|• FORM 10-K/A • EX-10.33 • EX-31.1 • EX-31.2 • EX-32|
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Amendment No. 1)
For the Fiscal Year ended March 31, 2012
For the transition period from to
Commission File Number: 001-07731
EMERSON RADIO CORP.
(Exact name of registrant as specified in its charter)
Registrants telephone number, including area code: (973) 428-2000
Securities registered pursuant to Section 12(b) of the Act:
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ YES x NO.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act). ¨ YES x NO.
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 requirement for the past 90 days. x YES ¨ NO.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every 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 registrant was required to submit and post such files.) x Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of larger accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨ YES x NO.
Aggregate market value of the voting and non-voting common equity of the registrant held by non-affiliates of the registrant at September 30, 2011 (computed by reference to the last reported sale price of the Common Stock on the NYSE MKT on such date): $18,186,420
Number of Common Shares outstanding at July 30, 2012: 27,129,832
DOCUMENTS INCORPORATED BY REFERENCE:
Unless the context otherwise requires, the term the Company and Emerson, refers to Emerson Radio Corp. and its subsidiaries.
This Amendment No. 1 on Form 10-K/A (the Form 10/KA) to the Annual Report on Form 10-K (the Annual Report) of the Company for the fiscal year ended March 31, 2012, filed with the Securities and Exchange Commission (the SEC) on July 13, 2012, is filed solely for the purpose of including information that was to be incorporated by reference from the Companys definitive proxy statement pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended (the Exchange Act). The Company will not file its proxy statement for its annual meeting of stockholders within 120 days of its fiscal year ended March 31, 2012, and is therefore amending and restating in their entirety Items 10, 11, 12, 13 and 14 of Part III of the Annual Report. In addition, pursuant to Rule 13a-14(a) under the Exchange Act, the Company is including with this Form 10-K/A certain currently dated certifications. Except as described above, no other amendments are being made to the Annual Report. This Form 10-K/A does not reflect events occurring after the filing of the Annual Report on July 13, 2012 or modify or update the disclosure contained in the Annual Report in any way other than as required to reflect the amendments discussed above and reflected below.
The following table sets forth certain information regarding the current directors of Emerson Radio Corp. (Emerson, us or the Company).
Board of Directors and Committees
The Companys Board presently consists of seven directors and, other than the resignation from the Board of Mr. Adrian Ma on August 8, 2011 and the appointment to the Board of Mr. Vincent Fok on August 31, 2011 to fill the vacancy created by Mr. Mas resignation, the Boards composition is otherwise unchanged since the beginning of the Companys fiscal year ended March 31, 2012 (Fiscal 2012) Messrs. Ho, Will, Hon, Fok, Mahathir, Sethi and Snellings currently serve on the Board. The Board has determined that four of the seven current directors, Messrs. Will, Mahathir, Sethi and Snellings, meet the definition of independence as established by the NYSE MKT listing rules.
The Board presently has two standing committees, the Audit Committee, which is a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act and Rule 10A-3 thereunder, and the Corporate Governance, Nominating and Compensation Committee. Prior to November 10, 2011, there was a third committee, the Related Party Transaction Review Committee, which was dissolved on that date, and whose duties have been assigned to the Corporate Governance, Nominating and Compensation Committee.
The Companys Audit Committee currently consists of Mr. Sethi and Mr. Snellings, both of whom the Board has determined meet the definition of independence as established by the NYSE MKT listing rules and SEC rules, and its composition is unchanged since the beginning of Fiscal 2012. Mr. Sethi is currently the Chairman of the Audit Committee and the audit committee financial expert. Pursuant to Section 803(B)(2)(c) of the NYSE MKT Company Guide (the Company Guide), as a smaller reporting company, the Company is required to have an audit committee of at least two independent members, as defined by the listing standards of the NYSE MKT.
The Audit Committee is empowered by the Board, among other things, to: (i) serve as an independent and objective party to monitor the Companys financial reporting process, internal control system and disclosure control system; (ii) review and appraise the audit efforts of the Companys independent accountants; (iii) assume direct responsibility for the appointment, compensation, retention and oversight of the work of the outside auditors and for the resolution of disputes between the outside auditors and the Companys management regarding financial reporting issues; and (iv) provide the opportunity for direct communication among the independent accountants, financial and senior management and the Board. During Fiscal 2012, the Audit Committee performed its duties under a written charter approved by the Board and formally met four times. A copy of the Companys Audit Committee Charter is posted on the Companys website: www.emersonradio.com on the Investor Relations page.
The Board believes that the Company and its stockholders are best served by having leadership personnel from the Companys principal stockholder and individuals who have extensive experience in the Companys industry and knowledge of the Companys competitive landscape serve on its Board. The Board also believes that the backgrounds and qualifications of its directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities. Please refer to the biographies of each of the Companys directors for a discussion of the specific experience, qualifications, attributes or skills that led to the conclusion that each individual should serve as a director.
Codes of Ethics
The Company has adopted a Code of Ethics for Senior Financial Officers (Code of Ethics) that applies to its Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Controller and Treasurer. This Code of Ethics was established with the intention of focusing Senior Financial Officers on areas of ethical risk, providing guidance to help them recognize and deal with ethical issues, providing mechanisms to report unethical conduct, fostering a culture of honesty and accountability, deterring wrongdoing and promoting fair and accurate disclosure and financial reporting.
The Company has also adopted a Code of Conduct for Officers, Directors and Employees of Emerson Radio Corp. and its Subsidiaries (Code of Conduct). We prepared this Code of Conduct to help all officers, directors and employees understand and comply with the Companys policies and procedures. Overall, the purpose of the Companys Code of Conduct is to deter wrongdoing and promote (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (ii) full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC and in other public communications made by the Company; (iii) compliance with applicable governmental laws, rules and regulations; (iv) prompt internal reporting of code violations to an appropriate person or persons identified in the Code of Conduct; and (v) accountability for adherence to the Code of Conduct.
The Code of Ethics and the Code of Conduct are posted on the Companys website: www.emersonradio.com on the Investor Relations page. If the Company makes any substantive amendments to, or grant any waiver (including any implicit waiver) from a provision of the Code of Ethics or the Code of Conduct, and that relates to any element of the Code of Ethics definition enumerated in Item 406 (b) of Regulation S-K, the Company will disclose the nature of such amendment or waiver on its website or in a current report on Form 8-K.
The following table sets forth certain information regarding the executive officers of Emerson:
Duncan Hon has served as the Companys Chief Executive Officer since August 2011 and a director of the Company since February 2009. Until his appointment as the Companys Chief Executive Officer, Mr. Hon served as the Companys Deputy Chief Executive Officer since November 2009. See Mr. Hons biographical information above.
Andrew L. Davis has served as the Companys Executive Vice President and Chief Financial Officer since September 2010. Mr. Davis also serves as Secretary of the Company, a position to which he was elected in November 2007. Previously, Mr. Davis served as Vice President, Finance and Corporate Controller of the Company since joining the Company in August 2007. Prior to joining the Company, Mr. Davis held various executive and managerial positions in accounting and finance with several companies, most recently CA, Inc., and prior to that, ce Global Sourcing AG. Mr. Davis is a C.P.A., holds a B.B.A. in Accounting from Iowa State University and an M.B.A. from the University of Connecticut.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Companys directors, officers, and stockholders who beneficially own more than 10% of any class of its equity securities registered pursuant to Section 12 of the Exchange Act, to file initial reports of ownership and reports of changes in ownership with respect to the Companys equity securities with the SEC and the NYSE MKT. All reporting persons are required to furnish the Company with copies of all reports that such reporting persons file with the SEC pursuant to Section 16(a) of the Exchange Act.
Based solely upon a review of Forms 3 and 4 and amendments to these forms furnished to the Company, and Forms 5, along with amendments thereto, all parties subject to the reporting requirements of Section 16(a) timely filed all such required reports during and with respect to Fiscal 2012.
Summary Compensation Table
The following Summary Compensation Table sets forth information concerning compensation for services rendered in all capacities to the Company and its subsidiaries for Fiscal 2012 and for the fiscal year ended March 31, 2011 (Fiscal 2011) which was awarded to, earned by or paid to each person who served as the Companys principal executive officer at any time during Fiscal 2012, the two most highly compensated executive officers other than the principal executive officer who were serving as executive officers as of March 31, 2012 and up to two additional individuals for whom disclosure would have been provided but for the fact that the individual was not serving as an executive officer of the smaller reporting company as of March 31, 2012 (collectively, the Named Executive Officers).
During Fiscal 2012, the Company had employment agreements with certain of its Named Executive Officers, each of which is described below.
Duncan Hon. Duncan Hon, our President and Chief Executive Officer, entered into an employment agreement with Emerson effective as of October 1, 2009, which set forth the terms and conditions pursuant to which Mr. Hon would serve as the Companys Deputy Chief Executive Officer. The agreement provided for an annual base salary of $300,000 and a discretionary bonus at the end of the Companys fiscal year as recommended by the Board. The term expired on September 30, 2010. On September 8, 2010, the Companys Board approved an increase in Mr. Hons annual base salary to $375,000. Such salary increase was made effective retroactive to April 1, 2010. On March 24, 2011, Mr. Hon and Emerson agreed that the employment agreement would be terminated and be of no further force and effect effective at the close of business on March 31, 2011. Effective April 1, 2011, Mr. Hon entered into an employment agreement with a wholly-owned, indirect subsidiary of the Company. Such agreement sets forth the terms and conditions pursuant to which Mr. Hon would serve as the Companys Deputy Chief Executive Officer and, subsequently, as Chief Executive Officer. The agreement provides for an annual base salary of 2,925,000 Hong Kong Dollars (HKD) and an annual discretionary bonus payable at any time as recommended by the Board. The contract extends until the earlier of the retirement of Mr. Hon on the first day of the following month immediately after his 60th birthday, or the termination of the agreement by either the Company or Mr. Hon upon the delivery from one to the other of one month prior written notice. In November 2011, the Board approved an increase to Mr. Hons base annual salary to $475,000 effective August 31, 2011 based on the recommendation of the Boards Compensation, Governance and Nominating Committee.
Andrew L. Davis. Andrew L. Davis, our Executive Vice President and Chief Financial Officer, entered into an employment agreement with the Company on August 1, 2007, which provided that Mr. Davis shall serve as the Companys Vice President Finance and Corporate Controller. The agreement provides for an annual base salary of $225,000 and a discretionary bonus at the end of the Companys fiscal year as recommended by the Board. The initial term expired on July 31, 2008. During the term extensions, the Company has the right to terminate the agreement upon 90 days prior written notice and Mr. Davis has the right to terminate the agreement upon 90 days prior written notice. In connection with his appointment as Executive Vice President and Chief Financial Officer, the Company entered into an amendment to the existing employment agreement with Mr. Davis dated September 3, 2010 pursuant to which Mr. Daviss base salary was increased to $275,000 effective as of September 3, 2010.
Adrian Ma. Adrian Ma, our former President and Chief Executive Officer, resigned from these positions, and as a director, of Emerson, effective August 8, 2011. Mr. Ma entered into a consulting agreement with the Company for a period of one year, beginning August 1, 2011 and expiring July 31, 2012, for a fee of approximately $221,000. In June 2012, Mr. Ma entered into new consulting agreement with the Company for a period of one year, beginning August 1, 2012 and expiring July 31, 2013, for a fee of approximately $124,000.
Greenfield Pitts. Greenfield Pitts, our former Chief Financial Officer, entered into an employment agreement with the Company on April 3, 2007, which set forth the terms and conditions pursuant to which Mr. Pitts would serve as the Companys Chief Financial Officer. The agreement provided for an annual base salary of $250,000 and a discretionary bonus at the end of the Companys fiscal year as recommended by the Board. The initial term expired on March 31, 2008. During the term extensions, the Company had the right to terminate the agreement upon 90 days prior written notice and Mr. Pitts had the right to terminate the agreement upon 90 days prior written notice. On September 3, 2010, Mr. Pitts and the Company agreed that this employment agreement would be terminated and of no further force and effect effective at the close of business on September 3, 2010. Mr. Pitts entered into a consulting agreement with the Company for a period of one year, beginning September 4, 2010, for a fee of $125,000. This consulting agreement was not renewed after its expiration date of September 3, 2011.
Outstanding Equity Awards at Fiscal Year End
None of the Companys Named Executive Officers held any outstanding equity awards at March 31, 2012.
Compensation of Directors
During Fiscal 2012, our directors who were not employees (Outside Directors), specifically Messrs. Ho, Fok, Mahathir, Sethi, Snellings and Will were paid $85,000, $29,167, $74,167, $74,167, $80,000 and $74,167, respectively, for serving on the Board and on our various committees during the period. The Company does not compensate directors who are employees of the Company for their services as directors.
Outside Directors are each paid an annual directors fee of $50,000. The Outside Director serving as the Chairman of the Board receives an additional annual fee of $20,000. Each Outside Director serving on a committee of the Board receives an additional fee of $15,000 per annum with no additional fee for serving as chairman of a committee. The Company does not pay any additional fees for attendance at meetings of the Board or the committees. All directors fees are paid in four equal quarterly installments per annum and are pro-rated in situations where an Outside Director serves less than a full one year term.
Additionally, each Outside Director is eligible to participate in the Companys 2004 Non-Employee Outside Director Stock Option Plan. The Companys directors are reimbursed their expenses for attendance at meetings.
The following table provides certain information with respect to the compensation earned or paid to the Companys Outside Directors during Fiscal 2012.
During Fiscal 2012, the Company recovered $15,960 from Mr. Will in accordance with terms of the above arrangement.
The following table sets forth, as of July 30, 2012, the beneficial ownership of (i) each current director; (ii) each of the Companys Named Executive Officers; (iii) the Companys current directors and executive officers as a group; and (iv) each stockholder known by the Company to own beneficially more than 5% of the Companys outstanding shares of common stock. Common stock beneficially owned and percentage ownership as of July 30, 2012 was based on 27,129,832 shares outstanding. Except as otherwise noted, the address of each of the following beneficial owners is c/o Emerson Radio Corp., 3 University Plaza, suite 405, Hackensack, New Jersey 07601.
Equity Compensation Plan Information
The following table gives information about the Companys common stock that may be issued upon the exercise of options and rights under its 1994 Stock Compensation Program, 1994 Non-Employee Director Stock Option Plan, Emerson Radio Corp. 2004 Employee Stock Incentive Plan and 2004 Non-Employee Outside Director Stock Option Plan, as of March 31, 2012 (the Plans). The 1994 Plans expired in July 2004 and the remaining Plans are the only equity compensation plans in existence as of March 31, 2012.
From time to time, Emerson engages in business transactions with The Grande Holdings Limited (Provisional Liquidators Appointed) and its direct and indirect subsidiaries (Grande). Set forth below is a summary of such transactions.
The Grande Holdings Limited (Provisional Liquidators Appointed) (Grande), a Bermuda corporation, has, together with S&T International Distribution Limited (S&T), Grande N.A.K.S. Ltd. and Christopher Ho (Chairman of Grandes and Emersons Boards of Directors) (together with Grande, the Reporting Persons) filed, on July 5, 2012, a Schedule 13D/A with the Securities and Exchange Commission (SEC) stating that, as of the filing date, the Reporting Persons (except Christopher Ho) had the shared power to vote and direct the disposition of 15,243,283 shares, or approximately 56.2%, of the outstanding common stock of Emerson, subject only to the rights granted to Deutsche Bank AG (Deutsche Bank) pursuant to a security agreement entered into between S&T and Deutsche Bank on January 20, 2010 in which S&T granted a security interest in an aggregate of 3,780,600 shares in Emerson common stock (the Pledged Shares) owned by S&T but pledged to Deutsche Bank for the purposes of securing obligations owing from Grande to Deutsche Bank (the Secured Obligations).
The aforementioned Schedule 13D/A also states that, as of the filing date, the Reporting Persons are aware only of the sale of 391,199 of the Pledged Shares by Deutsche Bank and that they have not yet been able to verify whether, or to what extent, Deutsche Bank has taken any other actions in respect of the Pledged Shares. The Reporting Persons also are of the view that the Secured Obligations have already been settled and, therefore, S&T reportedly is seeking clarification of the basis on which Deutsche Bank has claimed beneficial ownership of the remaining 3,380,079 shares out of the remaining 3,389,401 Pledged Shares. On February 11, 2011, Deutsche Bank filed a Schedule 13G with the SEC stating that it had sole voting and sole dispositive power over the Pledged Shares, which represent approximately 12.5% of the Companys outstanding common stock. On January 9, 2012, Deutsche Bank filed with the SEC a Form 4 Statement of Changes in Beneficial Ownership stating that, after sales by it of certain of the Pledged Shares, it beneficially owned 3,380,079 shares of Emersons common stock, and on February 10, 2012, Deutsche Bank filed with the SEC a Schedule 13G stating that it was the beneficial owner with sole voting and sole dispositive power of such shares. As a result of the foregoing, there are competing claims to 3,380,079 shares of Emersons common stock. Until further clarification is obtained, Emerson is unable to determine the beneficial ownership of such shares.
On May 31, 2011, upon application of a major creditor, the High Court of Hong Kong appointed Fok Hei Yu (who is also known by the anglicized name Vincent Fok), a current director, and Roderick John Sutton, both of FTI Consulting (Hong Kong) Limited (FTI), as Joint and Several Provisional Liquidators over Grande (the Provisional Liquidators over Grande). Accordingly, as of May 31, 2011, the directors of Grande no longer have the ability to exercise control over Grande or the power to direct the voting and disposition of the 15,243,283 shares described in footnote (2) to Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Instead, Mr. Fok, as a Provisional Liquidator over Grande, has such power.
Related Party Transactions
Rented Space in Hong Kong
Effective January 1, 2010, Emerson entered into a lease agreement with Lafe Properties (Hong Kong) Limited (Lafe), a related party of Grande at that time, pursuant to which Emerson rented 36,540 square feet from Lafe for the purpose of housing its Hong Kong based office personnel and for its use to refurbish certain returned products. This lease agreement expired on December 31, 2010 and was renewed for a one year period on substantially the same terms during December 2010, and expired on December 31, 2011. On December 31, 2010, Lafe was sold by its immediate holding company to an independent third party, and, as such, the Company no longer considers Lafe to be a related party to the Company beginning December 31, 2010. For the nine months ended December 31, 2010, Emersons rent expense associated with this lease was approximately $387,000.
Related service charges associated with this lease agreement that the Company continues to procure from Brighton Marketing Limited, a subsidiary of Grande, The Grande Properties Management Limited, a related party of Grande, and The Grande Group (HK) Ltd., a related party of Grande, totaled approximately $81,000 for the twelve months ended March 31, 2012 as compared to approximately $161,000 for the twelve months ended March 31, 2011, which also included charges associated with the lease agreement that were provided during the twelve months ended March 31, 2011 by Devon Technical Services Ltd., a subsidiary of Grande. Emerson owed The Grande Group (HK) Ltd. approximately $1,000 pertaining to these charges at March 31, 2012. Emerson owed Brighton Marketing Limited approximately $2,000 pertaining to these charges at March 31, 2011.
Rented Space in the Peoples Republic of China
In December 2008, Emerson signed a lease agreement with Akai Electric (China) Co., Ltd. (Akai China), a subsidiary of Grande prior to its disposal on December 24, 2010, concerning the rental of office space, office equipment, and lab equipment for Emersons quality assurance personnel in Zhongshan, Peoples Republic of China. The lease term began in July 2007 and ended by its terms in June 2009, at which time the agreement renewed automatically on a month-by-month basis unless canceled by either party. The agreement was cancelled in May 2011.
On December 24, 2010, Grande announced that it sold Capetronic Group Ltd. (Capetronic) to a purchaser who, along with its beneficial owner, are third parties independent of Grande and its connected persons, as defined in the Listing Rules, and to the best of Grandes and its directors knowledge, information and belief, having made all reasonable inquiries (the Sale). As Akai China was a subsidiary of Capetronic at the time of the Sale, and was disposed of along with Capetronic by Grande, the Company is no longer considering Akai China to be a related party to the Company beginning December 24, 2010.
For the nine months ended December 31, 2010, Emersons rent expense associated with this lease agreement totaled approximately $85,000.
Consulting Services Provided to Emerson by one of its Directors
During the twelve months ended March 31, 2012 and March 31, 2011, Emerson paid consulting fees of approximately $62,000 and $114,000, respectively, to Mr. Eduard Will, a director of Emerson, for work performed by Mr. Will related to strategy for the Kayne Litigation as more fully described in Note 9 Legal Proceedings Kayne Litigation, merger and acquisition research, as well as work related to the strategy for a shareholder derivative lawsuit that the Company settled in January 2011. In addition, during the twelve months ended March 31, 2012 and March 31, 2011, Emerson paid expense reimbursements and advances, in the aggregate, of approximately $19,000 and $23,000, respectively, to Mr. Will, related to this consulting work and his service as a director of Emerson. At March 31, 2012 and March 31, 2011, the Company owed Mr. Will approximately $10,000 and nil related to these activities.
On April 7, 2010, upon a request made to the Company by S&T International Distribution Limited (S&T), a subsidiary of Grande, the Company entered into an agreement with S&T, whereby the Company returned to S&T on April 7, 2010 that portion of the taxes that the Company had withheld from the dividend paid on March 24, 2010 to S&T, which the Company believes is not subject to U.S. tax based on the Companys good-faith estimate of its accumulated earnings and profits (the Agreement). The Company believes this transaction results in an off-balance sheet arrangement, which is comprised of a possible contingent tax liability of the Company, which, if recognized, would be offset by the calling by the Company on S&T of the indemnification provisions of the Agreement. Per the terms of the Agreement, Emerson invoiced S&T in June 2010 approximately $42,000 for reimbursement of legal fees incurred by Emerson with regard to the Agreement and approximately $33,000 as a transaction fee for having entered into the Agreement. In January 2011, Emerson agreed, upon the request of S&T, to waive approximately $5,000 of the legal charges that had been invoiced to S&T in June 2010. S&T paid the full amount owed to Emerson of approximately $70,000 in February 2011. In February 2011, upon the request of S&T to the Company, the Company and S&T agreed the collateral pledged as a part of the Agreement would no longer be required and this collateral was returned by the Company to S&T in March 2011.
During the twelve months ended March 31, 2012 and March 31, 2011, Emerson invoiced Vigers Appraisal & Consulting Ltd. (Vigers), a related party of Grande, approximately $4,000 and $5,000, respectively, for office rental and usage of telephone and data lines maintained by Emerson. Vigers owed Emerson approximately $1,000 and nil, respectively, at March 31, 2012 and March 31, 2011, related to this activity.
During the twelve months ended March 31, 2011, Akai Sales Pte Ltd. (Akai Sales), a subsidiary of Grande, invoiced Emerson approximately $7,300 for travel expenses and courier fees which Akai Sales paid on Emersons behalf. At March 31, 2011, Emerson owed Akai Sales nil. There were no transactions between Akai Sales and the Company during the twelve months ended March 31, 2012.
Review and Approval of Transactions with Related Parties
It is the policy of the Company that any proposed transactions between the Company and related parties, as defined by the Financial Accounting Standard Boards Accounting Standards Codification Topic 850 (ASC 850) (RPT Transactions), must be pre-approved by the Corporate Governance, Nominating and Compensation Committee of the Board (the CGNC Committee), and all RPT Transactions which are greater than $100,000 must be pre-approved by a majority of those directors of the Company who are independent within the meaning of NYSE MKT Company Guide § 803(A)(2), as may be amended from time to time. In reviewing and approving transactions between the Company and related parties, the CGNC Committee and independent directors are to determine whether the proposed transaction is entirely fair to the Company and in the Companys best interest. For purposes of the policy, related parties means (i) an officer or director of the Company or the member of the immediate family of any of them or (ii) any other corporation, partnership, association, limited liability company, limited liability partnership, trust or other entity or organization in which one or more of the Companys officers or directors are (a) directors, officers, trustees or other fiduciaries or (b) have a financial interest.
The Companys Board presently consists of seven directors Messrs. Ho, Will, Hon, Fok, Mahathir, Sethi and Snellings. The Board has determined that four of the seven current directors, Messrs. Will, Mahathir, Sethi and Snellings, meet the definition of independence as established by the NYSE MKT listing standards.
The Companys Corporate Governance, Nominating and Compensation Committee currently consists of Messrs. Mahathir (Chairman), Ho, Snellings and Will.
The Companys Audit Committee currently consists of Messrs. Sethi (Chairman) and Snellings.
In accordance with the requirements of the Sarbanes-Oxley Act of 2002 and the Audit Committees charter, all audit and audit-related work and all non-audit work performed by the Companys independent accountants, MSPC Certified Public Accountants and Advisors, A Professional Corporation (MSPC), is approved in advance by the Audit Committee, including the proposed fees for such work. The Audit Committee is informed of each service actually rendered.
Applicable law and regulations provide an exemption that permits certain services to be provided by the Companys outside auditors even if they are not pre-approved. The Company has not relied on this exemption at any time since the Sarbanes-Oxley Act was enacted.
a(3) Exhibits. The following exhibits are filed with this Amendment No. to the Annual Report on Form 10-K/A.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Amendment No. 1 on Form 10-K/A to the Registrants Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
EMERSON RADIO CORP.
Dated: July 30, 2012
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.