Liquidity	6 Months Ended
Sep. 30, 2018
Liquidity
Liquidity	NOTE 2 - LIQUIDITY The Company reported net income of approximately $1,217,000 and $183,000 for the three and six months ended September 30, 2018, respectively as compared to net income of approximately $784,000 and $257,000 for the three and six months ended September 30, 2017. The Company’s net income and cash flow continue to be affected by the Toys R Us bankruptcy as net sales decreased to approximately $24,305,000 and $26,141,000 for the three and six months ended September 30, 2018, respectively from approximately $32,802,000 and $36,742,000 for the three and six months ended September 30, 2017, respectively. Lost sales from Toys R Us of approximately $5,394,000 for the three months ended September 30, 2018 and approximately $6,329,000 for the six months ended September 30, 2018 accounted for approximately 63% and 60%, of the decrease in sales from the three and six months ended September 30, 2017, respectively. There was a decrease in sales of approximately $1,500,000 to one major customer that only took one holiday promotional item instead of two in the previous year. The remaining decrease was primarily due to the timing of shipments for various customers rolling over to the next quarter. To assist with the Company’s cash requirements during fiscal 2019 our parent company agreed to continue to delay payment of related party trade debt as well as payments due on subordinated debt until the end of peak season when liquidity improves. Our parent company has also agreed to suspend a portion of monthly service and development fees totaling approximately $99,000 for the six months commencing July 1, 2018 through December 31, 2018. Management believes that it has adequate cash available on its revolving credit facility to meet all obligations for the next twelve months. To assist the Company in remaining compliant with its revolving credit facility covenants, PNC Bank issued a third amendment and waiver in August 2018 to the Revolving Credit Facility and the Security Agreement in effect for fiscal 2019 amending the fixed charge coverage ratio and annual capital expenditure limits. While management continues to assess the long term effect of the Toys R Us bankruptcy, management is confident that the temporary suspension of payments on related party debt, suspension of service and development fees for six months, availability of cash from our revolving credit facility and significant efforts to reduce inventory levels during the current fiscal year will be adequate to meet the company’s liquidity requirements for the next twelve months.

Liquidity

6 Months Ended

Sep. 30, 2018

NOTE 2 - LIQUIDITY

The Company reported net income of approximately $1,217,000 and $183,000 for the three and six months ended September 30, 2018, respectively as compared to net income of approximately $784,000 and $257,000 for the three and six months ended September 30, 2017. The Company’s net income and cash flow continue to be affected by the Toys R Us bankruptcy as net sales decreased to approximately $24,305,000 and $26,141,000 for the three and six months ended September 30, 2018, respectively from approximately $32,802,000 and $36,742,000 for the three and six months ended September 30, 2017, respectively. Lost sales from Toys R Us of approximately $5,394,000 for the three months ended September 30, 2018 and approximately $6,329,000 for the six months ended September 30, 2018 accounted for approximately 63% and 60%, of the decrease in sales from the three and six months ended September 30, 2017, respectively. There was a decrease in sales of approximately $1,500,000 to one major customer that only took one holiday promotional item instead of two in the previous year. The remaining decrease was primarily due to the timing of shipments for various customers rolling over to the next quarter. To assist with the Company’s cash requirements during fiscal 2019 our parent company agreed to continue to delay payment of related party trade debt as well as payments due on subordinated debt until the end of peak season when liquidity improves. Our parent company has also agreed to suspend a portion of monthly service and development fees totaling approximately $99,000 for the six months commencing July 1, 2018 through December 31, 2018. Management believes that it has adequate cash available on its revolving credit facility to meet all obligations for the next twelve months. To assist the Company in remaining compliant with its revolving credit facility covenants, PNC Bank issued a third amendment and waiver in August 2018 to the Revolving Credit Facility and the Security Agreement in effect for fiscal 2019 amending the fixed charge coverage ratio and annual capital expenditure limits. While management continues to assess the long term effect of the Toys R Us bankruptcy, management is confident that the temporary suspension of payments on related party debt, suspension of service and development fees for six months, availability of cash from our revolving credit facility and significant efforts to reduce inventory levels during the current fiscal year will be adequate to meet the company’s liquidity requirements for the next twelve months.