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Liquidity | 12 Months Ended
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Mar. 31, 2020
Liquidity |
Liquidity | NOTE 2 - LIQUIDITY The Company reported net loss of approximately $2.9 million for the fiscal year ended March 31, 2020 as compared to net income of approximately $0.6 million for the fiscal year ended March 31, 2019. In August 2019, a major customer received goods that were significantly water damaged due to excess moisture absorbed in pallets shipped by the factory. As a result we incurred a loss in cash flow of approximately $1.6 million in revenue and approximately $0.8 million in additional out of pocket expenses to retrieve, inspect, warehouse and properly destroy the goods. As of July 10, 2020 we have recovered approximately $2.3 million from our cargo insurance coverage and secured vendor invoice credits of $0.4 million from the factory that caused the damage. The Company’s inventory also increased by approximately $1.5 million due to overstock returns as well as excess inventory of the new Carpool Karaoke product. On June 16, 2020, the Company executed the Intercreditor Revolving Credit Facility on eligible accounts receivable and inventory. The Company signed a two-year Loan and Security Agreement for a $10,000,000 financing facility with Crestmark on eligible accounts receivable. Further, the Company also executed a two-year Loan and Security Agreement with Iron Horse for up to $2,500,000 in inventory financing. The Intercreditor Revolving Loan Facility expire on June 15, 2022. The Company has adequate cash on hand and cash available on its Intecreditor Revolving Credit Facility, approximately $1.4 million as of the date of this filing, to meet all obligations during this off-peak season. Management is confident that the availability of cash from our Intercreditor Revolving Credit Facility and our projections to reduce excess inventory during the next year will be adequate to meet the Company’s liquidity requirements for at least the next twelve months.

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