2,000,000 additional shares of common stock, at a purchase price of $0.0093 per warrant, in any combination thereof, solely to cover over-allotments, if any. The Underwriter exercised its option to purchase 2,000,000 additional warrants and 2,000,000 additional shares for total gross proceeds of $4.5 million. After deducting the underwriting commission and expenses, the Company received net proceeds of approximately $194.4 million. The Company used the proceeds of the offering to fund a portion of the purchase price for the AC Acquisition. On June 2, 2021, the Company issued 5,895,973 shares of common stock to the Sellers in connection with the Acquisition (See Note 10). From June 25 through July 16, 2021, 1,052,248 shares of common stock were issued as a result of the exercise of 1,052,248 warrants for proceeds of $2.4 million. On June 3, 2021, the Company granted restricted stock awards under the 1847 Goedeker Inc. 2020 Equity Incentive Plan described below to certain directors, officers, and management of the Company for an aggregate of 216,800 shares of common stock valued at $0.6 million. All restricted stock awards vested immediately. On March 29, 2022, the Company granted 69,766 shares to two new directors valued at $0.07 million. All restricted stock awards vest immediately. In July 2022, the Company purchased 1,229,222 shares of its common stock in accordance with a board approved stock repurchase program. The total cost of the acquired shares was $2,000,000 or an average cost of $1.63 per share. Effective December 31, 2022 the board retired all the purchased shares. Equity Incentive Plan Effective as of July 30, 2020, the Company established the 1847 Goedeker Inc. 2020 Equity Incentive Plan (the “Plan”) and reserved 555,000 shares of common stock for issuance under the Plan. The Plan was approved by the Company’s board of directors and stockholders on April 21, 2020. On April 9, 2021, the board of directors approved an amendment to the Plan to increase the number of shares of common Stock reserved for issuance under the Plan from 555,000 to 1,000,000 shares. On December 17, 2021, the board of directors approved an amendment to the Plan to increase the number of shares of common Stock reserved for issuance under the Plan from 1,000,000 to 11,000,000 shares. Such increase was approved by the Company’s stockholders effective as of December 21, 2021. The Plan is administered by the compensation committee of the board of directors. The Plan permits the grant of restricted stock, stock options and other forms of incentive compensation to the Company’s officers, employees, directors, and consultants. As of December 31, 2022, 11,000,000 shares remain issuable under the 2020 EIP. Stock Options On July 28, 2021, the Company issued to a Company officer nonqualified stock options to purchase 150,000 shares of common stock pursuant to the Plan. The stock options have an exercise price of $3.10 per share and vest 25% annually over a 4-year period. The Company has calculated these options’ estimated fair market value at $0.3 million using the Black-Scholes pricing model, with the following assumptions: expected term 6.25 years, stock price $3.10, exercise price $3.10, volatility 77.65%, risk-free rate 1.00%, and no forfeiture rate. Below is a table summarizing the changes in stock options outstanding during the years ended December 31, 2022 and 2021: Weighted-Average Options Exercise Price Outstanding at December 31, 2020 555,000 $ 9.00 Granted 150,000 3.10 Exercised - - Forfeited (482,039 ) 9.00 Outstanding at December 31, 2021 222,961 $ 5.03 Granted - - Exercised - - Forfeited (185,461 ) 5.42 Outstanding at December 31, 2022 37,500 $ 3.10 Exercisable at December 31, 2022 37,500 $ 3.10 During the year end December 31, 2022, 72,960 stock options forfeited as a result of employee terminations. Stock-based compensation expense related to stock options of $0.2 and $0.3 million was recorded during the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the remaining unrecognized compensation cost related to non-vested stock options is $0.2 million and is expected to be recognized over 2.6 years. The outstanding stock options have a weighted average remaining contractual life of 8.6 years and a total intrinsic value of nil Warrants On August 4, 2020, the Company issued warrants for the purchase of 55,560 shares of common stock to affiliates of the representative in its initial public offering. These warrants are exercisable at any time and from time to time, in whole or in part, beginning on January 26, 2021 until July 30, 2025, an exercise price of $11.25 per share (subject to customary adjustments), and may also be exercised on a cashless basis if, at any time during the term of the warrants, the issuance of common stock upon exercise of the warrants is not covered by an effective registration statement. On March 19, 2021, the Company issued four-year warrants to purchase an aggregate of 400,000 shares of common stock to two investors. These warrants are exercisable at any time and from time to time, in whole or in part, at an exercise price of $12.00 per share (subject to customary adjustments) and may also be exercised on a cashless basis if, at any time during the term of the warrants, the issuance of common stock upon exercise of the warrants is not covered by an effective registration statement. On June 2, 2021, the Company issued warrants to purchase 93,111,111 shares of common stock in the public offering. These warrants are exercisable immediately and expire five years from the date of issuance. The warrants have an exercise price of $2.25 per share, subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common stock or upon any distributions of assets, including cash, stock or other property to stockholders, and may also be exercised on a cashless basis if, at any time during the term of the warrants, the issuance of common stock upon exercise of the warrants is not covered by an effective registration statement. Below is a table summarizing the changes in warrants outstanding during the years ended December 31, 2022 and 2021: Weighted- Warrants Exercise Outstanding at December 31, 2020 55,560 $ 11.25 Granted 93,511,111 2.29 Exercised (1,052,248 ) (2.25 ) Forfeited - - Outstanding at December 31, 2021 92,514,423 $ 2.30 Granted - - Exercised - - Forfeited - - Outstanding at December 31, 2022 92,514,423 $ 2.30 Exercisable at December 31, 2022 92,514,423 $ 2.30 As of December 31, 2022, the outstanding warrants have a weighted average remaining contractual life of 3.4 years and a total intrinsic value of nil | NOTE 12—STOCKHOLDERS’ EQUITY As of March 31, 2023, the Company was authorized to issue 200,000,000 shares of common stock, $0.0001 par value per share, and 20,000,000 shares of “blank check” preferred stock, 0.0001 par value per share. To date, the Company has not designated or issued any shares of preferred stock. During 2022, the Company purchased 1,229,222 shares of common stock for a total purchase price of $2,000,000. Effective December 31, 2022, the board authorized that the shares purchased be retired. Common Stock As of March 31, 2023 and December 31, 2022, the Company had 105,469,878 and 105,227,876 shares of common stock issued and outstanding, respectively. Each share entitles the holder thereof to one vote per share on all matters coming before the stockholders of the Company for a vote. During the three months ended March 31, 2023 the Company issued 242,002 shares to employees and a director and recognized $188 thousand of compensation expense in connection therewith. Equity Incentive Plan Effective as of July 30, 2020, the Company established the 1847 Goedeker Inc. 2020 Equity Incentive Plan (the “Plan”) and reserved 555,000 shares of common stock for issuance under the Plan. The Plan was approved by the Company’s board of directors and stockholders on April 21, 2020. On April 9, 2021, the board of directors approved an amendment to the Plan to increase the number of shares of common Stock reserved for issuance under the Plan from 555,000 to 1,000,000 shares. On December 17, 2021, the board of directors approved an amendment to the Plan to increase the number of shares of common Stock reserved for issuance under the Plan from 1,000,000 to 11,000,000 shares. Such increase was approved by the Company’s stockholders effective as of December 21, 2021. The Plan is administered by the compensation committee of the board of directors. The Plan permits the grant of restricted stock, stock options and other forms of incentive compensation to the Company’s officers, employees, directors, and consultants. As of March 31, 2023, 11,000,000 shares remain issuable under the 2020 EIP. Stock Options On January 1, 2023, the Company granted an option to purchase 86,550 shares of common stock pursuant to an employment agreement. The stock options have an exercise price of $0.58 per share and vest 25% annually over a 4-year period. The Company has calculated the estimated fair market value of these options at $0.03 million using the Black-Scholes pricing model, with the following assumptions: expected term 7.0 years, stock price $0.58, exercise price $0.58, volatility 67%, risk-free rate 3.9%, and no forfeiture rate. Below is a table summarizing the changes in stock options outstanding during the three months ended March 31, 2023: Weighted-Average Options Exercise Price Outstanding at December 31, 2022 150,000 $ 3.10 Granted 86,550 0.58 Exercised - - Forfeited (150,000 ) $ 3.10 Outstanding at March 31, 2023 86,550 $ 0.58 Exercisable at March 31, 2023 - $ - During the three months ended March 31, 2023, 37,500 stock options forfeited, as a result of employee terminations. Warrants Below is a table summarizing the changes in warrants outstanding during the three months ended March 31, Weighted-Average Warrants Exercise Price Outstanding at December 31, 2022 92,514,423 $ 2.30 Granted - - Exercised - Forfeited - - Outstanding at March 31, 2023 $ 92,514,423 $ 2.30 Exercisable at March 31, 2023 $ 92,514,423 $ 2.30 As of March 31, 2023, the outstanding warrants have a weighted average remaining contractual life of 3.2 years and a total intrinsic value of nil |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
EARNINGS (LOSS) PER SHARE | NOTE 16—EARNINGS (LOSS) PER SHARE The computation of weighted average shares outstanding and the basic loss per common share for the following periods consisted of the following (in thousands, except per share amounts): December 31, December 31, 2022 2021 Basic Loss Per Share Net loss $ (125,965 ) $ (7,582 ) Weighted average common shares outstanding 106,436,719 64,528,299 Basic loss per share $ (1.18 ) $ (0.12 ) Diluted Loss Per Share Weighted average common shares outstanding 106,436,719 64,528,299 Effect of dilutive stock options and warrants - - Total potential shares outstanding 106,436,719 64,528,299 Diluted loss per share $ (1.18 ) $ (0.12 ) For the year ended December 31, 2022 and 2021, there were 92,737,384 potential common share equivalents from warrants and options excluded from the diluted earnings per share calculations as their effect is anti-dilutive. | NOTE 13—EARNINGS (LOSS) PER SHARE The computation of weighted average shares outstanding and the basic loss per common share for the following periods consisted of the following (in thousands, except per share amounts): Three Months Ended March 31, June 30, September 30, March 31, 2022 2022 2022 2023 Basic Earnings (Loss) Per Share Net income (loss) $ 5,819 $ (4,292 ) $ (5,184 ) $ (2,761 ) Weighted average common shares outstanding 106,386,548 105,774,197 105,227,876 105,380,910 Basic earnings (loss) per share $ 0.05 $ (.04 ) $ (0.05 ) $ (0.03 ) Six Months Ended Nine Months Ended June 30, June 30, September 30, September 30, 2022 2021 2022 2021 Basic Earnings (Loss) Per Share Net income (loss) $ 1,527 $ 539 $ (3,627 ) $ 3,856 Weighted average common shares outstanding 106,080,764 21,410,073 105,792,287 50,047,045 Basic earnings (loss) per share $ 0.01 $ 0.03 $ (0.03 ) $ 0.08 For the three months ended March 31, 2023 and March 31, 2022, there were 92,514,423 and 92,694,423, respectively potential common share equivalents from stock options and warrants excluded from the diluted EPS calculations as their effect is anti-dilutive. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 17—INCOME TAXES As of December 31, 2022 and 2021, the Company had net operating loss carry forwards of approximately $6.3 million and $21.0 million, respectively, that may be available to reduce future years’ taxable income indefinitely. Future tax benefits which may arise as a result of these losses have not been recognized in these consolidated financial statements, as their realization is determined not likely to occur. Accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. For the year ending December 2021, the company reflects a deferred tax liability in the amount of 8.4M due to the future tax liability from an asset with an indefinite life known as a “naked credit.” The future tax liability from this indefinite lived asset can be offset by up to 80% of net operating loss carryforwards created after 2017. The remaining portion of the future tax liability from indefinite lived assets cannot be used to offset definite lived deferred tax assets. The impairment of the value indefinite lived assets in the year ending December 31, 2022 reduced the future expected tax liability sufficiently that no naked credit exists because the future tax liability is determined to be less than 80% of future net operating losses. The components of the provision for income taxes for the years ended December 31, 2022 and 2021, consisted of the following (in thousands): December 31, December 31, 2022 2021 Current federal and state $ - $ 468 Valuation allowance 3,960 1,201 Deferred federal and state (12,369 ) (1,567 ) Total provision (benefit) for income taxes $ (8,409 ) $ 102 The difference between the income tax expense (benefit) reported and amounts computed by applying the statutory federal rate of 21.0% to pretax income (loss) for the years ended December 31, 2022 and 2021, consisted of the following (in thousands): December 31, December 31, 2022 2021 Federal tax $ (28,219 ) $ (1,571 ) State tax, net of federal benefit (3,185 ) (177 ) Other state tax adjustments - 34 Permanent items 504 (1 ) Goodwill impairment 18,531 Acquisition costs 202 Change in state tax rates 436 Valuation allowance 3,960 1.179 Total income tax provision (benefit) $ (8,409 ) $ 102 Effective tax rate (6.3 )% (1.4 )% Deferred income tax assets and liabilities at December 31, 2022 and 2021, consisted of the following temporary differences and carry-forward items (in thousands): December 31, December 31, 2022 2021 Inventory 418 $ 197 Receivables 352 236 Accrued expenses 79 1,929 Interest limitations 1,170 370 Reserves 5,443 4,312 Other 169 169 Derivative (743 ) Lease liabilities 2,977 3,825 Loss carryforward 4,853 1,429 Valuation allowance (10,957 ) (6,998 ) Total deferred tax asset 3,761 $ 5,469 Fixed assets (123 ) (246 ) Right-of-use assets (2,732 ) (3,490 ) Intangibles (906 ) (10,140 ) Total deferred tax liability $ (3,761 ) $ (13,876 ) Total deferred tax liability, net $ - $ (8,407 ) The Company accrues interest and penalties related to unrecognized tax benefits. The Company does not believe it has any unrecognized tax benefits for December 31, 2022 and 2021 that would have a material impact on the financial statements. The Company’s income tax returns are open to examination by the Internal Revenue Service and various State jurisdictions. December 31, December 31, 2022 2021 Net deferred tax liability $ 1 $ (8,407 ) Valuation allowance $ - $ - |
Derivative Instruments (Interes
Derivative Instruments (Interest Rate Swap) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS (INTEREST RATE SWAP) | NOTE 18—DERIVATIVE INSTRUMENTS (INTEREST RATE SWAP): On May 9, 2022, the Company entered into a Term Loan agreement with Bank of America, N.A. (See Note 11). On the same day, the Company entered into an interest rate swap agreement to reduce its exposure to fluctuations in the floating interest rate tied to SOFR under the Term Loan with a notional amount of $100 million. The interest rate swap became effective on May 9, 2022, and will terminate on May 31, 2029. The Company receives variable interest payments monthly based on a one-month SOFR and pays a fixed rate of 2.93% to the counterparty. As of December 31, 2022, the fair value of the interest rate swap agreement was $3.2 million and was classified as a derivative asset in our consolidated balance sheet. Additionally, during the year ended December 31, 2022, the Company recognized a $3.2 million gain on the change in fair value of the interest rate swap. The Company classified the interest rate swap in Level 2 of the fair value hierarchy. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | NOTE 19—COMMITMENTS AND CONTINGENCIES On January 18, 2019, the Company entered into an asset purchase agreement with Goedeker Television, Steve Goedeker and Mike Goedeker, pursuant to which on April 5, 2019 the Company acquired substantially all of the assets of Goedeker Television used in its retail appliance and furniture business (the “Goedeker Business”). Pursuant to the asset purchase agreement, Goedeker Television entitled to receive an earn out payment of $0.2 million if the EBITDA (as defined in the asset purchase agreement) of the Goedeker Business for the trailing twelve (12) month period from April 5, 2022 is $2.5 million or greater, and may be entitled to receive a partial earn out payment if the EBITDA of the Goedeker Business is less than $2.5 million but greater than $1.5 million. The Company expects to meet this target and adjusted the contingent note payable in the consolidated balance sheet to the present value of the amount due of $0.2 million as of December 31, 2021. The final payment of $0.2 was paid October 2022. Legal Proceedings At the Company’s annual meeting on December 21, 2021, the stockholders were asked to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation, dated July 30, 2020 (the “Certificate of Incorporation”), increasing the number of authorized shares of the Company’s common stock, par value $0.0001 per share (“Common Stock” and such proposal, the “Share Increase Proposal”) by 50,000,000 shares of Common Stock. As reported in a Form 8-K filing on December 28, 2021, the Share Increase Proposal was adopted and a Certificate of Amendment to the Certificate of Incorporation setting forth the amendment adopted pursuant to the Share Increase Proposal (the “Certificate of Amendment”) was filed with the Secretary of State of the State of Delaware (the “Delaware Secretary of State”). To date, none of these newly authorized shares has actually been issued. Three purported beneficial owners of Common Stock subsequently expressed concerns about a statement in the Company’s proxy statement related to the Share Increase Proposal, specifically questioning, in light of the proxy statement, the ability of brokerage firms and other custodians to vote shares of Common Stock held by them for the benefit of their customers in the absence of instructions from the beneficial owners. Based on an examination of the situation performed following receipt of these demands, the Company believes that the vote at the annual meeting was properly tabulated and that the proposed amendment was properly adopted in accordance with Delaware law. In light of the demands, however, and to ensure against any future question as to the validity of these newly authorized shares, the Company has elected to seek validation of its Certificate of Amendment through a Petition to the Court of Chancery of the State of Delaware (the “Court of Chancery”) pursuant to Section 205 of the Delaware General Corporation Law (the “205 Petition”). The action, styled In re 1847 Goedeker Inc. One of the purported stockholders who had submitted a demand related to adoption of the Share Increase Proposal has filed a Class Action Complaint in the Court of Chancery against the Company and its Board of Directors. The lawsuit, captioned Scot T. Boden v. 1847 Goedeker Inc., et al. Boden Subsequent to December 31, 2022, the Company settled this claim for $475,000. On October 31, 2022, a putative shareholder class action was filed against Polished.com Inc. (the “Company”) and certain of its current and former officers and directors, as well as certain underwriters of the Company’s 2020 initial public offering (the “IPO”). The action was commenced in the United States District Court for the Eastern District of New York court and is captioned Ryan Maschhoff v. Polished.com Inc., et al. | NOTE 14—COMMITMENTS AND CONTINGENCIES Legal Proceedings Three purported beneficial owners of Common Stock subsequently expressed concerns about a statement in the Company’s proxy statement related to the Share Increase Proposal, specifically questioning, in light of the proxy statement, the ability of brokerage firms and other custodians to vote shares of Common Stock held by them for the benefit of their customers in the absence of instructions from the beneficial owners. Based on an examination of the situation performed following receipt of these demands, the Company believes that the vote at the annual meeting was properly tabulated and that the proposed amendment was properly adopted in accordance with Delaware law. In light of the demands, however, and to ensure against any future question as to the validity of these newly authorized shares, the Company has elected to seek validation of its Certificate of Amendment through a Petition to the Court of Chancery of the State of Delaware (the “Court of Chancery”) pursuant to Section 205 of the Delaware General Corporation Law (the “205 Petition”). The action, styled In re 1847 Goedeker Inc. One of the purported stockholders who had submitted a demand related to adoption of the Share Increase Proposal has filed a Class Action Complaint in the Court of Chancery against the Company and its Board of Directors. The lawsuit, captioned Scot T. Boden v. 1847 Goedeker Inc., et al. Boden Subsequent to December 31, 2022, the Company settled this claim for $475,000. On October 31, 2022, a putative shareholder class action was filed against Polished.com Inc. (the “Company”) and certain of its current and former officers and directors, as well as certain underwriters of the Company’s 2020 initial public offering (the “IPO”). The action was commenced in the United States District Court for the Eastern District of New York court and is captioned Ryan Maschhoff v. Polished.com Inc., et al. |
Subsequent Events
Subsequent Events | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Subsequent Events [Abstract] | ||
SUBSEQUENT EVENTS | NOTE 20—SUBSEQUENT EVENTS Subsequent to December 31, 2022, the Company signed a letter of intent for a sublease from DMI, a related party for a new warehouse in a building being leased by DMI. The new lease will allow the Company to close its two existing New Jersey warehouses and consolidate operations into one new warehouse. The lease, which is expected to be finalized in the third quarter of 2023 is for 228,000 square feet for seven years at a cost of approximately $15 per square foot, including common area charges with annual increases of 3.75%. Bank of America Loan Amendment On July 25, 2023, the Company and Bank of America amended the Credit Agreement (the “Amendment”), in part, to waive events of defaults on its existing credit agreement. The Amendment requires the Company to pay the existing Term Facility and Revolving Facility by August 31, 2024 (the “Maturity Date”). The Revolving Loan decreased to $10,000,000 from and after July 25, 2023. The Letter of Credit commitments decreased to $2,000,000 and the Swing Line Loan was eliminated. The amendment also establishes a new EBITDA covenant and requires the Company to maintain minimum liquidity of $8 million including restricted cash and $5 million excluding restricted cash. Liquidity as defined in the Amendment includes Cash and certain qualifying customer and credit card accounts receivable. The Term Loan and Revolving Loan will bear interest on the unpaid principal amount thereof as follows: (i) if it is a loan bearing interest at a rate determined by the Base Rate, then at the Base Rate plus the Applicable Rate for such loan and (ii) if it is a loan bearing interest at a rate determined by Term SOFR, then at Term SOFR plus the Applicable Rate for such loan. The Company may elect to continue or convert the existing interest rate benchmark for the Term Loan from Term SOFR to Base Rate, and may elect the interest rate benchmark for future revolving loans as either Term SOFR or Base Rate (and, with respect to any loan made using Term SOFR, may also select the interest period applicable to any such loan), by notifying the Agent and the Lenders from time to time in accordance with the provisions of the Amendment and Credit Agreement. The Applicable Rate increased from a high of 1.95% and 0.95%, respectively, for Term SOFR and Base Rate in the Credit Agreement to 4.00% for each of Term SOFR and Base Rate as a result of the Amendment. Interest is payable in arrears on each Interest Payment Date (as defined in the Credit Agreement). Notwithstanding the foregoing, following an event of default, the loans under the Credit Facilities will bear interest at a rate that is 2% per annum higher than the interest rate then in effect for the applicable loan. Commencing on September 30, 2023, through and including June 30, 2024, the Borrowers must repay the principal amount of the Term Loan in quarterly installments of $1,875,000 each, payable on the last business day of each March, June, September and December. Revolving Loans may be repaid and reborrowed at any time until the Maturity Date, subject to the terms and conditions set forth in the Credit Agreement. Mandatory prepayments of Revolving Loans are required if the amount borrowed at any time exceeds the commitment amount. The Company may voluntarily prepay the Loans from time to time in accordance with the provisions of the Credit Agreement, and will be required to prepay the Loans under certain limited circumstances as set forth in the Credit Agreement, including upon receipt of cash proceeds in connection with certain specified asset sales, receipt of loss or condemnation proceeds or other cash proceeds received other than in the ordinary course of business or upon receipt of cash proceeds from the incurrence of indebtedness that is not permitted under the Credit Agreement, all as more specifically set forth in the Credit Agreement. The Loans may from time to time be further evidenced by separate promissory notes issued by the Borrowers. As a result of the reduced term, the Company has begun discussions with investment bankers to place financing to replace the existing credit agreement by August 31, 2024. | NOTE 15—SUBSEQUENT EVENTS Subsequent to December 31, 2022, the Company signed a letter of intent for a sublease from DMI, a related party for a new warehouse in a building being leased by DMI. The new lease will allow the Company to close its two existing New Jersey warehouses and consolidate operations into one new warehouse. The lease, which is expected to be finalized in the fourth quarter of 2023 or the first quarter of 2024, will be for leased space of approximately 228,000 square feet for seven years at a cost of approximately $15 per square foot, including common area charges with annual increases of 3.75%. Bank of America Loan Amendment On July 25, 2023, the Company and Bank of America amended the Credit Agreement (the “Amendment”), in part, to waive events of defaults on its existing credit agreement. The Amendment requires the Company to pay the existing Term Facility and Revolving Facility by August 31, 2024 (the “Maturity Date”). The Revolving Loan decreased to $10,000,000 from and after July 25, 2023. The Letter of Credit commitments decreased to $2,000,000 and the Swing Line Loan was eliminated. The amendment also establishes a new EBITDA covenant and requires the Company to maintain minimum liquidity of $8 million including restricted cash and $5 million excluding restricted cash. Liquidity as defined in the Amendment includes Cash and certain qualifying customer and credit card accounts receivable. The Term Loan and Revolving Loan will bear interest on the unpaid principal amount thereof as follows: (i) if it is a loan bearing interest at a rate determined by the Base Rate, then at the Base Rate plus the Applicable Rate for such loan and (ii) if it is a loan bearing interest at a rate determined by Term SOFR, then at Term SOFR plus the Applicable Rate for such loan. The Company may elect to continue or convert the existing interest rate benchmark for the Term Loan from Term SOFR to Base Rate, and may elect the interest rate benchmark for future revolving loans as either Term SOFR or Base Rate (and, with respect to any loan made using Term SOFR, may also select the interest period applicable to any such loan), by notifying the Agent and the Lenders from time to time in accordance with the provisions of the Amendment and Credit Agreement. The Applicable Rate increased from a high of 1.95% and 0.95%, respectively, for Term SOFR and Base Rate in the Credit Agreement to 4.00% for each of Term SOFR and Base Rate as a result of the Amendment. Interest is payable in arrears on each Interest Payment Date (as defined in the Credit Agreement). Notwithstanding the foregoing, following an event of default, the loans under the Credit Facilities will bear interest at a rate that is 2% per annum higher than the interest rate then in effect for the applicable loan. Commencing on September 30, 2023, through and including June 30, 2024, the Borrowers must repay the principal amount of the Term Loan in quarterly installments of $1,875,000 each, payable on the last business day of each March, June, September and December. Revolving Loans may be repaid and reborrowed at any time until the Maturity Date, subject to the terms and conditions set forth in the Credit Agreement. Mandatory prepayments of Revolving Loans are required if the amount borrowed at any time exceeds the commitment amount. The Company may voluntarily prepay the Loans from time to time in accordance with the provisions of the Credit Agreement, and will be required to prepay the Loans under certain limited circumstances as set forth in the Credit Agreement, including upon receipt of cash proceeds in connection with certain specified asset sales, receipt of loss or condemnation proceeds or other cash proceeds received other than in the ordinary course of business or upon receipt of cash proceeds from the incurrence of indebtedness that is not permitted under the Credit Agreement, all as more specifically set forth in the Credit Agreement. The Loans may from time to time be further evidenced by separate promissory notes issued by the Borrowers. As a result of the reduced term, the Company has begun discussions with investment bankers to place financing to replace the existing credit agreement by August 31, 2024. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and are presented in US dollars. | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include our wholly owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The Company does not have a majority or minority interest in any other company, either consolidated or unconsolidated. | |
Use of Estimates | Use of Estimates The preparation of these consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of and during the reported period of the consolidated financial statements. Actual results could differ from those estimates. We evaluate our estimates and assumptions on an ongoing basis. | |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and marketable securities with original maturities of three months or less. The Company maintains deposits in several financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses related to amounts in excess of FDIC limits. Cash and cash equivalents include: (1) currency on hand, (2) demand deposits with banks or financial institutions, (3) other kinds of accounts that have the general characteristics of demand deposits, and (4) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The majority of payments due from financial institutions for the settlement of credit card and debit card transactions process within two business days and are, therefore, classified as cash and cash equivalents. Other payment methods that take more time to settle are classified as receivables. At December 31, 2022, restricted cash includes $0.2 million to secure a vendor letter of credit and $0.75 million withheld by credit card processors as security for the Company’s customer refund claims and credit card chargebacks. The cash pledged to secure the letter of credit will be released when the vendor offers the Company credit terms, and the cash held by credit card processors will be released at the discretion of the credit card companies. | |
Revenue Recognition and Cost of Revenue | Revenue Recognition and Cost of Revenue The Company records revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers.” Substantially all the Company’s sales are to individual retail consumers (homeowners), builders and designers. The Company’s performance obligation is to deliver the customer’s order. Each customer order generally contains only one performance obligation based on the merchandise sale to be delivered, at which time revenue is recognized. Control of the delivery transfers to customers when the customer can direct the use of, and obtain substantially all the benefits from, the Company’s products, which generally occurs when the customer assumes the risk of loss. The risk of loss shifts to the customer at different times depending on the method of delivery. The Company delivers products to its customers in three possible ways. The first way is through a shipment of the products through a third-party carrier from the Company’s warehouse to the customer (a “Company Shipment”). The second way is through a shipment of the products through a third-party carrier from a warehouse other than the Company’s warehouse to the customer (a “Drop Shipment”) and the third way is where the Company itself delivers the products to the customer and often also installs the product (a “Local Delivery”). In the case of a Local Delivery, the Company loads the product on its own or contracted trucks and delivers and installs the product at the customer’s location. When a product is delivered through a Local Delivery, risk of loss passes to the customer at the time of installation and revenue is recognized upon installation at the customer’s location. In the case of a Company Shipment and a Drop Shipment, the delivery to the customer is made free on board, or FOB, shipping point (whether from the Company’s warehouse or a third party’s warehouse). Therefore, risk of loss and title transfers to the customer once the products are shipped (i.e., leaves the Company’s warehouse or a third-party’s warehouse). After shipment and prior to delivery, the customer is able to redirect the product to a different destination, which demonstrates the customer’s control over the product once shipped. Once the risk of loss has shifted to the customer, the Company has satisfied its performance obligation and the Company recognizes revenue. The Company agrees with customers on the selling price of each transaction. This transaction price is generally based on the agreed upon sales price. In the Company’s contracts with customers, it allocates the entire transaction price to the sales price, which is the basis for the determination of the relative standalone selling price allocated to each performance obligation. Any sales tax, value added tax, and other tax the Company collects concurrently with revenue-producing activities are excluded from revenue. We offer promotional financing and credit cards issued by third-party banks that manage and directly extend credit to our customers. The banks are the sole owners of the accounts receivable generated under the program and, accordingly, we do not hold any customer receivables related to these programs and act as an agent in the financing transactions with customers. We frequently offer sales incentives that entitle our customers to discounts at the time of purchase (if 3 rd The Company also sells extended warranty contracts, acting as an agent for the warranty company and earns a commission on the warranty contracts purchased by customers; therefore, the cost of the warranty contracts is netted against warranty revenue in the accompanying consolidated statements of operations. The Company assumes no liability for repairs to products on which it has sold a warranty contract or products for which no warranty is sold, as the warranty obligations associated with the sale of our products are assurance-type warranties that are a guarantee of the product’s intended functionality and, therefore, do not represent a distinct performance obligation within the context of the contract. Sales returns are estimated based on historical return levels and our expectation of future returns. We also recognize a return asset, and corresponding adjustment to cost of sales, for our right to recover the goods returned by the customer, measured at the former carrying amount of the goods, less any expected recovery cost. At each financial reporting date, we assess our estimates of expected returns, refund liabilities, and return assets. Customer deposits ‒ Includes amounts collected from customers when an order is placed. The deposits are recognized as revenue when the order is shipped to the customer, or they are refunded by the Company in the event of an order cancellation. As of December 31, 2022, and 2021, customer deposits amounted to $7.3 million and $28.8 million, respectively. Cost of revenue ‒ Includes the cost of purchased merchandise plus the cost of shipping merchandise and where applicable installation, net of promotional rebates and other incentives received from vendors. Vendor allowances primarily consist of volume rebates that are earned as a result of attaining certain purchase levels and advertising allowances for the promotion of vendors’ products that are typically based on guaranteed minimum amounts with additional amounts being earned for attaining certain purchase levels. These vendor allowances are accrued as earned, with those allowances received as a result of attaining certain purchase levels accrued over the incentive period based on estimates of purchases. Volume rebates and certain advertising allowances reduce the carrying cost of inventory and are recognized in cost of sales when earned. Shipping and Handling ‒ The Company invoices its customers for shipping and handling charges associated with luxury appliance sales and premium services like “white glove” delivery. For standard delivery, also known as “curb” delivery, the cost of shipping and handling is already included in the quoted price provided to the customer. Irrespective of the delivery option chosen by the customer, the cost of shipping and handling is included in cost of sales. Advertising ‒ Costs for advertising are expensed as incurred and include direct response performance marketing costs, such as paid search advertising, social media advertising, and search engine optimization. For the years ended December 31, 2022 and 2021, advertising expenses amounted to $25.5 million and $12.0 million, respectively. | |
Receivables | Receivables Receivables consists of customer’s balance payments for which the Company extends credit to certain homebuilders and designers based on prior business relationships, and vendor rebate receivables. Vendor rebate receivables represent amounts due from manufacturers from whom the Company purchases products. Rebate receivables are stated at the amount that management expects to collect from manufacturers (vendors). Rebates are calculated on product and model sales programs from specific vendors. The rebates are paid at intermittent periods either in cash or through issuance of vendor credit memos, which can be applied against vendor accounts payable. Based on the Company’s assessment of the credit history with its manufacturers, it has concluded that there should be no allowance for uncollectible accounts for vendor rebates. The Company maintains an allowance for doubtful accounts, which is established based on estimated losses expected to be incurred in the collection of accounts receivable. As of December 31, 2022 and 2021, the balance of the allowance was $1.5 million and $1.0 million, respectively. The Company had no significant concentrations of receivables balances as of December 31, 2022, and 2021. | |
Merchandise Inventory | Merchandise Inventory Inventory consists of finished products acquired for resale and is stated at the lower of cost (on an average cost basis) or net realizable value. The Company conducts regular evaluations of the inventory value and performs write-downs based on its estimates of market conditions. As of December 31, 2022 and 2021, the Company determined that an obsolescence allowance of $1.8 million and $0.8 million, respectively, was necessary. | |
Property and Equipment | Property and Equipment Property and equipment are stated at their historical cost. Maintenance and repair expenses of property and equipment are expensed in operations as incurred. Leasehold improvements are amortized over the lesser of the base term of the lease or estimated life of the leasehold improvements. Depreciation is computed using the straight-line method over estimated useful lives as follows: Useful Life (Years) Equipment 5 Warehouse equipment 2-7 Furniture and fixtures 1-3 Transportation equipment 1-5 Leasehold improvements 2-5 Showroom inventory 5 | |
Intangible Assets | Intangible Assets The Company’s definite-lived intangible assets primarily consisted of marketing-related and customer relationships which are being amortized over their estimated useful lives, or 5 years. The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. The Company has no intangibles with indefinite lives. | |
Goodwill | Goodwill Goodwill represents the excess of consideration transferred over the fair value of tangible and identifiable intangible net assets acquired and the liabilities assumed in a business combination. Substantially all of the Company’s goodwill was recognized in the purchase price allocations when the Company was acquired in 2019 and when ACI was acquired in June 2021. Goodwill is not subject to amortization; instead, it is tested for impairment at the reporting unit level annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. In conducting the impairment test, the Company first reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. We currently operate as a single reporting unit. When testing goodwill for impairment, the Company has the option of first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If we elect to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that carrying value exceeds its fair value, we perform a quantitative goodwill impairment test. Under the quantitative goodwill impairment test, if our reporting unit’s carrying amount exceeds its fair value, we will record an impairment charge based on that difference. The Company conducts its annual goodwill impairment test on December 31 or whenever an indicator of impairment exists. As a result of the quantitative impairment assessment, the carrying value of the single reporting unit exceeded its fair value, and the Company recorded $85.4 million of non-cash goodwill impairment charge during the year ended December 31, 2022. At December 31, 2021, there was no impairment of goodwill. | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews the carrying value of long-lived assets such property and equipment, right-of-use (“ROU”) assets, and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of the assets might not be recoverable. These events and circumstances may include significant decreases in the market price of an asset or asset group, significant changes in the extent or manner in which an asset or asset group is being used by the Company or in its physical condition, a significant change in legal factors or in the business climate, a history or forecast of future operating or cash flow losses, significant disposal activity, a significant decline in the Company’s share price, a significant decline in revenue or adverse changes in the economic environment. If such facts indicate a potential impairment, the Company would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, the Company will estimate the fair value of the asset group using appropriate valuation methodologies, which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset group’s carrying amount and its estimated fair value. During the fourth quarter of 2022, the Company recognized an impairment charge of $23.7 million related to our marketing-related and customer relationships intangible assets, which is primarily composed of intangible assets recognized in the acquisition of ACI. During 2021, we identified changes in events and circumstances relating to a certain ROU operating lease asset, that was abandoned as a result of the Company closing its warehouse and retail showroom in anticipation of relocating to a new facility that was acquired in the acquisition of ACI. Consequently, the lease facility was abandoned and we recorded an impairment loss during the year ended December 31, 2021 of $1.4 million. | |
Leases | Leases The Company accounts for leases in accordance with ASC Topic 842, “Leases Operating lease payments are recognized as an expense on a straight-line basis over the lease term in equal amounts of rent expense attributed to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in later years. The difference between rent expense recognized and actual rental payments is typically represented as the spread between the ROU asset and lease liability. When calculating the present value of minimum lease payments, we account for leases as one single lease component if a lease has both lease and non-lease fixed cost components. Variable lease and non-lease cost components are expensed as incurred. We do not recognize ROU assets and lease liabilities for short-term leases that have an initial lease term of 12 months or less. We recognize the lease payments associated with short-term leases as an expense on a straight-line basis over the lease term. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined in the following three categories: Level 1: Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date. Level 2: Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly. Level 3: Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. Cash, restricted cash, receivables, inventory, vendor deposits, prepaid expenses, accounts payable, accrued expenses, and customer deposits approximate fair value, due to their short-term nature. The carrying value of notes payable and short and long-term debt also approximates fair value since these instruments bear market rates of interest. Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to long-lived assets and goodwill, which are remeasured when the derived fair value is below carrying value in the consolidated balance sheets. | |
Derivative Instruments – Interest Rate Swaps | Derivative Instruments – Interest Rate Swaps The Company uses interest rate swap agreements to manage interest rate exposures. The Company recognizes interest rate swap agreements as either a derivative asset or liability on the balance sheet at fair value. The fair value of an interest rate swap agreement is determined using widely accepted valuation techniques, including discounted cash flow analyses on the expected cash flows of each derivative. These analyses reflect the contractual terms of the derivative, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities. The fair value of interest rate swap agreements is determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. Included in the following table are the Company’s major categories of assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 (in thousands): Fair Value Measurement at December 31, 2022 Description Level 1 Level 2 Level 3 Total Assets: Derivative instruments Interest rate swap $ - $ 3,178 $ - $ 3,178 | Derivative Instruments – Interest Rate Swaps The Company uses interest rate swap agreements to manage interest rate exposures. The Company recognizes interest rate swap agreements as either a derivative asset or liability on the balance sheet at fair value. The fair value of an interest rate swap agreement is determined using widely accepted valuation techniques, including discounted cash flow analyses on the expected cash flows of each derivative. These analyses reflect the contractual terms of the derivative, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities. The fair value of interest rate swap agreements is determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are recorded with respect to temporary differences in the accounting treatment of items for financial reporting purposes and for income tax purposes. Where, based on the weight of available evidence, it is more likely than not that some amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management’s judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized. A tax position must meet a minimum probability threshold before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. | |
Sales Tax Liability | Sales Tax Liability On June 21, 2018, the U.S. Supreme Court issued an opinion in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018) Quill Corp v. North Dakota | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is calculated by adjusting the weighted average number of shares of common stock outstanding for the dilutive effect, if any, of common stock equivalents. Common stock equivalents whose effect would be antidilutive are not included in diluted earnings (loss) per share. The Company uses the treasury stock method to determine the dilutive effect, which assumes that all common stock equivalents have been exercised at the beginning of the period and that the funds obtained from those exercises were used to repurchase shares of common stock of the Company at the average closing market price during the period (see Note 16). | |
Stock-Based Compensation | Stock-Based Compensation We recognize the fair value compensation cost relating to stock-based payment transactions in accordance with ASC Topic 718, “Share-Based Payments,” | |
Impact of COVID-19 | Impact of COVID-19 In 2022, we experienced only minor impact to our operations, primarily due to staffing challenges brought on by COVID-19. We continue to monitor the current COVID-19 situation in each market in which we operate and will react accordingly. In May 2023, the US Government declared an end to the pandemic. | |
Liquidity and Going Concern Assessment | Liquidity and Going Concern Assessment Management assesses liquidity and going concern uncertainty in the Company’s consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors. Based on this assessment, as necessary or applicable, management makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations can be achieved and management has the proper authority to execute them within the look-forward period. As of December 31, 2022, we had cash and cash equivalents of $19.5 million, restricted cash of $1.0 million, and vendor deposits of $25.0 million, and total working capital of $25.9 million. For the year ended December 31, 2022, the Company incurred an operating loss of $134.4 million, and cash flows used in operations of $46.7 million. The operating loss for 2022 included $11.5 million in non-cash charges for depreciation and amortization, as well as an impairment charge of $109.1 million. The Company performed an assessment to determine whether there were conditions or events that, considered in the aggregate, raised substantial doubt about the Company’s ability to continue as a going concern within one year after the filing date of this report, when the accompanying financial statements are being issued. Initially, this assessment did not consider the potential mitigating effect of management’s plans that had not been fully implemented. The Company considered several conditions and events including (1) financial results and operations, (2) the investigation of certain allegations made by certain former employees related to the Company’s business operations, (3) technical non-compliance with certain loan covenants of our term loan with Bank of America, based in part due to our failure to timely deliver financial statements, and (4) the Company not being in compliance with the continued listing standards of NYSE American LLC (the “Exchange”) since the Company failed to timely file certain required filings, which if not successfully remediated could lead to the potential delisting of the Company from the Exchange Based on the circumstances discussed above in the initial assessment, substantial doubt exists regarding our ability to continue as a going concern. Management then assessed the mitigating effect of its plans to determine if it is probable that the plans (1) would be effectively implemented within one year after the filing date of this report, when the accompanying financial statements are being issued and (2) when implemented, would mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern. As discussed below, the Company has implemented plans which encompass short-term cash preservation initiatives to provide the Company with adequate liquidity to meet its obligations for at least the 12-month period following the date its fiscal year 2022 financial statements are issued, in addition to creating sustained cash flow generation thereafter. The Company has either taken or intends to take, the following actions, among others, to improve its liquidity position and to address uncertainty about its ability to continue as a going concern: ● As described in Note 19, the Company entered into a loan amendment of their term loan and revolver loan agreement with Bank of America, in which Bank of America waived specific technical defaults and re-established a revolver loan commitment balance of $10 million. ● We are taking concrete steps to improve efficiency and profitability through headcount reductions and consolidation of operations including the imminent consolidation of two existing New Jersey warehouses into one new warehouse. ● We hired an internationally recognized firm of digital advertising consultants to help us improve our return on advertising spend, which we believe when completed will result in more sales per dollar of advertising expense. ● We are implementing new financing initiatives for our customers, including a new store-branded credit card and a leasing alternative for customers who do not qualify for conventional credit, and we have added a new payment processor which will provide additional liquidity compared to our incumbent processor. ● We have changed our sales focus to emphasizing the sale of high-margin luxury products, as opposed to mass-market appliances, began becoming dealers for higher-margin small appliances and promoting them on our website, and have begun actively negotiating improved terms with several of our largest appliance vendors. Management has prepared estimates of operations for fiscal years 2023 and 2024 and believes that sufficient funds will be generated from operations to fund its operations, and to service its debt obligations for one year from the date of the filing of these consolidated financial statements in the Company’s 10-K. The accompanying consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. Management believes that based on relevant conditions and events that are known and reasonably knowable that its forecasts, for one year from the date of the filing of these consolidated financial statements, indicate improved operations and the Company’s ability to continue operations as a going concern. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts In An Entity’s Own Equity. ASU 2020-06 simplifies the accounting for certain convertible instruments by removing the separation models for convertible debt with a cash conversion feature and for convertible instruments with a beneficial conversion feature. As a result, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. Additionally, ASU 2020-06 amends the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method. The treasury stock method is no longer available. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2022. The Company’s adoption of this update did not have a material impact on the consolidated financial statements and related disclosures. Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2019. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. The Company has elected this extension and the effective date for the Company to adopt this standard will be for fiscal years beginning after December 15, 2022. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU amends ASC 805 to require acquiring entities to apply ASC 606 to recognize and measure contract assets and contract liabilities in business combinations. The ASU is effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on our consolidated financial statements. In March 2022, the FASB issued ASU 2022-02, Troubled Debt Restructurings (“TDRs”) and Vintage Disclosures (Topic 326): Financial Instruments – Credit Losses. This amended guidance will eliminate the accounting designation of a loan modification as a TDR, including eliminating the measurement guidance for TDRs. The amendments also enhance existing disclosure requirements and introduce new requirements related to modifications of receivables made to borrowers experiencing financial difficulty. Additionally, this guidance requires entities to disclose gross write-offs by year of origination for financing receivables, such as loans and interest receivable. The ASU is effective January 1, 2023, and is required to be applied prospectively, except for the recognition and measurement of TDRs which can be applied on a modified retrospective basis. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on our consolidated financial statements. The Company currently believes that all other issued and not yet effective accounting standards are not relevant to the Company’s consolidated financial statements. | Recent Accounting Pronouncements Recently Adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts In An Entity’s Own Equity. ASU 2020-06 simplifies the accounting for certain convertible instruments by removing the separation models for convertible debt with a cash conversion feature and for convertible instruments with a beneficial conversion feature. As a result, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. Additionally, ASU 2020-06 amends the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method. The treasury stock method is no longer available. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2022. The Company’s adoption of this update did not have a material impact on the consolidated financial statements and related disclosures. Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2019. This pronouncement was amended under ASU 2019-10 to allow an extension on the adoption date for entities that qualify as a small reporting company. The Company has elected this extension and the effective date for the Company to adopt this standard will be for fiscal years beginning after December 15, 2022. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU amends ASC 805 to require acquiring entities to apply ASC 606 to recognize and measure contract assets and contract liabilities in business combinations. The ASU is effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on our consolidated financial statements. In March 2022, the FASB issued ASU 2022-02, Troubled Debt Restructurings (“TDRs”) and Vintage Disclosures (Topic 326): Financial Instruments – Credit Losses. This amended guidance will eliminate the accounting designation of a loan modification as a TDR, including eliminating the measurement guidance for TDRs. The amendments also enhance existing disclosure requirements and introduce new requirements related to modifications of receivables made to borrowers experiencing financial difficulty. Additionally, this guidance requires entities to disclose gross write-offs by year of origination for financing receivables, such as loans and interest receivable. The ASU is effective January 1, 2023, and is required to be applied prospectively, except for the recognition and measurement of TDRs which can be applied on a modified retrospective basis. The Company has not completed its assessment of the standard but does not expect the adoption to have a material impact on our consolidated financial statements. The Company currently believes that all other issued and not yet effective accounting standards are not relevant to the Company’s consolidated financial statements. |
Restatement | Restatement The Company restated its previously issued financial statements as of and for the year ended December 31, 2021, to reflect the following adjustments: Consolidated Statement of Operations 1. Reduction in revenue of $16.6 million, which comprised the following: (1) an increase in the allowance for sales returns of $7.4 million, (2) revenue of $8.1 million that should be recognized in 2022, and (3) sales tax collections of $1.1 million improperly recognized as revenue. 2. Net reduction in cost of goods of $6.7 million, which comprised of the following: (1) reduction in product cost of sales due to an increase in the allowance for sales returns of $4.0 million, (2) reduction in product cost of sales of $6.0 million relating to revenue cutoff that should be recognized in 2022, and (3) an offsetting increase in cost of goods sold from an over accrual of vendor rebates ($0.4 million), under accrual of vendor purchases ($1.5 million), and an error in inventory cutoff ($1.4 million). 3. Increase in general and administrative expenses of $0.9 million, resulting from an increase in bad debt expense of $0.6 million in accordance with the Company’s policy for allowance for doubtful accounts, and an over accrual of sales tax receivable of $0.3 million. 4. As a result of the changes above, income tax changed from a tax benefit of $4.4 million to a tax expense of $0.1 million. Consolidated Balance Sheet 5. Net increase in current assets of $6.6 million, which comprised the following: (1) increase in inventory of $7.7 million, resulting from the reduction in cost of goods sold attributable to the allowance for sales returns, revenue cutoff, and inventory cutoff, offset by a reduction in showroom inventory of $1.0 million that was reclassified as property and equipment, (2) reduction in receivables of $1.1 million, resulting from an increase to the allowance for doubtful accounts of $0.6 million, and an over accrual of vendor rebates (as detailed in Nos. 1-4 above). 6. Net increase in current liabilities of $18.3 million, which comprised the following: (1) increase in accounts payable of $10.3 million, as a result of the increase in the allowance for sales returns, and an under accrual of sales tax refund receivable (netted with the sales tax liability), and (2) increase in customer deposits related to revenue cutoff (as detailed in Nos. 1-4 above). 7. Increase in long-term liabilities of $4.5 million, relating to an increase to the deferred tax liability as a result of the changes described above. As Originally Reported Adjustments As Restated Current assets $ 121,318 (5) $ 6,577 $ 127,895 Property and equipment 3,554 (5) 1,031 4,585 Total assets $ 375,984 $ 7,608 $ 383,592 Current liabilities $ 105,341 (6) 18,320 $ 123,661 Deferred tax liability 3,867 (7) 4,540 8,407 Total liabilities 170,381 22,860 193,241 Accumulated deficit (19,056 ) (15,252 ) (34,308 ) Total liabilities and stockholders’ equity $ 375,984 $ 7,608 $ 383,592 As Originally Reported Adjustments As Restated Product sales, net $ 362,314 (1) $ (16,589 ) $ 345,725 Cost of goods sold 282,655 (2) (6,733 ) 275,922 Operating expense 71,339 (3) 918 72,257 Income taxes 4,376 (4) (4,478 ) (102 ) Net income (loss) $ 7,670 $ (15,252 ) $ (7,582 ) Net income (loss) per common share BASIC $ 0.12 $ (0.12 ) DILUTED $ 0.10 $ (0.12 ) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING BASIC 64,528,299 64,528,299 DILUTED 76,460,460 64,528,299 Additional Common Stock Paid-Inc Accumulated Stockholders’ Shares Amount Capital Deficit Equity Balance at December 31, 2021 as originally filed 106,387,322 $ 11 $ 224,648 $ (19,056 ) $ 205,603 Adjustments to results of operations for the year ended December 31, 2021 - - - (15,252 ) (15,252 ) Balance at December 31, 2021 as restated 106,387,322 $ 11 $ 224,648 $ (34,308 ) $ 190,351 As As Reported Adjustments Restated Cash Flows from Operating Activities Net income (loss) $ 7,670 $ (15,252 ) $ (7,582 ) Receivables (5,603 ) (1-4) 444 (5,159 ) Inventory (18,459 ) (5) (8,121 ) (26,580 ) Accounts payable and accrued expenses 14,178 (5) 10,207 24,385 Customer deposits (18,968 ) (6) 8,113 (10,855 ) Deferred tax expense (benefit) (4,908 ) (6) 4,540 (368 ) Miscellaneous other accounts 1,116 (7) 69 1,185 Net cash used in operating activities (18,328 ) - (18,328 ) Net cash used in investing activities (204,834 ) - (204,834 ) Net cash provided by financing activities 247,041 - 247,041 Net change in cash and restricted cash 23,879 - 23,879 Cash and restricted cash at beginning of year 9,912 - 9,912 Cash and restricted cash at end of year $ 33,791 $ - $ 33,791 | Restatement The Company restated its previously issued financial statements as of and for the three months ended March 31, 2022, to reflect the following adjustments: Consolidated Statements of Operations 1. Revenue declined by $4.1 million because of an understatement of a returns allowance and revenue cutoff issues. 2. Cost of goods sold increased $1.0 million, net by reclassification of expenses from operating expenses to cost of goods sold offset by the reduction in product cost associated with the reduction in revenue. 3. Operating expense declined by $1.9 million primarily by reclassification of operating expense to cost of goods sold 4. Other income (expense) various miscellaneous adjustments totaling $0.2 million. 5. Income tax expense declined by $3.3 million. 6. As a result of the above adjustments, net income declined by $0.1 million. Consolidated Balance Sheet 7. Current assets declined by $13.2 million from a $3.8 million reduction in vendor rebate accrual, inventory declined by $6.7 million, net from changes to sales returns allowance and revenue cutoff adjustments, and prepaid expenses declined by $2.7 million by to adjust for charging some items to expense, rather than prepaid expense. 8. Reclassification of showroom inventory to property and equipment. 9. Eliminate a right-of-use asset on a property that was not occupied. 10. Reflect the issuance of shares granted to two directors. 11. Reflect adjustments made to 2021 accumulated deficit and adjustment to net income for the three months ended March 31, 2022. As Reported Adjustments As Restated Current assets $ 134,010 (7) $ (13,223 ) $ 120,787 Property and equipment 3,688 (8) 978 4,666 Operating lease right-of-use assets 15,262 (9) (1,127 ) 14,135 Total assets $ 386,581 $ (13,372 ) $ 373,209 Total liabilities $ 175,037 1,849 $ 176,886 Common stock and additional paid in capital 224,678 (10) 134 224,812 Accumulated deficit (13,134 ) (11) (15,354 ) (28,489 ) Total liabilities and stockholders’ equity $ 386,581 $ (13,371 ) $ 373,209 As Reported Adjustments As Restated Product sales, net $ 152,752 (1) $ (4,071 ) $ 148,681 Cost of goods sold 116,883 (2) 1,036 117,919 Operating expense 25,802 (3) (1,915 ) 23,887 Other income (expense) (762 ) (4) (186 ) (948 ) Income taxes (3,383 ) (5) 3,275 (109 ) Net income (loss) $ 5,922 (6) $ (103 ) $ 5,819 Net income (loss) per common share BASIC $ 0.06 $ 0.05 DILUTED $ 0.06 $ 0.05 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING BASIC 106,387,332 106,387,332 DILUTED 106,387,332 106,387,332 Additional Total Common Stock Paid-Inc Accumulated Stockholders’ Shares Amount Capital Deficit Equity Balance March 31, 2022 as originally filed 106,386,332 $ 11 $ 224,667 $ (13,134 ) $ 211,544 Adjustment to reflect issuance of vested stock 69,766 - 134 - 134 Adjustments to results of operations for the year ended December 31, 2022 (15,252 ) (15,252 ) Adjustments to results of operations for the three months ended March 31, 2022 - - - (103 ) (103 ) Balance March 31, 2022, as restated 106,456,098 $ 11 $ 224,801 $ (28,489 ) $ 196,323 As Filed Adjustments As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) Adjustments to reconcile net income (loss) to net cash used in by operating activities: $ 5,922 $ (103 ) $ 5,819 Deferred tax (liability) asset 1,785 (1,810 ) (25 ) Changes in operating assets and liabilities: Receivables (1,694 ) 2,693 999 Merchandise inventory (8,209 ) 14,343 6,134 Prepaid expenses and other assets (2,312 ) 2,751 439 Accounts payable and accrued expenses 11,368 (9,450 ) 1,918 Customer deposits (7,622 ) (8,603 ) (16,225 ) Various other changes (2,985 ) 372 (2,612 ) Net cash used in operating activities (3,747 ) 193 (3,554 ) CASH FLOWS FROM INVESTING ACTIVITIES Net cash used in investing activities (6 ) (31 ) (37 ) CASH FLOWS FROM FINANCING ACTIVITIES Net cash used in financing activities (1,634 ) - (1,634 ) NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (5,387 ) 162 (5,225 ) CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD 33,791 - 33,791 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD $ 28,404 $ 162 $ 28,566 Cash, cash equivalents, and restricted cash consist of the following: End of the period Cash and cash equivalents $ 25,821 162 25,983 Restricted cash 2,583 - 2,583 $ 28,404 $ 28,404 $ 28,404 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Summary of Significant Accounting Policies [Abstract] | ||
Schedule of property and equipment estimated useful life | Useful Life (Years) Equipment 5 Warehouse equipment 2-7 Furniture and fixtures 1-3 Transportation equipment 1-5 Leasehold improvements 2-5 Showroom inventory 5 | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Fair Value Measurement at December 31, 2022 Description Level 1 Level 2 Level 3 Total Assets: Derivative instruments Interest rate swap $ - $ 3,178 $ - $ 3,178 | |
Schedule of consolidated balance sheet | As Originally Reported Adjustments As Restated Current assets $ 121,318 (5) $ 6,577 $ 127,895 Property and equipment 3,554 (5) 1,031 4,585 Total assets $ 375,984 $ 7,608 $ 383,592 Current liabilities $ 105,341 (6) 18,320 $ 123,661 Deferred tax liability 3,867 (7) 4,540 8,407 Total liabilities 170,381 22,860 193,241 Accumulated deficit (19,056 ) (15,252 ) (34,308 ) Total liabilities and stockholders’ equity $ 375,984 $ 7,608 $ 383,592 | As Reported Adjustments As Restated Current assets $ 134,010 (7) $ (13,223 ) $ 120,787 Property and equipment 3,688 (8) 978 4,666 Operating lease right-of-use assets 15,262 (9) (1,127 ) 14,135 Total assets $ 386,581 $ (13,372 ) $ 373,209 Total liabilities $ 175,037 1,849 $ 176,886 Common stock and additional paid in capital 224,678 (10) 134 224,812 Accumulated deficit (13,134 ) (11) (15,354 ) (28,489 ) Total liabilities and stockholders’ equity $ 386,581 $ (13,371 ) $ 373,209 |
Schedule of consolidated operation | As Originally Reported Adjustments As Restated Product sales, net $ 362,314 (1) $ (16,589 ) $ 345,725 Cost of goods sold 282,655 (2) (6,733 ) 275,922 Operating expense 71,339 (3) 918 72,257 Income taxes 4,376 (4) (4,478 ) (102 ) Net income (loss) $ 7,670 $ (15,252 ) $ (7,582 ) Net income (loss) per common share BASIC $ 0.12 $ (0.12 ) DILUTED $ 0.10 $ (0.12 ) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING BASIC 64,528,299 64,528,299 DILUTED 76,460,460 64,528,299 | As Reported Adjustments As Restated Product sales, net $ 152,752 (1) $ (4,071 ) $ 148,681 Cost of goods sold 116,883 (2) 1,036 117,919 Operating expense 25,802 (3) (1,915 ) 23,887 Other income (expense) (762 ) (4) (186 ) (948 ) Income taxes (3,383 ) (5) 3,275 (109 ) Net income (loss) $ 5,922 (6) $ (103 ) $ 5,819 Net income (loss) per common share BASIC $ 0.06 $ 0.05 DILUTED $ 0.06 $ 0.05 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING BASIC 106,387,332 106,387,332 DILUTED 106,387,332 106,387,332 |
Schedule of consolidated equity | Additional Common Stock Paid-Inc Accumulated Stockholders’ Shares Amount Capital Deficit Equity Balance at December 31, 2021 as originally filed 106,387,322 $ 11 $ 224,648 $ (19,056 ) $ 205,603 Adjustments to results of operations for the year ended December 31, 2021 - - - (15,252 ) (15,252 ) Balance at December 31, 2021 as restated 106,387,322 $ 11 $ 224,648 $ (34,308 ) $ 190,351 | Additional Total Common Stock Paid-Inc Accumulated Stockholders’ Shares Amount Capital Deficit Equity Balance March 31, 2022 as originally filed 106,386,332 $ 11 $ 224,667 $ (13,134 ) $ 211,544 Adjustment to reflect issuance of vested stock 69,766 - 134 - 134 Adjustments to results of operations for the year ended December 31, 2022 (15,252 ) (15,252 ) Adjustments to results of operations for the three months ended March 31, 2022 - - - (103 ) (103 ) Balance March 31, 2022, as restated 106,456,098 $ 11 $ 224,801 $ (28,489 ) $ 196,323 |
Schedule of consolidated cash flow | As As Reported Adjustments Restated Cash Flows from Operating Activities Net income (loss) $ 7,670 $ (15,252 ) $ (7,582 ) Receivables (5,603 ) (1-4) 444 (5,159 ) Inventory (18,459 ) (5) (8,121 ) (26,580 ) Accounts payable and accrued expenses 14,178 (5) 10,207 24,385 Customer deposits (18,968 ) (6) 8,113 (10,855 ) Deferred tax expense (benefit) (4,908 ) (6) 4,540 (368 ) Miscellaneous other accounts 1,116 (7) 69 1,185 Net cash used in operating activities (18,328 ) - (18,328 ) Net cash used in investing activities (204,834 ) - (204,834 ) Net cash provided by financing activities 247,041 - 247,041 Net change in cash and restricted cash 23,879 - 23,879 Cash and restricted cash at beginning of year 9,912 - 9,912 Cash and restricted cash at end of year $ 33,791 $ - $ 33,791 | As Filed Adjustments As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) Adjustments to reconcile net income (loss) to net cash used in by operating activities: $ 5,922 $ (103 ) $ 5,819 Deferred tax (liability) asset 1,785 (1,810 ) (25 ) Changes in operating assets and liabilities: Receivables (1,694 ) 2,693 999 Merchandise inventory (8,209 ) 14,343 6,134 Prepaid expenses and other assets (2,312 ) 2,751 439 Accounts payable and accrued expenses 11,368 (9,450 ) 1,918 Customer deposits (7,622 ) (8,603 ) (16,225 ) Various other changes (2,985 ) 372 (2,612 ) Net cash used in operating activities (3,747 ) 193 (3,554 ) CASH FLOWS FROM INVESTING ACTIVITIES Net cash used in investing activities (6 ) (31 ) (37 ) CASH FLOWS FROM FINANCING ACTIVITIES Net cash used in financing activities (1,634 ) - (1,634 ) NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (5,387 ) 162 (5,225 ) CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD 33,791 - 33,791 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD $ 28,404 $ 162 $ 28,566 Cash, cash equivalents, and restricted cash consist of the following: End of the period Cash and cash equivalents $ 25,821 162 25,983 Restricted cash 2,583 - 2,583 $ 28,404 $ 28,404 $ 28,404 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Revenues [Abstract] | ||
Schedule of disaggregated revenue | For the Years Ended December 31, December 31, 2022 2021 Appliance sales $ 500,506 $ 313,456 Furniture and other sales 33,878 32,269 Total $ 534,474 $ 345,725 | For the Three Months Ended March 31, March 31, June 30, September 30, 2023 2022 2022 2022 Appliance sales $ 90,464 $ 138,549 $ 128,242 $ 136,044 Furniture sales and other sales 4,975 10,132 10,221 7,522 Total $ 95,439 $ 148,681 $ 138,463 $ 141,566 |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Receivables [Abstract] | ||
Schedule of receivables | December 31, December 31, 2022 2021 Trade accounts receivable $ 13,691 $ 10,693 Vendor rebates receivable 8,514 11,189 Other receivables 5,951 2,660 Total receivables 28,156 24,542 Less allowance for doubtful accounts (1,506 ) (1,011 ) Total receivables, net $ 26,650 $ 23,531 | March 31, March 31, June 30, September 30, 2023 2022 2022 2022 Trade accounts receivable $ 11,576 $ 15,831 $ 15,367 $ 17,160 Vendor rebates receivable 4,393 5,462 6,902 11,633 Other receivables 2,230 2,251 2,251 2,251 Total receivables 18,199 23,544 26,844 26,314 Less allowance for doubtful accounts (1,507 ) (1,133 ) (1,507 ) (1,422 ) Total receivables, net $ 16,693 $ 22,411 $ 25,657 $ 24,892 |
Merchandise Inventory (Tables)
Merchandise Inventory (Tables) | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Merchandise Inventory [Abstract] | ||
Schedule of merchandise inventory | December 31, December 31, 2022 2021 Appliances $ 39,702 $ 49,631 Furniture and other 3,853 3,605 Total merchandise inventory 43,555 53,236 Less reserve for obsolescence (1,789 ) (843 ) Total merchandise inventory, net $ 41,766 $ 52,393 | March 31, March 31, June 30, September 30, 2023 2022 2022 2022 Appliances $ 35,109 $ 44,626 $ 54,216 $ 42,593 Furniture 721 714 925 826 Other 2,309 1,763 2,609 2,469 Total merchandise inventory 38,139 47,103 57,750 45,888 Less reserve for obsolescence (1,789 ) (900 ) (1,000 ) (1,400 ) Total merchandise inventory, net $ 36,350 $ 46,203 $ 56,750 $ 44,488 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | December 31, December 31, 2022 2021 Warehouse equipment $ 291 290 Financed warehouse equipment 515 256 Office furniture and equipment 324 226 Transportation equipment 1,466 1,417 Leasehold improvements 3,131 1,814 Showroom inventory 1,037 1,032 Total property and equipment 6,764 5,035 Less: accumulated depreciation (1,689 ) (450 ) Property and equipment, net $ 5,075 $ 4,585 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Intangible Assets and Goodwill [Abstract] | ||
Schedule of intangible assets | December 31, December 31, 2022 2021 Customer relationships $ 3,461 $ 24,148 Marketing-related 6,835 26,935 Total intangible assets 10,296 51,083 Less: accumulated amortization - (6,871 ) Intangible assets, net $ 10,296 $ 44,212 | March 31, March 31, June 30, September 30, 2023 2022 2022 2022 Customer relationships $ 3,461 $ 24,148 $ 24,148 $ 24,148 Marketing-related 6,835 26,935 26,935 26,935 Total intangible assets 20,296 51,083 51,083 51,083 Less: accumulated amortization (753 ) (9,425 ) (11,979 ) (14,534 ) Intangible assets, net $ 9,543 $ 41,658 $ 39,104 $ 36,549 |
Schedule of estimated amortization expense | Year Ending December 31, Amount 2023 $ 3,013 2024 3,013 2025 3,013 2026 1,257 Total $ 10,296 | Year Ending December 31, Amount 2023, remainder of year $ 2,260 2024 3,013 2025 3,013 2026 1,256 2027 - Total $ 9,543 |
Schedule of goodwill | Balance January 1, 2021 $ 4,726 Goodwill from acquisition of Appliances Connection 185,720 Goodwill from acquisition of Appliances Gallery 1,168 Balance at December 31, 2021 $ 191,614 Impairment charge for the year-ended December 31, 2022 (85,441 ) Balance December 31, 2022 $ 106,173 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Payable and Accrued Expenses [Abstract] | |
Schedule of accounts payable and accrued expenses | December 31, December 31, 2022 2021 Trade accounts payable $ 34,345 $ 42,659 Accrued sales tax 36,196 24,980 Accrued payroll liabilities 680 984 Accrued interest 37 794 Accrued liability for sales returns 3,916 7,624 Accrued income taxes - 274 Credit cards payable 32 1,004 Accrued insurance 1,180 955 Accrued severance - 496 Other accrued liabilities 5,151 3,029 Total accounts payable and accrued expenses $ 81,537 $ 82,799 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Business Combinations [Abstract] | ||
Schedule of purchase consideration at fair value | Purchase consideration at fair value: Cash consideration $ 180,000 Common stock 12,264 Working capital adjustment 32,411 Total consideration $ 224,675 Assets acquired and liabilities assumed at fair value: Cash $ 5,897 Receivables 17,141 Vendor deposits 15,000 Merchandise inventory 21,634 Prepaid expenses and other current assets 2,194 Property and equipment 1,891 Right-of-use operating lease assets 1,834 Customer relationships 23,399 Tradenames 25,567 Goodwill 185,720 Accounts payable and accrued expenses (45,715 ) Customer deposits (17,536 ) Notes payable (1,527 ) Finance lease liabilities (215 ) Right-of-use operating lease liabilities (1,834 ) Net deferred tax liabilities (8,775 ) Net assets acquired $ 224,675 Purchase consideration at fair value: Cash consideration $ 1,420 Total consideration $ 1,420 Assets acquired and liabilities assumed at fair value: Merchandise inventory $ 483 Prepaid expenses and other current assets 6 Property and equipment 19 Goodwill 1,168 Customer deposits (256 ) Net assets acquired $ 1,420 | Purchase consideration at fair value: Cash consideration $ 180,000 Common stock 12,264 Working capital adjustment 32,411 Total consideration $ 224,675 Assets acquired and liabilities assumed at fair value: Cash $ 5,897 Receivables 17,141 Vendor deposits 15,000 Merchandise inventory 21,634 Prepaid expenses and other current assets 2,194 Property and equipment 1,891 Right-of-use operating lease assets 1,834 Customer relationships 23,399 Tradenames 25,567 Goodwill 185,720 Accounts payable and accrued expenses (45,715 ) Customer deposits (17,536 ) Notes payable (1,527 ) Finance lease liabilities (215 ) Right-of-use operating lease liabilities (1,834 ) Net deferred tax liabilities (8,775 ) Net assets acquired $ 224,675 |
Schedule of unaudited pro forma results | December 31, 2021 Net sales $ 525,152 Net income $ 12,658 Earnings per share: Basic and diluted $ 0.20 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Notes Payable [Abstract] | ||
Schedule of future minimum principal payments | Year Ending December 31, Amount 2023 $ 6,628 2024 91,576 2025 182 2026 9 2027 8 Total future minimum payments 98,403 Less: debt discount (959 ) Total 97,444 Total current portion of notes payable, net $ 6,628 Total notes payable, net of current portion $ 90,816 | Year Ending December 31, Amount 2023 Remainder of year $ 5,296 2024 91,594 2025 201 2026 29 2027 21 Total future minimum payments 97,141 Less: debt discount (905 ) Total $ 96,236 Total current portion of notes payable, net $ 7,264 Total notes payable, net of current portion $ 88,972 |
Leases (Tables)
Leases (Tables) | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Schedule of supplemental balance sheet information related to leases | The following was included in our consolidated balance sheet as of December 31, 2022 and 2021 (in thousands): December 31, December 31, 2022 2021 Operating lease right-of-use assets $ 11,688 $ 14,937 Lease liabilities, current portion 3,726 3,628 Lease liabilities, long-term 9,013 12,739 Total operating lease liabilities $ 12,739 $ 16,367 Weighted-average remaining lease term (months) 73 77 Weighted average discount rate 3.9 % 4.0 % | March 31, December 31, 2023 2022 Operating lease right-of-use assets $ 10,857 $ 11,688 Lease liabilities, current portion 3,353 3,726 Lease liabilities, long-term 8,443 9,014 Total operating lease liabilities $ 11,796 $ 12,740 Weighted-average remaining lease term (months) 70 73 Weighted average discount rate 3.9 % 3.9 % |
Schedule of future minimum principal payments on our finance leases payable | As of December 31, 2022, maturities of operating lease liabilities were as follows, in thousands: Year Ending December 31, Amount 2023 $ 4,175 2024 1,808 2025 1,489 2026 1,531 2027 1,284 Thereafter 4,159 Total 14,446 Less: imputed interest (1,707 ) Total operating lease liabilities $ 12,739 | Year Ending December 31, Amount 2023 Remainder of year $ 4,175 2024 1,808 2025 1,489 2026 1,532 2027 1,284 Thereafter 4,159 Total 14,447 Less: imputed interest (1,707 ) Total operating lease liabilities $ 12,740 |
Schedule of future minimum principal payments on our finance leases payable | Future minimum principal payments on our finance leases payable as of December 31, 2022, are as follows (in thousands): Year Ending December 31, Amount 2023 $ 125 2024 109 2025 107 2026 21 Total future minimum payments 362 Less: debt discount (25 ) Total 337 Total current portion of finance leases, net $ 112 Total finance leases, net of current portion $ 225 | Year Ending December 31, Amount 2023 Remainder of year $ 90 2024 109 2025 107 2026 21 2027 - Total future minimum payments 362 Less: debt discount (21 ) Total 306 Total current portion of finance leases, net $ 108 Total finance leases, net of current portion $ 198 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Stockholders' Equity [Abstract] | ||
Schedule of stock options outstanding | Weighted-Average Options Exercise Price Outstanding at December 31, 2020 555,000 $ 9.00 Granted 150,000 3.10 Exercised - - Forfeited (482,039 ) 9.00 Outstanding at December 31, 2021 222,961 $ 5.03 Granted - - Exercised - - Forfeited (185,461 ) 5.42 Outstanding at December 31, 2022 37,500 $ 3.10 Exercisable at December 31, 2022 37,500 $ 3.10 | Weighted-Average Options Exercise Price Outstanding at December 31, 2022 150,000 $ 3.10 Granted 86,550 0.58 Exercised - - Forfeited (150,000 ) $ 3.10 Outstanding at March 31, 2023 86,550 $ 0.58 Exercisable at March 31, 2023 - $ - |
Schedule of warrants outstanding | Weighted- Warrants Exercise Outstanding at December 31, 2020 55,560 $ 11.25 Granted 93,511,111 2.29 Exercised (1,052,248 ) (2.25 ) Forfeited - - Outstanding at December 31, 2021 92,514,423 $ 2.30 Granted - - Exercised - - Forfeited - - Outstanding at December 31, 2022 92,514,423 $ 2.30 Exercisable at December 31, 2022 92,514,423 $ 2.30 | Weighted-Average Warrants Exercise Price Outstanding at December 31, 2022 92,514,423 $ 2.30 Granted - - Exercised - Forfeited - - Outstanding at March 31, 2023 $ 92,514,423 $ 2.30 Exercisable at March 31, 2023 $ 92,514,423 $ 2.30 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended | 15 Months Ended |
Dec. 31, 2022 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Schedule of weighted average shares outstanding and the basic loss per common share | December 31, December 31, 2022 2021 Basic Loss Per Share Net loss $ (125,965 ) $ (7,582 ) Weighted average common shares outstanding 106,436,719 64,528,299 Basic loss per share $ (1.18 ) $ (0.12 ) Diluted Loss Per Share Weighted average common shares outstanding 106,436,719 64,528,299 Effect of dilutive stock options and warrants - - Total potential shares outstanding 106,436,719 64,528,299 Diluted loss per share $ (1.18 ) $ (0.12 ) | Three Months Ended March 31, June 30, September 30, March 31, 2022 2022 2022 2023 Basic Earnings (Loss) Per Share Net income (loss) $ 5,819 $ (4,292 ) $ (5,184 ) $ (2,761 ) Weighted average common shares outstanding 106,386,548 105,774,197 105,227,876 105,380,910 Basic earnings (loss) per share $ 0.05 $ (.04 ) $ (0.05 ) $ (0.03 ) Six Months Ended Nine Months Ended June 30, June 30, September 30, September 30, 2022 2021 2022 2021 Basic Earnings (Loss) Per Share Net income (loss) $ 1,527 $ 539 $ (3,627 ) $ 3,856 Weighted average common shares outstanding 106,080,764 21,410,073 105,792,287 50,047,045 Basic earnings (loss) per share $ 0.01 $ 0.03 $ (0.03 ) $ 0.08 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense (benefit) | The components of the provision for income taxes for the years ended December 31, 2022 and 2021, consisted of the following (in thousands): December 31, December 31, 2022 2021 Current federal and state $ - $ 468 Valuation allowance 3,960 1,201 Deferred federal and state (12,369 ) (1,567 ) Total provision (benefit) for income taxes $ (8,409 ) $ 102 |
Schedule of difference between the income tax expense (benefit) and statutory federal rate | The difference between the income tax expense (benefit) reported and amounts computed by applying the statutory federal rate of 21.0% to pretax income (loss) for the years ended December 31, 2022 and 2021, consisted of the following (in thousands): December 31, December 31, 2022 2021 Federal tax $ (28,219 ) $ (1,571 ) State tax, net of federal benefit (3,185 ) (177 ) Other state tax adjustments - 34 Permanent items 504 (1 ) Goodwill impairment 18,531 Acquisition costs 202 Change in state tax rates 436 Valuation allowance 3,960 1.179 Total income tax provision (benefit) $ (8,409 ) $ 102 Effective tax rate (6.3 )% (1.4 )% |
Schedule of the internal revenue service | Deferred income tax assets and liabilities at December 31, 2022 and 2021, consisted of the following temporary differences and carry-forward items (in thousands): December 31, December 31, 2022 2021 Inventory 418 $ 197 Receivables 352 236 Accrued expenses 79 1,929 Interest limitations 1,170 370 Reserves 5,443 4,312 Other 169 169 Derivative (743 ) Lease liabilities 2,977 3,825 Loss carryforward 4,853 1,429 Valuation allowance (10,957 ) (6,998 ) Total deferred tax asset 3,761 $ 5,469 Fixed assets (123 ) (246 ) Right-of-use assets (2,732 ) (3,490 ) Intangibles (906 ) (10,140 ) Total deferred tax liability $ (3,761 ) $ (13,876 ) Total deferred tax liability, net $ - $ (8,407 ) |
Schedule of the internal revenue service | The Company accrues interest and penalties related to unrecognized tax benefits. The Company does not believe it has any unrecognized tax benefits for December 31, 2022 and 2021 that would have a material impact on the financial statements. The Company’s income tax returns are open to examination by the Internal Revenue Service and various State jurisdictions. December 31, December 31, 2022 2021 Net deferred tax liability $ 1 $ (8,407 ) Valuation allowance $ - $ - |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Restricted cash | $ 950,000 | $ 950,000 | $ 8,067,000 | $ 2,583,000 | $ 1,733,000 | $ 1,733,000 |
Customer deposits | 7,300,000 | 28,800,000 | ||||
Advertising expense | 25,500,000 | 12,000,000 | ||||
Allowance for doubtful accounts | 1,500,000 | 1,000,000 | ||||
Allowance amount | 1,789,000 | $ 1,789,000 | $ 843,000 | $ 1,400,000 | $ 1,000,000 | $ 900,000 |
Estimated useful lives | 5 years | 5 years | ||||
Impairment charge | $ 1,400,000 | |||||
Accrual and related interest expense | $ 19,300,000 | 18,500,000 | ||||
Cash and cash equivalents | 19,500,000 | |||||
Restricted cash | 1,000,000 | |||||
Deposits, Money Market Deposits | 25,000,000 | 12,200,000 | ||||
Working capital | 25,900,000 | |||||
Operating loss | 134,400,000 | |||||
Cash from operation | 46,700,000 | |||||
Depreciation and amortization | 11,500,000 | |||||
Impairment charges | 109,100,000 | |||||
Loan commitment balance | 10,000,000 | |||||
Reduction in revenue | 4,100,000 | 16,600,000 | ||||
Allowance for sales returns | 7,400,000 | |||||
Reverse revenue | 8,100,000 | |||||
Sales taxes | 1,100,000 | |||||
Cost of goods sold | 1,000,000 | |||||
Sales return allowance | 4,000,000 | |||||
Adjusting recognized revenue | 6,000,000 | |||||
Accrual of vendor purchases | 1,500,000 | |||||
Adjustment inventory | 1,400,000 | |||||
General and administrative expenses | 900,000 | |||||
Bad debt expense | 600,000 | |||||
Allowance for doubtful accounts | 300,000 | |||||
Income tax expense | 3,300,000 | 4,400,000 | ||||
Expense | 100,000 | |||||
Current assets | 13,200,000 | 18,300,000 | ||||
Net increase in inventory | 3,800,000 | 7,700,000 | ||||
Property and equipment | 1,000,000 | |||||
Reduction in accounts receivable | 1.1 | |||||
Allowance for doubtful accounts | 0.6 | |||||
Accounts payable | 10,300,000 | |||||
Total liabilities | 4,500,000 | |||||
Operating expense | 1,900,000 | |||||
Other income and expense | 200,000 | |||||
Net income | 100,000 | |||||
Allowance for sales returns | 6,700,000 | |||||
Prepaid expenses | $ 2,700,000 | |||||
Goodwill [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Impairment assets | 85,400,000 | |||||
Minimum [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Intangible assets | 23,700,000 | |||||
Rebates receivable | 400,000 | |||||
Current assets | 6,600,000 | |||||
Maximum [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Cost of goods sold | 6,700,000 | |||||
Vendor [Member] | Minimum [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Restricted cash | 200,000 | |||||
Vendor [Member] | Maximum [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Restricted cash | 750,000 | |||||
Merchandise Inventory [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Allowance amount | $ 1,800,000 | $ 800,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful life | Dec. 31, 2022 |
Equipment [Member] | |
Schedule of property and equipment estimated useful life [Abstract] | |
Useful life | 5 years |
Warehouse Equipment [Member] | Minimum [Member] | |
Schedule of property and equipment estimated useful life [Abstract] | |
Useful life | 2 years |
Warehouse Equipment [Member] | Maximum [Member] | |
Schedule of property and equipment estimated useful life [Abstract] | |
Useful life | 7 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Schedule of property and equipment estimated useful life [Abstract] | |
Useful life | 1 year |
Furniture and Fixtures [Member] | Maximum [Member] | |
Schedule of property and equipment estimated useful life [Abstract] | |
Useful life | 3 years |
Transportation Equipment [Member] | Minimum [Member] | |
Schedule of property and equipment estimated useful life [Abstract] | |
Useful life | 1 year |
Transportation Equipment [Member] | Maximum [Member] | |
Schedule of property and equipment estimated useful life [Abstract] | |
Useful life | 5 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Schedule of property and equipment estimated useful life [Abstract] | |
Useful life | 2 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Schedule of property and equipment estimated useful life [Abstract] | |
Useful life | 5 years |
Showroom Inventory [Member] | |
Schedule of property and equipment estimated useful life [Abstract] | |
Useful life | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of assets and liabilities measured at fair value on a recurring basis $ in Thousands | Dec. 31, 2022 USD ($) |
Derivative instruments | |
Interest rate swap | $ 3,178 |
Level 1 [Member] | |
Derivative instruments | |
Interest rate swap | |
Level 2 [Member] | |
Derivative instruments | |
Interest rate swap | 3,178 |
Level 3 [Member] | |
Derivative instruments | |
Interest rate swap |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of consolidated balance sheet - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
As Originally Reported [Member] | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Current assets | $ 134,010 | $ 121,318 |
Property and equipment | 3,688 | 3,554 |
Total assets | 386,581 | 375,984 |
Current liabilities | 105,341 | |
Deferred tax liability | 3,867 | |
Total liabilities | 175,037 | 170,381 |
Accumulated deficit | (13,134) | (19,056) |
Total liabilities and stockholders’ equity | $ 386,581 | 375,984 |
Adjustments [Member] | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Current assets | 6,577 | |
Property and equipment | 1,031 | |
Total assets | 7,608 | |
Current liabilities | 18,320 | |
Deferred tax liability | 4,540 | |
Total liabilities | 22,860 | |
Accumulated deficit | (15,252) | |
Total liabilities and stockholders’ equity | 7,608 | |
As Restated [Member] | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Current assets | 127,895 | |
Property and equipment | 4,585 | |
Total assets | 383,592 | |
Current liabilities | 123,661 | |
Deferred tax liability | 8,407 | |
Total liabilities | 193,241 | |
Accumulated deficit | (34,308) | |
Total liabilities and stockholders’ equity | $ 383,592 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of consolidated operation - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
As Originally Reported [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Product sales, net | $ 152,752 | $ 362,314 |
Cost of goods sold | 116,883 | 282,655 |
Operating expense | 25,802 | 71,339 |
Income taxes | (3,383) | 4,376 |
Net income (loss) | $ 5,922 | $ 7,670 |
Net income (loss) per common share | ||
BASIC (in Dollars per share) | $ 0.06 | $ 0.12 |
DILUTED (in Dollars per share) | $ 0.06 | $ 0.1 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||
BASIC (in Shares) | 106,387,332 | 64,528,299 |
DILUTED (in Shares) | 106,387,332 | 76,460,460 |
Adjustments [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Product sales, net | $ (16,589) | |
Cost of goods sold | (6,733) | |
Operating expense | 918 | |
Income taxes | (4,478) | |
Net income (loss) | $ (103) | (15,252) |
As Restated [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Product sales, net | 148,681 | 345,725 |
Cost of goods sold | 117,919 | 275,922 |
Operating expense | 23,887 | 72,257 |
Income taxes | (109) | (102) |
Net income (loss) | $ 5,819 | $ (7,582) |
Net income (loss) per common share | ||
BASIC (in Dollars per share) | $ 0.05 | $ (0.12) |
DILUTED (in Dollars per share) | $ 0.05 | $ (0.12) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||
BASIC (in Shares) | 106,387,332 | 64,528,299 |
DILUTED (in Shares) | 106,387,332 | 64,528,299 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
As Originally Reported [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | |||
Balance | $ 205,603 | ||
Balance | $ 211,544 | ||
As Originally Reported [Member] | Additional Paid-Inc Capital | |||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | |||
Balance | 224,648 | ||
Balance | 224,667 | ||
As Originally Reported [Member] | Accumulated Deficite | |||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | |||
Balance | $ (19,056) | ||
Balance | (13,134) | ||
As Originally Reported [Member] | Common Stock | |||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | |||
Balance (in Shares) | 106,387,322 | ||
Balance | $ 11 | ||
Adjustments [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | |||
Adjustments to results of operations for the year ended December 31, 2021 | (103) | $ (15,252) | (15,252) |
Adjustments [Member] | Additional Paid-Inc Capital | |||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | |||
Adjustments to results of operations for the year ended December 31, 2021 | |||
Adjustments [Member] | Accumulated Deficite | |||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | |||
Adjustments to results of operations for the year ended December 31, 2021 | $ (103) | (15,252) | (15,252) |
Adjustments [Member] | Common Stock | |||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | |||
Adjustments to results of operations for the year ended December 31, 2021 | |||
As Restated [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | |||
Balance | 190,351 | ||
Balance | 190,351 | ||
As Restated [Member] | Additional Paid-Inc Capital | |||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | |||
Balance | 224,648 | ||
Balance | 224,648 | ||
As Restated [Member] | Accumulated Deficite | |||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | |||
Balance | $ (34,308) | ||
Balance | $ (34,308) | ||
As Restated [Member] | Common Stock | |||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | |||
Balance (in Shares) | 106,387,322 | ||
Balance | $ 11 | ||
Balance (in Shares) | 106,387,322 | ||
Balance | $ 11 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details) - Schedule of consolidated cash flow - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
As Originally Reported [Member] | ||
Cash Flows from Operating Activities | ||
Net income (loss) | $ 5,922 | $ 7,670 |
Receivables | (1,694) | (5,603) |
Inventory | (18,459) | |
Accounts payable and accrued expenses | 14,178 | |
Customer deposits | (7,622) | (18,968) |
Deferred income taxes | 1,785 | (4,908) |
Miscellaneous other accounts | 1,116 | |
Net cash used in operating activities | (3,747) | (18,328) |
Net cash used in investing activities | (6) | (204,834) |
Net cash provided by financing activities | (1,634) | 247,041 |
Net change in cash and restricted cash | (5,387) | 23,879 |
Cash and restricted cash at beginning of year | 33,791 | 9,912 |
Cash and restricted cash at end of year | 33,791 | |
Adjustments [Member] | ||
Cash Flows from Operating Activities | ||
Net income (loss) | (103) | (15,252) |
Receivables | 2,693 | 444 |
Inventory | (8,121) | |
Accounts payable and accrued expenses | 10,207 | |
Customer deposits | (8,603) | 8,113 |
Deferred income taxes | (1,810) | 4,540 |
Miscellaneous other accounts | 69 | |
Net cash used in operating activities | 193 | |
Net cash used in investing activities | (31) | |
Net cash provided by financing activities | ||
Net change in cash and restricted cash | 162 | |
As Restated [Member] | ||
Cash Flows from Operating Activities | ||
Net income (loss) | 5,819 | (7,582) |
Receivables | 999 | (5,159) |
Inventory | (26,580) | |
Accounts payable and accrued expenses | 24,385 | |
Customer deposits | (16,225) | (10,855) |
Deferred income taxes | (25) | (368) |
Miscellaneous other accounts | 1,185 | |
Net cash used in operating activities | (3,554) | (18,328) |
Net cash used in investing activities | (37) | (204,834) |
Net cash provided by financing activities | (1,634) | 247,041 |
Net change in cash and restricted cash | (5,225) | 23,879 |
Cash and restricted cash at beginning of year | $ 33,791 | 9,912 |
Cash and restricted cash at end of year | $ 33,791 |
Revenues (Details) - Schedule o
Revenues (Details) - Schedule of disaggregated revenue - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue, Major Customer [Line Items] | ||
Total | $ 534,474 | $ 345,725 |
Appliance Sales [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total | 500,506 | 313,456 |
Furniture and other sales [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total | $ 33,878 | $ 32,269 |
Receivables (Details) - Schedul
Receivables (Details) - Schedule of receivables - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule of Receivables [Abstract] | ||||||
Trade accounts receivable | $ 11,576 | $ 13,691 | $ 17,160 | $ 15,367 | $ 15,831 | $ 10,693 |
Vendor rebates receivable | 4,393 | 8,514 | 11,633 | 6,902 | 5,462 | 11,189 |
Other receivables | 2,230 | 5,951 | 2,251 | 2,251 | 2,251 | 2,660 |
Total receivables | 18,199 | 28,156 | 26,314 | 26,844 | 23,544 | 24,542 |
Less allowance for doubtful accounts | (1,506) | (1,011) | ||||
Total receivables, net | $ 16,693 | $ 26,650 | $ 22,411 | $ 25,657 | $ 24,892 | $ 23,531 |
Vendor Deposits (Details)
Vendor Deposits (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Vendor Deposits [Abstract] | ||
Number of vendor | 1 | |
Vendor deposits | $ 25 | $ 12.2 |
Merchandise Inventory (Details)
Merchandise Inventory (Details) - Schedule of merchandise inventory - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory [Line Items] | ||||||
Total merchandise inventory | $ 38,139 | $ 43,555 | $ 45,888 | $ 57,750 | $ 47,103 | $ 53,236 |
Less reserve for obsolescence | (1,789) | (1,789) | (1,400) | (1,000) | (900) | (843) |
Total merchandise inventory, net | $ 36,350 | 41,766 | $ 44,488 | $ 56,750 | $ 46,203 | 52,393 |
Appliances [Member] | ||||||
Inventory [Line Items] | ||||||
Total merchandise inventory | 39,702 | 49,631 | ||||
Furniture [Member] | ||||||
Inventory [Line Items] | ||||||
Total merchandise inventory | $ 3,853 | $ 3,605 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 1.2 | $ 0.4 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Property and Equipment [Abstract] | ||
Total property and equipment | $ 6,764 | $ 5,035 |
Less: accumulated depreciation | (1,689) | (450) |
Property and equipment, net | 5,075 | 4,585 |
Warehouse equipment [Member] | ||
Schedule of Property and Equipment [Abstract] | ||
Total property and equipment | 291 | 290 |
Financed Warehouse Equipment [Member] | ||
Schedule of Property and Equipment [Abstract] | ||
Total property and equipment | 515 | 256 |
Office furniture and equipment [Member] | ||
Schedule of Property and Equipment [Abstract] | ||
Total property and equipment | 324 | 226 |
Transportation equipment [Member] | ||
Schedule of Property and Equipment [Abstract] | ||
Total property and equipment | 1,466 | 1,417 |
Leasehold improvements [Member] | ||
Schedule of Property and Equipment [Abstract] | ||
Total property and equipment | 3,131 | 1,814 |
Showroom inventory [Member] | ||
Schedule of Property and Equipment [Abstract] | ||
Total property and equipment | $ 1,037 | $ 1,032 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||||
Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 12, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets and Goodwill (Details) [Line Items] | |||||||
Identified intangible assets | $ 2,100 | $ 2,100 | |||||
Intangible assets net | 49,000 | 49,000 | |||||
Amortization expense | $ 800 | $ 2,550 | $ 2,550 | $ 2,550 | $ 6,100 | $ 10,200 | |
Intangible assets | 5 years | 5 years | |||||
Carrying value | $ 23,700 | ||||||
Customer [Member] | |||||||
Intangible Assets and Goodwill (Details) [Line Items] | |||||||
Marketing-related intangible assets | 23,700 | ||||||
Enterprise [Member] | |||||||
Intangible Assets and Goodwill (Details) [Line Items] | |||||||
Recorded impairment charge | $ 85,400 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill (Details) - Schedule of intangible assets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule of intangible assets [Abstract] | ||||||
Customer relationships | $ 3,461 | $ 3,461 | $ 24,148 | $ 24,148 | $ 24,148 | $ 24,148 |
Marketing-related | 6,835 | 6,835 | 26,935 | 26,935 | 26,935 | 26,935 |
Total intangible assets | 20,296 | 10,296 | 51,083 | 51,083 | 51,083 | 51,083 |
Less: accumulated amortization | (753) | (14,534) | (11,979) | (9,425) | (6,871) | |
Intangible assets, net | $ 9,543 | $ 10,296 | $ 36,549 | $ 39,104 | $ 41,658 | $ 44,212 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill (Details) - Schedule of estimated amortization expense - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Schedule of estimated amortization expense [Abstract] | ||
2023 | $ 2,260 | $ 3,013 |
2024 | 3,013 | 3,013 |
2025 | 3,013 | 3,013 |
2026 | $ 1,256 | 1,257 |
Total | $ 10,296 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill (Details) - Schedule of goodwill - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of goodwill [Abstract] | ||
Balance beginning | $ 4,726 | |
Impairment charge for the year-ended December 31, 2022 | $ (85,441) | |
Goodwill from acquisition of Appliances Connection | 185,720 | |
Goodwill from acquisition of Appliances Gallery | 1,168 | |
Balance ending | $ 106,173 | $ 191,614 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - Schedule of accounts payable and accrued expenses - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Accounts Payable and Accrued Expenses [Abstract] | ||
Trade accounts payable | $ 34,345 | $ 42,659 |
Accrued sales tax | 36,196 | 24,980 |
Accrued payroll liabilities | 680 | 984 |
Accrued interest | 37 | 794 |
Accrued liability for sales returns | 3,916 | 7,624 |
Accrued income taxes | 274 | |
Credit cards payable | 32 | 1,004 |
Accrued insurance | 1,180 | 955 |
Accrued severance | 496 | |
Other accrued liabilities | 5,151 | 3,029 |
Total accounts payable and accrued expenses | $ 81,537 | $ 82,799 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Millions | 12 Months Ended | 15 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2023 | |
Business Combinations (Details) [Line Items] | |||
Aggregate purchase price | $ 224.7 | ||
Cash | $ 180 | ||
Shares of common stock (in Shares) | 5,895,973 | ||
Common stock value | $ 12.3 | ||
Net working capital | 32.4 | ||
Acquisition related expenses | $ 0.9 | ||
Intangible assets acquired period | 5 years | 5 years | |
Contributed net sales | $ 297.9 | ||
Net income from continuing operations | 14.9 | ||
Agreement purchase price | $ 1.4 | ||
Common stock, description | The aggregate purchase price was $224.7 million, consisting of (i) $180.0 million in cash, (ii) 5,895,973 shares of the Company’s common stock valued at $12.3 million, and (iii) $32.4 million as a result of the post-closing net working capital adjustment provision. The Company recorded $0.9 million in acquisition-related expenses. | ||
Appliance Gallery [Member] | |||
Business Combinations (Details) [Line Items] | |||
Contributed net sales | 0.2 | ||
Net income from continuing operations | 0.2 | ||
Appliances [Member] | |||
Business Combinations (Details) [Line Items] | |||
Contributed net sales | $ 297.9 |
Business Combinations (Detail_2
Business Combinations (Details) - Schedule of purchase consideration at fair value $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Purchase consideration at fair value: | |
Cash consideration | $ 1,420 |
Total consideration | 1,420 |
Assets acquired and liabilities assumed at fair value: | |
Merchandise inventory | 483 |
Prepaid expenses and other current assets | 6 |
Property and equipment | 19 |
Goodwill | 1,168 |
Customer deposits | (256) |
Net assets acquired | 1,420 |
Updated Allocation [Member] | |
Purchase consideration at fair value: | |
Cash consideration | 180,000 |
Common stock | 12,264 |
Working capital adjustment | 32,411 |
Total consideration | 224,675 |
Assets acquired and liabilities assumed at fair value: | |
Cash | 5,897 |
Receivables | 17,141 |
Vendor deposits | 15,000 |
Merchandise inventory | 21,634 |
Prepaid expenses and other current assets | 2,194 |
Property and equipment | 1,891 |
Right-of-use operating lease assets | 1,834 |
Customer relationships | 23,399 |
Tradenames | 25,567 |
Goodwill | 185,720 |
Accounts payable and accrued expenses | (45,715) |
Customer deposits | (17,536) |
Notes payable | (1,527) |
Finance lease liabilities | (215) |
Right-of-use operating lease liabilities | (1,834) |
Net deferred tax liabilities | (8,775) |
Net assets acquired | $ 224,675 |
Business Combinations (Detail_3
Business Combinations (Details) - Schedule of unaudited pro forma results $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) $ / shares | |
Schedule of Unaudited Pro Forma Results [Abstract] | |
Net sales | $ 525,152 |
Net income | $ 12,658 |
Earnings per share: | |
Basic and diluted (in Dollars per share) | $ / shares | $ 0.2 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Jul. 25, 2023 | May 09, 2022 | Jun. 02, 2021 | Jul. 25, 2023 | Mar. 19, 2021 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Dec. 31, 2020 | Aug. 25, 2020 | |
Notes Payable (Details) [Line Items] | |||||||||||
Principal amount | $ 2,800,000 | ||||||||||
Aggregate initial amount | $ 70,000,000 | ||||||||||
Term loan | 60,000,000 | $ 55,200,000 | |||||||||
Revolving credit facility | 10,000,000 | ||||||||||
Aggregate principal amount | $ 60,000,000 | ||||||||||
Comprised of principal | 58,500,000 | ||||||||||
Net of unamortized loan costs | 3,300,000 | ||||||||||
Lender and placement agent fees | 3,500,000 | ||||||||||
Legal other fees | 300,000 | ||||||||||
Line of credit, aggregate initial amount | $ 140,000,000 | ||||||||||
Swingline subfacility | 2,000,000 | ||||||||||
Letter of credit subfacility | 10,000,000 | ||||||||||
Amortization | $ 1,100,000 | ||||||||||
Agreement outstanding amount | $ 40,000,000 | ||||||||||
Loan decreased | $ 10,000,000,000 | ||||||||||
Commitments decreased | 2,000,000,000 | ||||||||||
Restricted cash | $ 1,000,000 | ||||||||||
Credit agreement | 4% | 4% | |||||||||
Line of credit interest rate | 2% | 2% | |||||||||
Credit limit | 2,000,000 | ||||||||||
Accounts payable | $ 200,000 | ||||||||||
Warrant purchase (in Shares) | 200,000 | ||||||||||
Common stock at an exercise price (in Dollars per share) | $ 12 | ||||||||||
Purchase price amount | $ 2,500,000 | ||||||||||
Aggregate of purchase price | 5,000,000 | ||||||||||
Fair value of debt amount | 1,300,000 | ||||||||||
Outstanding balance of vehicle loans | $ 900,000 | ||||||||||
Term loan quarterly installments due year one | $ 5,296,000 | 6,628,000 | |||||||||
Term loan quarterly installments due year two | $ 91,594,000 | $ 91,576,000 | |||||||||
Maximum [Member] | |||||||||||
Notes Payable (Details) [Line Items] | |||||||||||
Applicable rate percentage | 1.95% | 1.95% | |||||||||
Interest rates | 5.70% | ||||||||||
Minimum [Member] | |||||||||||
Notes Payable (Details) [Line Items] | |||||||||||
Applicable rate percentage | 0.95% | 0.95% | |||||||||
Interest rates | 3.80% | ||||||||||
Arvest Loan [Member] | |||||||||||
Notes Payable (Details) [Line Items] | |||||||||||
Principal amount | $ 3,500,000 | ||||||||||
Outstanding balance of loan | $ 96,500,000 | $ 96,500,000 | |||||||||
Comprised balance amount | 97,500,000 | 97,500,000 | |||||||||
Unamortized loan costs | 1,000,000 | $ 1,000,000 | |||||||||
Term Loan [Member] | |||||||||||
Notes Payable (Details) [Line Items] | |||||||||||
Agreement outstanding amount | $ 40,000,000 | ||||||||||
10% OID Senior Promissory Notes [Member] | |||||||||||
Notes Payable (Details) [Line Items] | |||||||||||
Net proceeds | 4,600,000 | ||||||||||
Write off of debt discount | $ 1,700,000 | ||||||||||
Forecast [Member] | |||||||||||
Notes Payable (Details) [Line Items] | |||||||||||
Commitments decreased | $ 2,000,000 | ||||||||||
Liquidity amount | 8,000,000 | 8,000,000 | |||||||||
Restricted cash | $ 5,000,000 | $ 5,000,000 | |||||||||
Term Loan [Member] | |||||||||||
Notes Payable (Details) [Line Items] | |||||||||||
Line of credit, aggregate initial amount | 100,000,000 | ||||||||||
Principal loan amount | 1,250,000,000 | $ 1,875,000,000 | |||||||||
Term loan quarterly installments due year one | $ 1,250,000,000 | ||||||||||
Term loan quarterly installments due year two | $ 1,875,000,000 | ||||||||||
Revolving Credit Facility [Member] | |||||||||||
Notes Payable (Details) [Line Items] | |||||||||||
Line of credit, aggregate initial amount | 40,000,000 | ||||||||||
M and T Credit Agreement [Member] | |||||||||||
Notes Payable (Details) [Line Items] | |||||||||||
Principal amount | $ 100,000,000 |
Notes Payable (Details) - Sched
Notes Payable (Details) - Schedule of future minimum principal payments - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Schedule of future minimum principal payments [Abstract] | ||
2023 | $ 5,296 | $ 6,628 |
2024 | 91,594 | 91,576 |
2025 | 201 | 182 |
2026 | 29 | 9 |
2027 | 21 | 8 |
Total future minimum payments | 97,141 | 98,403 |
Less: debt discount | (905) | (959) |
Total | 96,236 | 97,444 |
Total current portion of notes payable, net | 7,264 | 6,628 |
Total notes payable, net of current portion | $ 88,972 | $ 90,816 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Sep. 09, 2021 | Jul. 29, 2021 | Jun. 02, 2021 | Jan. 13, 2021 | May 31, 2019 | Apr. 05, 2019 | Jun. 30, 2021 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Leases (Details) [Line Items] | |||||||||||||
Term of lease | 26 months | 5 years | 7 years | ||||||||||
Base rent | $ 8,305 | $ 45,000 | |||||||||||
Abandonment loss | $ 1,400 | ||||||||||||
Percentage of base rent | 71.43% | ||||||||||||
Percentage of taxes Paid | 71.43% | ||||||||||||
Total cost | $ 56,250 | ||||||||||||
Operating lease right of use asset | $ 10,857 | $ 11,688 | $ 14,937 | $ 14,135 | $ 13,327 | $ 12,512 | |||||||
Lease agreement term, description | AC Gallery entered into a lease agreement with Tom’s Flooring, LLC for the showroom and warehouse located in Largo, Florida. The lease is for a term of four months commencing on September 1, 2021 and ending on December 31, 2021 and provides for a case rent of $6,500 per month. AC Gallery must also pay its one-third pro rata portion of the common area maintenance charges, utilities and sales taxes. | ||||||||||||
Storage fee first year | $ 136,274 | ||||||||||||
Storage fee second year | 140,362 | ||||||||||||
Storage fee last two months | 144,573 | ||||||||||||
Security deposit | 272,549 | ||||||||||||
Operating lease expense | $ 1,100 | 3,800 | $ 1,800 | ||||||||||
Total due of leases amount | $ 340 | ||||||||||||
Warehouse [Member] | |||||||||||||
Leases (Details) [Line Items] | |||||||||||||
Operating lease right of use asset | $ 3,400 | ||||||||||||
Bath Ave L L C [Member] | |||||||||||||
Leases (Details) [Line Items] | |||||||||||||
Term of lease | 10 years | ||||||||||||
Base rent | $ 74,263 | ||||||||||||
Operating lease right of use asset | 8,400 | ||||||||||||
Bath Ave L L C [Member] | Maximum [Member] | |||||||||||||
Leases (Details) [Line Items] | |||||||||||||
Base rent | $ 96,896 | ||||||||||||
Realty L L C [Member] | |||||||||||||
Leases (Details) [Line Items] | |||||||||||||
Term of lease | 10 years | ||||||||||||
Base rent | $ 6,365 | ||||||||||||
Operating lease right of use asset | $ 700 | ||||||||||||
Dynamic Marketing, Inc. [Member] | |||||||||||||
Leases (Details) [Line Items] | |||||||||||||
Operating lease right of use asset | $ 3,000 | ||||||||||||
St. Charles, Missouri [Member] | |||||||||||||
Leases (Details) [Line Items] | |||||||||||||
Lease agreement, description | On January 13, 2021, the Company entered into a lease agreement with Westgate 200, LLC, which was amended on March 31, 2021, for its new principal office and showroom in St. Charles, Missouri. The lease terminates on April 30, 2027, with two options to renew for additional five year periods. The base rent is $20,977 per month until September 30, 2021, and increases to $31,465 per month until April 30, 2022, after which time the base rent increases at approximately 2.5% per year thereafter. The Company must also pay its 43.4% pro rata portion of the property taxes, operating expenses and insurance costs and is also responsible to pay for the utilities used on the premises. The lease contains customary events of default. The initial ROU asset and liability associated with this lease is $2.0 million. |
Leases (Details) - Schedule of
Leases (Details) - Schedule of supplemental balance sheet information related to leases - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule of supplemental balance sheet information related to leases [Abstract] | ||||||
Operating lease right-of-use assets | $ 10,857 | $ 11,688 | $ 14,135 | $ 13,327 | $ 12,512 | $ 14,937 |
Lease liabilities, current portion | $ 3,353 | 3,726 | 3,628 | |||
Lease liabilities, long-term | 9,013 | 12,739 | ||||
Total operating lease liabilities | $ 12,739 | $ 16,367 | ||||
Weighted-average remaining lease term (months) | 70 months | 73 months | 77 months | |||
Weighted average discount rate | 3.90% | 3.90% | 4% |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of maturities of operating lease liabilities - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of maturities of operating lease liabilities [Abstract] | ||
2023 | $ 4,175 | $ 4,175 |
2024 | 1,808 | 1,808 |
2025 | 1,489 | 1,489 |
2026 | 1,532 | 1,531 |
2027 | 1,284 | 1,284 |
Thereafter | 4,159 | 4,159 |
Total | 14,447 | 14,446 |
Less: imputed interest | (1,707) | (1,707) |
Total operating lease liabilities | $ 12,740 | $ 12,739 |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of future minimum principal payments on our finance leases payable - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Schedule of future minimum principal payments on our finance leases payable [Abstract] | ||
2023 | $ 90 | $ 125 |
2024 | 109 | 109 |
2025 | 107 | 107 |
2026 | 21 | 21 |
Total future minimum payments | 362 | |
Less: debt discount | (21) | (25) |
Total | 306 | 337 |
Total current portion of finance leases, net | 108 | 112 |
Total finance leases, net of current portion | $ 198 | $ 225 |
Supplier Concentration (Details
Supplier Concentration (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
One Vendor [Member] | Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | |||
Supplier Concentration (Details) [Line Items] | |||
Percentage of revenues and purchases | 69% | 69% | 72% |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | 7 Months Ended | 12 Months Ended | ||||
Apr. 05, 2019 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 15, 2022 | |
Related Party Transactions [Abstract] | |||||||
Service fee to manager | $ 62,500 | ||||||
Management fees | $ 300 | $ 300 | |||||
Equity interest rate | 1.60% | ||||||
Net of hold backs | $ 48,400 | $ 73,400 | $ 255,900 | 177,800 | |||
Deposits at DMI total | 30,000 | 25,000 | |||||
Vendor rebates amount | $ 4,400 | 5,800 | |||||
Vendor rebate deposits | $ 12,200 | 12,200 | |||||
Vendor rebates receivable | 5,800 | $ 5,800 | |||||
Total rent paid | 600 | 1,000 | |||||
Total rent expense | $ 400 | 700 | |||||
Expense of improvement of building | $ 1,200 | ||||||
Total lease amount due | $ 1,200 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||
Jun. 03, 2021 USD ($) shares | Jun. 02, 2021 USD ($) $ / shares shares | Mar. 19, 2021 $ / shares shares | Jul. 31, 2022 USD ($) $ / shares shares | Mar. 29, 2022 USD ($) shares | Jul. 28, 2021 | Jul. 16, 2021 USD ($) shares | Mar. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Jan. 01, 2023 shares | Sep. 30, 2022 $ / shares shares | Jun. 30, 2022 $ / shares shares | Mar. 31, 2022 $ / shares shares | Dec. 17, 2021 shares | Apr. 09, 2021 shares | Aug. 04, 2020 $ / shares shares | Jul. 30, 2020 shares | Apr. 21, 2020 shares | |
Stockholders' Equity (Details) [Line Items] | |||||||||||||||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | |||||||||||||
Common stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |||||||||||||
Preferred stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||
Common stock, shares outstanding | 105,469,878 | 25,000,000 | |||||||||||||||||
Purchased shares of common stock | 1,229,222 | 1,229,222 | |||||||||||||||||
Total purchase price (in Dollars) | $ | $ 2,000,000 | ||||||||||||||||||
Common stock, shares issued | 105,469,878 | 105,227,876 | 106,387,332 | 105,227,876 | 105,227,876 | 106,457,098 | |||||||||||||
Common stock, shares outstanding | 105,469,878 | 105,227,876 | 106,387,332 | 105,227,876 | 105,227,876 | 106,457,098 | |||||||||||||
Voting rights | one | ||||||||||||||||||
Shares of common stock sold | 91,111,111 | ||||||||||||||||||
Shares of common stock issued | 1 | 1,052,248 | |||||||||||||||||
Stock price (in Dollars per share) | $ / shares | $ 2.25 | $ 0.58 | |||||||||||||||||
Total gross proceeds (in Dollars) | $ | $ 205,000 | ||||||||||||||||||
Underwriting agreement, description | Under the underwriting agreement, the Company granted the Underwriter a 30-day option to purchase up to 2,000,000 additional shares of common stock, at a purchase price of $2.0832 per share, and/or warrants to purchase up to 2,000,000 additional shares of common stock, at a purchase price of $0.0093 per warrant, in any combination thereof, solely to cover over-allotments, if any. The Underwriter exercised its option to purchase 2,000,000 additional warrants and 2,000,000 additional shares for total gross proceeds of $4.5 million. | The Plan permits the grant of restricted stock, stock options and other forms of incentive compensation to the Company’s officers, employees, directors, and consultants. | |||||||||||||||||
Exercise of warrants | 1,052,248 | ||||||||||||||||||
Shares granted | 69,766 | ||||||||||||||||||
Number of new directors | 2 | 242,002 | |||||||||||||||||
New directors valued (in Dollars) | $ | $ 70 | $ 188 | |||||||||||||||||
Acquired shares (in Dollars) | $ | $ 2,000,000 | ||||||||||||||||||
Average cost of per share (in Dollars per share) | $ / shares | $ 1.63 | ||||||||||||||||||
Remaining issuable shares | 11,000,000 | 11,000,000 | |||||||||||||||||
Officer nonqualified stock options, description | the Company issued to a Company officer nonqualified stock options to purchase 150,000 shares of common stock pursuant to the Plan. The stock options have an exercise price of $3.10 per share and vest 25% annually over a 4-year period. The Company has calculated these options’ estimated fair market value at $0.3 million using the Black-Scholes pricing model, with the following assumptions: expected term 6.25 years, stock price $3.10, exercise price $3.10, volatility 77.65%, risk-free rate 1.00%, and no forfeiture rate. | ||||||||||||||||||
Stock options forfeited | 72,960 | ||||||||||||||||||
Stock-based compensation expense related (in Dollars) | $ | $ 200 | $ 300 | |||||||||||||||||
Unrecognized compensation cost related to non-vested stock options (in Dollars) | $ | $ 200 | ||||||||||||||||||
Expected recognized years | 2 years 7 months 6 days | ||||||||||||||||||
Weighted average remaining contractual life | 3 years 2 months 12 days | 3 years 4 months 24 days | |||||||||||||||||
Total intrinsic value (in Dollars) | $ | |||||||||||||||||||
Purchase shares of common stock | 400,000 | 86,550 | |||||||||||||||||
Exercise price per share (in Dollars per share) | $ / shares | $ 12 | $ 0.58 | |||||||||||||||||
Number of investors | 2 | ||||||||||||||||||
Annually percentage | 25% | ||||||||||||||||||
Estimated fair market value (in Dollars) | $ | $ 30 | ||||||||||||||||||
Expected term | 7 years | ||||||||||||||||||
Exercise price (in Dollars per share) | $ / shares | $ 0.58 | ||||||||||||||||||
Volatility percentage | 67% | ||||||||||||||||||
Risk-free rate percentage | 3.90% | ||||||||||||||||||
Stock options forfeited shares | 37,500 | ||||||||||||||||||
Equity Incentive Plan [Member] | |||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||||||
Reserved shares of common stock for issuance | 555,000 | 555,000 | |||||||||||||||||
Common Stock [Member] | |||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||||||
Common stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | ||||||||||||||||||
Common stock, shares issued | 105,227,876 | 106,387,332 | |||||||||||||||||
Common stock, shares outstanding | 105,227,876 | 106,387,332 | |||||||||||||||||
Shares of common stock issued | 5,895,973 | ||||||||||||||||||
Proceeds from warrants exercises (in Dollars) | $ | $ 2,400 | ||||||||||||||||||
Warrant [Member] | |||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||||||
Shares of common stock issued | 1 | ||||||||||||||||||
Minimum [Member] | |||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||||||
Reserved shares of common stock for issuance | 1,000,000 | 555,000 | |||||||||||||||||
Maximum [Member] | |||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||||||
Reserved shares of common stock for issuance | 11,000,000 | 1,000,000 | |||||||||||||||||
IPO [Member] | |||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||||||
Purchase shares of common stock | 93,111,111 | ||||||||||||||||||
Exercise price per share (in Dollars per share) | $ / shares | $ 2.25 | ||||||||||||||||||
Directors and Officers [Member] | |||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||||||
Aggregate shares of common stock | 216,800 | ||||||||||||||||||
Aggregate shares of common stock, value (in Dollars) | $ | $ 600 | ||||||||||||||||||
Stock Options [Member] | |||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||||||
Weighted average remaining contractual life | 8 years 7 months 6 days | ||||||||||||||||||
Total intrinsic value (in Dollars) | $ | |||||||||||||||||||
Underwriter [Member] | |||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||||||
Net proceeds (in Dollars) | $ | $ 194,400 | ||||||||||||||||||
Affiliated Entity [Member] | |||||||||||||||||||
Stockholders' Equity (Details) [Line Items] | |||||||||||||||||||
Purchase shares of common stock | 55,560 | ||||||||||||||||||
Exercise price per share (in Dollars per share) | $ / shares | $ 11.25 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of stock options outstanding - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Stock Options Outstanding [Abstract] | |||
Outstanding beginning balance, Options | 37,500 | 222,961 | 555,000 |
Outstanding beginning balance, Weighted Average Exercise Price | $ 3.1 | $ 5.03 | $ 9 |
Options Granted | 86,550 | 150,000 | |
Weighted-Average Exercise Price Granted | $ 0.58 | $ 3.1 | |
Options Exercised | |||
Weighted-Average Exercise Price Exercised | |||
Options Forfeited | (150,000) | (185,461) | (482,039) |
Weighted-Average Exercise Price Forfeited | $ 5.42 | $ 9 | |
Outstanding ending balance, Options | 37,500 | 222,961 | |
Outstanding ending balance, Weighted Average Exercise Price | $ 0.58 | $ 3.1 | $ 5.03 |
Options Exercisable | 37,500 | ||
Weighted Average Exercise Price Exercisable | $ 3.1 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of warrants outstanding - Warrant [Member] - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product Warranty Liability [Line Items] | |||
Outstanding beginning balance, Warrants | 92,514,423 | 92,514,423 | 55,560 |
Outstanding beginning balance, Weighted Average Exercise Price | $ 2.3 | $ 2.3 | $ 11.25 |
Granted, Warrants | 93,511,111 | ||
Granted, Weighted Average Exercise Price | $ 2.29 | ||
Exercised, Warrants | (1,052,248) | ||
Exercised, Weighted Average Exercise Price | $ (2.25) | ||
Forfeited, Warrants | |||
Forfeited, Weighted Average Exercise Price | |||
Outstanding ending balance, Warrants | 92,514,423 | 92,514,423 | 92,514,423 |
Outstanding ending balance, Weighted Average Exercise Price | $ 2.3 | $ 2.3 | $ 2.3 |
Exercisable ending balance, Warrants | 92,514,423 | 92,514,423 | |
Exercisable ending balance, Weighted Average Exercise Price | $ 2.3 | $ 2.3 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||||
Stock options warrants shares | 92,514,423 | 92,694,423 | 92,737,384 | 92,737,384 |
Earnings (Loss) Per Share (De_2
Earnings (Loss) Per Share (Details) - Schedule of weighted average shares outstanding and the basic loss per common share - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Weighted Average Shares Outstanding And The Basic Loss Per Common Share Abstract | ||||||||||||
Net income (loss) (in Dollars) | $ (125,965) | $ (7,582) | ||||||||||
Weighted average common shares outstanding | 105,380,910 | 105,227,876 | 105,774,197 | 106,386,548 | 106,387,331 | 36,540,827 | 106,080,764 | 21,410,073 | 105,792,287 | 50,047,045 | 106,436,719 | 64,528,299 |
Effect of dilutive stock options and warrants | ||||||||||||
Total potential shares outstanding | 105,380,910 | 105,227,876 | 105,774,197 | 106,386,548 | 131,787,293 | 46,448,892 | 106,080,764 | 26,364,106 | 105,792,287 | 61,816,085 | 106,436,719 | 64,528,299 |
Diluted loss per share (in Dollars per share) | $ (0.03) | $ (0.05) | $ (0.04) | $ 0.05 | $ 0.03 | $ 0.09 | $ 0.01 | $ 0.02 | $ (0.03) | $ 0.06 | $ (1.18) | $ (0.12) |
Basic loss per share (in Dollars per share) | $ (0.03) | $ (0.05) | $ (0.04) | $ 0.05 | $ 0.03 | $ 0.11 | $ 0.01 | $ 0.03 | $ (0.03) | $ 0.08 | $ (1.18) | $ (0.12) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards (in Dollars) | $ 6.3 | $ 21 |
Net valuation allowance (in Dollars) | $ 8.4 | |
Percentage of net operating loss carryforwards | 80% | |
Percentage of future net operating losses | 80% | |
Statutory federal rate | 21% | 21% |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of income tax expense (benefit) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Income Tax Expense Benefit [Abstract] | ||
Current federal and state | $ 468 | |
Valuation allowance | 3,960 | 1,201 |
Deferred federal and state | (12,369) | (1,567) |
Total provision (benefit) for income taxes | $ (8,409) | $ 102 |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of difference between the income tax expense (benefit) and statutory federal rate - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Difference Between the Income Tax Expense Benefit and Statutory Federal Rate [Abstract] | ||
Federal tax | $ (28,219,000) | $ (1,571,000) |
State tax, net of federal benefit | (3,185,000) | (177,000) |
Other state tax adjustments | 34,000 | |
Permanent items | 504,000 | (1,000) |
Goodwill impairment | 18,531,000 | |
Acquisition costs | 202,000 | |
Change in state tax rates | 436,000 | |
Valuation allowance | 3,960,000 | 1,179 |
Total income tax provision (benefit) | $ (8,409,000) | $ 102,000 |
Effective tax rate | (6.30%) | (1.40%) |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of income tax assets and liabilities - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Income Tax Assets and Liabilities [Abstract] | ||
Inventory | $ 418 | $ 197 |
Receivables | 352 | 236 |
Accrued expenses | 79 | 1,929 |
Interest limitations | 1,170 | 370 |
Reserves | 5,443 | 4,312 |
Other | 169 | 169 |
Derivative | (743) | |
Lease liabilities | 2,977 | 3,825 |
Loss carryforward | 4,853 | 1,429 |
Valuation allowance | (10,957) | (6,998) |
Total deferred tax asset | 3,761 | 5,469 |
Fixed assets | (123) | (246) |
Right-of-use assets | (2,732) | (3,490) |
Intangibles | (906) | (10,140) |
Total deferred tax liability | $ (3,761) | (13,876) |
Total deferred tax liability, net | $ (8,407) |
Income Taxes (Details) - Sche_4
Income Taxes (Details) - Schedule of the internal revenue service - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of the internal revenue service [Abstract] | ||
Net deferred tax liability | $ 1 | $ (8,407) |
Valuation allowance |
Derivative Instruments (Inter_2
Derivative Instruments (Interest Rate Swap) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | May 09, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative notional amount | $ 100 | |
Fixed rate percentage | 2.93% | |
Change in fair value interest rate | $ 3.2 | |
Gain change in fair value of interest rate | $ 3.2 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||||
Oct. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Commitments and Contingencies (Details) [Line Items] | |||||||
Asset purchase agreement, description | Pursuant to the asset purchase agreement, Goedeker Television entitled to receive an earn out payment of $0.2 million if the EBITDA (as defined in the asset purchase agreement) of the Goedeker Business for the trailing twelve (12) month period from April 5, 2022 is $2.5 million or greater, and may be entitled to receive a partial earn out payment if the EBITDA of the Goedeker Business is less than $2.5 million but greater than $1.5 million. | ||||||
Due amount | $ 200 | ||||||
Final payment | $ 200 | ||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Settled amount | $ 475,000 | ||||||
Common Stock [Member] | |||||||
Commitments and Contingencies (Details) [Line Items] | |||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | ||||||
Shares of common stock (in Shares) | 50,000,000 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Jul. 25, 2023 USD ($) | Jul. 25, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) m² | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 09, 2021 | Apr. 05, 2019 | |
Subsequent Events (Details) [Line Items] | |||||||||
Leased space (in Square Meters) | m² | 228,000 | ||||||||
Lease cost | $ 1,200,000 | ||||||||
Annual charges percentage | 3.75% | ||||||||
Maturity date | Aug. 31, 2024 | ||||||||
Commitments decreased | $ 2,000,000,000 | ||||||||
Restricted cash | $ 950,000 | $ 950,000 | $ 1,733,000 | $ 1,733,000 | $ 2,583,000 | ||||
Credit agreement | 4% | 4% | |||||||
Interest rate | 2% | ||||||||
Term loan in quarterly installments amount | $ 1,875,000 | ||||||||
Lease term | 7 years | 26 months | 5 years | ||||||
Revolving loan decreased amount | 10,000,000 | $ 10,000,000 | |||||||
Letter of credit commitments decreased amount | 2,000,000 | ||||||||
Bear interest rate | 2% | ||||||||
Maximum [Member] | |||||||||
Subsequent Events (Details) [Line Items] | |||||||||
Applicable rate percentage | 1.95% | 1.95% | |||||||
Minimum [Member] | |||||||||
Subsequent Events (Details) [Line Items] | |||||||||
Applicable rate percentage | 0.95% | 0.95% | |||||||
Forecast [Member] | |||||||||
Subsequent Events (Details) [Line Items] | |||||||||
Loan decreased amount | 10,000,000 | ||||||||
Commitments decreased | 2,000,000 | ||||||||
Liquidity amount | 8,000,000 | 8,000,000 | |||||||
Restricted cash | $ 5,000,000 | $ 5,000,000 | |||||||
DMI [Member] | |||||||||
Subsequent Events (Details) [Line Items] | |||||||||
Lease cost | $ 15,000 | ||||||||
SOFR [Member] | |||||||||
Subsequent Events (Details) [Line Items] | |||||||||
Base rate of each term | 4% | ||||||||
SOFR [Member] | Maximum [Member] | |||||||||
Subsequent Events (Details) [Line Items] | |||||||||
Applicable rate | 1.95% | ||||||||
SOFR [Member] | Minimum [Member] | |||||||||
Subsequent Events (Details) [Line Items] | |||||||||
Applicable rate | 0.95% |
Summary of Significant Accou_10
Summary of Significant Accounting Policies (Details) - Schedule of consolidated balance sheet - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
As originally Reported [Member] | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Current assets | $ 134,010 | $ 121,318 |
Property and equipment | 3,688 | 3,554 |
Operating lease right-of-use assets | 15,262 | |
Total assets | 386,581 | 375,984 |
Total liabilities | 175,037 | 170,381 |
Common stock and additional paid in capital | 224,678 | |
Accumulated deficit | (13,134) | (19,056) |
Total liabilities and stockholders’ equity | 386,581 | 375,984 |
Adjustments [Member] | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Current assets | (13,223) | |
Property and equipment | 978 | |
Operating lease right-of-use assets | (1,127) | |
Total assets | (13,372) | |
Total liabilities | 1,849 | |
Common stock and additional paid in capital | 134 | |
Accumulated deficit | (15,354) | |
Total liabilities and stockholders’ equity | (13,371) | |
As Restated [Member] | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Current assets | 120,787 | |
Property and equipment | 4,666 | |
Operating lease right-of-use assets | 14,135 | $ 14,937 |
Total assets | 373,209 | |
Total liabilities | 176,886 | |
Common stock and additional paid in capital | 224,812 | |
Accumulated deficit | (28,489) | |
Total liabilities and stockholders’ equity | $ 373,209 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies (Details) - Schedule of consolidated operation - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
As originally Reported [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Product sales, net | $ 152,752 | $ 362,314 |
Cost of goods sold | 116,883 | 282,655 |
Operating expense | 25,802 | 71,339 |
Other income (expense) | (762) | |
Income taxes | (3,383) | 4,376 |
Net income (loss) | $ 5,922 | $ 7,670 |
Net income (loss) per common share | ||
BASIC (in Dollars per share) | $ 0.06 | $ 0.12 |
DILUTED (in Dollars per share) | $ 0.06 | $ 0.1 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||
BASIC (in Shares) | 106,387,332 | 64,528,299 |
DILUTED (in Shares) | 106,387,332 | 76,460,460 |
Adjustments [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Product sales, net | $ (4,071) | |
Cost of goods sold | 1,036 | |
Operating expense | (1,915) | |
Other income (expense) | (186) | |
Income taxes | 3,275 | |
Net income (loss) | (103) | |
As Restated [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Product sales, net | 148,681 | $ 345,725 |
Cost of goods sold | 117,919 | 275,922 |
Operating expense | 23,887 | 72,257 |
Other income (expense) | (948) | |
Income taxes | (109) | (102) |
Net income (loss) | $ 5,819 | $ (7,582) |
Net income (loss) per common share | ||
BASIC (in Dollars per share) | $ 0.05 | $ (0.12) |
DILUTED (in Dollars per share) | $ 0.05 | $ (0.12) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||
BASIC (in Shares) | 106,387,332 | 64,528,299 |
DILUTED (in Shares) | 106,387,332 | 64,528,299 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
As Originally Reported [Member] | ||||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | ||||
Balance | $ 211,544 | $ 205,603 | ||
As Originally Reported [Member] | Common Stock | ||||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | ||||
Balance (in Shares) | 106,386,332 | |||
Balance | $ 11 | |||
As Originally Reported [Member] | Additional Paid-Inc Capital | ||||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | ||||
Balance | 224,667 | 224,648 | ||
As Originally Reported [Member] | Accumulated Deficit | ||||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | ||||
Balance | (13,134) | $ (19,056) | ||
Adjustments [Member] | ||||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | ||||
Adjustment to reflect issuance of vested stock | 134 | |||
Adjustments to results of operations | $ (103) | $ (15,252) | $ (15,252) | |
Adjustments [Member] | Common Stock | ||||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | ||||
Adjustment to reflect issuance of vested stock (in Shares) | 69,766 | |||
Adjustment to reflect issuance of vested stock | ||||
Adjustments to results of operations | ||||
Adjustments [Member] | Additional Paid-Inc Capital | ||||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | ||||
Adjustment to reflect issuance of vested stock | 134 | |||
Adjustments to results of operations | ||||
Adjustments [Member] | Accumulated Deficit | ||||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | ||||
Adjustment to reflect issuance of vested stock | ||||
Adjustments to results of operations | (103) | $ (15,252) | $ (15,252) | |
As Restated [Member] | ||||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | ||||
Balance | $ 196,323 | |||
As Restated [Member] | Common Stock | ||||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | ||||
Balance (in Shares) | 106,456,098 | |||
Balance | $ 11 | |||
As Restated [Member] | Additional Paid-Inc Capital | ||||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | ||||
Balance | 224,801 | |||
As Restated [Member] | Accumulated Deficit | ||||
Summary of Significant Accounting Policies (Details) - Schedule of consolidated equity [Line Items] | ||||
Balance | $ (28,489) |
Summary of Significant Accou_13
Summary of Significant Accounting Policies (Details) - Schedule of consolidated cash flow - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Previously Reported [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) Adjustments to reconcile net income (loss) to net cash used in by operating activities: | $ 5,922 | $ 7,670 |
Deferred tax (liability) asset | 1,785 | (4,908) |
Receivables | (1,694) | (5,603) |
Merchandise inventory | (8,209) | |
Prepaid expenses and other assets | (2,312) | |
Accounts payable and accrued expenses | 11,368 | |
Customer deposits | (7,622) | (18,968) |
Various other changes | (2,985) | |
Net cash used in operating activities | (3,747) | (18,328) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Net cash used in investing activities | (6) | (204,834) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net cash (used in) provided by financing activities | (1,634) | 247,041 |
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (5,387) | 23,879 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD | 33,791 | |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | 28,404 | 33,791 |
Cash and cash equivalents | 25,821 | |
Restricted cash | 2,583 | |
Cash and cash equivalents and restricted cash total, End of the period | 28,404 | |
Adjustments [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) Adjustments to reconcile net income (loss) to net cash used in by operating activities: | (103) | (15,252) |
Deferred tax (liability) asset | (1,810) | 4,540 |
Receivables | 2,693 | 444 |
Merchandise inventory | 14,343 | |
Prepaid expenses and other assets | 2,751 | |
Accounts payable and accrued expenses | (9,450) | |
Customer deposits | (8,603) | 8,113 |
Various other changes | 372 | |
Net cash used in operating activities | 193 | |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Net cash used in investing activities | (31) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net cash (used in) provided by financing activities | ||
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 162 | |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD | ||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | 162 | |
Cash and cash equivalents | 162 | |
Restricted cash | ||
Cash and cash equivalents and restricted cash total, End of the period | 28,404 | |
As Restated [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) Adjustments to reconcile net income (loss) to net cash used in by operating activities: | 5,819 | (7,582) |
Deferred tax (liability) asset | (25) | (368) |
Receivables | 999 | (5,159) |
Merchandise inventory | 6,134 | |
Prepaid expenses and other assets | 439 | |
Accounts payable and accrued expenses | 1,918 | |
Customer deposits | (16,225) | (10,855) |
Various other changes | (2,612) | |
Net cash used in operating activities | (3,554) | (18,328) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Net cash used in investing activities | (37) | (204,834) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net cash (used in) provided by financing activities | (1,634) | 247,041 |
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (5,225) | 23,879 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD | 33,791 | |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | 28,566 | $ 33,791 |
Cash and cash equivalents | 25,983 | |
Restricted cash | 2,583 | |
Cash and cash equivalents and restricted cash total, End of the period | $ 28,404 |
Revenues (Details) - Schedule_2
Revenues (Details) - Schedule of disaggregated revenue - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Revenue, Major Customer [Line Items] | ||||
Total | $ 95,439 | $ 141,566 | $ 138,463 | $ 148,681 |
Appliance Sales [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Total | 90,464 | 136,044 | 128,242 | 138,549 |
Other Sales [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Total | $ 4,975 | $ 7,522 | $ 10,221 | $ 10,132 |
Receivables (Details) - Sched_2
Receivables (Details) - Schedule of receivables - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule of Receivables [Abstract] | ||||||
Trade accounts receivable | $ 11,576 | $ 13,691 | $ 17,160 | $ 15,367 | $ 15,831 | $ 10,693 |
Vendor rebates receivable | 4,393 | 8,514 | 11,633 | 6,902 | 5,462 | 11,189 |
Other receivables | 2,230 | 5,951 | 2,251 | 2,251 | 2,251 | 2,660 |
Total receivables | 18,199 | $ 28,156 | 26,314 | 26,844 | 23,544 | $ 24,542 |
Less allowance for doubtful accounts | (1,507) | (1,422) | (1,507) | (1,133) | ||
Total receivables, net | $ 16,693 | $ 24,892 | $ 25,657 | $ 22,411 |
Merchandise Inventory (Detail_2
Merchandise Inventory (Details) - Schedule of merchandise inventory - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory [Line Items] | ||||||
Total merchandise inventory | $ 38,139 | $ 43,555 | $ 45,888 | $ 57,750 | $ 47,103 | $ 53,236 |
Less reserve for obsolescence | (1,789) | (1,789) | (1,400) | (1,000) | (900) | (843) |
Total merchandise inventory, net | 36,350 | $ 41,766 | 44,488 | 56,750 | 46,203 | $ 52,393 |
Appliances [Member] | ||||||
Inventory [Line Items] | ||||||
Total merchandise inventory | 35,109 | 42,593 | 54,216 | 44,626 | ||
Furniture [Member] | ||||||
Inventory [Line Items] | ||||||
Total merchandise inventory | 721 | 826 | 925 | 714 | ||
Other [Member] | ||||||
Inventory [Line Items] | ||||||
Total merchandise inventory | $ 2,309 | $ 2,469 | $ 2,609 | $ 1,763 |
Intangible Assets and Goodwil_6
Intangible Assets and Goodwill (Details) - Schedule of intangible assets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule Of Intangible Assets Abstract | ||||||
Customer relationships | $ 3,461 | $ 3,461 | $ 24,148 | $ 24,148 | $ 24,148 | $ 24,148 |
Marketing-related | 6,835 | 6,835 | 26,935 | 26,935 | 26,935 | 26,935 |
Total intangible assets | 20,296 | 10,296 | 51,083 | 51,083 | 51,083 | 51,083 |
Less: accumulated amortization | (753) | (14,534) | (11,979) | (9,425) | (6,871) | |
Intangible assets, net | $ 9,543 | $ 10,296 | $ 36,549 | $ 39,104 | $ 41,658 | $ 44,212 |
Intangible Assets and Goodwil_7
Intangible Assets and Goodwill (Details) - Schedule of estimated amortization expense - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Schedule Of Estimated Amortization Expense Abstract | ||
2023, remainder of year | $ 2,260 | $ 3,013 |
2024 | 3,013 | 3,013 |
2025 | 3,013 | 3,013 |
2026 | 1,256 | $ 1,257 |
2027 | ||
Total | $ 9,543 |
Business Combinations (Detail_4
Business Combinations (Details) - Schedule of purchase consideration at fair value - Initial Allocation [Member] $ in Thousands | 12 Months Ended |
Jun. 30, 2021 USD ($) | |
Purchase consideration at fair value: | |
Cash consideration | $ 180,000 |
Common stock | 12,264 |
Working capital adjustment | 32,411 |
Total consideration | 224,675 |
Assets acquired and liabilities assumed at fair value: | |
Cash | 5,897 |
Receivables | 17,141 |
Vendor deposits | 15,000 |
Merchandise inventory | 21,634 |
Prepaid expenses and other current assets | 2,194 |
Property and equipment | 1,891 |
Right-of-use operating lease assets | 1,834 |
Customer relationships | 23,399 |
Tradenames | 25,567 |
Goodwill | 185,720 |
Accounts payable and accrued expenses | (45,715) |
Customer deposits | (17,536) |
Notes payable | (1,527) |
Finance lease liabilities | (215) |
Right-of-use operating lease liabilities | (1,834) |
Net deferred tax liabilities | (8,775) |
Net assets acquired | $ 224,675 |
Notes Payable (Details) - Sch_2
Notes Payable (Details) - Schedule of future minimum principal payments - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Schedule of future minimum principal payments [Abstract] | ||
2023 Remainder of year | $ 5,296 | $ 6,628 |
2024 | 91,594 | 91,576 |
2025 | 201 | 182 |
2026 | 29 | 9 |
2027 | 21 | 8 |
Total future minimum payments | 97,141 | 98,403 |
Less: debt discount | (905) | (959) |
Total | 96,236 | 97,444 |
Total current portion of notes payable, net | 7,264 | 6,628 |
Total notes payable, net of current portion | $ 88,972 | $ 90,816 |
Leases (Details) - Schedule o_4
Leases (Details) - Schedule of supplemental balance sheet information related to leases - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule Of Supplemental Balance Sheet Information Related To Leases Abstract | ||||||
Operating lease right-of-use assets | $ 10,857 | $ 11,688 | $ 14,135 | $ 13,327 | $ 12,512 | $ 14,937 |
Lease liabilities, current portion | 3,353 | 3,726 | $ 3,628 | |||
Lease liabilities, long-term | 8,443 | 9,014 | ||||
Total operating lease liabilities | $ 11,796 | $ 12,740 | ||||
Weighted-average remaining lease term (months) | 70 months | 73 months | 77 months | |||
Weighted average discount rate | 3.90% | 3.90% | 4% |
Leases (Details) - Schedule o_5
Leases (Details) - Schedule of future minimum principal payments on our finance leases payable - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Future Minimum Principal Payments On Our Finance Leases Payable Abstract | ||
2023 Remainder of year | $ 4,175 | $ 4,175 |
2024 | 1,808 | 1,808 |
2025 | 1,489 | 1,489 |
2026 | 1,532 | 1,531 |
2027 | 1,284 | 1,284 |
Thereafter | 4,159 | 4,159 |
Total | 14,447 | 14,446 |
Less: imputed interest | (1,707) | (1,707) |
Total operating lease liabilities | $ 12,740 | $ 12,739 |
Leases (Details) - Schedule o_6
Leases (Details) - Schedule of future minimum principal payments on our finance leases payable - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Schedule Of Future Minimum Principal Payments On Our Finance Leases Payable Abstract | ||
2023 Remainder of year | $ 90 | $ 125 |
2024 | 109 | 109 |
2025 | 107 | 107 |
2026 | 21 | 21 |
2027 | ||
Total future minimum payments | 362 | |
Less: debt discount | (21) | (25) |
Total | 306 | 337 |
Total current portion of finance leases, net | 108 | 112 |
Total finance leases, net of current portion | $ 198 | $ 225 |
Stockholders' Equity (Details_3
Stockholders' Equity (Details) - Schedule of stock options outstanding - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Stock Options Outstanding [Abstract] | |||
Outstanding beginning balance, Options | 150,000 | ||
Outstanding beginning balance, Weighted Average Exercise Price | $ 3.1 | $ 5.03 | $ 9 |
Granted, Options | 86,550 | 150,000 | |
Granted, Weighted-Average Exercise Price | $ 0.58 | $ 3.1 | |
Exercised, Options | |||
Exercised, Weighted-Average Exercise Price | |||
Forfeited, Options | (150,000) | (185,461) | (482,039) |
Forfeited, Weighted-Average Exercise Price | $ 3.1 | ||
Outstanding ending balance, Options | 86,550 | 150,000 | |
Outstanding ending balance, Weighted Average Exercise Price | $ 0.58 | $ 3.1 | $ 5.03 |
Exercisable, Options | 37,500 | ||
Exercisable, Weighted Average Exercise Price | $ 3.1 |
Stockholders' Equity (Details_4
Stockholders' Equity (Details) - Schedule of warrants outstanding - Warrant [Member] - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product Warranty Liability [Line Items] | |||
Outstanding beginning balance, Warrants | 92,514,423 | 92,514,423 | 55,560 |
Outstanding beginning balance, Weighted Average Exercise Price | $ 2.3 | $ 2.3 | $ 11.25 |
Granted, Warrants | 93,511,111 | ||
Granted, Weighted Average Exercise Price | $ 2.29 | ||
Exercised, Warrants | (1,052,248) | ||
Exercised, Weighted Average Exercise Price | $ (2.25) | ||
Forfeited, Warrants | |||
Forfeited, Weighted Average Exercise Price | |||
Outstanding ending balance, Warrants | 92,514,423 | 92,514,423 | 92,514,423 |
Outstanding ending balance, Weighted Average Exercise Price | $ 2.3 | $ 2.3 | $ 2.3 |
Exercisable ending balance, Warrants | 92,514,423 | 92,514,423 | |
Exercisable ending balance, Weighted Average Exercise Price | $ 2.3 | $ 2.3 |
Earnings (Loss) Per Share (De_3
Earnings (Loss) Per Share (Details) - Schedule of weighted average shares outstanding and the basic loss per common share - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Weighted Average Shares Outstanding And The Basic Loss Per Common Share Abstract | ||||||||||||
Net income (loss) | $ (2,761) | $ (5,184) | $ (4,292) | $ 5,819 | $ 1,527 | $ 539 | $ (3,627) | $ 3,856 | ||||
Weighted average common shares outstanding | 105,380,910 | 105,227,876 | 105,774,197 | 106,386,548 | 106,387,331 | 36,540,827 | 106,080,764 | 21,410,073 | 105,792,287 | 50,047,045 | 106,436,719 | 64,528,299 |
Basic earnings (loss) per share | $ (0.03) | $ (0.05) | $ (0.04) | $ 0.05 | $ 0.03 | $ 0.11 | $ 0.01 | $ 0.03 | $ (0.03) | $ 0.08 | $ (1.18) | $ (0.12) |