What changed in this filing

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Item 1. Financial Statements

2026-02-17 compared with 2025-11-14 · 170 added, 143 removed, 447 unchanged (41% 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:

18 unchanged sentences

(In thousands except share data)

September 30, 2025

December 31, 2025

March 31, 2025

3 unchanged sentences

Short term investments

12,545 14,868

Accounts receivable, net

30 unchanged sentences

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

52,965,797 shares issued at September 30, 2025 and March 31, 2025, respectively;

21,042,652 shares outstanding at September 30, 2025 and March 31, 2025, respectively

52,965,797 shares issued at December 31, 2025 and March 31, 2025, respectively;

21,042,652 shares outstanding at December 31, 2025 and March 31, 2025, respectively

Additional paid-in capital

2 unchanged sentences

( 31,813 ) ( 28,936 )

Treasury stock, at cost ( 31,923,145 shares at September 30, 2025 and March 31, 2025, respectively)

Treasury stock, at cost ( 31,923,145 shares at December 31, 2025 and March 31, 2025, respectively)

( 33,201 ) ( 33,201 )

8 unchanged sentences

(In thousands)

Six Months Ended September 30,

Nine Months Ended December 31,

(In thousands)

Cash Flows from Operating Activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

$ ( 2,877 ) $ ( 2,370 )

Adjustments to reconcile net loss to net cash (used in) operating activities:

Non-cash lease expense

2 unchanged sentences

Accounts receivable

Licensing receivable

Prepaid purchases

( 109 ) ( 32 )

Prepaid expenses and other current assets

1 unchanged sentence

Right of use assets-operating

Right of use assets-finance

Short term lease liabilities

1 unchanged sentence

Income taxes payable

( 668 ) ( 531 )

Deferred revenue

( 96 ) ( 64 )

Net cash (used in) operating activities

( 2,780 ) ( 3,256 )

Cash Flows From Investing Activities:

1 unchanged sentence

Purchases of short-term investments

( 9,080 ) ( 16,277 )

Additions to property and equipment

Net cash provided by (used in) investing activities

5,788 ( 15,951 )

Cash Flows from Financing Activities:

2 unchanged sentences

Net cash (used in) provided by financing activities

Net (decrease) in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

3,007 ( 19,201 )

Cash and cash equivalents at beginning of the period

Cash and cash equivalents at end of the period

$ 4,193 $ 689

Supplemental disclosure of non-cash investing and financing activities:

13 unchanged sentences

Balance — September 30, 2025

Balance — December 31, 2025

Preferred Stock

3 unchanged sentences

Balance — September 30, 2024

Balance — December 31, 2024

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, 2025 and the results of operations for the three and six month periods ended September 30, 2025 and September 30, 2024 .

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, 2025 and the results of operations for the three and nine month periods ended December 31, 2025 and December 31, 2024 .

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the unaudited 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, 2025 (“fiscal 2025 ”), included in the Company’s Annual Report on Form 10 -K for fiscal 2025 .

The results of operations for the three and six month periods ended September 30, 2025 are not necessarily indicative of the results of operations that may be expected for any other condensed interim period or for the full year ending March 31, 2026 (“fiscal 2026 ”).

The results of operations for the three and nine month periods ended December 31, 2025 are not necessarily indicative of the results of operations that may be expected for any other condensed interim period or for the full year ending March 31, 2026 .

Recently Adopted Accounting Pronouncements

Accounting Standards Update 2025 - 05 Financial Instruments—Credit Losses (Topic 326 ):

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025 - 05, which provides ( 1 ) all entities with a practical expedient and ( 2 ) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers.

The practical expedient allows an entity to assume that, when estimating expected credit losses, current conditions as of the balance sheet date remain unchanged for the remaining life of the asset.

The accounting policy election permits nonpublic entities that elect the practical expedient to also consider collection activity occurring after the balance sheet date when estimating expected credit losses.

The standard is effective for fiscal years beginning after December 15, 2025, and for interim periods within those annual reporting periods.

Early adoption is permitted.

The Company has adopted ASU 2025 - 05 for the three and nine month periods ended December 31, 2025.

The adoption did not have a material impact on its financial condition, results of operations or cash flows.

Recent Accounting Pronouncements

46 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, 2025 , the Company recorded deferred revenue of approximately $ 32,000 as compared to approximately $ 96,000 as of March 31, 2025 on its condensed consolidated balance sheets.

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

As of December 31, 2025 , the Company recorded deferred revenue of nil as compared to approximately $ 96,000 as of March 31, 2025 on its condensed consolidated balance sheets.

As of December 31, 2024 , the Company recorded deferred revenue of approximately $ 128,000 as compared to approximately $ 191,000 as of March 31, 2024 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)

8 unchanged sentences

— 1,013 — 2,945

Variety Wholesalers

$ 1,308 $ 3,684 $ 2,440 $ 7,308

$ 932 $ 2,568 $ 2,192 $ 4,566

Accounts Receivable, net

The Company extends credit based upon evaluations of a customer’s financial condition and provides for any anticipated credit losses in the Company’s financial statements based upon management’s estimates and ongoing reviews of recorded allowances.

The disclosure of the credit loss calculated is based on reasonable and supportable forecasts including historical, current and forecasted information.

Credit is extended for periods between 30 and 150 days, on a net basis.

2 unchanged sentences

Receivables are written off once they are considered uncollectible.

The accounts receivable balance on a net basis was approximately $ 1,203,000 as of September 30, 2025 as compared to approximately $ 1,499,000 as of March 31, 2025 and approximately $ 1,343,000 as of March 31, 2024 .

As of September 30, 2025 , Amazon.com ("Amazon") accounted for approximately 59 % and Fred Meyer Inc.

("Fred Meyer") accounted for approximately 15 % of the Company’s total trade accounts receivable, net of specific reserves.

The accounts receivable balance on a net basis was approximately $ 1,456,000 as of December 31, 2025 as compared to approximately $ 1,499,000 as of March 31, 2025 and approximately $ 1,343,000 as of March 31, 2024 .

As of December 31, 2025 , Amazon.com ("Amazon") accounted for approximately 69 % and Bi-Mart ("Bi-Mart") accounted for approximately 12 % of the Company’s total trade accounts receivable, net of specific reserves.

As of March 31, 2025 , Amazon accounted for approximately 59 % and Variety Wholesalers Inc.

("Variety") accounted for approximately 19 % 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 September 30, 2025 or March 31, 2025 .

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

Accounts receivable roll-forward:

As of September 30, As of March 31, As of March 31,

As of December 31, As of March 31, As of March 31,

Trade receivables

5 unchanged sentences

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

As of September 30,

As of December 31,

Opening balance

6 unchanged sentences

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,

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

2 unchanged sentences

NOTE 3 — SHAREHOLDERS ’ EQUITY

Outstanding capital stock at September 30, 2025 consisted of common stock and Series A preferred stock.

Outstanding capital stock at December 31, 2025 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, 2025 , the Company had no options, warrants or other potentially dilutive securities outstanding.

At December 31, 2025 , 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, 2025 and March 31, 2025 , inventories consisted of the following (in thousands):

September 30, 2025

As of December 31, 2025 and March 31, 2025 , inventories consisted of the following (in thousands):

December 31, 2025

March 31, 2025

1 unchanged sentence

NOTE 5 — INCOME TAXES

As of September 30, 2025 , the Com pany had approximately $ 21.4 million of U.S.

As of December 31, 2025 , the Com pany had approximately $ 22.2 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, 2025 , the Company had approximately $ 23.2 million of U.S.

At December 31, 2025 , the Company had approximately $ 23.9 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 Company analyzed the future reasonability of recognizing its deferred tax assets at September 30, 2025 .

As a result, the Company concluded that a 100% valuation allowance of approximately $ 6,739,000 w o uld be recorded against the assets.

The income of foreign subsidiaries before taxes was approximately $ 165,000 for the three month period ended September 30, 2025 as compared to income of foreign subsidiaries before taxes of approximately $ 249,000 for the three month period ended September 30, 2024 .

The income of foreign subsidiaries before taxes was approximately $ 344,000 for the six month period ended September 30, 2025 as compared to income of foreign subsidiaries before taxes of approximately $ 520,000 for the six month period ended September 30, 2024 .

Although the Company generated a net operating loss, it recorded income tax expense of approximately $ 9,000 during the three and six month periods ended September 30, 2025 , primarily resulting from state income taxes.

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

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 analyzed the future reasonability of recognizing its deferred tax assets at December 31, 2025 .

As a result, the Company concluded that a 100% valuation allowance of approximately $ 6,927,000 would be recorded against the assets.

The income of foreign subsidiaries before taxes was approximately $ 141,000 for the three month period ended December 31, 2025 as compared to income of foreign subsidiaries before taxes of approximately $ 218,000 for the three month period ended December 31, 2024 .

The income of foreign subsidiaries before taxes was approximately $ 485,000 for the nine month period ended December 31, 2025 as compared to income of foreign subsidiaries before taxes of approximately $ 738,000 for the nine month period ended December 31, 2024 .

The Company generated a net operating loss and recorded income tax expense of nil during the three and nine month periods ended December 31, 2025 .

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

The Company after adoption of ASU 2019 - 12 “Income Taxes (Topic 740 ) – Simplifying the Accounting for Income Taxes” during fiscal 2022, incurred non-income based state taxes of approximately $ 9,000 for both of the nine month periods ended December 31, 2025 and December 31, 2024, which 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, 2025 , the Company’s open tax years for examination for U.S.

As of December 31, 2025 , the Company’s open tax years for examination for U.S.

federal tax are 2017 - 2025, and for U.S.

2 unchanged sentences

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

As of September 30, 2025 , 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, 2025 , 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, 2025 and March 31, 2025 , the Company had a federal tax liability of nil and approximately $ 668,000 , 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.

As of September 30, 2025 and March 31, 2025 , the Company’s short term portion was nil and approximately $ 668,000 , respectively.

As of each of September 30, 2025 and March 31, 2025 , the Company's long term portion was nil.

As of December 31, 2025 and March 31, 2025 , the Company had a federal tax liability of nil and approximately $ 668,000 , 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.

As of December 31, 2025 and March 31, 2025 , the Company’s short term portion was nil and approximately $ 668,000 , respectively.

As of each of December 31, 2025 and March 31, 2025 , the Company's long term portion was nil .

The liability was payable over 8 years.

6 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, 2025 .

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, 2025 , the Company was billed approximately $ 33,000 and $ 65,000 , 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, 2025 the Company owed approximately $ 1,000 to VACL related to these charges.

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 VACL, which is a company related to the Company's Chairman.

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

During the three and nine month periods ended December 31, 2025 , the Company was billed approximately $ 33,000 and $ 98,000 , 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, 2025 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 VACL, which is a company related to the Company's Chairman.

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

Charges for promotional items

During each of the three and six month periods ended September 30, 2025 , the Company purchased nil of promotional items from The Whisky Capital Pte Ltd ("TWCPL"), which is a company related to the Company's Chairman.

During the three and six month periods ended September 30, 2024 , the Company purchased nil and approximately $ 30,000 , respectively, of promotional items from TWCPL.

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

During each of the three and nine month periods ended December 31, 2025 , the Company purchased nil of promotional items from The Whisky Capital Pte Ltd ("TWCPL"), which is a company related to the Company's Chairman.

During the three and nine month periods ended December 31, 2024 , the Company purchased nil and approximately $ 30,000 , respectively, of promotional items from TWCPL.

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

NOTE 7 — SHORT TERM DEPOSITS AND INVESTMENTS

As of September 30, 2025 and March 31, 2025 , the Company held approximately $ 0.7 million and approximately $ 0.9 million, respectively, in short term deposits.

As of December 31, 2025 and March 31, 2025 , the Company held approximately $ 3.8 million and approximately $ 0.9 million, respectively, in short term deposits.

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

As of September 30, 2025 and March 31, 2025 , the Company also held approximately $ 12.5 million and $ 14.9 million, respecti vely, in short term investments which had maturity dates greater than 90 days and are classified as short term investments.

As of December 31, 2025 and March 31, 2025 , the Company also held approximately $ 9.1 million and approximately $ 14.9 million, respecti vely, in short term investments which had maturity dates greater than 90 days and are classified as short term investments.

Under ASC Topic 820 Fair Value Measurement, the 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.

1 unchanged sentence

Customer Concentration

For the three month period ended September 30, 2025 , the Company’s three largest customers accounted for approximately 77 % of the Company’s net revenues, of which Amazon accounted for approximately 56 %, Costco accounted for approximately 11 % and Variety accounted for approximately 10 %.

For the three month period ended December 31, 2025 , the Company’s two largest customers accounted for approximately 69 % of the Company’s net revenues, of which Amazon accounted for approximately 54 % and Bi-Mart accounted for approximately 15 %.

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

For the six months ended September 30, 2025 , the Company’s three largest customers accounted for approximately 62 % of the Company’s net revenues, of which Amazon accounted for approximately 31 %, Variety accounted for approximately 16 % and Fred Meyer accounted for approximately 15 %.

For the nine months ended December 31, 2025 , the Company’s two largest customers accounted for approximately 50 % of the Company’s net revenues, of which Amazon accounted for approximately 39 % and Fred Meyer 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, 2024 , the Company’s three largest customers accounted for approximately 86 % of the Company’s net revenues, of which Walmart accounted for approximately 42 %, 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 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 months 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 months 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.

1 unchanged sentence

Product Concentration

For the three and six month periods ended September 30, 2025 , the Company’s gross product sales included microwave ovens, which generated approximately 63 % and 76 %, respectively, of the Company’s gross product sales and audio products, which generated approximately 27 % and 18 %, respectively, of the Company’s gross product sales.

For the three and nine month periods ended December 31, 2025 , the Company’s gross product sales included microwave ovens, which generated approximately 59 % and 69 %, respectively, of the Company’s gross product sales and audio products, which generated approximately 37 % and 25 %, 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 respective periods.

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 gros s 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 respective periods.

Concentrations of Credit Risk

As of September 30, 2025 , the Company’s top two customers accounted for approximately 59 % and 15 %, respectively, of the Company's total trade accounts receivable, net of specific reserves.

As of December 31, 2025 , the Company’s top two customers accounted for approximately 69 % and 12 %, respectively, of the Company's total trade accounts receivable, net of specific reserves.

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

2 unchanged sentences

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 allowance for credit losses on the Company's total trade accounts receivable balances was approximately $ 1,113,000 as of September 30, 2025 and $ 1,107,000 as of March 31, 2025 .

The allowance for credit losses on the Company's total trade accounts receivable balances was approximately $ 954,000 as of December 31, 2025 and approximately $ 1,107,000 as of March 31, 2025 .

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

2 unchanged sentences

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

as of September 30, 2025 and March 31, 2025 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 $ 0.8 million and approximately $ 0.9 million at September 30, 2025 and March 31, 2025 , respectively.

The Company also has short term deposits in foreign financial institutions which are not FDIC insured of approximately $ 12.5 million and $ 14.9 million as of September 30, 2025 and March 31, 2025 , respectively.

as of December 31, 2025 and March 31, 2025 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 $ 3.9 million and approximately $ 0.9 million at December 31, 2025 and March 31, 2025 , respectively.

The Company also has short term deposits in foreign financial institutions which are not FDIC insured of approximately $ 9.1 million and approximately $ 14.9 million as of December 31, 2025 and March 31, 2025 , respectively.

Supplier Concentration

During the three month period ended September 30, 2025 , the Company procured 100 % of its products for resale from its three largest factory suppliers, of which approximately 46 % was supplied by its largest supplier and approximately 27 %, and 27 %, respectively, was supplied by the other two suppliers.

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

No other suppliers accounted for greater than 10% for either the three month period ended September 30, 2025 or September 30, 2024 .

During the six month period ended September 30, 2025 , the Company procured approximately 93 % of its products for resale from its three largest factory suppliers, of which approximately 41 % was supplied by its largest supplier and approximately 30 %, and 22 %, respectively, was supplied by the other two suppliers.

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 four suppliers.

No other suppliers accounted for greater than 10% for either the three month period ended September 30, 2025 or September 30, 2024 .

During the three month period ended December 31, 2025 , the Company procured 100 % of its products for resale from its four largest factory suppliers, of which approximately 34 % was supplied by its largest supplier and approximately 25 %, 23 % and 18 %, respectively, was supplied by the other three suppliers.

During the three month period ended December 31, 2024 , the Company procured approximately 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.

No other suppliers accounted for greater than 10% for either the three month period ended December 31, 2025 or December 31, 2024 .

During the nine month period ended December 31, 2025 , the Company procured approximately 88 % of its products for resale from its three largest factory suppliers, of which approximately 35 % was supplied by its largest supplier and approximately 28 %, and 25 %, respectively, was supplied by the other two suppliers.

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.

No other suppliers accounted for greater than 10% for either the nine month period ended December 31, 2025 or December 31, 2024 .

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 twenty-three to forty-five months.

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

As of September 30, 2025 , the Company’s current operating lease liabilities and finance lease liabilities were $ 153,000 and $ 1,000 , respectively and its non-current operating lease liabilities and finance lease liabilities were $ 243,000 and $ 4,000 , respectively.

The Company did not identify any events or conditions during the quarter ended December 31, 2025 to indicate that a reassessment or re-measurement of the Company’s existing leases was required.

As of December 31, 2025 , the Company’s current operating lease liabilities and finance lease liabilities were $ 158,000 and $ 1,000 , respectively and its non-current operating lease liabilities and finance lease liabilities were $ 201,000 and $ 4,000 , 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, 2025 was $ 374,000 and $ 5,000 , respectively.

The net balance of the Company’s operating and finance lease right-of-use assets as of December 31, 2025 was $ 338,000 and $ 5,000 , 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, 2025 , the current operating liability of this lease is approximately $ 105,000 and its non-current liability is $ 106,000 .

Its right-of-use asset value is approximately $ 211,000 , as of September 30, 2025 .

As of December 31, 2025 , the current operating liability of this lease is approximately $ 108,000 and its non-current liability is $ 78,000 .

Its right-of-use asset value is approximately $ 186,000 , as of December 31, 2025 .

The components of lease costs, which were included in operating expenses in the Company’s unaudited 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)

1 unchanged sentence

Operating lease cost

$ 45 $ 48 $ 90 $ 100

The supplemental cash flow information related to leases are as follows:

6 unchanged sentences

Weighted average remaining lease term (in months)

As of September 30, 2025

As of September 30, 2024

As of December 31, 2025

As of December 31, 2024

Operating leases

2 unchanged sentences

Operating leases

10.38 % 10.39 %

Finance leases

10.50 % 10.50 %

As of September 30, 2025 the maturities of lease liabilities were as follows:

As of December 31, 2025 the maturities of lease liabilities were as follows:

(in thousands)

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Results of Operations

The following table summarizes certain financial information for the three and six month periods ended September 30, 2025 (fiscal 2026) and September 30, 2024 (fiscal 2025) (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, 2025 and December 31, 2024 (in thousands):

Three Months Ended December 31,

Nine Months Ended December 31,

Net product sales

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Provision for income taxes

Net product sales — Net product sales for the three month period ended September 30, 2025 were approximately $1.1 million as compared to approximately $2.7 million for the three month period ended September 30, 2024, a decrease of approximately $1.6 million, or 57.8%.

The Company’s sales during the three month period ended September 30, 2025 were highly concentrated among its three largest customers – Amazon, Costco and Walmart – comprising in the aggregate approximately 83% of the Company’s total net product sales during the period.

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 during the period.

Net product sales for the six month period ended September 30, 2025 were approximately $2.7 million as compared to approximately $4.8 million for the six month period ended September 30, 2024, a decrease of approximately $2.1 million, or 43.4%.

The Company’s sales during the six month period ended September 30, 2025 were highly concentrated among its three largest customers – Amazon, Variety and Fred Meyer – comprising in the aggregate approximately 65% of the Company’s total net product sales during the period.

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 during the period.

Net product sales — Net product sales for the three month period ended December 31, 2025 were approximately $1.8 million as compared to approximately $3.9 million for the three month period ended December 31, 2024, a decrease of approximately $2.1 million, or 53.6%.

The Company’s net product sales during the three month period ended December 31, 2025 were highly concentrated among its three largest customers – Amazon, Bi-Mart and Walmart – comprising in the aggregate approximately 82% of the Company’s total net product sales during the period.

The Company’s net product 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.

Net product sales for the nine month period ended December 31, 2025 were approximately $4.5 million as compared to approximately $8.7 million for the nine month period ended December 31, 2024, a decrease of approximately $4.2 million, or 48.0%.

The Company’s sales during the nine month period ended December 31, 2025 were highly concentrated among its three largest customers – Amazon, Fred Meyer and Variety – comprising in the aggregate approximately 64% of the Company’s total net product sales during the period.

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 during the period.

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 nil and approximately $11,000 for the three month periods ended September 30, 2025 and September 30, 2024, respectively, and by nil and approximately $21,000 for the six month periods ended September 30, 2025 and September 30, 2024, respectively.

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

In the aggregate, these adjustments had the effect of increasing net product sales and operating income by approximately $1,000 and approximately $11,000 for the three month periods ended December 31, 2025 and December 31, 2024, respectively, and by nil and approximately $32,000 for the nine month periods ended December 31, 2025 and December 31, 2024, respectively.

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

i) Houseware products:

Net sales of houseware products decreased approximately $0.4 million, or 33.1%, to approximately $0.8 million for the three month period ended September 30, 2025 as compared to approximately $1.2 million for the three month period ended September 30, 2024, driven by decreased net sales of microwave ovens.

Certain of the Company's key customers refuse to accept price increases from recently imposed tariffs, which negatively impacted net sales during the quarter ended September 30, 2025.

Net sales of houseware products decreased $0.1 million, or 3.4%, to approximately $2.2 million for the six month period ended September 30, 2025 as compared to approximately $2.3 million for the six month period ended September 30, 2024, driven by decreased net sales of microwave ovens and compact refrigerators.

Net sales of houseware products decreased approximately $1.0 million, or 46.9%, to approximately $1.1 million for the three month period ended December 31, 2025 as compared to approximately $2.1 million for the three month period ended December 31, 2024, driven by decreased net sales of microwave ovens.

Certain of the Company's key customers refuse to accept price increases from recently imposed tariffs, which negatively impacted net sales during the quarter ended December 31, 2025.

Net sales of houseware products decreased $ 1.1 million, or 24.3%, to approximately $3.3 million for the nine month period ended December 31, 2025 as compared to approximately $4.4 million for the nine month period ended December 31, 2024, driven by decreased net sales of microwave ovens and compact refrigerators.

ii) Audio products:

Net sales of audio products decreased approximately $1.2 million, or 78.3%, to approximately $0.3 million for the three month period ended September 30, 2025 as compared to approximately $1.5 million for the three month period ended September 30, 2024, primarily due to a discontinued clock radio at Walmart.

Net sales of audio products decreased approximately $2.0 million, or 80.9%, to approximately $0.5 million for the six month period ended September 30, 2025 as compared to approximately $2.5 million for the six month period ended September 30, 2024, primarily due to a discontinued clock radio at Walmart.

Net sales of audio products decreased approximately $1.1 million, or 61.7%, to approximately $0.7 million for the three month period ended December 31, 2025 as compared to approximately $1.8 million for the three month period ended December 31, 2024, primarily due to a discontinued clock radio at Walmart.

Net sales of audio products decreased approximately $3.1 million, or 72.6%, to approximately $1.1 million for the nine month period ended December 31, 2025 as compared to approximately $4.2 million for the nine month period ended December 31, 2024, primarily due to a discontinued clock radio at Walmart.

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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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.

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.

Although the Company is monitoring the trade and political environment and working to mitigate the effects 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 impact 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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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, 2025 was approximately $88,000 as compared to approximately $68,000 for the three month period ended September 30, 2024, an increase of approximately $20,000, or 29.4%.

The increase for the three month period ended September 30, 2025 was the result of increases of annual guaranteed minimum royalties of the Company's licensees.

Licensing revenue for the six month period ended September 30, 2025 was approximately $174,000 as compared to approximately $137,000 for the six month period ended September 30, 2024, an increase of approximately $37,000, or 27.0%.

The increase for the six month period ended September 30, 2025 was the result of increases of annual guaranteed minimum royalties of the Company's licensees.

Net revenues — Net revenues were approximately $1.2 million for the three month period ended September 30, 2025 as compared to approximately $2.7 million for the three month period ended September 30, 2024, a decrease of approximately $1.5 million, or 55.6%.

Licensing revenue — Licensing revenue for the three month period ended December 31, 2025 was approximately $87,000 as compared to approximately $111,000 for the three month period ended December 31, 2024, a decrease of approximately $24,000, or 21.6%.

The decrease can be attributed to one of the Company's licensees exceeding its annual guaranteed minimum royalties for the three month period ended December 31, 2024 which did not repeat for the three month period ended December 31, 2025.

Licensing revenue for the nine month period ended December 31, 2025 was approximately $261,000 as compared to approximately $248,000 for the nine month period ended December 31, 2024, an increase of approximately $13,000, or 5.2%.

The increase for the nine month period ended December 31, 2025 was the result of increases of annual guaranteed minimum royalties of the Company's licensees.

Net revenues — Net revenues were approximately $1.9 million for the three month period ended December 31, 2025 as compared to approximately $4.0 million for the three month period ended December 31, 2024, a decrease of approximately $2.1 million, or 53.6%.

The decrease in net revenues can be attributed primarily to the discontinuation of a clock radio at Walmart.

Net revenues were approximately $2.9 million for the six month period ended September 30, 2025 as compared to approximately $4.9 million for the six month period ended September 30, 2024, a decrease of approximately $2.0 million, or 41.5%.

The decrease in net revenues can be attributed primarily to the discontinuation of a clock radio.

Cost of sales — Cost of sales decreased approximately $1.3 million, or 50.7%, to approximately $1.2 million for the three month period ended September 30, 2025 as compared to approximately $2.5 million for the three month period ended September 30, 2024.

The decrease in absolute terms for the three month period ended September 30, 2025 as compared to the three month period ended September 30, 2024 was primarily related to the discontinuation of a clock radio at Walmart and the negative impact of tariffs on the Company's microwave product line.

Cost of sales decreased approximately $1.6 million, or 35.6%, to approximately $2.9 million for the six month period ended September 30, 2025 as compared to approximately $4.5 million for the six month period ended September 30, 2024.

The decrease in absolute terms for the six month period ended September 30, 2025 as compared to the six month period ended September 30, 2024 was primarily related to the discontinuation of a clock radio at Walmart and the negative impact of tariffs on the Company's microwave product line.

Selling, general and administrative expenses ( “ S,G&A ” ) — S,G&A was approximately $1.2 million for the three month period ended September 30, 2025 as compared to $1.4 million for the three month period ended September 30, 2024, a decrease of approximately $0.2 million or 14.0%.

S,G&A, as a percentage of net revenues, was approximately 98.4% for the three month period ended September 30, 2025 as compared to approximately 50.7% for the three month period ended September 30, 2024.

The decrease in S,G&A for the three month period ended September 30, 2025 as compared to the three month period ended September 30, 2024 was primarily driven by a decrease in compensation costs of approximately $177,000 and a decrease in advertising costs of approximately $32,000 partially offset by an increase in legal fees of approximately $38,000.

Compensation costs for the three month period ended September 30, 2025 were approximately $645,000 as compared to approximately $822,000 for the three month period ended September 30, 2024.

Advertising costs for the three month period ended September 30, 2025 were approximately $13,000 as compared to approximately $45,000 for the three month period ended September 30, 2024.

Legal fees for the three month period ended September 30, 2025 were approximately $93,000 as compared to approximately $55,000 for the three month period ended September 30, 2024.

S,G&A was approximately $2.5 million for the six month period ended September 30, 2025 as compared to approximately $2.8 million for the six month period ended September 30, 2024, a decrease of approximately $0.3 million or 10.3%.

S,G&A, as a percentage of net revenues, was approximately 87.0% for the six month period ended September 30, 2025 as compared to approximately 56.8% for the six month period ended September 30, 2024.

The decrease in S,G&A for the six month period ended September 30, 2025 as compared to the six month period ended September 30, 2024 was primarily driven by a decrease in compensation costs of approximately $102,000, a decrease in legal fees of approximately $102,000 and a decrease in travel and entertainment costs of approximately $38,000.

Compensation costs for the six month period ended September 30, 2025 were approximately $1,415,000 as compared to approximately $1,517,000 for the six month period ended September 30, 2024.

Legal fees for the six month period ended September 30, 2025 were approximately $136,000 as compared to approximately $238,000 for the six month period ended September 30, 2024.

Travel and entertainment costs for the six month period ended September 30, 2025 were approximately $27,000 as compared to approximately $65,000 for the six month period ended September 30, 2024.

Interest income, net — Interest income, net, was approximately $153,000 for the three month period ended September 30, 2025 as compared to approximately $236,000 for the three month period ended September 30, 2024, a decrease of approximately $83,000.

Net revenues were approximately $4.8 million for the nine month period ended December 31, 2025 as compared to approximately $8.9 million for the nine month period ended December 31, 2024, a decrease of approximately $4.1 million, or 46.5%.

The decrease in net revenues can be attributed primarily to the discontinuation of a clock radio at Walmart.

Cost of sales — Cost of sales decreased approximately $1.8 million, or 52.0%, to approximately $1.7 million for the three month period ended December 31, 2025 as compared to approximately $3.5 million for the three month period ended December 31, 2024.

The decrease in absolute terms for the three month period ended December 31, 2025 as compared to the three month period ended December 31, 2024 was primarily related to the discontinuation of a clock radio at Walmart and the negative impact of tariffs on the Company's microwave product line.

Cost of sales decreased approximately $3.4 million, or 42.8%, to approximately $4.6 million for the nine month period ended December 31, 2025 as compared to approximately $8.0 million for the nine month period ended December 31, 2024.

The decrease in absolute terms for the nine month period ended December 31, 2025 as compared to the nine month period ended December 31, 2024 was primarily related to the discontinuation of a clock radio at Walmart and the negative impact of tariffs on the Company's microwave product line.

Selling, general and administrative expenses ( “ S,G&A ” ) — S,G&A was approximately $1.0 million for the three month period ended December 31, 2025 as compared to $1.2 million for the three month period ended December 31, 2024, a decrease of approximately $0.2 million or 15.7%.

S,G&A, as a percentage of net revenues, was approximately 54.6% for the three month period ended December 31, 2025 as compared to approximately 30.6% for the three month period ended December 31, 2024.

The decrease in S,G&A for the three month period ended December 31, 2025 as compared to the three month period ended December 31, 2024 was primarily driven by a decrease in compensation costs of approximately $168,000 and an increase in bad debt recoveries of approximately $164,000, partially offset by an increase in legal fees of approximately $160,000.

Compensation costs for the three month period ended December 31, 2025 were approximately $568,000 as compared to approximately $736,000 for the three month period ended December 31, 2024.

Bad debt recoveries for the three month period ended December 31, 2025 were approximately $164,000 as compared to nil for the three month period ended December 31, 2024.

Legal fees for the three month period ended December 31, 2025 were approximately $123,000 as compared to approximately $37,000 of legal fee recoveries for the three month period ended December 31, 2024.

S,G&A was approximately $3.5 million for the nine month period ended December 31, 2025 as compared to approximately $4.0 million for the nine month period ended December 31, 2024, a decrease of approximately $0.5 million or 11.9%.

S,G&A, as a percentage of net revenues, was approximately 74.2% for the nine month period ended December 31, 2025 as compared to approximately 45.1% for the nine month period ended December 31, 2024.

The decrease in S,G&A for the nine month period ended December 31, 2025 as compared to the nine month period ended December 31, 2024 was primarily driven by a decrease in compensation costs of approximately $271,000, an increase in bad debt recoveries of approximately $164,000 and a decrease in travel and entertainment costs of approximately $42,000.

Compensation costs for the nine month period ended December 31, 2025 were approximately $1,983,000 as compared to approximately $2,254,000 for the nine month period ended December 31, 2024.

Bad debt recoveries for the nine month period ended December 31, 2025 were approximately $164,000 as compared to nil for the nine month period ended December 31, 2024.

Travel and entertainment costs for the nine month period ended December 31, 2025 were approximately $40,000 as compared to approximately $82,000 for the nine month period ended December 31, 2024.

Interest income, net — Interest income, net, was approximately $132,000 for the three month period ended December 31, 2025 as compared to approximately $206,000 for the three month period ended December 31, 2024, a decrease of approximately $74,000.

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

Interest income, net, was approximately $322,000 for the six month period ended September 30, 2025 as compared to approximately $499,000 for the six month period ended September 30, 2024, a decrease of approximately $177,000.

Interest income, net, was approximately $454,000 for the nine month period ended December 31, 2025 as compared to approximately $705,000 for the nine month period ended December 31, 2024, a decrease of approximately $251,000.

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

Provision for income taxes — For both three month periods ended September 30, 2025 and September 30, 2024, the Company recorded income tax expense of nil.

For the six month period ended September 30, 2025, the Company recorded income tax expense of nil as compared to approximately $3,000 for the six month period ended September 30, 2024.

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 each of the six month periods ended September 30, 2025 and September 30, 2024, which are now reported as S,G&A.

Provision for income taxes — For both three month periods ended December 31, 2025 and December 31, 2024, the Company recorded income tax expense of nil.

For the nine month period ended December 31, 2025, the Company recorded income tax expense of nil as compared to approximately $3,000 for the nine month period ended December 31, 2024.

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 each of the nine month periods ended December 31, 2025 and December 31, 2024, 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, 2025 , 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, 2025 , 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 — As a result of the foregoing factors, the Company realized a net loss of approximately $1,043,000 for the three month period ended September 30, 2025 as compared to a net loss of approximately $881,000 for the three month period ended September 30, 2024.

As a result of the foregoing factors, the Company realized a net loss of approximately $2,183,000 for the six month period ended September 30, 2025 as compared to a net loss of approximately $1,843,000 for the six month period ended September 30, 2024.

Net loss — As a result of the foregoing factors, the Company realized a net loss of approximately $694,000 for the three month period ended December 31, 2025 as compared to a net loss of approximately $527,000 for the three month period ended December 31, 2024.

As a result of the foregoing factors, the Company realized a net loss of approximately $2,877,000 for the nine month period ended December 31, 2025 as compared to a net loss of approximately $2,370,000 for the nine month period ended December 31, 2024.

Liquidity and Capital Resources

As of September 30, 2025, the Company had cash and cash equivalents of approximately $0.9 million as compared to approximately $1.2 million at March 31, 2025.

Cash and cash equivalents includes short term investments in deposits which were classified as cash equivalents of approximately $0.7 million as of September 30, 2025 compared to approximately $0.9 million of such deposits as of March 31, 2025.

Working capital decreased to approximately $18.9 million at September 30, 2025 as compared to approximately $21.1 million at March 31, 2025.

The decrease in cash and cash equivalents of approximately $0.3 million was due to the net loss generated during the period of approximately $2.2 million, the decrease in income tax payable of approximately $0.7 million, an increase in prepaid expenses and other current assets of approximately $0.1 million and an increase in inventory of approximately $0.1 million, partially offset by a decrease in short term deposits of approximately $2.3 million, a decrease in accounts receivable of approximately $0.3 million and an increase in accounts payable and current liabilities of approximately $0.2 million.

Net cash used by operating activities was approximately $2.6 million for the six month period ended September 30, 2025, resulting from the loss generated during the period of approximately $2.2 million, a decrease in income tax payable of approximately $0.7 million, an increase in prepaid expenses and other current assets of approximately $0.1 million and an increase in inventory of approximately $0.1 million, partially offset a decrease in accounts receivable of approximately $0.3 million and an increase in accounts payable and other current liabilities of approximately $0.2 million.

Net cash provided by investing activ ities was approximately $2.3 million for t he six month period ended September 30, 2025 due to redemptions of short-term investments.

Net cash used by financing ac tivities was approximately $1,000 for the six month period ended September 30, 2025 .

As of December 31, 2025, the Company had cash and cash equivalents of approximately $4.2 million as compared to approximately $1.2 million at March 31, 2025.

Cash and cash equivalents includes short term investments in deposits which were classified as cash equivalents of approximately $3.8 million as of December 31, 2025 compared to approximately $0.9 million of such deposits as of March 31, 2025.

Working capital decreased to approximately $18.3 million at December 31, 2025 as compared to approximately $21.1 million at March 31, 2025.

The increase in cash and cash equivalents of approximately $3.0 million was due to the decrease in short term investments of approximately $5.8 million, the decrease in inventory of approximately $0.5 million and the increase in accounts payable and other current liabilities of approximately $0.3 million, partially offset by the net loss generated during the period of approximately $2.9 million and the decrease in income tax payable of approximately $0.7 million.

Net cash used by operating activities was approximately $2.8 million for the nine month period ended December 31, 2025, resulting from the loss generated during the period of approximately $2.9 million and a decrease in income tax payable of approximately $0.7 million, partially offset by a decrease in inventory of approximately $0.5 million and an increase in accounts payable and other current liabilities of approximately $0.3 million.

Net cash provided by investing activ ities was approximately $5.8 million for t he nine month period ended December 31, 2025 due to redemptions of short-term investments.

Net cash used by financing ac tivities was approximately $1,000 for the nine month period ended December 31, 2025 .

Sources and Uses of Funds

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Off-Balance Sheet Arrangements

As of September 30, 2025, the Company did not have any off-balance sheet arrangements as defined under the rules of the SEC.

As of December 31, 2025, the Company did not have any off-balance sheet arrangements as defined under the rules of the SEC.

Recently Adopted Accounting Pronouncements

Accounting Standards Update 2025-05 Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025-05, which provides (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers.

The practical expedient allows an entity to assume that, when estimating expected credit losses, current conditions as of the balance sheet date remain unchanged for the remaining life of the asset.

The standard is effective for fiscal years beginning after December 15, 2025, and for interim periods within those annual reporting periods.

Early adoption is permitted.

The Company has adopted ASU 2025-05 for the three and nine month periods ended December 31, 2025.

The adoption did not have a material impact on its financial condition, results of operations or cash flows.

Recent Accounting Pronouncements

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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