What changed in this filing

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Item 1. Financial Statements

2025-02-14 compared with 2024-11-14 · 169 added, 140 removed, 433 unchanged (42% of the section changed)

4 unchanged sentences

(In thousands, except per share data)

Three Months Ended September 30, Six Months Ended September 30,

Three Months Ended December 31, Nine Months Ended December 31,

Net revenues:

15 unchanged sentences

Settlement of litigation

— 3,100 — 3,100

Interest income, net

2 unchanged sentences

( 527 ) ( 435 ) ( 2,367 ) 1,723

Provision for income tax expense

(Benefit) provision for income tax expense

— ( 14 ) 3 74

Net (loss) income

12 unchanged sentences

(In thousands except share data)

September 30, 2024

December 31, 2024

March 31, 2024

3 unchanged sentences

Short term investments

Accounts receivable, net

Accounts receivable, net of allowances for credit losses of $ 313,000 and $ 257,000 as of December 31, 2024 and March 31, 2024, respectively

Licensing receivable

30 unchanged sentences

Common shares — $ 0.01 par value, 75,000,000 shares authorized;

52,965,797 shares issued at September 30, 2024 and March 31, 2024, respectively;

21,042,652 shares outstanding at September 30, 2024 and March 31, 2024, respectively

52,965,797 shares issued at December 31, 2024 and March 31, 2024, respectively;

21,042,652 shares outstanding at December 31, 2024 and March 31, 2024, respectively

Additional paid-in capital

2 unchanged sentences

( 26,575 ) ( 24,205 )

Treasury stock, at cost ( 31,923,145 shares at September 30, 2024 and March 31, 2024, respectively)

Treasury stock, at cost ( 31,923,145 shares at December 31, 2024 and March 31, 2024, respectively)

( 33,201 ) ( 33,201 )

8 unchanged sentences

(In thousands)

Six Months Ended September 30,

Nine Months Ended December 31,

(In thousands)

7 unchanged sentences

Accounts receivable

( 769 ) ( 668 )

Licensing receivable

1 unchanged sentence

Prepaid purchases

( 191 ) ( 133 )

Prepaid expenses and other current assets

( 136 ) ( 57 )

Accounts payable and other current liabilities

( 320 ) ( 61 )

Right of use assets-operating

7 unchanged sentences

Deferred revenue

( 42 ) ( 149 )

Net cash (used) by operating activities

1 unchanged sentence

Cash Flows From Investing Activities:

Proceeds from sale of short-term investments

Purchases of short-term investments

( 16,277 ) ( 18,505 )

Additions to property and equipment

25 unchanged sentences

Balance — March 31, 2024

3,677 $ 3,310 52,965,797 $ 529 $ 79,792 $ ( 24,205 ) $ ( 33,201 ) $ 26,225

— — — — — ( 962 ) — ( 962 )

Balance — June 30, 2024

3,677 $ 3,310 52,965,797 $ 529 $ 79,792 $ ( 25,167 ) $ ( 33,201 ) $ 25,263

— — — — — ( 881 ) — ( 881 )

Balance — September 30, 2024

3,677 $ 3,310 52,965,797 $ 529 $ 79,792 $ ( 26,048 ) $ ( 33,201 ) $ 24,382

— — — — — ( 527 ) — ( 527 )

Balance — December 31, 2024

3,677 $ 3,310 52,965,797 $ 529 $ 79,792 $ ( 26,575 ) $ ( 33,201 ) $ 23,855

Preferred Stock

1 unchanged sentence

Balance — March 31, 2023

3,677 $ 3,310 52,965,797 $ 529 $ 79,792 $ ( 24,971 ) $ ( 33,201 ) $ 25,459

— — — — — ( 565 ) — ( 565 )

Balance — June 30, 2023

3,677 $ 3,310 52,965,797 $ 529 $ 79,792 $ ( 25,536 ) $ ( 33,201 ) $ 24,894

— — — — — 2,635 — 2,635

Balance — September 30, 2023

3,677 $ 3,310 52,965,797 $ 529 $ 79,792 $ ( 22,901 ) $ ( 33,201 ) $ 27,529

— — — — — ( 421 ) — ( 421 )

Balance — December 31, 2023

3,677 $ 3,310 52,965,797 $ 529 $ 79,792 $ ( 23,322 ) $ ( 33,201 ) $ 27,108

The accompanying notes are an integral part of the condensed consolidated financial statements.

6 unchanged sentences

The Company designs, sources, imports and markets certain houseware and consumer electronic products, and licenses the Company’s trademarks for a variety of products.

The unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the Company’s condensed consolidated financial position as of September 30, 2024 and the results of operations for the three and six month periods ended September 30, 2024 and September 30, 2023 .

The unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the Company’s condensed consolidated financial position as of December 31, 2024 and the results of operations for the three and nine month periods ended December 31, 2024 and December 31, 2023 .

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the condensed consolidated financial statements not misleading have been included.

4 unchanged sentences

Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the condensed consolidated financial statements and notes thereto for the fiscal year ended March 31, 2024 (“fiscal 2024 ”), included in the Company’s Annual Report on Form 10 -K for fiscal 2024.

The results of operations for the three and six month periods ended September 30, 2024 are not necessarily indicative of the results of operations that may be expected for any other condensed period or for the full year ending March 31, 2025 (“fiscal 2025” ).

Recent Accounting Pronouncement

The following Accounting Standards Update (“ASU”) was issued by the Financial Accounting Standards Board (“FASB”) which relate to or could relate to the Company as concerns the Company’s normal ongoing operations or the industry in which the Company operates.

The results of operations for the three and nine month periods ended December 31, 2024 are not necessarily indicative of the results of operations that may be expected for any other condensed period or for the full year ending March 31, 2025 (“fiscal 2025 ”).

Recent Accounting Pronouncements

The following Accounting Standards Updates (“ASUs”) were issued by the Financial Accounting Standards Board (“FASB”) which relate to or could relate to the Company as concerns the Company’s normal ongoing operations or the industry in which the Company operates.

Accounting Standards Update 2023 - 07 Segment Reporting (Topic 280 ):

4 unchanged sentences

The adoption of this guidance did not have any impact on the Company's segment reporting.

Accounting Standards Update 2024 - 03 Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

"Disaggregation of Income Statement Expenses ” (Issued November 2024 )

In November 2024, the FASB issued ASU No.

2024 - 03 “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses.” This ASU requires public business entities to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories.

The requirements are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027.

Entities are permitted to apply either the prospective or retrospective transition methods.

The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.

Segment Reporting

29 unchanged sentences

In the case where a royalty is paid to the Company in advance, the royalty payment is initially recorded as a liability and recognized as revenue as the royalties are deemed to be earned according to the principles outlined above.

As of September 30, 2024, the Company recorded deferred revenue of approximately $ 149,000 as compared to approximately $ 191,000 as of March 31, 2024 on its condensed consolidated balance sheets.

As of September 30, 2023, the Company recorded deferred revenue of nil as compared to approximately $ 149,000 as of March 31, 2023 on its condensed consolidated balance sheets.

As of December 31, 2024 , the Company recorded deferred revenue of approximately $ 127,000 as compared to approximately $ 191,000 as of March 31, 2024 on its condensed consolidated balance sheets.

As of December 31, 2023 , the Company recorded deferred revenue of $ 212,000 as compared to approximately $ 149,000 as of March 31, 2023 on its condensed consolidated balance sheets.

All of the deferred revenue for the periods presented are related to licensing revenue.

Disaggregation of Revenue

Three Months Ended September 30, Six Months Ended September 30,

Three Months Ended December 31, Nine Months Ended December 31,

Disaggregation of revenue (in 000's)

9 unchanged sentences

3,684 2,201 7,308 6,127

2,568 2,329 4,566 4,048

NOTE 2 — EARNINGS PER SHARE

1 unchanged sentence

Weighted average shares includes the impact of shares held in treasury.

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

Net (loss) income

6 unchanged sentences

NOTE 3 — SHAREHOLDERS ’ EQUITY

Outstanding capital stock at September 30, 2024 consisted of common stock and Series A preferred stock.

Outstanding capital stock at December 31, 2024 consisted of common stock and Series A preferred stock.

The Series A preferred stock is non-voting, has no dividend preferences and has not been convertible since March 31, 2002;

however, it retains a liquidation preference.

At September 30, 2024 , the Company had no options, warrants or other potentially dilutive securities outstanding.

At December 31, 2024 , the Company had no options, warrants or other potentially dilutive securities outstanding.

NOTE 4 — INVENTORY

1 unchanged sentence

Cost is determined using the first -in, first -out method.

As of September 30, 2024 and March 31, 2024 , inventories consisted of the following (in thousands):

September 30, 2024

As of December 31, 2024 and March 31, 2024 , inventories consisted of the following (in thousands):

December 31, 2024

March 31, 2024

2 unchanged sentences

NOTE 5 — INCOME TAXES

At September 30, 2024 , the Company had $ 16.6 million of U.S.

At December 31, 2024 , the Com pany had $ 17.4 million of U.S.

federal net operating loss (“NOL”) carry forwards.

These losses do not expire but are limited to utilization of 80 % of taxable income in any one year.

At September 30, 2024 , the Company had approximately $ 16.7 million of U.S.

At December 31, 2024 , the Company had approximately $ 17.9 million of U.S.

state NOL carry forwards.

The tax benefits related to these state NOL carry forwards and future deductible temporary differences are recorded to the extent management believes it is more likely than not that such benefits will be realized.

The income of foreign subsidiaries before taxes was $ 249,000 for the three month period ended September 30, 2024 as compared to income of foreign subsidiaries before taxes of $ 296,000 for the three month period ended September 30, 2023 .

The income of foreign subsidiaries before taxes was $ 520,000 for the six month period ended September 30, 2024 as compared to income of foreign subsidiaries before taxes of $ 599,000 for the six month period ended September 30, 2023 .

The Company analyzed the future reasonability of recognizing its deferred tax assets at September 30, 2024 .

The Company analyzed the future reasonability of recognizing its deferred tax assets at December 31, 2024 .

As a result, the Company concluded that a 100% valuation allowance of approximately $ 4,975,000 would be recorded against the assets.

Although the Company generated a net operating loss, it recorded income tax expense of approximately nil and $ 3,000 during the three and six month periods ended September 30, 2024 , respectively, primarily resulting from state income taxes.

During the three and six month periods ended September 30, 2023 , the Company generated net income and recorded income tax expense of approximately $ 88,000 and $ 88,000 , respectively, of which approximately $ 9,000 resulted from state income taxes..

The income of foreign subsidiaries before taxes was $ 218,000 for the three month period ended December 31, 2024 as compared to income of foreign subsidiaries before taxes of $ 293,000 for the three month period ended December 31, 2023 .

The income of foreign subsidiaries before taxes was $ 738,000 for the nine month period ended December 31, 2024 as compared to income of foreign subsidiaries before taxes of $ 892,000 for the nine month period ended December 31, 2023 .

Although the Company generated a net operating loss, it recorded income tax expense of approximately nil and $ 3,000 during the three and nine month periods ended December 31, 2024 , respectively, primarily resulting from state income taxes.

During the three and nine month periods ended December 31, 2023 , the Company generated net income and recorded an income tax benefit of approximately $ 14,000 and income tax expense of approximately $ 74,000 , respectively.

After the adoption of ASU 2019 - 12 “Income Taxes (Topic 740 ) – Simplifying the Accounting for Income Taxes” during fiscal 2022, these non-income based state taxes are now reported within selling, general and administrative expenses.

The Company is subject to examination and assessment by tax authorities in numerous jurisdictions.

As of September 30, 2024 , the Company’s open tax years for examination for U.S.

As of December 31, 2024 , the Company’s open tax years for examination for U.S.

federal tax are 2017 - 2024, and for U.S.

2 unchanged sentences

As a result, the Company may be subject to additional tax expense.

As of September 30, 2024 , the Company is asserting under ASC 740 - 30 that all of the unremitted earnings of its foreign subsidiaries are indefinitely invested.

As of December 31, 2024 , the Company is asserting under ASC 740 - 30 that all of the unremitted earnings of its foreign subsidiaries are indefinitely invested.

The Company evaluates this assertion each period based on a number of factors, including the operating plans, budgets, and forecasts for both the Company and its foreign subsidiaries;

2 unchanged sentences

and the tax consequences of any decision to repatriate earnings of foreign subsidiaries to the U.S.

As of September 30, 2024 and March 31, 2024 , the Company had a federal tax liability of approximately $ 668,000 and $ 1,202,000 , respectively, related to the repatriation of the Company’s undistributed earnings of its foreign subsidiaries as required by the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).

As of September 30, 2024 and March 31, 2024, the Company’s short term portion was approximately $ 668,000 and $ 534,000 , respectively, and the long term portion was nil and approximately $ 668,000 , respectively.

As of December 31, 2024 and March 31, 2024 , the Company had a federal tax liability of approximately $ 668,000 and $ 1,202,000 , respectively, related to the repatriation of the Company’s undistributed earnings of its foreign subsidiaries as required by the Tax Cuts and Jobs Act of 2017 (the “Tax Act”).

As of December 31, 2024 and March 31, 2024 , the Company’s short term portion was approximately $ 668,000 and $ 534,000 , respectively, and the long term portion was nil and approximately $ 668,000 , respectively.

The liability is payable over 8 years.

The first five installments were each equal to 8 %, the sixth was equal to 15 %, the seventh was equal to 20 % and the final installment is equal to 25 % of the liability.

As of September 30, 2024 , the Company has paid seven of the eight installments.

The first five installments were each e qual to 8 %, the sixth was equal to 15 %, the seventh was equal to 20 % and the final installment is equal to 25 % of the liability.

As of December 31, 2024 , the Company has paid seven of the eight installments.

Each installment must be remitted on or before July 15 th of the year in which such installment is due.

4 unchanged sentences

S&T International Distribution Limited (“S&T”), which is a wholly owned subsidiary of Grande N.A.K.S.

Ltd., which is a wholly owned subsidiary of Nimble, collectively have, based on a Schedule 13D/A filed with the SEC on February 15, 2019, the shared power to vote and direct the disposition of 15,243,283 shares, or approximately 72.4 %, of the Company’s outstanding common stock as of September 30, 2024 .

Accordingly, the Company is a “controlled company” as defined in Section 801 (a) of the NYSE American Company Guide.

1 unchanged sentence

Charges of rental and utility fees on office space in Hong Kong

During the three and six month periods ended September 30, 2024 , the Company was billed approximately $ 36,000 and $ 76,000 , respectively, for rental and utility fees from Vigers Appraisal and Consulting Ltd (“VACL”), which is a company related to the Company’s Chairman of the Board of Directors ("Chairman").

As of September 30, 2024 the Company owed approximately $ 1,000 to VACL related to these charges.

During the three month and six month periods ended September 30, 2023, the Company was billed approximately $ 40,000 and $ 79,000 , respectively, for rental and utility fees from VACL, which is a company related to the Company's Chairman.

As of September 30, 2023 the Company owed approximately $ 1,000 to VACL related to these charges.

During the three and nine month periods ended December 31, 2024 , the Company was billed approximately $ 26,000 and $ 101,000 , respectively, for rental and utility fees from Vigers Appraisal and Consulting Ltd (“VACL”), which is a company related to the Company’s Chairman of the Board of Directors ("Chairman").

As of December 31, 2024 the Company owed approximately $ 1,000 to VACL related to these charges.

During the three and nine month periods ended December 31, 2023 , the Company was billed approximately $ 40,000 and $ 119,000 , respectively, for rental and utility fees from VACL, which is a company related to the Company's Chairman.

As of December 31, 2023 the Company owed approximately $ 1,000 to VACL related to these charges.

Charges for promotional items

During the three and six month periods ended September 30, 2024 , the Company purchased nil and approximately $ 30,000 , respectively, of promotional items from The Whisky Capital Pte Ltd ("TWCPL"), which is a company related to the Company's Chairman.

As of September 30, 2024 the Company owed nil to TWCPL related to these charges.

During the three and six month periods ended September 30, 2023, the Company had no transactions with TWCPL.

During the three and nine month periods ended December 31, 2024 , the Company purchased nil and approximately $ 30,000 , respectively, of promotional items from The Whisky Capital Pte Ltd ("TWCPL"), which is a company related to the Company's Chairman.

As of December 31, 2024 the Company owed nil to TWCPL related to these charges.

During the three and nine month periods ended December 31, 2023 , the Company had no transactions with TWCPL.

NOTE 7 — SHORT TERM DEPOSITS AND INVESTMENTS

As of September 30, 2024 and March 31, 2024 , the Company held nil and approximately $ 19.1 million, respectively, in term deposits.

As of December 31, 2024 and March 31, 2024 , the Company held $ 50,000 and approximately $ 19.1 million, respectively, in term deposits.

Such term deposits had maturity dates of 90 days or less and, as a result, were classified as cash equivalents.

As of September 30, 2024 and March 31, 2024 , the Company held approximately $ 16.3 million and nil, respectively, in short term investments which had maturity dates greater than 90 days.

As of December 31, 2024 and March 31, 2024 , the Company held approximately $ 15.8 million and nil, respecti vely, in short term investments which had maturity dates greater than 90 days.

NOTE 8 — CONCENTRATION RISK

Customer Concentration

For the three month period ended September 30, 2024 , the Company’s three largest customers accounted for approximately 86 % of the Company’s net revenues, of which Walmart Inc.

("Walmart") accounted for approximately 42 %, Amazon.com ("Amazon") accounted for approximately 31 % and Fred Meyer accounted for approximately 13 %.

For the three month period ended December 31, 2024 , the Company’s three largest customers accounted for approximately 92 % of the Company’s net revenues, of which Amazon.com ("Amazon") accounted for approximately 43 %, Walmart Inc.

("Walmart") accounted for approximately 25 % and Big Lots Stores, Inc ("Big Lots") accounted for approximately 24 %.

No other customer accounted for greater than 10% of the Company's net revenues during the period.

For the six month period ended September 30, 2024 , the Company’s three largest customers accounted for approximately 84 % of the Company’s net revenues, of which Walmart accounted for approximately 39 %, Amazon accounted for approximately 34 % and Fred Meyer accounted for approximately 11 %.

For the nine month period ended December 31, 2024 , the Company’s three largest customers accounted for approximately 82 % of the Company’s net revenues, of which Amazon accounted for approximately 38 %, Walmart accounted for approximately 33 % and Big Lots accounted for approximately 11 %.

No other customer accounted for greater than 10% of the Company's net revenues during the period.

For the three month period ended September 30, 2023 , the Company’s three largest customers accounted for approximately 90 % of the Company’s net revenues, of which Walmart accounted for approximately 60 %, Amazon accounted for approximately 19 % and Fred Meyer accounted for approximately 11 %.

For the three month period ended December 31, 2023 , the Company’s two largest customers accounted for approximately 84 % of the Company’s net revenues, of which Walmart accounted for approximately 65 % and Amazon accounted for approximately 19 %.

No other customer accounted for greater than 10% of the Company's net revenues during the period.

For the six month period ended September 30, 2023 , the Company’s three largest customers accounted for approximately 89 % of the Company’s net revenues, of which Walmart accounted for approximately 53 %, Amazon accounted for approximately 22 % and Fred Meyer accounted for approximately 14 %.

For the nine month period ended December 31, 2023 , the Company’s three largest customers accounted for approximately 89 % of the Company’s net revenues, of which Walmart accounted for approximately 58 %, Amazon accounted for approximately 21 % and Fred Meyer accounted for approximately 10 %.

No other customer accounted for greater than 10% of the Company's net revenues during the period.

1 unchanged sentence

Product Concentration

For the three and six month periods ended September 30, 2024 , the Company’s gross product sales included microwave ovens, which generated approximately 43 % and 45 %, respectively, of the Company’s gross product sales and audio products, which generated approximately 55 % and 52 %, respectively, of the Company’s gross product sales.

For the three and nine month periods ended December 31, 2024 , the Company’s gross product sales included microwave ovens, which generated approximately 53 % and 49 %, respectively, of the Company’s gross product sales and audio products, which generated approximately 46 % and 49 %, respectively, of the Company’s gross product sales.

No other products accounted for greater than 10% of the Company's gross product sales during the period.

For the three and six month periods ended September 30, 2023 , the Company’s gross product sales included microwave ovens, which generated approximately 27 % and 32 %, respectively, of the Company’s gross product sales and audio products, which generated approximately 70 % and 66 %, respectively, of the Company’s gross product sales.

For the three and nine month periods ended December 31, 2023 , the Company’s gross product sales included microwave ovens, which generated approximately 22 % and 28 %, respectively, of the Company’s gross product sales and audio products, which generated approximately 76 % and 70 %, respectively, of the Company’s gros s product sales.

No other products accounted for greater than 10% of the Company's gross product sales during the period.

Concentrations of Credit Risk

As a percentage of the Company’s total trade accounts receivable, net of specific reserves, the Company’s top four customers accounted for approximately 42 %, 23 %, 16 % and 14 % respectively, as of September 30, 2024 .

As a percentage of the Company’s total trade accounts receivable, net of specific reserves, the Company’s top three customers accounted for approximately 52 %, 27 % and 10 % respectively, as of December 31, 2024 .

No other customers accounted for greater than 10% of the Company's total trade accounts receivable, net of specific reserves, as of such date.

6 unchanged sentences

The Company’s cash balances on deposit in the U.S.

as of September 30, 2024 and March 31, 2024 were insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 per qualifying bank account in accordance with FDIC rules.

The Company’s cash, cash equivalents and restricted cash balances in excess of these FDIC-insured limits were approximately $ 0.2 million and approximately $ 19.6 million at September 30, 2024 and March 31, 2024 , respectively.

as of December 31, 2024 and March 31, 2024 were insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per qualifying bank account in accordance with FDIC rules.

The Company’s cash, cash equivalents and restricted cash balances in excess of these FDIC-insured limits were approximately $ 0.4 million and approximately $ 19.6 million at December 31, 2024 and March 31, 2024 , respectively.

Supplier Concentration

During the three month period ended September 30, 2024 , the Company procured 91 % of its products for resale from its four largest factory suppliers, of wh ich approximately 47 % was supplied by its largest supplier and approximately 16 %, 16 % and 12 %, respectively, was supplied by the other three suppliers.

During the three month period ended September 30, 2023 , the Company procured 80 % of its products for resale from its three largest factory suppliers, of which approximately 34 % was supplied by its largest supplier and approximately 31 % and 15 %, respectively, was supplied by the other two suppliers.

No other suppliers accounted for greater than 10% for either three month periods ended September 30, 2024 or September 30, 2023 .

During the six month period ended September 30, 2024 , the Company procured 100 % of its products for resale from its five largest factory suppliers, of which approximately 38 % was supplied by its largest supplier and approximately 19 %, 17 %, 16 % and 10 %, respectively, was supplied by the other three suppliers.

During the six month period ended September 30, 2023 , the Company procured 80 % of its products for resale from its three largest factory suppliers, of which approximately 39 % was supplied by its largest supplier and approximately 24 % and 17 %, respectively, was supplied by the other two suppliers.

No other suppliers accounted for greater than 10% for either six m onth periods ended September 30, 2024 or September 30, 2023 .

During the three month period ended December 31, 2024 , the Company procured 94 % of its products for resale from its four largest factory suppliers, of which approximately 46 % was supplied by its largest supplier and approximately 22 %, 15 % and 11 %, respectively, was supplied by the other three suppliers.

During the three month period ended December 31, 2023 , the Company procured 86 % of its products for resale from its three largest factory suppliers, of which approximately 37 % was supplied by its largest supplier and approximately 28 % and 21 %, respectively, was supplied by the other two suppliers.

No other suppliers accounted for greater than 10% for either the three month period ended December 31, 2024 or December 31, 2023 .

During the nine month period ended December 31, 2024 , the Company procured 94 % of its products for resale from its five largest factory suppliers, of which approximately 41 % was supplied by its largest supplier and approximately 19 %, 12 %, 11 % and 11 %, respectively, was supplied by the other four suppliers.

During the nine month period ended December 31, 2023 , the Company procured 93 % of its products for resale from its four largest factory suppliers, of which approximately 29 % was supplied by its largest supplier and approximately 26 %, 23 % and 15 %, respectively, was supplied by the other two suppliers.

No other suppliers accounted for greater than 10% for either the nine month period ended December 31, 2024 or December 31, 2023 .

NOTE 9 — LEASES

1 unchanged sentence

and in Hong Kong as well as a copier in the U.S.

These leases have remaining non-cancellable lease terms of thirty-five to fifty-seven months.

These leases have remaining non-cancellable lease terms of thirty-two to fifty-four months.

The Company has elected not to separate lease and non-lease components for all leased assets.

The Company did not identify any events or conditions during the quarter ended September 30, 2024 to indicate that a reassessment or re-measurement of the Company’s existing leases was required.

As of September 30, 2024 , the Company’s current operating lease liabilities and finance lease liabilities were $ 128,000 and $ 1,000 , respectively and its non-current operating lease liabilities and finance lease liabilities were $ 397,000 and $ 6,000 , respectively.

The Company did not identify any events or conditions during the quarter ended December 31, 2024 to indicate that a reassessment or re-measurement of the Company’s existing leases was required.

As of December 31, 2024 , the Company’s current operating lease liabilities and finance lease liabilities were $ 132,000 and $ 1,000 , respectively and its non-current operating lease liabilities and finance lease liabilities were $ 360,000 and $ 5,000 , respectively.

The Company’s operating and finance lease right-of-use asset balances are presented in non-current assets.

The net balance of the Company’s operating and finance lease right-of-use assets as of September 30, 2024 was $ 509,000 and $ 6,000 , respectively.

The net balance of the Company’s operating and finance lease right-of-use assets as of December 31, 2024 was $ 476,000 and $ 6,000 , respectively.

As disclosed in "Note 6 - Related Party Transactions", the Company's Hong Kong office space is being leased from VACL, which is a company related to the Company's Chairman.

As of September 30, 2024 , the current operating liability of this lease is approximately $ 95,000 and its non-current liability is $ 211,000 .

Its right-of-use asset value is approximately $ 306,000 , as of September 30, 2024 .

As of December 31, 2024 , the current operating liability of this lease is approximately $ 97,000 and its non-current liability is $ 186,000 .

Its right-of-use asset value is approximately $ 283,000 , as of December 31, 2024 .

The components of lease costs, which were included in operating expenses in the Company’s condensed consolidated statements of operations, were as follows:

Three Months Ended September 30,

Six Months Ended September 30,

Three Months Ended December 31,

Nine Months Ended December 31,

(in thousands)

5 unchanged sentences

Operating cash flows from operating leases

46 43 141 123

Right-of-use assets obtained in exchange for lease obligations:

Operating leases

313 248 313 248

Finance leases

1 unchanged sentence

Weighted average remaining lease term (in months)

As of September 30, 2024

As of September 30, 2023

As of December 31, 2024

As of December 31, 2023

Operating leases

5 unchanged sentences

10.50 % 7.50 %

As of September 30, 2024 the maturities of lease liabilities were as follows:

As of December 31, 2024 the maturities of lease liabilities were as follows:

(in thousands)

3 unchanged sentences

Imputed interest

( 150 ) ( 2 )

NOTE 10 — LEGAL PROCEEDINGS

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changes in U.S.

and foreign trade regulations and tariffs, including potential increases of tariffs on goods imported into the U.S., and uncertainty regarding the same;

and foreign trade regulations and tariffs, including recent and potential future increases of tariffs on goods imported into the U.S., and uncertainty regarding the same;

limited access to financing or increased cost of financing;

8 unchanged sentences

Results of Operations

The following table summarizes certain financial information for the three and six month periods ended September 30, 2024 (fiscal 2025) and September 30, 2023 (fiscal 2024) (in thousands):

Three Months Ended September 30,

Six Months Ended September 30,

The following table summarizes certain financial information for the three and nine month periods ended December 31, 2024 (fiscal 2025) and December 31, 2023 (fiscal 2024) (in thousands):

Three Months Ended December 31,

Nine Months Ended December 31,

Net product sales

6 unchanged sentences

(Loss) income before income taxes

Provision for income taxes

(Benefit) provision for income taxes

Net (loss) income

Net product sales — Net product sales for the three month period ended September 30, 2024 were approximately $2.7 million as compared to approximately $2.4 million for the three month period ended September 30, 2023 , an increase of approximately $0.3 million, or 10.6%.

The Company’s sales during the three month period ended September 30, 2024 were highly concentrated among its three largest customers –Walmart, Amazon, and Fred Meyer – comprising in the aggregate approximately 88% of the Company’s total net product sales.

The Company’s sales during the three month period ended September 30, 2023 , were highly concentrated among its three largest customers – Walmart, Amazon and Fred Meyer – comprising in the aggregate approximately 91% of the Company’s total net product sales.

Net product sales for the six month period ended September 30, 2024 were approximately $4.8 million as compared to approximately $4.1 million for the six month period ended September 30, 2023 , an increase of approximately $0.7 million, or 15.8%.

The Company’s sales during the six month period ended September 30, 2024 were highly concentrated among its three largest customers – Walmart, Amazon and Fred Meyer – comprising in the aggregate approximately 86% of the Company’s total net product sales.

The Company’s sales during the six month period ended September 30, 2023 , were highly concentrated among its three largest customers – Walmart, Amazon and Fred Meyer – comprising in the aggregate approximately 91% of the Company’s total net product sales.

Net product sales — Net product sales for the three month period ended December 31, 2024 were approximately $3.9 million as compared to approximately $2.6 million for the three month period ended December 31, 2023, an increase of approximately $1.3 million, or 49.8%.

The Company’s sales during the three month period ended December 31, 2024 were highly concentrated among its three largest customers – Amazon, Walmart and Big Lots – comprising in the aggregate approximately 95% of the Company’s total net product sales during the period.

The Company’s sales during the three month period ended December 31, 2023, were highly concentrated among its two largest customers – Walmart and Amazon – comprising in the aggregate approximately 85% of the Company’s total net product sales.

Net product sales for the nine month period ended December 31, 2024 were approximately $8.7 million as compared to approximately $6.7 million for the nine month period ended December 31, 2023, an increase of approximately $2.0 million, or 28.9%.

The Company’s sales during the nine month period ended December 31, 2024 were highly concentrated among its three largest customers – Amazon, Walmart and Big Lots – comprising in the aggregate approximately 84% of the Company’s total net product sales.

The Company’s sales during the nine month period ended December 31, 2023, were highly concentrated among its three largest customers – Walmart, Amazon and Fred Meyer – comprising in the aggregate approximately 91% of the Company’s total net product sales.

Net product sales are comprised primarily of the sales of houseware and audio products which bear the Emerson® brand name.

Net product sales may be periodically impacted by adjustments made to the Company’s sales allowance and marketing support accrual to record unanticipated customer deductions from accounts receivable or to reduce the accrual by any amounts which were accrued in the past but not taken by customers through deductions from accounts receivable within a certain time period.

In the aggregate, these adjustments had the effect of increasing net product sales and operating income by approxim ately $11,000 and $3,000 for the three month periods ended September 30, 2024 and September 30, 2023 , respectively, and by approximately $21,000 and $6,000 for the six month periods ended September 30, 2024 and September 30, 2023 , respectively.

In the aggregate, these adjustments had the effect of increasing net product sales and operating income by approxim ately $11,000 and $3,000 for the three month periods ended December 31, 2024 and December 31, 2023, respectively, and by approximately $32,000 and $9,000 for the nine month periods ended December 31, 2024 and December 31, 2023, respectively.

The major elements which contributed to the overall increase in net product sales were as follows:

i) Houseware products:

Net sales of houseware products increased approximately $0.5 million, or 67.5%, to approximately $1.2 million for the three month period ended September 30, 2024 as compared to approximately $0.7 million for the three month period ended September 30, 2023 , driven by increased net sales of newly introduced microwave ovens and refrigerators to the market.

Net sales of houseware products increased approximately $0.9 million, or 65.0%, to approximately $2.3 million for the six month period ended September 30, 2024 as compared to approximately $1.4 million for the six month period ended September 30, 2023 , driven by increased net sales of newly introduced microwave ovens and refrigerators to the market.

Net sales of houseware products increased approximately $1.5 million, or 239.8%, to approximately $2.1 million for the three month period ended December 31, 2024 as compared to approximately $0.6 million for the three month period ended December 31, 2023, driven by increased net sales of newly introduced microwave ovens to the market.

Net sales of houseware products increased approximately $2.4 million, or 118.9%, to approximately $4.4 million for the nine month period ended December 31, 2024 as compared to approximately $2.0 million for the nine month period ended December 31, 2023, driven by increased net sales of newly introduced microwave ovens and refrigerators to the market.

ii) Audio products:

Net sales of audio products decreased approximately $0.2 million, or 13.4%, to approximately $1.5 million for the three month period ended September 30, 2024 as compared to approximately $1.7 million for the three month period ended September 30, 2023 .

Net sales of audio products decreased approximately $0.2 million, or 9.5%, to $2.5 million for the six month period ended September 30, 2024 as compared to approximately $2.7 million for the six month period ended September 30, 2023 .

Net sales of audio products decreased approximately $0.2 million, or 9.9%, to approximately $1.8 million for the three month period ended December 31, 2024 as compared to approximately $2.0 million for the three month period ended December 31, 2023.

Net sales of audio products decreased approximately $0.5 million, or 9.7%, to $4.2 million for the nine month period ended December 31, 2024 as compared to approximately $4.7 million for the nine month period ended December 31, 2023.

Business operations — The Company expects to continue to expand its existing distribution channels and to develop and promote new products with retailers in the U.S and Mexico.

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The Company also is continuing its efforts to identify strategic courses of action related to its licensing activities, including seeking new licensing relationships.

The Company has engaged each of Leveraged Marketing Corporation of America and Global Licensing Services Pte Limited as an agent to assist in identifying and procuring potential licensees.

Emerson’s success is dependent on its ability to anticipate and respond to changing consumer demands and trends in a timely manner, as well as expanding into new markets and sourcing new products that are profitable to the Company.

The Company has engaged each of Leveraged Marketing Corporation of America and Global Licensi ng Services Pte Limited as an agent to assist in identifying and procuring potential licensees.

Emerson’s success is dependent on its ability to anticipate and res pond to changing consumer demands and trends in a timely manner, as well as expanding into new markets and sourcing new products that are profitable to the Company.

Geo-political factors may also affect the Company’s operations and demand for the Company’s products, which are subject to customs requirements and to tariffs and quotas set by governments through mutual agreements and bilateral actions.

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tariffs on categories of products that the Company imports from China, and China’s retaliatory tariffs on certain goods imported from the United States, as well as modifications to international trade policy, will continue to affect its product costs going forward.

If no mitigation steps are taken, or the mitigation is unsuccessful, the combination of tariffs will result in significantly increased annualized costs to the Company as all of the Company’s products are currently manufactured by suppliers in China.

Although the Company is monitoring the trade and political environment and working to mitigate the possible effect of tariffs with its suppliers as well as its customers through pricing and sourcing strategies, the Company cannot be certain how its customers and competitors will react to the actions taken.

If the Company's mitigation efforts are unsuccessful, the combination of tariffs will result in significantly increased annualized costs to the Company as all of the Company’s products are currently manufactured by suppliers in China.

In addition, heightened tensions between the United States and China over Hong Kong and any resulting retaliatory policies may affect our operations in Hong Kong.

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The aggregate award to the Company also includes the $4.1 million of advanced deposits previously paid to the Company.

The $4.1 million of advanced deposits was reduced by approximately $1 million of incurred legal fees.

The $4.1 million of advanc ed deposits was reduced by approximately $1 million of incurred legal fees.

The remaining balance of $3.1 million was released by the Company to other income during the quarter ended September 30, 2023.

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However, management believes, based on its examination of such matters, that the Company’s ultimate liability will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Licensing revenue — Licensing revenue for the three month period ended September 30, 2024 was approximately $68,000 as compared to approximately $24,000 for the three month period ended September 30, 2023 , an increase of approximately $44,000, or 183.3%.

The increase for the three month period ended September 30, 2024 , was the result of an annual escalation of guaranteed minimum royalties from an ongoing licensee and the revenue earned from a new licensee.

Licensing revenue for the six month period ended September 30, 2024 was approximately $137,000 as compared to approximately $101,000 for the six month period ended September 30, 2023 , an increase of approximately $36,000, or 35.6%.

The year-over-year increase was the result of an annual escalation of guaranteed minimum royalties from an ongoing licensee and the revenue earned from a new licensee partially offset by lost revenue from a terminated licensee in June 2023.

Net revenues — Net revenues were approximately $2.7 million for the three month period ended September 30, 2024 as compared to approximately $2.4 million for the three month period ended September 30, 2023 , an increase of approximately $0.3 million, or 12.3%.

Licensing revenue — Licensing revenue for the three month period ended December 31, 2024 was approximately $111,000 as compared to approximately $23,000 for the three month period ended December 31, 2023, an increase of approximately $88,000, or 382.6%.

The increase for the three month period ended December 31, 2024, was the result of one of the Company's licensees exceeding their annual guaranteed minimum royalties and the revenue earned from a new licensee.

Licensing revenue for the nine month period ended December 31, 2024 was approximately $248,000 as compared to approximately $124,000 for the nine month period ended December 31, 2023, an increase of approximately $124,000, or 100%.

The year-over-year increase was the result of one of its licensees exceeding their annual guaranteed minimum royalties and the revenue earned from a new licensee, partially offset by lost revenue from a terminated licensee in June 2023.

Net revenues — Net revenues were approximately $4.0 million for the three month period ended December 31, 2024 as compared to approximately $2.6 million for the three month period ended December 31, 2023, an increase of approximately $1.4 million, or 52.7%.

The increase in net revenues can be attributed primarily to the introduction of new models of the Company's houseware products to the marketplace as well as increased demand from the Company's key customers.

Net revenues were approximately $4.9 million for the six month period ended September 30, 2024 as compared to approximately $4.2 million for the six month period ended September 30, 2023 , an increase of approximately $0.7 million, or 16.2%.

Net revenues were approximately $8.9 million for the nine month period ended December 31, 2024 as compared to approximately $6.9 million for the nine month period ended December 31, 2023, an increase of approximately $2.0 million, or 30.1%.

Cost of sales — Cost of sales increased approximately $0.4 million, or 20.9% to approximately $2.5 million for the three month period ended September 30, 2024 as compared to approximately $2.1 million for the three month period ended September 30, 2023 .

The increase in absolute terms for the three month period ended September 30, 2024 as compared to the three month period ended September 30, 2023 was primarily related to an increase in net product sales, increased carrying costs of inventory and the product mix of sales in the current quarter.

Cost of sales increased approximately $1.0 million, or 27.4% to approximately $4.5 million for the six month period ended September 30, 2024 as compared to approximately $3.5 million for the six month period ended September 30, 2023 .

The increase in absolute terms for the six month period ended September 30, 2024 as compared to the six month period ended September 30, 2023 was primarily related to an increase in net product sales, increased carrying costs of inventory and the product mix of sales in the current six month period.

Selling, general and administrative expenses ( “ S,G&A ” ) — S,G&A was approximately $1.4 million for the three month period ended September 30, 2024 as compared to approximately $1.1 million for the three month period ended September 30, 2023 , an increase of approximately $0.3 million or 30.6%.

S,G&A, as a percentage of net revenues, was approximately 50.7% for the three month period ended September 30, 2024 as compared to approximately 43.6% for the three month period ended September 30, 2023 .

The increase in S,G&A for the three month period ended September 30, 2024 as compared to the three month period ended September 30, 2023 was driven primarily by increased compensation costs of approximately $259,000, increased audit fees of approximately $29,000, and increased advertising expense of approximately $27,000, partially offset by a decrease in legal fees of approximately $57,000.

Compensation costs for the three month period ended September 30, 2024 were approximately $822,000 as compared to approximately $563,000 for the three month period ended September 30, 2023 .

Audit fees for the three month period ended September 30, 2024 were approximately $54,000 as compared to approximately $25,000 for the three month period ended September 30, 2023 .

Advertising expense for the three month period ended September 30, 2024 were approximately $45,000 as compared to approximately $18,000 for the three month period ended September 30, 2023 .

Legal fees for the three month period ended September 30, 2024 were approximately $55,000 as compared to approximately $112,000 for the three month period ended September 30, 2023 .

S,G&A was approximately $2.8 million for the six month period ended September 30, 2024 as compared to approximately $2.3 million for the six month period ended September 30, 2023 , an increase of approximately $0.5 million or 24.0%.

S,G&A, as a percentage of net revenues, was approximately 56.8% for the six month period ended September 30, 2024 as compared to approximately 53.3% for the six month period ended September 30, 2023 .

The increase in S,G&A for the six month period ended September 30, 2024 as compared to the six month period ended September 30, 2023 was driven primarily by increased compensation costs of approximately $395,000, increased audit fees of approximately $70,000, and increased advertising expense of approximately $26,000.

Compensation costs for the six month period ended September 30, 2024 were approximately $1,517,000 as compared to approximately $1,122,000 for the six month period ended September 30, 2023 .

Audit fees for the six month period ended September 30, 2024 were approximately $120,000 as compared to approximately $50,000 for the six month period ended September 30, 2023 .

Advertising expense for the six month period ended September 30, 2024 were approximately $73,000 as compared to approximately $47,000 for the six month period ended September 30, 2023 .

Cost of sales — Cost of sales increased approximately $1.4 million, or 63.8% to approximately $3.5 million for the three month period ended December 31, 2024 as compared to approximately $2.1 million for the three month period ended December 31, 2023.

The increase in absolute terms for the three month period ended December 31, 2024 as compared to the three month period ended December 31, 2023 was primarily related to an increase in net product sales, increased carrying costs of inventory and the product mix of sales in the current quarter.

Cost of sales increased approximately $2.3 million, or 41.2% to approximately $8.0 million for the nine month period ended December 31, 2024 as compared to approximately $5.7 million for the nine month period ended December 31, 2023.

The increase in absolute terms for the nine month period ende d December 31, 2024 as compared to the nine month period ended December 31, 2023 was primarily related to an increase in net product sales, increased carrying costs of inventory and the product mix of sales in the current nine month period.

Selling, general and administrative expenses ( “ S,G&A ” ) — S,G&A was approximately $1.2 million for both three month periods ended December 31, 2024 and December 31, 2023.

S,G&A, as a percentage of net revenues, was approximately 30.6% for the three month period ended December 31, 2024 as compared to approximately 45.8% for the three month period ended December 31, 2023.

The changes in S,G&A for the three month period ended December 31, 2024 as compared to the three month period ended December 31, 2023 was driven primarily by increased compensation costs of approximately $178,000, increased commission expense of approximately $49,000 and increases in trade expenses of approximately $35,000, partially offset by a decrease in legal fees of approximately $274,000.

Compensation costs for the three month period ended December 31, 2024 were approximately $737,000 as compared to approximately $558,000 for the three month period ended December 31, 2023.

Commission expense fees for the three month period ended December 31, 2024 were approximately $72,000 as compared to approximately $23,000 for the three month period ended December 31, 2023.

Trade expenses for the three month period ended December 31, 2024 were approximately $73,000 as compared to approximately $38,000 for the three month period ended December 31, 2023.

Legal fees for the three month period ended December 31, 2024 generated a benefit of approximately $37,000 as compared to expense of approximately $236,000 for the three month period ended December 31, 2023.

S,G&A was approximately $4.0 million for the nine month period ended December 31, 2024 as compared to approximately $3.5 million for the nine month period ended December 31, 2023, an increase of approximately $0.5 million or 16.3%.

S,G&A, as a percentage of net revenues, was approximately 45.1% for the nine month period ended December 31, 2024 as compared to approximately 50.4% for the nine month period ended December 31, 2023.

The increase in S,G&A for the nine month period ended December 31, 2024 as compared to the nine month period ended December 31, 2023 was driven primarily by increased compensation costs of approximately $573,000, increased trade expenses of $90,000, increased audit fees of approximately $73,000 and increased depreciation expense of approximately $41,000 partially offset by a decrease in legal fees of approximately $260,000.

Compensation costs for the nine month period ended December 31, 2024 were approximately $2,253,000 as compared to approximately $1,680,000 for the nine month period ended December 31, 2023.

Trade expenses for the nine month period ended December 31, 2024 were approximately $210,000 as compared to approximately $120,000 for the nine month period ended December 31, 2023.

Audit fees for the nine month period ended December 31, 2024 were approximately $176,000 as compared to approximately $103,000 for the nine month period ended December 31, 2023.

Depreciation expense for the nine month period ended December 31, 2024 were approximately $57,000 as compared to approximately $16,000 for the nine month period ended December 31, 2023.

Legal fees for the nine month period ended December 31, 2024 were approximately $201,000 as compared to approximately $461,000 for the nine month period ended December 31, 2023.

Settlement of litigation — Based on a judgement affirmation by the U.S.

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See "Note 10 - Legal Proceedings" in the Notes to the Consolidated Financial Statements.

Interest income, net — Interest income, net, was approximately $236,000 for the three month period ended September 30, 2024 as compared to approximately $289,000 for the three month period ended September 30, 2023 , a decrease of approximately $53,000.

Interest income, net — Interest income, net, was approximately $206,000 for the three month period ended December 31, 2024 as compared to approximately $289,000 for the three month period ended December 31, 2023 , a decrease of approximately $83,000.

The decrease was primarily due to lower levels of cash invested on the Company’s short term investments.

Interest income, net, was approximately $499,000 for the six month period ended September 30, 2024 as compared to approximately $583,000 for the six month period ended September 30, 2023 , a decrease of approximately $84,000.

Interest income, net, was approximately $705,000 for the nine month period ended December 31, 2024 as compared to approximately $872,000 for the nine month period ended December 31, 2023 , a decrease of approximately $167,000.

The decrease was primarily due to lower levels of cash invested on the Company’s short term investments.

Provision for income taxes — For the three month period ended September 30, 2024 , the Company recorded income tax expense of nil as compared to approximately $88,000 for the three month period ended September 30, 2023 .

For the six month period ended September 30, 2024 , the Company recorded income tax expense of approximately $3,000 as compared to $88,000 for the six month period ended September 30, 2023 .The Company under the adoption of ASU 2019-12 “Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes” incurred non-income based state taxes of approximately $9,000 for both of the six month periods ended September 30, 2024 and September 30, 2023 , which are now reported as S,G&A.

(Benefit) provision for income taxes — For the three month period ended December 31, 2024, the Company recorded income tax expense of nil as compared to an income tax benefit of approximately $14,000 for the three month period ended December 31, 2023.

For the nine month period ended December 31, 2024, the Company recorded income tax expense of approximately $3,000 as compared to $74,000 for the nine month period ended December 31, 2023.The Company under the adoption of ASU 2019-12 “Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes” incurred non-income based state taxes of approximately $9,000 for both of the nine month periods ended December 31, 2024 and December 31, 2023, which are now reported as S,G&A.

See “Note 5 – Income Taxes”.

Although the Company generated a net loss during the three and six months ended September 30, 2024 , it is unable to realize an income tax benefit until the Company can demonstrate the ability to generate net income on a sustained basis.

Although the Company generated a net loss during the three and nine months ended December 31, 2024 , it is unable to realize an income tax benefit until the Company can demonstrate the ability to generate net income on a sustained basis.

Therefore, the Company is obligated to record a 100% valuation allowance against the deferred tax assets.

Net loss (income) — As a result of the foregoing factors, the Company realized a net loss of approximately $881,000 for the three month period ended September 30, 2024 as compared to net income of approximately $2,365,000 for the three month period ended September 30, 2023 .

As a result of the foregoing factors, the Company realized a net loss of approximately $1,843,000 for the six month period ended September 30, 2024 as compared to net income of approximately $2,070,000 for the six month period ended September 30, 2023 .

Net loss (income) — As a result of the foregoing factors, the Company realized a net loss of approximately $527,000 for the three month period ended December 31, 2024 as compared to a net loss of approximately $421,000 for the three month period ended December 31, 2023.

As a result of the foregoing factors, the Company realized a net loss of approximately $2,370,000 for the nine month period ended December 31, 2024 as compared to net income of approximately $1,649,000 for the nine month period ended December 31, 2023.

Liquidity and Capital Resources

As of September 30, 2024 , the Company had cash and cash equivalents of approximately $0.5 million as compared to approximately $19.9 million at March 31, 2024 .

Cash and cash equivalents includes short term investments in deposits which were classified as cash equivalents of nil as of September 30, 2024 compared to approximately $19.1 million of such deposits as of March 31, 2024 .

Working capital decreased to approximately $23.9 million at September 30, 2024 as compared to approximately $26.6 million at March 31, 2024 .

The decrease in cash and cash equivalents of approximately $19.4 million was due to an increase in short term deposits of approximately $16.3 million, the net loss generated during the period of approximately $1.8 million, an increase in accounts receivable of approximately $0.8 million, a decrease in long-term taxes payable of approximately $0.7 million, a decrease in accounts payable and other current liabilities of approximately $0.3 million, an increase in right of use assets of approximately $0.2 million, an increase in prepaid purchases of approximately $0.2 million and an increase in prepaid expenses and other current liabilities of approximately $0.1 million, partially offset by a decrease in inventory of approximately $0.8 million and an increase in long term operating lease liabilities of approximately $0.2 million.

Net cash used by operating activities was approximately $2.9 million for the six month period ended September 30, 2024 , resulting from the loss generated during the period of approximately $1.8 million, an increase in accounts receivable of approximately $0.8 million, a decrease in income taxes payable of approximately $0.5 million, a decrease in accounts payable and other current liabilities of $0.3 million, an increase in right of use assets of approximately $0.3 million and an increase in prepaid purchases of approximately $0.2 million, partially offset by a decrease in inventory of approximately $0.8 million and an increase in long term lease liabilities of approximately $0.2 million.

Net cash used by investing activities was approximately $16.5 million for the six month period ended September 30, 2024 due to purchases of short-term investments of approximately $16.3 million and additions to property and equipment of approximately $0.2 million.

Net cash provided by financing activities was approximately $7,000 for the six month period ended September 30, 2024 due to a new copier lease.

As of December 31, 2024, the Company had cash and cash equivalents of approximately $0.7 million as compared to approximately $19.9 million at March 31, 2024.

Cash and cash equivalents includes short term investments in deposits which were classified as cash equivalents of $0.1 million as of December 31, 2024 compared to approximately $19.1 million of such deposits as of March 31, 2024.

Working capital decreased to approximately $23.4 million at December 31, 2024 as compared to approximately $26.6 million at March 31, 2024.

The decrease in cash and cash equivalents of approximately $19.2 million was due to an increase in short term deposits of approximately $15.7 million, the net loss generated during the period of approximately $2.4 million, an increase in accounts receivable of approximately $2.2 million, a decrease in long-term taxes payable of approximately $0.7 million, a decrease in right of use assets of approximately $0.2 million and an increase in property and equipment of approximately $0.1 million, partially offset by a decrease in inventory of approxima tely $1.8 million, an increase in long term operating lease liabilities of approximately $0.2 million and an increase in short-term taxes payable of approximately $0.1 million.

Net cash used by operating activities was approxim ately $3.3 million for the nine month period ended December 31, 2024, resulting from the loss generated during the period of approximately $2.4 million, an increase in accounts receivable of approximately $2.2 million, a decrease in income taxes payable of approximately $0.5 million and an increase in right of use assets of approximately $0.3 million, partially offset by a decrease in inventory of approximately $1.8 million, an increase in long term lease liabilities of approximately $0.2 million and an increase in accounts payab le and other current liabilities of approximately $0.1 million.

Net cash used by investing activities was approximately $16.0 million for the nine month period ended December 31, 2024 due to net purchases of short-term investments of approximately $15.8 million and additions to property and equipment of approximately $0.2 million.

Net cash provided by financing activities was approximately $6,000 for the nine month period ended December 31, 2024 due to a new copier lease.

Sources and Uses of Funds

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Off-Balance Sheet Arrangements

As of September 30, 2024, the Company did not have any off-balance sheet arrangements as defined under the rules of the SEC.

Recent Accounting Pronouncement

The following ASU was issued by the FASB which relate to or could relate to the Company as concerns the Company’s normal ongoing operations or the industry in which the Company operates.

As of December 31, 2024, the Company did not have any off-balance sheet arrangements as defined under the rules of the SEC.

Recent Accounting Pronouncements

The following ASUs were issued by the FASB which relate to or could relate to the Company as concerns the Company’s normal ongoing operations or the industry in which the Company operates.

Accounting Standards Update 2023-07 Segment Reporting (Topic 280):

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The adoption of this guidance did not have any impact on the Company's segment reporting.

Accounting Standards Update 2024-03 Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

"Disaggregation of Income Statement Expenses ” (Issued November 2024)

In November 2024, the FASB issued ASU No.

2024-03 “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

The requirements are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027.

Entities are permitted to apply either the prospective or retrospective transition methods.

The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements