What changed in this filing

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Item 1A. Risk Factors

2025-06-27 compared with 2024-06-27 · 31 added, 30 removed, 345 unchanged (15% of the section changed)

5 unchanged sentences

The Company relies on a small number of key customers for the majority of its business, and the loss or significant reduction in business with any of these key customers would materially and adversely affect the Company ’ s revenues and earnings.

Certain customers have historically made up a significant percen tage of the Company’s product sales and net revenues.

For fiscal 2024, Walmart, Amazon and Fred Meyer accounted for approximately 53%, 20% and 10%, respectively, of the Company’s net revenues.

Certain customers have historically made up a significant percentage of the Company’s product sales and net revenues.

For fiscal 2025, Amazon and Walmart accounted for approximately 39% and 31%, respectively, of the Company’s net revenues.

For fiscal 2024, Walmart, Amazon and Fred Meyer accounted for approximately 53%, 20% and 10%, respectively, of the Company’s net revenues.

1 unchanged sentence

All customer purchases are made through individual purchase orders and the Company does not have any long-term supply contracts with its customers.

Accordingly, sales from customers that have accounted for a significant portion of the Company’s net product sales and net revenues in past periods, individually or as a group, ma y not continue in future periods, or if continued, may not reach or exceed historical levels in any period, which has happened in the past and could happen in the future.

Accordingly, sales from customers that have accounted for a significant portion of the Company’s net product sales and net revenues in past periods, individually or as a group, may not continue in future periods, or if continued, may not reach or exceed historical levels in any period, which has happened in the past and could happen in the future.

Some of the Company’s key customers may also experience economic difficulties or otherwise default on their obligations to the Company.

6 unchanged sentences

For the twelve months ended March 31, 2024, the Company’s gross product sales were comprised principally of the same two product types within the same two categories — housewares products and audio products.

Microwave ovens, which product type is within the housewares category, generated approximately 27% of the Company’s gross product sales.

Audio products generated approximately 73% of the Company’s gross product sales during fiscal 2023.

During fiscal 2024, microwave ovens generated approximately 32% of the Company’s gross product sales and

audio products generated approximately 66% of the Company’s gross product sales.

Because the market for these product types and categories is characterized by periodic new product introductions, the Company’s future financial performance will depend, in part, on the successful and timely development and customer acceptance of new and enhanced versions of these product types and other products distributed by the Company.

6 unchanged sentences

The Company’s level of sales depends on the effectiveness of these organizations, as well as the effectiveness of its own employees.

Some of these third party representatives may sell (and do sell), with the Company’s permission, competitive products of third parties as well as the Company’s products.

Some of these third party representatives sell, with the Company’s permission, competitive products of third parties as well as the Company’s products.

During fiscal 2025 and fiscal 2024, these organizations were responsible for approximately 52% and 40%, respectively, of the Company’s net revenues.

In addition, in fiscal 2024 one of these representative organizations was responsible for approximately 30% of the Company’s net revenues and in fiscal 2023 one of these representative organizations was responsible for approximately 38% of the Company’s net revenues.

If any of the Company’s third party sales representative organizations engaged by the Company, especially the Company’s largest, fails to adequately promote, market and sell its products, the Company’s revenues could be significantly decreased until a replacement organization or distributor could be retained by the Company, which has happened in the past and could happen in the future.

In addition, in fiscal 2025 one of these representative organizations was responsible for approximately 38% and another was responsible for approximately 10% of the Company’s net revenues.

In fiscal 2024 one of these representative organizations was responsible for approximately 30% of the Company’s net revenues.

No other representative was responsible for greater than 10% of the Company's net revenues in either fiscal 2025 or fiscal 2024.

If any of the Company’s third party sales representative organizations engaged by the Company, especially the Company’s largest, fails to adequately promote, market and sell its products, the Company’s revenues could be significan tly decreased until a replacement organization or distributor could be retained by the Company, which has happened in the past and could happen in the future.

The loss or reduction of product sales made through third party sales representative organizations could have a material adverse effect on the Company’s business and results of operations.

4 unchanged sentences

As a result, there is significant competition for retail shelf space.

In addition, the Company’s two largest customers, Walmart and Amazon, use their own private label brands that compete directly with some of the Company’s products.

In addition, the Company’s largest customers, including Walmart and Amazon, use their own private label brands that compete directly with some of the Company’s products.

As the retailers in the houseware and consumer electronics industry become more concentrated, competition for sales to these retailers may increase, which could materially reduce the Company's revenues and profitability.

16 unchanged sentences

The Company does not have any long-term or exclusive purchase commitments with any of its suppliers.

In fiscal 2024 the Company reduced its reliance on its largest supplier from approximately 75% to 38% of the Company’s purchases of products.

The Company also increased its number of significant suppliers from 2 to 4, each of which supplied over 10% of the Company's purchased products.

In fiscal 2025 and 2024, the Company relied on its 4 largest suppliers to supply approximately 95% of its purchases of products.

The Company’s failure to maintain existing relationships with its suppliers or to establish new relationships on similar pricing and credit terms in the future could negatively affect the Company’s ability to obtain products in a timely manner.

14 unchanged sentences

Given that the Company’s suppliers are based primarily in China, finding suppliers outside of China could result in additional risks, including additional compliance requirements with foreign laws and taxes, obtaining distribution and administrative support and training new personnel.

During fiscal 2024, inbound freight costs have declined from the higher costs we experienced from the COVID-19 pandemic and related global supply chain disruptions and have begun to approach levels seen prior to the impact of such factors.

However, recently the Company is experiencing increased inbound freight costs, albeit not to the levels experienced during the COVID-19 pandemic.

If the Company is unable to deliver products in the required amounts and in a timely fashion, the Company could experience delays or reductions in shipments to its customers, which could materially and adversely affect the Company ’ s revenues and relationships with its customers.

121 unchanged sentences

Furthermore, it is unclear whether the current U.S.

administration will alter the existing trade agreements between China and the U.S.

administration will further alter the existing trade agreements between China and the U.S.

or otherwise modify or impose additional tariffs on imports from China.

14 unchanged sentences

Any of the factors described above may materially and adversely affect the Company’s revenues and/or increase its operating expenses.

Tariffs or other restrictions placed on the Company ’ s products imported into the United States from China, or any related countermeasures taken by China, could have a material adverse effect on the Company ’ s business, profitability and results of operations.

Tariffs or other restrictions placed on the Company ’ s products imported into the United States from China, or any related countermeasures taken by China, have had and could continue to have a material adverse effect on the Company ’ s business, profitability and results of operations.

The Company has operations in China and all of the Company’s products are currently manufactured by suppliers in China.

This concentration exposes the Company to risks associated with doing business globally, including changes in tariffs.

Any tariffs or other trade restrictions affecting the import of these products to the United States from China or any retaliatory trade measures taken by China in response to existing or future tariffs could have a material adverse effect on the Company’s results of operations going forward.

The Company’s dependency on its overseas suppliers could exacerbate these and other risks, and any tariffs on the categories of products the Company imports to the United States could negatively affect the demand for such products, increase the cost of components, delay production or affect the Company’s ability to compete against competitors who do not manufacture in China or otherwise are not subject to such tariffs.

Effective in September 2018, the United States imposed tariffs of 10% on approximately $200 billion worth of goods imported from China, including categories of products the Company imports from China.

These tariffs were increased to 25% effective in May 2019 and were scheduled to further increase to 30% in October 2019, which increases were subsequently delayed indefinitely after an interim deal was reached between the United States and China.

Effective in September 2019, the United States imposed additional tariffs on essentially all remaining Chinese-origin imports, including approximately $300 billion worth of goods imported from China (“List 4 products”).

Tariffs of 15% were imposed on certain List 4 products effective in September 2019 (“List 4A products”), and the remainder were scheduled to be subject to these tariffs effective in December 2019 (“List 4B products”).

In January 2020, the United States and China signed a Phase One Economic and Trade Agreement, pursuant to which the tariff increases on the List 4B products remained suspended and the rate of additional tariffs on the List 4A products was reduced to 7.5%, while all other tariffs remain in place.

The effects on the Company of these imposed and proposed tariffs are uncertain because of the dynamic nature of governmental actions and responses, as well as possible exemptions for certain products.

and China are able to negotiate the issues to restore a mutually advantageous and fair trading regime, the increased tariffs could be eliminated, but given the uncertainties, including as a result of the recent change in U.S.

administrations and any other political changes, there can be no assurance of whether, or when, this will be accomplished.

Effective in September 2018, the United States imposed tariffs of 10% on certain goods imported from China, including categories of products the Company imports from China.

These tariffs were increased to 25% effective in May 2019.

Effective in September 2019 (and as amended by the certain Phase One Economic and Trade Agreement entered into between the United States and China in January 2020), the United States imposed additional tariffs of approximately 7.5% on essentially all remaining goods imported from China.

T he new United States presidential administration has promoted and implemented plans to further raise tariffs and pursue other trade policies intended to restrict imports from nearly all of the United States' current trading partners and, in particular, China.

In May 2025, following a series of tariffs imposed by the United States on imports from China and reciprocal tariffs from China on imports from the United States, the countries agreed on cumulative, bilateral reciprocal tariffs of 10% to take effect on August 12, 2025, pending the outcome of ongoing discussions between the countries.

It has been reported that these negotiations will result in an additional 20% tariff on imports from China, representing an aggregate tariff rate of 55%.

The ultimate scope of the effects on the Company of these imposed and proposed tariffs is uncertain because of the dynamic nature of governmental actions and responses, as well as possible exemptions for certain products.

If the currently imposed and proposed tariffs covering the categories of products that the Company imports continue or are increased, and the Company is unable to obtain an exception, it could have a material adverse effect on the Company’s business.

Although the Company is monitoring the trade environment and working to mitigate the effects of tariffs through pricing and sourcing strategies, including through ongoing inventory management, the Company cannot be certain how its customers and competitors will react to the actions taken.

Although the Company is continuing to monitor the trade environment and working to mitigate the effects of tariffs through pricing and sourcing strategies, including through ongoing inventory management, the Company cannot be certain how its customers and competitors will react to the actions taken.

If the Company determines to pass some or all of these new tariff burdens on to its customers as product price increases in the future, the result may be a degradation of the Company’s competitive position and a loss of customers that would adversely affect the Company’s operating performance.

Additional tariffs imposed by the United States, and any related countermeasures by China, including as a result of the heightened tensions between the United States and China over Hong Kong, could further increase the Company’s cost of goods and reduce its gross margins.

We cannot predict future trade policy, whether exclusions will be reinstated, or the terms of any renegotiated trade agreements and their impacts on our business.

The imposition of these new or additional tariffs or other trade barriers by the United States, should they be implemented and sustained for an extended period of time, and any related countermeasures by China, including as a result of the heightened tensions between the United States and China over Hong Kong, could further increase the Company’s cost of goods and reduce its gross margins.

We cannot predict future trade policy and regulations in the United States and other countries, including whether, and to what extent, there may be additional changes to international trade agreements, such as those with China, or whether, or to what extent, quotas, duties, additional tariffs, export controls or other restrictions will be changed or imposed by the United States or by other countries, and their impacts on our business.

The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to further adversely impact demand for our products, our costs, our customers, our suppliers, and the U.S.

economy, which in turn could further adversely impact our business, financial condition and results of operations.

and world economy, which in turn could further adversely impact our business, financial condition and results of operations.

Our business involves the potential for product recalls, which could affect our revenue and profitability.

The products that we sell are subject to various mandatory and voluntary standards.

As a marketer and distributor of consumer products, we are subject to the Consumer Product Safety Act and the Federal Hazardous Substances Act, which empower the Consumer Products Safety Commission (“CPSC”) to seek to exclude from the market those products that are found to be unsafe or hazardous.

As a marketer and distributor of consumer products, we are subject to the Consumer Product Safety Act and the Federal Hazardous Substances Act, which empower the CPSC to seek to exclude from the market those products that are found to be unsafe or hazardous.

In addition, the U.S.

Food and Drug Administration (“FDA”) and other governmental authorities regulate the development, manufacture, sale and distribution of certain of our products.

FDA and other governmental authorities regulate the development, manufacture, sale and distribution of certain of our products.

Under certain circumstances, the CPSC, the FDA or other government agencies could require us to repair, replace or refund the purchase price of one or more of our products, or we may voluntarily do so.

13 unchanged sentences

Failure to comply with public health, consumer protection and other regulations could affect our reputation, revenue and profitability.

Some jurisdictions require that products be listed by UL, a not-for-profit organization that sets safety standards for products, or other similar recognized laboratories.

Electrical appliances are subject to various mandatory and voluntary standards.

Some jurisdictions require that products be listed by Underwriters’ Laboratories, Inc.

(UL), a not-for-profit organization that sets safety standards for products, or other similar recognized laboratories.

We endeavor to design our products to meet the certification requirements of, and to be certified in, each of the jurisdictions in which they are sold.

115 unchanged sentences

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-K

Item 1A. Risk Factors