Quarterly report pursuant to Section 13 or 15(d)

Restatement of Previously Issued Financial Statements (Tables)

v3.23.3
Restatement of Previously Issued Financial Statements (Tables)
 3 Months Ended
Apr. 30, 2023
Accounting Changes and Error Corrections [Abstract]  
Schedule of Restatement of Previously Issued Financial Statements
A summary of the impacts of the adjustments on the previously reported financial statements are included below:

For the Thirteen Weeks Ended
April 30, 2023 May 1, 2022
(in thousands) As Previously Reported As Restated As Previously Reported As Restated
Net sales $ 141,193  $ 141,193  $ 129,380  $ 129,380 
Gross profit 70,704  70,575  66,108  65,974 
Operating (loss) income (5,869) (5,706) 2,645  2,494 
Net (loss) income $ (4,230) $ (4,115) $ 1,895  $ 1,786 

As of
April 30, 2023 January 29, 2023
(in thousands) As Previously Reported As Restated As Previously Reported As Restated
Total current assets $ 187,697  $ 181,462  $ 194,041  $ 187,715 
Total non-current assets 240,339  239,747  224,013  220,911 
Total assets $ 428,036  $ 421,209  $ 418,054  $ 408,626 
Total current liabilities 96,922  89,127  88,839  82,041 
Total non-current liabilities 141,868  142,826  135,955  133,491 
Total liabilities 238,790  231,953  224,794  215,532 
Total equity 189,246  189,256  193,260  193,094 
THE LOVESAC COMPANY
CONDENSED BALANCE SHEET
(unaudited)
April 30, 2023
As Previously Reported Corrections Reference As Restated
Assets
Current Assets
Merchandise inventories, net 106,819  (2,361) (a)(g) 104,458 
Prepaid expenses and other current assets 17,306  (3,874) (a)(b)(e)(f) 13,432 
Total Current Assets 187,697  (6,235) 181,462 
Operating lease right-of-use assets 142,463  1,146  (b) 143,609 
Other Assets
Deferred tax asset 10,750  (791) (f) 9,959 
Other assets 26,318  (947) (e) 25,371 
Total Other Assets 38,657  (1,738) 36,919 
Total Assets $ 428,036  $ (6,827) $ 421,209 
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 32,165  $ (2,068) (b) $ 30,097 
Accrued expenses 16,765  (500) (a)(f) 16,265 
Current operating lease liabilities 22,160  (5,227)
(b)(e)
 16,933 
Total Current Liabilities 96,922  (7,795) 89,127 
Operating Lease Liability, long-term 141,868  958  (b) 142,826 
Total Liabilities 238,790  (6,837) 231,953 
Stockholders’ Equity
Additional paid-in capital 182,770  61  (h) 182,831 
Accumulated earnings (deficit)
 6,476  (51) (a)(b)(f)(g)(h) 6,425 
Stockholders' Equity 189,246  10  189,256 
Total Liabilities and Stockholders' Equity $ 428,036  $ (6,827) $ 421,209 
The description of each error is described above. The impact of each error for the corresponding period in the above table is described below:
(a) Last Mile Freight - The correction of these misstatements resulted in a decrease to merchandise inventories, net of $2.2 million, an increase to prepaid expenses and other current assets of $0.6 million, a decrease to accrued expenses of less than $0.1 million, and a decrease to accumulated earnings of $1.6 million at April 30, 2023.
(b) Leases - The correction of these misstatements resulted in an increase to prepaid expenses and other current assets of less than $0.1 million, an increase to operating lease right-of-use assets of $1.1 million, a decrease to accounts payable of
$2.1 million, an increase to current operating lease liabilities of $0.2 million, an increase to operating lease liability, long-term of $1.0 million, and an increase to accumulated earnings of $2.1 million at April 30, 2023.
(e) Balance Sheet Reclassifications - The correction of these misstatements resulted in a decrease to prepaid expenses and other current assets of $4.5 million, a decrease to current operating lease liabilities of $5.5 million and a decrease to other assets of $1.0 million at April 30, 2023.
(f) Income Taxes - The tax impact of all misstatements resulted in a decrease to prepaid expenses and other current assets of less than $0.1 million, a decrease to deferred tax asset of $0.8 million, a decrease to accrued expenses of $0.5 million, and a decrease to accumulated earnings of $0.3 million at April 30, 2023.
(g) Inventory and Cost of Goods Sold - The correction of these misstatements resulted in a decrease to merchandise inventories, net of $0.1 million and a decrease to accumulated earnings of $0.1 million at April 30, 2023.
(h) Equity Based Compensation Expense - The correction of these misstatements resulted in an increase to additional paid-in capital of $0.1 million and decrease in accumulated earnings of $0.1 million at April 30, 2023.
THE LOVESAC COMPANY
CONDENSED STATEMENT OF OPERATIONS
(unaudited)

For the Thirteen Weeks Ended April 30, 2023
As Previously Reported Corrections Reference As Restated
Cost of merchandise sold 70,489  129 
(a)(g)
 70,618 
Gross profit 70,704  (129) 70,575 
Operating expenses
Selling, general and administration expenses 56,838  (292) (b)(c)(h) 56,546 
Total operating expenses 76,573  (292) 76,281 
Operating (loss) income (5,869) 163  (5,706)
Net (loss) income before taxes (5,528) 163  (5,365)
Benefit from (provision for) income taxes 1,298  (48) (f) 1,250 
Net (loss) income $ (4,230) $ 115  $ (4,115)
Net (loss) income per common share:
Basic $ (0.28) $ 0.01  $ (0.27)
Diluted $ (0.28) $ 0.01  $ (0.27)
The description of each error is described above. The impact of each error for the corresponding period in the above table is described below:
(a) Last Mile Freight - The correction of these misstatements resulted in an increase to cost of merchandise sold of $0.3 million for the thirteen weeks ended April 30, 2023.
(b) Leases - The correction of these misstatements resulted in an increase to selling, general and administrative expenses of less than $0.1 million for the thirteen weeks ended April 30, 2023.
(c) Buyer’s Remorse - The correction of these misstatements resulted in a decrease to selling, general and administrative expenses of $0.4 million for the thirteen weeks ended April 30, 2023.
(f) Income Taxes - The tax impact of all misstatements resulted in a decrease to benefit from income taxes of less than $0.1 million for the thirteen weeks ended April 30, 2023.
(g) Inventory and Cost of Goods Sold - The correction of these misstatements resulted in a decrease to cost of merchandise sold of $0.2 million for the thirteen weeks ended April 30, 2023.
(h) Equity Based Compensation Expense - The correction of these misstatements resulted in an increase to selling, general and administrative expenses of $0.1 million for the thirteen weeks ended April 30, 2023.
THE LOVESAC COMPANY
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THIRTEEN WEEKS ENDED APRIL 30, 2023
(unaudited)

Common
(amounts in thousands, except share amounts) Restatement Reference Shares Amount Additional paid-in capital
Accumulated earnings (deficit)
 Total Shareholders' Equity
As Previously Reported
Balance - January 29, 2023 15,195,698  $ —  $ 182,554  $ 10,706  $ 193,260 
Net loss —  —  —  (4,230) (4,230)
Equity-based compensation —  —  686  —  686 
Balance - April 30, 2023 15,217,120  $ —  $ 182,770  $ 6,476  $ 189,246 
Restatement Impacts
Balance - January 29, 2023
(a)(b)(c)(f)(g)
 —  $ —  $ —  $ (166) $ (166)
Net income
(a)(b)(c)(f)(g)(h)
 —  —  —  115  115 
Equity-based compensation (h) —  —  61  —  61 
Balance - April 30, 2023 —  $ —  $ 61  $ (51) $ 10 
As Restated
Balance - January 29, 2023 15,195,698  $ —  $ 182,554  $ 10,540  $ 193,094 
Net loss —  —  —  (4,115) (4,115)
Equity-based compensation —  —  747  —  747 
Balance - April 30, 2023 15,217,120  $ —  $ 182,831  $ 6,425  $ 189,256 
See descriptions of the net (loss) income impacts in the statement of operations for the thirteen weeks ended April 30, 2023 section above.
THE LOVESAC COMPANY
CONDENSED STATEMENT OF CASH FLOWS
(unaudited)

For the Thirteen Weeks Ended April 30, 2023
As Previously Reported Corrections Reference As Restated
Cash Flows from Operating Activities
Net (loss) income $ (4,230) $ 115 
(a)(b)(c)(f)(g)(h)
 $ (4,115)
Adjustments to reconcile net (loss) income to cash provided by operating activities:
Equity based compensation 686  61  (h) 747 
Non-cash operating lease cost 5,308  7  (b) 5,315 
Deferred income taxes (1,330) 48  (f) (1,282)
Change in operating assets and liabilities:
Trade accounts receivable (8,978) (366) (c) (9,344)
Merchandise inventories 13,143  2,026  (a)(g) 15,169 
Prepaid expenses and other current assets 5,971  (1,750) (a)(b)(e)(f) 4,221 
Other assets (4,455) 1,448  (e) (3,007)
Accounts payable and accrued expenses (5,785) (4,593) (a)(b)(f) (10,378)
Operating lease liabilities (5,515) 3,004 
(b)(e)
 (2,511)
Net cash provided by operating activities
 6,291  —  6,291 
Cash Flows from Investing Activities
Net cash used in investing activities (4,177) —  (4,177)
Cash Flows from Financing Activities
Net cash used in financing activities (522) —  (522)
Net change in cash and cash equivalents 1,592  —  1,592 
Cash and cash equivalents - Beginning 43,533  43,533 
Cash and cash equivalents - Ending $ 45,125  $ —  $ 45,125 
See descriptions of the net (loss) income impacts in the statement of operations for the thirteen weeks ended April 30, 2023 section above.