32621--7/14/2010--EMERSON_RADIO

related topics

{debt, indebtedness, cash}

{product, market, service}

{customer, product, revenue}

{capital, credit, financial}

{tax, income, asset}

{condition, economic, financial}

{product, liability, claim}

{stock, price, operating}

{operation, international, foreign}

{property, intellectual, protect}

{stock, price, share}

{interest, director, officer}

{provision, law, control}

{loan, real, estate}

The failure by the Company to maintain its relationships with its licensees, licensors and distributors or the failure to obtain new licensees, licensors or distribution relationships could materially and adversely affect the Company s revenues and earnings. The majority ownership of the Company s common stock by subsidiaries of The Grande Holdings Limited, a Bermuda Corporation, which is listed and is based in Hong Kong, substantially reduces the influence of other stockholders, and the interests of The Grande Holdings Limited may conflict with the interests of the Company s other stockholders. A number of the Company s directors and senior executive officers also are managing directors or senior officers of Grande and have loyalties and fiduciary obligations to both Grande and the Company. The Company s business could be materially and adversely affected if it cannot protect its intellectual property rights or if it infringes on the intellectual property rights of others. The Company s revenues and earnings could be materially and adversely affected if it cannot anticipate market trends or enhance existing products or achieve market acceptance of new products. The continuing global economic situation may adversely affect the Company s access to financing or may increase the cost of financing the Company s operations. The Company s existing credit facility, which represents its sole source of external funding, will expire in December 2010. If the Company is unable to maintain access to external funding, it may be unable fund future growth. Foreign regulations and changes in the political, social and economic conditions in the foreign countries in which the Company operates its business could affect the Company s revenues and earnings materially and adversely. The inability to use its tax net operating losses could result in a charge to earnings and could require the Company to pay higher taxes. The Company is subject to intense competition in the industry in which it operates, which could cause material reductions in the selling price of its products or losses of its market share. Changes in consumer spending and economic conditions may cause its quarterly operating results to fluctuate and cause its stock price to decline. If the Company s third party sales representatives fail to adequately promote, market and sell the Company s products, the Company s revenues could significantly decrease. The Company could be exposed to product liability or other claims for which its product liability or other insurance may be inadequate. A decline in the value of the auction rate securities included in the Company s investments could materially adversely affect its earnings and continue to materially adverse its liquidity. Any substantial indebtedness the Company incurs from time to time may adversely affect its ability to obtain additional funds and may increase its vulnerability to economic or business downturns. The Company has pledged substantially all of its assets to secure its borrowings under its credit facilities and is subject to covenants that may restrict its ability to operate its business. Grande s controlling interest in the Company s common stock as well as its organizational documents and Delaware law make it difficult for the Company to be acquired without the consent and cooperation of Grande, the Company s board of directors and management. If the Company s common stock is de-listed from the NYSE Amex, shareholders liquidity in their shares may be adversely affected and shareholders may have difficulty selling their shares or attaining a satisfactory price.

Full 10-K form ▸

32621--7/14/2010--EMERSON_RADIO_CORP