True000170175802/042024Q1http://fasb.org/us-gaap/2023#OperatingLeaseRightOfUseAssethttp://fasb.org/us-gaap/2023#OperatingLeaseLiabilityCurrenthttp://fasb.org/us-gaap/2023#OperatingLeaseLiabilityNoncurrenthttp://fasb.org/us-gaap/2023#OperatingLeaseLiabilityCurrent00017017582023-01-302023-04-3000017017582023-05-31xbrli:shares00017017582023-04-30iso4217:USD00017017582023-01-29iso4217:USDxbrli:shares00017017582022-01-312022-05-010001701758us-gaap:CommonStockMember2022-01-300001701758us-gaap:AdditionalPaidInCapitalMember2022-01-300001701758us-gaap:RetainedEarningsMember2022-01-3000017017582022-01-300001701758us-gaap:RetainedEarningsMember2022-01-312022-05-010001701758us-gaap:AdditionalPaidInCapitalMember2022-01-312022-05-010001701758us-gaap:CommonStockMember2022-01-312022-05-010001701758us-gaap:CommonStockMember2022-05-010001701758us-gaap:AdditionalPaidInCapitalMember2022-05-010001701758us-gaap:RetainedEarningsMember2022-05-0100017017582022-05-010001701758us-gaap:CommonStockMember2023-01-290001701758us-gaap:AdditionalPaidInCapitalMember2023-01-290001701758us-gaap:RetainedEarningsMember2023-01-290001701758us-gaap:RetainedEarningsMember2023-01-302023-04-300001701758us-gaap:AdditionalPaidInCapitalMember2023-01-302023-04-300001701758us-gaap:CommonStockMember2023-01-302023-04-300001701758us-gaap:CommonStockMember2023-04-300001701758us-gaap:AdditionalPaidInCapitalMember2023-04-300001701758us-gaap:RetainedEarningsMember2023-04-30love:showroomxbrli:pure0001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberus-gaap:ShippingAndHandlingMember2022-01-312023-01-290001701758srt:ScenarioPreviouslyReportedMember2023-01-302023-04-300001701758srt:ScenarioPreviouslyReportedMember2022-01-312022-05-010001701758srt:ScenarioPreviouslyReportedMember2023-04-300001701758srt:ScenarioPreviouslyReportedMember2023-01-290001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberus-gaap:ShippingAndHandlingMember2023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberlove:RetailRelatedInventoryMerchandiseMemberus-gaap:ShippingAndHandlingMember2023-04-300001701758love:RevisionOfPriorPeriodErrorCorrectionAdjustmentLeasesMemberlove:OperatingLeaseRightOfUseAssetMember2023-04-300001701758love:RevisionOfPriorPeriodErrorCorrectionAdjustmentLeasesMember2023-04-300001701758us-gaap:AccountsPayableMemberlove:RevisionOfPriorPeriodErrorCorrectionAdjustmentLeasesMember2023-04-300001701758us-gaap:OtherAssetsMemberlove:RevisionOfPriorPeriodErrorCorrectionAdjustmentBalanceSheetReclassificationMember2023-04-300001701758love:RevisionOfPriorPeriodErrorCorrectionAdjustmentBalanceSheetReclassificationMember2023-04-300001701758love:DeferredIncomeTaxAssetNetMembersrt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberus-gaap:RetainedEarningsMember2023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberus-gaap:AdditionalPaidInCapitalMember2023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2023-01-302023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberus-gaap:ShippingAndHandlingMemberlove:CostOfGoodsAndServicesSoldMember2023-01-302023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-302023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberlove:BuyersRemorseMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-302023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberlove:IncomeTaxExpenseBenefitMember2023-01-302023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberlove:CostOfGoodsAndServicesSoldMember2023-01-302023-04-300001701758srt:ScenarioPreviouslyReportedMemberus-gaap:CommonStockMember2023-01-290001701758srt:ScenarioPreviouslyReportedMemberus-gaap:AdditionalPaidInCapitalMember2023-01-290001701758srt:ScenarioPreviouslyReportedMemberus-gaap:RetainedEarningsMember2023-01-290001701758srt:ScenarioPreviouslyReportedMemberus-gaap:RetainedEarningsMember2023-01-302023-04-300001701758srt:ScenarioPreviouslyReportedMemberus-gaap:AdditionalPaidInCapitalMember2023-01-302023-04-300001701758srt:ScenarioPreviouslyReportedMemberus-gaap:CommonStockMember2023-04-300001701758srt:ScenarioPreviouslyReportedMemberus-gaap:AdditionalPaidInCapitalMember2023-04-300001701758srt:ScenarioPreviouslyReportedMemberus-gaap:RetainedEarningsMember2023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberus-gaap:CommonStockMember2023-01-290001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberus-gaap:AdditionalPaidInCapitalMember2023-01-290001701758us-gaap:RetainedEarningsMembersrt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2023-01-290001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2023-01-290001701758us-gaap:RetainedEarningsMembersrt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2023-01-302023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberus-gaap:AdditionalPaidInCapitalMember2023-01-302023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberus-gaap:CommonStockMember2023-04-300001701758srt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMemberus-gaap:AdditionalPaidInCapitalMember2023-04-300001701758us-gaap:RetainedEarningsMembersrt:RevisionOfPriorPeriodErrorCorrectionAdjustmentMember2023-04-300001701758us-gaap:ShippingAndHandlingMember2023-01-302023-04-300001701758us-gaap:ShippingAndHandlingMember2022-01-312022-05-010001701758love:ShowroomsMember2023-01-302023-04-300001701758love:ShowroomsMember2022-01-312022-05-010001701758love:InternetMember2023-01-302023-04-300001701758love:InternetMember2022-01-312022-05-010001701758love:OtherMember2023-01-302023-04-300001701758love:OtherMember2022-01-312022-05-010001701758us-gaap:NonUsMemberus-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMember2023-01-302023-04-300001701758us-gaap:NonUsMemberus-gaap:SalesRevenueNetMemberus-gaap:GeographicConcentrationRiskMember2022-01-312022-05-010001701758us-gaap:RestrictedStockUnitsRSUMember2023-01-302023-04-300001701758us-gaap:StockOptionMember2023-01-302023-04-300001701758us-gaap:WarrantMember2023-01-302023-04-300001701758us-gaap:RestrictedStockUnitsRSUMember2022-01-312022-05-010001701758us-gaap:StockOptionMember2022-01-312022-05-010001701758us-gaap:WarrantMember2022-01-312022-05-0100017017582022-03-2400017017582022-03-2500017017582022-03-252022-03-2500017017582018-06-292018-06-2900017017582018-06-290001701758love:CommonStockWarrantsMember2023-04-300001701758love:CommonStockWarrantsMember2023-01-302023-04-300001701758love:CommonStockWarrantsMember2022-05-010001701758love:CommonStockWarrantsMember2022-01-312022-05-010001701758love:TwoThousandsSeventeenEquityIncentivePlanMember2023-01-302023-04-300001701758love:TwoThousandsSeventeenEquityIncentivePlanMember2023-04-3000017017582019-06-012019-06-30love:trading_day00017017582021-02-012022-01-3000017017582021-06-052021-06-050001701758us-gaap:RestrictedStockMember2023-01-290001701758us-gaap:RestrictedStockMember2023-01-302023-04-300001701758us-gaap:RestrictedStockMember2023-04-300001701758us-gaap:RestrictedStockMember2022-01-300001701758us-gaap:RestrictedStockMember2022-01-312022-05-010001701758us-gaap:RestrictedStockMember2022-05-010001701758us-gaap:RestrictedStockMember2023-03-012023-03-31love:segment0001701758love:SactionalsMember2023-01-302023-04-300001701758love:SactionalsMember2022-01-312022-05-010001701758love:SacsMember2023-01-302023-04-300001701758love:SacsMember2022-01-312022-05-010001701758us-gaap:AllOtherSegmentsMember2023-01-302023-04-300001701758us-gaap:AllOtherSegmentsMember2022-01-312022-05-01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Amendment No. 2)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                    to                     
Commission File Number: 001-38555
 
THE LOVESAC COMPANY
(Exact name of registrant as specified in its charter)
Delaware32-0514958
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
Two Landmark Square, Suite 300
 
 Stamford, Connecticut
06901
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (888) 636-1223
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.00001 par value per share LOVE The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☐Accelerated filer☒
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the Registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of May 31, 2023, there were 15,216,988 shares of common stock, $0.00001 par value per share, outstanding.




EXPLANATORY NOTE

The Lovesac Company (“Lovesac”, the “Company”, “we”, “our” and similar terms) is filing this Amendment No. 2 on Form 10-Q/A (“Amendment No. 2”) to amend the Company’s Quarterly Form 10-Q for the period ended April 30, 2023 (the “Original 10-Q”), originally filed with the Securities and Exchange Commission (“SEC”) on June 9, 2023, as amended by Amendment No. 1 on Form 10-Q/A (“Amendment No. 1”) filed on November 2, 2023, solely to include certain footnote disclosures to our unaudited quarterly condensed financial statements as of and for the period ended April 30, 2023 (the “Restated Financial Statements”) that were included in the unaudited financial statements in the Original 10-Q, but were inadvertently omitted from the Restated Financial Statements included in Part I, Item 1 of Amendment No. 1. The restatement is further described in Amendment No. 1 and in Note 2. Restatement and Other Corrections of Previously Issued Financial Statements to the Restated Financial Statements in Part I. Item 1 contained herein.

In accordance with applicable SEC rules, this Amendment No. 2 includes new certifications specified in Rule 13a-14 under the Exchange Act from our Chief Executive Officer and Chief Financial Officer dated as of the date of this filing.

Except as described above, no other amendments are being made to the Original 10-Q, as amended by Amendment No. 1. This Amendment No. 2 does not reflect events occurring after the filing of the Original 10-Q, as amended by Amendment No. 1, or modify or update the disclosure contained therein in any way other than as required to reflect the amendments discussed above.


TABLE OF CONTENTS
i
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
THE LOVESAC COMPANY
CONDENSED BALANCE SHEETS
 April 30,
2023		January 29,
2023
(As Restated)(As Restated)
(amounts in thousands, except share and per share amounts)(unaudited)
Assets  
Current Assets  
Cash and cash equivalents$45,125 $43,533 
Trade accounts receivable18,447 9,103 
Merchandise inventories, net104,458 119,627 
Prepaid expenses and other current assets13,432 15,452 
Total Current Assets181,462 187,715 
Property and equipment, net59,219 52,904 
Operating lease right-of-use assets143,609 135,411 
Other Assets
Goodwill144 144 
Intangible assets, net1,445 1,411 
Deferred tax asset9,959 8,677 
Other assets25,371 22,364 
Total Other Assets36,919 32,596 
Total Assets$421,209 $408,626 
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable$30,097 $24,576 
Accrued expenses16,265 25,417 
Payroll payable6,582 6,783 
Customer deposits15,372 6,760 
Current operating lease liabilities16,933 13,075 
Sales taxes payable3,878 5,430 
Total Current Liabilities89,127 82,041 
Operating Lease Liabilities, long-term142,826 133,491 
Line of Credit— — 
Total Liabilities231,953 215,532 
Commitments and Contingencies (see Note 7)
Stockholders’ Equity
Preferred Stock $0.00001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of April 30, 2023 and January 29, 2023.
— — 
Common Stock $.00001 par value, 40,000,000 shares authorized, 15,217,120 shares issued and outstanding as of April 30, 2023 and 15,195,698 shares issued and outstanding as of January 29, 2023.
— — 
Additional paid-in capital182,831 182,554 
Accumulated earnings6,425 10,540 
Stockholders’ Equity189,256 193,094 
Total Liabilities and Stockholders’ Equity$421,209 $408,626 
The accompanying notes are an integral part of these condensed financial statements.
1
THE LOVESAC COMPANY
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
Thirteen weeks ended
(amounts in thousands, except per share data and share amounts)April 30,
2023		May 1,
2022
(As Restated)(As Restated)
Net sales$141,193 $129,380 
Cost of merchandise sold70,618 63,406 
Gross profit70,575 65,974 
Operating expenses
Selling, general and administration expenses56,546 44,918 
Advertising and marketing16,913 15,901 
Depreciation and amortization2,822 2,661 
Total operating expenses76,281 63,480 
Operating (loss) income(5,706)2,494 
Interest income (expense), net341 (35)
Net (loss) income before taxes(5,365)2,459 
Benefit from (provision for) income taxes1,250 (673)
Net (loss) income $(4,115)$1,786 
Net (loss) income per common share:
Basic$(0.27)$0.12 
Diluted$(0.27)$0.11 
Weighted average number of common shares outstanding:
Basic15,230,763 15,155,378 
Diluted15,230,763 16,173,339 

The accompanying notes are an integral part of these condensed financial statements.
2
THE LOVESAC COMPANY
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THIRTEEN WEEKS ENDED APRIL 30, 2023 AND MAY 1, 2022
(unaudited)


CommonAdditional Paid-in
Capital		Accumulated
(Deficit)
Earnings		Total Shareholders' Equity
(amounts in thousands, except share amounts)SharesAmount
Balance - January 30, 2022 (As Restated)15,123,338 $— $173,762 $(15,948)$157,814 
Net income (As restated)— — — 1,786 1,786 
Equity based compensation— — 1,163 — 1,163 
Issuance of common stock for restricted stock1,704 — — — — 
Taxes paid for net share settlement of equity awards— — (47)— (47)
Balance - May 1, 2022 (As Restated)15,125,042 $— $174,878 $(14,162)$160,716 
Balance - January 29, 2023 (As Restated)15,195,698 $— $182,554 $10,540 $193,094 
Net loss (As restated)— — — (4,115)(4,115)
Equity based compensation— — 747 — 747 
Issuance of common stock for restricted stock21,422 — — — — 
Taxes paid for net share settlement of equity awards— — (470)— (470)
Balance - April 30, 2023 (As Restated)15,217,120 $— $182,831 $6,425 $189,256 


The accompanying notes are an integral part of these condensed financial statements.
3
THE LOVESAC COMPANY
CONDENSED STATEMENT OF CASH FLOWS
(unaudited)
Thirteen weeks ended
April 30,
2023		May 1,
2022
(amounts in thousands)(As Restated)(As Restated)
Cash Flows from Operating Activities  
Net (loss) income$(4,115)$1,786 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization of property and equipment2,697 2,575 
Amortization of other intangible assets125 86 
Amortization of deferred financing fees42 29 
Equity based compensation747 1,163 
Non-cash operating lease cost5,315 4,184 
Deferred income taxes(1,282)492 
Changes in operating assets and liabilities:
Trade accounts receivable(9,344)2,134 
Merchandise inventories15,169 (14,515)
Prepaid expenses and other current assets4,221 813 
Other assets(3,007)(26)
Accounts payable and accrued expenses(10,378)(11,768)
Operating lease liabilities(2,511)(4,571)
Customer deposits8,612 (5,709)
Net Cash Provided by (Used in) Operating Activities6,291 (23,327)
Cash Flows from Investing Activities
Purchase of property and equipment(4,177)(4,450)
Payments for patents and trademarks— (27)
Net Cash Used in Investing Activities(4,177)(4,477)
Cash Flows from Financing Activities
Payment of deferred financing costs(52)(161)
Taxes paid for net share settlement of equity awards(470)(47)
Net Cash Used in Financing Activities(522)(208)
Net Change in Cash and Cash Equivalents1,592 (28,012)
Cash and Cash Equivalents - Beginning43,533 92,392 
Cash and Cash Equivalents - Ending$45,125 $64,380 
Supplemental Cash Flow Disclosures
Cash paid for taxes$— $905 
Cash paid for interest$30 $33 
Non-cash investing activities:
Asset acquisitions not yet paid for at period end$4,994 $1,541 
The accompanying notes are an integral part of these condensed financial statements.
4
THE LOVESAC COMPANY
CONDENSED NOTES TO FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEKS ENDED APRIL 30, 2023 AND MAY 1, 2022
Note 1. Basis of Presentation and Summary of Significant Accounting Policies

The balance sheet of The Lovesac Company (the “Company”, “we”, “us” or “our”) as of January 29, 2023, which has been derived from our audited financial statements as of and for the 52-week year ended January 29, 2023, and the accompanying interim unaudited condensed financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. Certain information and note disclosures normally included in annual financial statements, prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), have been condensed or omitted pursuant to those rules and regulations. The financial information presented herein, which is not necessarily indicative of results to be expected for the full current fiscal year, reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the interim unaudited condensed financial statements. Such adjustments are of a normal, recurring nature. These condensed financial statements should be read in conjunction with the Company’s financial statements filed in its Annual Report on Form 10-K/A for the fiscal year ended January 29, 2023.
Due to the seasonality of the Company’s business, with the majority of our activity occurring in the fourth quarter of each fiscal year, the results of operations for the thirteen weeks ended April 30, 2023 and May 1, 2022 are not necessarily indicative of results to be expected for the full fiscal year.
Nature of Operations
We are a technology driven company that designs, manufactures and sells unique, high quality furniture derived through its proprietary "Designed for Life" approach which results in products that are built to last a lifetime and designed to evolve as our customers’ lives do. The Company markets and sells its products through modern and efficient showrooms and, increasingly, through online net sales directly at www.lovesac.com, supported by direct-to-consumer touch-feel points in the form of our own showrooms, which include our newly created mobile concierge and kiosks, as well as through shop-in-shops and online pop-up-shops with third party retailers. As of April 30, 2023, the Company operated 211 showrooms including kiosks and mobile concierges located throughout the United States. The Company was formed as a Delaware corporation on January 3, 2017, in connection with a corporate reorganization with SAC Acquisition LLC, a Delaware limited liability company, the predecessor entity to the Company.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. The Company evaluates its estimates and judgements on an ongoing basis based on historical experience, expectations of future events and various other factors we believe to be reasonable under the circumstances and revise them when necessary in the period the change is determined. Actual results may differ from the original or revised estimates.
Recent Accounting Pronouncements
The Company has considered all recent accounting pronouncements issued by the Financial Accounting Standards Board and they were considered to be not applicable or the adoption of such pronouncements will not have a material impact on the financial statements.
5
Employee Benefit Plan

In February 2017, the Company established The Lovesac Company 401(k) Plan (the “401(k) Plan”) with Elective Deferrals beginning May 1, 2017. The 401(k) Plan calls for Elective Deferral Contributions, Safe Harbor Matching Contributions and Profit-Sharing Contributions. All associates of the Company will be eligible to participate in the 401(k) Plan as of the day of the month which is coincident with or next follows the date on which they attain age 21 and complete one month of service. Participants will be able to contribute up to 100% of their eligible compensation to the 401(k) Plan subject to limitations with the IRS. The Company's contributions to the 401(k) Plan were $0.5 million and $0.4 million for the thirteen weeks ended April 30, 2023 and May 1, 2022, respectively.

Note 2. Restatement and Other Corrections of Previously Issued Condensed Financial Statements

The Audit Committee of the Board of Directors of Lovesac completed an independent investigation in August 2023 whereby the Company concluded $2.2 million of last mile shipping expenses relating to the fiscal year ended January 29, 2023 were improperly capitalized during the quarter ended April 30, 2023. Through this investigation, the Company also determined that the methodology used to estimate an accrual of last mile freight expenses at each period end was not accurate because the calculation did not use the correct number of shipments that were accepted by the shipper for delivery, but not yet invoiced to the Company. Management prepared a quantitative and qualitative analysis of these errors, along with certain other immaterial accounting errors, in accordance with the U.S. SEC Staff's Accounting Bulletin Nos. 99 and 108, Materiality, and concluded the aggregate impact of all the errors are material to the Company's previously reported interim, year-to-date, and annual financial statements as of and for the year ended January 29, 2023 and the Company’s previously reported interim financial statements as of and for the three-month period ended April 30, 2023. As a result, the accompanying financial statements as of April 30, 2023, and for the three months ended April 30, 2023 and May 1, 2022, and related notes hereto, have been restated to correct these errors.

A summary of the impacts of the adjustments on the previously reported financial statements are included below:

For the Thirteen Weeks Ended
April 30, 2023May 1, 2022
(in thousands)As Previously ReportedAs RestatedAs Previously ReportedAs Restated
Net sales$141,193 $141,193 $129,380 $129,380 
Gross profit70,704 70,575 66,108 65,974 
Operating (loss) income(5,869)(5,706)2,645 2,494 
Net (loss) income$(4,230)$(4,115)$1,895 $1,786 

As of
April 30, 2023January 29, 2023
(in thousands)As Previously ReportedAs RestatedAs Previously ReportedAs Restated
Total current assets$187,697 $181,462 $194,041 $187,715 
Total non-current assets240,339 239,747 224,013 220,911 
Total assets$428,036 $421,209 $418,054 $408,626 
Total current liabilities96,922 89,127 88,839 82,041 
Total non-current liabilities141,868 142,826 135,955 133,491 
Total liabilities238,790 231,953 224,794 215,532 
Total equity189,246 189,256 193,260 193,094 

A description of the errors and their impacts on the previously issued financial statements are included below.

Description of Misstatement Adjustments

(a) Last Mile Freight

6
The Company recorded adjustments to correct misstatements identified from the internal investigation related to last mile freight expenses. The result of the investigation concluded an inappropriately recorded journal entry increased inventory by $2.2 million related to shipping expense pertaining to fiscal 2023, and also concluded the methodology used to estimate last mile freight accrual was incorrect. The correction of these items represent the net impact of the findings from the investigation as noted above.

(b) Leases

The Company recorded adjustments to correct certain misstatements related to its operating leases. In the fiscal year 2022, the Company recorded an incorrect entry that resulted in the double-counting of rent expense associated with operating leases, with a corresponding impact on prepaid rent and lease liabilities as of January 30, 2022. In addition, the Company reversed the out of period correction of an incorrect entry pertaining to incremental borrowing rate that had been corrected for in the Annual Report on Form 10-K/A for the fiscal year ended January 29, 2023. This entry had an impact on prepaid rent, right-of-use assets, and the current and long-term portion of operating lease liabilities, as of and during the fiscal year ended January 29, 2023. The Company also recorded the effects of an embedded lease entered into during the quarter that was previously identified and considered immaterial.


(c) Buyer’s Remorse

The Company recorded an adjustment to correct certain canceled sales orders related to buyer’s remorse, which related to fiscal 2023 and was incorrectly reflected as an increase to Selling, General and Administrative Expense for the thirteen weeks ended April 30, 2023. The Company defines buyer's remorse as a customer who cancels an order within a short window of time after making a purchase.


(d) Supplier Rebates

During the quarter ended July 31, 2022, the Company received rebates from certain of its suppliers which was incorrectly recorded to cost of goods sold for the entire amount of the rebate received instead of deferring a portion of the rebate to inventory and recognizing the rebate in cost of goods sold as the related inventory was sold. We corrected these misstatements to defer the up-front consideration from suppliers when the retention or receipt of that consideration was to recognize the consideration as a reduction of cost of goods sold over the sell through rate of the inventory.

(e) Balance Sheet Reclassifications

The Company recorded adjustments to correct the classification of certain balance sheet reclassifications between short and long-term assets. These adjustments primarily related to the classification of prepaid expenses and other current assets and the classification of other assets (long-term). In addition, the Company recorded adjustments to correct the classification of tenant improvement allowances which resulted in a reclassification between prepaid expenses and other current assets and short-term lease liabilities.

(f) Income Taxes

The Company recorded adjustments to recognize the net impact on current and deferred income taxes associated with all the misstatements described herein. The adjustments to income taxes were recorded in the period corresponding with the respective misstatements. The correction of this error resulted in a decrease in benefit from income taxes for less than $0.1 million for the period ended April 30, 2023.

(g) Inventory and Cost of Goods Sold

The Company recorded adjustments to correct for a misstatement of an accrual related to a duplicate recording of a vendor invoice for freight charges. The Company recorded another adjustment to correct for the misstatement of inventory related to partial returned goods.

(h) Equity Based Compensation Expense

The Company recorded an adjustment to recognize equity based compensation expense in the period ended April 30, 2023 related to a one-time performance and retention long-term incentive award granted to our Chief Executive Officer in March 2023.

7
Description of Restatement Tables

Below, we have presented a reconciliation from the as previously reported to the restated values for our condensed financial statements for the quarterly period ended April 30, 2023. The values as previously reported were derived from our Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2023 filed on June 9, 2023.

THE LOVESAC COMPANY
CONDENSED BALANCE SHEET
(unaudited)
April 30, 2023
As Previously ReportedCorrectionsReferenceAs Restated
Assets
Current Assets
Merchandise inventories, net106,819 (2,361)(a)(g)104,458 
Prepaid expenses and other current assets17,306 (3,874)(a)(b)(e)(f)13,432 
Total Current Assets187,697 (6,235)181,462 
Operating lease right-of-use assets142,463 1,146 (b)143,609 
Other Assets
Deferred tax asset10,750 (791)(f)9,959 
Other assets26,318 (947)(e)25,371 
Total Other Assets38,657 (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 expenses16,765 (500)(a)(f)16,265 
Current operating lease liabilities22,160 (5,227)
(b)(e)
16,933 
Total Current Liabilities96,922 (7,795)89,127 
Operating Lease Liability, long-term141,868 958 (b)142,826 
Total Liabilities238,790 (6,837)231,953 
Stockholders’ Equity
Additional paid-in capital182,770 61 (h)182,831 
Accumulated earnings (deficit)
6,476 (51)(a)(b)(f)(g)(h)6,425 
Stockholders' Equity189,246 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
8
$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.

9
THE LOVESAC COMPANY
CONDENSED STATEMENT OF OPERATIONS
(unaudited)

For the Thirteen Weeks Ended April 30, 2023
As Previously ReportedCorrectionsReferenceAs Restated
Cost of merchandise sold70,489 129 
(a)(g)
70,618 
Gross profit70,704 (129)70,575 
Operating expenses
Selling, general and administration expenses56,838 (292)(b)(c)(h)56,546 
Total operating expenses76,573 (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 taxes1,298 (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.

10
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 ReferenceSharesAmountAdditional paid-in capital
Accumulated earnings (deficit)
Total Shareholders' Equity
As Previously Reported
Balance - January 29, 202315,195,698 $— $182,554 $10,706 $193,260 
Net loss— — — (4,230)(4,230)
Equity-based compensation— — 686 — 686 
Balance - April 30, 202315,217,120 $— $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, 202315,195,698 $— $182,554 $10,540 $193,094 
Net loss— — — (4,115)(4,115)
Equity-based compensation— — 747 — 747 
Balance - April 30, 202315,217,120 $— $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.
11
THE LOVESAC COMPANY
CONDENSED STATEMENT OF CASH FLOWS
(unaudited)

For the Thirteen Weeks Ended April 30, 2023
As Previously ReportedCorrectionsReferenceAs 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 compensation686 61 (h)747 
Non-cash operating lease cost5,308 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 inventories13,143 2,026 (a)(g)15,169 
Prepaid expenses and other current assets5,971 (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 equivalents1,592 — 1,592 
Cash and cash equivalents - Beginning43,533 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.
No other misstatements impacted the classifications between net operating, net investing, or net financing cash flow activities for the thirteen weeks ended April 30, 2023.
Note 3. Revenue Recognition

The Company’s revenue consists substantially of product net sales. The Company reports product net sales net of discounts and recognizes them at the point in time when control transfers to the customer, which generally occurs upon our delivery to a third-party carrier.
Shipping and handling charges billed to customers are included in revenue. The Company recognizes shipping and handling expense as fulfillment activities (rather than a promised good or service) when the activities are performed. Accordingly, the Company records the expenses for shipping and handling activities at the same time the Company recognizes revenue. Shipping and handling costs incurred are included in cost of merchandise sold and include inbound freight and tariff costs relative to inventory sold, warehousing, and last mile shipping to our customers. During the thirteen weeks ended April 30, 2023 and May 1, 2022, shipping and handling costs were $37.9 million and $35.0 million, respectively.
Estimated refunds for returns and allowances are recorded using our historical return patterns, adjusting for any changes in returns policies. The Company records estimated refunds for net sales returns on a monthly basis as a reduction of net sales and cost of sales on the condensed statements of operations and an increase in inventory and customers returns liability on the condensed balance sheets. There was a returns allowance recorded on the condensed balance sheet in the amount of $2.1 million as of April 30, 2023 and $4.5 million as of January 29, 2023, which was included in accrued expenses and
12
$0.5 million as of April 30, 2023 and $1.0 million as of January 29, 2023, associated with sales returns included in merchandise inventories.
In some cases, deposits are received before the Company transfers control, resulting in contract liabilities. These contract liabilities are reported as customer deposits on the Company’s condensed balance sheet. As of April 30, 2023 and January 29, 2023, the Company recorded under customer deposit liabilities the amount of $15.4 million and $6.8 million respectively. During the thirteen weeks ended April 30, 2023 and May 1, 2022, the Company recognized approximately $6.8 million and $13.3 million, respectively, related to our customer deposits.
The Company offers its products through an inventory lean omni-channel platform that provides a seamless and meaningful experience to its customers in showrooms, which includes mobile concierge and kiosks, and through the internet. The Other channel predominantly represents net sales through the use of online pop-up-shops and shop-in-shops that are staffed with associates trained to demonstrate and sell our product. The following represents net sales disaggregated by channel:
Thirteen weeks ended
(amounts in thousands)April 30,
2023		May 1,
2022
Showrooms$83,574 $81,254 
Internet40,225 31,255 
Other17,394 16,871 
$141,193 $129,380 
The Company has no foreign operations and its net sales to foreign countries was less than .01% of total net sales in both fiscal 2024 and 2023.  The Company had no customers that comprise more than 10% of total net sales for the thirteen weeks ended April 30, 2023 and May 1, 2022. 
See Note 10 for sales disaggregated by product.
Barter Arrangements
The Company has a bartering arrangement with a third-party vendor. The Company repurposes returned open-box inventory in exchange for media credits, which are being used to support our advertising initiatives to create brand awareness and drive net sales growth. Barter transactions with commercial substance are recorded at a transaction price based on the estimated fair value of the non-cash consideration of the media credits to be received and the revenue is recognized when control of inventory is transferred, which is when the inventory is picked up in our warehouse. Fair value is estimated using various considerations, including the cost of similar media advertising if transacted directly, the expected sales price of product given up in exchange for the media credits, and the expected usage of media credits prior to expiration based on a marketing spend forecast. The Company recognizes an asset for media credits which is subsequently evaluated for impairment at each reporting period for any changes in circumstances. As the barter credits are expected to be utilized at various dates through their expiration dates, the Company will classify the amount expected to be utilized in the next fiscal year as current, which is included in Prepaid and Other Current Assets, with the remaining balance included as part of Other Assets on the balance sheet.
During the thirteen weeks ended April 30, 2023 and May 1, 2022, the Company recognized $4.1 million and $2.6 million, respectively, of barter sales in exchange for media credits. The Company had $28.5 million and $25.2 million of unused media credits as of April 30, 2023 and January 29, 2023, respectively, and did not recognize any impairment. The difference between the opening and closing balances of the Company's prepaid barter credit primarily results from the inventory exchanged for media credits during the period, offset by utilization of those credits.

13
Note 4. Income Taxes

The Company recorded an income tax benefit of $1.3 million and income tax expense of $0.7 million for the thirteen weeks ended April 30, 2023 and May 1, 2022, respectively. The effective tax rate was 23.3% for the thirteen weeks ended April 30, 2023 as compared to 27.4% for the thirteen weeks ended May 1, 2022. The effective tax rate for the thirteen weeks ended April 30, 2023 and May 1, 2022 varies from the 21% federal statutory tax rate primarily due to state taxes.
The Company does not anticipate any material adjustments relating to unrecognized tax benefits within the next twelve months; however, the ultimate outcome of tax matters is uncertain and unforeseen results can occur. The Company had no material interest or penalties during the thirteen weeks ended April 30, 2023 and May 1, 2022, respectively, and does not anticipate any such items during the next twelve months. The Company's policy is to record interest and penalties directly related to uncertain tax positions as income tax expense in the condensed statements of operations.
Note 5. Basic and Diluted Net (Loss) Income Per Common Share
Basic net (loss) income per common share is computed by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common shares outstanding and common stock equivalents outstanding during the period. Diluted net income per common share includes, in periods in which they are dilutive, the effect of those potentially dilutive securities where the average market price of the common stock exceeds the exercise prices for the respective periods. In periods of loss, there are no potentially dilutive common shares to add to the weighted average number of common shares outstanding.
For the thirteen weeks ended April 30, 2023, the effects of 1,283,449 shares of common stock related to restricted stock units, 495,366 shares of common stock underlying stock options, and warrants to purchase 281,750 shares of common stock were excluded from the diluted net loss per share calculation because the effect of including these potentially dilutive shares was antidilutive.
For the thirteen weeks ended May 1, 2022, the effects of 767,023 shares of common stock related to restricted stock units, 495,366 shares of common stock underlying stock options, and warrants to purchase 281,750 shares of common stock were included in the diluted share calculation.
14
Note 6. Leases
Components of lease expense were as follows (in thousands):
Thirteen weeks ended
April 30, 2023May 01, 2022
Operating lease expense$7,004 $5,334 
Variable lease expense2,056 2,214 
Short term lease expense240 179 
Total lease expense$9,300 $7,727 
Variable lease expense includes index-based changes in rent, maintenance, real estate taxes, insurance and other variable charges.
The Company’s weighted average lease terms and weighted average discount rates are as follows:
Thirteen weeks ended
April 30, 2023May 01, 2022
(As Restated)
Weighted average remaining lease term (in years)
Operating Leases7.57.2
Weighted average discount rate
Operating Leases4.43 %3.97 %
We did not recognize any impairment charges associated with showroom-level right-of-use assets during the thirteen weeks ended April 30, 2023 or May 1, 2022.
Future minimum lease payments under non-cancelable leases as of April 30, 2023 were as follows (in thousands):
(amounts in thousands)(As Restated)
2024$16,445 
202528,909 
202626,501 
202724,170 
202821,869 
Thereafter73,477 
Total undiscounted future minimum lease payments191,371 
Less: imputed interest(31,612)
Total present value of lease obligations159,759 
Less: current operating lease liability(16,933)
Operating lease liability- long term$142,826 
15
Supplemental Cash Flow information and non-cash activity related to our operating leases is as follows (in thousands):
Thirteen weeks ended
(amounts in thousands)April 30, 2023May 01, 2022
(As Restated)
Operating cash flow information: 
Amounts paid on operating lease liabilities$6,945 $4,062 
Non-cash activities
Right-of-use assets obtained in exchange for lease obligations$16,118 $12,513 
Note 7. Commitments and Contingencies
Legal Proceedings
The Company is involved in various legal proceedings in the ordinary course of business. Management cannot presently predict the outcome of these matters, although management believes, based in part on the advice of counsel, that the ultimate resolution of these matters will not have a materially adverse effect on the Company’s condensed financial position, results of operations or cash flows.

The Company has voluntarily self-reported to the SEC information concerning the internal investigation of the accounting matters described in the Explanatory Note and in Note 2. Restatement and Other Corrections of Previously Issued Condensed Financial Statements. As a result of self-reporting, the Company is the subject of an ongoing, non-public investigation by the SEC. The Company is cooperating fully with the SEC in its investigation and continues to respond to requests in connection with this matter. The investigation could result in the SEC seeking various penalties and relief including, without limitation, civil injunctive relief and/or civil monetary penalties or administrative relief. The nature of the relief or remedies the SEC may seek with respect to the Company, if any, cannot be predicted at this time.


Note 8. Financing Arrangements
The Company has a line of credit with Wells Fargo Bank, National Association (“Wells”). On March 25, 2022, the line of credit with Wells was amended and increased from $25 million to allow the Company to borrow up to $40.0 million, subject to borrowing base and availability restrictions, and will mature in March 2024. Borrowings are limited to 90% of eligible credit card receivables plus 85% of eligible wholesale receivables plus 85% of the net recovery percentage for the eligible inventory multiplied by the value of such eligible inventory of the Company for the period from December 16 of each year until October 14 of the immediately following year, with a seasonal increase to 90% of the net recovery percentage for the period from October 15 of each year until December 15 of such year, seasonal advance rate, minus applicable reserves established by Wells. The amended agreement contains a financial covenant that requires us to maintain undrawn availability under the credit facility of at least 10% of the lesser of (i) the aggregate commitments in the amount of $40.0 million and (ii) the amounts available under the credit facility based on eligible accounts receivable and inventory.
On March 24, 2023, the Company amended the credit agreement to extend the maturity date to September 2024. All other terms of the credit agreement remain unchanged. As of April 30, 2023 and January 29, 2023, the Company’s borrowing availability under the line of credit with Wells was $36.0 million. As of April 30, 2023 and January 29, 2023, there were no borrowings outstanding on this line of credit.
16
Note 9. Stockholders' Equity

Common Stock Warrants
On June 29, 2018, the Company issued 281,750 warrants with a five-year term to Roth Capital Partners, LLC as part of the underwriting agreement in connection with the Company's IPO. The warrants remain outstanding as of April 30, 2023. Warrants may be exercised on a cashless basis, where the holders receive fewer shares of common stock in lieu of a cash payment to the Company. There were no warrants issued, exercised, or expired and canceled for the thirteen weeks ended April 30, 2023 and May 1, 2022. As of April 30, 2023, 281,750 warrants remain outstanding with an average exercise price of $19.20 and a weighted average remaining contractual life of 0.16 years. As of May 1, 2022, 281,750 warrants remain outstanding with an average exercise price of $19.20 and a weighted average remaining contractual life of 1.16 years.
Equity Incentive Plan
The Company adopted the Amended and Restated 2017 Equity Incentive Plan (the “2017 Equity Plan”) which provides for awards in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance units, cash-based awards and other stock-based awards. All awards shall be granted within 10 years from the effective date of the 2017 Equity Plan. In fiscal 2024, the 2017 Equity Plan was amended and restated to increase the shares of our common stock authorized and reserved for issuance by 225,000 shares, which increased the number of shares of common stock reserved for issuance under the 2017 Equity Plan to 2,879,889 shares of common stock as of April 30, 2023.
Stock Options
In June 2019, the Company granted 495,366 non-statutory stock options to certain officers of the Company with an option price of $38.10 per share. 100% of the stock options are subject to vesting on the third anniversary of the date of grant if the officers are still employed by the Company and the average closing price of the Company’s common stock for the prior 40 consecutive trading days has been at least $75 by the third anniversary of the grant. Both the employment and the market condition must be satisfied no later than June 5, 2024 or the options will terminate. These options were valued using a Monte Carlo simulation model to account for the path dependent market conditions that stipulate when and whether or not the options shall vest. The 495,366 stock options were modified in fiscal 2022 to extend the term of the options through June 5, 2024. This resulted in additional compensation of approximately $0.9 million of which, $0.3 million was recorded upon modification with the remaining expense to be recognized over the remaining expected term. The market condition was met on June 5, 2021, which was the date on which the average closing price of the Company’s common stock had been at least $75 for 40 consecutive trading days. The options vested and became exercisable on June 5, 2022 as the officers were still employed on that date.
There were no stock options issued, exercised, or expired and canceled for the thirteen weeks ended April 30, 2023 and May 1, 2022. As of April 30, 2023, 495,366 stock options remain outstanding with a weighted average exercise price of $38.10, a weighted average remaining contractual life of 1.10 years, and no intrinsic value. As of May 1, 2022, 495,366
17
stock options remain outstanding with a weighted average exercise price of $38.10, a weighted average remaining contractual life of 2.1 years and intrinsic value of $8.05.

Restricted Stock Units
A summary of the status of our unvested restricted stock units as of April 30, 2023 and May 1, 2022, and changes during the thirteen weeks then ended, is presented below:
 Number of shares Weighted average grant date fair value
Unvested at January 29, 2023
640,256$34.50 
Granted693,98926.97 
Forfeited(12,888)35.17 
Vested(37,908)46.22 
Unvested at April 30, 2023
1,283,449$30.07 
 Number of shares Weighted average grant date fair value
Unvested at January 30, 2022
533,333 $28.41 
Granted256,329 46.11 
Forfeited(20,159)22.88 
Vested(2,480)16.57 
Unvested at May 1, 2022
767,023 $34.31 
Equity based compensation expense was approximately $0.7 million and $1.2 million for the thirteen weeks ended April 30, 2023 and May 1, 2022, respectively.
The total unrecognized equity-based compensation cost related to unvested stock option and restricted unit awards was approximately $11.3 million as of April 30, 2023 and will be recognized in operations over a weighted average period of 4.1 years.
In March 2023, Shawn Nelson, our Chief Executive Officer, received a one-time performance and retention long-term incentive grant of 235,000 Restricted Stock Units (the “RSU Grant”) pursuant to the 2017 Equity Plan and Mr. Nelson’s Restricted Stock Units Agreement and Grant Notice (the “RSU Agreement”). The RSU Grant vests on the later to occur of (i) the fifth anniversary of the date of grant so long as, (x) on or prior to such date (subject to certain limited extensions), the Company has achieved a specified level of performance with respect to share price and net sales, and (y) Mr. Nelson remains in continuous service with the Company as Chief Executive Officer through such date; or (ii) if the specified level of performance with respect to net sales is not achieved on or prior to the fifth anniversary of the date of grant, but the other conditions in subclause (i) are achieved, the first date that such specified level of performance with respect to net sales is achieved, so long as it is achieved on or prior to the seventh anniversary of the date of grant and so long as Mr. Nelson remains in continuous service with the Company through such date. Except in the event of termination of employment as defined in the 2017 Equity Plan, the RSU Grant will be settled in shares of common stock of the Company on the first anniversary of the applicable vesting date. The RSU grant was valued using a Monte Carlo simulation model to account for the path dependent market conditions that stipulate when and whether or not the options shall vest. The expense will be recognized on a straight-line basis over the longest of the derived, explicit, or implicit service period.
18
Note 10. Segment Information
Segments are reflective of how the chief operating decision maker ("CODM") reviews operating results for the purpose of allocating resources and assessing performance. The CODM group of the Company are the Chief Executive Officer and the President and Chief Operating Officer. The Company's operating segments are the sales channels, which share similar economic and other qualitative characteristics, and are aggregated together as one reportable segment.
The Company’s sales by product which are considered one segment are as follows:
 Thirteen weeks ended
(amounts in thousands)April 30,
2023		May 1,
2022
Sactionals$127,903 $115,002 
Sacs10,737 11,927 
Other2,553 2,451 
 $141,193 $129,380 
19
PART II. OTHER INFORMATION
Item 6. Exhibits
Exhibit
Number		Description of ExhibitFiled / Incorporated
 by Reference
 from Form **		Incorporated by
Reference from
 Exhibit Number		Dated Filed
8-K10.106/02/2023
8-K10.106/07/2023
8-K10.206/07/2023
Filed herewith.  
Filed herewith.  
Filed herewith.  
Filed herewith.  
101.INSXBRL Instance Document   
101.SCHInline XBRL Taxonomy Extension Schema Document   
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document   
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document   
101.LABInline XBRL Taxonomy Extension Label Linkbase Document   
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document   
104Cover Page Interactive Data File (embedded within the Inline XBRL document)  
+ Indicates a management contract or compensatory plan.
*This certification is deemed not filed for purposes of section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act.
20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
The Lovesac Company
By:/s/ Shawn Nelson
Shawn Nelson
Date: November 30, 2023
Chief Executive Officer
(Principal Executive Officer)
By:
/s/ Keith Siegner
Keith Siegner
Date: November 30, 2023
Executive Vice President and
 Chief Financial Officer
(Principal Financial Officer and
 Principal Accounting Officer)
21

Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO
EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Shawn Nelson, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q/A of The Lovesac Company;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: November 30, 2023
Signed:/s/ Shawn Nelson
Name:Shawn Nelson
Title:Chief Executive Officer
(Principal Executive Officer)


Exhibit 31.2
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO
EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Keith Siegner, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q/A of The Lovesac Company;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 30, 2023
Signed:
/s/ Keith Siegner
Name:
Keith Siegner
Title:
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)


Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Shawn Nelson, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q/A of The Lovesac Company for the thirteen weeks ended April 30, 2023, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q/A fairly presents, in all material respects, the financial condition and results of operations of The Lovesac Company.
Date: November 30, 2023
Signed:/s/ Shawn Nelson
Name:Shawn Nelson
Title:Chief Executive Officer
(Principal Executive Officer)


Exhibit 32.2
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Keith Siegner, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q/A of The Lovesac Company for the thirteen weeks ended April 30, 2023, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q/A fairly presents, in all material respects, the financial condition and results of operations of The Lovesac Company.
Date: November 30, 2023
Signed:
/s/ Keith Siegner
Name:
Keith Siegner
Title:
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)

v3.23.3
Cover - shares
 3 Months Ended
Apr. 30, 2023
May 31, 2023
Cover [Abstract]    
Document Type 10-Q/A  
Document Quarterly Report true  
Document Period End Date Apr. 30, 2023  
Document Transition Report false  
Entity File Number 001-38555  
Entity Registrant Name THE LOVESAC COMPANY  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 32-0514958  
Entity Address, Address Line One Two Landmark Square  
Entity Address, Address Line Two Suite 300  
Entity Address, City or Town Stamford  
Entity Address, State or Province CT  
Entity Address, Postal Zip Code 06901  
City Area Code 888  
Local Phone Number 636-1223  
Title of 12(b) Security Common Stock, $0.00001 par value per share  
Trading Symbol LOVE  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   15,216,988
Amendment Flag true  
Entity Central Index Key 0001701758  
Current Fiscal Year End Date --02-04  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q1  
Amendment Description EXPLANATORY NOTE The Lovesac Company (“Lovesac”, the “Company”, “we”, “our” and similar terms) is filing this Amendment No. 2 on Form 10-Q/A (“Amendment No. 2”) to amend the Company’s Quarterly Form 10-Q for the period ended April 30, 2023 (the “Original 10-Q”), originally filed with the Securities and Exchange Commission (“SEC”) on June 9, 2023, as amended by Amendment No. 1 on Form 10-Q/A (“Amendment No. 1”) filed on November 2, 2023, solely to include certain footnote disclosures to our unaudited quarterly condensed financial statements as of and for the period ended April 30, 2023 (the “Restated Financial Statements”) that were included in the unaudited financial statements in the Original 10-Q, but were inadvertently omitted from the Restated Financial Statements included in Part I, Item 1 of Amendment No. 1. The restatement is further described in Amendment No. 1 and in Note 2. Restatement and Other Corrections of Previously Issued Financial Statements to the Restated Financial Statements in Part I. Item 1 contained herein.In accordance with applicable SEC rules, this Amendment No. 2 includes new certifications specified in Rule 13a-14 under the Exchange Act from our Chief Executive Officer and Chief Financial Officer dated as of the date of this filing. Except as described above, no other amendments are being made to the Original 10-Q, as amended by Amendment No. 1. This Amendment No. 2 does not reflect events occurring after the filing of the Original 10-Q, as amended by Amendment No. 1, or modify or update the disclosure contained therein in any way other than as required to reflect the amendments discussed above.  
v3.23.3
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Apr. 30, 2023
Jan. 29, 2023
Current Assets    
Cash and cash equivalents $ 45,125 $ 43,533
Trade accounts receivable 18,447 9,103
Merchandise inventories, net 104,458 119,627
Prepaid expenses and other current assets 13,432 15,452
Total Current Assets 181,462 187,715
Property and equipment, net 59,219 52,904
Operating lease right-of-use assets 143,609 135,411
Other Assets    
Goodwill 144 144
Intangible assets, net 1,445 1,411
Deferred tax asset 9,959 8,677
Other assets 25,371 22,364
Total Other Assets 36,919 32,596
Total Assets 421,209 408,626
Current Liabilities    
Accounts payable 30,097 24,576
Accrued expenses 16,265 25,417
Payroll payable 6,582 6,783
Customer deposits 15,372 6,760
Current operating lease liabilities 16,933 13,075
Sales taxes payable 3,878 5,430
Total Current Liabilities 89,127 82,041
Operating Lease Liabilities, long-term 142,826 133,491
Line of Credit 0 0
Total Liabilities 231,953 215,532
Commitments and Contingencies (see Note 7)
Stockholders’ Equity    
Preferred Stock $0.00001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of April 30, 2023 and January 29, 2023. 0 0
Common Stock $.00001 par value, 40,000,000 shares authorized, 15,217,120 shares issued and outstanding as of April 30, 2023 and 15,195,698 shares issued and outstanding as of January 29, 2023. 0 0
Additional paid-in capital 182,831 182,554
Accumulated earnings 6,425 10,540
Stockholders’ Equity 189,256 193,094
Total Liabilities and Stockholders’ Equity $ 421,209 $ 408,626
v3.23.3
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares
Apr. 30, 2023
Jan. 29, 2023
Statement of Financial Position [Abstract]    
Preferred stock, par value (in dollars per share) $ 0.00001 $ 0.00001
Preferred stock, shares authorized (in shares) 10,000,000 10,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock, par value (in dollars per share) $ 0.00001 $ 0.00001
Common stock, shares authorized (in shares) 40,000,000 40,000,000
Common stock, shares issued (in shares) 15,217,120 15,195,698
Common stock, shares outstanding (in shares) 15,217,120 15,195,698
v3.23.3
Condensed Statements of Operations - USD ($)
$ in Thousands
 3 Months Ended
Apr. 30, 2023
May 01, 2022
Income Statement [Abstract]    
Net sales $ 141,193 $ 129,380
Cost of merchandise sold 70,618 63,406
Gross profit 70,575 65,974
Operating expenses    
Selling, general and administration expenses 56,546 44,918
Advertising and marketing 16,913 15,901
Depreciation and amortization 2,822 2,661
Total operating expenses 76,281 63,480
Operating (loss) income (5,706) 2,494
Interest income (expense), net 341 (35)
Net (loss) income before taxes (5,365) 2,459
Benefit from (provision for) income taxes 1,250 (673)
Net (loss) income $ (4,115) $ 1,786
Net (loss) income per common share:    
Basic (in dollars per share) $ (0.27) $ 0.12
Diluted (in dollars per share) $ (0.27) $ 0.11
Weighted average number of common shares outstanding:    
Basic (in shares) 15,230,763 15,155,378
Diluted (in shares) 15,230,763 16,173,339
v3.23.3
Condensed Statements of Changes in Stockholders' Equity - USD ($)
$ in Thousands
Total
Common
Additional Paid-in Capital
Accumulated (Deficit) Earnings
Beginning balance (in shares) at Jan. 30, 2022   15,123,338    
Beginning balance at Jan. 30, 2022 $ 157,814 $ 0 $ 173,762 $ (15,948)
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net (loss) income 1,786     1,786
Equity based compensation 1,163   1,163  
Vested restricted stock units (in shares)   1,704    
Exercise of warrants (in shares)   0    
Taxes paid for net share settlement of equity awards (47)   (47)  
Ending balance (in shares) at May. 01, 2022   15,125,042    
Ending balance at May. 01, 2022 160,716 $ 0 174,878 (14,162)
Beginning balance (in shares) at Jan. 29, 2023   15,195,698    
Beginning balance at Jan. 29, 2023 193,094 $ 0 182,554 10,540
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Net (loss) income (4,115)     (4,115)
Equity based compensation 747   747  
Vested restricted stock units (in shares)   21,422    
Taxes paid for net share settlement of equity awards (470)   (470)  
Ending balance (in shares) at Apr. 30, 2023   15,217,120    
Ending balance at Apr. 30, 2023 $ 189,256 $ 0 $ 182,831 $ 6,425
v3.23.3
Condensed Statement of Cash Flows - USD ($)
$ in Thousands
 3 Months Ended
Apr. 30, 2023
May 01, 2022
Cash Flows from Operating Activities    
Net (loss) income $ (4,115) $ 1,786
Adjustments to reconcile net income to net cash used in operating activities:    
Depreciation and amortization of property and equipment 2,697 2,575
Amortization of other intangible assets 125 86
Amortization of deferred financing fees 42 29
Equity based compensation 747 1,163
Non-cash operating lease cost 5,315 4,184
Deferred income taxes (1,282) 492
Changes in operating assets and liabilities:    
Trade accounts receivable (9,344) 2,134
Merchandise inventories 15,169 (14,515)
Prepaid expenses and other current assets 4,221 813
Other assets (3,007) (26)
Accounts payable and accrued expenses (10,378) (11,768)
Operating lease liabilities (2,511) (4,571)
Customer deposits 8,612 (5,709)
Net Cash Provided by (Used in) Operating Activities 6,291 (23,327)
Cash Flows from Investing Activities    
Purchase of property and equipment (4,177) (4,450)
Payments for patents and trademarks 0 (27)
Net Cash Used in Investing Activities (4,177) (4,477)
Cash Flows from Financing Activities    
Payment of deferred financing costs (52) (161)
Taxes paid for net share settlement of equity awards (470) (47)
Net Cash Used in Financing Activities (522) (208)
Net Change in Cash and Cash Equivalents 1,592 (28,012)
Cash and Cash Equivalents - Beginning 43,533 92,392
Cash and Cash Equivalents - Ending 45,125 64,380
Supplemental Cash Flow Disclosures    
Cash paid for taxes 0 905
Cash paid for interest 30 33
Non-cash investing activities:    
Asset acquisitions not yet paid for at period end $ 4,994 $ 1,541
v3.23.3
Basis of Presentation and Summary of Significant Accounting Policies
 3 Months Ended
Apr. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Summary of Significant Accounting Policies
The balance sheet of The Lovesac Company (the “Company”, “we”, “us” or “our”) as of January 29, 2023, which has been derived from our audited financial statements as of and for the 52-week year ended January 29, 2023, and the accompanying interim unaudited condensed financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. Certain information and note disclosures normally included in annual financial statements, prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), have been condensed or omitted pursuant to those rules and regulations. The financial information presented herein, which is not necessarily indicative of results to be expected for the full current fiscal year, reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the interim unaudited condensed financial statements. Such adjustments are of a normal, recurring nature. These condensed financial statements should be read in conjunction with the Company’s financial statements filed in its Annual Report on Form 10-K/A for the fiscal year ended January 29, 2023.
Due to the seasonality of the Company’s business, with the majority of our activity occurring in the fourth quarter of each fiscal year, the results of operations for the thirteen weeks ended April 30, 2023 and May 1, 2022 are not necessarily indicative of results to be expected for the full fiscal year.
Nature of Operations
We are a technology driven company that designs, manufactures and sells unique, high quality furniture derived through its proprietary "Designed for Life" approach which results in products that are built to last a lifetime and designed to evolve as our customers’ lives do. The Company markets and sells its products through modern and efficient showrooms and, increasingly, through online net sales directly at www.lovesac.com, supported by direct-to-consumer touch-feel points in the form of our own showrooms, which include our newly created mobile concierge and kiosks, as well as through shop-in-shops and online pop-up-shops with third party retailers. As of April 30, 2023, the Company operated 211 showrooms including kiosks and mobile concierges located throughout the United States. The Company was formed as a Delaware corporation on January 3, 2017, in connection with a corporate reorganization with SAC Acquisition LLC, a Delaware limited liability company, the predecessor entity to the Company.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. The Company evaluates its estimates and judgements on an ongoing basis based on historical experience, expectations of future events and various other factors we believe to be reasonable under the circumstances and revise them when necessary in the period the change is determined. Actual results may differ from the original or revised estimates.
Recent Accounting Pronouncements
The Company has considered all recent accounting pronouncements issued by the Financial Accounting Standards Board and they were considered to be not applicable or the adoption of such pronouncements will not have a material impact on the financial statements.
Employee Benefit Plan

In February 2017, the Company established The Lovesac Company 401(k) Plan (the “401(k) Plan”) with Elective Deferrals beginning May 1, 2017. The 401(k) Plan calls for Elective Deferral Contributions, Safe Harbor Matching Contributions and Profit-Sharing Contributions. All associates of the Company will be eligible to participate in the 401(k) Plan as of the day of the month which is coincident with or next follows the date on which they attain age 21 and complete one month of service. Participants will be able to contribute up to 100% of their eligible compensation to the 401(k) Plan subject to limitations with the IRS. The Company's contributions to the 401(k) Plan were $0.5 million and $0.4 million for the thirteen weeks ended April 30, 2023 and May 1, 2022, respectively.
v3.23.3
Restatement of Previously Issued Financial Statements
 3 Months Ended
Apr. 30, 2023
Accounting Changes and Error Corrections [Abstract]  
Restatement of Previously Issued Financial Statements
Note 2. Restatement and Other Corrections of Previously Issued Condensed Financial Statements

The Audit Committee of the Board of Directors of Lovesac completed an independent investigation in August 2023 whereby the Company concluded $2.2 million of last mile shipping expenses relating to the fiscal year ended January 29, 2023 were improperly capitalized during the quarter ended April 30, 2023. Through this investigation, the Company also determined that the methodology used to estimate an accrual of last mile freight expenses at each period end was not accurate because the calculation did not use the correct number of shipments that were accepted by the shipper for delivery, but not yet invoiced to the Company. Management prepared a quantitative and qualitative analysis of these errors, along with certain other immaterial accounting errors, in accordance with the U.S. SEC Staff's Accounting Bulletin Nos. 99 and 108, Materiality, and concluded the aggregate impact of all the errors are material to the Company's previously reported interim, year-to-date, and annual financial statements as of and for the year ended January 29, 2023 and the Company’s previously reported interim financial statements as of and for the three-month period ended April 30, 2023. As a result, the accompanying financial statements as of April 30, 2023, and for the three months ended April 30, 2023 and May 1, 2022, and related notes hereto, have been restated to correct these errors.

A summary of the impacts of the adjustments on the previously reported financial statements are included below:

For the Thirteen Weeks Ended
April 30, 2023May 1, 2022
(in thousands)As Previously ReportedAs RestatedAs Previously ReportedAs Restated
Net sales$141,193 $141,193 $129,380 $129,380 
Gross profit70,704 70,575 66,108 65,974 
Operating (loss) income(5,869)(5,706)2,645 2,494 
Net (loss) income$(4,230)$(4,115)$1,895 $1,786 

As of
April 30, 2023January 29, 2023
(in thousands)As Previously ReportedAs RestatedAs Previously ReportedAs Restated
Total current assets$187,697 $181,462 $194,041 $187,715 
Total non-current assets240,339 239,747 224,013 220,911 
Total assets$428,036 $421,209 $418,054 $408,626 
Total current liabilities96,922 89,127 88,839 82,041 
Total non-current liabilities141,868 142,826 135,955 133,491 
Total liabilities238,790 231,953 224,794 215,532 
Total equity189,246 189,256 193,260 193,094 

A description of the errors and their impacts on the previously issued financial statements are included below.

Description of Misstatement Adjustments

(a) Last Mile Freight
The Company recorded adjustments to correct misstatements identified from the internal investigation related to last mile freight expenses. The result of the investigation concluded an inappropriately recorded journal entry increased inventory by $2.2 million related to shipping expense pertaining to fiscal 2023, and also concluded the methodology used to estimate last mile freight accrual was incorrect. The correction of these items represent the net impact of the findings from the investigation as noted above.

(b) Leases

The Company recorded adjustments to correct certain misstatements related to its operating leases. In the fiscal year 2022, the Company recorded an incorrect entry that resulted in the double-counting of rent expense associated with operating leases, with a corresponding impact on prepaid rent and lease liabilities as of January 30, 2022. In addition, the Company reversed the out of period correction of an incorrect entry pertaining to incremental borrowing rate that had been corrected for in the Annual Report on Form 10-K/A for the fiscal year ended January 29, 2023. This entry had an impact on prepaid rent, right-of-use assets, and the current and long-term portion of operating lease liabilities, as of and during the fiscal year ended January 29, 2023. The Company also recorded the effects of an embedded lease entered into during the quarter that was previously identified and considered immaterial.


(c) Buyer’s Remorse

The Company recorded an adjustment to correct certain canceled sales orders related to buyer’s remorse, which related to fiscal 2023 and was incorrectly reflected as an increase to Selling, General and Administrative Expense for the thirteen weeks ended April 30, 2023. The Company defines buyer's remorse as a customer who cancels an order within a short window of time after making a purchase.


(d) Supplier Rebates

During the quarter ended July 31, 2022, the Company received rebates from certain of its suppliers which was incorrectly recorded to cost of goods sold for the entire amount of the rebate received instead of deferring a portion of the rebate to inventory and recognizing the rebate in cost of goods sold as the related inventory was sold. We corrected these misstatements to defer the up-front consideration from suppliers when the retention or receipt of that consideration was to recognize the consideration as a reduction of cost of goods sold over the sell through rate of the inventory.

(e) Balance Sheet Reclassifications

The Company recorded adjustments to correct the classification of certain balance sheet reclassifications between short and long-term assets. These adjustments primarily related to the classification of prepaid expenses and other current assets and the classification of other assets (long-term). In addition, the Company recorded adjustments to correct the classification of tenant improvement allowances which resulted in a reclassification between prepaid expenses and other current assets and short-term lease liabilities.

(f) Income Taxes

The Company recorded adjustments to recognize the net impact on current and deferred income taxes associated with all the misstatements described herein. The adjustments to income taxes were recorded in the period corresponding with the respective misstatements. The correction of this error resulted in a decrease in benefit from income taxes for less than $0.1 million for the period ended April 30, 2023.

(g) Inventory and Cost of Goods Sold

The Company recorded adjustments to correct for a misstatement of an accrual related to a duplicate recording of a vendor invoice for freight charges. The Company recorded another adjustment to correct for the misstatement of inventory related to partial returned goods.

(h) Equity Based Compensation Expense

The Company recorded an adjustment to recognize equity based compensation expense in the period ended April 30, 2023 related to a one-time performance and retention long-term incentive award granted to our Chief Executive Officer in March 2023.
Description of Restatement Tables

Below, we have presented a reconciliation from the as previously reported to the restated values for our condensed financial statements for the quarterly period ended April 30, 2023. The values as previously reported were derived from our Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2023 filed on June 9, 2023.

THE LOVESAC COMPANY
CONDENSED BALANCE SHEET
(unaudited)
April 30, 2023
As Previously ReportedCorrectionsReferenceAs Restated
Assets
Current Assets
Merchandise inventories, net106,819 (2,361)(a)(g)104,458 
Prepaid expenses and other current assets17,306 (3,874)(a)(b)(e)(f)13,432 
Total Current Assets187,697 (6,235)181,462 
Operating lease right-of-use assets142,463 1,146 (b)143,609 
Other Assets
Deferred tax asset10,750 (791)(f)9,959 
Other assets26,318 (947)(e)25,371 
Total Other Assets38,657 (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 expenses16,765 (500)(a)(f)16,265 
Current operating lease liabilities22,160 (5,227)
(b)(e)
16,933 
Total Current Liabilities96,922 (7,795)89,127 
Operating Lease Liability, long-term141,868 958 (b)142,826 
Total Liabilities238,790 (6,837)231,953 
Stockholders’ Equity
Additional paid-in capital182,770 61 (h)182,831 
Accumulated earnings (deficit)
6,476 (51)(a)(b)(f)(g)(h)6,425 
Stockholders' Equity189,246 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 ReportedCorrectionsReferenceAs Restated
Cost of merchandise sold70,489 129 
(a)(g)
70,618 
Gross profit70,704 (129)70,575 
Operating expenses
Selling, general and administration expenses56,838 (292)(b)(c)(h)56,546 
Total operating expenses76,573 (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 taxes1,298 (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 ReferenceSharesAmountAdditional paid-in capital
Accumulated earnings (deficit)
Total Shareholders' Equity
As Previously Reported
Balance - January 29, 202315,195,698 $— $182,554 $10,706 $193,260 
Net loss— — — (4,230)(4,230)
Equity-based compensation— — 686 — 686 
Balance - April 30, 202315,217,120 $— $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, 202315,195,698 $— $182,554 $10,540 $193,094 
Net loss— — — (4,115)(4,115)
Equity-based compensation— — 747 — 747 
Balance - April 30, 202315,217,120 $— $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 ReportedCorrectionsReferenceAs 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 compensation686 61 (h)747 
Non-cash operating lease cost5,308 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 inventories13,143 2,026 (a)(g)15,169 
Prepaid expenses and other current assets5,971 (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 equivalents1,592 — 1,592 
Cash and cash equivalents - Beginning43,533 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.
No other misstatements impacted the classifications between net operating, net investing, or net financing cash flow activities for the thirteen weeks ended April 30, 2023.
v3.23.3
Revenue Recognition
 3 Months Ended
Apr. 30, 2023
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
The Company’s revenue consists substantially of product net sales. The Company reports product net sales net of discounts and recognizes them at the point in time when control transfers to the customer, which generally occurs upon our delivery to a third-party carrier.
Shipping and handling charges billed to customers are included in revenue. The Company recognizes shipping and handling expense as fulfillment activities (rather than a promised good or service) when the activities are performed. Accordingly, the Company records the expenses for shipping and handling activities at the same time the Company recognizes revenue. Shipping and handling costs incurred are included in cost of merchandise sold and include inbound freight and tariff costs relative to inventory sold, warehousing, and last mile shipping to our customers. During the thirteen weeks ended April 30, 2023 and May 1, 2022, shipping and handling costs were $37.9 million and $35.0 million, respectively.
Estimated refunds for returns and allowances are recorded using our historical return patterns, adjusting for any changes in returns policies. The Company records estimated refunds for net sales returns on a monthly basis as a reduction of net sales and cost of sales on the condensed statements of operations and an increase in inventory and customers returns liability on the condensed balance sheets. There was a returns allowance recorded on the condensed balance sheet in the amount of $2.1 million as of April 30, 2023 and $4.5 million as of January 29, 2023, which was included in accrued expenses and
$0.5 million as of April 30, 2023 and $1.0 million as of January 29, 2023, associated with sales returns included in merchandise inventories.
In some cases, deposits are received before the Company transfers control, resulting in contract liabilities. These contract liabilities are reported as customer deposits on the Company’s condensed balance sheet. As of April 30, 2023 and January 29, 2023, the Company recorded under customer deposit liabilities the amount of $15.4 million and $6.8 million respectively. During the thirteen weeks ended April 30, 2023 and May 1, 2022, the Company recognized approximately $6.8 million and $13.3 million, respectively, related to our customer deposits.
The Company offers its products through an inventory lean omni-channel platform that provides a seamless and meaningful experience to its customers in showrooms, which includes mobile concierge and kiosks, and through the internet. The Other channel predominantly represents net sales through the use of online pop-up-shops and shop-in-shops that are staffed with associates trained to demonstrate and sell our product. The following represents net sales disaggregated by channel:
Thirteen weeks ended
(amounts in thousands)April 30,
2023		May 1,
2022
Showrooms$83,574 $81,254 
Internet40,225 31,255 
Other17,394 16,871 
$141,193 $129,380 
The Company has no foreign operations and its net sales to foreign countries was less than .01% of total net sales in both fiscal 2024 and 2023.  The Company had no customers that comprise more than 10% of total net sales for the thirteen weeks ended April 30, 2023 and May 1, 2022. 
See Note 10 for sales disaggregated by product.
Barter Arrangements
The Company has a bartering arrangement with a third-party vendor. The Company repurposes returned open-box inventory in exchange for media credits, which are being used to support our advertising initiatives to create brand awareness and drive net sales growth. Barter transactions with commercial substance are recorded at a transaction price based on the estimated fair value of the non-cash consideration of the media credits to be received and the revenue is recognized when control of inventory is transferred, which is when the inventory is picked up in our warehouse. Fair value is estimated using various considerations, including the cost of similar media advertising if transacted directly, the expected sales price of product given up in exchange for the media credits, and the expected usage of media credits prior to expiration based on a marketing spend forecast. The Company recognizes an asset for media credits which is subsequently evaluated for impairment at each reporting period for any changes in circumstances. As the barter credits are expected to be utilized at various dates through their expiration dates, the Company will classify the amount expected to be utilized in the next fiscal year as current, which is included in Prepaid and Other Current Assets, with the remaining balance included as part of Other Assets on the balance sheet.
During the thirteen weeks ended April 30, 2023 and May 1, 2022, the Company recognized $4.1 million and $2.6 million, respectively, of barter sales in exchange for media credits. The Company had $28.5 million and $25.2 million of unused media credits as of April 30, 2023 and January 29, 2023, respectively, and did not recognize any impairment. The difference between the opening and closing balances of the Company's prepaid barter credit primarily results from the inventory exchanged for media credits during the period, offset by utilization of those credit
v3.23.3
Income Taxes
 3 Months Ended
Apr. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company recorded an income tax benefit of $1.3 million and income tax expense of $0.7 million for the thirteen weeks ended April 30, 2023 and May 1, 2022, respectively. The effective tax rate was 23.3% for the thirteen weeks ended April 30, 2023 as compared to 27.4% for the thirteen weeks ended May 1, 2022. The effective tax rate for the thirteen weeks ended April 30, 2023 and May 1, 2022 varies from the 21% federal statutory tax rate primarily due to state taxes.
The Company does not anticipate any material adjustments relating to unrecognized tax benefits within the next twelve months; however, the ultimate outcome of tax matters is uncertain and unforeseen results can occur. The Company had no material interest or penalties during the thirteen weeks ended April 30, 2023 and May 1, 2022, respectively, and does not anticipate any such items during the next twelve months. The Company's policy is to record interest and penalties directly related to uncertain tax positions as income tax expense in the condensed statements of operations.
v3.23.3
Leases
 3 Months Ended
Apr. 30, 2023
Leases [Abstract]  
Leases Leases
Components of lease expense were as follows (in thousands):
Thirteen weeks ended
April 30, 2023May 01, 2022
Operating lease expense$7,004 $5,334 
Variable lease expense2,056 2,214 
Short term lease expense240 179 
Total lease expense$9,300 $7,727 
Variable lease expense includes index-based changes in rent, maintenance, real estate taxes, insurance and other variable charges.
The Company’s weighted average lease terms and weighted average discount rates are as follows:
Thirteen weeks ended
April 30, 2023May 01, 2022
(As Restated)
Weighted average remaining lease term (in years)
Operating Leases7.57.2
Weighted average discount rate
Operating Leases4.43 %3.97 %
We did not recognize any impairment charges associated with showroom-level right-of-use assets during the thirteen weeks ended April 30, 2023 or May 1, 2022.
Future minimum lease payments under non-cancelable leases as of April 30, 2023 were as follows (in thousands):
(amounts in thousands)(As Restated)
2024$16,445 
202528,909 
202626,501 
202724,170 
202821,869 
Thereafter73,477 
Total undiscounted future minimum lease payments191,371 
Less: imputed interest(31,612)
Total present value of lease obligations159,759 
Less: current operating lease liability(16,933)
Operating lease liability- long term$142,826 
Supplemental Cash Flow information and non-cash activity related to our operating leases is as follows (in thousands):
Thirteen weeks ended
(amounts in thousands)April 30, 2023May 01, 2022
(As Restated)
Operating cash flow information: 
Amounts paid on operating lease liabilities$6,945 $4,062 
Non-cash activities
Right-of-use assets obtained in exchange for lease obligations$16,118 $12,513 
v3.23.3
Basic and Diluted Net (Loss) Income Per Common Share
 3 Months Ended
Apr. 30, 2023
Earnings Per Share [Abstract]  
Basic and Diluted Net (Loss) Income Per Common Share Basic and Diluted Net (Loss) Income Per Common Share
Basic net (loss) income per common share is computed by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common shares outstanding and common stock equivalents outstanding during the period. Diluted net income per common share includes, in periods in which they are dilutive, the effect of those potentially dilutive securities where the average market price of the common stock exceeds the exercise prices for the respective periods. In periods of loss, there are no potentially dilutive common shares to add to the weighted average number of common shares outstanding.
For the thirteen weeks ended April 30, 2023, the effects of 1,283,449 shares of common stock related to restricted stock units, 495,366 shares of common stock underlying stock options, and warrants to purchase 281,750 shares of common stock were excluded from the diluted net loss per share calculation because the effect of including these potentially dilutive shares was antidilutive.
For the thirteen weeks ended May 1, 2022, the effects of 767,023 shares of common stock related to restricted stock units, 495,366 shares of common stock underlying stock options, and warrants to purchase 281,750 shares of common stock were included in the diluted share calculation.
v3.23.3
Commitment and Contingencies
 3 Months Ended
Apr. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Legal Proceedings
The Company is involved in various legal proceedings in the ordinary course of business. Management cannot presently predict the outcome of these matters, although management believes, based in part on the advice of counsel, that the ultimate resolution of these matters will not have a materially adverse effect on the Company’s condensed financial position, results of operations or cash flows.

The Company has voluntarily self-reported to the SEC information concerning the internal investigation of the accounting matters described in the Explanatory Note and in Note 2. Restatement and Other Corrections of Previously Issued Condensed Financial Statements. As a result of self-reporting, the Company is the subject of an ongoing, non-public investigation by the SEC. The Company is cooperating fully with the SEC in its investigation and continues to respond to requests in connection with this matter. The investigation could result in the SEC seeking various penalties and relief including, without limitation, civil injunctive relief and/or civil monetary penalties or administrative relief. The nature of the relief or remedies the SEC may seek with respect to the Company, if any, cannot be predicted at this time.
v3.23.3
Financing Arrangements
 3 Months Ended
Apr. 30, 2023
Line of Credit Facility [Abstract]  
Financing Arrangements Financing Arrangements
The Company has a line of credit with Wells Fargo Bank, National Association (“Wells”). On March 25, 2022, the line of credit with Wells was amended and increased from $25 million to allow the Company to borrow up to $40.0 million, subject to borrowing base and availability restrictions, and will mature in March 2024. Borrowings are limited to 90% of eligible credit card receivables plus 85% of eligible wholesale receivables plus 85% of the net recovery percentage for the eligible inventory multiplied by the value of such eligible inventory of the Company for the period from December 16 of each year until October 14 of the immediately following year, with a seasonal increase to 90% of the net recovery percentage for the period from October 15 of each year until December 15 of such year, seasonal advance rate, minus applicable reserves established by Wells. The amended agreement contains a financial covenant that requires us to maintain undrawn availability under the credit facility of at least 10% of the lesser of (i) the aggregate commitments in the amount of $40.0 million and (ii) the amounts available under the credit facility based on eligible accounts receivable and inventory.
On March 24, 2023, the Company amended the credit agreement to extend the maturity date to September 2024. All other terms of the credit agreement remain unchanged. As of April 30, 2023 and January 29, 2023, the Company’s borrowing availability under the line of credit with Wells was $36.0 million. As of April 30, 2023 and January 29, 2023, there were no borrowings outstanding on this line of credit.
v3.23.3
Stockholders' Equity
 3 Months Ended
Apr. 30, 2023
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Stockholders' Equity
Common Stock Warrants
On June 29, 2018, the Company issued 281,750 warrants with a five-year term to Roth Capital Partners, LLC as part of the underwriting agreement in connection with the Company's IPO. The warrants remain outstanding as of April 30, 2023. Warrants may be exercised on a cashless basis, where the holders receive fewer shares of common stock in lieu of a cash payment to the Company. There were no warrants issued, exercised, or expired and canceled for the thirteen weeks ended April 30, 2023 and May 1, 2022. As of April 30, 2023, 281,750 warrants remain outstanding with an average exercise price of $19.20 and a weighted average remaining contractual life of 0.16 years. As of May 1, 2022, 281,750 warrants remain outstanding with an average exercise price of $19.20 and a weighted average remaining contractual life of 1.16 years.
Equity Incentive Plan
The Company adopted the Amended and Restated 2017 Equity Incentive Plan (the “2017 Equity Plan”) which provides for awards in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance units, cash-based awards and other stock-based awards. All awards shall be granted within 10 years from the effective date of the 2017 Equity Plan. In fiscal 2024, the 2017 Equity Plan was amended and restated to increase the shares of our common stock authorized and reserved for issuance by 225,000 shares, which increased the number of shares of common stock reserved for issuance under the 2017 Equity Plan to 2,879,889 shares of common stock as of April 30, 2023.
Stock Options
In June 2019, the Company granted 495,366 non-statutory stock options to certain officers of the Company with an option price of $38.10 per share. 100% of the stock options are subject to vesting on the third anniversary of the date of grant if the officers are still employed by the Company and the average closing price of the Company’s common stock for the prior 40 consecutive trading days has been at least $75 by the third anniversary of the grant. Both the employment and the market condition must be satisfied no later than June 5, 2024 or the options will terminate. These options were valued using a Monte Carlo simulation model to account for the path dependent market conditions that stipulate when and whether or not the options shall vest. The 495,366 stock options were modified in fiscal 2022 to extend the term of the options through June 5, 2024. This resulted in additional compensation of approximately $0.9 million of which, $0.3 million was recorded upon modification with the remaining expense to be recognized over the remaining expected term. The market condition was met on June 5, 2021, which was the date on which the average closing price of the Company’s common stock had been at least $75 for 40 consecutive trading days. The options vested and became exercisable on June 5, 2022 as the officers were still employed on that date.
There were no stock options issued, exercised, or expired and canceled for the thirteen weeks ended April 30, 2023 and May 1, 2022. As of April 30, 2023, 495,366 stock options remain outstanding with a weighted average exercise price of $38.10, a weighted average remaining contractual life of 1.10 years, and no intrinsic value. As of May 1, 2022, 495,366
stock options remain outstanding with a weighted average exercise price of $38.10, a weighted average remaining contractual life of 2.1 years and intrinsic value of $8.05.

Restricted Stock Units
A summary of the status of our unvested restricted stock units as of April 30, 2023 and May 1, 2022, and changes during the thirteen weeks then ended, is presented below:
 Number of shares Weighted average grant date fair value
Unvested at January 29, 2023
640,256$34.50 
Granted693,98926.97 
Forfeited(12,888)35.17 
Vested(37,908)46.22 
Unvested at April 30, 2023
1,283,449$30.07 
 Number of shares Weighted average grant date fair value
Unvested at January 30, 2022
533,333 $28.41 
Granted256,329 46.11 
Forfeited(20,159)22.88 
Vested(2,480)16.57 
Unvested at May 1, 2022
767,023 $34.31 
Equity based compensation expense was approximately $0.7 million and $1.2 million for the thirteen weeks ended April 30, 2023 and May 1, 2022, respectively.
The total unrecognized equity-based compensation cost related to unvested stock option and restricted unit awards was approximately $11.3 million as of April 30, 2023 and will be recognized in operations over a weighted average period of 4.1 years.
In March 2023, Shawn Nelson, our Chief Executive Officer, received a one-time performance and retention long-term incentive grant of 235,000 Restricted Stock Units (the “RSU Grant”) pursuant to the 2017 Equity Plan and Mr. Nelson’s Restricted Stock Units Agreement and Grant Notice (the “RSU Agreement”). The RSU Grant vests on the later to occur of (i) the fifth anniversary of the date of grant so long as, (x) on or prior to such date (subject to certain limited extensions), the Company has achieved a specified level of performance with respect to share price and net sales, and (y) Mr. Nelson remains in continuous service with the Company as Chief Executive Officer through such date; or (ii) if the specified level of performance with respect to net sales is not achieved on or prior to the fifth anniversary of the date of grant, but the other conditions in subclause (i) are achieved, the first date that such specified level of performance with respect to net sales is achieved, so long as it is achieved on or prior to the seventh anniversary of the date of grant and so long as Mr. Nelson remains in continuous service with the Company through such date. Except in the event of termination of employment as defined in the 2017 Equity Plan, the RSU Grant will be settled in shares of common stock of the Company on the first anniversary of the applicable vesting date. The RSU grant was valued using a Monte Carlo simulation model to account for the path dependent market conditions that stipulate when and whether or not the options shall vest. The expense will be recognized on a straight-line basis over the longest of the derived, explicit, or implicit service period.
v3.23.3
Segment Information
 3 Months Ended
Apr. 30, 2023
Segment Reporting [Abstract]  
Segment Information Segment Information
Segments are reflective of how the chief operating decision maker ("CODM") reviews operating results for the purpose of allocating resources and assessing performance. The CODM group of the Company are the Chief Executive Officer and the President and Chief Operating Officer. The Company's operating segments are the sales channels, which share similar economic and other qualitative characteristics, and are aggregated together as one reportable segment.
The Company’s sales by product which are considered one segment are as follows:
 Thirteen weeks ended
(amounts in thousands)April 30,
2023		May 1,
2022
Sactionals$127,903 $115,002 
Sacs10,737 11,927 
Other2,553 2,451 
 $141,193 $129,380 
v3.23.3
Basis of Presentation and Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Apr. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Use of Estimates
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. The Company evaluates its estimates and judgements on an ongoing basis based on historical experience, expectations of future events and various other factors we believe to be reasonable under the circumstances and revise them when necessary in the period the change is determined. Actual results may differ from the original or revised estimates.
Recent Accounting Pronouncements
Recent Accounting Pronouncements
The Company has considered all recent accounting pronouncements issued by the Financial Accounting Standards Board and they were considered to be not applicable or the adoption of such pronouncements will not have a material impact on the financial statements.
Employee Benefit Plan
Employee Benefit Plan
In February 2017, the Company established The Lovesac Company 401(k) Plan (the “401(k) Plan”) with Elective Deferrals beginning May 1, 2017. The 401(k) Plan calls for Elective Deferral Contributions, Safe Harbor Matching Contributions and Profit-Sharing Contributions. All associates of the Company will be eligible to participate in the 401(k) Plan as of the day of the month which is coincident with or next follows the date on which they attain age 21 and complete one month of service. Participants will be able to contribute up to 100% of their eligible compensation to the 401(k) Plan subject to limitations with the IRS.
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, 2023May 1, 2022
(in thousands)As Previously ReportedAs RestatedAs Previously ReportedAs Restated
Net sales$141,193 $141,193 $129,380 $129,380 
Gross profit70,704 70,575 66,108 65,974 
Operating (loss) income(5,869)(5,706)2,645 2,494 
Net (loss) income$(4,230)$(4,115)$1,895 $1,786 

As of
April 30, 2023January 29, 2023
(in thousands)As Previously ReportedAs RestatedAs Previously ReportedAs Restated
Total current assets$187,697 $181,462 $194,041 $187,715 
Total non-current assets240,339 239,747 224,013 220,911 
Total assets$428,036 $421,209 $418,054 $408,626 
Total current liabilities96,922 89,127 88,839 82,041 
Total non-current liabilities141,868 142,826 135,955 133,491 
Total liabilities238,790 231,953 224,794 215,532 
Total equity189,246 189,256 193,260 193,094 
THE LOVESAC COMPANY
CONDENSED BALANCE SHEET
(unaudited)
April 30, 2023
As Previously ReportedCorrectionsReferenceAs Restated
Assets
Current Assets
Merchandise inventories, net106,819 (2,361)(a)(g)104,458 
Prepaid expenses and other current assets17,306 (3,874)(a)(b)(e)(f)13,432 
Total Current Assets187,697 (6,235)181,462 
Operating lease right-of-use assets142,463 1,146 (b)143,609 
Other Assets
Deferred tax asset10,750 (791)(f)9,959 
Other assets26,318 (947)(e)25,371 
Total Other Assets38,657 (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 expenses16,765 (500)(a)(f)16,265 
Current operating lease liabilities22,160 (5,227)
(b)(e)
16,933 
Total Current Liabilities96,922 (7,795)89,127 
Operating Lease Liability, long-term141,868 958 (b)142,826 
Total Liabilities238,790 (6,837)231,953 
Stockholders’ Equity
Additional paid-in capital182,770 61 (h)182,831 
Accumulated earnings (deficit)
6,476 (51)(a)(b)(f)(g)(h)6,425 
Stockholders' Equity189,246 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 ReportedCorrectionsReferenceAs Restated
Cost of merchandise sold70,489 129 
(a)(g)
70,618 
Gross profit70,704 (129)70,575 
Operating expenses
Selling, general and administration expenses56,838 (292)(b)(c)(h)56,546 
Total operating expenses76,573 (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 taxes1,298 (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 ReferenceSharesAmountAdditional paid-in capital
Accumulated earnings (deficit)
Total Shareholders' Equity
As Previously Reported
Balance - January 29, 202315,195,698 $— $182,554 $10,706 $193,260 
Net loss— — — (4,230)(4,230)
Equity-based compensation— — 686 — 686 
Balance - April 30, 202315,217,120 $— $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, 202315,195,698 $— $182,554 $10,540 $193,094 
Net loss— — — (4,115)(4,115)
Equity-based compensation— — 747 — 747 
Balance - April 30, 202315,217,120 $— $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 ReportedCorrectionsReferenceAs 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 compensation686 61 (h)747 
Non-cash operating lease cost5,308 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 inventories13,143 2,026 (a)(g)15,169 
Prepaid expenses and other current assets5,971 (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 equivalents1,592 — 1,592 
Cash and cash equivalents - Beginning43,533 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.
v3.23.3
Revenue Recognition (Tables)
 3 Months Ended
Apr. 30, 2023
Revenue from Contract with Customer [Abstract]  
Schedule of sales disaggregated by channel The following represents net sales disaggregated by channel:
Thirteen weeks ended
(amounts in thousands)April 30,
2023		May 1,
2022
Showrooms$83,574 $81,254 
Internet40,225 31,255 
Other17,394 16,871 
$141,193 $129,380 
v3.23.3
Leases (Tables)
 3 Months Ended
Apr. 30, 2023
Leases [Abstract]  
Schedule of components of lease expense
Components of lease expense were as follows (in thousands):
Thirteen weeks ended
April 30, 2023May 01, 2022
Operating lease expense$7,004 $5,334 
Variable lease expense2,056 2,214 
Short term lease expense240 179 
Total lease expense$9,300 $7,727 
Schedule of lease terms and rates
The Company’s weighted average lease terms and weighted average discount rates are as follows:
Thirteen weeks ended
April 30, 2023May 01, 2022
(As Restated)
Weighted average remaining lease term (in years)
Operating Leases7.57.2
Weighted average discount rate
Operating Leases4.43 %3.97 %
Schedule to reconcile undiscounted future minimum lease payments
Future minimum lease payments under non-cancelable leases as of April 30, 2023 were as follows (in thousands):
(amounts in thousands)(As Restated)
2024$16,445 
202528,909 
202626,501 
202724,170 
202821,869 
Thereafter73,477 
Total undiscounted future minimum lease payments191,371 
Less: imputed interest(31,612)
Total present value of lease obligations159,759 
Less: current operating lease liability(16,933)
Operating lease liability- long term$142,826 
Schedule of supplemental cash flow information and non-cash activity related to operating leases
Supplemental Cash Flow information and non-cash activity related to our operating leases is as follows (in thousands):
Thirteen weeks ended
(amounts in thousands)April 30, 2023May 01, 2022
(As Restated)
Operating cash flow information: 
Amounts paid on operating lease liabilities$6,945 $4,062 
Non-cash activities
Right-of-use assets obtained in exchange for lease obligations$16,118 $12,513 
v3.23.3
Stockholders' Equity (Tables)
 3 Months Ended
Apr. 30, 2023
Stockholders' Equity Note [Abstract]  
Schedule of unvested restricted stock
A summary of the status of our unvested restricted stock units as of April 30, 2023 and May 1, 2022, and changes during the thirteen weeks then ended, is presented below:
 Number of shares Weighted average grant date fair value
Unvested at January 29, 2023
640,256$34.50 
Granted693,98926.97 
Forfeited(12,888)35.17 
Vested(37,908)46.22 
Unvested at April 30, 2023
1,283,449$30.07 
 Number of shares Weighted average grant date fair value
Unvested at January 30, 2022
533,333 $28.41 
Granted256,329 46.11 
Forfeited(20,159)22.88 
Vested(2,480)16.57 
Unvested at May 1, 2022
767,023 $34.31 
v3.23.3
Segment Information (Tables)
 3 Months Ended
Apr. 30, 2023
Segment Reporting [Abstract]  
Schedule of operating segments
The Company’s sales by product which are considered one segment are as follows:
 Thirteen weeks ended
(amounts in thousands)April 30,
2023		May 1,
2022
Sactionals$127,903 $115,002 
Sacs10,737 11,927 
Other2,553 2,451 
 $141,193 $129,380 
v3.23.3
Basis of Presentation and Summary of Significant Accounting Policies (Details)
$ in Millions
 3 Months Ended
Apr. 30, 2023
USD ($)
showroom
May 01, 2022
USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Number of stores | showroom 211  
Contributions plan, percentage 100.00%  
Employer contribution plan, cost | $ $ 0.5 $ 0.4
v3.23.3
Restatement of Previously Issued Financial Statements - Additional Information (Details) - USD ($)
 3 Months Ended 12 Months Ended
Apr. 30, 2023
May 01, 2022
Jan. 29, 2023
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Cost of merchandise sold $ 70,618,000 $ 63,406,000  
Deferred tax asset 9,959,000   $ 8,677,000
Revision Of Prior Period Reclassification Adjustment Member      
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Cost of merchandise sold 129,000    
Deferred tax asset (791,000)    
Shipping and Handling      
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Cost of merchandise sold 37,900,000 $ 35,000,000  
Shipping and Handling | Revision Of Prior Period Reclassification Adjustment Member      
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Cost of merchandise sold     $ 2,200,000
Deferred tax asset $ 100,000    
v3.23.3
Restatement of Previously Issued Financial Statements - Schedule of Impacts on Previously Issued Financial Statements (Details) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 30, 2023
May 01, 2022
Jan. 29, 2023
Jan. 30, 2022
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Net sales $ 141,193 $ 129,380    
Gross profit 70,575 65,974    
Operating (loss) income (5,706) 2,494    
Net (loss) income (4,115) 1,786    
Total Current Assets 181,462   $ 187,715  
Total non-current assets 239,747   220,911  
Total assets 421,209   408,626  
Total Current Liabilities 89,127   82,041  
Total non-current liabilities 142,826   133,491  
Total liabilities 231,953   215,532  
Total equity 189,256 160,716 193,094 $ 157,814
Previously Reported        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Net sales 141,193 129,380    
Gross profit 70,704 66,108    
Operating (loss) income (5,869) 2,645    
Net (loss) income (4,230) $ 1,895    
Total Current Assets 187,697   194,041  
Total non-current assets 240,339   224,013  
Total assets 428,036   418,054  
Total Current Liabilities 96,922   88,839  
Total non-current liabilities 141,868   135,955  
Total liabilities 238,790   224,794  
Total equity $ 189,246   $ 193,260  
v3.23.3
Restatement of Previously Issued Financial Statements - Balance Sheet (Details) - USD ($)
$ in Thousands
Apr. 30, 2023
Jan. 29, 2023
May 01, 2022
Jan. 30, 2022
Current Assets        
Merchandise inventories, net $ 104,458 $ 119,627    
Prepaid expenses and other current assets 13,432 15,452    
Total Current Assets 181,462 187,715    
Operating lease right-of-use assets 143,609 135,411    
Other Assets        
Deferred tax asset 9,959 8,677    
Other assets 25,371 22,364    
Total Other Assets 36,919 32,596    
Total assets 421,209 408,626    
Current Liabilities        
Accounts payable 30,097 24,576    
Accrued expenses 16,265 25,417    
Current operating lease liabilities 16,933 13,075    
Total Current Liabilities 89,127 82,041    
Operating Lease Liabilities, long-term 142,826 133,491    
Total liabilities 231,953 215,532    
Stockholders’ Equity        
Additional paid-in capital 182,831 182,554    
Accumulated earnings 6,425 10,540    
Stockholders' Equity 189,256 193,094 $ 160,716 $ 157,814
Total Liabilities and Stockholders' Equity $ 421,209 408,626    
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Operating lease right-of-use assets      
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] Current operating lease liabilities      
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] Operating Lease Liabilities, long-term      
Previously Reported        
Current Assets        
Merchandise inventories, net $ 106,819      
Prepaid expenses and other current assets 17,306      
Total Current Assets 187,697 194,041    
Operating lease right-of-use assets 142,463      
Other Assets        
Deferred tax asset 10,750      
Other assets 26,318      
Total Other Assets 38,657      
Total assets 428,036 418,054    
Current Liabilities        
Accounts payable 32,165      
Accrued expenses 16,765      
Current operating lease liabilities 22,160      
Total Current Liabilities 96,922 88,839    
Operating Lease Liabilities, long-term 141,868      
Total liabilities 238,790 224,794    
Stockholders’ Equity        
Additional paid-in capital 182,770      
Accumulated earnings 6,476      
Stockholders' Equity 189,246 193,260    
Total Liabilities and Stockholders' Equity 428,036      
Revision Of Prior Period Reclassification Adjustment Member        
Current Assets        
Merchandise inventories, net (2,361)      
Prepaid expenses and other current assets (3,874)      
Total Current Assets (6,235)      
Operating lease right-of-use assets 1,146      
Other Assets        
Deferred tax asset (791)      
Other assets (947)      
Total Other Assets (1,738)      
Total assets (6,827)      
Current Liabilities        
Accounts payable (2,068)      
Accrued expenses (500)      
Current operating lease liabilities (5,227)      
Total Current Liabilities (7,795)      
Operating Lease Liabilities, long-term 958      
Total liabilities (6,837)      
Stockholders’ Equity        
Additional paid-in capital 61      
Accumulated earnings (51)      
Stockholders' Equity 10 $ (166)    
Total Liabilities and Stockholders' Equity (6,827)      
Revision Of Prior Period Reclassification Adjustment Member | Deferred Income Tax Asset, Net        
Current Assets        
Prepaid expenses and other current assets 100      
Other Assets        
Deferred tax asset 800      
Current Liabilities        
Accrued expenses 500      
Stockholders’ Equity        
Accumulated earnings 300      
Revision Of Prior Period Reclassification Adjustment Member | Prepaid Expenses and Other Current Assets        
Current Assets        
Merchandise inventories, net 100      
Revision Of Prior Period Reclassification Adjustment Member | Accumulated (Deficit) Earnings        
Stockholders’ Equity        
Accumulated earnings 100      
Revision Of Prior Period Reclassification Adjustment Member | Additional Paid-in Capital        
Stockholders’ Equity        
Additional paid-in capital 100      
Revision Of Prior Period Reclassification Adjustment Member | Shipping and Handling        
Other Assets        
Deferred tax asset 100      
Revision Of Prior Period Reclassification Adjustment Member | Shipping and Handling | Retail Related Inventory, Merchandise        
Current Assets        
Merchandise inventories, net 2,200      
Prepaid expenses and other current assets 600      
Current Liabilities        
Accrued expenses 100      
Stockholders’ Equity        
Accumulated earnings 1,600      
Revision of Prior Period, Error Correction, Adjustment, Leases        
Current Assets        
Operating lease right-of-use assets 1,100      
Current Liabilities        
Current operating lease liabilities 200      
Operating Lease Liabilities, long-term 1,000      
Revision of Prior Period, Error Correction, Adjustment, Leases | Operating Lease, Right Of Use Asset        
Current Assets        
Prepaid expenses and other current assets 100      
Stockholders’ Equity        
Accumulated earnings 2,100      
Revision of Prior Period, Error Correction, Adjustment, Leases | Accounts Payable        
Current Liabilities        
Accounts payable 2,100      
Revision of Prior Period, Error Correction, Adjustment, Balance Sheet Reclassification        
Current Liabilities        
Current operating lease liabilities 5,500      
Revision of Prior Period, Error Correction, Adjustment, Balance Sheet Reclassification | Other Assets        
Current Assets        
Prepaid expenses and other current assets 4,500      
Other Assets        
Other assets $ 1,000      
v3.23.3
Restatement of Previously Issued Financial Statements - Statement of Operations (Details) - USD ($)
 3 Months Ended 12 Months Ended
Apr. 30, 2023
May 01, 2022
Jan. 29, 2023
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Cost of merchandise sold $ 70,618,000 $ 63,406,000  
Gross profit 70,575,000 65,974,000  
Selling, general and administration expenses 56,546,000 44,918,000  
Total operating expenses 76,281,000 63,480,000  
Operating (loss) income (5,706,000) 2,494,000  
Net (loss) income before taxes (5,365,000) 2,459,000  
Benefit from (provision for) income taxes 1,250,000 (673,000)  
Net (loss) income $ (4,115,000) $ 1,786,000  
Basic (in dollars per share) $ (0.27) $ 0.12  
Diluted (in dollars per share) $ (0.27) $ 0.11  
Shipping and Handling      
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Cost of merchandise sold $ 37,900,000 $ 35,000,000  
Previously Reported      
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Cost of merchandise sold 70,489,000    
Gross profit 70,704,000 66,108,000  
Selling, general and administration expenses 56,838,000    
Total operating expenses 76,573,000    
Operating (loss) income (5,869,000) 2,645,000  
Net (loss) income before taxes (5,528,000)    
Benefit from (provision for) income taxes 1,298,000    
Net (loss) income $ (4,230,000) $ 1,895,000  
Basic (in dollars per share) $ (0.28)    
Diluted (in dollars per share) $ (0.28)    
Revision Of Prior Period Reclassification Adjustment Member      
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Cost of merchandise sold $ 129,000    
Gross profit (129,000)    
Selling, general and administration expenses (292,000)    
Total operating expenses (292,000)    
Operating (loss) income 163,000    
Net (loss) income before taxes 163,000    
Benefit from (provision for) income taxes (48,000)    
Net (loss) income $ 115,000    
Basic (in dollars per share) $ 0.01    
Diluted (in dollars per share) $ 0.01    
Revision Of Prior Period Reclassification Adjustment Member | Shipping and Handling      
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Cost of merchandise sold     $ 2,200,000
Revision Of Prior Period Reclassification Adjustment Member | Cost of Goods and Services Sold      
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Cost of merchandise sold $ (200,000)    
Revision Of Prior Period Reclassification Adjustment Member | Cost of Goods and Services Sold | Shipping and Handling      
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Cost of merchandise sold 300,000    
Revision Of Prior Period Reclassification Adjustment Member | Selling, General and Administrative Expenses      
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Selling, general and administration expenses 100,000    
Revision Of Prior Period Reclassification Adjustment Member | Selling, General and Administrative Expenses | Buyers Remorse      
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Selling, general and administration expenses (400,000)    
Revision Of Prior Period Reclassification Adjustment Member | Income Tax Expense (Benefit)      
Error Corrections and Prior Period Adjustments Restatement [Line Items]      
Benefit from (provision for) income taxes $ 100,000    
v3.23.3
Restatement of Previously Issued Financial Statements - Statement of Changes in Stockholders' Equity (Details) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 30, 2023
May 01, 2022
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Beginning balance $ 193,094 $ 157,814
Net (loss) income (4,115) 1,786
Equity based compensation 747 1,163
Ending balance $ 189,256 $ 160,716
Common    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Beginning balance (in shares) 15,195,698 15,123,338
Beginning balance $ 0 $ 0
Ending balance $ 0 $ 0
Ending balance (in shares) 15,217,120 15,125,042
Additional Paid-in Capital    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Beginning balance $ 182,554 $ 173,762
Equity based compensation 747 1,163
Ending balance 182,831 174,878
Accumulated (Deficit) Earnings    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Beginning balance 10,540 (15,948)
Net (loss) income (4,115) 1,786
Ending balance 6,425 (14,162)
Previously Reported    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Beginning balance 193,260  
Net (loss) income (4,230) $ 1,895
Equity based compensation 686  
Ending balance $ 189,246  
Previously Reported | Common    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Beginning balance (in shares) 15,195,698  
Beginning balance $ 0  
Ending balance $ 0  
Ending balance (in shares) 15,217,120  
Previously Reported | Additional Paid-in Capital    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Beginning balance $ 182,554  
Equity based compensation 686  
Ending balance 182,770  
Previously Reported | Accumulated (Deficit) Earnings    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Beginning balance 10,706  
Net (loss) income (4,230)  
Ending balance 6,476  
Revision Of Prior Period Reclassification Adjustment Member    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Beginning balance (166)  
Net (loss) income 115  
Equity based compensation 61  
Ending balance $ 10  
Revision Of Prior Period Reclassification Adjustment Member | Common    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Beginning balance (in shares) 0  
Beginning balance $ 0  
Ending balance $ 0  
Ending balance (in shares) 0  
Revision Of Prior Period Reclassification Adjustment Member | Additional Paid-in Capital    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Beginning balance $ 0  
Equity based compensation 61  
Ending balance 61  
Revision Of Prior Period Reclassification Adjustment Member | Accumulated (Deficit) Earnings    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Beginning balance (166)  
Net (loss) income 115  
Ending balance $ (51)  
v3.23.3
Restatement of Previously Issued Financial Statements - Statement of Cash Flows (Details) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 30, 2023
May 01, 2022
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Net (loss) income $ (4,115) $ 1,786
Equity based compensation 747 1,163
Non-cash operating lease cost 5,315 4,184
Deferred income taxes (1,282) 492
Trade accounts receivable (9,344) 2,134
Merchandise inventories 15,169 (14,515)
Prepaid expenses and other current assets 4,221 813
Other assets (3,007) (26)
Accounts payable and accrued expenses (10,378) (11,768)
Operating lease liabilities (2,511) (4,571)
Net Cash Provided by (Used in) Operating Activities 6,291 (23,327)
Net Cash Used in Investing Activities (4,177) (4,477)
Net Cash Used in Financing Activities (522) (208)
Net Change in Cash and Cash Equivalents 1,592 (28,012)
Cash and Cash Equivalents - Beginning 43,533 92,392
Cash and Cash Equivalents - Ending 45,125 64,380
Previously Reported    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Net (loss) income (4,230) $ 1,895
Equity based compensation 686  
Non-cash operating lease cost 5,308  
Deferred income taxes (1,330)  
Trade accounts receivable (8,978)  
Merchandise inventories 13,143  
Prepaid expenses and other current assets 5,971  
Other assets (4,455)  
Accounts payable and accrued expenses (5,785)  
Operating lease liabilities (5,515)  
Net Cash Provided by (Used in) Operating Activities 6,291  
Net Cash Used in Investing Activities (4,177)  
Net Cash Used in Financing Activities (522)  
Net Change in Cash and Cash Equivalents 1,592  
Cash and Cash Equivalents - Beginning 43,533  
Cash and Cash Equivalents - Ending 45,125  
Revision Of Prior Period Reclassification Adjustment Member    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Net (loss) income 115  
Equity based compensation 61  
Non-cash operating lease cost 7  
Deferred income taxes 48  
Trade accounts receivable (366)  
Merchandise inventories 2,026  
Prepaid expenses and other current assets (1,750)  
Other assets 1,448  
Accounts payable and accrued expenses (4,593)  
Operating lease liabilities 3,004  
Net Cash Provided by (Used in) Operating Activities 0  
Net Cash Used in Investing Activities 0  
Net Cash Used in Financing Activities 0  
Net Change in Cash and Cash Equivalents 0  
Cash and Cash Equivalents - Ending $ 0  
v3.23.3
Revenue Recognition (Details) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 30, 2023
May 01, 2022
Jan. 29, 2023
Disaggregation of Revenue [Line Items]      
Cost of merchandise sold $ 70,618 $ 63,406  
Returns allowance 2,100   $ 4,500
Accrued expenses 500   1,000
Customer deposit liabilities 15,400   6,800
Recognized related to customer deposits 6,800 13,300  
Inventory exchanged for media credits 4,100 $ 2,600  
Unused media credits $ 28,500   $ 25,200
Foreign Countries | Revenue Benchmark | Geographic Concentration Risk      
Disaggregation of Revenue [Line Items]      
Concentration of sales (less than) 0.01% 0.01%  
Shipping and Handling      
Disaggregation of Revenue [Line Items]      
Cost of merchandise sold $ 37,900 $ 35,000  
v3.23.3
Revenue Recognition - Schedule of sales disaggregated by channel (Details) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 30, 2023
May 01, 2022
Disaggregation of Revenue [Line Items]    
Sales $ 141,193 $ 129,380
Showrooms [Member]    
Disaggregation of Revenue [Line Items]    
Sales 83,574 81,254
Internet [Member]    
Disaggregation of Revenue [Line Items]    
Sales 40,225 31,255
Other [Member]    
Disaggregation of Revenue [Line Items]    
Sales $ 17,394 $ 16,871
v3.23.3
Income Taxes (Details) - USD ($)
 3 Months Ended
Apr. 30, 2023
May 01, 2022
Income Tax Disclosure [Abstract]    
Benefit from (provision for) income taxes $ (1,250,000) $ 673,000
Effective income tax rate, percent 23.30% 27.40%
Penalties and interest expense $ 0 $ 0
v3.23.3
Leases - Schedule of components of lease expense (Details) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 30, 2023
May 01, 2022
Leases [Abstract]    
Operating lease expense $ 7,004 $ 5,334
Variable lease expense 2,056 2,214
Short term lease expense 240 179
Total lease expense $ 9,300 $ 7,727
v3.23.3
Leases - Schedule of lease terms and rates (Details)
Apr. 30, 2023
May 01, 2022
Leases [Abstract]    
Operating leases, weighted average remaining lease term (in years) 7 years 6 months 7 years 2 months 12 days
Operating leases, weighted average discount rate 4.43% 3.97%
v3.23.3
Leases - Narrative (Details) - USD ($)
 3 Months Ended
Apr. 30, 2023
May 01, 2022
Leases [Abstract]    
Impairment charges $ 0 $ 0
v3.23.3
Leases - Schedule of future minimum payments for operating leases (Details) - USD ($)
$ in Thousands
Apr. 30, 2023
Jan. 29, 2023
Leases [Abstract]    
2024 $ 16,445  
2025 28,909  
2026 26,501  
2027 24,170  
2028 21,869  
Thereafter 73,477  
Total undiscounted future minimum lease payments 191,371  
Less: imputed interest (31,612)  
Total present value of lease obligations 159,759  
Less: current operating lease liability (16,933) $ (13,075)
Operating Lease Liabilities, long-term $ 142,826 $ 133,491
v3.23.3
Leases - Supplemental Cash Flow Information (Details) - USD ($)
$ in Thousands
 3 Months Ended
Apr. 30, 2023
May 01, 2022
Leases [Abstract]    
Amounts paid on operating lease liabilities $ 6,945 $ 4,062
Right-of-use assets obtained in exchange for lease obligations $ 16,118 $ 12,513
v3.23.3
Basic and Diluted Net (Loss) Income Per Common Share (Details) - shares
 3 Months Ended
Apr. 30, 2023
May 01, 2022
Restricted Stock Units    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive (in shares) 1,283,449 767,023
Stock Options    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive (in shares) 495,366 495,366
Warrants    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Potentially dilutive (in shares) 281,750 281,750
v3.23.3
Financing Arrangements (Details) - USD ($)
Mar. 25, 2022
Apr. 30, 2023
Jan. 29, 2023
Mar. 24, 2022
Line of Credit Facility [Abstract]        
Borrowings amount $ 40,000,000   $ 36,000,000 $ 25,000,000
Eligible credit card receivables percentage 90.00%      
Eligible wholesale receivables percentage 85.00%      
Net recovery percentage 85.00%      
Increase the net recovery percentage 90.00%      
Minimum undrawn availability 10.00%      
Line of credit   $ 0 $ 0  
v3.23.3
Stockholders' Equity - Narrative (Details)
$ / shares in Units, $ in Millions
 1 Months Ended 3 Months Ended 12 Months Ended
Jun. 05, 2021
trading_day
$ / shares
Jun. 29, 2018
shares
Mar. 31, 2023
shares
Jun. 30, 2019
trading_day
$ / shares
shares
Apr. 30, 2023
USD ($)
$ / shares
shares
May 01, 2022
USD ($)
$ / shares
shares
Jan. 30, 2022
USD ($)
shares
Class of Stock [Line Items]              
Warrants issued (in shares)   281,750          
Warrants issued, term   5 years          
Cashless warrant exercised (in shares)         0 0  
Increase in common stock reserved for future issuance (in shares)         225,000    
Non statutory stock options granted (in shares)       495,366      
Stock option price exercise (in dollars per share) | $ / shares       $ 38.10      
Stock options are subject to vesting percentage       100.00%      
Consecutive trading days | trading_day 40     40      
Stock price (in dollars per share) | $ / shares $ 75     $ 75      
Stock option modified (in shares)             495,366
Additional compensation | $             $ 0.9
Modification and remaining expense was recognized | $             $ 0.3
Number of options, outstanding (in shares)         495,366 495,366  
Weighted average exercise price, outstanding (in dollars per share) | $ / shares         $ 38.10 $ 38.10  
Weighted average remaining contractual life, outstanding (in years)         1 year 1 month 6 days 2 years 1 month 6 days  
Average intrinsic value, outstanding (in dollars per share) | $ / shares         $ 0 $ 8.05  
Equity based compensation expense | $         $ 0.7 $ 1.2  
Total unrecognized equity based compensation cost related to unvested stock option and restricted unit awards | $         $ 11.3    
Weighted average period         4 years 1 month 6 days    
Restricted stock units              
Class of Stock [Line Items]              
Restricted stock award grant (in shares)     235,000        
2017 Equity Incentive Plan              
Class of Stock [Line Items]              
Granted term         10 years    
Common stock reserved issuance (in shares)         2,879,889    
Warrants Activity              
Class of Stock [Line Items]              
Number of warrants, warrants outstanding (in shares)         281,750 281,750  
Average exercise price, warrants outstanding (in dollars per share) | $ / shares         $ 19.20 $ 19.20  
Weighted average remaining contractual life (in years), warrants outstanding, beginning balance         1 month 28 days 1 year 1 month 28 days  
v3.23.3
Stockholders' Equity - Schedule of unvested restricted stock (Details) - Restricted stock units - $ / shares
 3 Months Ended
Apr. 30, 2023
May 01, 2022
Number of shares    
Number of shares, unvested, beginning balance (in shares) 640,256 533,333
Number of shares, granted (in shares) 693,989 256,329
Number of shares, forfeited (in shares) (12,888) (20,159)
Number of shares, vested (in shares) (37,908) (2,480)
Number of shares, unvested, ending balance (in shares) 1,283,449 767,023
Weighted average grant date fair value    
Weighted average grant date fair value, unvested, beginning balance (in dollars per share) $ 34.50 $ 28.41
Weighted average grant date fair value, granted (in dollars per share) 26.97 46.11
Weighted average grant date fair value, forfeited (in dollars per share) 35.17 22.88
Weighted average grant date fair value, vested (in dollars per share) 46.22 16.57
Weighted average grant date fair value, unvested, ending balance (in dollars per share) $ 30.07 $ 34.31
v3.23.3
Segment Information (Details)
$ in Thousands
 3 Months Ended
Apr. 30, 2023
USD ($)
segment
May 01, 2022
USD ($)
Segment Reporting Information [Line Items]    
Number of reporting segments | segment 1  
Net sales $ 141,193 $ 129,380
Sactionals    
Segment Reporting Information [Line Items]    
Net sales 127,903 115,002
Sacs    
Segment Reporting Information [Line Items]    
Net sales 10,737 11,927
Other    
Segment Reporting Information [Line Items]    
Net sales $ 2,553 $ 2,451
Lovesac (NASDAQ:LOVE)
Historical Stock Chart
From Apr 2024 to May 2024 Click Here for more Lovesac Charts.
Lovesac (NASDAQ:LOVE)
Historical Stock Chart
From May 2023 to May 2024 Click Here for more Lovesac Charts.