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 December 31,						Nine Months Ended December 31,
	2019			2018			2019			2018

Net revenues:
Net product sales	$	2,038		$	2,421		$	4,975		$	7,040
Licensing revenue		56			120			167			350
Net revenues		2,094			2,541			5,142			7,390
Costs and expenses:
Cost of sales		2,105			2,360			5,404			7,025
Selling, general and administrative expenses		1,152			948			3,208			2,883
		3,257			3,308			8,612			9,908
Operating (loss)		(1,163	)		(767	)		(3,470	)		(2,518	)
Other income:
Interest income, net		179			240			638			617
(Loss) before income taxes		(984	)		(527	)		(2,832	)		(1,901	)
Provision for income tax expense		4			2			19			73
Net (loss)		(988	)		(529	)		(2,851	)		(1,974	)
Basic (loss) per share	$	(0.05	)	$	(0.02	)	$	(0.14	)	$	(0.09	)
Diluted (loss) per share	$	(0.05	)	$	(0.02	)	$	(0.14	)	$	(0.09	)
Weighted average shares outstanding
Basic		21,043			21,637			21,043			22,221
Diluted		21,043			21,637			21,043			22,221

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

	December 31, 2019			March 31, 2019

ASSETS
Current Assets:
Cash and cash equivalents	$	6,498		$	7,917
Short term investments		27,964			28,371
Accounts receivable, net		862			604
Inventory		2,587			3,520
Prepaid purchases		89			417
Prepaid expenses and other current assets		416			424
Total Current Assets		38,416			41,253
Non-Current Assets:
Property, plant, and equipment, net		5			6
Deferred tax assets, net		437			448
Right-of-use asset-operating leases		496			—
Right-of-use asset-finance leases		5			—
Other assets		94			154
Total Non-Current Assets		1,037			608
Total Assets	$	39,453		$	41,861
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and other current liabilities		811			545
Short-term operating lease liability		236			—
Short-term finance lease liability		1			—
Income tax payable, current portion		195			250
Deferred revenue		—			165
Total Current Liabilities		1,243			960
Non-Current Liabilities:
Long-term operating lease liability		296			—
Long-term finance lease liability		4			—
Income tax payable		2,033			2,173
Total Non-Current Liabilities		2,333			2,173
Total Liabilities	$	3,576		$	3,133
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, 2019 and March 31, 2019, respectively; 21,042,652 shares outstanding at December 31, 2019 and March 31, 2019, respectively		529			529
Additional paid-in capital		79,792			79,792
Accumulated deficit		(14,553	)		(11,702	)
Treasury stock, at cost (31,923,145 shares at December 31, 2019 and March 31, 2019, respectively)		(33,201	)		(33,201	)
Total Shareholders’ Equity		35,877			38,728
Total Liabilities and Shareholders’ Equity	$	39,453		$	41,861

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

	Nine Months Ended December 31,
	2019			2018
	(In thousands)
Cash Flows from Operating Activities:
Net (loss)	$	(2,851	)	$	(1,974	)
Adjustments to reconcile net loss to net cash (used) by operating activities:
Amortization of right-of-use assets		36			—
Depreciation and amortization		1			5
Deferred tax assets		11			80
Asset allowances and reserves		18			(177	)
Changes in assets and liabilities:
Accounts receivable		(276	)		1,312
Royalty receivable		3			(100	)
Due to affiliates		—			5
Inventory		933			(1,454	)
Prepaid purchases		328			324
Prepaid expenses and other current assets		5			(75	)
Other assets		60			(6	)
Accounts payable and other current liabilities		266			(167	)
Income taxes payable		(195	)		(250	)
Deferred revenue		(165	)		(50	)
Net cash (used) by operating activities		(1,826	)		(2,527	)
Cash Flows From Investing Activities:
Proceeds from sale of short-term investments		1,850			30,079
Purchases of short-term investments		(1,443	)		(28,110	)
Disposals of property, plant and equipment		—			1
Net cash provided by investing activities		407			1,970
Cash Flows from Financing Activities:
Purchases of treasury stock		—			(2,611	)
Net cash (used) by financing activities		—			(2,611	)
Net (decrease) in cash and cash equivalents		(1,419	)		(3,168	)
Cash and cash equivalents at beginning of the period		7,917			25,096
Cash and cash equivalents at end of the period	$	6,498		$	21,928
Supplemental disclosures:
Cash paid for:
Interest	$	—		$	—
Income taxes	$	199		$	277

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, 2019	$	3,310		52,965,797	$	529	$	79,792	$	(11,702	)	$	(33,201	)	$	38,728
Net loss		—		—		—		—		(2,851	)		—			(2,851	)
Balance — December 31, 2019	$	3,310		52,965,797	$	529	$	79,792	$	(14,553	)	$	(33,201	)	$	35,877


			Common Stock				Additional								Total
	Preferred		Number		Par		Paid-In		Accumulated			Treasury			Shareholders’
	Stock		of Shares		Value		Capital		Deficit			Stock			Equity
Balance — March 31, 2018	$	3,310		52,965,797	$	529	$	79,792	$	(9,265	)	$	(30,583	)	$	43,783
Purchase of treasury stock		—		—		—		—		—			(2,611	)		(2,611	)
Net loss		—		—		—		—		(1,974	)		—			(1,974	)
Balance — December 31, 2018	$	3,310		52,965,797	$	529	$	79,792	$	(11,239	)	$	(33,194	)	$	39,198
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~~2019 and the results of operations for the three and nine month periods ended December 31, ~~2017~~2019 and December 31, ~~2016.~~2018. 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~~2019 (“fiscal ~~2017”~~2019”), included in the Company’s annual report on Form 10-K, as amended, for fiscal ~~2017.~~2019.

The results of operations for the three and nine month periods ended December 31, ~~2017~~2019 are not necessarily indicative of the results of operations that may be expected for any other interim periods or for the full year ending March 31, ~~2018~~2020 (“fiscal ~~2018”~~2020”).

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

Unless otherwise disclosed in the notes to these consolidated financial statements, the estimated fair value of the financial assets and liabilities approximates the carrying value.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which requires lease assets and ~~Marketing Support Expenses~~

~~Sales allowances, marketing support programs, promotions~~liabilities to be recorded on the balance sheet. This update is effective for public entities in fiscal years beginning after December 15, 2018, including interim reporting periods within those fiscal years, and ~~other volume-based incentives which~~certain qualitative and quantitative disclosures are ~~provided to retailers~~also required. Early adoption was permitted. The Company has adopted this ASU and ~~distributors are accounted for~~related amendments as of April 1, 2019 on ~~an accrual basis~~a modified retrospective basis. The Company has applied the modified retrospective approach by recording a cumulative effect adjustment as ~~a reduction to net revenues~~of the date of adoption, whereby prior comparative periods will not be retrospectively presented in the ~~period in which~~consolidated financial statements. The Company has also elected certain practical expedients permitted under the ~~related sales are recognized in accordance~~transition guidance, including to retain the historical lease classification as well as relief from reviewing expired or existing contracts to determine if they contain leases. The Company will be exempting leases with ~~ASC topic 605, “Revenue Recognition”, subtopic 50 “Customer Payments~~an initial term of twelve months or less from balance sheet recognition and ~~Incentives”~~will not separate lease 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”).~~non-lease components.

Upon adoption, 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 50total lease liabilities of $695,000, 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 amountcorresponding right-of-use assets 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,$650,000, all of which ~~are required to be met in order to recognize revenue.~~

~~If additional marketing support programs, promotions~~is associated with leased office space. The difference between the right-of-use asset and ~~other volume-based incentives are required to promote the Company’s products subsequent~~lease liability is due to the ~~initial sale, then additional reserves may be required~~existing deferred balance, resulting from historical straight-lining of operating leases that was reclassified upon adoption to reduce the measurement of the right-of-use assets. The Company’s Consolidated Statements of Income and ~~are accrued~~Consolidated Statements of Cash Flows were not materially impacted. See Note 9, “Leases” for ~~when such support is offered.~~further details.

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.~~

Accounting Standards Update ~~2014-09 “Revenue from Contracts with Customers”~~2019-12 “Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes” (Issued ~~May 2014)~~December 2019)

In ~~May 2014,~~December 2019, the FASB issued ASU ~~2014-09 “Revenue from Contracts with Customers" in order~~2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes,” which is intended to ~~ensure that revenue recognition requirements are the same under both US GAAP and International Financial Reporting Standards ("IFRS").~~simplify various aspects related to accounting for income taxes. ASU ~~2014-09~~2019-12 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 similarcertain exceptions to the ~~previous model, but updated to align with certain changes to the lessee model~~general principles in Topic 740 and also ~~the new revenue recognition provisions contained in~~clarifies and amends existing guidance to improve consistent application. ASU ~~2014-09 (see above). ASU 2016-02~~2019-12 is effective for fiscal years ~~and interim periods~~ beginning after December 15, ~~2018. Early adoption~~2020. This standard is ~~permitted.~~required to take effect in the Company’s first quarter (June 2021) of our fiscal year ending March 31, 2022. The Company is ~~assessing~~currently evaluating the ~~standard to determine if ASU 2016-02~~impact that the adoption of this guidance will have ~~a material impact~~ on its consolidated financial ~~statements.~~statements and related disclosures.

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. Under the Direct Import Program, title passes in the country of origin. 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.

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.

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,					Three Months Ended December 31,						Nine Months Ended December 31,
	2017			2016		2017			2016		2019			2018			2019			2018
	(In thousands, except per share data)					(In thousands, except per share data)
Numerator:
Net (loss) income	$	(1,171	)	$	448	$	(3,103	)	$	559
Net (loss)											$	(988	)	$	(529	)	$	(2,851	)	$	(1,974	)
Denominator:
Denominator for basic and diluted earnings per share — weighted average shares		24,299			27,129		25,857			27,130		21,043			21,637			21,043			22,221
Net (loss) income per share:
Basic and diluted (loss) income per share	$	(0.05	)	$	.02	$	(0.12	)	$	.02
Net (loss) per share:
Basic and diluted (loss) per share											$	(0.05	)	$	(0.02	)	$	(0.14	)	$	(0.09	)

Outstanding capital stock at December 31, ~~2017~~2019 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,~~2019, the Company had no 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 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~~2019 and March 31, ~~2017,~~2019, inventories consisted of the following (in thousands):

At December 31, ~~2017,~~2019, the Company had ~~$3.1~~$5.9 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 December 31, 2019, the Company had approximately ~~$5.6~~$13.2 million of U.S. state net operating loss carry forwards. The tax benefits related to these state net operating loss 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 future periods and through future profitable operating results, therefore management has increased its valuation allowance by $712,000 to a total~~realized. The income of ~~$1,000,700 as of~~foreign subsidiaries before taxes was $393,000 for the quarter ended December 31, ~~2017.~~ 2019 as compared to income before taxes of $215,000 for the quarter ended December 31, 2018.

The ~~gross amount~~Company analyzed the future reasonability of ~~the Company’s~~recognizing its deferred tax assets at December 31, ~~2017 was $1,570,000 as compared to $1,080,000 as~~2019. As a result, the Company concluded that a valuation allowance of ~~March 31, 2017.~~approximately $2,100,000 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 $4,000 during the three months ended December 31, 2019, primarily resulting from state income taxes. During the ~~federal statutory rate primarily due to~~three months ended December 31, 2018, 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 are not deductible for federal~~of $2,000. During the nine months ended December 31, 2019, the Company recorded income tax ~~purposes, increases to~~expense of $19,000 and for the ~~valuation allowance and state~~nine months ended December 31, 2018, the Company recorded income ~~taxes.~~tax expense of $73,000.

The Company is subject to examination and assessment by tax authorities in numerous jurisdictions. As of December 31, ~~2017,~~2019, the Company’s open tax years for examination for U.S. federal tax are ~~fiscal 2015-fiscal 2017~~2016-2018, and for U.S. ~~states~~states’ tax are ~~fiscal 2012-fiscal 2016.~~

2015-2018. 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, the President of the United States signed into law the Tax Cuts and Jobs Act tax reform legislation. This legislation makes significant change in U.S. tax law including a reduction in the corporate tax rates, changes to net operating loss carryforwards and carrybacks, and a repeal of the corporate alternative minimum tax. The legislation reduced the U.S. corporate tax rate from the current rate of 35% to 21%. As a result 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 on a gross basis, to income tax expense in continuing operations and a corresponding reduction in the deferred tax asset. However, the net impact of the revaluation resulted 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 Company 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 related to the Company’s Chairman of the Board.~~ subsidiaries. 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 December 31, 2019. Accordingly, the Company is a “controlled company” as defined in Section 801(a) of the NYSE American Company Guide.

On September 26, 2017, Wealth Warrior Global Limited (“Wealth Warrior”) acquired approximately 65.9% of the outstanding share capital of Grande from Sino Bright Enterprises Co., Ltd., 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% of the outstanding share capital of Grande as of October 10, 2017. Accordingly, a change of control of the Company was deemed to have occurred as Wealth Warrior may be deemed 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~~rental 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 cashutility fees on ~~its balance sheet.~~

~~Ancillary Expenses Pertaining to Rented Office Space~~office space in Hong Kong

During the three and nine months ended December 31, ~~2017,~~2019, the Company was billed approximately ~~$4,000~~$44,000 and ~~$13,000~~$131,000 respectively, for rental and utility fees from Vigers Appraisal and ~~service charges from The Grande Properties Management Limited~~Consulting Ltd (“~~GPML”) and Lafe Strategic Services Limited (“LSSL”~~VACL”), which ~~are companies~~is a company related to the Company’s Chairman of the ~~Board, in connection with~~Board. As of December 31, 2019 the ~~Company’s rented office space in Hong Kong. The~~ Company owed nil to ~~both GPML and LSSL~~VACL related to these ~~charges at December 31, 2017.~~

During both the three and nine months ended December 31, ~~2017,~~2019, the Company was billed approximately $6,000 ~~and $17,000~~ for ~~administrative fees~~its share of installation charges related to ~~Phenomenon Agents~~an air conditioning system from Lafe Strategic Services Ltd (“~~PAL”), Sansui Acoustics Research Corporation (“SARC”) and TWD Industrial Co. Ltd. (“TICL"~~LSSL”), which ~~are subsidiaries~~is a company related to the Company’s Chairman of ~~Grande. The~~the Board. As of December 31, 2019 the Company ~~was~~ owed nil ~~from PAL, SARC and TICL~~to LSSL related to these ~~charges at December 31, 2017.~~

At December 31, ~~2017~~2019 and March 31, ~~2017,~~2019, the Company held short term investments totaling ~~$22.2~~$28.0 million and ~~$25.1~~$28.4 million, respectively. These investments were comprised of bank certificates of deposit, which bear an interest rate of ~~1.55%~~approximately 1.93% and will mature in ~~February 2018.~~March 2020.

For the three months ended December 31, 2019, the Company’s three largest customers accounted for approximately 88% of the Company’s net revenues, of which Walmart accounted for 45%, Amazon accounted for 30% and Fred Meyer accounted for 13%.

For the nine months ended December 31, 2019, the Company’s three largest customers accounted for approximately 80% of the Company’s net revenues, of which Walmart accounted for 44%, Amazon accounted for 24% and Fred Meyer accounted for 12%.

For the three months ended December 31, 2018, the Company’s three largest customers accounted for approximately 89% of the Company’s net revenues, of which Walmart accounted for 51%, Amazon accounted for 23% and Fred Meyer accounted for 15%.

For the nine months ended December 31, 2018, the Company’s three largest customers accounted for approximately 80% of the Company’s net revenues, of which Walmart accounted for 49%, Amazon accounted for 17% and Fred Meyer 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 and nine months ended December 31, 2019, 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 28% and 36%, respectively, of the Company’s gross product sales. Audio products generated approximately 64% and 59%, respectively, of the Company’s gross product sales.

For the three and nine months ended December 31, 2018, 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 28% and 39%, respectively, of the Company’s gross product sales. Audio products generated approximately 67% and 56%, respectively, 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 30% as of December 31, 2019, respectively. 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 29% as of March 31, 2019, 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.

During the three and nine months ended December 31, 2019, the Company procured approximately 90% and 86% of its products for resale from its two largest factory suppliers, of which 48% and 52%, respectively, was supplied by its largest supplier. During the three and nine months ended December 31, 2018, the Company procured approximately 96% and 90% of its products for resale from its two largest factory suppliers, of which 86% and 72%, respectively, 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 three to five 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 December 31, 2019 to indicate that a reassessment or re-measurement of our existing leases was required. There were also no impairment indicators identified during the quarter ended December 31, 2019 that required an impairment test for the Company’s right-of-use assets or other long-lived assets in accordance with ASC 360-10.

As of December 31, 2019, the Company’s current operating and finance lease liabilities were $236,000 and $1,000, respectively and its non-current operating and finance lease liabilities were $296,000 and $4,000, respectively. The Company’s operating and finance lease right-of-use asset balances are presented in non-current assets. The net balance of the Company’s operating and finance lease right-of-use assets as of December 31, 2019 was $496,000 and $5,000, 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 December 31,				Nine Months Ended December 31,
	2019		2018		2019		2018
	(in thousands)				(in thousands)
Lease cost
Operating lease cost	$	63	$	—	$	190	$	—
Finance lease cost		—		—		—		—
Amortization of right-of-use assets		—		—		—		—
Interest on lease liabilities		—		—		—		—
Variable lease costs		—		—		—		—
Total lease cost		63		—		190		—

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		66		—		197		—
Operating cash flows from finance leases		—		—		—		—
Financing cash flows from finance leases		—		—		1		—

Right-of-use assets obtained in exchange for lease obligations:
Operating leases		—		—		650		—
Finance leases		—		—		5		—

As of December 31, 2019 the maturities of lease liabilities were as follows:
(in thousands)	Operating Leases			Finance Leases

2019 (excluding the 3 months ended March 31, 2019)	$	67		$	-
2020		266			1
2021		162			1
2022		84			1
2023		—			1
Thereafter		—			1
Total lease payments	$	579		$	5
Less: Imputed interest		(47	)		—
Total	$	532		$	5

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.

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:

the effects of currency fluctuations between the U.S. dollar and Chinese renminbi relative to the dollar and increases in costs of production in China; and

•

~~the effects of currency fluctuations between the U.S. dollar and Chinese renminbi relative to the dollar and increases in costs of production in China; and~~

the other factors listed under “Risk Factors” in the Company’s Form 10-K, as amended, for the fiscal year ended March 31, ~~2017~~2019 and other filings with the ~~Securities and Exchange Commission (the “SEC”).~~SEC.

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.

Results of Operations

The following table summarizes certain financial information for the three and nine month periods ended December 31, ~~2017~~2019 (fiscal ~~2018)~~2020) and December 31, ~~2016~~2018 (fiscal ~~2017)~~2019) (in thousands):

	Three Months Ended December 31,						Nine Months Ended December 31,					Three Months Ended December 31,						Nine Months Ended December 31,
	2017			2016			2017			2016		2019			2018			2019			2018
Net product sales	$	4,075		$	3,764		$	10,413		$	14,079	$	2,038		$	2,421		$	4,975		$	7,040
Licensing revenue		161			1,170			546			3,518		56			120			167			350
Net revenues		4,236			4,934			10,959			17,597		2,094			2,541			5,142			7,390
Cost of sales		4,046			3,361			10,292			12,921		2,105			2,360			5,404			7,025
Other operating costs and expenses		14			23			38			200
Selling, general and administrative expenses		1,100			1,198			3,784			3,881		1,152			948			3,208			2,883
Operating (loss) income		(924	)		352			(3,155	)		595
Operating (loss)													(1,163	)		(767	)		(3,470	)		(2,518	)
Interest income, net		131			54			365			162		179			240			638			617
(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
(Loss) before income taxes													(984	)		(527	)		(2,832	)		(1,901	)
Provision for income taxes													4			2			19			73
Net (loss)												$	(988	)	$	(529	)	$	(2,851	)	$	(1,974	)

Net product sales — Net product sales for the third quarter of fiscal ~~2018~~2020 were ~~$4.1~~$2.0 million as compared to ~~$3.8~~$2.4 million for the third quarter of fiscal ~~2017, an increase~~2019, a decrease of ~~$0.3~~$0.4 million, or ~~8.3%~~15.8%. The Company’s sales during the third quarters of fiscal ~~2018~~2020 and fiscal ~~2017~~2019 were highly concentrated among the Company’s ~~two~~three largest customers – Wal-Mart, ~~and Amazon for the third quarter of fiscal 2018 and Wal-Mart~~Amazon.com and Fred Meyer ~~for the third quarter of fiscal 2017,~~– where ~~gross~~net product sales comprised approximately ~~79.5%~~90% and ~~79.0%~~94%, respectively, of the Company’s total ~~gross~~net product sales.

~~For~~Net product sales for the nine month period of fiscal ~~2018, net product sales~~2020 were ~~$10.4~~$5.0 million as compared to ~~$14.1~~$7.0 million for the nine month period of fiscal ~~2017,~~2019, a decrease of ~~$3.7~~$2.0 million, or ~~26.0%~~29.3%. The Company’s sales during the nine month periods of fiscal ~~2018~~2020 and fiscal ~~2017~~2019 were highly concentrated among the Company’s ~~two~~three largest customers – Wal-Mart, ~~and Amazon for the nine month period of fiscal 2018 and Wal-Mart~~Amazon.com and Fred Meyer ~~for the nine month period of fiscal 2017,~~– where ~~gross~~net product sales comprised approximately ~~76.2%~~83% and ~~85.8%~~84%, respectively, of the Company’s total ~~gross~~net product sales.

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 approximately ~~$18,000~~nil and ~~$40,000~~$6,000 for the third quarters of fiscal ~~2018~~2020 and fiscal ~~2017,~~2019, respectively, and approximately ~~$41,000~~nil and ~~$121,000~~$15,000 for the nine month periods of fiscal ~~2018~~2020 and fiscal ~~2017~~2019, respectively. Net product sales are comprised primarily of the sales of houseware and audio products which bear the Emerson^® brand name. 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~~The Company is also investing 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 Leveraged Marketing Corporation of America (“LMCA”) 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 demand for the ~~third quarter~~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 recently imposed and proposed U.S. tariffs on categories of ~~fiscal 2018 were $1.1 million~~products that the Company imports from China and China’s retaliatory tariffs on certain goods imported from the United States, as ~~compared~~well as modifications to ~~$1.2 million~~international trade policy, will 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 environment and working to mitigate the possible effect of tariffs with its suppliers as well as its customers through pricing and sourcing strategies, including drawing down inventory built up in advance of the recent tariff increases, the Company cannot be certain how its customers and competitors will react to the actions taken. 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 ~~third quarter~~Company’s products, it will have a negative effect on the Company’s product sales and gross margins. In addition, public health threats, such as the coronavirus, influenza and other highly communicable diseases or viruses, could adversely affect our operations and the operations and production capabilities of ~~fiscal 2017. However, operating costs~~our suppliers in China, including as a result of quarantine or closure. The extent to which the recent coronavirus outbreak in China and other countries may affect our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its effects, among others. 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 ~~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 month period of fiscal 2018, operating costs were $3.8 million~~Company’s Annual Report on Form 10-K, as ~~compared to $3.9 million~~amended, 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.year ended March 31, 2019, as updated in Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q.

Licensing revenue — Licensing revenue in the third quarter of fiscal ~~2018~~2020 was ~~$0.2 million~~$56,000 as compared to ~~$1.2 million~~$120,000 in the third quarter of fiscal ~~2017,~~2019, a decrease of ~~$1.0 million~~$64,000, or ~~86.2% which~~53.3%. The year-over-year decrease can be ~~primarily~~ attributed to the ~~loss~~non-renewal of one of the ~~license agreement with Funai~~Company’s licensees which ~~ended on~~expired in December ~~31, 2016.~~2018.

Licensing revenue for the nine month period of fiscal ~~2018~~2020 was ~~$0.5 million~~$167,000 as compared to ~~$3.5 million~~$350,000 for the nine month period of fiscal ~~2017,~~2019, a decrease of ~~$3.0 million~~$183,000, or ~~84.5% which~~52.3%. The year-over-year decrease can be ~~primarily~~ attributed to the ~~loss~~non-renewal of one of the ~~license agreement with Funai~~Company’s licensees which ~~ended on~~expired in 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.2018.

Net revenues — As a result of the foregoing factors, the Company’s net revenues were ~~$4.2~~$2.1 million in the third quarter of fiscal ~~2018~~2020 as compared to ~~$4.9~~$2.5 million in the third quarter of fiscal ~~2017,~~2019, a decrease of ~~$0.7~~$0.4 million, or ~~14.2%~~17.6% and ~~$11.0~~$5.1 million for the nine month period of fiscal ~~2018~~2020 as compared to ~~$17.6~~$7.4 million for the nine month period of fiscal ~~2017,~~2019, a decrease of ~~$6.6~~$2.3 million or ~~37.7%~~30.4%.

Cost of sales — In absolute terms, cost of sales ~~increased $0.7~~decreased $0.3 million, or ~~20.4%~~10.8%, to ~~$4.1~~$2.1 million in the third quarter of fiscal ~~2018~~2020 as compared to ~~$3.4~~$2.4 million in the third quarter of fiscal ~~2017.~~2019. The ~~increase~~decrease in absolute terms for the third quarter of fiscal ~~2018~~2020 as compared to the third quarter of fiscal ~~2017~~2019 was primarily related to ~~increased~~decreased net product sales ~~partially offset~~and by lower year-over-year gross cost of sales as a percentage of gross sales.

In absolute terms, cost of sales decreased ~~$2.6~~$1.6 million, or ~~20.4%~~23.1%, to ~~$10.3~~$5.4 million for the nine month period of fiscal ~~2018~~2020 as compared to ~~$12.9~~$7.0 million for the nine month period of fiscal ~~2017.~~2019. The decrease in absolute terms for the nine month period of fiscal ~~2018~~2020 as compared to the nine month period of fiscal ~~2017~~2019 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 the third quarter of fiscal ~~2018~~2020 and fiscal ~~2017,~~2019, the Company purchased ~~97%~~90% and ~~98%~~96%, respectively, from its two largest suppliers. For the nine month period of fiscal ~~2018~~2020 and fiscal ~~2017,~~2019, the Company purchased ~~93%~~86% and ~~92%~~90%, 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 million in the third quarter of fiscal ~~2018~~2020 as compared to ~~$1.2~~$0.9 million in the third quarter of fiscal ~~2017, a decrease~~2019, an increase of ~~$0.1~~$0.2 million, or ~~8.2%~~21.5%. S,G&A, as a percentage of net revenues, was ~~26.0%~~55.0% in the third quarter of fiscal ~~2018~~2020 as compared to ~~24.3%~~37.3% in the third quarter of fiscal ~~2017.~~2019. The ~~decrease~~increase in S,G&A was ~~due~~attributed to ~~reductions in IT costs, tax counsel, travel & entertainment costs, directors fees and~~ legal ~~fees which included $76,000 related to a trademark infringement suit.~~fees.

S,G&A, in absolute terms, was ~~$3.7~~$3.2 million for the nine month period of fiscal ~~2018~~2020 as compared to ~~$3.8~~$2.9 million for the nine month period of fiscal ~~2017, a decrease~~2019, an increase of ~~$0.1~~$0.3 million, or ~~2.5%~~11.3%. S,G&A, as a percentage of net revenues, was ~~34.5%~~62.4% for the nine month period of fiscal ~~2018~~2020 as compared to ~~22.1%~~39.0% for the nine month period of fiscal ~~2017.~~2019. The ~~decrease~~increase in S,G&A was ~~due~~primarily attributed 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.~~fees.

Interest income, net — Interest income, net, was ~~$131,000~~$179,000 in the third quarter of fiscal ~~2018~~2020 as compared to ~~$54,000~~$240,000 in the third quarter of fiscal ~~2017, an increase~~2019, a decrease of ~~$77,000.~~$61,000. The ~~increase~~decrease was primarily due to ~~higher~~lower average interest rates earned on the Company’s short term investments.

Interest income, net, was ~~$365,000~~$638,000 for the nine month period of fiscal ~~2018~~2020 as compared to ~~$162,000~~$617,000 for the nine month period of fiscal ~~2017,~~2019, an increase of ~~$203,000.~~$21,000. The increase was primarily due to higher investments in interest bearing accounts but lower average interest rates earned on the Company’s short term investments.

Provision ~~(benefit)~~ for income taxes — In the third quarter of fiscal ~~2018,~~2020, the Company recorded an income tax expense of ~~$378,000~~$4,000 as compared to an income tax ~~benefit~~expense of ~~$42,000~~$2,000 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~~2019. See “Note 5 – Income Taxes) had an adverse impact of $246,000 on a net basis to 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.Taxes”.

For the nine month period of fiscal ~~2018,~~2020, the Company recorded an income tax expense of ~~$313,000~~$19,000 as compared to income tax expense of ~~$198,000~~$73,000 for the nine month period of fiscal ~~2017.~~ 2019. See “Note 5 – Income Taxes”.

Although the Company generated a net ~~loss~~losses during ~~the nine month period of~~ fiscal ~~2018, the Tax Cuts~~2020 and ~~Jobs Act legislation (See Note 5 – Income Taxes) had~~fiscal 2019, it was unable to realize an ~~adverse impact of $223,000 on a net basis~~income tax benefit due to valuation allowances recorded against 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~~$988,000 in the third quarter of fiscal ~~2018~~2020 as compared to a net ~~income~~loss of ~~$0.4 million~~$529,000 in the third quarter of fiscal ~~2017.~~2019.

For the nine month period of fiscal ~~2018,~~2020, the Company realized a net loss of ~~$3.1~~$2.9 million as compared to a net ~~income~~loss of ~~$0.6~~$2.0 million for the nine month period of fiscal ~~2017.~~2019.

As of December 31, ~~2017,~~2019, the Company had cash and cash equivalents of approximately ~~$20.8~~$6.5 million as compared to approximately ~~$41.6~~$7.9 million at March 31, 2019. Working capital decreased to $37.2 million at December 31, ~~2016. Working capital decreased to $48.4 million at December 31, 2017~~2019 as compared to ~~$56.6~~$40.3 million at ~~December~~March 31, ~~2016.~~2019. The decrease in cash and cash equivalents of approximately ~~$20.8~~$1.4 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~~$2.8 million, an increase in ~~prepaid purchases~~right-of-use assets of ~~$1.3~~$0.5 million, an increase in accounts receivable of ~~$0.8~~$0.3 million ~~an increase~~and a decrease in ~~inventory~~deferred revenue of ~~$0.4~~$0.2 million partially offset by a decrease in inventory of ~~$1.7~~$0.9 million, ~~in prepaid expenses and other current assets and~~ a decrease in ~~deferred tax assets~~short term investments of $0.4 million, a decrease in prepaid purchases of $0.3 million, an increase in ~~income taxes payable~~long term operating lease liabilities of ~~$0.1~~$0.3 million, ~~and~~ a decrease in ~~royalties~~accounts payable and other ~~receivables~~current liabilities of ~~$0.1~~$0.3 million and an increase in short term operating lease liabilities of $0.2 million.

Net cash used by operating activities was ~~$4.8~~approximately $1.8 million for the nine months ended December 31, ~~2017,~~2019, resulting from a ~~$3.1~~$2.8 million net loss generated during the period, an increase in ~~inventory of $2.2 million, an increase in prepaid purchases of $0.7 million and an increase in~~ accounts receivable of ~~$0.4~~$0.3 million, a decrease in income taxes payable of $0.2 million and a decrease in deferred revenue of $0.1 million partially offset by a decrease in inventory of $0.9 million, a decrease in prepaid expenses and other current assets of ~~$0.9~~$0.3 million, an increase in accounts payable and other ~~current~~ liabilities of $0.3 million and a decrease in ~~deferred tax~~other 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~~approximately $0.4 million for the nine months ended December 31, ~~2017~~2019 due to a ~~reduction~~decrease in short term certificates of deposit.

Net cash used by financing activities was ~~approximately $4.6 million~~nil for the nine months ended December 31, ~~2017 due to repurchases of common stock pursuant to the Company’s stock repurchase plan.~~2019.

The Company’s principal existing sources of cash are generated from operations. 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,~~2019, the Company did not have any off-balance sheet arrangements as defined under the rules of the ~~Securities~~SEC.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lease assets and ~~Exchange Commission.~~liabilities to be recorded on the balance sheet. This update is effective for public entities in fiscal years beginning after December 15, 2018, including interim reporting periods within those fiscal years, and certain qualitative and quantitative disclosures are also required. Early adoption was permitted. The Company has adopted this ASU and related amendments as of April 1, 2019 on a modified retrospective basis. The Company has applied the modified retrospective approach by recording a cumulative effect adjustment as of the date of adoption, whereby prior comparative periods will not be retrospectively presented in the consolidated financial statements. The Company has also elected certain practical expedients permitted under the transition guidance, including to retain the historical lease classification as well as relief from reviewing expired or existing contracts to determine if they contain leases. The Company will be exempting leases with an initial term of twelve months or less from balance sheet recognition and will not separate lease and non-lease components.

Upon adoption, the Company recognized total lease liabilities of $695,000, and corresponding right-of-use assets of $650,000, all of which is associated with leased office space. The difference between the right-of-use asset and lease liability is due to the existing deferred balance, resulting from historical straight-lining of operating leases that was reclassified upon adoption to reduce the measurement of the right-of-use assets. The Company’s Consolidated Statements of Income and Consolidated Statements of Cash Flows were not materially impacted. See Note 9, “Leases” for further details.

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 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”)) 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,~~2019, 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~~2019 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 to various risks and uncertainties, including those described 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,~~2019, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of the Company’s common stock. ~~There~~Except as set forth below, there have been no material changes to our risk factors since the Company's ~~Quarterly~~Annual Report on Form ~~10-Q~~10-K for the ~~period~~year ended March 31, 2019.

Foreign regulations and changes in trade policies and the political, social and economic conditions in the United States and the foreign countries in which the Company operates its business could affect the Company’s revenues and earnings materially and adversely.

The Company has operations in China and derives a significant portion of its revenue from sales of products manufactured by third parties located in China. In addition, third parties located in China and other countries located in the same region produce and supply many of the components and raw materials used in the Company’s products. Conducting an international business inherently involves a number of difficulties and risks that could materially and adversely affect the Company’s ability to generate revenues and could subject the Company to increased costs. Furthermore, the current U.S. administration continues to signal its intent to alter trade agreements between China and the U.S. and may impose additional tariffs on imports from China. It is possible that further tariffs may be imposed on the categories of products the Company imports to the United States, or that the Company’s business will be affected by retaliatory trade measures taken by China or other countries in response to existing or future tariffs, causing the Company to raise prices or make changes to its operations, any of which could adversely affect demand for the Company’s products or increase its costs.

Among the other factors that may adversely affect the Company’s revenues and increase its costs are:

Any of the factors described above may materially and adversely affect the Company’s revenues and/or increase its operating expenses.

Tariffs or other restrictions placed on the Company’s products imported into the United States from China, or any related counter-measures taken by China, could have a material adverse effect on the Company’s business, profitability and results of operations.

The Company has operations in China and all of the Company’s products are currently manufactured by suppliers in China. Any tariffs or other trade restrictions affecting the import of these products from China or any retaliatory trade measures taken by China in response to existing or future tariffs could have a material adverse effect on the Company’s results of operations going forward. The Company’s dependency on its overseas suppliers could exacerbate these and other risks, and any tariffs on the categories of products the Company imports to the United States could negatively affect the demand for such products, increase the cost of components, delay production or affect the Company’s ability to compete against competitors who do not manufacture in China or otherwise are not subject to such tariffs.

Beginning in 2018, the United States has imposed additional duties, ranging from 10% to 25%, on a variety of goods imported from China. Effective in September ~~30, 2017.~~2018, the Office of the U.S. Trade Representative (“USTR”) imposed tariffs of 10% on approximately $200 billion worth of goods imported from China (“List 3 products”), including categories of products the Company imports from China and increased these tariffs to 25% effective in May 2019. In August 2019, the U.S. administration directed the USTR to increase tariffs on List 3 products from 25% to 30% effective October 2019, which increases were subsequently delayed indefinitely. In May 2019, the USTR proposed imposing additional tariffs of up to 25% on essentially all remaining Chinese-origin imports, including approximately $300 billion worth of goods imported from China (“List 4 products”). Tariffs of 15% were imposed on certain List 4 products effective in September 2019 (“List 4A products”), and the remainder were scheduled to be subject to these tariffs effective in December 2019 (“List 4B products”). In January 2020, the United States and China signed a Phase One Economic and Trade Agreement, pursuant to which the tariff increases on the List 4B products remained suspended and the rate of additional tariffs on the List 4A products was reduced to 7.5%, while all other tariffs remain in place. The effects on the Company of the recently imposed and proposed tariffs are uncertain because of the dynamic nature of governmental actions and responses, as well as possible exemptions for certain products. If the U.S. and China are able to negotiate the issues to restore a mutually advantageous and fair trading regime, the increased tariffs could be eliminated, but given the uncertainties, there can be no assurance of whether, or when, this will be accomplished. If the recently imposed and proposed tariffs covering the categories of products that the Company imports continue or are increased, and the Company is unable to obtain an exception, it could have a material adverse effect on the Company’s business.

Although the Company is monitoring the trade environment and working to mitigate the possible effect of tariffs through pricing and sourcing strategies, including through proactive management of inventory built up in advance of the recent tariff increases, and may take additional steps, the Company cannot be certain how its customers and competitors will react to the actions taken. Additional tariffs imposed by the United States, and any related counter-measures by China, could increase the Company’s cost of goods and reduce its gross margins. If the Company determines to pass some or all of these new tariff burdens on to its customers as product price increases in the future, the result may be a degradation of the Company’s competitive position and a loss of customers that would adversely affect the Company’s operating performance. However, the ultimate outcome of these tariff actions is not clear at this time, and there can be no assurances that the Company’s mitigation efforts will be successful or that the imposition of any such tariffs or trade actions would not have a material adverse effect on the Company’s revenue, gross margins and operating results.

~~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		1013
Item 3. Quantitative and Qualitative Disclosures About Market Risk		1517
Item 4. Controls and Procedures		1518
PART II — OTHER INFORMATION
Item 1. Legal Proceedings		1619
Item 1A. Risk Factors		1619
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		1721
SIGNATURES		1822

10.35.1		Retention Letter Agreement dated October 7, 2019, between the Company and Michael Binney (incorporated by reference to Exhibit 10.35.1 of Emerson’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019).†

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+		XBRL Instance Document.

101.2+		XBRL Taxonomy Extension Schema Document.

101.3+		XBRL Taxonomy Extension Calculation Linkbase Document.

101.4+		XBRL Taxonomy Extension Definition Linkbase Document.

101.5+		XBRL Taxonomy Extension Label Linkbase Document.

101.6+		XBRL Taxonomy Extension Presentation Linkbase 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

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

Weighted average remaining lease term (in months)	As of December 31, 2019			As of December 31, 2018
Operating leases		28.6			—
Finance leases		53.2			—

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

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
Date: February 14, ~~2018~~2020				Duncan Hon
				Chief Executive Officer (Principal Executive Officer)

				/s/ Michael Binney
Date: February 14, ~~2018~~2020				Michael Binney
				Chief Financial Officer (Principal Financial and Accounting Officer)