EMERSON RADIO CORP

Previous wording

The following table summarizes certain financial information for the three month period ended June 30, 2025 (fiscal 2026) and June 30, 2024 (fiscal 2025) (in thousands):

Current wording

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

Previous wording

Net product sales — Net product sales for the three month period ended June 30, 2025 were approximately $1.6 million as compared to approximately $2.1 million for the three month period ended June 30, 2024, a decrease of approximately $0.5 million, or 25.4%. The Company’s sales during the three month period ended June 30, 2025 were highly concentrated among its three largest customers – Variety, Fred Meyer and Amazon – comprising in the aggregate approximately 68% of the Company’s total net product sales during the period. The Company’s sales during the three month period ended June 30, 2024, were highly concentrated among its three largest customers – Amazon, Walmart and Chedraui – comprising in the aggregate approximately 89% of the Company’s total net product sales.

Current wording

Net product sales — Net product sales for the three month period ended September 30, 2025 were approximately $1.1 million as compared to approximately $2.7 million for the three month period ended September 30, 2024, a decrease of approximately $1.6 million, or 57.8%. The Company’s sales during the three month period ended September 30, 2025 were highly concentrated among its three largest customers – Amazon, Costco and Walmart – comprising in the aggregate approximately 83% of the Company’s total net product sales during the period. The Company’s sales during the three month period ended September 30, 2024, were highly concentrated among its three largest customers – Walmart, Amazon and Fred Meyer – comprising in the aggregate approximately 88% of the Company’s total net product sales during the period.

Previous wording

Net product sales are comprised primarily of the sales of houseware and audio products which bear the Emerson® brand name. Net product sales may be periodically impacted by adjustments made to the Company’s sales allowance and marketing support accrual to record unanticipated customer deductions from accounts receivable or to reduce the accrual by any amounts which were accrued in the past but not taken by customers through deductions from accounts receivable within a certain time period. In the aggregate, these adjustments had the effect of increasing net product sales and operating income by nil and approximately $10,000 forthe three month periods ended June 30, 2025 and June 30, 2024, respectively. The major elements which contributed to the overall increase in net product sales were as follows:

Current wording

Net product sales are comprised primarily of the sales of houseware and audio products which bear the Emerson® brand name. Net product sales may be periodically impacted by adjustments made to the Company’s sales allowance and marketing support accrual to record unanticipated customer deductions from accounts receivable or to reduce the accrual by any amounts which were accrued in the past but not taken by customers through deductions from accounts receivable within a certain time period. In the aggregate, these adjustments had the effect of increasing net product sales and operating income by nil and approximately $11,000 forthe three month periods ended September 30, 2025 and September 30, 2024, respectively, and by nil and approximately $21,000 for the six month periods ended September 30, 2025 and September 30, 2024, respectively. The major elements which contributed to the overall increase in net product sales were as follows:

Previous wording

ii)Audio products: Net sales of audio products decreased approximately $0.9 million, or 85.7%, to approximately $0.1 million for the three month period ended June 30, 2025 as compared to approximately $1.0 million for the three month period ended June 30, 2024, primarily due to a discontinued clock radio at Walmart.

Current wording

ii)Audio products: Net sales of audio products decreased approximately $1.2 million, or 78.3%, to approximately $0.3 million for the three month period ended September 30, 2025 as compared to approximately $1.5 million for the three month period ended September 30, 2024, primarily due to a discontinued clock radio at Walmart. Net sales of audio products decreased approximately $2.0 million, or 80.9%, to approximately $0.5 million for the six month period ended September 30, 2025 as compared to approximately $2.5 million for the six month period ended September 30, 2024, primarily due to a discontinued clock radio at Walmart.

Previous wording

In light of the adverse macroeconomic conditions domestically and internationally, the Company has implemented certain cost-reduction actions intended to reduce expenditures. However, the environment remains uncertain. Demand for the Company’s products remains competitive and requires actions to continue carefully managing inventory. Accordingly, current results and financial condition discussed herein may not be indicative of future operating results and trends.

Current wording

In light of the adverse macroeconomic conditions domestically and internationally, the Company has implemented certain cost-reduction actions intended to reduce expenditures. However, the economic environment remains uncertain. Demand for the Company’s products remains competitive and requires the Company to continue carefully managing inventory. Accordingly, our current results and financial condition discussed herein may not be indicative of our future operating results and trends.

Previous wording

Licensing revenue — Licensing revenue for the three month period ended June 30, 2025 was approximately $86,000 as compared to approximately $69,000 for the three month period ended June 30, 2024, an increase of approximately $17,000, or 24.6%. The increase for the three month period ended June 30, 2025 was the result of increases of annual guaranteed minimum royalties of the Company's licensees.

Current wording

Licensing revenue — Licensing revenue for the three month period ended September 30, 2025 was approximately $88,000 as compared to approximately $68,000 for the three month period ended September 30, 2024, an increase of approximately $20,000, or 29.4%. The increase for the three month period ended September 30, 2025 was the result of increases of annual guaranteed minimum royalties of the Company's licensees.

Previous wording

Net revenues — Net revenues were approximately $1.7 million for the three month period ended June 30, 2025 as compared to approximately $2.2 million for the three month period ended June 30, 2024, a decrease of approximately $0.5 million, or 23.8%. The decrease in net revenues can be attributed primarily to the discontinuation of a clock radio partially offset by the introduction of new models of the Company's houseware products to the marketplace.

Current wording

Net revenues — Net revenues were approximately $1.2 million for the three month period ended September 30, 2025 as compared to approximately $2.7 million for the three month period ended September 30, 2024, a decrease of approximately $1.5 million, or 55.6%. The decrease in net revenues can be attributed primarily to the discontinuation of a clock radio at Walmart.

Previous wording

Cost of sales — Cost of sales decreased approximately $0.3 million, or 17.0% to approximately $1.7 million for the three month period ended June 30, 2025 as compared to approximately $2.0 million for the three month period ended June 30, 2024. The decrease in absolute terms for the three month period ended June 30, 2025 as compared to the three month period ended June 30, 2024 was primarily related to a decrease in net product sales partially offset by increased carrying costs of inventory and the product mix of sales in the current quarter.

Current wording

Cost of sales — Cost of sales decreased approximately $1.3 million, or 50.7%, to approximately $1.2 million for the three month period ended September 30, 2025 as compared to approximately $2.5 million for the three month period ended September 30, 2024. The decrease in absolute terms for the three month period ended September 30, 2025 as compared to the three month period ended September 30, 2024 was primarily related to the discontinuation of a clock radio at Walmart and the negative impact of tariffs on the Company's microwave product line.

Previous wording

Selling, general and administrative expenses (“S,G&A”) — S,G&A was approximately $1.3 million for the three month period ended June 30, 2025 as compared to $1.4 million for the three month period ended June 30, 2024, a decrease of approximately $0.1 million or 6.8%. S,G&A, as a percentage of net revenues, was approximately 78.8% for the three month period ended June 30, 2025 as compared to approximately 64.4% for the three month period ended June 30, 2024. The changes in S,G&A for the three month period ended June 30, 2025 as compared to the three month period ended June 30, 2024 was driven primarily by a decrease in legal fees of approximately $141,000 and a decrease in travel and entertainment costs of approximately $42,000 partially offset by an increase in compensation costs of approximately $75,000 and an increase in advertising costs of approximately $27,000.

Current wording

Selling, general and administrative expenses (“S,G&A”) — S,G&A was approximately $1.2 million for the three month period ended September 30, 2025 as compared to $1.4 million for the three month period ended September 30, 2024, a decrease of approximately $0.2 million or 14.0%. S,G&A, as a percentage of net revenues, was approximately 98.4% for the three month period ended September 30, 2025 as compared to approximately 50.7% for the three month period ended September 30, 2024. The decrease in S,G&A for the three month period ended September 30, 2025 as compared to the three month period ended September 30, 2024 was primarily driven by a decrease in compensation costs of approximately $177,000 and a decrease in advertising costs of approximately $32,000 partially offset by an increase in legal fees of approximately $38,000. Compensation costs for the three month period ended September 30, 2025 were approximately $645,000 as compared to approximately $822,000 for the three month period ended September 30, 2024. Advertising costs for the three month period ended September 30, 2025 were approximately $13,000 as compared to approximately $45,000 for the three month period ended September 30, 2024. Legal fees for the three month period ended September 30, 2025 were approximately $93,000 as compared to approximately $55,000 for the three month period ended September 30, 2024.

Previous wording

Interest income, net — Interest income, net, was approximately $169,000 for the three month period ended June 30, 2025 as compared to approximately $263,000 for the three month period ended June 30, 2024, a decrease of approximately $94,000. The decrease was primarily due to lower levels of cash invested on the Company’s short term investments.

Current wording

Interest income, net — Interest income, net, was approximately $153,000 for the three month period ended September 30, 2025 as compared to approximately $236,000 for the three month period ended September 30, 2024, a decrease of approximately $83,000. The decrease was primarily due to lower levels of cash invested on the Company’s short term investments.

Previous wording

Provision for income taxes — For the three month period ended June 30, 2025, the Company recorded income tax expense of nil as compared to $3,000 for the three month period ended June 30, 2024. The Company under the adoption of ASU 2019-12 “Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes” incurred non-income based state taxes of approximately $9,000 for each of the three month periods ended June 30, 2025 and June 30, 2024, which are now reported as S,G&A. See “Note 5 – Income Taxes”.

Current wording

Provision for income taxes — For both three month periods ended September 30, 2025 and September 30, 2024, the Company recorded income tax expense of nil. For the six month period ended September 30, 2025, the Company recorded income tax expense of nil as compared to approximately $3,000 for the six month period ended September 30, 2024. The Company under the adoption of ASU 2019-12 “Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes” incurred non-income based state taxes of approximately $9,000 for each of the six month periods ended September 30, 2025 and September 30, 2024, which are now reported as S,G&A. See “Note 5 – Income Taxes”.

Previous wording

Although the Company generated a net loss during the three months ended June 30, 2025, it is unable to realize an income tax benefit until the Company can demonstrate the ability to generate net income on a sustained basis. Therefore, the Company is obligated to record a 100% valuation allowance against the deferred tax assets.

Current wording

Although the Company generated a net loss during the three and six months ended September 30, 2025, it is unable to realize an income tax benefit until the Company can demonstrate the ability to generate net income on a sustained basis. Therefore, the Company is obligated to record a 100% valuation allowance against the deferred tax assets.

Previous wording

***Net loss ***— As a result of the foregoing factors, the Company realized a net loss of approximately $1,140,000 for the three month period ended June 30, 2025 as compared to a net loss of approximately $962,000 for the three month period ended June 30, 2024.

Current wording

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

Previous wording

As of June 30, 2025, the Company had cash and cash equivalents of approximately $1.7 million as compared to approximately $1.2 million at March 31, 2025. Cash and cash equivalents includes short term investments in deposits which were classified as cash equivalents of approximately $1.0 million as of June 30, 2025 compared to approximately $0.9 million of such deposits as of March 31, 2025. Working capital decreased to approximately $20.0 million at June 30, 2025 as compared to approximately $21.1 million at March 31, 2025. The increase in cash and cash equivalents of approximately $0.5 million was due to a decrease in short term deposits of approximately $1.0 million, an increase in accounts payable and current liabilities of approximately $0.9 million and a decrease in accounts receivable of approximately $0.2 million, partially offset by the net loss generated during the period of approximately $1.1 million, an increase in inventory of approximately $0.3 million, an increase in prepaid purchases of approximately $0.1 million and an increase in prepaid expenses and other current assets of approximately $0.1 million.

Current wording

As of September 30, 2025, the Company had cash and cash equivalents of approximately $0.9 million as compared to approximately $1.2 million at March 31, 2025. Cash and cash equivalents includes short term investments in deposits which were classified as cash equivalents of approximately $0.7 million as of September 30, 2025 compared to approximately $0.9 million of such deposits as of March 31, 2025. Working capital decreased to approximately $18.9 million at September 30, 2025 as compared to approximately $21.1 million at March 31, 2025. The decrease in cash and cash equivalents of approximately $0.3 million was due to the net loss generated during the period of approximately $2.2 million, the decrease in income tax payable of approximately $0.7 million, an increase in prepaid expenses and other current assets of approximately $0.1 million and an increase in inventory of approximately $0.1 million, partially offset by a decrease in short term deposits of approximately $2.3 million, a decrease in accounts receivable of approximately $0.3 million and an increase in accounts payable and current liabilities of approximately $0.2 million.

Previous wording

Net cash used by operating activities was approxim ately $0.5 million for the three month period ended June 30, 2025, resulting from the loss generated during the period of approximately $1.1 million, an increase in inventory of approximately $0.3 million, an increase in prepaid purchases of approximately $0.1 million and an increase in prepaid expenses and other current assets of approximately $0.1 million, partially offset by an increase in accounts payable and other current liabilities of approximately $0.9 million and a decrease in accounts receivable of approximately $0.2 million.

Current wording

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

Previous wording

Net cash provided by investing activ ities was approximately $983,000 for thethree month period ended June 30, 2025 due to redemptions of short-term investments.

Current wording

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

Previous wording

Net cash provided by financing activities was nil for thethree month period ended June 30, 2025.

Current wording

Net cash used by financing activities was approximately $1,000 for thesix month period ended September 30, 2025.