Note 12 - Risks and Uncertainties

12 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

NOTE 12 — RISKS AND UNCERTAINTIES:

Customer Concentration

For fiscal 2025, the Company’s three largest customers accounted for approximately 79% of the Company’s net revenues, with Amazon accounting for 39%, Walmart accounting for 31% and Big Lots accounting for 9%. For fiscal 2024, the Company’s three largest customers accounted for approximately 83% of the Company’s net revenues with Walmart accounting for 53%, Amazon accounting for 20% and Fred Meyer accounting for 10%.  

Product Concentration

For fiscal 2025, the Company’s gross product sales included microwave ovens, which generated approximately 51%, and audio products, which generated approximately 47% of the Company's gross product sales. 

For fiscal 2024, the Company’s gross product sales included microwave ovens, which generated approximately 33%, and audio products, which generated approximately 66% of the Company's gross product sales.

As a result of this dependence, a significant decline in pricing of, or market acceptance of these product types and categories, either in general or specifically as marketed by the Company, would have a material adverse effect on the Company’s business, financial condition and results of operations. Because the market for these product types and categories is characterized by periodic new product introductions, the Company’s future financial performance will depend, in part, on the successful and timely development and customer acceptance of new and enhanced versions of these product types and other products distributed by the Company. There can be no assurance that the Company will continue to be successful in marketing these products types within these categories or any other new or enhanced products.

Concentrations of Credit Risk

As a percent of the Company’s total trade accounts receivable, net of specific reserves, Amazon and Variety Wholesalers accounted for 59% and 19%, respectively, as of March 31, 2025. As a percent of the Company’s total trade accounts receivable, net of specific reserves, Walmart, Chedraui and Amazon accounted for 34%, 30% and 25%, respectively, as of March 31, 2024. No other customer accounted for more than 10% of the Company’s total trade accounts receivable, net of specific reserves, as of March 31, 2025 or March 31, 2024. The Company periodically performs credit evaluations of its customers but generally does not require collateral, and the Company provides for any anticipated credit losses in the financial statements based upon management’s estimates and ongoing reviews of recorded allowances. The allowance for credit losses on the Company’s total trade accounts receivable balances was approximately $1,107,000 at March 31, 2025 and $25,000 at March 31, 2024. Due to the high concentration of the Company’s net trade accounts receivables among just two or three customers, any significant failure by one of these customers to pay the Company their outstanding balances would result in a material adverse effect on the Company’s business, financial condition and results of operations.

The Company maintains its cash accounts with major U.S. and foreign financial institutions. The Company’s cash and restricted cash balances on deposit in the U.S. as of March 31, 2025 and  March 31, 2024 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 $0.9 million and approximately $19.6 million at March 31, 2025 and March 31, 2024, respectively. The Company also has short term deposits in foreign financial institutions which are not FDIC insured of approximately of $14.9 million. These short term deposits have maturity dates over 90 days and are classified as short term investments on the Company's Consolidated Balance Sheets.

Supplier Concentration

During both fiscal 2025 and 2024, the Company procured 95% of its products for resale from its four largest factory suppliers. Approximately 37% of these products were procured from its largest supplier in both periods. See the Supplier table under the heading "Design and Manufacturing" in this Form 10-K, for further details.

No assurance can be given that ample supply of product would be available at current prices and on current credit terms. This is if the Company were required to seek alternative sources of supply, without adequate notice by a supplier or a reasonable opportunity to seek alternate production facilities and component parts. Any resulting significant shortage of product supply would have a material adverse effect on the Company’s business, financial condition and results of operation.

Third Party Representatives

In fiscal 2025, the Company utilized 5 sales representative organizations, two of these representative organizations were responsible for approximately 48% of the Company's net revenues, including one which represented approximately 38% and another which represented 10% of its net revenues. In fiscal 2024, the Company utilized 6 sales representative organizations, including one which represented 30% of its net revenues. No other sales representative organization accounted for more than 10% of the Company's net revenues in fiscal 2025 or fiscal 2024. The loss or reduction of product sales made through third party representative organizations could have a material adverse effect on the Company's business and results of operations. Finding replacement organizations could be a time consuming process during which the Company's revenues could be negatively impacted.