What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-06-27 compared with 2024-06-27 · 141 added, 134 removed, 533 unchanged (34% of the section changed)

2 unchanged sentences

Report of Independent Registered Public Accounting Firm (Grassi & Co., CPAs, P.C., NY PCAOB firm ID 606)

Report of Independent Registered Public Accounting Firm (Moore Stephens, CPAs, P.C., NY PCAOB firm ID 717)

Consolidated Statements of Operations for the years ended March 31, 2025 and 2024

9 unchanged sentences

We have audited the accompanying consolidated balance sheets of Emerson Radio Corp.

and Subsidiaries (the “Company”) as of March 31, 2024, and the related consolidated statements of operations, changes in stockholders' equity, and cash flows, for the one year in the period ended March 31, 2024, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2024, and the results of their operations and its cash flows for the year ended March 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

and Subsidiaries (the “Company”) as of March 31, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders' equity, and cash flows for each of the two years in the period ended March 31, 2025 and March 31, 2024, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025, and the results of their operations and its cash flows for each of the two years in the period ended March 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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June 27, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of Emerson Radio Corp.

and Subsidiaries

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Emerson Radio Corp.

and Subsidiaries (the “Company”) as of March 31, 2023, and

the related consolidated statements of operations, changes in stockholders' equity, and cash flows, for the one year in the period ended March 31, 2023, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2023, and the results of their operations and their cash flows for the one year in the period ended March 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below arise from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relates.

As described in Note 1 of the consolidated financial statements, the Company values inventory at the lower of cost or net realizable value (determined on a first-in, first-out basis) and includes inventory purchase costs and allocated overhead.

The Company records valuation adjustments for the excess cost of inventory over the estimated net realizable value.

Valuation adjustments for slow-moving and obsolete inventory are calculated on an individual product basis based on physical inspection of the product in connection with a physical inventory, review of slow-moving products, forecasted sales, and consideration of active marketing programs.

We identified valuation adjustments for slow-moving and obsolete inventories as a critical audit matter because of the significant judgment required by management in developing its assumptions about forecasted consumption and sales, and in determining the estimated net realizable value adjustments applied to individual inventory items.

Testing management’s assumptions and estimates used in calculating the valuation adjustments required a high degree of auditor judgment.

The primary procedures we performed to address this critical audit matter included:

• We tested the reliability of system-generated reports used by management on a sample basis by agreeing the selected items to the underlying records.

• We observed the physical condition of inventories during physical inventory counts.

• We tested the accuracy of the valuation adjustments by selecting a sample of inventory items and recalculating the estimated net realizable value based upon subsequent period transactions.

• We tested the reasonableness of management’s assumptions about forecasted sales by:

• Performing a retrospective review to assess management’s estimated percentages by comparing the prior year inventory to current year consumption and sales.

• Corroborating the assumptions related to slow-moving products and forecasted sales with management.

Certified Public Accountants and Advisors, A Professional Corporation

We have served as the Company’s auditor from 2005 through September 30, 2023.

New York, New York

June 27, 2024

EMERSON RADIO CORP.

12 unchanged sentences

Total cost of sales and SG&A

16,400 12,469

Operating loss

3 unchanged sentences

Interest income, net

Income from governmental assistance program

Income (loss) before income taxes

(Loss) income before income taxes

( 4,728 ) 856

Provision for income tax expense

Net income (loss)

Provision for income taxes

Net (loss) income

( 4,731 ) 766

Basic income (loss) per share

Basic (loss) income per share

$ ( 0.22 ) $ 0.04

Diluted income (loss) per share

Diluted (loss) income per share

$ ( 0.22 ) $ 0.04

13 unchanged sentences

$ 1,186 $ 19,890

Short term investments

Accounts receivable, net

13 unchanged sentences

Accounts payable and other current liabilities

$ 808 $ 1,158

Due to affiliate

2 unchanged sentences

Income tax payable, current portion

Advanced deposits

Deferred revenue

2 unchanged sentences

Long-term operating lease liability

Long-term finance lease liability

Income tax payable

42 unchanged sentences

Cash Flows from Operating Activities:

Net income (loss)

Net (loss) income

$ ( 4,731 ) $ 766

2 unchanged sentences

Depreciation and amortization

Non-cash reserve charges

Changes in assets and liabilities:

Accounts receivable

( 1,262 ) ( 215 )

Licensing receivable

4 unchanged sentences

Right of use assets-operating

Short term lease liabilities

( 313 ) ( 248 )

Right of use assets-finance

Short term lease liabilities

Long term lease liabilities

Due to affiliate

Income taxes payable

1 unchanged sentence

Advanced deposits

( 3,316 ) 3,316

Deferred revenue

4 unchanged sentences

Purchases of short-term investments

( 16,277 ) ( 18,505 )

Additions to property and equipment

( 195 ) ( 119 )

Net cash (used) by investing activities

( 15,063 ) ( 119 )

Cash Flows from Financing Activities:

1 unchanged sentence

Long term finance liability

Net cash (used) by financing activities

Net cash provided (used) by financing activities

Net (decrease) in cash and cash equivalents

6 unchanged sentences

Right-of-use assets obtained in exchange for new operating lease liabilities

Right-of-use assets obtained in exchange for new finance lease liabilities

Supplemental disclosures:

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All significant intercompany accounts and transactions have been eliminated in the consolidation.

Certain items in prior year financials may have been reclassified to conform to current year presentation.

In fiscal 2023, the Consolidated Statement of Operations presented licensing revenue as $ 1,102,000 which included royalty revenue of $ 730,000 and licensing revenue of approximately $ 372,000 .

In fiscal 2023, the Consolidated Statement of Cash Flows presented long term lease liabilities as a usage of cash of approximately $ 141,000 and has been adjusted to a usage of cash of approximately $ 139,000 .

Also in fiscal 2023, the Consolidated Statement of Cash Flows presented long term finance liability as nil and has been adjusted to a usage of cash of approximately $ 2,000 .

Use of Estimates

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Cash and Cash Equivalents

Highly liquid investments with original maturities of three months or less at the time of purchase are considered to be cash equivalents.

Highly liquid investments with original maturities of 90 days or less at the time of purchase are considered to be cash equivalents.

Fair Values of Financial Instruments

1 unchanged sentence

Long-Lived Assets

The Company’s long-lived assets include property and equipment.

At March 31, 2024 , the Company had ap proximately $ 95,000 of property and equipment, net of accumulated depreciation.

The Company’s long-lived assets include property and equipment and right of use assets.

At March 31, 2025 , the Company had ap proximate ly $ 211,000 o f property and equipment, net of accumulated depreciation.

At March 31, 2025 , the Company's right of use assets were approximately $ 448,000 .

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC Topics 350 “Intangibles” and 360 “Property, Plant and Equipment”.

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

As of March 31, 2025, the Company recorded deferred revenue of approximately $ 96,000 as compared to approximately $ 191,000 as of March 31, 2024 and 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

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Receivables are written off once they are considered uncollectible.

The allowance for doubtful accounts receivable increased approximately $ 800 for the year ended March 31, 2024 and increased by $ 20,800 for the year ended March 31, 2023 .

The accounts receivable balance on a net basis was approximately $ 1,499,000 as of March 31, 2025 as compared to approximately $ 1,343,000 as of March 31, 2024 and approximately $ 1,165,000 as of March 31, 2023.

The allowance for credit losses increased approximately $ 1,082,000 for the year ended March 31, 2025 and increased by $ 800 for the year ended March 31, 2024 .

As of March 31, 2025 , Amazon and Variety Wholesalers accounted for 59 % and 19 %, respectively, of the Company’s total trade accounts receivable, net of specific reserves.

As of March 31, 2024 , Walmart, Chedraui and Amazon accounted for 34 %, 30 % and 25 %, respectively, of the Company’s total trade accounts receivable, net of specific reserves.

As of March 31, 2023 , Amazon, Walmart and Fred Meyer accounted for 43 %, 35 % and 11 %, respectively, of the Company’s total trade accounts receivable, net of specific reserves.

No other customer accounted for more than 10% of the Company’s total trade accounts receivable, net of specific reserves, as of March 31, 2025 or March 31, 2024 .

Accounts receivable roll-forward:

As of March 31,

Trade receivables

$ 2,606 $ 1,368 $ 1,190

Allowance for credit losses

( 1,107 ) ( 25 ) ( 25 )

Accounts receivable, net

1,499 1,343 1,165

Accounts receivables deemed uncollectible are charged against the allowance for credit losses when identified:

As of March 31,

Opening balance

$ ( 25 ) $ ( 25 )

Reserve adjustment

Allowance for credit losses

( 1,107 ) ( 25 )

Cost of Sales

8 unchanged sentences

Conversely, the sales return reserve could be decreased if the actual return rates are less than the historical return rates, which were used to establish the reserve.

At March 31, 2024 the sales return reserve balance was approximately $ 67,000 as compared to approximately $ 83,000 as of March 31, 2023, a decrease of $ 16,000 during fiscal 2024.

At March 31, 2023, the sales return reserve balance was approximately $ 83,000 as compared to approximately $ 84,000 as of March 31, 2022, a decrease of $ 1,000 during fiscal 2023.

At March 31, 2025 the sales return reserve balance was approximately $ 70,000 as compared to approximately $ 67,000 as of March 31, 2024 , an increase of $ 3,000 during fiscal 2025 .

At March 31, 2024 , the sales return reserve balance was approximately $ 67,000 as compared to approximately $ 83,000 as of March 31, 2023 , a decrease o f $ 16,000 duri ng fiscal 2024 .

Foreign Currency

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Advertising expenses are charged against earnings as incurred and are included in selling, general and administrative expenses.

The Company incurred approximately $ 122,000 of advertising expenses during fiscal 2024 and approximately $ 39,000 during fiscal 2023 .

The Company incurred approx imately $ 165,000 of advertising expenses during fiscal 2025 and approximately $ 122,000 during fiscal 2024 .

Sales Allowance and Marketing Support Expenses

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As of March 31, 2025 and March 31, 2024 , the Company had no outstanding options or warrants.

Accounting Pronouncements

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.

Accounting Standards Update 2016 - 13 “ Financial Instruments – Credit Losses ” (Issued June 2016)

In June 2016, the FASB issued ASU 2016 - 13 “Financial Instruments - Credit Losses” to introduce new guidance for the accounting for credit losses on instruments within its scope.

ASU 2016 - 13 requires among other things, the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts.

Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses.

In addition, ASU 2016 - 13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.

ASU 2016 - 13 is effective for fiscal years and interim periods beginning after December 15, 2022.

The adoption did not have a material impact on its financial statements.

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 ):

"Improvements to Reportable Segment Disclosures " (Issued October 2023 )

In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280 ):

"Improvements to Reportable Segment Disclosures" ("ASU 2023 - 07" ) to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.

This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

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.

Accounting Standards Update 2023 - 09 Income Taxes (Topic 740 ) :

"Improvements to Income Tax Disclosures" Income Statement Expenses " (Issued December 2023 )

In December 2023, the FASB issued ASU No.

2023 - 09, “Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures.” ASU2023 - 09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

ASU 2023 - 09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

NOTE 2 — INVENTORIES:

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As of March 31, 2025 and March 31, 2024 , inventories consisted exclusively of purchased finished goods.

As of March 31, 2024 , inventory was valued at approximately $ 6,953,000 which included a valuation reserve of approximately $ 316,000 .

As of March 31, 2025 , inventory was valued at approximat ely $ 4,909,000 which included a valuation reserve of approximately $ 354,000 .

As of March 31, 2024 , inventory was valued at approximately $ 6,953,000 which included a valuation reserve of approximately $ 316,000 .

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 March 31, 2024.

("N.A.K.S"), 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 March 31, 2025 .

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

1 unchanged sentence

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

During fiscal 2024 and fiscal 2023 , the Company was billed approximately $ 158,000 and $ 158,000 , resp ectively, 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.

During fiscal 2025 and fiscal 2024 , the Company was billed approximately $ 138,000 and $ 158,000 , 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.

The Company owed $ 819 to VACL related to rental charges as of March 31, 2025 and $ 827 as of March 31, 2024 .

During fiscal 2024 and fiscal 2023 , the Company was billed approximately nil and $ 1,600 , respectively, for its share of installation charges related to an air conditioning system, and purchase of protective materials for coronavirus from Vigers Strategic Services Ltd (“VSSL”), which is a company related to the Company’s Chairman of the Board.

During fiscal 2025 and fiscal 2024 , the Company was billed approximately $ 385 and nil, respectively, for its share of installation charges related to an air conditioning system, and purchase of protective materials for coronavirus from Vigers Strategic Services Ltd (“VSSL”), which is a company related to the Company’s Chairman of the Board.

Vigers Strategic Services Ltd was formerly known as Lafe Strategic Services Ltd.

The Company owed nil to VSSL related to these charges as at March 31, 2024 and March 31, 2023 .

The Company owed nil to VSSL related to these charges at March 31, 2025 and March 31, 2024 .

Charges for promotional items

During fiscal 2025 , the Company purchased approximately $ 30,000 of promotional items from The Whisky Capital Pte Ltd ("TWCPL"), which is a company related to the Company's Chairman.

The Company owed nil to TWCPL related to these charges as at March 31, 2025 .

The Company had no transactions with TWCPL during fiscal 2024 .

NOTE 4 — PROPERTY AND EQUIPMENT:

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Total property and equipment

Depreciation of property and equipment amounted to approximately $ 26,000 and $ 800 for the twelve months ended March 31, 2024 and 2023 , respectively.

During fiscal 2024 , the Company did not dispose of any property and equipment.

During fiscal 2023 , the Company disposed of fully depreciated property and equipment with a gross book value of approximately $ 211,000 .

The Company did not recognize a gain or loss on these disposals.

Depreciation of property and equipment amounted to a pproximately $ 78,000 and $ 26,000 for the twelve months ended March 31, 2025 and 2024 , respectively.

During fiscal 2025 and 2024 , the Company did not dispose of any property and equipment.

NOTE 5 — INCOME TAXES:

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Of the federal net operating loss carryforwards at March 31, 2025 , $ 19.1 million can be carried forward indefinitely.

As of March 31, 2025, the Company had $ 2.0 million of foreign net operating loss carryforwards which do not expire.

Utilization of the net operating loss and tax credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future, as provided by Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, or Section 382, as well as similar state provisions and other provisions of the Code.

18 unchanged sentences

Valuation allowance

1,636 ( 244 )

Provision for income tax expense

3 unchanged sentences

Accounts receivable reserves

Property and equipment and intangible assets

Net operating loss and credit carry forwards

5 unchanged sentences

Property and equipment

( 16 ) ( 19 )

Total deferred tax liabilities:

$ ( 16 ) $ ( 19 )

The Company has $ 19.1 million of U.S.

federal net operating loss carry forwards (“NOLs”) and $ 21.1 million of state NOLs as of March 31, 2025 as follows:

March 31, 2024

Federal NOL's State NOL's

Federal NOL's

Loss Year (Fiscal)

4 unchanged sentences

$ — $ 0.8 2037

$ — $ 2.7 2038

$ 3.3 $ 2.8 2039

$ 3.6 $ 3.1 2040

$ 4.0 $ 1.9 2041

$ 3.4 $ 1.9 2042

$ ( 1.4 ) $ ( 1.6 ) 2043

$ 1.9 $ 1.6 2044

$ — $ 2.6 Federal indefinite/State 2038

$ 1.9 $ 2.7 Federal indefinite/State 2039

$ 3.7 $ 3.0 Federal indefinite/State 2040

$ 4.0 $ 3.2 Federal indefinite/State 2041

$ 3.4 $ 2.9 Federal indefinite/State 2042

$ 2.4 $ 2.1 Federal indefinite/State 2044

$ 3.7 $ 3.2 Federal indefinite/State 2045

$ 19.1 $ 21.1

18 unchanged sentences

The Company’s ERP software provider is subscription based with annual commitments as follows (in thousands).

Rent expense resulting from leases with non-affiliated companies aggregated $ 49,000 and $ 86,000 f or fiscal 2024 and 2023 .

Rent expense resulting from leases with non-affiliated companies ag gregated $ 64,000 and $ 49,000 for fiscal 2025 and 2024 .

Letters of Credit:

6 unchanged sentences

The Company matches a percentage of the participants’ contributions up to a specified amount.

These contributions to the plan for fiscal 2024 and 2023 were approximately $ 19,000 for both periods and were charged against earnings for the periods presented.

These contributions to the plan for fiscal 2025 and 2024 were approxi mately $ 19,000 for both p eriods and were charged against earnings for the periods presented.

NOTE 7 — SHAREHOLDERS ’ EQUITY:

7 unchanged sentences

however, it retains a liquidation preference.

NOTE 8 — SHORT TERM INVESTMENTS:

At both March 31, 2024 and March 31, 2023 , the Company held short-term investments in deposits totaling nil .

The Company held $ 19.1 million in term deposits which were classified as cash equivalents as of March 31, 2024 and $ 23.1 million in term deposits classified as cash equivalents as of March 31, 2023 .

As of March 31, 2024 and March 31, 2023, the Company's term deposits had maturity dates of 90 days or less.

NOTE 8 — SHORT TERM DEPOSITS AND INVESTMENTS:

The Company held approximately $ 0.9 million in short term deposits as of March 31, 2025 and approximately $ 19.1 million in short term deposits as of March 31, 2024 .

These short term deposits have maturity dates of 90 days or less and are classified as cash equivalents.

The Company also held short-term investments in deposits totaling approximately $ 14.9 million at March 31, 2025 as compared to nil at March 31, 2024 .

These short-term i nvestments in deposits have maturity dates greater than 90 days and are classified as short-term investments.

Under ASC Topic 820 Fair Value Measurement, t he carrying amounts of the Company’s financial instruments, such as cash, short term deposits and short term investments approximate fair values due to the short-term nature of these instruments and are classified under the fair value hierarchy of Level 1.

NOTE 9 — NET INCOME (LOSS) PER SHARE:

1 unchanged sentence

Twelve Months Ended March 31,

Net income (loss)

Net (loss) income

$ ( 4,731 ) $ 766

Denominator for basic and diluted income (loss) per share — weighted average shares

Denominator for basic and diluted loss/income per share — weighted average shares

21,042,652 21,042,652

Net income (loss) per share:

Basic and diluted income (loss) per share

Net (loss) income per share:

Basic and diluted (loss) income per share

$ ( 0.22 ) $ 0.04

1 unchanged sentence

NOTE 10 — LICENSE AGREEMENTS:

During fiscal 2025 the Company was party to two license agreements.

During fiscal 2024 the Company was party to three license agreements, one of which was terminated by the Company in June 2023.

The remaining agreements allow the licensee to access the Company’s trademarks for the manufacture and/or the sale of consumer electronics and other products.

The remaining agreements allow the licensee to access the Company’s trademarks for the manufacture and/or the sale of consumer electr onics and other products.

The license agreements (i) allow the licensee to use the Company’s trademarks for a specific product category, or for sales within specific geographic areas, or for sales to a specific customer base, or any combination of the above, or any other category that might be defined in the applicable license agreement and (ii) may be subject to renewal at the initial expiration of the applicable license agreement and are governed by the laws of the United States.

The Company recorded licensing revenues of approximately $ 336,000 in fiscal 2025 and $ 218,000 in fiscal 2024 under the license agreements.

The Company also recorded several one -time settlement agreements with customers of Emerson Quiet Kool, which aggregated $ 175,000 in fiscal 2024 and $ 730,000 in fiscal 2023.

The Company also recorded several one -time settlement agreements with customers of Emerson Quiet Kool, which aggregated nil in fiscal 2025 and $ 175,000 in fiscal 2024 .

The agreements allow Emerson Quiet Kool's customers to sell-off their on hand inventories over a limited period.

24 unchanged sentences

not have any effect on the ability of the Company to collect the judgement.

In addition, in connection with those bankruptcy proceedings, the Chapter

7 trustee of Home Easy has filed a complaint seeking the return of the

$ 4.1 million of advanced deposits previously paid to the Company and the outcome of such litigation remains uncertain.

The Company is not currently a party to any other legal proceedings other than litigation matters, in most cases involving ordinary and routine claims incidental to its business.

3 unchanged sentences

Customer Concentration

For fiscal 2024 , the Company’s three largest customers accounted for approximately 83 % of the Company’s net revenues, with Walmart accounting for 53 %, Amazon accounting for 20 % and Fred Meyer accounting for 10 %.

For fiscal 2025 , the Company’s three largest customers accounted for approximately 79 % of the Company’s net revenues, with Amazon accounting for 39 %, Walmart accounting for 31 % and Big Lots accounting for 9 %.

For fiscal 2024 , the Company’s three largest customers accounted for approximately 83 % of the Company’s net revenues with Walmart accounting for 53 %, Amazon accounting for 20 % and Fred Meyer accounting for 10 %.

Product Concentration

For fiscal 2024 , the Company’s gross product sales included microwave ovens, which generated approximately 33 %, and audio products, which generated 66 % of the Company's gross product sales.

For fiscal 2023 , the Company’s gross product sales included microwave ovens, which generated approximately 27 %, and audio products, which generated 73 % of the Company's gross product sales.

For fiscal 2025 , the Company’s gross product sales included microwave ovens, which generated approximately 51 %, and audio products, which generated approximately 47 % of the Company's gross product sales.

For fiscal 2024 , the Company’s gross product sales included microwave ovens, which generated approximately 33 %, and audio products, which generated approximately 66 % of the Company's gross product sales.

As a result of this dependence, a significant decline in pricing of, or market acceptance of these product types and categories, either in general or specifically as marketed by the Company, would have a material adverse effect on the Company’s business, financial condition and results of operations.

2 unchanged sentences

Concentrations of Credit Risk

As a percent of the Company’s total trade ac counts receivable, net of specific reserves, Amazon and Variety Wholesalers accounted for 59 % and 19 %, respectively, as of March 31, 2025 .

As a percent of the Company’s total trade accounts receivable, net of specific reserves, Walmart, Chedraui and Amazon accounted for 34 %, 30 % and 25 %, respectively, as of March 31, 2024 .

As a percent of the Company’s total trade accounts receivable, net of specific reserves, Amazon, Walmart and Fred Meyer accounted for 43 %, 35 % and 11 %, respectively, as of March 31, 2023 .

No other customer accounted for more than 10% of the Company’s total trade accounts receivable, net of specific reserves, as of March 31, 2025 or March 31, 2024 .

The Company periodically performs credit evaluations of its customers but generally does not require collateral, and the Company provides for any anticipated credit losses in the financial statements based upon management’s estimates and ongoing reviews of recorded allowances.

The accounts receivable allowance for doubtful accounts on the Company’s total trade accounts receivable balances was approximately $ 25,000 at March 31, 2024 and at March 31, 2023 .

Due to the high concentration of the Com pany’s net trade accounts receivables among just three customers, any significant failure by one of these customers to pay the Company their outstanding balances would result in a material adverse effect on the Company’s business, financial condition and results of operations.

The allowance for credit losses on the Company’s total trade accounts receivable balances was approximately $ 1,107,000 at March 31, 2025 and $ 25,000 at March 31, 2024 .

Due to the high concentration of the Company’s net trade accounts receivables among just two or three customers, any significant failure by one of these customers to pay the Company their outstanding balances would result in a material adverse effect on the Company’s business, financial condition and results of operations.

The Company maintains its cash accounts with major U.S.

3 unchanged sentences

The Company’s cash, cash equivalents and restricted cash balances in excess of these FDIC-insured limits were approximately $ 0.9 million and approximately $ 19.6 million at March 31, 2025 and March 31, 2024 , respectively.

The Company also has short term deposits in foreign financial institutions which are not FDIC insured of approximately of $ 14.9 million.

These short term deposits have maturity dates over 90 days and are classified as short term investments on the Company's Consolidated Balance Sheets.

Supplier Concentration

During fiscal 2024 , the Company reduced its reliance on its largest factory supplier, from approximately 75 % to 38 % of the Company's purchases of products for resale.

During fiscal 2023 , the Company procured 95 % of its products for resale from its two largest factory suppliers.

Approximately 75 % of these products were procured from one of the suppliers and approximately 20 % were procured from the other.

During both fiscal 2025 and 2024 , the Company procured 95 % of its products for resale from its four largest factory suppliers.

Approximately 37 % of these products were procured from its largest supplier in both periods.

See the Supplier table under the heading "Design and Manufacturing " in this Form 10 -K, for further details.

No assurance can be given that ample supply of product would be available at current prices and on current credit terms.

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Third Party Representatives

In fiscal 2024 , the Company utilized 6 sales representative organizations, including one which represented approximately 30 % of its net revenues.

In fiscal 2023 , the Company utilized 2 sales representative organizations, including one which represented 38 % of it net revenues.

In fiscal 2025 , the Company utilized 5 sales representative organizations, two of these representative organizations were responsible for approximately 48 % of the Company's net revenues, including one which represented approximately 38 % and another which represented 10 % of its net revenues.

In fiscal 2024 , the Company utilized 6 sales representative organizations, including one which represented 30 % of its net revenues.

No other sales representative organization accounted for more than 10% of the Company's net revenues in fiscal 2025 or fiscal 2024 .

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

These leases have remaining non-cancellable lease terms of thr ee to fifty-seven months.

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

These leases have remaining non-cancellable lease terms of twenty-nine to fifty-one 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 fiscal 2025 to indicate that a reassessment or re-measurement of the Company’s existing leases was required.

There were also no impairment indicators identified during fiscal 2025 that required an impairment test for the Company’s right-of-use assets or other long-lived assets in accordance with ASC 360 - 10, "Impairment and Disposal of Long-Lived Assets”.

As of March 31, 2024 , the Company’s current operating and finance lease liabilities were approximately $ 93,000 and $ 300 , respectively, and its non-current operating and finance lease liabilities were approximately $ 198,000 and nil , respectively.

As of March 31, 2025 , the Company’s current operating and finance lease liabilities were approximately $ 136,000 and $ 1,200 , respectively, and its non-current operating and finance lease liabilities were approximately $ 321,000 and $ 5,100 , 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 March 31, 2025 were approximately $ 443,000 and $ 5,700 , respectively.

As disclosed in "Note 3 - Related Party Transactions", the Company's Hong Kong office space is being leased from Vigers Appraisal and Consulting Ltd (“VACL”), which is a company related to the Company’s Chairman of the Board.

As of March 31, 2024 , the current operating liability of this lease is approximately $ 62,000 and its non-current liability is nil.

As disclosed in "Note 3 - Related Party Transactions", the Company's office space in Hong Kong is being leased from VACL, which is a company related to the Company’s Chairman of the Board.

As of March 31, 2025 , the current operating liability of this lease is approximately $ 100,000 and its non-current liability is approximately $ 160,000 .

Its right-of-use asset value is approximately $ 260,000 , as of March 31, 2025 .

In January 2023, the Company relocated its corporate headquarters to a temporary office space, while its new landlord built out the agreed-upon space.

The Company was not obligated to pay rent while it resided in the temporary office space.

The Company took possession of the completed space on July 1, 2023, which became the commencement date of a 66 month lease.

The right-of-use asset value of this operating lease is approximately $ 248,000 .

As of March 31, 2025 , the Company's office space in the United States has a current operating liability of approximately $ 36,000 and its non-current liability is approximately $ 162,000 .

The right-of-use asset value of this operating lease is approximately $ 183,000 , March 31, 2025 .

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

Twelve Months Ended March 31,

Year Ended March 31,

(in thousands)

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Imputed interest

NOTE 15 — GOVERNMENTAL ASSISTANCE PROGRAM

During fiscal 2024 and 2023, the Company’s Hong Kong subsidiary recorded income of nil and approximately $ 34,000 , respectively, under a governmental program called the Employment Support Scheme (“ESS”).

The proceeds were required to be used for payroll expenses and the Company was subject to government-appointed random reviews to verify the information submitted by the applicant.

The income realized from the amount granted under the ESS program is presented as Other Income under the description called “Income from governmental assistance program” in the Consolidated Statements of Operations.

NOTE 15 — SUBSEQUENT EVENTS

As of the date of this filing, there were no subsequent events to disclose.

NOTE 16 — SEGMENT INFORMATION

The Company currently operates as one segment which includes two revenue types, product sales and licensing revenue.

While the Company discloses product sales and licensing revenue separately, management does not consider these to be separate segments, as all Emerson branded product is sold though similar sales channels and to similar customers.

Management's determination for the allocation of resources is not analyzed by revenue streams, but as a single business unit.

The determination of a single business segment is consistent with the consolidated financial information provided to the Company's Chief Operating Decision Maker ("CODM").

The Company's CODMs are the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer who review and evaluate consolidated net income for purposes of assessing performance, allocating resources, making operating decisions and for its planning and forecasting processes.

Segment expenses are provided to the CODM on the same basis as disclosed in the condensed Consolidated Statements of Operations.

The CODM does not evaluate performance nor does it allocate resources based on segment assets and therefore such information is not presented in the notes to the financial statements.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data