8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 19, 2007

EMERSON RADIO CORP.

(Exact Name of Registrant as Specified in Charter)

Delaware	001-07731	22-3285224
(State Or Other Jurisdiction Of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

9 Entin Road, Parsippany, New Jersey	07054
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (973) 884-5800

Not Applicable
(Former Address, if changed since Last Report) (Zip Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01. Entry Into a Material Definitive Agreement.
	Item 2.02. Results of Operations and Financial Condition.
	Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
	Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
	Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers, Compensatory Arrangements to Certain Officers.
	Item 8.01 Other Events.
SIGNATURE
EX-10.1: PROMISSORY NOTE
EX-10.2: GUARANTY
EX-99.1: PRESS RELEASE

Item 1.01. Entry Into a Material Definitive Agreement.

     On February 21, 2007, Capetronics Display Limited, a British Virgin Islands corporation, Nakamichi Corporation, a Japanese corporation, Akai Electric (China) Co. Ltd., a Peoples’ Republic of China corporation, and Sansui Electric (China) Co. Ltd., a Peoples’ Republic of China corporation (collectively, the “Borrowers”), each of which is a wholly-owned subsidiary of The Grande Holdings Limited (“Grande”), the beneficial owner of approximately 50.8% of the Company’s outstanding shares of common stock, jointly and severally, issued a promissory note (the “Note”) in favor of Emerson Radio Corp. (the “Company”) in the principal amount of $23,501,513.71. The principal amount of the Note represents outstanding amounts currently owed to the Company as a result of certain related party transactions entered into between the Company and the Borrowers in October and November 2006, including interest that had accrued from the date of such related party transactions until the date of the Note. Simultaneously with the execution of the Note, Grande executed a guaranty (the “Guaranty”) in favor of the Company pursuant to which Grande guaranteed payment of all of the obligations of the Borrowers under the Note in accordance with the terms thereof.

     Interest on the unpaid principal balance of the Note accrues at a rate of 8.25% per annum, commencing on February 21, 2007, until all obligations under the Note are paid in full, subject to an automatic increase of 2% per annum in the event of default under the Note in accordance with the terms thereof. Payments of principal and interest under the Note are to be made in nine installments from April 1, 2007 through June 3, 2007 in such amounts and on such dates as set forth in the Note, with all amounts of interest due under the Note scheduled to be paid with the final installment. The Borrowers may prepay the principal amount outstanding, together with all accrued and unpaid interest, in whole or in part, at any time or from time to time without premium or penalty.

     The description of the Note and the Guaranty set forth herein does not purport to be complete and is qualified in its entirety by reference to the full text thereof, copies of which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K.

Item 2.02. Results of Operations and Financial Condition.

     On February 21, 2007, the Company issued a press release regarding selected operating results for the quarter ended December 31, 2006. A copy of this press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K. See “Item 8.01 — Other Events” set forth below.

     The information in this report under Item 2.02 is being furnished pursuant to Item 2.02 of Form 8-K, insofar as it discloses historical information regarding selected results of operations of the Company as of, and for the quarter ended December 31, 2006. In accordance with General Instructions B.2 of Form 8-K, the information in this Current Report on Form 8-K under Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

     As a result of certain related party transactions entered into between the Company and affiliates of The Grande Holdings Limited, the beneficial owner of approximately 50.8% of the Company’s outstanding common stock (“Grande”), the Company may be deemed to be in breach of certain covenants contained in the Company’s credit facility, including a covenant restricting the Company from lending money and from entering into related party transactions without the consent of its lender. Although the Company has discussed such events and transactions with its lender, the lender has not provided the Company with a written waiver of such potential events of default and has reserved all rights and remedies available to it under the credit facility. The Company intends to meet with representatives of its lender over the next few days, but there is no assurance that the lender will agree to provide a waiver. The Company presently has approximately $7.8 million of letters of credit outstanding under its $45 million credit facility. In the event the lender elected to declare such events an event of default, the lender could accelerate repayment of all outstanding amounts due under the facility. In addition, the Company would be required to write-off deferred financing costs in the amount of $330,000. While the Company does not anticipate any difficulty in repaying such amounts, it is likely that, that in the absence of future credit commitments from its current or a future lender, it would be difficult for the Company to operate its business as it has done in the past.

Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

     As described under “Item 8.01 — Other Events” set forth below, the Company was unable to timely file its Quarterly Report on Form 10-Q for the quarter ended December 31, 2006 (the “Form 10-Q”). As a result, the Company is not in compliance with Section 1101 of the American Stock Exchange (“AMEX”) Company Guide (the “Company Guide”), as disclosed in the Company’s press release being filed with this Current Report on Form 8-K as Exhibit 99.1. Although the Company has notified AMEX, the Company has not yet received a notice from AMEX with respect to such non-compliance. The Company intends to promptly take all necessary actions to regain compliance with the AMEX requirements by filing its Form 10-Q as soon as reasonably practicable, however, there can be no assurance that the Company will be able to regain compliance with AMEX requirements and maintain its AMEX listing.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers, Compensatory Arrangements to Certain Officers.

     On February 19, 2007, the Board of Directors of Emerson Radio Corp. (the “Company”) appointed Greenfield Pitts (age 56), a current director of the Company as the Company’s Chief Financial Officer and principal accounting officer. Mr. Pitts has served as a director of the Company since March 2006. From 2001-2006, Mr. Pitts served as a Director, Asian Corporate Finance, for Wachovia Securities in Hong Kong and from 1997-2001, Mr. Pitts served as the Head of a Strategic Alliance with HSBC Holdings PLC and Wachovia Bank. Mr. Pitts has a 33-year background in international banking and was associated with Wachovia Bank, the Company’s present lender, for more than 25 years, with assignments in London, Atlanta and Hong Kong. As a result of the appointment of Mr. Pitts, the Company named (i) Michael A.B. Binney, the Company’s President — International Operations, as the Company’s acting Controller while it conducts a search for a Controller, (ii) John D. Florian, the Company’s former Deputy Chief Financial Officer and Controller (principal financial and accounting officer), as Chief Financial Officer, Emerson North American Operations, and (iii) Ivan Lau, as Chief Financial Officer, Emerson Asian Operations, formerly the Company’s Controller in Asia, a role he has served in

since February 2006. The Company and Mr. Pitts have not yet finalized the compensation to be received by Mr. Pitts in his role as Chief Financial Officer of the Company. The Company will file an additional Current Report on Form 8-K when such compensation is finalized.

Item 8.01 Other Events.

     The Company announced today that, although it has issued a press release setting forth the Company’s selected statement of operations for the quarter ended December 31, 2006, it was unable to file its full Form 10-Q by the required deadline. The Form 10-Q will contain more detailed information about the Company’s operating results for the quarter, such as footnotes to the Company’s financial statements, including a discussion of certain related party transactions, and management’s discussion and analysis of the Company’s operating results for the period. The reason that the Company will be unable to file the Form 10-Q in a timely manner is set forth below.

     During the quarter ended December 31, 2006, the Company and affiliates of Grande entered into a number of related party transactions that resulted in loans and letters of credit under the Company’s credit facility being issued for the benefit of affiliates of Grande. These loans are (i) subject to a repayment schedule that commences on April 1, 2007 and ends on June 3, 2007 as set forth in the Note (as described under Item 1.01 of this Form 8-K) and (ii) guaranteed by Grande. The Company’s Audit Committee recently conducted an initial review of these transactions and concluded that these financing transactions (i) were not made on substantially the same terms, including interest rates and collateral and return on investment, as those prevailing at the time for comparable transactions with unrelated persons, and (ii) involved more than the normal risk of collectibility. In addition, the review of the transactions revealed material weaknesses in the Company’s internal controls. The deficiencies that were uncovered related to (i) one or more senior managers failing to follow the Company’s existing internal controls over purchases and sales of inventory and utilization of the Company’s credit facilities and (ii) the lack of documentation related to such related party transactions. These events have also raised concerns about the Company’s overall control environment. Although such events may not result in any adjustment to the Company’s financial statements, such events reflect material weaknesses with respect to the Company internal controls.

     The Company’s Audit Committee is continuing its independent review into certain related party transactions entered into by the Company, including its subsidiaries, with affiliates of Grande from December 2005 to the present, and internal controls related to such transactions.

     As part of the Company’s remedial actions, on February 20, 2007, the Board of Directors appointed a committee of the Board of Directors comprised of Adrian Ma, the Company’s Chief Executive Officer, Greenfield Pitts, the Company’s Chief Financial Officer, Michael A.B. Binney, the Company’s President — International Operations, and Eduard Will, the Company’s President - North American Operations, to internally review and approve all related party transactions in an amount in excess of $500,000. Following review and approval by this newly formed committee, all such related party transactions will be reviewed and approved by the Company’s Audit Committee.

     A copy of the press release announcing the information included in this Current Report on Form 8-K is included with this Current Report on Form 8-K as Exhibit 99.1.

Forward Looking Statements

     This Current Report on Form 8-K, including Exhibit 99.1, contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including the Company’s ability to obtain a waiver from its lender. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. Forward-looking statements represent our management’s judgment regarding future events. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, the Company can give no assurance that such expectations will prove to be correct. All statements other than statements of historical fact included in this Current Report on Form 8-K are forward-looking statements. The Company cannot guarantee the accuracy of the forward-looking statements, and you should be aware that the Company’s actual results could differ materially from those contained in the forward-looking statements due to a number of factors, including the statements under “Risk Factors” contained in the Company’s reports filed with the Securities and Exchange Commission.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits

As described above, the following Exhibit is included as part of this Current Report on Form 8-K:

Exhibit 10.1	Promissory Note, dated as of February 21, 2007 made by Capetronics Display Limited, Nakamichi Corporation, Akai Electric (China) Co. Ltd., and Sansui Electric (China) Co. Ltd. in favor of Emerson Radio Corp.
Exhibit 10.2	Guaranty, dated as of February 21, 2007, made by The Grande Holdings Ltd. in favor of Emerson Radio Corp.
Exhibit 99.1	Press release dated February 21, 2007

SIGNATURE

     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 hereunto duly authorized.

EMERSON RADIO CORP.
By:	/s/ Adrian Ma
	Name:	Adrian Ma
	Title:	Chief Executive Officer

Dated: February 21, 2007

EX-10.1

Exhibit 10.1

PROMISSORY NOTE

US$23,501,513.71 February 21, 2007

     FOR VALUE RECEIVED, CAPETRONIC DISPLAY LIMITED, a British Virgin Islands corporation, with offices located at Grande Building, No. 5 Zhongshan Road, Zhongshan, Guandong, P.R.C., China, NAKAMICHI CORPORATION, a Japanese corporation, with offices located at 23-3 Higashi 2-chome Shibuya-ku, Tokyo Japan, AKAI ELECTRIC (CHINA) CO. LTD., a Peoples’ Republic of China corporation, with offices located at Grande Building, No. 5 Zhongshan Road, Zhongshan, Guandong, P.R.C., China, and SANSUI ELECTRIC (CHINA) CO. LTD., a Peoples’ Republic of China corporation, with offices located at Grande Building, No. 5 Zhongshan Road, Zhongshan, Guandong, P.R.C., China (each an “Issuer”, and collectively, the “Issuers”), hereby, jointly and severally, promise to pay to EMERSON RADIO CORP., a Delaware corporation, or its successors and/or assigns (the “Holder”), the sum of TWENTY-THREE MILLION FIVE HUNDRED ONE THOUSAND FIVE HUNDRED THIRTEEN and 71/100 Dollars ($23,501,513.71) in lawful money of the United States of America, together with interest thereon at the rate set forth in Section 2 below and payable in accordance with the provisions of this Promissory Note.

     1. PAYMENTS. Except as otherwise provided herein, payments of principal and interest shall be made in installments (each, an “Installment”) in such amounts and on such dates as set forth on Schedule 1 to this Promissory Note, with all amounts of interest due hereunder scheduled to be paid in the final Installment. All of the foregoing payments and any other payments under this Promissory Note shall be made by wire transfer of immediately available funds pursuant to the following instructions:

To:	Emerson Radio Corp.
	5101 Statesman Dr
	Irving, Texas 75063
Account #:
SWIFT Code:
ABA #:
Bank:

     2. INTEREST. Interest on the unpaid principal balance hereof shall accrue at a rate equal to EIGHT and 25/100^th percent (8.25%) per annum, commencing on February 20, 2007, until all obligations hereunder shall have been paid and satisfied in full; provided, however, that upon the occurrence of an Event of Default (as defined below), the interest rate shall automatically increase by TWO percent (2%) per annum until such time as such Event of Default shall be cured or waived by the Holder.

     3. OPTIONAL PREPAYMENT. The Issuers may prepay the principal amount outstanding hereunder, together with all accrued and unpaid interest, in whole or in part, at any time or from time to time without premium or penalty. All payments made hereunder, including prepayments, shall first be applied to accrued and unpaid interest, and the balance, if any, towards reduction of the principal amount owed hereunder.

     4. EVENTS OF DEFAULT.

          (a) The occurrence of any one or more of the following events shall constitute an event of default (hereinafter, an “Event of Default”) under this Promissory Note:

          (i) the Issuers’ failure to pay all or any part of the principal or interest hereunder when due;

          (ii) any Issuer shall deny any of its obligations under this Promissory Note, or any Issuer or any other person acting on behalf of an Issuer shall challenge the effectiveness or enforceability of this Promissory Note;

          (iii) The Grande Holdings Limited, a Bermuda corporation (the “Parent Guarantor”), shall deny any of its obligations under, or challenge the effectiveness or enforceability of the Guaranty, dated as of February 21, 2007, executed and delivered by the Parent Guarantor for the benefit of the Holder (the “Guaranty”);

          (iv) the invalidity or unenforceability of the Guaranty; and/or

          (v) any Issuer or the Parent Guarantor shall have applied for or consented to the appointment of a custodian, receiver, trustee or liquidator, or other court-appointed fiduciary of all or a substantial part of its properties; or a custodian, receiver, trustee or liquidator or other court appointed fiduciary shall have been appointed for any Issuer or the Parent Guarantor with or without the consent of such person; any Issuer or the Parent Guarantor is generally not paying its debts as they become due by means of available assets or is insolvent, or has made a general assignment for the benefit of creditors; any Issuer or the Parent Guarantor files a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or seeking to take advantage of any insolvency law (including, without limitation, Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute, or any other federal, state or foreign bankruptcy, reorganization, moratorium or insolvency law relating to or affecting the enforcement of creditors’ rights generally (any of the foregoing, an “Insolvency Law”)), or an answer admitting the material allegations of a petition in any bankruptcy, reorganization or insolvency proceeding or has taken action for the purpose of effecting any of the foregoing; or the appointment of any trustee, receiver, custodian, liquidator, or other court-appointed fiduciary of such Issuer or the Parent Guarantor, as the case may be, or of all or any substantial part of such person’s properties, after the commencement of any proceeding against any Issuer

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or the Parent Guarantor seeking any reorganization, rehabilitation, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any Insolvency Law.

          (b) Upon the occurrence of any Event of Default, the Holder may declare all amounts due hereunder to be due and payable immediately and, upon any such declaration, the same shall become and be immediately due and payable. If an Event of Default specified in clause (vi) occurs, then all amounts due hereunder shall become immediately due and payable without any declaration or other act on the part of the Holder. Upon the occurrence of any Event of Default, the Holder may, in addition to declaring all amounts due hereunder to be immediately due and payable, pursue any available remedy, whether at law or in equity. The Holder shall be deemed to have made such declaration to the Issuers under this Section 4(b) by (i) providing written notice to any Issuer at the address set forth in the first paragraph of this Promissory Note by any method reasonably selected by the Holders, which notice shall be deemed to be received by both Issuers upon receipt by the Holder of a confirmation of delivery to any Issuer, (ii) upon the Holder or a person acting on its behalf making a public announcement setting forth the Holder’s intention to accelerate the obligations under this Promissory Note (including, without limitation, by including such information in a report filed with the U.S. Securities and Exchange Commission by the Holder), or (iii) providing notice of such declaration to the Parent Guarantor in accordance with the notice provisions under the Guaranty.

     5. FEES AND EXPENSES. Upon the occurrence of an Event of Default, the Issuers shall pay all reasonable costs that the Holder incurs in enforcing this Promissory Note, including, without limitation, reasonable attorneys fees and expenses.

     6. WAIVER OF PRESENTMENT, DEMAND AND DISHONOR. No delay on the part of the Holder in exercising any power or right hereunder shall operate as a waiver of any such power or right; nor shall any single or partial exercise of any power or right preclude any other or further exercise of such power or right, or the exercise of any other power or right, and no waiver whatsoever shall be valid unless in writing, signed by the Holder, and then only to the extent expressly set forth therein. No remedy is exclusive of any other remedy and all remedies shall be cumulative to the maximum extent permitted by applicable law. Each Issuer hereby waives presentment, demand for payment, diligence, notice of dishonor and all other notices or demands in connection with the delivery, acceptance, performance, default or indorsement of this Promissory Note.

     7. AMENDMENTS AND ASSIGNMENT. This Promissory Note can be amended only by an instrument signed by the Holder and the Issuers. Neither this Promissory Note nor any of the obligation of the Issuers under this Promissory Note may not be assigned or transferred without the prior written consent of the Holder. The Holder may sell, assign, transfer, pledge, hypothecate or otherwise dispose of this Promissory Note or any of its rights hereunder without the consent of the Issuers.

     8. GOVERNING LAW. This Promissory Note has been delivered in the State of New York and is to be construed and enforced according to, and governed by, the laws of the State of New York without regard to the choice of law principles thereof.

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     9. CONSENT TO JURISDICTION; CONSENT TO JURISDICTION. Each Issuer hereby irrevocably submits to the jurisdiction of the courts of the State of New York and to the jurisdiction of the United States District Court for the Southern District of New York, in each case, located in the Borough of Manhattan in The City of New York, for the purposes of any suit, action or other proceeding brought by Holder arising out of or based upon this Promissory Note. EACH ISSUER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT ISSUER IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT SUCH ISSUER’S PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THIS PROMISSORY NOTE MAY NOT BE ENFORCED IN OR BY SUCH COURT.

     10. JURY WAIVER. EACH ISSUER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO REQUEST OR TO HAVE A TRIAL BY JURY IN ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF THIS PROMISSORY NOTE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

[Signature Page Follows.]

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     IN WITNESS WHEREOF, each Issuer has caused this Promissory Note to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

ATTEST	CAPETRONIC DISPLAY LIMITED
/s/ Ruby Lee	By:	/s/ Paul Law Fwok Fai
Name: Ruby Lee		Name: Paul Law Fwok Fai Title: Authorised Signatory
ATTEST	NAKAMICHI CORPORATION
/s/ Ruby Lee	By:	/s/ Michael Binney
Name: Ruby Lee		Name: Michael Binney Title: Director
ATTEST	AKAI ELECTRIC (CHINA) CO. LTD.
/s/ Ruby Lee	By:	/s/ Paul Law Fwok Fai
Name: Ruby Lee		Name: Paul Law Fwok Fai Title: Authorised Signatory
ATTEST	SANSUI ELECTRIC (CHINA) CO. LTD.
/s/ Ruby Lee	By:	/s/ Paul Law Fwok Fai
Name: Ruby Lee		Name: Paul Law Fwok Fai Title: Authorised Signatory

Signature Page To Promissory Note

SCHEDULE 1

INSTALLMENTS

Installment		Installment Amount
Number	Payment Date	(in US Dollars)
1.	April 1, 2007	$	672,000.00
2.	April 7, 2007	$	4,626,800.00
3.	April 26, 2007	$	4,785,246.38
4.	May 4, 2007	$	4,543,664.18
5.	May 5, 2007	$	1,780,790.62
6.	May 10, 2007	$	120,271.88
7.	May 17, 2007	$	4,225,894.55
8.	May 26, 2007	$	1,056,729.53
9.	June 3, 2007	$	2,060,348.47

Schedule 1 To Promissory Note

EX-10.2

Exhibit 10.2

GUARANTY

Parsippany, New Jersey February 21, 2007

     FOR VALUE RECEIVED, and in consideration of the issuance of and/or drawings under letters of credit issued by Wachovia Bank, National Association under the applications by Emerson Radio Macao Commercial Offshore Limited, a subsidiary of EMERSON RADIO CORP., a Delaware corporation (“Lender”), for the benefit of CAPETRONIC DISPLAY LIMITED, NAKAMICHI CORPORATION, AKAI ELECTRIC (CHINA) CO. LTD. and/or SANSUI ELECTRIC (CHINA) CO. LTD., each of which is a wholly owned subsidiary of the undersigned (each, a “Borrower”, and, collectively, “Borrowers”), under Letter of Credit Nos. IC611935H, IC611936H, IC611982H, IC612205H, IC612206H, IC612968H, IC613030H, IC613031H, IC613372H and IC613373H (the “Letters of Credit”), the obligations of Borrowers to repay such amounts is evidenced by the Promissory Note, dated as of February 21, 2007, issued by the Borrowers to Lender (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Promissory Note”), and for other good and valuable consideration, the undersigned (hereinafter referred to as “Guarantor” or “the undersigned”) unconditionally guarantees to Lender, its successors, endorsees and assigns the prompt payment when due (whether by acceleration or otherwise) of all present and future obligations and liabilities of any and all kinds of Borrowers to Lender and of all instruments of any nature evidencing or relating to any such obligations and liabilities upon which any Borrower or one or more parties and any Borrower is or may become liable to Lender, whether incurred by any Borrower as maker, endorser, drawer, acceptor, guarantor, issuer, accommodation party or otherwise, and whether due or to become due, secured or unsecured, absolute or contingent, joint or several, and however or whenever acquired, directly or indirectly, by Lender, whether arising under, out of, or in connection with the Promissory Note or any documents, instruments or agreements relating to or executed in connection with the Promissory Note or any documents, instruments or agreements referred to in the Promissory Note (together with the Promissory Note, as each may be amended, modified, restated or supplemented from time to time, the “Loan Documents”), or otherwise (all of which are herein collectively referred to as the “Obligations”), and irrespective of the genuineness, validity, regularity or enforceability of such Obligations, or of any instrument evidencing any of the Obligations or of any collateral therefor or of the existence or extent of such collateral, and irrespective of the allowability, allowance or disallowance of any or all of the Obligations in any case commenced by or against any Borrower under any Insolvency Law (as defined in Section 2 hereof), including, without limitation, obligations or indebtedness of any Borrower for post-petition interest, fees, costs and charges that would have accrued or been added to the Obligations but for the commencement of such case. In furtherance of the foregoing, the undersigned hereby agrees as follows:

     1. No Impairment. Lender may at any time and from time to time, either before or after the maturity thereof, without notice to or further consent of the undersigned, extend the time of payment of, exchange or surrender any collateral for, renew or extend any of the Obligations or increase or decrease the interest rate thereon, and may also make any agreement with any Borrower or with any other party to or person liable on any of the Obligations, or interested therein, for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between

Lender and any Borrower or any such other party or person, or make any election of rights Lender may deem desirable under Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute, or any other federal, state or foreign bankruptcy, reorganization, moratorium or insolvency law relating to or affecting the enforcement of creditors’ rights generally (any of the foregoing, an “Insolvency Law”) without in any way impairing or affecting this Guaranty. This instrument shall be effective regardless of the subsequent merger or consolidation of Borrower, or any change in the composition, nature, personnel, jurisdiction or organization or location of Borrower and shall extend to any successor entity to Borrower, including a debtor in possession or the like under any Insolvency Law.

     2. Guaranty Absolute. The undersigned guarantees that the Obligations will be paid strictly in accordance with the terms of the Promissory Note and/or any other document, instrument or agreement creating or evidencing the Obligations, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Borrower with respect thereto. Guarantor hereby knowingly accepts the full range of risk encompassed within a contract of “continuing guaranty” which risk includes the possibility that one or more Borrowers will contract additional indebtedness for which Guarantor may be liable hereunder after any such Borrower’s financial condition or ability to pay its lawful debts when they fall due has deteriorated, whether or not any such Borrower has properly authorized incurring such additional indebtedness. The undersigned acknowledges that (i) no oral representations, including any representations to extend credit or provide other financial accommodations to the Borrowers, have been made by Lender to induce the undersigned to enter into this Guaranty and (ii) any extension of credit to the Borrowers shall be governed solely by the provisions of the Promissory Note. The liability of the undersigned under this Guaranty shall be absolute and unconditional, in accordance with its terms, and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation: (a) any waiver, indulgence, renewal, extension, amendment or modification of or addition, consent or supplement to or deletion from or any other action or inaction under or in respect of the Loan Documents or any other instruments or agreements relating to the Obligations or any assignment or transfer of any thereof, (b) any lack of validity or enforceability of any Loan Document or other documents, instruments or agreements relating to the Obligations or any assignment or transfer of any thereof, (c) any furnishing of any additional security to Lender or its assignees or any acceptance thereof or any release of any security by Lender or its assignees, (d) any limitation on any party’s liability or obligation under the Loan Documents or any other documents, instruments or agreements relating to the Obligations or any assignment or transfer of any thereof or any invalidity or unenforceability, in whole or in part, of any such document, instrument or agreement or any term thereof, (e) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to Borrower, or any action taken with respect to this Guaranty by any trustee or receiver, or by any court, in any such proceeding, whether or not the undersigned shall have notice or knowledge of any of the foregoing, (f) any exchange, release or nonperfection of any collateral, or any release, or amendment or waiver of or consent to departure from any guaranty or security, for all or any of the Obligations or (g) any other circumstance which might otherwise constitute a defense available to, or a discharge of, the undersigned. Any amounts due from the undersigned to Lender shall bear interest until such amounts are paid in full at the highest rate then applicable to the Obligations. Obligations include post-petition interest whether or not allowed or allowable.

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     3. Waivers. (a) This Guaranty is a guaranty of payment and not of collection. Lender shall be under no obligation to institute suit, exercise rights or remedies or take any other action against any Borrower or any other person liable with respect to any of the Obligations or resort to any collateral security held by it to secure any of the Obligations as a condition precedent to the undersigned being obligated to perform as agreed herein and Guarantor hereby waives any and all rights which it may have by statute or otherwise which would require Lender to do any of the foregoing. Guarantor further consents and agrees that Lender shall be under no obligation to marshal any assets in favor of Guarantor, or against or in payment of any or all of the Obligations. The undersigned hereby waives all suretyship defenses and any rights to interpose any defense, counterclaim or offset of any nature and description which the undersigned may have or which may exist between and among Lender, any Borrower and/or the undersigned with respect to the undersigned’s obligations under this Guaranty, or which any Borrower may assert on the underlying debt, including but not limited to failure of consideration, breach of warranty, fraud, payment (other than cash payment in full of the Obligations), statute of frauds, bankruptcy, infancy, statute of limitations, accord and satisfaction, and usury.

          (b) The undersigned further waives (i) notice of the acceptance of this Guaranty, of the making of any such loans or extensions of credit, and of all notices and demands of any kind to which the undersigned may be entitled, including, without limitation, notice of adverse change in any Borrower’s financial condition or of any other fact which might materially increase the risk of the undersigned and (ii) presentment to or demand of payment from anyone whomsoever liable upon any of the Obligations, protest, notices of presentment, non-payment or protest and notice of any sale of collateral security or any default of any sort.

          (c) Notwithstanding any payment or payments made by the undersigned hereunder, or any setoff or application of funds of the undersigned by Lender, the undersigned shall not be entitled to be subrogated to any of the rights of Lender against any Borrower or against any collateral or guarantee or right of offset held by Lender for the payment of the Obligations, nor shall the undersigned seek or be entitled to seek any contribution or reimbursement from any Borrower in respect of payments made by the undersigned hereunder, until all amounts owing to Lender by any Borrower on account of the Obligations are paid in full and the Promissory Note has been terminated. If, notwithstanding the foregoing, any amount shall be paid to the undersigned on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full and the Promissory Note shall not have been terminated, such amount shall be held by the undersigned in trust for Lender, segregated from other funds of the undersigned, and shall forthwith upon, and in any event within two (2) business days of, receipt by the undersigned, be turned over to Lender in the exact form received by the undersigned (duly endorsed by the undersigned to Lender, if required), to be applied against the Obligations, whether matured or unmatured, in such order as Lender may determine, subject to the provisions of the Promissory Note. Any and all present and future debts and obligations of any Borrower to the undersigned are hereby waived and postponed in favor of, and subordinated to the full payment and performance of, all present and future debts and obligations of Borrowers to Lender.

     4. Security. All sums at any time to the credit of the undersigned and any property of the undersigned in Lender’s possession or in the possession of any bank, financial institution or other entity that directly or indirectly, through one or more intermediaries, controls or is

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controlled by, or is under common control with, Lender (each such entity, an “Affiliate”) shall be deemed held by Lender or such Affiliate, as the case may be, as security for any and all of the undersigned’s obligations to Lender and to any Affiliate of Lender, no matter how or when arising and whether under this or any other instrument, agreement or otherwise.

     5. Representations and Warranties. The undersigned hereby represents and warrants (all of which representations and warranties shall survive until all Obligations are indefeasibly satisfied in full and the Promissory Note has been irrevocably terminated), that:

     (a) Corporate Status. The undersigned is a corporation duly organized, validly existing and in good standing under the laws of Bermuda and has full power, authority and legal right to own its property and assets and to transact the business in which it is engaged.

     (b) Authority and Execution. The undersigned has full power, authority and legal right to execute and deliver, and to perform its obligations under, this Guaranty and has taken all necessary corporate and legal action to authorize the execution, delivery and performance of this Guaranty.

     (c) Legal, Valid and Binding Character. This Guaranty constitutes the legal, valid and binding obligation of the undersigned enforceable in accordance with its terms, except as enforceability may be limited by applicable Insolvency Law.

     (d) Violations. The execution, delivery and performance of this Guaranty will not violate any requirement of law applicable to the undersigned or any material contract, agreement or instrument to which the undersigned is a party or by which the undersigned or any property of the undersigned is bound or result in the creation or imposition of any mortgage, lien or other encumbrance other than to Lender on any of the property or assets of the undersigned pursuant to the provisions of any of the foregoing.

     (e) Consents or Approvals. No consent of any other person or entity (including, without limitation, any creditor of the undersigned) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required in connection with the execution, delivery, performance, validity or enforceability of this Guaranty.

     (f) Litigation. No litigation, arbitration, investigation or administrative proceeding of or before any court, arbitrator or governmental authority, bureau or agency is currently pending or, to the best knowledge of the undersigned, threatened (i) with respect to this Guaranty or any of the transactions contemplated by this Guaranty or (ii) against or affecting the undersigned, or any of property or assets of the undersigned, which, if adversely determined, would have a material adverse effect on the business, operations, assets or condition, financial or otherwise, of the undersigned.

     (g) Financial Benefit. The undersigned has derived or expects to derive a financial or other advantage from the benefits derived by Borrowers under the Letters of Credit or any other Obligation incurred by Borrower to Lender.

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     6. Acceleration. (a) If any breach of any covenant or condition or other event of default shall occur and be continuing under any agreement made by any Borrower or the undersigned to Lender, or any Borrower or the undersigned should at any time become insolvent, or make a general assignment, or if a proceeding in or under any Insolvency Law shall be filed or commenced by, or in respect of, the undersigned, or if a notice of any lien, levy, or assessment is filed of record with respect to any assets of the undersigned by the United States of America or any department, agency, or instrumentality thereof, or if any taxes or debts owing at any time or times hereafter to any one of them becomes a lien or encumbrance upon any assets of the undersigned in Lender’s possession, or otherwise, any and all Obligations shall for purposes hereof, at Lender’s option, be deemed due and payable without notice notwithstanding that any such Obligation is not then due and payable by Borrower.

          (b) The undersigned will promptly notify Lender of any default by the undersigned in the performance or observance of any term or condition of any agreement to which the undersigned is a party if the effect of such default is to cause, or permit the holder of any obligation under such agreement to cause, such obligation to become due prior to its stated maturity and, if such an event occurs, Lender shall have the right to accelerate the undersigned’s obligations hereunder.

     7. Payments from Guarantor. Lender, in its sole and absolute discretion, with or without notice to the undersigned, may apply on account of the Obligations any payment from the undersigned or any other guarantor, or amounts realized from any security for the Obligations, or may deposit any and all such amounts realized in a non-interest bearing cash collateral deposit account to be maintained as security for the Obligations.

     8. Costs. The undersigned shall pay on demand, all costs, fees and expenses (including expenses for legal services of every kind) relating or incidental to the enforcement or protection of the rights of Lender hereunder or under any of the Obligations.

     9. No Termination. This is a continuing irrevocable guaranty and shall remain in full force and effect and be binding upon the undersigned, and the undersigned’s successors and assigns, until all of the Obligations have been paid in full and the Promissory Note has been irrevocably terminated.

     10. Recapture. Anything in this Guaranty to the contrary notwithstanding, if Lender receives any payment or payments on account of the liabilities guaranteed hereby, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver, or any other party under any Insolvency Law, common law or equitable doctrine, then to the extent of any sum not finally retained by Lender, the undersigned’s obligations to Lender shall be reinstated and this Guaranty shall remain in full force and effect (or be reinstated) until payment shall have been made to Lender, which payment shall be due on demand.

     11. Books and Records. The books and records of Lender showing the account between Lender and Borrower shall be admissible in evidence in any action or proceeding, shall be binding upon the undersigned for the purpose of establishing the items therein set forth and shall constitute prima facie proof thereof.

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     12. No Waiver. No failure on the part of Lender to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Lender of any right, remedy or power hereunder preclude any other or future exercise of any other legal right, remedy or power. Each and every right, remedy and power hereby granted to Lender or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by Lender at any time and from time to time.

     13. Waiver of Jury Trial. THE UNDERSIGNED DOES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR RELATING OR INCIDENTAL HERETO. THE UNDERSIGNED DOES HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.

     14. Governing Law; Jurisdiction; Amendments. THIS INSTRUMENT CANNOT BE CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED, CONSTRUED AND INTERPRETED AS TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE UNDERSIGNED EXPRESSLY CONSENTS TO THE JURISDICTION AND VENUE OF THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR ALL PURPOSES IN CONNECTION HEREWITH. ANY JUDICIAL PROCEEDING BY THE UNDERSIGNED AGAINST LENDER INVOLVING, DIRECTLY OR INDIRECTLY ANY MATTER OR CLAIM IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED HEREWITH SHALL BE BROUGHT ONLY IN THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE UNDERSIGNED FURTHER CONSENTS THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS OR PAPERS (INCLUDING, WITHOUT LIMITATION, ANY NOTICE OR MOTION OR OTHER APPLICATION TO EITHER OF THE AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR OUTSIDE OF THE STATE OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE PROVIDED A REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS. THE UNDERSIGNED WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREON AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR BASED UPON FORUM NON CONVENIENS.

     15. Severability. To the extent permitted by applicable law, any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the

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remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

     16. Amendments, Waivers. No amendment or waiver of any provision of this Guaranty nor consent to any departure by the undersigned therefrom shall in any event be effective unless the same shall be in writing executed by the undersigned and Lender.

     17. Notices. All notices, requests and demands to or upon (a) the undersigned, shall be in writing and shall be deemed to have been duly given or made (i) when delivered, if by hand, (ii) three (3) days after being sent, postage prepaid, if by registered or certified mail, (iii) when confirmed electronically, if by facsimile or by e-mail of a Portable Document Format (PDF) file, (iv) when delivered, if by a recognized overnight delivery service (in the case of the events described in clauses (i) through (iv), inclusive, to the number and/or address set forth beneath the signature of the undersigned), or (v) upon Lender or a person acting on its behalf making a public announcement relating to this Guaranty and/or the Obligations (including, without limitation, by including such information in a report filed with the U.S. Securities and Exchange Commission by Lender), or (b) Lender, shall be deemed duly given or made (i) when delivered, if by hand, or (ii) when delivered, if by a recognized overnight delivery service, in each case to the principal offices of Lender located at 9 Entin Road, Parsippany, New Jersey 07054.

     18. Successors. Lender may, from time to time, without notice to the undersigned, sell, assign, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Obligations and/or rights under this Guaranty. In each such event, Lender, its Affiliates and each and every immediate and successive purchaser, assignee, transferee or holder of all or any part of the Obligations shall have the right to enforce this Guaranty, by legal action or otherwise, for its own benefit as fully as if such purchaser, assignee, transferee or holder were herein by name specifically given such right. Lender shall have an unimpaired right to enforce this Guaranty for its benefit with respect to that portion of the Obligations which Lender has not disposed of, sold, assigned, or otherwise transferred.

     19. Release. Nothing except cash payment in full in lawful money of the United States of America of the Obligations shall release the undersigned from liability under this Guaranty.

[Signature Page Follows.]

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     IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned this 21st day of February, 2007.

THE GRANDE HOLDINGS LIMITED, a Bermuda corporation
By:	/s/ Michael Binney
	Name:	Michael Binney
	Title:	Director

Notice Address:

146 Robinson Road
#01-01
Singapore 068909
Attention: Ruby Lee Yen Kee, Esq., Managing Director, Legal
Telephone No.: 011-65-6221-0010
Facsimile No.:
E-mail Address: ryk@grande.com.sg

Signature Page to Guaranty of
The Grande Holdings Limited

EX-99.1

Exhibit 99.1

NEWS & INFORMATION

FOR:	EMERSON RADIO CORP.
	9 Entin Road
	Parsippany, NJ 07054-0430
CONTACT:	Emerson Radio Corp.          or:	Investor Relations:
	John D. Florian	Robert Maffei
	Chief Financial Officer — North America	Investor Relations Manager
	(973) 428-2044	(973) 428-2098
		Brainerd Communicators
		Brad Edwards or
		Jonathan Schaffer
		(212) 986-6667

Wednesday, February 21, 2007

EMERSON RADIO ANNOUNCES FISCAL 2007 THIRD QUARTER RESULTS BUT WILL NOT TIMELY
FILE QUARTERLY REPORT ON FORM 10-Q
~ Board Member Greenfield Pitts Appointed as Chief Financial Officer
Discussions Continuing with Lead Bank Concerning Waiver of Covenant Violations by Company~

PARSIPPANY, N.J. — February 21, 2007 — Emerson Radio Corp. (AMEX:MSN) today reported preliminary financial results for its third fiscal quarter and nine months ended December 31, 2006. The Company also announced today that it has delayed the filing of its 10-Q with the Securities and Exchange Commission for the reasons set forth below.

Net revenues for the third quarter of fiscal 2007 increased $12.8 million, or 16.7%, to $89.3 million compared to $76.5 million during the same period last year. Revenue growth in the third quarter was driven primarily by holiday promotional item sales and increased sales of Emerson^® branded products including the Company’s new iPod accessories line. Net income increased to $3.7 million, or $0.14 per diluted share, for the third quarter of fiscal 2007, compared to net income of $1.4 million, or $0.05 per diluted share, in last year’s third quarter.

Net revenues for the nine months ended December 31, 2006, increased 26.7% to $244.2 million compared to $192.7 million during the same period last year. Income from continuing operations increased to $8.1 million, or $0.30 per diluted share, for the first nine months of fiscal 2007, compared to $2.8 million, or $0.10 per diluted share, last year.

Mr. Eduard Will, Emerson Radio Corp. President — North American Operations, commented, “Emerson’s improving financial results are being driven by key existing performers like our iPod^® accessories and home appliance lines, particularly microwaves, as well as entry into new appliance categories. In addition to the benefits of our growing revenue base, profitability gains reflect our success in increasing efficiencies and streamlining operations wherever possible. Year to date, our revenues grew nearly 26.7% over the prior year nine-month period, and our pre-tax income reached $11.9 million during such period versus $3.7 million for the entire 2006 fiscal year.

“Emerson Radio will pursue multiple avenues for continuing this performance growth, including new product lines in home appliances and high-potential digital consumer electronics, as well as an expansion of its brand portfolio,” added Mr. Will. “In new product categories, the Company is seeking to leverage its strong distribution within major mass merchandising channels and its reputation for quality and affordability. A key strategic opportunity for us is flat panel televisions, and our promotional sales this past holiday season represent our initial foray into this market. In January, we continued the momentum with promotional sales geared towards Super Bowl customers under our revitalized H.H. Scott brand name. Also, in January, we announced our entry into the emerging HD radio segment with the grant of a non-exclusive technology license from iBiquity Digital Corporation to produce and sell HD Radio digital audio receivers for the North American consumer electronics market. We expect to bring our first HD Radio receivers to market this year.”

Emerson noted that it is expanding its home appliances line and will unveil new offerings at the International Home & Housewares Show in March. In the third quarter, the Company also strengthened its themed product category with the addition of the Barbie licensing agreement with Mattel, which was announced at the New York Toy Fair last week. Barbie products under the new agreement will be in stores nationally in April 2007. The Company’s license agreement for the Nickelodeon name, trademark and logo

will expire on March 31, 2007 and the Company will have the right to sell off product using the Nickelodeon name, trademark and logo for an additional 90 days following such termination.

“As for our brand portfolio, we are also excited to be gaining access to the valuable Akai, Sansui and Nakamichi brands of our controlling shareholder, Grande Group,” added Mr. Will. “Emerson expects to assume responsibility for marketing products for these brands in the North American market. These brands are individually well regarded in key Asian and European markets and have past successful track records in the U.S. With our design, procurement, distribution and marketing capabilities, they could emerge as an attractive, incremental driver of future growth.”

Greenfield Pitts Appointed CFO

Separately, the Company announced today the appointment of Greenfield Pitts to the position of Chief Financial Officer of Emerson Radio Corp. Mr. Pitts, 56, has served as a director of the Company since March 2006 and will retain his board seat. From 2001-2006, Mr. Pitts served as a Director, Asian Corporate Finance, for Wachovia Securities in Hong Kong and from 1997-2001, Mr. Pitts served as the Head of a Strategic Alliance with HSBC Holdings PLC and Wachovia Bank. Mr. Pitts has a 33-year background in international banking and was associated with Wachovia Bank, the Company’s present lender, for more than 25 years, with assignments in London, Atlanta and Hong Kong. As a result of the appointment of Mr. Pitts, the Company named (i) Michael A.B. Binney, the Company’s President — International Operations, as the Company’s acting Controller while it conducts a search for a Controller, (ii) John D. Florian, the Company’s former Deputy Chief Financial Officer and Controller (principal financial and accounting officer), as Chief Financial Officer, Emerson North American Operations, and (iii) Ivan Lau, as Chief Financial Officer, Emerson Asian Operations, formerly the Company’s Controller in Asia, a role he has served in since February 2006.

Christopher Ho, Chairman of Emerson Radio Corp., commented, “We are delighted that Greenfield has agreed to accept this additional responsibility in support of the Company’s growth. Greenfield’s comprehensive understanding of Emerson and of management’s objectives, along with his extensive experience as a banker in Asia, should enable him to excel in his role as CFO of Emerson Radio.”

Failure to timely file Quarterly Report on Form 10-Q with Securities and Exchange Commission

The Company also announced today that, although it has issued a press release setting forth statement of operations for the nine months ended December 31, 2006, it was unable, for the reasons set forth in the following paragraph, to file its full Form 10-Q for December 31, 2006 (the “Form 10-Q”) with the Securities and Exchange Commission by the required deadline. The Form 10-Q will contain more detailed information about the Company’s operating results for the quarter, such as footnotes to the Company’s financial statements, including a discussion of certain related party transactions, and management’s discussion and analysis of the Company’s operating results for the period.

During the quarter ended December 31, 2006, the Company and affiliates of Grande Holdings Limited, the beneficial owner of approximately 50.8% of the Company’s outstanding common stock (Grande) entered into a number of related party transactions that resulted in loans and letters of credit under the Company’s credit facility being issued for the benefit of affiliates of Grande. These loans are (i) subject to a repayment schedule that commences on April 1, 2007 and ends on June 3, 2007 as set forth in a promissory note dated February 21, 2007, in the principal amount of $23.5 million executed by four affiliates of Grande and (ii) guaranteed by Grande. The Company’s Audit Committee recently conducted an initial review of these transactions and concluded that these financing transactions (i) were not made on substantially the same terms, including interest rates and collateral, and return on investment, as those prevailing at the time for comparable transactions with unrelated persons, and (ii) involved more than the normal risk of collectibility. In addition, the review of the transactions revealed material weaknesses in the Company’s internal controls. The deficiencies that were uncovered related to (i) one or more senior managers failing to follow the Company’s existing internal controls over purchases and sales of inventory and utilization of the Company’s credit facilities and (ii) the lack of documentation related to such related party transactions. These events have also raised concerns about the Company’s overall control environment. Although such events may not result in any adjustment to the Company’s financial statements, such events reflect material weaknesses with respect to the Company internal controls.

The Company’s Audit Committee is continuing its independent review into certain related party transactions entered into by the Company, including its subsidiaries, with affiliates of Grande from December 2005 to the present, and internal controls related to such transactions.

As part of the Company’s remedial actions, on February 20, 2007, the Board of Directors appointed a committee of the Board of Directors comprised of Adrian Ma, the Company’s Chief Executive Officer, Greenfield Pitts, the Company’s Chief Financial Officer, Michael A.B. Binney, the Company’s President — International Operations, and Eduard Will, the Company’s President — North American Operations, to internally review and approve all related party transactions in an amount in excess of $500,000. Following review and approval by this newly formed committee, all such related party transactions will be reviewed and approved by the Company’s Audit Committee.

Discussions with Lead Bank Concerning Waivers of Covenant Violations

As a result of the related party transactions described above between the Company and affiliates of Grande, the Company may be deemed to be in breach of certain covenants contained in the Company’s credit facility, including a covenant restricting the Company from lending money and from entering into related party transactions without the consent of its lender. Although the Company has discussed such events and transactions with its lender, the lender has not provided the Company with a written waiver of such potential events of default and has reserved all rights and remedies available to it under the credit facility. The Company intends to meet with representatives of its lender over the next few days, but there is no assurance that the lender will agree to provide a waiver. The Company presently has approximately $7.8 million of letters of credit outstanding under its $45 million credit facility. In the event the lender elected to declare such events an event of default, the lender could accelerate repayment of all outstanding amounts due under the facility. In addition, the Company would be required to write-off deferred financing costs in the amount of $330,000. While the Company does not anticipate any difficulty in repaying such amounts, it is likely that, that in the absence of future credit commitments from its current or a future lender, it would be difficult for the Company to operate its business as it has done in the past.

American Stock Exchange

Because the Company did not timely file its Form 10-Q, it is not in compliance with Section 1101 of the American Stock Exchange (“AMEX”) Company Guide (the “Company Guide”). Although Emerson notified AMEX, it has not yet received a notice from AMEX with respect to such non-compliance. The Company

intends to promptly take all necessary actions to regain compliance with the AMEX requirements by filing its Form 10-Q as soon as reasonably practicable, however, there can be no assurance that the Company will be able to regain compliance with AMEX requirements and maintain its AMEX listing.

Other Recent Events

In January, Emerson was advised by The Grande (nominees) LTD., a subsidiary of Grande that it has determined not to pursue at this time its proposal to sell to Emerson a 51% interest in Capetronic Group, Ltd., a consumer electronics manufacturer. The proposal, which was initially made to the Company on November 8, 2006, contemplated a closing of the proposed sale no later than December 31, 2006 and a purchase price of $108 million. The Grande subsidiary reserved its right to make a similar offer to the Company in the future. Grande beneficially owns approximately 50.8% of Emerson’s common shares outstanding.

8-K

The Company expects to file a current report on Form 8-K containing the information included in this press release later today.

About Emerson Radio Corporation
Emerson Radio Corporation (AMEX:MSN), founded in 1948, is headquartered in Parsippany, N.J. The Company designs, markets and licenses, worldwide, full lines of televisions and other video products, microwaves, clocks, radios, audio and home theater products. Emerson’s web site is www.emersonradio.com

Forward Looking Statements
This release contains “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including the Company’s ability to obtain a waiver from its lender and its ability to maintain its AMEX listing. Forward-looking statements reflect management’s current knowledge, assumptions, judgment and expectations regarding future performance or events. Although management believes that the expectations reflected in such statements are reasonable, they give no assurance that such expectations will prove to be correct and you should be aware that actual results could differ materially from those contained in the forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, including the risk factors detailed in the Company’s reports as filed with the Securities and Exchange Commission. The Company assumes no obligation to update the information contained in this news release.

EMERSON RADIO CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except earnings per share data)

	Three Months Ended				Nine Months Ended
	December 31				December 31
	2006		2005		2006		2005
Net revenues	$	89,339	$	76,514	$	244,168	$	192,737
Costs and expenses:
Cost of sales		76,481		66,555		210,977		167,577
Cost of sales-related party		12		—		33		—
Other operating costs and expenses		1,330		1,823		4,355		4,663
Selling, general and administrative expenses (exclusive of non-cash compensation shown below)		5,402		5,588		16,208		14,810
Acquisition costs		—		—		21		—
Non-cash compensation		83		90		138		260
		83,307		74,056		231,732		187,310
Operating income		6,032		2,458		12,436		5,427
Interest expense, net		457		370		564		976
Income before income taxes and discontinued operations		5,575		2,088		11,872		4,451
Provision for income taxes		1,880		693		3,792		1,638
Income from continuing operations		3,695		1,395		8,080		2,813
Income from discontinued operations, net of tax		—		—		—		272
Gain on sale of Sport Supply Group, Inc., net of tax		—		—		—		12,646
Income from discontinued operations		—		—		—		12,918
Net income	$	3,695	$	1,395	$	8,080	$	15,731
Basic net income per share:
Continuing operations	$	0.14	$	0.05	$	0.30	$	0.10
Discontinued operations		—		—		—		0.48
	$	0.14	$	0.05	$	0.30	$	0.58
Diluted net income per share:
Continuing operations	$	0.14	$	0.05	$	0.30	$	0.10
Discontinued operations		—		—		—		0.48
	$	0.14	$	0.05	$	0.30	$	0.58
Weighted average shares outstanding:
Basic		27,097		27,048		27,080		27,089
Diluted		27,117		27,154		27,121		27,185