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Restatement of Previously Issued Consolidated Financial Statements | 3 Months Ended
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Jun. 30, 2025
Accounting Changes and Error Corrections [Abstract] |
Restatement of Previously Issued Financial Statements | Restatement of Previously Issued Consolidated Financial Statements As further described below, our unaudited consolidated financial statements for the quarter ended June 30, 2024, have been restated to reflect the correction of material errors. Restatement Background The need for restatement was identified: (1) in part by the Audit Committee Investigation (the “Investigation”) as disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, as filed with the SEC on October 14, 2025 (the “2025 Form 10-K”); and (2) during financial analyses conducted in connection with the preparation of the Company’s consolidated financial statements for the fiscal year ended March 31, 2025. The Company participates in a range of vendor-funded programs through which it receives reimbursements for certain activities, including advertising, sales incentives, and other promotional efforts, typically linked to purchase or sales volume thresholds. These programs are designed to offset costs incurred in connection with stocking, promoting, and selling vendor products. The Company identified certain errors in its accounting for payments, rebates and discounts from suppliers arising from a misapplication of US GAAP. Historically, the Company accounted for (1) certain promotional sales reimbursements as a component of its revenues and (2) certain co-operative advertising expenses as a component of advertising costs that were not specific, incremental or identifiable. The Company notes that these payments, rebates, and discounts should be accounted for as a component of (reduction to) cost of sales. Furthermore, after a thorough review of the Company's vendor agreements, the Company also identified the following additional errors within our accounting for vendor consideration which was also included in the Restatement: 1)A specific vendor whose marketing and advertising arrangements, previously categorized as cost of sales, needed to be reclassified to offset advertising expenses. 2)A specific vendor whose promotional sales reimbursements, previously categorized as advertising expenses, needed to be reclassified to cost of sales. Restatement Adjustments The following table summarizes the effect of the errors on the Company’s consolidated statements of operations for the quarter ended June 30, 2024:
|  | Three Months Ended June 30, 2024
|  | As Reported |  | Adjustment |  | As Restated
Net sales |  | $ | 67,952 |  |  | $ | (1,745) |  |  | $ | 66,207 |
Cost of sales |  | $ | 49,981 |  |  | $ | (2,811) |  |  | $ | 47,170 |
Gross profit |  | $ | 17,971 |  |  | $ | 1,066 |  |  | $ | 19,037 |
Advertising |  | $ | 6,990 |  |  | $ | 1,066 |  |  | $ | 8,056 |
Total operating expenses |  | $ | 13,585 |  |  | $ | 1,066 |  |  | $ | 14,651 |
Advertising Costs of Acquiring a New Customer |  | $58 |  |  |  | $67
Advertising Costs as a Percentage of Sales |  | 10.3 | % |  |  |  | 12.2 | %

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- Definition The entire disclosure for reporting error correction. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 250 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 7 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483443/250-10-50-7 + Details
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