What changed in this filing

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Item 1. Financial Statements

2022-02-14 compared with 2021-11-15 · 73 added, 64 removed, 247 unchanged (36% of the section changed)

4 unchanged sentences

(In thousands, except per share data)

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

Net revenues:

5 unchanged sentences

Operating loss

Other income:

Other (loss) income:

Loss on settlement of litigation

Interest income, net

1 unchanged sentence

Loss before income taxes

Provision (benefit) for income tax expense

Provision for income tax expense

Basic loss per share

6 unchanged sentences

(In thousands except share data)

September 30, 2021

December 31, 2021

March 31, 2021

7 unchanged sentences

Non-Current Assets:

Property and equipment, net

Right-of-use asset-operating leases

23 unchanged sentences

Common shares — $ 0.01 par value, 75,000,000 shares authorized;

shares issued at September 30, 2021 and March 31, 2021, respectively;

shares outstanding at September 30, 2021 and March 31, 2021, respectively

shares issued at December 31, 2021 and March 31, 2021, respectively;

shares outstanding at December 31, 2021 and March 31, 2021, respectively

Additional paid-in capital

Accumulated deficit

Treasury stock, at cost ( 31,923,145 shares at September 30, 2021

Treasury stock, at cost ( 31,923,145 shares at December 31, 2021

and March 31, 2021, respectively)

6 unchanged sentences

(In thousands)

Six Months Ended September 30,

Nine Months Ended December 31,

(In thousands)

13 unchanged sentences

Long term lease liabilities

Due to affiliate

Income taxes payable

2 unchanged sentences

Cash Flows From Investing Activities:

Net proceeds (purchases) of short-term investments

Proceeds from sale of short-term investments

Purchases of short-term investments

Additions to property and equipment

Net cash provided by investing activities

14 unchanged sentences

Balance — March 31, 2021

Balance — September 30, 2021

Balance — December 31, 2021

Shareholders’

Balance — March 31, 2020

Balance — September 30, 2020

Balance — December 31, 2020

The accompanying notes are an integral part of the consolidated financial statements.

6 unchanged sentences

The Company designs, sources, imports and markets certain houseware and consumer electronic products, and licenses the Company’s trademarks for a variety of products.

The unaudited interim consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the Company’s consolidated financial position as of September 30, 2021 and the results of operations for the three and six month periods ended September 30, 2021 and September 30, 2020.

The unaudited interim consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the Company’s consolidated financial position as of December 31, 2021 and the results of operations for the three and nine month periods ended December 31, 2021 and December 31, 2020.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the financial statements not misleading have been included.

4 unchanged sentences

Accordingly, these unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended March 31, 2021 (“fiscal 2021”), included in the Company’s annual report on Form 10-K, as amended, for fiscal 2021.

The results of operations for the three and six month periods ended September 30, 2021 are not necessarily indicative of the results of operations that may be expected for any other interim period or for the full year ending March 31, 2022 (“fiscal 2022”).

The results of operations for the three and nine month periods ended December 31, 2021 are not necessarily indicative of the results of operations that may be expected for any other interim period or for the full year ending March 31, 2022 (“fiscal 2022”).

Whenever necessary, reclassifications are made to conform the prior year’s consolidated financial statements to the current year’s presentation.

4 unchanged sentences

ASU 2019-12 is effective for fiscal years beginning after December 15, 2020.

This standard is required to take effect in the Company’s first quarter (June 2021) of the Company’s fiscal year ending March 31, 2022.

This standard took effect in the first quarter (June 2021) of the Company’s fiscal year ending March 31, 2022.

The adoption of ASU 2019-12 had no material impact on the Company’s consolidated financial statements and related disclosures.

29 unchanged sentences

Weighted average shares includes the impact of shares held in treasury.

Three Months Ended September 30,

Six Months Ended

September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

Denominator for basic and diluted loss per share —

3 unchanged sentences

NOTE 3 — SHAREHOLDERS’ EQUITY

Outstanding capital stock at September 30, 2021 consisted of common stock and Series A preferred stock.

Outstanding capital stock at December 31, 2021 consisted of common stock and Series A preferred stock.

The Series A preferred stock is non-voting, has no dividend preferences and has not been convertible since March 31, 2002;

however, it retains a liquidation preference.

At September 30, 2021, the Company had no options, warrants or other potentially dilutive securities outstanding.

At December 31, 2021, the Company had no options, warrants or other potentially dilutive securities outstanding.

NOTE 4 — INVENTORY

1 unchanged sentence

Cost is determined using the first-in, first-out method.

As of September 30, 2021 and March 31, 2021, inventories consisted of the following (in thousands):

September 30, 2021

As of December 31, 2021 and March 31, 2021, inventories consisted of the following (in thousands):

December 31, 2021

March 31, 2021

1 unchanged sentence

NOTE 5 — INCOME TAXES

At September 30, 2021, the Company had $ 12.5 million of U.S.

At December 31, 2021, the Company had $ 13.2 million of U.S.

federal net operating loss (“NOL”) carry forwards.

These losses do not expire but are limited to utilization of 80 % of taxable income in any one year.

At September 30, 2021, the Company had approximately $ 16.1 million of U.S.

At December 31, 2021, the Company had approximately $ 16.3 million of U.S.

state NOL carry forwards.

The tax benefits related to these state NOL carry forwards and future deductible temporary differences are recorded to the extent management believes it is more likely than not that such benefits will be realized.

The income of foreign subsidiaries before taxes was $ 34,000 for the three months ended September 30, 2021 as compared to a loss before taxes of $ 22,000 for the three months ended September 30, 2020.

The income of foreign subsidiaries before taxes was $ 52,000 for the six months ended September 30, 2021 as compared to income before taxes of nil for the six months ended September 30, 2020.

The Company analyzed the future reasonability of recognizing its deferred tax assets at September 30, 2021.

The income of foreign subsidiaries before taxes was $ 19,000 for the three month period ended December 31, 2021 as compared to income before taxes of $ 103,000 for the three month period ended December 31, 2020.

The income of foreign subsidiaries before taxes was $ 71,000 for the nine month period ended December 31, 2021 as compared to income before taxes of $ 103,000 for the nine month period ended December 31, 2020.

The Company analyzed the future reasonability of recognizing its deferred tax assets at December 31, 2021.

As a result, the Company concluded that a 100 % valuation allowance of approximately $ 4,152,000 would be recorded against the assets.

During the three months ended September 30, 2021 and September 30, 2020, the Company recorded income tax expense of approximately nil and an income tax benefit of $ 1,000 , respectively, primarily resulting from state income taxes.

During the six months ended September 30, 2021 and September 30, 2020, the Company recorded income tax expense of approximately $ 11,000 and $ 5,300 respectively, primarily resulting from state income taxes.

During the three month periods ended December 31, 2021 and December 31, 2020, the Company recorded income tax expense of nil and $ 9,900 , respectively, primarily resulting from state income taxes.

During the nine month periods ended December 31, 2021 and December 31, 2020, the Company recorded income tax expense of approximately $ 11,000 and $ 15,200 respectively, primarily resulting from state income taxes.

The Company is subject to examination and assessment by tax authorities in numerous jurisdictions.

As of September 30, 2021, the Company’s open tax years for examination for U.S.

As of December 31, 2021, the Company’s open tax years for examination for U.S.

federal tax are 2016 - 2021 , and for U.S.

2 unchanged sentences

As a result, the Company may be subject to additional tax expense.

As of September 30, 2021 the Company is asserting under ASC 740-30 that all of the unremitted earnings of its foreign subsidiaries are indefinitely invested.

As of December 31, 2021 the Company is asserting under ASC 740-30 that all of the unremitted earnings of its foreign subsidiaries are indefinitely invested.

The Company evaluates this assertion each period based on a number of factors, including the operating plans, budgets, and forecasts for both the Company and its foreign subsidiaries;

2 unchanged sentences

and the tax consequences of any decision to repatriate earnings of foreign subsidiaries to the U.S.

As of September 30, 2021, the Company had a federal tax liability of approximately $ 1,808,000 related to the repatriation of the Company’s undistributed earnings of its foreign subsidiaries as required by the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) .

As of September 30, 2021, the Company’s short term portion was approximately $ 195,000 and the long term portion was approximately $ 1,613,000 .

As of December 31, 2021, the Company had a federal tax liability of approximately $ 1,808,000 related to the repatriation of the Company’s undistributed earnings of its foreign subsidiaries as required by the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) .

As of December 31, 2021, the Company’s short term portion was approximately $ 195,000 and the long term portion was approximately $ 1,613,000 .

As of March 31, 2021, the Company had a federal tax liability of approximately $ 2,031,000 related to the repatriation of the Company’s undistributed earnings of its foreign subsidiaries as required by the Tax Act .

2 unchanged sentences

The first five installments are each equal to 8 % , the sixth is equal to 15 %, the seventh is equal to 20 % and the final installment is equal to 25 % of the liability.

As of September 30, 2021, the Company has made four of the eight installments.

As of December 31, 2021, the Company has made four of the eight installments.

Each installment is due on or before July 15 th of the year in which such installment is due.

NOTE 6 — RELATED PARTY TRANSACTIONS

3 unchanged sentences

S&T International Distribution Limited (“S&T”), which is a wholly owned subsidiary of Grande N.A.K.S.

Ltd., which is a wholly owned subsidiary of Nimble, collectively have, based on a Schedule 13D/A filed with the SEC on February 15, 2019, the shared power to vote and direct the disposition of 15,243,283 shares, or approximately 72.4 %, of the Company’s outstanding common stock as of September 30, 2021.

Accordingly, the Company is a “controlled company” as defined in Section 801(a) of the NYSE American Company Guide.

1 unchanged sentence

Charges of rental and utility fees on office space in Hong Kong

During the three and six months ended September 30, 2021, the Company was billed approximately $ 43,000 and $ 86,000 , respectively, for rental and utility fees from Vigers Appraisal and Consulting Ltd (“VACL”), which is a company related to the Company’s Chairman of the Board.

As of September 30, 2021 the Company owed approximately $ 800 to VACL related to these charges.

During the three and six months ended September 30, 2021, the Company was billed approximately $ 400 and $ 1,400 , respectively, for purchases of personal protection equipment from Vigers Strategic Services Ltd (“VSSL”), which is a company related to the Company’s Chairman of the Board.

During the three and nine month periods ended December 31, 2021, the Company was billed approximately $ 40,000 and $ 126,000 , respectively, for rental and utility fees from Vigers Appraisal and Consulting Ltd (“VACL”), which is a company related to the Company’s Chairman of the Board.

As of December 31, 2021 the Company owed approximately $ 800 to VACL related to these charges.

During the three and nine month periods ended December 31, 2021, the Company was billed approximately $ 600 and $ 2,000 , respectively, for purchases of personal protection equipment from Vigers Strategic Services Ltd (“VSSL”), which is a company related to the Company’s Chairman of the Board.

Vigers Strategic Services Ltd was formerly known as Lafe Strategic Services Ltd.

As of September 30, 2021 the Company owed nil to VSSL related to these charges.

As of December 31, 2021 the Company owed nil to VSSL related to these charges.

NOTE 7 — SHORT TERM INVESTMENTS

At September 30, 2021 and March 31, 2021, the Company held short term investments in deposits totaling nil and $ 25.0 million, respectively.

The Company held $ 24.1 million in deposits which were classified as cash equivalents as of September 30, 2021 and $ 1.0 million of such deposits as of March 31, 2021.

At December 31, 2021 and March 31, 2021, the Company held short term investments in deposits totaling nil and $ 25.0 million, respectively.

The Company held $ 22.0 million in deposits which were classified as cash equivalents as of December 31, 2021 and $ 1.0 million of such deposits as of March 31, 2021.

NOTE 8 — CONCENTRATION RISK

Customer Concentration

For the three months ended September 30, 2021, the Company’s three largest customers accounted for approximately 90 % of the Company’s net revenues, of which Amazon accounted for 39 %, Walmart accounted for 32 % and Fred Meyer accounted for 19 %.

For the six months ended September 30, 2021, the Company’s three largest customers accounted for approximately 86 % of the Company’s net revenues, of which Walmart accounted for 38 %, Amazon accounted for 27 % and Fred Meyer accounted for 21 %.

For the three months ended September 30, 2020, the Company’s three largest customers accounted for approximately 77 % of the Company’s net revenues, of which Walmart accounted for 32 %, Fred Meyer accounted for 23 % and Amazon accounted for 22 %.

For the six months ended September 30, 2020, the Company’s three largest customers accounted for approximately 76 % of the Company’s net revenues, of which Walmart accounted for 37 %, Amazon accounted for 22 % and Fred Meyer accounted for 17 %.

For the three month period ended December 31, 2021, the Company’s three largest customers accounted for approximately 92 % of the Company’s net revenues, of which Amazon accounted for 50 %, Walmart accounted for 37 % and Fred Meyer accounted for 5 %.

For the nine month period ended December 31, 2021, the Company’s three largest customers accounted for approximately 88 % of the Company’s net revenues, of which Walmart accounted for 37 %, Amazon accounted for 36 % and Fred Meyer accounted for 15 %.

For the three month period ended December 31, 2020, the Company’s three largest customers accounted for approximately 88 % of the Company’s net revenues, of which Walmart accounted for 42 %, Amazon accounted for 39 % and Fred Meyer accounted for 7 %.

For the nine month period ended December 31, 2020, the Company’s three largest customers accounted for approximately 81 % of the Company’s net revenues, of which Walmart accounted for 39 %, Amazon accounted for 29 % and Fred Meyer accounted for 13 %.

A significant decline in net sales to any of the Company’s key customers would have a material adverse effect on the Company’s business, financial condition and results of operation.

Product Concentration

For the three and six months ended September 30, 2021, the Company’s gross product sales were comprised of two product types within two categories — housewares products and audio products, of which microwave ovens generated approximately 26 % and 33 %, respectively, of the Company’s gross product sales.

For the three and nine month periods ended December 31, 2021, the Company’s gross product sales were comprised of two product types within two categories — housewares products and audio products, of which microwave ovens generated approximately 10 % and 24 %, respectively, of the Company’s gross product sales.

Audio products generated approximately 89 % and 76 %, respectively, of the Company’s gross product sales.

For the three and six months ended September 30, 2020, the Company’s gross product sales were comprised of the same two product types within two categories — housewares products and audio products, of which microwave ovens generated approximately 46 % and 43 %, respectively, of the Company’s gross product sales.

For the three and nine month periods ended December 31, 2020, the Company’s gross product sales were comprised of the same two product types within two categories — housewares products and audio products, of which microwave ovens generated approximately 25 % and 36 %, respectively, of the Company’s gross product sales.

Audio products generated approximately 73 % and 62 %, respectively, of the Company’s gross product sales.

Concentrations of Credit Risk

As a percent of the Company’s total trade accounts receivable, net of specific reserves, the Company’s top two customers accounted for 43 % and 27 % as of September 30, 2021, respectively.

As a percent of the Company’s total trade accounts receivable, net of specific reserves, the Company’s top two customers accounted for 56 % and 27 % as of December 31, 2021, respectively.

As a percent of the Company’s total trade accounts receivable, net of specific reserves, the Company’s top two customers accounted for 69 % and 28 % as of March 31, 2021, respectively.

4 unchanged sentences

The Company’s cash and restricted cash balances on deposit in the U.S.

as of September 30, 2021 and March 31, 2021 were insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 per qualifying bank account in accordance with FDIC rules.

The Company’s cash, cash equivalents and restricted cash balances in excess of these FDIC-insured limits were approximately $ 25.8 million and approximately $ 5.0 million at September 30, 2021 and March 31, 2021, respectively.

as of December 31, 2021 and March 31, 2021 were insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 per qualifying bank account in accordance with FDIC rules.

The Company’s cash, cash equivalents and restricted cash balances in excess of these FDIC-insured limits were approximately $ 24.5 million and approximately $ 5.0 million at December 31, 2021 and March 31, 2021, respectively.

Supplier Concentration

During each of the three and six months ended September 30, 2021, the Company procured 100 % of its products for resale from its two largest factory suppliers, of which 84 % and 83 %, respectively, was supplied by its largest supplier.

During each of the three and six months ended September 30, 2020, the Company procured 100 % of its products for resale from its two largest factory suppliers, of which 53 % and 58 %, respectively, was supplied by its largest supplier.

During the three and nine month periods ended December 31, 2021, the Company procured 100 % of its products for resale from its two largest factory suppliers, of which 81 % and 83 %, respectively, was supplied by its largest supplier.

During the three and nine month periods ended December 31, 2020, the Company procured 95 % and 98 % of its products for resale from its two largest factory suppliers, of which 57 % and 58 %, respectively, was supplied by its largest supplier.

NOTE 9 — LEASES

1 unchanged sentence

and in Hong Kong as well as a copier in the U.S.

These leases have remaining non-cancellable lease terms of sixteen months to three years .

These leases have remaining non-cancellable lease terms of thirteen months to three years .

The Company has elected not to separate lease and non-lease components for all leased assets.

The Company did not identify any events or conditions during the quarter ended September 30, 2021 to indicate that a reassessment or re-measurement of the Company’s existing leases was required.

There were also no impairment indicators identified during the quarter ended September 30, 2021 that required an impairment test for the Company’s right-of-use assets or other long-lived assets in accordance with ASC 360-10.

As of September 30, 2021, the Company’s current operating and finance lease liabilities were $ 220,000 and $ 1,000 , respectively and its non-current operating and finance lease liabilities were $ 302,000 and $ 2,000 , respectively.

The Company did not identify any events or conditions during the quarter ended December 31, 2021 to indicate that a reassessment or re-measurement of the Company’s existing leases was required.

There were also no impairment indicators identified during the quarter ended December 31, 2021 that required an impairment test for the Company’s right-of-use assets or other long-lived assets in accordance with ASC 360-10.

As of December 31, 2021, the Company’s current operating and finance lease liabilities were $ 225,000 and $ 1,000 , respectively and its non-current operating and finance lease liabilities were $ 244,000 and $ 2,000 , respectively.

The Company’s operating and finance lease right-of-use asset balances are presented in non-current assets.

The net balance of the Company’s operating and finance lease right-of-use assets as of September 30, 2021 was $ 506,000 and $ 3,000 , respectively.

The net balance of the Company’s operating and finance lease right-of-use assets as of December 31, 2021 was $ 455,000 and $ 3,000 , respectively.

The components of lease costs, which were included in operating expenses in the Company’s condensed consolidated statements of operations, were as follows:

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

(in thousands)

16 unchanged sentences

Weighted average remaining lease term (in months)

As of September 30, 2021

As of September 30, 2020

As of December 31, 2021

As of December 31, 2020

Operating leases

3 unchanged sentences

Finance leases

As of September 30, 2021 the maturities of lease liabilities were as follows:

As of December 31, 2021 the maturities of lease liabilities were as follows:

(in thousands)

4 unchanged sentences

NOTE 10 — PAYCHECK PROTECTION PROGRAM AND EMPLOYMENT SUPPORT SCHEME

On July 5, 2021, the Company’s Paycheck Protection Program (”PPP”) loan of approximately $ 204,400 plus accrued interest of $ 2,400 was forgiven by the Small Business Administration (“SBA”).

On July 5, 2021, the Company’s Paycheck Protection Program (”PPP”) loan of approximately $ 204,400 plus accrued interest of $ 2,400 was forgiven by the Small Business Administration.

The Company recorded the impact of its PPP loan forgiveness as other income during the quarter ended September 30, 2021.

During the quarter ended September 30, 2020, the Company’s Hong Kong subsidiary applied for and was granted approximately $ 55,000 under a governmental program called the Employment Support Scheme (“ESS”).

During the three months ended December 31, 2021 and December 31, 2020, the Company’s Hong Kong subsidiary recorded nil and $ 28,000 , respectively, under the governmental program called the Employment Support Scheme (“ESS”).

During the nine months ended December 31, 2021 and December 31, 2020, the Company’s Hong Kong subsidiary recorded nil and $ 83,000 , respectively, under the ESS program.

The income realized from the PPP loan forgiveness and the amount granted under the ESS program are presented as Other Income under the description called “Income from governmental assistance programs” in the Consolidated Statements of Operations.

NOTE 11 — SUBSEQUENT EVENT

On January 3, 2022, a legal settlement was entered into between the Company and one of its former directors that resolved certain disputes, including certain claims against the former director and an indemnification claim made by the former director.

The amount of the settlement was $ 450,000 and is presented separately in the Consolidated Statements of Operations as a loss on settlement of litigation for the three and nine month periods ended December 31, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements