10-K/A
1
d86094d10ka.htm
10-K/A
10-K/A
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year ended March 31, 2021
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: 001-07731
EMERSON RADIO CORP.
(Exact name of registrant as specified in its charter)
Delaware
22-3285224
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
35 Waterview Blvd., Suite 140, Parsippany, NJ
07054
(Address of principal executive offices)
(Zip Code)
Registrants telephone number, including area code:
(973) 428-2000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, par value $.01 per share
MSN
NYSE American
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. ☐ YES ☒ NO.
Indicate by check mark if the registrant is not required
to file reports pursuant to Section 13 or Section 15(d) of the Act). ☐ YES ☒ NO.
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 requirement for the past 90
days. ☒ YES ☐ NO.
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, a 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 has filed a report on and attestation to its managements assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). ☐ YES ☒ NO.
Aggregate market value of the voting and non-voting common equity of the registrant held by non-affiliates of the registrant at September 30, 2020 (computed by reference to the last reported sale price of the
Common Stock on the NYSE American on such date): $3,942,991.
Number of Common Shares outstanding at June 25, 2021: 21,042,652
DOCUMENTS INCORPORATED BY REFERENCE:
None
Table of Contents
EXPLANATORY NOTE
Unless the context otherwise requires, the term the Company and Emerson, refers to Emerson Radio Corp. and its
subsidiaries.
This Amendment No. 1 on Form 10-K/A (the Form 10-K/A) to the Annual Report on Form 10-K (the Annual Report) of the Company for the fiscal year ended March 31, 2021 (Fiscal 2021), filed
with the Securities and Exchange Commission (the SEC) on June 25, 2021, is filed solely for the purpose of including information that was to be incorporated by reference from the Companys definitive proxy statement pursuant to
Regulation 14A of the Securities Exchange Act of 1934, as amended (the Exchange Act). The Company will not file its proxy statement for its annual meeting of stockholders within 120 days of its fiscal year ended March 31, 2021, and
is therefore amending and restating in their entirety Items 10, 11, 12, 13 and 14 of Part III of the Annual Report. In addition, pursuant to Rule 13a-14(a) under the Exchange Act, the Company is amending Item
15 of Part IV of the Annual Report to update the exhibit list and to include certain currently dated certifications. Except as described above, no other amendments are being made to the Annual Report. This Form
10-K/A does not reflect events occurring after the filing of the Annual Report on June 25, 2021 or modify or update the disclosure contained in the Annual Report in any way other than as required to
reflect the amendments discussed above and reflected below.
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TABLE OF CONTENTS
Item
Page
Part III
4
10. Directors, Executive Officers and Corporate Governance
4
11. Executive Compensation
6
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
8
13. Certain Relationships and Related Transactions, and Director
Independence
9
14. Principal Accountant Fees and Services
10
Part IV
10
15. Exhibit and Financial Statement Schedules
10
Signatures
12
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PART III
ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors
The following table sets forth
certain information regarding the current members of the Board of Directors (the Board of Directors or the Board) of Emerson Radio Corp. (Emerson, us or the Company) as of June 25,
2021, except as noted below.
Name
Age
Director
Since
Principal Occupation or Employment
Christopher Ho *
70
2016
Christopher Ho, a director of the Company and the Chairman of the Board since June 2016, brings his extensive knowledge of the Company and experience in consumer electronics, international trade and corporate finance to the Board of
Directors. Mr. Ho had also previously served as the Companys Chairman of the Board from July 2006 through November 2013. He currently serves as a director and Chief Executive Officer of Lafe Corporation Limited, a company listed on the
Singapore Stock Exchange before its privatization in August 2020. Since May 2018, Mr. Ho has served as a director of S&T International Distribution Ltd. and Grande N.A.K.S. Ltd., which are wholly owned subsidiaries of Nimble Holdings
Company Limited. Mr. Ho previously was a director of The Grande Holdings Limited (now known as Nimble Holdings Company Limited), a Hong Kong-based group of companies engaged principally in property development in the Peoples Republic of
China and the distribution of consumer electronics products, from October 1991 to February 2016. Mr. Ho graduated from the University of Toronto in 1974. He is a Chartered Professional Accountant, Chartered Accountant and Chartered Management
Accountant of Canada. He is also a Certified Public Accountant in Hong Kong and a member of the Hong Kong Institute of Certified Public Accountants. He was a partner in an international accounting firm before joining The Grande Holdings Limited and
has extensive experience in distribution, licensing, manufacturing, international trade and corporate finance.
Based on Mr. Hos experience in consumer electronics, international trade and corporate finance, the Board of Directors believes that he is well qualified to serve as a director of the Company.
Duncan Hon
60
2009
Duncan Hon served as a director of the Company from February 2009 through June 2021 and as the Companys Chief Executive Officer and President from August 2011 through June 2021. Prior to that, Mr. Hon was the
Companys Deputy Chief Executive Officer from November 2009 to August 2011. From June 2016 to July 2017, Mr. Hon also served as the Companys Secretary. From May 2016 through June 2021, Mr. Hon served as a director of S&T
International Distribution Ltd. and, from May 2016 through September 2018, Grande N.A.K.S. Ltd., which are wholly owned subsidiaries of Nimble Holdings Company Limited. From May 2016 to December 2017, Mr. Hon served as the Chief Executive
Officer and an executive director of The Grande Holdings Limited (now known as Nimble Holdings Company Limited). Mr. Hon also served as a director of The Grande Holdings Limited from January 2011 until March 2013. He is a member of the Hong
Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants.
*
Effective as of July 1, 2021, Christopher Ho was appointed to serve as the Companys Chief Executive
Officer and President.
Effective as of June 30, 2021, Duncan Hon retired and resigned as a director of the Company and from his
positions as Chief Executive Officer and President of the Company. Mr. Hons resignation was not caused by any disagreement with the Company.
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Michael Binney
62
2016
Michael Binney, the Chief Financial Officer of the Company since March 2017 and the Companys Secretary since July 2017, has also served as a director of the Company since June 2016, bringing extensive public company accounting
experience in addition to his knowledge of the Company to the Board of Directors. Since August 2016, Mr. Binney has served as a director of S&T International Distribution Ltd. and Grande N.A.K.S. Ltd., which are wholly owned subsidiaries of
Nimble Holdings Company Limited. From November 2016 to December 2017, Mr. Binney served as an Executive Director and Group Chief Financial Officer of The Grande Holdings Limited (now known as Nimble Holdings Company Limited). He is a fellow
member of the Institute of Chartered Accountants in England and Wales, a fellow member of the Association of Chartered Certified Accountants and a fellow member of the Hong Kong Institute of Certified Public Accountants. From June 2016 through
November 2016, Mr. Binney served as Deputy Chief Executive Officer (Finance Accounting & Company Secretarial) of The Grande Holdings Limited. From 2010 to March 2016, Mr. Binney served as an Executive Director and Chief Financial
Officer of the Vinarco International Group of Companies, an upstream supplier to the oil and gas industry in the Asia-Pacific region. Mr. Binney previously served as a non-executive director of The Grande
Holdings Limited from 2009 to 2010, and as an Executive Director of The Grande Holdings Limited from 2001 to 2009. He also was a member of the Board of Directors of Lafe Corporation Limited, a company listed on the Singapore Exchange, as a non-executive director from 2009 to 2010 and as Executive Director from 2001 until 2009. Mr. Binney was a member of the Board of Directors of the Company from 2005 to 2008. Previous to
the above appointments, Mr. Binney worked for over 10 years at major international accounting firms including KPMG and PricewaterhouseCoopers.
Based on Mr. Binneys experience in management, accounting and public company reporting, the Board believes that he is well qualified to serve as a director of the Company.
Kareem E. Sethi (1)
44
2007
Kareem E. Sethi has been a director since December 2007. Mr. Sethi has served as Managing Director of Streetwise Capital Partners, Inc. since 2003. From 1999 until 2003, Mr. Sethi was Manager, Business Recovery Services
for PricewaterhouseCoopers LLP.
Based on Mr. Sethis experience in accounting, corporate finance and portfolio management, the Board believes that he is well qualified to serve as a director of the Company.
Kin Yuen (1)
66
2016
Kin Yuen, a director of the Company since June 2016, brings extensive experience in corporate finance, financial planning, public
company reporting and management to the Board of Directors. Since 2004, Mr. Yuen has served as an independent non-executive director of Huayi Tencent Entertainment Co. Ltd., a company listed on
the Stock Exchange of Hong Kong Limited and engaged in entertainment and media businesses. In September 2017, Mr. Yuen was appointed an executive director of Culturecom Holdings Limited, a company listed on the Hong Kong Stock Exchange and
engaged in publishing businesses. From April 2016 to December 2020, Mr. Yuen served as an independent non-executive director of Lafe Corporation Limited, a company listed on the
Singapore Exchange engaged in real property development. From 2009 to 2014, Mr. Yuen was the Chief Financial Officer and an Executive Director of Varitronix International Ltd., a Hong Kong-listed company and manufacturer of LCD and related
products. Mr. Yuen holds a Master of Business Administration degree from the University of Toronto, Canada. He is a Chartered Professional Accountant in Canada and he is a fellow member of the Hong Kong Institute of Certified Public
Accountants, and of the Association of Chartered Certified Accountants.
Based on
Mr. Yuens experience in corporate finance, financial planning, public company reporting and management, the Board of Directors believes that he is well qualified to serve as a director of the Company.
(1)
Member of the Audit Committee
Board of Directors and Committees
The
Companys Board of Directors presently consists of four directors. The Board of Directors has determined that two of the directors, Messrs. Sethi and Yuen, meet the definition of independence as established by the NYSE American listing
standards and applicable SEC rules.
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The Board of Directors presently has one standing committee, the Audit Committee, which is a
separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (the Exchange Act) and Rule 10A-3 thereunder.
The Companys Audit Committee currently consists of Mr. Sethi (Chairman) and Mr. Yuen, each of whom the Board has determined meets the definition of independence as established by the NYSE American listing rules and SEC rules.
Mr. Sethi is currently the Chairman of the Audit Committee and the audit committee financial expert. Pursuant to Section 803(B)(2)(c) of the NYSE American Company Guide (the Company Guide), as a smaller reporting
company the Company is required to have an audit committee of at least two independent members, as defined by the listing standards of the NYSE American.
The Audit Committee is empowered by the Board, among other things, to: (i) serve as an independent and objective party to monitor the
Companys financial reporting process, internal control system and disclosure control system; (ii) review and appraise the audit efforts of the Companys independent accountants; (iii) assume direct responsibility for the
appointment, compensation, retention and oversight of the work of the independent accountants and for the resolution of disputes between the independent accountants and the Companys management regarding financial reporting issues; and
(iv) provide the opportunity for direct communication among the independent accountants, financial and senior management and the Board. During Fiscal 2021, the Audit Committee performed its duties under a written charter approved by the Board.
A copy of the Companys Audit Committee Charter is posted on the Companys website: www.emersonradio.com on the Investor Relations page.
Controlled Company
The Company does not
maintain a nominating committee or a compensation committee. So long as Nimble Holdings Company Limited (Nimble) beneficially holds more than 50% of the outstanding common stock of Emerson, Emerson is a controlled company as
defined in Section 801(a) of the Company Guide. Accordingly, the Company relies on exemptions from certain corporate governance requirements to have (i) a majority of independent directors, (ii) a nominating and corporate governance
committee composed entirely of independent directors or (iii) a compensation committee composed entirely of independent directors. The full Board of Directors, among other things, (i) identifies individuals qualified to become members of
the Board of Directors and selects director nominees for election at the next Annual Meeting of Stockholders, (ii) reviews and monitors matters related to management development and succession, (iii) develops and implements executive
compensation policies and pay for performance criteria, and (iv) reviews and approves salaries, bonuses and incentive awards.
Director
Qualifications
The Board believes that the Company and its stockholders are best served by having individuals with leadership
experience with the Companys principal stockholder and its affiliates and individuals who have extensive experience in the Companys industry and knowledge of the Companys competitive landscape serve on its Board. The Board also
believes that the backgrounds and qualifications of its directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities. Please refer to the
biographies of each of the Companys directors for a discussion of the specific experience, qualifications, attributes or skills that led to the conclusion that each individual should serve as a director.
No material changes have been made to the procedures by which stockholders may recommend nominees to the Board.
Codes of Ethics
The Company has adopted
a Code of Ethics for Senior Financial Officers (Code of Ethics) that applies to its Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Controller and Treasurer. This Code of Ethics was established with the
intention of focusing Senior Financial Officers on areas of ethical risk, providing guidance to help them recognize and deal with ethical issues, providing mechanisms to report unethical conduct, fostering a culture of honesty and accountability,
deterring wrongdoing and promoting fair and accurate disclosure and financial reporting.
The Company has also adopted a Code of Conduct
for Officers, Directors and Employees of Emerson Radio Corp. and its Subsidiaries (Code of Conduct). We prepared this Code of Conduct to help all officers, directors and employees understand and comply with the Companys policies
and procedures. Overall, the purpose of the Companys Code of Conduct is to deter wrongdoing and promote (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and
professional relationships; (ii) full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC and in other public communications made by the Company;
(iii) compliance with applicable governmental laws, rules and regulations; (iv) prompt internal reporting of code violations to an appropriate person or persons identified in the Code of Conduct; and (v) accountability for adherence
to the Code of Conduct.
The Code of Ethics and the Code of Conduct are posted on the Companys website: www.emersonradio.com on the
Investor Relations page. If the Company makes any substantive amendments to, or grants any waiver (including any implicit waiver) from a provision of the Code of Ethics or the Code of Conduct, and that relates to any element of the Code of Ethics
definition enumerated in Item 406 (b) of Regulation S-K, the Company will disclose the nature of such amendment or waiver on its website or in a current report on Form
8-K.
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Executive Officers
The following table sets forth certain information regarding the executive officers of Emerson as of June 25, 2021, except as noted below:
Name
Age
Position
Year
Became Officer
Christopher Ho
70
Chief Executive Officer and President
2021
Duncan Hon
60
Chief Executive Officer and President
2009
Michael Binney
62
Executive Vice President and Chief Financial Officer
2017
Christopher Ho was appointed to serve as the Companys Chief Executive Officer and President,
effective July 1, 2021.
Duncan Hon served as the Companys Chief Executive Officer and President from August 2011
through June 2021. Mr. Hon served as the Companys Deputy Chief Executive Officer from November 2009 to August 2011. He also served as a Secretary of the Company from June 2016 to July 2017. Mr. Hon retired and resigned from his
positions as Chief Executive Officer and President of the Company effective June 30, 2021. See Mr. Hons biographical information above.
Michael Binney has served as the Companys Executive Vice President and Chief Financial Officer since March 2017 and has served as
Secretary of the Company since July 2017. He has served as a director of the Company since June 2016. See Mr. Binneys biographical information above.
Involvement in Certain Legal Proceedings
On March 25, 2013, The Stock Exchange of Hong Kong Limited (HKEX) published a news release announcing the censure of The
Grande Holdings Limited (now known as Nimble Holdings Company Limited) and certain of its then-existing and former directors, including Messrs. Ho and Binney, by the Listing Appeals Committee of the HKEX. The censure was related to the breach by The
Grande Holdings Limited of certain disclosure obligations pursuant to Rule 13.09(1) of the HKEX listing rules in 2007-2008 regarding the companys 2007 financial performance and the directors for their breach of the directors undertaking
under the HKEX listing rules to use best endeavors to procure the companys compliance with Rule 13.09(1). The HKEX required Mr. Ho to undergo training on listing rules compliance, which training requirement Mr. Ho completed in June
2013. Mr. Binney was also directed to attend training on listing rules compliance as a prerequisite to any future appointment as a director of an HKEX-listed company, which training requirement Mr. Binney completed in September 2016.
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ITEM 11 EXECUTIVE COMPENSATION
Summary Compensation Table
The following
Summary Compensation Table sets forth information concerning compensation for services rendered in all capacities to the Company and its subsidiaries for Fiscal 2021 and for the fiscal year ended March 31, 2020 (Fiscal 2020) which
was awarded to, earned by or paid to the Companys named executive officers at any time during Fiscal 2021.
Name and Principal Position
Fiscal
Year
Salary ($)
Bonus
($)(1)
All Other
Compensation
($)
Total ($)
Duncan Hon
Chief Executive Officer
2021
$
561,600
$
$
2,307
$
563,907
2020
$
561,600
$
$
2,307
$
563,907
Michael Binney
Chief Financial Officer
2021
$
156,000
$
$
2,307
$
158,307
2020
$
156,000
$
60,000
$
2,307
$
218,307
(1)
Represents bonus paid during the fiscal year.
Employment Agreements
During Fiscal
2021, the Company had employment agreements with certain of its named executive officers, each of which is described below.
Duncan
Hon. Duncan Hon, the Companys Chief Executive Officer, entered into an employment agreement, effective April 1, 2011, with Emerson Radio Macao Commercial Offshore Limited, a wholly owned subsidiary of the Company. Such agreement set
forth the terms and conditions pursuant to which Mr. Hon would serve as the Companys Deputy Chief Executive Officer and, subsequently, as Chief Executive Officer. The agreement provided for an annual base salary of 2,925,000 Hong Kong
Dollars (HKD), which was increased to $540,000 in February 2017 and to $561,600 in January 2019, which increase was consistent with increases for the majority of the Companys employees in January 2019, and an annual discretionary
bonus payable at any time as recommended by the Board. The contract extended until the earlier of the retirement of Mr. Hon on the first day of the following month immediately after his 60th birthday, or the termination of the agreement by
either the Company or Mr. Hon upon the delivery from one to the other of one month prior written notice. In June 2016, a supplementary agreement was made to change the earlier of the retirement of Mr. Hon to the first day of the following
month immediately after his 65th birthday. In connection with the Companys dissolution of its Macao subsidiary in 2019, Mr. Hon entered into a new employment agreement, effective as of April 1, 2019, with Emerson Radio (Hong Kong)
Limited, a wholly owned subsidiary of the Company, on substantially the same terms as his previous employment agreement.
Michael
Binney . Michael Binney, the Companys Executive Vice President and Chief Financial Officer, entered into an employment agreement, effective March 9, 2017, with Emerson Radio (Hong Kong) Limited, a wholly owned subsidiary of the
Company. The agreement provides for an annual base salary of $150,000, which was increased to $156,000 in January 2019, which increase was consistent with increases for the majority of the Companys employees in January 2019, and an annual
discretionary bonus payable at any time as recommended by the Board. The contract extends until the earlier of the retirement of Mr. Binney and the first day of the following month immediately after his 65th birthday, or the termination of the
agreement by either the Company or Mr. Binney upon the delivery from one to the other of one month prior written notice. In October 2019, the Board granted to Mr. Binney an aggregate cash retention bonus of $60,000, which will be earned in
three equal installments of $20,000 on each of the first three anniversaries of the retention bonus agreement, effective October 7, 2019, subject to repayment requirements in certain conditions.
Outstanding Equity Awards at Fiscal Year End
None of the Companys named executive officers held any outstanding equity awards at March 31, 2021.
Compensation of Directors
During Fiscal
2021, the Companys directors who were not employees (Outside Directors) were compensated for serving on the Board and on its various committees during the period. The Company does not compensate directors who are employees of the
Company for their services as directors.
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Outside Directors are each paid an annual directors fee of $50,000. The Outside
Director serving as the Chairman of the Board receives an additional annual fee of $20,000. Each Outside Director serving on the Audit Committee of the Board receives an additional fee of $15,000 per annum with no additional fee for serving as
chairman of the Audit Committee. Each Outside Director serving on the Special Litigation Committee of the Board established in June 2019 to investigate and evaluate certain derivative claims receives an additional fee of $5,000 per month. The
Company does not pay any additional fees for attendance at meetings of the Board or the committees. Audit Committee and Special Litigation Committee fees are paid in four equal quarterly installments per annum. Audit Committee and Special Litigation
Committee fees are pro-rated in situations where an Outside Director serves less than a full one year or periodic term.
Additionally, the Companys directors are reimbursed their expenses for attendance at meetings.
The following table provides certain information with respect to the compensation earned or paid to the Companys Outside Directors
during Fiscal 2021.
Director Compensation for Fiscal 2021
Name
Fees
Earned
or Paid in
Cash ($)
Total ($)
Christopher Ho
$
70,000
$
70,000
Kareem E. Sethi
$
65,000
$
65,000
Kin Yuen
$
125,000
$
125,000
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ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth, as of June 25, 2021, the beneficial ownership of
(i) each current director; (ii) each of the Companys named executive officers; (iii) the Companys current directors and executive officers as a group; and (iv) each stockholder known by the Company to own beneficially
more than 5% of the Companys outstanding shares of common stock. Common stock beneficially owned and percentage ownership as of June 25, 2021, was based on 21,042,652 shares outstanding. Except as otherwise indicated and based upon the
Companys review of information as filed with the SEC, the Company believes that the beneficial owners of the securities listed have sole or shared investment and voting power with respect to such shares, subject to community property laws
where applicable. Except as otherwise noted, the address of each of the following beneficial owners is c/o Emerson Radio Corp., 35 Waterview Blvd., Suite 140, Parsippany, New Jersey 07054.
Name and Address of Beneficial Owners
Amount and Nature of
Beneficial Ownership
Percent of Class
Christopher Ho
0
0
%
Duncan Hon
0
0
%
Michael Binney
0
0
%
Kareem E. Sethi
0
0
%
Kin Yuen
0
0
%
All Directors and Executive Officers as a Group (5
persons)
0
0
%
5% Shareholders:
S&T International Distribution Ltd.
15,243,283
(1)
72.4
%
(1)
Based, in part, upon disclosures filed on a Schedule 13D/A on February 15, 2019, by S&T International
Distribution Ltd. (S&T) and on a Schedule 13D/A on February 15, 2019, by Wealth Warrior Global Ltd. (Wealth Warrior), these shares are owned directly by S&T, which is a wholly owned subsidiary of Grande N.A.K.S.
Ltd. (N.A.K.S.), which is a wholly owned subsidiary of Nimble. As the owners of approximately 73.9% in the aggregate of Nimble, Wealth Warrior, Merchant Link Holdings Limited (ML), and Rise Vision Global Limited
(RV) share the indirect power to vote and dispose of the shares of the Companys common stock held for the account of S&T. ML is wholly owned by Aurizon Enterprises Limited (AE), AE is wholly owned by Omen Charm
Limited (OC), and OC is wholly owned by Splendid Brilliance (PTC) Limited (SB). RV is wholly owned by Ocean Rose Global Limited (OR), OR is wholly owned by Praisewise Limited (PL), and PL is wholly
owned by SB. Mr. Bingzhao Tan is the sole director of each of AE, ML, OR and RV, and the sole director and sole shareholder of Wealth Warrior. Ms. Guichai He is the sole director of OC and PL, and is sole director and sole shareholder of
SB. SB holds the shares of OC and PL in trust, and serves as the sole trustee over such shares. Accordingly, AE and OR share the indirect power to vote and dispose of these shares held for the account of S&T. Mr. Tan is the settlor and a
discretionary beneficiary of the shares of OC and PL held in trust by SB. Accordingly, Mr. Tan and Ms. He may be deemed to share power to direct the voting and disposition of these shares held for the account of S&T and may be deemed
to be a beneficial owner of such shares. The address of Nimble, N.A.K.S. and S&T is Unit C01, 32/F, TML Tower, 3 Hoi Shing Road, Tsuen Wan, New Territories, Hong Kong. The address of Mr. Tan and Ms. He, and of Wealth Warrior, ML, RV
and the above affiliated entities, is Unit C, 32/F., TML Tower, No. 3 Hoi Shing Road, Tsuen Wan, New Territories, Hong Kong.
Equity Compensation Plan Information
The
Company did not have any equity compensation plans in existence as of March 31, 2021.
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ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
Controlling Shareholder
S&T, which is a wholly owned subsidiary of N.A.K.S., which is a wholly owned subsidiary of Nimble, collectively have the shared power to
vote and direct the disposition of 15,243,283 shares, or approximately 72.4%, of the Companys outstanding common stock as of June 25, 2021. Accordingly, the Company is a controlled company as defined in Section 801(a) of
the Company Guide. From time to time, the Company engages in business transactions with its controlling shareholder, Nimble, or one or more of Nimbles direct and indirect subsidiaries. See Note 3 Related Party Transactions of the
Notes to the Consolidated Financial Statements contained in the Annual Report.
Indemnification of Officers and Directors
The Company enters into indemnification agreements with each of its directors and officers. These agreements require the Company to indemnify
these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to the Company, and to advance expenses incurred as a result of any proceeding against them as to which they could be
indemnified. The Company also intends to enter into indemnification agreements with its future directors and officers.
Review and Approval of
Transactions with Related Parties
It is the policy of the Company that any proposed transaction between the Company and related
parties, as defined by the Financial Accounting Standard Boards Accounting Standards Codification Topic 850 (ASC 850), that will or may reasonably be expected to involve an aggregate amount that exceeds $120,000 in a fiscal year must be pre-approved by the Audit Committee prior to any action in furtherance of such potential transaction being taken by the Board or any executive officer. In reviewing and approving proposed transactions between the
Company and related parties, the Audit Committee will determine whether the proposed transaction is entirely fair to the Company and in the Companys best interest. For purposes of the policy, related parties are as defined within ASC 850,
generally, but not limited, meaning (i) an officer or director of the Company or the member of the immediate family of any of them or (ii) any other corporation, partnership, association, limited liability company, limited liability
partnership, trust or other entity or organization in which one or more of the Companys officers or directors are (a) directors, officers, trustees or other fiduciaries or (b) have a financial interest.
Director Independence
The Companys
Board presently consists of four directors Messrs. Ho, Binney, Sethi and Yuen. The Board has determined that two of the four current directors, Messrs. Sethi and Yuen, meet the definition of independence as established by the NYSE American
listing standards and applicable SEC rules.
The Companys Audit Committee currently consists of Messrs. Sethi (Chairman) and Yuen.
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ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES
In accordance with the requirements of the Sarbanes-Oxley Act of 2002 and the Audit Committees charter, all audit and audit-related work
and all permitted non-audit work performed by the Companys independent registered public accountants, MSPC Certified Public Accountants and Advisors, A Professional Corporation (MSPC), is
approved in advance by the Audit Committee, including the proposed fees for such work, in order to ensure that the provision of such services does not impair the public accountants independence. The Audit Committee is informed of each service
actually rendered. All fees described below were approved by the Audit Committee in compliance with such pre-approval policies and procedures for the fiscal years ended March 31, 2021 and 2020,
respectively.
Audit Fees. Audit fees billed to the Company by MSPC for the audit of the financial statements included in
the Companys Annual Reports on Form 10-K, and reviews by MSPC of the financial statements included in the Companys Quarterly Reports on Form 10-Q, for the
fiscal years ended March 31, 2021 and 2020 totaled approximately $91,000 and $93,000, respectively.
Audit-Related Fees . The Company was not billed for any audit-related fees by MSPC for the fiscal years
ended March 31, 2021 or 2019, respectively.
Tax Fees. The Company was not billed by MSPC for tax services for the fiscal years ended March 31,
2021 or 2019, respectively.
All Other Fees. The Company was not billed by MSPC for the fiscal years ended March 31, 2021 and
2019, respectively, for any permitted non-audit services.
PART IV
ITEM 15 EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
(a)(3) Exhibits . The following exhibits are filed with this Amendment No. 1 on Form 10-K/A to the Annual Report
or are incorporated by reference, as indicated.
Exhibit Number
3.1
Certificate of Incorporation of Emerson (incorporated by reference to Exhibit (3) (a) of Emersons Registration Statement on Form S-1, Registration No. 33-53621, declared effective by the SEC on August 9, 1994) (filed in paper
format).
3.1.1
Certificate of Designation for Series A Preferred Stock (incorporated by reference to Exhibit (3) (b) of Emersons Registration Statement on Form S-1, Registration No. 33-53621, declared effective by the SEC on August 9, 1994)
(filed in paper format).
3.1.2
Amendment dated February 14, 1996 to the Certificate of Incorporation of Emerson (incorporated by reference to Exhibit (3) (a) of Emersons Quarterly
Report on Form 10-Q for the quarter ended December 31, 1995).
3.2
By-Laws of Emerson (incorporated by reference to Exhibit 3.1 of Emersons Quarterly Report on Form 10-Q for the quarter ended December
31, 2007).
3.2.1
Amendment dated November 28, 1995 to the By-Laws of Emerson adopted March 1994 (incorporated by reference to Exhibit (3) (b) of Emersons Quarterly Report
on Form 10-Q for the quarter ended December 31, 1995).
3.2.2
Amendment effective as of November 10, 2009 to the By-Laws of Emerson adopted March 1994 (incorporated by reference to Exhibit 3.1 of Emersons
Current Report on Form 8-K filed on November 16, 2009).
3.2.3
Amendment effective as of August 31, 2011 to the By-Laws of Emerson adopted March 1994 (incorporated by reference to Exhibit 3.2 of Emersons
Current Report on Form 8-K filed on September 7, 2011).
3.2.4
Amendment effective as of June 22, 2020 to the By-Laws of Emerson adopted March 1994 (incorporated by reference to Exhibit 3.1 of Emersons
Current Report on Form 8-K filed on June 24, 2020).
4.1
Description of Common Stock.*
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Exhibit Number
10.1
Employment Agreement dated as of March 31, 2011 between the Company and Mr.
Hon Tak Kwong (incorporated by reference to Exhibit 10.31 to Emersons Form 10-Q for the quarter ended September 30, 2011) .
10.1.1
Employment Agreement dated as of April 1, 2019, between Emerson Radio (Hong Kong) Limited and Mr.
Hon Tak Kwong (incorporated by reference to Exhibit 10.30.1 to Emersons Amendment No. 1 to Annual Report on Form 10-K for the year ended March 31, 2019).
10.2
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to Emersons Form 10-Q
for the quarter ended December 31, 2014) .
10.3
Employment Agreement dated March
9, 2017 between Emerson Radio (Hong Kong) Limited and Michael Binney (incorporated by reference to Exhibit 10.35 to Emersons Amendment No.
1 to Annual Report on Form 10-K for the year ended March 31, 2017).
10.3.1
Retention Letter Agreement dated October
7, 2019, between the Company and Michael Binney (incorporated by reference to Exhibit 10.35.1 of Emersons Quarterly Report on Form 10-Q for the quarter ended September 30, 2019).
10.4
Employment Agreement dated as of July 19, 2021 between Emerson Radio (Hong Kong) Limited and Mr.
Christopher Ho (incorporated by reference to Exhibit 10.1 to Emersons Form 8-K, dated July 20, 2021).
21.1
Principal Subsidiaries of the Company as of March 31, 2021.*
23.1
Consent of Independent Registered Public Accounting FirmMSPC, Certified Public Accountants and Advisors, Professional Corporation.*
31.1
Certification of the Companys Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002, dated June 25, 2021. *
31.2
Certification of the Companys Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002, dated June 25, 2021. *
31.3
Certification of the Companys Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated July 29, 2021.**
31.4
Certification of the Companys Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated July 29,
2021.**
32
Certification of the Companys Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated June 25, 2021. ***
101.INS
XBRL Instance Document. *
101.SCH
XBRL Taxonomy Extension Schema Document. *
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document. *
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document. *
101.LAB
XBRL Taxonomy Extension Label Linkbase Document. *
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document. *
*
Filed with Emersons Annual Report on Form 10-K for the year ended
March 31, 2021, filed with the Securities and Exchange Commission on June 25, 2021.
**
Filed herewith.
***
Furnished with Emersons Annual Report on Form 10-K for the year
ended March 31, 2021, filed with the Securities and Exchange Commission on June 25, 2021.
Management contract or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused
this Amendment No. 1 on Form 10-K/A to the Registrants Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
EMERSON RADIO CORP.
By:
/s/ Christopher Ho
Christopher Ho
Chief Executive Officer
Principal Executive Officer
Dated: July 29, 2021
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.