msn20240630_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 June 30, 2024

☐	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.)

959 Route 46 East, Suite 210, 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 August 14, 2024: 21,042,652.

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements	3
Condensed Consolidated Statements of Operations for the three months ended June 30, 2024, and 2023 (unaudited)	3
Condensed Consolidated Balance Sheets as of June 30, 2024 (unaudited), and March 31, 2024	4
Condensed Consolidated Statements of Cash Flow for the three months ended June 30, 2024 and 2023 (unaudited)	5
Condensed Consolidated Statements of Shareholders' Equity for the three months ended June 30, 2024 and 2023 (unaudited)	6
Notes to the Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition	13
Item 3. Quantitative and Qualitative Disclosures About Market Risk	17
Item 4. Controls and Procedures	17
PART II — OTHER INFORMATION	18
Item 1. Legal Proceedings	18
Item 1A. Risk Factors	18
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3. Defaults Upon Senior Securities	18
Item 4. Mine Safety Disclosure	18
Item 5. Other Information	18
Item 6. Exhibits	18
SIGNATURES	19

	Three months ended June 30,
	2024			2023

Net revenues:
Net product sales	$	2,129		$	1,732
Licensing revenue		69			77
Net revenues		2,198			1,809
Costs and expenses:
Cost of sales		2,004			1,470
Selling, general and administrative expenses		1,416			1,198
Total cost of sales and SG&A		3,420			2,668
Operating loss		(1,222	)		(859	)
Other income:
Interest income, net		263			294
Loss before income taxes		(959	)		(565	)
Provision for income tax expense		3			—
Net loss		(962	)		(565	)
Basic loss per share	$	(0.05	)	$	(0.03	)
Diluted loss per share	$	(0.05	)	$	(0.03	)
Weighted average shares outstanding
Basic		21,042,652			21,042,652
Diluted		21,042,652			21,042,652

	*June 30, 2024*			*March 31, 2024*
		(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	2,842		$	19,890
Short term investments		16,035			—
Accounts receivable, net		1,725			1,343
Licensing receivable		37			37
Inventory		6,120			6,953
Prepaid purchases		464			107
Prepaid expenses and other current assets		651			274
Total Current Assets		27,874			28,604
Non-Current Assets:
Property and equipment, net		258			95
Right-of-use asset-operating leases		236			282
Right-of-use asset-finance leases		6			—
Other assets		84			84
Total Non-Current Assets		584			461
Total Assets	$	28,458		$	29,065
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and other current liabilities		1,570			1,158
Due to affiliate		1			1
Short-term operating lease liability		58			93
Short-term finance lease liability		1			—
Income tax payable, current portion		534			531
Deferred revenue		170			191
Total Current Liabilities		2,334			1,974
Non-Current Liabilities:
Long-term operating lease liability		187			198
Long-term finance lease liability		6			—
Income tax payable-deferred		668			668
Total Non-Current Liabilities		861			866
Total Liabilities	$	3,195		$	2,840
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 June 30, 2024 and March 31, 2024, respectively; 21,042,652 shares outstanding at June 30, 2024 and March 31, 2024, respectively		529			529
Additional paid-in capital		79,792			79,792
Accumulated deficit		(25,167	)		(24,205	)
Treasury stock, at cost (31,923,145 shares at June 30, 2024 and March 31, 2024, respectively)		(33,201	)		(33,201	)
Total Shareholders’ Equity		25,263			26,225
Total Liabilities and Shareholders’ Equity	$	28,458		$	29,065

		*Three months ended June 30,*
	*2024*			*2023*
	(In thousands)
Cash Flows from Operating Activities:
Net loss	$	(962	)	$	(565	)
Adjustments to reconcile net loss to net cash (used) by operating activities:
Non-cash lease expense		40			34
Depreciation and amortization		17			4
Changes in assets and liabilities:
Accounts receivable		(382	)		(24	)
Licensing receivable		—			237
Inventory		833			106
Prepaid purchases		(357	)		(117	)
Prepaid expenses and other current assets		(377	)		61
Other assets		—			(10	)
Accounts payable and other current liabilities		412			64
Short term lease liabilities		(35	)		3
Long term lease liabilities		(11	)		(37	)
Income taxes payable		3			—
Advanced deposits		—			(154	)
Deferred revenue		(21	)		(149	)
Net cash (used) by operating activities		(840	)		(547	)
Cash Flows From Investing Activities:
Purchases of short-term investments		(16,035	)		—
Additions to property and equipment		(180	)		(50	)
Net cash (used) by investing activities		(16,215	)		(50	)
Cash Flows from Financing Activities:
Short term finance liability		1			—
Long term finance liability		6			—
Net cash provided by financing activities		7			—
Net (decrease) in cash and cash equivalents		(17,048	)		(597	)
Cash and cash equivalents at beginning of the period		19,890			25,268
Cash and cash equivalents at end of the period	$	2,842		$	24,671
Supplemental disclosure of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new finance lease liabilities	$	6			—
Supplemental disclosures:
Cash paid for:
Interest	$	—		$	2

	*Preferred Stock*				*Common Stock*				*Additional*								*Total*
	*Number*		*Preferred*		*Number*		*Par*		*Paid-In*		*Accumulated*			*Treasury*			*Shareholders’*
	*of Shares*		*Value*		*of Shares*		*Value*		*Capital*		*Deficit*			*Stock*			*Equity*
Balance — March 31, 2024		3,677	$	3,310		52,965,797	$	529	$	79,792	$	(24,205	)	$	(33,201	)	$	26,225
Net loss		—		—		—		—		—		(962	)		—			(962	)
Balance — June 30, 2024		3,677	$	3,310		52,965,797	$	529	$	79,792	$	(25,167	)	$	(33,201	)	$	25,263

	Preferred Stock				Common Stock				Additional								Total
	Number		Preferred		Number		Par		Paid-In		Accumulated			Treasury			Shareholders’
	of Shares		Value		of Shares		Value		Capital		Deficit			Stock			Equity
Balance — March 31, 2023		3,677	$	3,310		52,965,797	$	529	$	79,792	$	(24,971	)	$	(33,201	)	$	25,459
Net loss		—		—		—		—		—		(565	)		—			(565	)
Balance — June 30, 2023		3,677	$	3,310		52,965,797	$	529	$	79,792	$	(25,536	)	$	(33,201	)	$	24,894

	Three months ended June 30,
Disaggregation of revenue (in 000's)	*2024*		*2023*

Net revenues by type:
Net product sales	$	2,129	$	1,732
Licensing revenue		69		77
Net revenues		2,198		1,809

Net revenues by customers: (over 10%)
Amazon.com	$	984	$	569
Walmart		848		819
Chedraui		264		—
Total		2,096		1,388

		*June 30, 2024*				*March 31, 2024*
Finished goods		$	6,120			$	6,953

Weighted average remaining lease term (in months)	*As of June 30, 2024*			*As of June 30, 2023*
Operating leases		48.5			13.5
Finance leases		59.2			11.2

Weighted average discount rate
Operating leases		10.02	%		7.50	%
Finance leases		10.50	%		7.50	%

(in thousands)	Operating Leases			Finance Leases

2025	$	63		$	1
2026		54			2
2027		66			2
2028		67			2
2029		52			2
Total lease payments	$	302		$	9
Less: Imputed interest		(57	)		(2	)
Total	$	245		$	7

3.1	Certificate of Incorporation of Emerson (incorporated by reference to Exhibit (3) (a) of Emerson’s Registration Statement on Form S-1, Registration No. 33-53621, declared effective by the SEC on August 9, 1994) (filed in paper format).

3.1.1	Certificate of Designation for Series A Preferred Stock (incorporated by reference to Exhibit (3) (b) of Emerson’s Registration Statement on Form S-1, Registration No. 33-53621, declared effective by the SEC on August 9, 1994) (filed in paper format).

3.1.2	Amendment dated February 14, 1996 to the Certificate of Incorporation of Emerson (incorporated by reference to Exhibit (3) (a) of Emerson’s Quarterly Report on Form 10-Q for the quarter ended December 31, 1995).

3.2	By-Laws of Emerson (incorporated by reference to Exhibit 3.1 of Emerson’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2007).

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.**

101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.*

101.SCH	Inline XBRL Taxonomy Extension Schema Document.*

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.*

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.*

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.*

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.*

104	Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

	EMERSON RADIO CORP.
	(Registrant)

	/s/ Christopher W. Ho
Date: August 14, 2024	Christopher W. Ho
	Chief Executive Officer (Principal Executive Officer)

	/s/ Richard Li
Date: August 14, 2024	Richard Li
	Chief Financial Officer (Principal Financial and Accounting Officer)

SEC Form 10-Q filed by Emerson Radio Corporation