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 ~~and posted on its corporate website, if any,~~ every ~~interactive data file~~Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ 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. ~~(Check one):~~

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 ~~February 12, 2018: 23,716,992.~~

Three Months Ended December 31,

Nine Months Ended December 31,

2017

2016

2017

2016

(In thousands, except per share data)

(In thousands, except per share data)

Net revenues:

Net product sales

$
4,075

$
3,764

$
10,413

$
14,079

Licensing revenue

161

1,170

546

3,518

Net revenues

4,236

4,934

10,959

17,597

Costs and expenses:

Cost of sales

4,046

3,361

10,292

12,921

Other operating costs and expenses

14

23

38

200

Selling, general and administrative expenses

1,100

1,198

3,784

3,881

5,160

4,582

14,114

17,002

Operating (loss) income

(924
)

352

(3,155
)

595

Other income:

Interest income, net

131

54

365

162

(Loss) income before income taxes

(793
)

406

(2,790
)

757

Provision (Benefit) for income tax expense

378

(42
)

313

198

Net (loss) income

(1,171
)

448

(3,103
)

559

Basic net (loss) income per share

$
(0.05
)

$
.02

$
(0.12
)

$
.02

Diluted net (loss) income per share

$
(0.05
)

$
.02

$
(0.12
)

$
.02

Weighted average shares outstanding

Basic

24,299

27,129

25,857

27,130

Diluted

24,299

27,129

25,857

27,130

	Three Months Ended June 30,
	2022			2021

Net revenues:
Net product sales	$	1,004		$	1,987
Licensing revenue		70			65
Net revenues		1,074			2,052
Costs and expenses:
Cost of sales		879			1,609
Selling, general and administrative expenses		1,344			1,375
		2,223			2,984
Operating loss		(1,149	)		(932	)
Other (loss) income:
Interest income, net		50			17
Income from governmental assistance programs		22			—
Loss before income taxes		(1,077	)		(915	)
Provision for income tax expense		—			—
Net loss		(1,077	)		(915	)
Basic loss per share	$	(0.05	)	$	(0.04	)
Diluted loss per share	$	(0.05	)	$	(0.04	)
Weighted average shares outstanding
Basic		21,043			21,043
Diluted		21,043			21,043

The accompanying notes are an integral part of the consolidated financial statements.

December 31, 2017

March 31, 2017

(In thousands, except share data)

ASSETS

Current Assets:

Cash and cash equivalents

$
20,819

$
27,471

Short term investments

22,233

25,078

Accounts receivable, net

1,592

1,208

Royalty receivable

63

99

Inventory

3,071

838

Prepaid purchases

1,451

750

Prepaid expenses and other current assets

576

1,494

Total Current Assets

49,805

56,938

Property, plant, and equipment, net

16

18

Deferred tax assets, net

569

791

Other assets

172

101

Total Non-current Assets

757

910

Total Assets

$
50,562

$
57,848

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities:

Accounts payable and other current liabilities

1,087

756

Income tax payable

295

165

Total Current Liabilities

1,382

921

Total Non-current Liabilities

—

—

Total Liabilities

$
1,382

$
921

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 December 31, 2017 and March 31, 2017, respectively; 23,903,444
   and 27,065,852 shares outstanding at December 31, 2017 and March 31, 2017,
   respectively

529

529

Additional paid-in capital

79,792

79,792

Accumulated deficit

(5,517
)

(2,414
)
Treasury stock, at cost (29,062,353 and 25,899,945 shares at December 31, 2017
   and March 31, 2017, respectively)

(28,934
)

(24,290
)
Total Shareholders’ Equity

49,180

56,927

Total Liabilities and Shareholders’ Equity

$
50,562

$
57,848

	June 30, 2022			March 31, 2022

ASSETS
Current Assets:
Cash and cash equivalents	$	24,908		$	25,576
Accounts receivable, net		561			1,294
Inventory		2,433			2,112
Prepaid purchases		281			141
Prepaid expenses and other current assets		268			390
Total Current Assets		28,451			29,513
Non-Current Assets:
Property and equipment, net		2			2
Right-of-use asset-operating leases		350			403
Right-of-use asset-finance leases		2			2
Other assets		90			90
Total Non-Current Assets		444			497
Total Assets	$	28,895		$	30,010
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and other current liabilities		847			758
Short-term operating lease liability		189			211
Short-term finance lease liability		1			1
Income tax payable, current portion		205			195
Deferred revenue		140			210
Total Current Liabilities		1,382			1,375
Non-Current Liabilities:
Long-term operating lease liability		167			201
Long-term finance lease liability		1			2
Income tax payable		1,603			1,613
Total Non-Current Liabilities		1,771			1,816
Total Liabilities	$	3,153		$	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 June 30, 2022 and March 31, 2022, respectively; 21,042,652 shares outstanding at June 30, 2022 and March 31, 2022, respectively		529			529
Additional paid-in capital		79,792			79,792
Accumulated deficit		(24,688	)		(23,611	)
Treasury stock, at cost (31,923,145 shares at June 30, 2022 and March 31, 2022, respectively)		(33,201	)		(33,201	)
Total Shareholders’ Equity		25,742			26,819
Total Liabilities and Shareholders’ Equity	$	28,895		$	30,010

The accompanying notes are an integral part of the consolidated financial statements.

Nine Months Ended December 31,

2017

2016

(In thousands)

Cash Flows from Operating Activities:

Net (loss) income

$
(3,103
)

$
559

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

Depreciation and amortization

6

13

Deferred tax assets

222

387

Asset allowances and reserves

14

(173
)
Changes in assets and liabilities:

Accounts receivable

(398
)

2,198

Royalty receivable

36

1,142

Inventory

(2,233
)

(610
)
Prepaid purchases

(701
)

696

Prepaid expenses and other current assets

918

(1,678
)
Other assets

(71
)

1

Accounts payable and other current liabilities

331

(618
)
Due to affiliates

—

(512
)
Income taxes payable

130

(290
)
Net cash (used) provided by operating activities

(4,849
)

1,115

Cash Flows From Investing Activities:

Net proceeds from sale of short term investments

2,845

9,886

Proceeds from restricted cash

—

500

Additions to property, plant and equipment

(4
)

(5
)
Net cash provided by investing activities

2,841

10,381

Cash Flows from Financing Activities:

Purchases of treasury stock

(4,644
)

(18
)
Net cash (used) by financing activities

(4,644
)

(18
)
Net (decrease) increase in cash and cash equivalents

(6,652
)

11,478

Cash and cash equivalents at beginning of period

27,471

30,096

Cash and cash equivalents at end of period

$
20,819

$
41,574

Supplemental disclosures:

Cash paid for:

Interest

$
3

$
2

Income taxes

$
4

$
1,524

	Three Months Ended June 30,
	2022			2021
	(In thousands)
Cash Flows from Operating Activities:
Net (loss)	$	(1,077	)	$	(915	)
Adjustments to reconcile net loss to net cash (used) by operating activities:
Amortization of right-of-use assets		53			60
Asset valuation allowances		(35	)		12
Changes in assets and liabilities:
Accounts receivable		768			(410	)
Inventory		(321	)		(16	)
Prepaid purchases		(140	)		(380	)
Prepaid expenses and other current assets		122			8
Accounts payable and other current liabilities		89			(41	)
Short term lease liabilities		(22	)		(39	)
Long term lease liabilities		(35	)		(26	)
Due to affiliate		—			1
Deferred revenue		(70	)		(65	)
Net cash (used) by operating activities		(668	)		(1,811	)
Cash Flows From Investing Activities:
Proceeds from sale of short-term investments		—			984
Purchases of short-term investments		—			—
Net cash provided by investing activities		—			984
Cash Flows from Financing Activities:
		—			—
Net cash provided by financing activities		—			—
Net decrease in cash and cash equivalents		(668	)		(827	)
Cash and cash equivalents at beginning of the year		25,576			5,245
Cash and cash equivalents at end of the year	$	24,908		$	4,418
Supplemental disclosures:
Cash paid for:
Interest	$	3		$	1
Income taxes	$	—		$	—

The accompanying notes are an integral part of the consolidated financial statements.

			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		—		—		—		—		(1,077	)		—			(1,077	)
Balance — June 30, 2022	$	3,310		52,965,797	$	529	$	79,792	$	(24,688	)	$	(33,201	)	$	25,742

			Common Stock				Additional								Total
	Preferred		Number		Par		Paid-In		Accumulated			Treasury			Shareholders’
	Stock		of Shares		Value		Capital		Deficit			Stock			Equity
Balance — March 31, 2021	$	3,310		52,965,797	$	529	$	79,792	$	(19,985	)	$	(33,201	)	$	30,445
Net loss		—		—		—		—		(915	)		—			(915	)
Balance — June 30, 2021	$	3,310		52,965,797	$	529	$	79,792	$	(20,900	)	$	(33,201	)	$	29,530
The accompanying notes are an integral part of the consolidated financial statements.

The consolidated financial statements include the accounts of Emerson Radio Corp. and its subsidiaries (“Emerson” or the “Company”). 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 interim 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 consolidated financial position as of ~~December 31, 2017~~June 30, 2022 and the results of operations for the three ~~and nine~~ month periods ended ~~December 31, 2017~~June 30, 2022 and ~~December 31, 2016.~~June 30, 2021. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the financial statements not misleading have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. The preparation of the unaudited interim consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes; actual results could materially differ from those estimates. The unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and accordingly do not include all of the disclosures normally made in the Company’s annual consolidated financial statements. Accordingly, these unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended March 31, ~~2017~~2022 (“fiscal ~~2017”~~2022”), included in the Company’s ~~annual report~~Annual Report on Form 10-K, as amended, for fiscal ~~2017.~~2022.

The results of operations for the three ~~and nine~~ month ~~periods~~period ended ~~December 31, 2017~~June 30, 2022 are not necessarily indicative of the results of operations that may be expected for any other interim ~~periods~~period or for the full year ending March 31, ~~2018~~2023 (“fiscal ~~2018”~~2023”).

Whenever necessary, reclassifications are made to conform the prior year’s consolidated financial statements to the current year’s presentation.

Accounting Standards Update 2019-12 “Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes” (Issued December 2019)

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. This standard took effect in the ~~notes to these~~first quarter (June 2021) of the Company’s fiscal year ending March 31, 2022. The adoption of ASU 2019-12 had no material impact on the Company’s consolidated financial statements ~~the estimated fair value of the financial assets~~ and ~~liabilities approximates the carrying value.~~

Sales allowances, marketing support programs, promotions and other volume-based incentives which are provided to retailers and distributors are accounted for on an accrual basis as a reduction to net revenues in the period in which the related sales are recognized in accordance with ASC topic 605, “Revenue Recognition”, subtopic 50 “Customer Payments and Incentives” and Securities and Exchange Commission Staff Accounting Bulletins 101 “Revenue Recognition in Financial Statements,” and 104 “Revenue Recognition, corrected copy” (“SAB’s 101 and 104”).

At the time of sale, the Company reduces recognized gross revenue by allowances to cover, in addition to estimated sales returns as required by ASC topic 605, “Revenue Recognition”, subtopic 15 “Products”, (i) sales incentives offered to customers that meet the criteria for accrual under ASC topic 605, subtopic 50 and (ii) under SAB’s 101 and 104, an estimated amount to recognize additional non-offered deductions it anticipates and can reasonably estimate will be taken by customers which it does not expect to recover. Accruals for the estimated amount of future non-offered deductions are required to be made as contra-revenue items because that percentage of shipped revenue fails to meet the collectability criteria within SAB 104’s and 101’s four revenue recognition criteria, all of which are required to be met in order to recognize revenue.

If additional marketing support programs, promotions and other volume-based incentives are required to promote the Company’s products subsequent to the initial sale, then additional reserves may be required and are accrued for when such support is offered.disclosures.

The following Accounting Standards Updates (“ASUs”) were issued by the Financial Accounting Standards Board (“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. ~~These are not yet effective for this financial period.~~

~~Accounting Standards Update 2014-09 “Revenue from Contracts with Customers” (Issued May 2014)~~

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers" in order to ensure that revenue recognition requirements are the same under both US GAAP and International Financial Reporting Standards ("IFRS"). ASU 2014-09 removes inconsistencies and provides a more robust framework for addressing revenue issues. ASU 2014-09 was effective for reporting periods and interim periods beginning on or after December 15, 2016. In August 2015, the FASB issued ASU 2015-14 "Deferral of the Effective Date" to delay the implementation of ASU 2014-09 by one year, in response to feedback from preparers, practitioners and users of financial statements. Accordingly, ASU 2014-09 is now effective for reporting periods and interim periods beginning on or after December 15, 2017. Early adoption is permitted for reporting and interim periods beginning on or after December 15, 2016. The Company does not expect these amendments to have a material impact on its financial statements, as it is primarily a seller of tangible personal property whose contracts with customers and the related transaction prices and performance obligations will be minimally affected by the amendments.

In February 2016, the FASB issued ASU 2016-02 "Leases" to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 creates a new Accounting Standards Codification Topic 842 "Leases" to replace the previous Topic 840 "Leases." ASU 2016-02 affects both lessees and lessors, although for the latter the provisions are similar to the previous model, but updated to align with certain changes to the lessee model and also the new revenue recognition provisions contained in ASU 2014-09 (see above). ASU 2016-02 is effective for fiscal years and interim periods beginning after December 15, 2018. Early adoption is permitted. The Company is assessing the standard to determine if ASU 2016-02 will have a material impact on its financial statements.

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

In June 2016, the FASB issued ASU 2016-13 ~~"Financial~~“Financial Instruments - Credit ~~Losses"~~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, ~~the~~ 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, ~~2019.~~2022. Early adoption is permitted. The Company does not expect these amendments to have a material impact on its financial statements.

Revenue recognition: Sales to customers and related cost of sales are primarily recognized at the point in time when control of goods transfers to the customer. Control is considered to be transferred when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits of that good. Under the Direct Import Program, title passes in the country of origin when the goods are passed over the rail of the customer’s vessel. Under the Domestic Program, title passes primarily at the time of shipment. Estimates for future expected returns are based upon historical return rates and netted against revenues.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. Revenue is recorded net of customer discounts, promotional allowances, volume rebates and similar charges. When the Company offers the right to return product, historical experience is utilized to establish a liability for the estimate of expected returns. Sales and other tax amounts collected from customers for remittance to governmental authorities are excluded from revenue.

Management must make estimates of potential future product returns related to current period product revenue. Management analyzes historical returns, current economic trends and changes in customer demand for the Company’s products when evaluating the adequacy of the reserve for sales returns. Management judgments and estimates must be made and used in connection with establishing the sales return reserves in any accounting period. Additional reserves may be required if actual sales returns increase above the historical return rates. 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 the time of sale, the Company reduces recognized gross revenue by allowances to cover, in addition to estimated sales returns as required by ASC 606, (i) sales incentives offered to customers that meet the criteria for accrual and (ii) an estimated amount to recognize additional non-offered deductions it anticipates and can reasonably estimate will be taken by customers, which it does not expect to recover. Accruals for the estimated amount of future non-offered deductions are required to be made as contra-revenue items, because that percentage of shipped revenue fails to meet the collectability criteria within ASC 606.

The Company offers limited warranties for its consumer electronics, comparable to those offered to consumers by the Company’s competitors in the United States. Such warranties typically consist of a one year period for microwaves and a 90 day period for audio products, under which the Company pays for labor and parts, or offers a new or similar unit in exchange for a non-performing unit.

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts). Weighted average shares includes the impact of shares held in treasury.

Three Months Ended December 31,

Nine Months Ended December 31,

2017

2016

2017

2016

(In thousands, except per share data)

(In thousands, except per share data)

Numerator:

Net (loss) income

$
(1,171
)

$
448

$
(3,103
)

$
559

Denominator:

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

24,299

27,129

25,857

27,130

Net (loss) income per share:

Basic and diluted (loss) income per share

$
(0.05
)

$
.02

$
(0.12
)

$
.02

	Three Months Ended June 30,
	2022			2021

Numerator:
Net loss	$	(1,077	)	$	(915	)
Denominator:
Denominator for basic and diluted loss per share — weighted average shares		21,043			21,043
Net loss per share:
Basic and diluted loss per share	$	(0.05	)	$	(0.04	)

Outstanding capital stock at ~~December 31, 2017~~June 30, 2022 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 ~~December 31, 2017,~~June 30, 2022, the Company had no0 options, warrants or other potentially dilutive securities outstanding.

In December 2016, the Company publicly announced the approval by the Board of Directors of the repurchase of up to $5 million of its common stock, that the repurchases may be effected from time to time at prevailing market prices, through open market or in privately negotiated transactions, which may include, in whole or in part, the establishment of a purchase program pursuant to the safe harbor provided by Rule 10b5-1 under the Securities Exchange Act of 1934, through block purchases or through accelerated or forward or similar stock purchases, and that the Company intends to run the repurchase program through the end of calendar 2017, unless the period is extended or shortened by the Board of Directors.

In September 2017, the Company’s Board of Directors approved an additional $5 million, bringing the total authorized stock repurchases under the program to $10 million and extended the program to June 30, 2018. Under the program, repurchases will be funded from available working capital and any repurchased shares will be held in the treasury as authorized and issued shares available for general corporate purposes. During the three months ended December 31, 2017, 669,357 shares for $991,972 were repurchased. As of December 31, 2017, the Company had repurchased 3,226,388 shares for $4,710,572 under this program. The remaining balance of the program is $5,289,428 as of December 31, 2017.

Inventories, which consist primarily of finished goods, are stated at the lower of cost or ~~market.~~net realizable value. Cost is determined using the first-in, first-out method. As of ~~December 31, 2017~~June 30, 2022 and March 31, ~~2017,~~2022, inventories consisted of the following (in thousands):

At ~~December 31, 2017,~~June 30, 2022, the Company had ~~$3.1~~$15.3 million of U.S. federal net operating loss (“NOL”) carry ~~forwards and~~forwards. These losses do not expire but are limited to utilization of 80% of taxable income in any one year. At June 30, 2022, the Company had approximately ~~$5.6~~$18.1 million of U.S. state ~~net operating loss~~NOL carry forwards. The tax benefits related to these state NOL carry forwards ~~included in net deferred tax assets that~~and future deductible temporary differences are ~~available~~recorded to ~~offset future taxable income and can be carried forward for 20 years. Management~~the extent management believes it is ~~less~~more likely than ~~likely~~not that ~~all of the net deferred tax assets~~such benefits will be ~~realized through tax planning strategies available in~~realized.

The income of foreign subsidiaries before taxes was $83,000 for the three month period ended June 30, 2022 as compared to income of foreign subsidiaries before taxes of $18,000 for the three month period ended June 30, 2021.

The Company analyzed the future ~~periods and through future profitable operating results, therefore management has increased~~reasonability of recognizing its ~~valuation allowance by $712,000 to a total of $1,000,700 as of December 31, 2017. The gross amount of the Company’s~~ deferred tax assets at ~~December 31, 2017 was $1,570,000 as compared to $1,080,000 as~~June 30, 2022. As a result, the Company concluded that a 100% valuation allowance of ~~March 31, 2017.~~$4,658,000 would be recorded against the assets.

~~Due to~~Although the Company generated a change in ownership of Grande by Wealth Warrior Global Limited, as disclosed in a Schedule 13D filing on October 10, 2017, the Company’s ability to use a portion of its domestic NOL and tax carryforwards may be limited in future periods under the change of ownership provisions of the Tax Reform Act of 1986 (Internal Revenue Code Section 382). Furthermore, a portion of the carryforwards may expire before being applied to reduce futurenet operating loss, it recorded income tax ~~liabilities (see Item 1A. Risk Factors).~~

~~The Company’s effective tax rate differs~~expense of approximately $11,000 during the three month period ended June 30, 2022, primarily resulting from state income taxes. During the ~~federal statutory rate primarily due to~~three month period ended June 30, 2021, the Company recorded income ~~and losses incurred in foreign jurisdictions and taxed at locally applicable tax rates, subpart F income included in the Company’s~~ tax expense ~~expenses that~~of $11,000. 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 ~~not deductible for federal income tax purposes, increases to the valuation allowance~~now reported within selling, general and ~~state income taxes.~~administrative expenses.

The Company is subject to examination and assessment by tax authorities in numerous jurisdictions. As of ~~December 31, 2017,~~June 30, 2022, the Company’s open tax years for examination for U.S. federal tax are ~~fiscal 2015-fiscal 2017~~2016-2021, and for U.S. ~~states~~states’ tax are ~~fiscal 2012-fiscal 2016.~~

2015-2021. Based on the outcome of tax examinations or due to the expiration of statutes of limitations, it is reasonably possible that the unrecognized tax benefits related to uncertain tax positions taken in previously filed returns may be different from the liabilities that have been recorded for these unrecognized tax benefits. As a result, the Company may be subject to additional tax expense.

~~On December 22, 2017,~~As of June 30, 2022 and March 31, 2022, the ~~President~~Company had a federal tax liability of approximately $1,808,000 related to the repatriation of the ~~United States signed into law~~Company’s undistributed earnings of its foreign subsidiaries as required by the Tax Cuts and Jobs Act ~~tax reform legislation. This legislation makes significant change in U.S. tax law including a reduction in~~of 2017 (the “Tax Act”). As of June 30, 2022, the ~~corporate tax rates, changes~~Company’s short term portion was approximately $205,000 and the long term portion was approximately $1,603,000.

The liability is payable over 8 years. The first five installments are each equal to ~~net operating loss carryforwards~~8%, the sixth is equal to 15%, the seventh is equal to 20% and ~~carrybacks, and a repeal~~the final installment is equal to 25% of the ~~corporate alternative minimum tax. The legislation reduced~~liability. As of June 30, 2022, the ~~U.S. corporate tax rate from the current rate of 35% to 21%. As a result~~Company has paid 4 of the ~~enacted law, the Company was required to revalue its deferred tax assets and liability at the rate in effect during their scheduled reversal. This revaluation resulted in an addition of $665,600~~8 installments. Each installment must be remitted on ~~a gross basis, to income tax expense in continuing operations and a corresponding reduction in the deferred tax asset. However, the net impact~~or before July 15^th of the ~~revaluation resulted~~year in income tax expense of $223,000, after adjustments to the valuation allowance against the Company’s deferred tax assets. The new legislation will require the Company to pay tax on the unremitted earnings of its foreign subsidiaries though December 31, 2017. Because of the complexities involved in determining the previously unremitted earnings and profits of all our foreign subsidiaries, the Companywhich such installment is ~~still in the process of obtaining, preparing, and analyzing the required information and expects to~~

record an initial estimate of the impact on our Consolidated Financial Statements in the 4th quarter. The other provisions of the Tax Cuts and Jobs Act are not expected to have a material impact on the fiscal 2018 consolidated financial statements.

From time to time, Emerson engages in business transactions with its controlling shareholder, Nimble Holdings Company Limited (“Nimble”), formerly known as The Grande Holdings Limited (“Grande”), and one or more of ~~Grande’s~~Nimble’s direct and indirect subsidiaries, ~~and companies~~or with entities related to the Company’s Chairman of the Board. Set forth below is a summary of such transactions.

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 ~~Grande,~~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 ~~63.8%~~72.4%, of the Company’s outstanding common ~~stock.~~stock as of June 30, 2022. Accordingly, the Company is a “controlled company” as defined in Section 801(a) of the NYSE American Company Guide.

During the three month period ended June 30, 2022, the Company was billed approximately $40,000 for rental and utility fees from Vigers Appraisal and Consulting Ltd (“~~Wealth Warrior”~~VACL”) ~~acquired approximately 65.9% of the outstanding share capital of Grande from Sino Bright Enterprises Co.~~, ~~Ltd.,~~which is a company related to the Company’s Chairman of the Board. ~~Based upon disclosures filed by Wealth Warrior on a Schedule 13D on October 10, 2017, Wealth Warrior, together with its affiliates, collectively hold 73.9%~~As of ~~the outstanding share capital of Grande as of October 10, 2017. Accordingly, a change of control of~~June 30, 2022 the Company ~~was deemed~~owed nil to ~~have occurred as Wealth Warrior may be deemed~~VACL related to be a controlling person of Grande, and as a result may be deemed to share the power to vote or direct the vote of (and to share the power to dispose or direct the disposition of) the shares of the Company held for the account of S&T.

~~On February 9, 2018,~~ ~~Grande announced that it will change its name to Nimble Holdings Company Limited, subject to certain regulatory approvals.~~

In April 2016, the Company, upon a request made by S&T, considered and agreed to return to S&T the $500,000 of collateral which S&T had paid to the Company in September 2014 as a part of the indemnification agreement between S&T, Grande and the Company pertaining to an Internal Revenue Service challenge of the Company’s March 31, 2010 earnings and profits calculations underlying the taxability of a dividend paid during March 2010 to all of its stockholders, net of the $79,000 in expenses incurred by the Company in defending the IRS challenge. On April 29, 2016, the Company paid $421,000 to S&T to effectuate the release of the collateral net of the aforementioned expenses incurred by the Company. From September 30, 2014 through March 31, 2016, this pledged collateral had been recorded by the Company as restricted cash on its balance sheet.

~~Ancillary Expenses Pertaining to Rented Office Space in Hong Kong~~these charges.

During the three ~~and nine months~~month period ended ~~December 31, 2017,~~June 30, 2022, the Company was billed approximately ~~$4,000 and $13,000~~$400 for ~~utility and service charges~~purchases of personal protection equipment from ~~The Grande Properties Management Limited (“GPML”) and Lafe~~Vigers Strategic Services ~~Limited~~Ltd (“~~LSSL”~~VSSL”), which ~~are companies~~is a company related to the Company’s Chairman of the ~~Board, in connection with~~Board. VSSL was formerly known as Lafe Strategic Services Ltd. As of June 30, 2022 the ~~Company’s rented office space in Hong Kong. The~~ Company owed nil to ~~both GPML and LSSL~~VSSL related to these ~~charges at December 31, 2017.~~

During the three and nine months ended December 31, 2017, the Company billed approximately $6,000 and $17,000 for administrative fees to Phenomenon Agents Ltd (“PAL”), Sansui Acoustics Research Corporation (“SARC”) and TWD Industrial Co. Ltd. (“TICL"), which are subsidiaries of Grande. The Company was owed nil from PAL, SARC and TICL related to these charges at December 31, 2017.

At ~~December 31, 2017~~both June 30, 2022 and March 31, ~~2017,~~2022, the Company held short term investments in deposits totaling ~~$22.2~~nil. The Company held $21.1 million in deposits which were classified as cash equivalents as of June 30, 2022 and ~~$25.1~~$22.0 million ~~respectively. These investments~~of such deposits as of March 31, 2022.

For the three month period ended June 30, 2022, the Company’s three largest customers accounted for approximately 73% of the Company’s net revenues, of which Walmart accounted for 42%, Fred Meyer accounted for 19% and Amazon accounted for 12%.

For the three month period ended June 30, 2021, the Company’s three largest customers accounted for approximately 82% of the Company’s net revenues, of which Walmart accounted for 44%, Fred Meyer accounted for 24% and Amazon accounted for 14%.

A significant decline in net sales to any of the Company’s key customers would have a material adverse effect on the Company’s business, financial condition and results of operation.

For the three month period ended June 30, 2022, the Company’s gross product sales were comprised of two product types within two categories — housewares products and audio products, of which microwave ovens generated approximately 42% of the Company’s gross product sales. Audio products generated approximately 57% of the Company’s gross product sales.

For the three month period ended June 30, 2021, the Company’s gross product sales were comprised of the same two product types within two categories — housewares products and audio products, of which microwave ovens generated approximately 39% of the Company’s gross product sales. Audio products generated approximately 60% of the Company’s gross product sales.

As a percent of the Company’s total trade accounts receivable, net of specific reserves, the Company’s top two customers accounted for 47% and 21% as of June 30, 2022, respectively. As a percent of the Company’s total trade accounts receivable, net of specific reserves, the Company’s top three customers accounted for 69%, 17% and 11% as of March 31, 2022, respectively. 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. 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.

The Company maintains its cash accounts with major U.S. and foreign financial institutions. The Company’s cash and restricted cash balances on deposit in the U.S. as of June 30, 2022 and March 31, 2022 were insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per qualifying bank ~~certificates of deposit, which bear an interest rate of 1.55% and will mature~~account in ~~February 2018.~~accordance with FDIC rules. The Company’s cash, cash

equivalents and restricted cash balances in excess of these FDIC-insured limits were approximately $24.7 million and approximately $25.3 million at June 30, 2022 and March 31, 2022, respectively.

During the three month period ended June 30, 2022, the Company procured 100% of its products for resale from its two largest factory suppliers, of which 76% was supplied by its largest supplier. During the three month period ended June 30, 2021, the Company procured 100% of its products for resale from its two largest factory suppliers, of which 83% was supplied by its largest supplier.

The Company leases office space in the U.S. and in Hong Kong as well as a copier in the U.S. These leases have remaining non-cancellable lease terms of seven months to three years. 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 June 30, 2022 to indicate that a reassessment or re-measurement of the Company’s existing leases was required. There were also no impairment indicators identified during the quarter ended June 30, 2022 that required an impairment test for the Company’s right-of-use assets or other long-lived assets in accordance with ASC topic 360-10, “Impairment and Disposal of Long-Lived Assets”.

As of June 30, 2022, the Company’s current operating and finance lease liabilities were $189,000 and $1,000, respectively and its non-current operating and finance lease liabilities were $167,000 and $1,000, 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 June 30, 2022 was $350,000 and $2,000, respectively.

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

	Three Months Ended June 30,
	2022		2021
	(in thousands)
Lease cost
Operating lease cost	$	63	$	64
Finance lease cost		0		0
Amortization of right-of-use assets		0		0
Interest on lease liabilities		0		0
Variable lease costs		0		0
Total lease cost		63		64

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

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		63		67
Operating cash flows from finance leases		0		0
Financing cash flows from finance leases		0		0

Right-of-use assets obtained in exchange for lease obligations:
Operating leases		0		0
Finance leases		0		0

Information relating to the lease term and discount rate are as follows:

Weighted average remaining lease term (in months)	As of June 30, 2022			As of June 30, 2021
Operating leases		22.5			16.9
Finance leases		23.2			35.2

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

As of June 30, 2022 the maturities of lease liabilities were as follows:
(in thousands)	Operating Leases			Finance Leases

2023	$	170		$	1
2024		149			1
2025		62			1
2026		—			—
Thereafter		—			—
Total lease payments	$	381		$	3
Less: Imputed interest		(25	)		(1	)
Total	$	356		$	2

During the three month periods ended June 30, 2022 and June 30, 2021, the Company’s Hong Kong subsidiary recorded $22,000 and nil, respectively, under the governmental program called the Employment Support Scheme (“ESS”). The proceeds must be used for payroll expenses and the Company may be 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 are presented as Other Income under the description called “Income from governmental assistance programs” in the Consolidated Statements of Operations.

On April 19, 2022, the US District Court for the District of Delaware granted judgment in favor of the Company in its trademark infringement lawsuit against air conditioning and heating products provider Emerson Quiet Kool and wholesaler Home Easy (the “defendants”). Among other things, the court order issues an injunction and directs the US Patent and Trademark Office to cancel the defendants’ existing and proposed “Emerson Quiet Kool” trademarks and prohibits defendants from registering or applying to register the same mark or any other mark or name containing the word “Emerson” going forward. The judgment also awards $6.5 million to the Company. Like any judgment, there is no guarantee that the Company will be able to collect the judgment or, if it is able to collect, how soon it will be able to do so. The Company is pursuing various post-judgment motions against defendants. The defendants have filed a notice of appeal of the judgment.

Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition.

The following discussion of the Company’s operations and financial condition should be read in conjunction with the Financial Statements and notes thereto included elsewhere in this Quarterly Report.

In the following discussions, most percentages and dollar amounts have been rounded to aid presentation. Accordingly, all amounts are approximations.

This report contains ~~forward looking~~forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as ~~amended.~~amended (the “Exchange Act”).

Forward-looking statements include statements with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond the Company’s control, and which may cause the Company’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

All statements other than statements of historical fact are statements that could be forward-looking statements. The reader can identify these forward-looking statements through the Company’s use of words such as “may,” “will,” “can,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “seek,” “estimate,” “continue,” “plan,” “project,” “predict,” “could,” “intend,” “target,” “potential,” and other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation:

All forward-looking statements are expressly qualified in their entirety by this cautionary notice. The reader is cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this report or the date of the document incorporated by reference into this report. The Company has no obligation, and expressly disclaims any obligation, to update, revise or correct any of the forward-looking statements, whether as a result of new information, future events or otherwise. ~~Management~~The Company has expressed its expectations, beliefs and projections in good faith and it believes it has a reasonable basis for them. However, ~~management~~the Company cannot assure the reader that its expectations, beliefs or projections will result or be achieved or accomplished.

The following table summarizes certain financial information for the three ~~and nine~~ month periods ended ~~December 31, 2017~~June 30, 2022 (fiscal ~~2018)~~2023) and ~~December 31, 2016~~June 30, 2021 (fiscal ~~2017)~~2022) (in thousands):

	Three Months Ended December 31,						Nine Months Ended December 31,					Three Months Ended June 30,
	2017			2016			2017			2016		2022			2021
Net product sales	$	4,075		$	3,764		$	10,413		$	14,079	$	1,004		$	1,987
Licensing revenue		161			1,170			546			3,518		70			65
Net revenues		4,236			4,934			10,959			17,597		1,074			2,052
Cost of sales		4,046			3,361			10,292			12,921		879			1,609
Other operating costs and expenses		14			23			38			200
Selling, general and administrative expenses		1,100			1,198			3,784			3,881		1,344			1,375
Operating (loss) income		(924	)		352			(3,155	)		595
Operating loss													(1,149	)		(932	)
Interest income, net		131			54			365			162		50			17
(Loss) income before income taxes		(793	)		406			(2,790	)		757
Provision (Benefit) for income taxes		378			(42	)		313			198
Net (loss) income	$	(1,171	)	$	448		$	(3,103	)	$	559
Income from governmental assistance programs													22			-
Loss before income taxes													(1,077	)		(915	)
Provision for income taxes													-			-
Net loss												$	(1,077	)	$	(915	)

Net product sales — Net product sales for the ~~third~~ ~~quarter of fiscal 2018~~three month period ended June 30, 2022 were ~~$4.1~~$1.0 million as compared to ~~$3.8~~$2.0 million for the ~~third~~ ~~quarter~~three month period ended June 30, 2021, a decrease of ~~fiscal 2017, an increase of $0.3~~$1.0 million, or ~~8.3%~~49.5%. The Company’s sales during the ~~third~~ ~~quarters of fiscal 2018~~three month periods ended June 30, 2022 and ~~fiscal 2017~~June 30, 2021 were highly concentrated among the Company’s ~~two~~three largest customers – Wal-Mart, Fred Meyer and Amazon ~~for~~– comprising in the ~~third quarter of fiscal 2018~~aggregate approximately 78% and ~~Wal-Mart and Fred Meyer for the third quarter of fiscal 2017, where gross product sales comprised approximately 79.5% and 79.0%~~ 84%, respectively, of the Company’s total ~~gross product sales.~~

~~For the nine month period of fiscal 2018,~~ net product sales ~~were $10.4 million as compared to $14.1 million for the nine month period of fiscal 2017, a decrease of $3.7 million, or 26.0%~~. The Company’s sales during the nine month periods of fiscal 2018 and fiscal 2017 were highly concentrated among the Company’s two largest customers – Wal-Mart and Amazon for the nine month period of fiscal 2018 and Wal-Mart and Fred Meyer for the nine month period of fiscal 2017, where gross

Net product sales are comprised ~~approximately 76.2% and 85.8%~~primarily of the ~~Company’s total gross product sales.~~

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~~no effect ~~of increasing~~on net product sales and operating income ~~by approximately $18,000 and $40,000~~ for either of the ~~third quarters of fiscal 2018 and fiscal 2017, respectively, and approximately $41,000 and $121,000 for the nine~~three month periods ~~of fiscal 2018~~ended June 30, 2022 and ~~fiscal 2017 respectively. Net product sales are comprised primarily of the sales of houseware and audio products which bear the Emerson~~^® ~~brand name.~~June 30, 2021. The major elements which contributed to the overall decrease in net product sales were as follows:

Business operations ~~—Emerson will~~ — The Company expects to continue to expand ~~the~~its existing distribution channels and to develop and promote new products ~~to regain shelf spaces~~ with retailers in the ~~USA. Emerson~~U.S. The Company is also ~~investing~~continuing to invest in products and marketing activities to expand its sales through internet and ecommerce channels. These efforts ~~would~~ require investments in appropriate human resources, media marketing and development of products in various categories in addition to the traditional home appliances and audio products on which ~~Emerson~~the Company has historically focused. The Company also is continuing its efforts to identify strategic courses of action related to its licensing activities, including seeking new licensing relationships. The Company has engaged each of Leveraged Marketing Corporation of America and Global Licensing Services Pte Limited as an agent to assist in identifying and procuring potential licensees.

~~Emerson has taken active steps~~Emerson’s success is dependent on its ability to ~~manage~~anticipate and ~~control its operating costs. The operating costs~~respond to changing consumer demands and trends in a timely manner, as well as expanding into new markets and sourcing new products that are profitable to the Company. Geo-political factors may also affect the Company’s operations and demand for the ~~third~~Company’s products, which are subject to customs requirements and to tariffs and quotas set by governments through mutual agreements and bilateral actions. The Company expects that current and proposed U.S. 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. If no mitigation steps are taken, or the mitigation is 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 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. 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. At this time the Company is unable to quantify possible effects on its costs arising from the new tariffs, which are expected to increase the Company’s inventory costs and associated costs of sales as tariffs are incurred, and some costs may be passed through to the Company’s customers as product price increases in the future. However, if the Company is unable to successfully pass through the additional costs or otherwise mitigate the effects of these tariffs, or if the higher prices reduce demand for the Company’s products, it will have a negative effect on the Company’s product sales and gross margins.

Starting in the fourth quarter of fiscal ~~2018~~2020, the global COVID-19 pandemic has presented significant challenges and impacted the Company’s business and operating results, and the operations and production capabilities of the Company’s suppliers in China and the distribution capabilities of the Company’s third party logistics provider, including as a result of quarantine or closure. The pandemic has directly and indirectly disrupted certain sales and supply chain activities and affected the Company’s ability to address those challenges. Although the Company has since experienced increased demand in certain of its product categories and favorable impacts on its online channels as a result of the COVID-19 pandemic, the Company expects that the pandemic will continue to impact its business and operations over the coming quarters, including with respect to the magnitude and timing of orders by retailers, resellers, distributors and consumers. Additionally, surges in demand and shifts in shopping patterns related to the COVID-19 pandemic have strained the global freight network and availability of shipping containers, which has been further exacerbated by COVID-19 outbreaks and protocols at many port locations, resulting in carrier-imposed capacity restrictions, carrier delays and longer lead times, including shipment receiving and unloading backlogs at many U.S. ports. As a result, the Company’s shipping costs have recently increased by several multiples compared to fiscal 2021 averages. Global component shortages, in particular semiconductor chips, arising from these changes in consumer demand and reduced manufacturing capacity related to the COVID-19 pandemic have also caused and are likely to continue to result in significant price fluctuations and long lead times in the supply of these components. Although the Company is seeking alternate suppliers for these components, developing alternate sources of supply will be time consuming, difficult and costly, and may require the re-tooling of products to accommodate components from different suppliers. In addition to increasing cost trends, the Company’s suppliers are not equipped to hold meaningful amounts of inventory and if shipping container capacity remains limited or unavailable, they could pause manufacturing, which could ultimately impact the Company’s ability to fulfill customer orders on a timely basis. These impacts on the Company’s supply chain have and may continue to impact the Company’s ability to meet product demand, which could result in additional costs, customer dissatisfaction in the event of inventory shortages or may otherwise adversely impact the Company’s business and results of operations.

In light of the adverse effects of the COVID-19 pandemic on macroeconomic conditions domestically and internationally, along with the uncertainty associated with a potential recovery, the Company has implemented certain cost-reduction actions intended to reduce expenditures in light of the effects of the COVID-19 pandemic to the business. However, the environment remains highly uncertain and demand for the Company’s products remains difficult to assess due to many factors including the pace of economic recovery around the world, the status of various government stimulus programs, competitive intensity and retailer actions to continue carefully managing inventory. As a result, the Company is unable at this time to predict the full impact of the COVID-19 pandemic on its operations and financial results, and, depending on the magnitude and duration of the pandemic, including the further spread and severity of COVID-19 cases in areas in which the Company operates and the availability and distribution of effective vaccines, such

impact may be material. Accordingly, current results and financial condition discussed herein may not be indicative of future operating results and trends.

For more information on risks associated with the Company’s operations, including tariffs, please see the risk factors within Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K, as amended, for the year ended March 31, 2022.

Legal Proceedings — On April 19, 2022, the US District Court for the District of Delaware granted judgment in favor of the Company in its trademark infringement lawsuit against air conditioning and heating products provider Emerson Quiet Kool and wholesaler Home Easy (the “defendants”). Among other things, the court order issues an injunction and directs the US Patent and Trademark Office to cancel the defendants’ existing and proposed “Emerson Quiet Kool” trademarks and prohibits defendants from registering or applying to register the same mark or any other mark or name containing the word “Emerson” going forward. The judgment also awards $6.5 million to the Company. Like any judgment, there is no guarantee that the Company will be able to collect the judgment or, if it is able to collect, how soon it will be able to do so. The Company is pursuing various post-judgment motions against defendants. The defendants have filed a notice of appeal of the judgment.

Licensing revenue — Licensing revenue for the three month period ended June 30, 2022 was $70,000 as compared to $65,000 for the three month period ended June 30, 2021, an increase of $5,000, or 7.7%. The year-over-year increase can be attributed to the escalation in the annual minimum royalty earned by the Company from its licensee.

Net revenues — Net revenues were $1.1 million for the three month period ended June 30, 2022as compared to ~~$1.2~~$2.1 million for the third quarter of fiscal 2017. However, operating costs in the third quarter of fiscal 2018 included $76,000 of legal fees related to a trademark infringement suit taken by Emerson against a third party.

~~For the nine~~three month period of fiscal 2018, operating costs were $3.8 million as compared to $3.9 million for the nine month period of fiscal 2017. However, operating costs for the nine month period of fiscal 2018 included $469,000 of legal fees related to a trademark infringement suit taken by Emerson against a third party.

~~Licensing revenue~~ ~~— Licensing revenue in the third quarter of fiscal 2018 was $0.2 million as compared to $1.2 million in the third quarter of fiscal 2017,~~ended June 30, 2021, a decrease of $1.0 million, or ~~86.2% which can be primarily attributed to the loss of the license agreement with Funai which ended on December 31, 2016.~~47.7%.

Licensing revenue for the nine month period of fiscal 2018 was $0.5 million as compared to $3.5 million for the nine month period of fiscal 2017, a decrease of $3.0 million or 84.5% which can be primarily attributed to the loss of the license agreement with Funai which ended on December 31, 2016.

Management will continue to find licensees and to negotiate for a replacement licensee to Funai. However, given the current status of the world-wide TV consumer market, it is doubtful as to when a new contract will be concluded.

~~Net revenues~~ — As a result of the foregoing factors, the Company’s net revenues were $4.2 million in the third quarter of fiscal 2018 as compared to $4.9 million in the third quarter of fiscal 2017, a decrease of $0.7 million, or 14.2% and $11.0 million for the nine month period of fiscal 2018 as compared to $17.6 million for the nine month period of fiscal 2017, a decrease of $6.6 million or 37.7%.

Cost of sales — In absolute terms, cost of sales ~~increased~~decreased $0.7 million, or ~~20.4%~~45.4%, to ~~$4.1~~$0.9 million infor the ~~third quarter of fiscal 2018~~three month period ended June 30, 2022 as compared to ~~$3.4~~$1.6 million infor the ~~third quarter of fiscal 2017.~~three month period ended June 30, 2021. The ~~increase~~decrease in absolute terms for the ~~third quarter of fiscal 2018~~three month period ended June 30, 2022 as compared to the ~~third quarter of fiscal 2017~~three month period ended June 30, 2021 was primarily related to ~~increased~~a decrease in net product sales partially offset by ~~lower~~higher year-over-year gross cost of sales as a percentage of gross sales.

In absolute terms, cost of sales decreased $2.6 million, or 20.4%, to $10.3 million for the nine month period of fiscal 2018 as compared to $12.9 million for the nine month period of fiscal 2017. The decrease in absolute terms for the nine month period of fiscal 2018 as compared to the nine month period of fiscal 2017 was primarily related to decreased net product sales and by lower year-over-year gross cost of sales as a percentage of gross sales.

The Company purchases the products it sells from a limited number of factory suppliers. ~~For~~In each of the ~~third quarter of fiscal 2018~~three month periods ended June 30, 2022 and ~~fiscal 2017,~~June 30, 2021, the Company purchased ~~97% and 98%, respectively,~~100% of its products from its two largest suppliers. ~~For the nine month period of fiscal 2018 and fiscal 2017, the Company purchased 93% and 92%, respectively, from its two largest suppliers.~~

~~Other operating costs and expenses~~ — Other operating costs and expenses as a percentage of net product sales were 0.3% for the third quarter of fiscal 2018 as compared to 0.6% for the third quarter of fiscal 2017. In absolute terms, other operating costs and

expenses decreased $9,000, or 39.1%, to $14,000 for the third quarter of fiscal 2018 as compared to $23,000 for the third quarter of fiscal 2017 as a result of lower warranty and returns processing costs.

For the nine month period of fiscal 2018, other operating costs and expenses as a percentage of net product sales were 0.4% as compared to 1.4% for the nine month period of fiscal 2017. In absolute terms, other operating costs and expenses decreased $162,000, or 81.0%, to $38,000 for the nine month period of fiscal 2018 as compared to $200,000 for the nine month period of fiscal 2017 as a result of lower warranty and returns processing costs.

Selling, general and administrative expenses (“S,G&A”) — S,G&A, in absolute terms, was ~~$1.1~~$1.34 million infor the ~~third quarter of fiscal 2018~~three month period ended June 30, 2022 as compared to ~~$1.2~~$1.37 million ~~in the third quarter of fiscal 2017, a decrease of $0.1 million,~~for three month period ended June 30, 2021, essentially flat or ~~8.2%~~2.3%. S,G&A, as a percentage of net revenues, was ~~26.0% in~~125.1% for the ~~third quarter of fiscal 2018~~three month period ended June 30, 2022 as compared to ~~24.3% in~~67.0% for the ~~third quarter of fiscal 2017.~~three month period ended June 30, 2021. The decrease in S,G&A was ~~due~~primarily attributed to ~~reductions~~a decrease in ITcompensation costs ~~tax counsel, travel & entertainment costs, directors~~of approximately $124,000, a decrease in director’s fees of $32,000 and a decrease in bad debt expense of $22,000 partially offset by an increase in legal fees ~~which included $76,000 related to a trademark infringement suit.~~

~~S,G&A, in absolute terms, was $3.7 million~~of $158,000. Compensation costs for the ~~nine~~three month period ~~of fiscal 2018~~ended June 30, 2022 were $508,000 as compared to ~~$3.8 million~~$632,000 for the ~~nine~~three month period ~~of fiscal 2017, a decrease of $0.1 million or 2.5%~~ended June 30, 2021. ~~S,G&A, as a percentage of net revenues, was 34.5%~~Legal fees for the ~~nine~~three month period ~~of fiscal 2018~~ended June 30, 2022 were $431,000 as compared to ~~22.1%~~$273,000 for the ~~nine~~three month period ~~of fiscal 2017. The decrease in S,G&A was due~~ended June 30, 2021. Director’s fees for the three month period ended June 30, 2022 were $33,000 as compared to reductions in consulting costs, compensation costs, directors fees and outside service provider fees partially offset by increased legal fees as mentioned in “Business operations” of which $469,000 related to a trademark infringement suit.$65,000 for the three month period ended June 30, 2021.

Interest income, net — Interest income, net, was ~~$131,000 in~~$50,000 for the ~~third quarter of fiscal 2018~~three month period ended June 30, 2022 as compared to ~~$54,000 in~~$17,000 for the ~~third quarter of fiscal 2017,~~three month period ended June 30, 2021, an increase of ~~$77,000.~~$33,000. The increase was primarily due to higher average interest rates earned on the Company’s short term investments.

~~Interest income, net, was $365,000 for~~Income from governmental assistance programs — For the ~~nine~~three month period ended June 30, 2022, the Company recorded income of ~~fiscal 2018 as compared to $162,000 for~~approximately $22,000 under the ~~nine~~ESS program. For the three month period ended June 30, 2021, the Company recorded income of ~~fiscal 2017, an increase of $203,000. The increase was primarily due to higher average interest rates on~~nil under the ~~Company’s short term investments.~~ESS program. See “Note 10 – Governmental Assistance Programs”.

Provision (benefit) for income taxes — InFor the ~~third quarter of fiscal 2018,~~three month periods ended June 30, 2022 and June 30, 2021, the Company recorded an income tax expense of ~~$378,000~~nil. Under ASU 2019-12 “Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes” the Company incurred $10,950 of non-income based state taxes for both periods, which are now reported as ~~compared~~S,G &A. See “Note 5 – Income Taxes”.

Although the Company generated net losses during fiscal 2023 and fiscal 2022, it was unable to realize an income tax benefit of $42,000 in the third quarter of fiscal 2017. Although the Company generated a net loss during the third quarter of fiscal 2018, the Tax Cuts and Jobs Act legislation (See Note 5 – Income Taxes) had an adverse impact of $246,000 on a net basisdue to valuation allowances recorded against its deferred tax assets. ~~During the third quarter of fiscal 2018, the Company was assessed $128,000 by the state of California related to foreign based income for fiscal years 2012 and 2013.~~

For the nine month period of fiscal 2018, the Company recorded an income tax expense of $313,000 as compared to income tax expense of $198,000 for the nine month period of fiscal 2017. Although the Company generated a net loss during the nine month period of fiscal 2018, the Tax Cuts and Jobs Act legislation (See Note 5 – Income Taxes) had an adverse impact of $223,000 on a net basis to its deferred tax assets. During the nine month period of fiscal 2018, the Company was assessed $128,000 by the state of California related to foreign based income for fiscal years 2012 and 2013.

Net (loss) ~~income~~ — As a result of the foregoing factors, the Company realized a net loss of ~~$1.2 million in~~$1,077,000 for the ~~third quarter of fiscal 2018~~three month period ended June 30, 2022 as compared to ~~net income of $0.4 million in the third quarter of fiscal 2017.~~

~~For the nine month period of fiscal 2018, the Company realized~~ a net loss of ~~$3.1 million as compared to net income of $0.6 million~~$915,000 for the ~~nine~~three month period ~~of fiscal 2017.~~ended June 30, 2021.

As of ~~December 31, 2017,~~June 30, 2022, the Company had cash and cash equivalents of approximately ~~$20.8~~$24.9 million as compared to approximately ~~$41.6~~$25.6 million at ~~December~~March 31, ~~2016.~~2022. Cash and cash equivalents includes short term investments in deposits which were classified as cash

equivalents of $21.1 million as of June 30, 2022 compared to $22.0 million of such deposits as of March 31, 2022. Working capital decreased to ~~$48.4~~$27.1 million at ~~December 31, 2017~~June 30, 2022 as compared to ~~$56.6~~$28.1 million at ~~December~~March 31, ~~2016.~~2022. The decrease in cash and cash equivalents of approximately ~~$20.8~~$0.7 million was due to ~~an increase in short term investments of $12.0 million, an increase in treasury stock of $4.7 million,~~ the net loss generated during the ~~prior 12 months~~period of ~~$3.9~~$1.1 million, an increase in inventory of $0.3 million, an increase in prepaid purchases of ~~$1.3~~$0.1 million ~~an increase~~and a decrease in ~~accounts receivable~~deferred revenue of ~~$0.8 million, an increase in inventory of $0.4~~$0.1 million partially offset by a decrease in accounts receivable of ~~$1.7~~$0.7 million, a decrease in prepaid expenses and other current assets ~~and a decrease in deferred tax assets of $0.4 million, an increase in income taxes payable~~ of $0.1 million and ~~a decrease~~an increase in ~~royalties~~accounts payable and other ~~receivables~~current liabilities of $0.1 million.

Net cash used by operating activities was ~~$4.8~~approximately $0.7 million for the ~~nine months~~three month period ended ~~December 31, 2017,~~June 30, 2022, resulting from a ~~$3.1~~$1.1 million net loss generated during the period, an increase in inventory of ~~$2.2~~$0.3 million, an increase in prepaid purchases of ~~$0.7~~$0.1 million and ~~an increase~~a decrease in deferred revenue of $0.1 million partially offset by a decrease in accounts receivable of ~~$0.4~~$0.7 million, ~~partially offset by~~ a decrease in prepaid expenses and other current assets of ~~$0.9~~$0.1 million and an increase in accounts payable and other current liabilities of ~~$0.3 million, a decrease in deferred tax assets of $0.2 million and an increase in income taxes payable of~~ $0.1 million.

Net cash provided by investing activities was ~~$2.8 million~~nil for the ~~nine months~~three month period ended ~~December 31, 2017 due to a reduction in short term certificates of deposit.~~June 30, 2022.

Net cash used by financing activities was ~~approximately $4.6 million~~nil for the ~~nine months~~three month period ended ~~December 31, 2017 due to repurchases of common stock pursuant to the Company’s stock repurchase plan.~~June 30, 2022.

The Company’s principal existing sources of cash are generated from ~~operations.~~operations and its existing short-term investments. The Company believes that its existing cash balance and sources of cash will be sufficient to support existing operations over the next 12 months.

As previously disclosed, Funai terminated its license agreement with the Company effective as of December 31, 2016. This event will continue to have a material impact on the Company’s business, financial condition, results of operations and cash position. The Company is analyzing the impacts to its business of these events and is identifying strategic courses of action for consideration.

As of ~~December 31, 2017,~~June 30, 2022, the Company did not have any off-balance sheet arrangements as defined under the rules of the ~~Securities~~SEC.

Accounting Standards Update 2019-12 “Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes” (Issued December 2019)

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and ~~Exchange Commission.~~also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. This standard took effect in the first quarter (June 2021) of the Company’s fiscal year ending March 31, 2022. The adoption of ASU 2019-12 had no material impact on the Company’s consolidated financial statements and related disclosures.

The following ~~Accounting Standards Updates (“ASUs”)~~ASUs were issued by the ~~Financial Accounting Standards Board~~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, these are not yet effective for this financial period.~~operates.

~~Accounting Standards Update 2014-09 “Revenue from Contracts with Customers” (Issued May 2014)~~

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

The Company maintains disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d — 15(e) under the ~~Securities~~ Exchange ~~Act of 1934, as amended (the “Exchange Act”))~~Act) that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the ~~Securities and Exchange Commission’s~~SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s ~~principal executive officer~~Chief Executive Officer and ~~principal financial officer,~~Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Due to the inherent limitations of control systems, not all misstatements may be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some ~~persons;~~persons, by collusion of two or more people, or by management override of the control. Our controls and procedures can only provide reasonable, not absolute, assurance that the above objectives have been met.

The Company’s management, with the participation of our Chief Executive Officer and Chief Financial Officer, concluded that disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of ~~December 31, 2017,~~June 30, 2022, are effective to provide reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the ~~Securities and Exchange Commission’s~~SEC’s rules and forms and that such information is accumulated and communicated to management, including the Company’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There have been no changes in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended ~~December 31, 2017~~June 30, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~From time to time, the~~The Company ~~may be~~is not currently a party to any legal proceedings other than litigation ~~or subject~~matters, in most cases involving ordinary and routine claims incidental to ~~claims regarding matters arising out of the ordinary course of~~its business. Management cannot estimate with certainty the Company’s ultimate legal and financial liability with respect to any such pending litigation ~~matters or the disposition of any claims that it could incur.~~matters. However, management believes, based on its examination of ~~all existing litigation~~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.

~~The Company’s operations and financial results are subject~~There have been no material changes to ~~various risks and uncertainties, including those described~~the risk factors contained in Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K, as amended, for the year ended March 31, 2017, as updated by Part II, Item 1A of the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2017, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of the Company’s common stock. There have been no material changes to our risk factors since the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2017.2022.

~~The following table reports information regarding repurchases by the Company of its common stock during the three months ended December 31, 2017:~~None

Period

Total Number of
Shares Purchased

Average Price
Paid per Share

Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs

Approximate
Dollar Value
of Shares
that May Yet
be Purchased
Under the
Plans or
Programs

October 1 through October 31, 2017

175,410

$
1.47

175,410

$
6,023,264

November 1 through November 30, 2017

75,399

$
1.48

75,399

$
5,911,753

December 1 through December 31, 2017

418,548

$
1.49

418,548

$
5,289,428

Total

669,357

$
1.48

669,357

$
5,289,428

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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

~~3 University Plaza,~~35 Waterview Blvd., Suite ~~405, Hackensack,~~140, Parsippany, NJ		~~07601~~07054
(Address of principal executive offices)		(Zip code)


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

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~☒	Smaller reporting company	☒

~~Emerging growth company~~	☐		Emerging growth company	☐

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements		3
Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition		1014
Item 3. Quantitative and Qualitative Disclosures About Market Risk		1518
Item 4. Controls and Procedures		1519
PART II — OTHER INFORMATION
Item 1. Legal Proceedings		1620
Item 1A. Risk Factors		1620
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		1620
Item 3. Defaults Upon Senior Securities		1620
Item 4. Mine Safety Disclosure		1620
Item 5. Other Information		1720
Item 6. Exhibits		1720
SIGNATURES		1821


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.**

~~101.1+~~101.INS		Inline XBRL Instance ~~Document.~~Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.*

~~101.2+~~101.SCH		Inline XBRL Taxonomy Extension Schema Document.*

~~101.3+~~101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.*

~~101.4+~~101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.*

~~101.5+~~101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.*

~~101.6+~~101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.*

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)


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


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

	December 31, 2017			March 31, 2017
	(In thousands, except share data)
ASSETS
Current Assets:
Cash and cash equivalents	$	20,819		$	27,471
Short term investments		22,233			25,078
Accounts receivable, net		1,592			1,208
Royalty receivable		63			99
Inventory		3,071			838
Prepaid purchases		1,451			750
Prepaid expenses and other current assets		576			1,494
Total Current Assets		49,805			56,938
Property, plant, and equipment, net		16			18
Deferred tax assets, net		569			791
Other assets		172			101
Total Non-current Assets		757			910
Total Assets	$	50,562		$	57,848
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and other current liabilities		1,087			756
Income tax payable		295			165
Total Current Liabilities		1,382			921
Total Non-current Liabilities		—			—
Total Liabilities	$	1,382		$	921
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 December 31, 2017 and March 31, 2017, respectively; 23,903,444 and 27,065,852 shares outstanding at December 31, 2017 and March 31, 2017, respectively		529			529
Additional paid-in capital		79,792			79,792
Accumulated deficit		(5,517	)		(2,414	)
Treasury stock, at cost (29,062,353 and 25,899,945 shares at December 31, 2017 and March 31, 2017, respectively)		(28,934	)		(24,290	)
Total Shareholders’ Equity		49,180			56,927
Total Liabilities and Shareholders’ Equity	$	50,562		$	57,848

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
October 1 through October 31, 2017		175,410	$	1.47		175,410	$	6,023,264
November 1 through November 30, 2017		75,399	$	1.48		75,399	$	5,911,753
December 1 through December 31, 2017		418,548	$	1.49		418,548	$	5,289,428
Total		669,357	$	1.48		669,357	$	5,289,428

				EMERSON RADIO CORP.
				(Registrant)

				/s/ ~~Duncan Hon~~Christopher W. Ho
Date: ~~February 14, 2018~~August 15, 2022				~~Duncan Hon~~Christopher W. Ho
				Chief Executive Officer (Principal Executive Officer)

				/s/ ~~Michael Binney~~Richard Li
Date: ~~February 14, 2018~~August 15, 2022				~~Michael Binney~~Richard Li
				Chief Financial Officer (Principal Financial and Accounting Officer)