msn20220930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-07731

EMERSON RADIO CORP.

(Exact name of registrant as specified in its charter)

Delaware	22-3285224
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

35 Waterview Blvd., Suite 140, Parsippany, NJ	07054
(Address of principal executive offices)	(Zip code)

(973) 428-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share	MSN	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Indicate the number of shares outstanding of common stock as of November 14, 2022: 21,042,652.

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition	13
Item 3. Quantitative and Qualitative Disclosures About Market Risk	18
Item 4. Controls and Procedures	18
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	19
Item 1A. Risk Factors	19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3. Defaults Upon Senior Securities	19
Item 4. Mine Safety Disclosure	19
Item 5. Other Information	19
Item 6. Exhibits	19
SIGNATURES	20

	*Three Months Ended September 30,*						*Six Months Ended September 30,*
	*2022*			*2021*			*2022*			*2021*

Net revenues:
Net product sales	$	1,627		$	1,794		$	2,631		$	3,781
Licensing revenue		673			65			743			130
Net revenues		2,300			1,859			3,374			3,911
Costs and expenses:
Cost of sales		1,309			1,351			2,188			2,960
Selling, general and administrative expenses		1,291			1,363			2,635			2,738
		2,600			2,714			4,823			5,698
Operating loss		(300	)		(855	)		(1,449	)		(1,787	)
Other (loss) income:
Interest income, net		139			16			189			33
Income from governmental assistance programs		8			207			30			207
Loss before income taxes		(153	)		(632	)		(1,230	)		(1,547	)
Provision for income tax expense		—			—			—			—
Net loss		(153	)		(632	)		(1,230	)		(1,547	)
Basic loss per share	$	(0.01	)	$	(0.03	)	$	(0.06	)	$	(0.07	)
Diluted loss per share	$	(0.01	)	$	(0.03	)	$	(0.06	)	$	(0.07	)
Weighted average shares outstanding
Basic		21,043			21,043			21,043			21,043
Diluted		21,043			21,043			21,043			21,043

	September 30, 2022			March 31, 2022

ASSETS
Current Assets:
Cash and cash equivalents	$	27,773		$	25,576
Accounts receivable, net		1,071			1,294
Licensing receivable		49			—
Inventory		2,559			2,112
Prepaid purchases		60			141
Prepaid expenses and other current assets		445			390
Total Current Assets		31,957			29,513
Non-Current Assets:
Property and equipment, net		2			2
Right-of-use asset-operating leases		297			403
Right-of-use asset-finance leases		2			2
Other assets		90			90
Total Non-Current Assets		391			497
Total Assets	$	32,348		$	30,010
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and other current liabilities		642			758
Short-term operating lease liability		167			211
Short-term finance lease liability		1			1
Income tax payable, current portion		401			195
Advanced deposits		4,100			—
Deferred revenue		113			210
Total Current Liabilities		5,424			1,375
Non-Current Liabilities:
Long-term operating lease liability		132			201
Long-term finance lease liability		1			2
Income tax payable		1,202			1,613
Total Non-Current Liabilities		1,335			1,816
Total Liabilities	$	6,759		$	3,191
Shareholders’ Equity:
Series A Preferred shares — 10,000,000 shares authorized; 3,677 shares issued and outstanding; liquidation preference of $3,677,000		3,310			3,310
Common shares — $0.01 par value, 75,000,000 shares authorized; 52,965,797 shares issued at September 30, 2022 and March 31, 2022, respectively; 21,042,652 shares outstanding at September 30, 2022 and March 31, 2022, respectively		529			529
Additional paid-in capital		79,792			79,792
Accumulated deficit		(24,841	)		(23,611	)
Treasury stock, at cost (31,923,145 shares at September 30, 2022 and March 31, 2022, respectively)		(33,201	)		(33,201	)
Total Shareholders’ Equity		25,589			26,819
Total Liabilities and Shareholders’ Equity	$	32,348		$	30,010

			*Common Stock*				*Additional*								*Total*
	*Preferred*		*Number*		*Par*		*Paid-In*		*Accumulated*			*Treasury*			*Shareholders’*
	*Stock*		*of Shares*		*Value*		*Capital*		*Deficit*			*Stock*			*Equity*
Balance — March 31, 2022	$	3,310		52,965,797	$	529	$	79,792	$	(23,611	)	$	(33,201	)	$	26,819
Net loss		—		—		—		—		(1,230	)		—			(1,230	)
Balance — September 30, 2022	$	3,310		52,965,797	$	529	$	79,792	$	(24,841	)	$	(33,201	)	$	25,589

		*September 30, 2022*				*March 31, 2022*
Finished goods		$	2,559			$	2,112

Weighted average remaining lease term (in months)	*As of September 30, 2022*			*As of September 30, 2021*
Operating leases		20.4			29.9
Finance leases		20.2			32.2

Weighted average discount rate
Operating leases		7.50	%		7.50	%
Finance leases		7.50	%		7.50	%

(in thousands)	Operating Leases			Finance Leases

2023	$	108		$	1
2024		148			1
2025		62			—
2026		—			—
Thereafter		—			—
Total lease payments	$	318		$	2
Less: Imputed interest		(19	)		—
Total	$	299		$	2

	Three Months Ended September 30,						Six Months Ended September 30,
	2022			2021			2022			2021
Net product sales	$	1,627		$	1,794		$	2,631		$	3,781
Licensing revenue		673			65			743			130
Net revenues		2,300			1,859			3,374			3,911
Cost of sales		1,309			1,351			2,188			2,960
Selling, general and administrative expenses		1,291			1,363			2,635			2,738
Operating loss		(300	)		(855	)		(1,449	)		(1,787	)
Interest income, net		139			16			189			33
Income from governmental assistance programs		8			207			30			207
Loss before income taxes		(153	)		(632	)		(1,230	)		(1,547	)
Provision for income taxes		—			—			—			—
Net loss	$	(153	)	$	(632	)	$	(1,230	)	$	(1,547	)


31.1	Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

31.2	Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32	Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

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	EMERSON RADIO CORP.
	(Registrant)

	/s/ Christopher W. Ho
Date: November 14, 2022	Christopher W. Ho
	Chief Executive Officer (Principal Executive Officer)

	/s/ Richard Li
Date: November 14, 2022	Richard Li
	Chief Financial Officer (Principal Financial and Accounting Officer)

SEC Form 10-Q filed by Emerson Radio Corporation