Algorhythm (RIME) 10-Q 19 Aug 20 2021 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Jun. 30, 2020	Aug. 17, 2020
Cover [Abstract]
Entity Registrant Name	SINGING MACHINE CO INC
Entity Central Index Key	0000923601
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Amendment Flag	false
Current Fiscal Year End Date	--03-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	No
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		38,557,643
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2021

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2020	Mar. 31, 2020
Current Assets
Cash	$ 1,804,593	$ 345,200
Accounts receivable, net of allowances of $299,939 and $337,461, respectively	1,773,300	1,860,500
Due from banks	267,664	2,388,438
Accounts receivable related party - Winglight Pacific, Ltd		100,000
Insurance claim receivable		1,268,463
Inventories, net	6,870,220	7,601,277
Prepaid expenses and other current assets	214,157	252,473
Deferred financing costs	70,653	3,333
Total Current Assets	11,000,587	13,819,684
Property and equipment, net	745,556	771,349
Deferred tax assets	1,364,558	1,285,721
Operating Leases - right of use assets	2,618,513	573,874
Other non-current assets	114,422	150,509
Total Assets	15,843,636	16,601,137
Current Liabilities
Accounts payable	2,518,487	5,041,610
Accrued expenses	1,008,161	1,529,168
Revolving line of credit - Iron Horse Credit	1,400,000
Refunds due to customers	391,088	806,475
Reserve for sales returns	380,183	1,224,000
Current portion of finance leases	13,812	14,953
Current portion of installment notes	64,279	63,098
Current portion of note payable - Paycheck Protection Plan	172,685
Current portion of operating lease liabilities	758,910	321,389
Total Current Liabilities	7,109,321	9,502,409
Finance leases, net of current portion		2,550
Installment notes, net of current portion	263,531	283,193
Note payable - Payroll Protection Plan, net of current portion	271,945
Operating lease liabilities	1,914,921	322,263
Subordinated related party debt - Starlight Marketing Development, Ltd.	802,659	802,659
Total Liabilities	10,362,377	10,913,074
Commitments and Contingencies
Shareholders' Equity
Preferred stock, $1.00 par value; 1,000,000 shares authorized; no shares issued and outstanding
Additional paid-in capital	19,729,043	19,729,043
Accumulated deficit	(14,633,360)	(14,426,556)
Total Shareholders' Equity	5,481,259	5,688,063
Total Liabilities and Shareholders' Equity	15,843,636	16,601,137
Common Class A [Member]
Shareholders' Equity
Common stock value
Common Class B [Member]
Shareholders' Equity
Common stock value	385,576	385,576
Starlight Consumer Electronics Co.Ltd. [Member]
Current Liabilities
Due to related party	14,400	14,400
Starlight Electronics Co., Ltd [Member]
Current Liabilities
Due to related party	272,300	372,300
Starlight R&D, Ltd. [Member]
Current Liabilities
Due to related party	$ 115,016	$ 115,016

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2020	Mar. 31, 2020
Allowance for doubtful accounts receivable, net	$ 299,939	$ 337,461
Preferred stock, par value	$ 1	$ 1
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common Class A [Member]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000	100,000
Common stock, shares issued
Common stock, shares outstanding
Common Class B [Member]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	38,557,643	38,557,643
Common stock, shares outstanding	38,557,643	38,557,643

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Net Sales	$ 3,323,543	$ 4,809,040
Cost of Goods Sold	2,089,531	3,821,334
Gross Profit	1,234,012	987,706
Operating Expenses
Selling expenses	570,553	659,293
General and administrative expenses	1,363,290	1,371,056
Depreciation	71,107	59,461
Total Operating Expenses	2,004,950	2,089,810
Loss from Operations	(770,938)	(1,102,104)
Other Income (Expenses)
Gain from damaged goods insurance claim	131,292
Gain from extinguishment of accounts payable	390,000
Interest expense	(29,590)	(2,875)
Finance costs	(6,405)	(3,333)
Total Other Income (Expenses), net	485,297	(6,208)
Loss Before Income Tax Benefit	(285,641)	(1,108,312)
Income Tax Benefit	78,837	238,731
Net Loss	$ (206,804)	$ (869,581)
Net Loss per Common Share
Basic and Diluted	$ (0.01)	$ (0.02)
Weighted Average Common and Common Equivalent Shares:
Basic and Diluted	38,557,643	38,469,813

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities
Net loss	$ (206,804)	$ (869,581)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation	71,107	59,461
Amortization of deferred financing costs	6,405	3,333
Change in inventory reserve	32,696
Change in allowance for bad debts	(37,522)	10,852
Stock based compensation		17,502
Change in net deferred tax assets	(78,837)	(238,731)
Gain from extinguishment of accounts payable	390,000
Changes in operating assets and liabilities:
Accounts receivable	124,722	(3,103,409)
Due from banks	2,120,774	2,236,779
Accounts receivable - related parties	100,000	(78,432)
Insurance receivable	1,268,463
Inventories	698,361	(2,535,439)
Prepaid expenses and other current assets	38,316	(543,489)
Other non-current assets	36,087	45,786
Accounts payable	(2,913,123)	5,102,073
Accrued expenses	(521,007)	(192,221)
Due to related parties	(100,000)	100,499
Customer deposits		203,175
Refunds due to customers	(415,387)	268,982
Reserve for sales returns	(843,817)	(448,477)
Operating lease liabilities, net of operating leases - right of use assets	(14,460)	(13,667)
Net cash (used in) provided by operating activities	(244,026)	24,996
Cash flows from investing activities
Purchase of property and equipment	(45,314)	(159,586)
Net cash used in investing activities	(45,314)	(159,586)
Cash flows from financing activities
Net proceeds from revolving line of credit - PNC Bank		627,007
Net proceeds from revolving line of credit - Iron Horse Credit	1,400,000
Proceeds from note payable - Payroll Protection Program	444,630
Payment of bank term note		(125,000)
Payment of deferred financing costs	(73,725)
Payments on installment notes	(18,481)
Proceeds from subscription receivable		2,200
Payments on finance leases	(3,691)	(3,549)
Net cash provided by financing activities	1,748,733	500,658
Net change in cash	1,459,393	366,068
Cash at beginning of period	345,200	211,408
Cash at end of period	1,804,593	577,476
Supplemental disclosures of cash flow information:
Cash paid for interest	12,971	1,701
Operating leases - right of use assets initial adoption		1,108,330
Operating lease liabilities - initial adoption		1,234,368
Operating leases - right of use assets and lease liabilities at inception of lease	$ 2,184,105

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid in Capital [Member]	Subscriptions Receivable [Member]	Accumulated Deficit [Member]	Total
Balance at Mar. 31, 2019	$ 384,648	$ 19,687,263	$ (2,200)	$ (11,569,556)	$ 8,500,155
Balance, shares at Mar. 31, 2019	38,464,753
Net loss				(869,581)	(869,581)
Employee compensation-stock option		5,002			5,002
Collection of subscription receivable			2,200		2,200
Issuance of common stock - directors	$ 329	12,171			12,500
Issuance of common stock - directors, shares	32,890
Balance at Jun. 30, 2019	$ 384,977	19,704,436		(12,439,137)	7,650,276
Balance, shares at Jun. 30, 2019	38,497,643
Balance at Mar. 31, 2020	$ 385,576	19,729,043		(14,426,556)	5,688,063
Balance, shares at Mar. 31, 2020	38,557,643
Net loss				(206,804)	(206,804)
Balance at Jun. 30, 2020	$ 385,576	$ 19,729,043		$ (14,633,360)	$ 5,481,259
Balance, shares at Jun. 30, 2020	38,557,643

Basis of Presentation

Basis of Presentation	3 Months Ended
	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	NOTE 1 – BASIS OF PRESENTATION OVERVIEW The Singing Machine Company, Inc., a Delaware corporation (the “Company”, “SMC”, “The Singing Machine”) and its three wholly-owned subsidiaries SMC (Comercial Offshore De Macau) Limitada (“Macau Subsidiary”), SMC Logistics, Inc. (“SMC-L”) and SMC-Music, Inc.(“SMC-M”) are primarily engaged in the development, marketing, and sale of consumer karaoke audio systems, accessories, musical instruments and musical recordings. The products are sold by SMC to retailers and distributors for resale to consumers.

Liquidity

Liquidity	3 Months Ended
	Jun. 30, 2020
Liquidity
Liquidity	NOTE 2 – LIQUIDITY The Company reported a net loss of approximately $207,000 for the three months ended June 30, 2020 as compared to a net loss of approximately $870,000 for the three months ended June 30, 2019. In August 2019, a major customer received goods that were significantly water damaged due to excess moisture absorbed in pallets shipped by the factory. As a result we incurred a loss in cash flow of approximately $1,559,000 in revenue and approximately $849,000 in additional out of pocket expenses to retrieve, inspect, warehouse and properly destroy the goods during Fiscal 2020. As of this filing we have we have recovered approximately $2,245,000 from our cargo insurance coverage consisting of settlement of approximately $1,268,000 in insurance claim receivable, approximately $131,000 reflected as gain from damaged goods insurance claim in the condensed consolidated statement of operations for the three months ended June 30, 2020 with the remaining gain on recovery of approximately $846,000 subsequently received in July 2020 which will be recognized as a gain from damaged goods insurance claim in the next quarter ending September 30, 2020. We also secured vendor invoice credits of $390,000 from the factory that caused the damage which is reflected as gain from extinguishment of accounts payable in the condensed consolidated statement of operations for the three months ended June 30, 2020. On June 16, 2020, the Company executed an Intercreditor Revolving Credit Facility on eligible accounts receivable and inventory which replaced a revolving credit facility with PNC bank that was terminated on June 16, 2020. The Company signed a two-year Loan and Security Agreement for a $10,000,000 financing facility (“Crestmark Facility”) with Crestmark Bank (“Crestmark”) on eligible accounts receivable. Further, the Company also executed a two-year Loan and Security Agreement (“IHC Facility”) with Iron Horse Credit (“IHC”) for up to $2,500,000 in inventory financing. The Intercreditor Revolving Loan Facility will expire on June 15, 2022. The Company has adequate cash on hand and cash available on its Intercreditor Revolving Credit Facility (approximately $2,600,000 as of the date of this filing) to meet all obligations during this off-peak season. On May 5, 2020, the Company received loan proceeds from Crestmark in the amount of approximately $444,000 under the Paycheck Protection Program (“PPP”). The PPP was established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest may be forgivable to the extent the Company uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. Management is confident that the availability of cash from our Intercreditor Revolving Credit Facility, proceeds from the insurance claim settlement, proceeds from the PPP loan and our projections to reduce excess inventory during the next year will be adequate to meet the Company’s liquidity requirements for at least the next twelve months.

Summary of Accounting Policies

Summary of Accounting Policies	3 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Summary of Accounting Policies	NOTE 3 – SUMMARY OF ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION The condensed consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in the condensed consolidated financial statements. The accompanying unaudited condensed financial statements for the three months ended June 30, 2020 and 2019 have been prepared in accordance with generally accepted accounting principles applicable to interim financial information and the requirements of Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States for complete consolidated financial statements. In the opinion of management, such condensed consolidated financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair presentation of the condensed consolidated financial position and the condensed consolidated results of operations. The condensed consolidated results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet information as of March 31, 2020 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2020. The interim condensed consolidated financial statements should be read in conjunction with that report. USE OF ESTIMATES The Singing Machine makes estimates and assumptions in the ordinary course of business relating to sales returns and allowances, warranty reserves, inventory reserves and reserves for promotional incentives that affect the reported amounts of assets and liabilities and of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Future events and their effects cannot be determined with absolute certainty; therefore, the determination of estimates requires the exercise of judgment. Historically, past changes to these estimates have not had a material impact on the Company’s financial condition. However, circumstances could change which may alter future expectations. COLLECTIBILITY OF ACCOUNTS RECEIVABLE The Singing Machine’s allowance for doubtful accounts is based on management’s estimates of the creditworthiness of its customers, current economic conditions and historical information, and, in the opinion of management, is believed to be in an amount sufficient to respond to normal business conditions. Management sets 100% reserves for customers in bankruptcy and other reserves based upon historical collection experience. The Company is subject to chargebacks from customers for cooperative marketing programs, defective returns, return freight and handling charges that are deducted from open invoices and reduce collectability of open invoices. Should business conditions deteriorate or any major customer default on its obligations to the Company, this allowance may need to be significantly increased, which would have a negative impact on operations. FOREIGN CURRENCY TRANSLATION The functional currency of the Macau Subsidiary is the Hong Kong dollar. The financial statements of the subsidiary are translated to U.S. dollars using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are recorded in the condensed consolidated statement of operations and translations are recorded in a separate component of shareholders’ equity. Any such amounts were not material during the periods presented. Concentration of Credit Risk At times, the Company maintains cash in United States bank accounts that are more than the Federal Deposit Insurance Corporation insured amounts. The Company also maintains cash balances in foreign financial institutions. The amounts at foreign financial institutions at June 30, 2020 and March 31, 2020 are approximately $70,000 and $217,000, respectively. Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of accounts receivable. INVENTORY Inventories are comprised primarily of electronic karaoke equipment, microphones and accessories, and are stated at the lower of cost or net realizable value, as determined using the first in, first out method. Inventories also include an estimate for the net realizable value of expected future inventory returns due to warranty and allowance programs. As of June 30, 2020 and March 31, 2020 the estimated amounts for these future inventory returns were approximately $784,000 and $1,367,000, respectively. The Company reduces inventory on hand to its net realizable value on an item-by-item basis when it is apparent that the expected realizable value of an inventory item falls below its original cost. A charge to cost of sales results when the estimated net realizable value of specific inventory items declines below cost. Management regularly reviews the Company’s investment in inventories for such declines in value. As of June 30, 2020 and March 31, 2020 the Company had inventory reserves of approximately $467,000 and approximately $434,000, respectively for estimated excess and obsolete inventory. DEFERRED FINANCING COSTS The Company classifies deferred financing costs incurred when obtaining or renewing revolving credit facilities as assets in the accompanying condensed consolidated balance sheets as it is likely that during certain periods during non-peak season there will be no balance due on these credit facilities to offset the deferred financing costs. In June 2020, the Company incurred approximately $74,000 in deferred financing costs associated with the closing of the Crestmark Facility and the IHC Facility which are being amortized over the term of the agreement and were classified as current assets on the accompanying condensed consolidated balance sheets. LONG-LIVED ASSETS The Company reviews long-lived assets for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recoverable. If the undiscounted future cash flows attributable to the related assets are less than the carrying amount, the carrying amounts are reduced to fair value and an impairment loss is recognized in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.” LEASES The Company follows FASB ASC 842, “Leases”. The ASC requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than twelve months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. (See Note 7– LEASES). The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date. The liability is equal to the present value of the remaining minimum lease payments. The asset is based on the liability, subject to certain adjustments. Operating leases result in straight-line expense (similar to operating leases under the prior accounting standard) while finance leases result in a front-loaded expense pattern (similar to capital leases under the prior accounting standard). As the interest rate implicit in the Company’s operating leases is not readily determinable, the Company utilizes its incremental borrowing rate to discount the lease payments. The Company utilizes the implicit rate for its finance leases. PROPERTY AND EQUIPMENT Property and equipment are stated at cost, less accumulated depreciation. Expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to their estimated useful lives using accelerated and straight-line methods. FAIR VALUE OF FINANCIAL INSTRUMENTS We follow FASB ASC 825, Financial Instruments, which requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate that value. For purposes of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts of the Company’s short-term financial instruments, including accounts receivable, accounts payable, accrued expenses, refunds due to customers and due to/from related parties approximates fair value due to the relatively short period to maturity for these instruments. The carrying amounts on the subordinated debt to Starlight Marketing Development, Ltd. (related party), finance leases approximate fair value due to the relatively short period to maturity and related interest accrued at a rate similar to market rates. The carrying amount on the revolving lines of credit approximate fair value due the relatively short period to maturity and related interest accrued at market rates. The carrying amount on the PPP note payable of credit approximate fair value due the relatively short period to maturity as management intends to apply for total forgiveness of the loan in the current fiscal year. REVENUE RECOGNITION AND RESERVE FOR SALES RETURNS The Company recognizes revenue in accordance with FASB ASC 606, “Revenue from Contracts with Customers”. All revenue is generated from contracts with customers. The Company recognizes revenue when the goods are delivered and control of the goods sold is transferred to the customer, in an amount, referred to as the transaction price, that reflects the consideration to which the Company is expected to be entitled in exchange for those goods. The Company determines revenue recognition utilizing the following five steps: (1) identification of the contract with a customer, (2) identification of the performance obligations in the contract (promised goods or services that are distinct), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations, and (5) recognition of revenue when, or as, the Company transfers control of the product or service for each performance obligation. The Company’s contracts with customers consist of one performance obligation (the sale of the Company’s products). The Company’s contracts have no financing elements, payment terms are less than 120 days and have no further contract asset or liability obligations once control of goods is transferred to the customer. Revenue is recorded in the amount of consideration the Company expects to receive for the sale of these goods. Costs incurred in fulfilling contracts with customers include administrative costs associated with the procurement of goods are included in general and administrative expenses, in-bound freight costs are included in the cost of goods sold and accrued sales representative commissions are included in selling expenses in the accompanying condensed consolidated statements of operations as our underlying customer agreements are less than one year. The Company disaggregates revenues by product line and major geographic region as most of its revenue is generated by the sales of karaoke hardware and the Company has no other material business segments (See Note 9 – GEOGRAPHICAL INFORMATION). While the Company generally does not allow products to be returned, the Company does provide for variable consideration contingent upon the occurrence of uncertain future events. Variable consideration is estimated at the expected value or at the most likely amount depending on the type of consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company estimates variable consideration under our return allowance programs for goods returned to the customer for various reasons, whereby a sales return reserve is recorded based on historic return amounts, specific events as identified and management estimates. The Company’s reserve for sales returns were approximately $380,000 and $1,224,000 as of June 30, 2020 and March 31, 2020, respectively. Revenue is derived from four different major product lines. Disaggregated approximate revenue from these product lines for the three months ended June 30, 2020 and 2019 consisted of the following: Revenue by Product Line Three Months Ended Product Line June 30, 2020 June 30, 2019 Classic Karaoke Machines $ 2,275,000 $ 4,156,000 Download Karaoke Machines 323,000 141,000 SMC Kids Toys 146,000 140,000 Music and Accessories 579,000 372,000 Total Net Sales $ 3,323,000 $ 4,809,000 SHIPPING AND HANDLING COSTS Shipping and handling costs are performed by both the Company and third party logistics companies. Shipping and handling activities are performed before the customer obtains control of the goods sold to them and are considered activities to fulfill the Company’s promise to transfer the goods. For the three months ended June 30, 2020 and 2019 shipping and handling expenses were approximately $83,000 and $89,000, respectively. These expenses are classified as a component of selling expenses in the accompanying condensed consolidated statements of operations. STOCK BASED COMPENSATION The Company follows the provisions of the FASB ASC 718-20, “Compensation – Stock Compensation Awards Classified as Equity”. ASC 718-20 requires all share-based payments to employees including grants of employee stock options, be measured at fair value and expensed in the condensed consolidated statements of operations over the service period (generally the vesting period). The Company uses the Black-Scholes option valuation model to value stock options. Employee stock option compensation expense for the three months ended June 30, 2020 and 2019 includes the estimated fair value of options granted, amortized on a straight-line basis over the requisite service period for the entire portion of the award. For the three months ended June 30, 2020 and 2019, the stock option expense was approximately $0 and $5,000, respectively. ADVERTISING Costs incurred for producing and publishing advertising of the Company are charged to operations the first time the advertising takes place. The Company has entered into cooperative advertising agreements with its major customers that specifically indicate that the customer must spend the cooperative advertising fund upon the occurrence of mutually agreed events. The percentage of the cooperative advertising allowance ranges from 1% to 13% of the purchase. The customers must advertise the Company’s products in the customer’s catalog, local newspaper and other advertising media. The customer must submit the proof of the performance (such as a copy of the advertising showing the Company’s products) to the Company to request for the allowance. The customer does not have the ability to spend the allowance at their discretion. The Company believes that the identifiable benefit from the cooperative advertising program and the fair value of the advertising benefit is equal or greater than the cooperative advertising expense. Advertising expense for the three months ended June 30, 2020 and 2019 was approximately $321,000 and $361,000, respectively. As of June 30, 2020 and March 31, 2020 there was an accrual for cooperative advertising allowances of $395,000 and $685,000, respectively. These amounts were a component of accrued expenses in the condensed consolidated balance sheets. RESEARCH AND DEVELOPMENT COSTS Research and development costs are charged to results of operations as incurred. These expenses are shown as a component of selling, general and administrative expenses in the condensed consolidated statements of income. For the three months ended June 30, 2020 and 2019, these amounts totaled approximately $13,000 and $5,000, respectively. INCOME TAXES T h C o m p n f o ll o w t h p o v isi on of F A S A S 74 A o un t i n f o n o m T x n d t h ss n li b ili t m t h o o A S 740 d f t s s t n li b ilit i og n i f o t h u t u t o n s q u n e tt i b u t t d i ff e n b t w e t h i n a n i st t e m e n r y i ng a m ou n t o x i s ti n s s t a n li b iliti n t h i s p t i v t b s f t s s e t n li b iliti e m s u u s i n e n t t t x p t t pp l t t a x b l i n o m i t h y i w h i t h o s t e m po r d i ff e n e x p t t b o v o s t t l d n d A S 740 t he f o d f t ss t a n li b iliti o h n g i t t i o gn i i i n o m i t h p i o t h i n l u d t h n t m e n d t i i m o li k l t h n o t h s o m po ti o o d f t ss w i l n o b li d v l u t i o ll o w a n i og n i d The Company analyzes its deferred tax assets and liabilities at the end of each interim period and, based on management’s best estimate of its full year effective tax rate, recognizes cumulative adjustments to its deferred tax assets and liabilities. For the three months ended June 30, 2020 and 2019 we estimated our effective tax rate to be approximately 27.6% and 21.5%, respectively. As of June 30, 2020, and March 31, 2020, the Singing Machine had net deferred tax assets of approximately $1,365,000 and $1,286,000, respectively. The Company recorded an income tax benefit of approximately $79,000 and $239,000 for the three months ended June 30, 2020 and 2019, respectively. The Company recognizes a liability for uncertain tax positions. An uncertain tax position is defined as a position in a previously filed tax return or a position expected to be taken in a future tax return that is not based on clear and unambiguous tax law and which is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company measures the tax benefits recognized based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. As of June 30, 2020, there were no uncertain tax positions that resulted in any adjustment to the Company’s provision for income taxes. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. The Company currently has no liabilities recorded for accrued interest or penalties related to uncertain tax provisions. COMPUTATION OF LOSS PER COMMON SHARE Loss per common share is computed by dividing the net loss by the weighted average of common shares outstanding during the period. As of June 30, 2020 and 2019 total potential dilutive shares from common stock options amounted to 2,230,000 and 2,310,000 shares, respectively. These shares were not included in the computation of diluted earnings per share for the three months ended June 30, 2020 and 2019 because their effect was anti-dilutive. RECENT ACCOUNTING PRONOUNCEMENTS In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740). In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses” (Topic 326)

Inventories, Net

Inventories, Net	3 Months Ended
	Jun. 30, 2020
Inventory Disclosure [Abstract]
Inventories, Net	NOTE 4 - INVENTORIES, NET Inventories are comprised of the following components: June 30, March 31, 2020 2020 Finished Goods $ 5,869,000 $ 6,595,000 Inventory in Transit 684,000 73,000 Estimated Cost of Future Returns 784,000 1,367,000 Subtotal 7,337,000 8,035,000 Less:Inventory Reserve 467,000 434,000 Inventories, net $ 6,870,000 $ 7,601,000

Property and Equipment

Property and Equipment	3 Months Ended
	Jun. 30, 2020
Property, Plant and Equipment [Abstract]
Property and Equipment	NOTE 5 – PROPERTY AND EQUIPMENT A summary of property and equipment is as follows: USEFUL June 30, March 31, Computer and office equipment 5-7 years $ 445,000 $ 445,000 Furniture and fixtures 7 years 98,000 98,000 Warehouse equipment 7 years 195,000 195,000 Molds and tooling 3-5 years 1,726,000 1,680,000 2,464,000 2,418,000 Less: Accumulated depreciation 1,718,000 1,647,000 $ 746,000 $ 771,000 Depreciation expense for the three months ended June 30, 2020 and 2019 was approximately $71,000 and $59,000, respectively.

Bank Financing

Bank Financing	3 Months Ended
	Jun. 30, 2020
Debt Disclosure [Abstract]
Bank Financing	NOTE 6 – BANK FINANCING Intercreditor Revolving Credit Facility Crestmark Bank and Iron Horse Credit On June 16, 2020, the Company executed an Intercreditor Revolving Credit Facility on eligible accounts receivable and inventory which replaced the Company’s previous revolving credit facility with PNC Bank which was terminated on June 16, 2020. The Company signed a two-year Loan and Security Agreement for a $10.0 million financing facility with Crestmark Bank on eligible accounts receivable. The outstanding loan balance cannot exceed $10.0 million during peak selling season between July 1 and December 31and is reduced to a maximum of $5.0 million between January 1 and July 31. Costs associated with closing of the Intercreditor Revolving Credit Facility of approximately $74,000 are deferred and are being amortized over the term of the agreement. During the three months ended June 30, 2020 the Company incurred amortization expense of approximately $3,000 associated with the amortization of deferred financing costs from the Intercreditor Revolving Credit Facility. Under the Crestmark Facility: ● Advance rate shall not exceed 70% of Eligible Accounts Receivable aged less than 90 days from invoice date. ● Crestmark shall maintain a base dilution reserve of 1% for each 1% of dilution over 15%. ● Crestmark will implement an availability block of 20% of amounts due on Iron Horse Intercreditor Revolving Line of Credit. ● Mandatory pay-down of the loan to zero in January and February each year. The Crestmark Facility is secured by a security interest in all assets including a first security interest in Accounts Receivable and Inventory. Notwithstanding the foregoing, Crestmark shall subordinate its first security interest in inventory to IHC as agreed between all parties. The Crestmark Facility bears interest at the Wall Street Journal Prime Rate plus 5.50% with a floor of 8.75%. Interest and Maintenance Fees shall be calculated on the higher of the actual average monthly loan balance from the prior month or a minimum average loan balance of $2,000,000. There was no interest expense on the Crestmark Facility for the three months ended June 30, 2020 and 2019. The Crestmark Facility expires on June 15, 2022. There was no outstanding balance on the Crestmark Facility as of June 30, 2020. In addition, the Company also executed a two-year Loan and Security Agreement with IHC for up to $2,500,000 in inventory financing. Under the IHC Facility: ● Advance rate shall not exceed the lower of (a) 70% of the inventory cost or (b) 85% of Net Orderly Liquidation Value (NOLV) as determined by an independent third-party appraiser engaged by Iron Horse. ● The Company must maintain a fixed charge coverage ratio test of 1:1 times measured on a rolling 12-month basis, defined as EBITDA less non-financed capital expenditures, cash dividends and distributions paid and cash taxes paid divided by the sum of interest and principal on all indebtedness. This financial covenant has been waived for the first six months of the IHC Facility. The IHC Facility is secured by a perfected security interest in the Company’s inventory. The IHC Facility bears interest at 1.292% per month or 15.51% annually. Interest shall be calculated on the higher of the actual average monthly loan balance from the prior month or a minimum average loan balance of $1,000,000. Interest expense for the three months ended June 30, 2020 and 2019 was approximately $8,000 and $0, respectively. The IHC Facility expires on June 15, 2022. As of June 30, 2020 and March 31, 2020 there was an outstanding balance of $1,400,000 and $0, respectively. Revolving Credit Facility PNC Bank On June 22, 2017, the Company renewed the existing revolving credit facility (the “PNC Revolving Credit Facility”) with PNC Bank, National Association (“PNC”) for an additional three years which was terminated on June 16, 2020 and replaced by the Intercreditor Revolving Credit Facility with Crestmark and IHC. In September 2019 the Company defaulted on the PNC Revolving Credit Facility due to non-compliance with the fixed charge coverage ratio requirement. In November 2019, the Company entered into a Forbearance Agreement with PNC whereby PNC delayed taking action it would have been be entitled to under a default through March 31, 2020. The Company remained in default of the Forbearance Agreement up until termination of the Revolving Credit Facility on June 16, 2020 at which time the Company entered into the Intercreditor Revolving Credit Facility with Crestmark and IHC. At June 30, 2020 and March 31, 2020 there were no amounts due on the PNC Revolving Credit Facility. During the three months ended June 30, 2020 and 2019 the Company incurred interest expense of approximately $0 and $1,000, respectively, on amounts borrowed against the PNC Revolving Credit Facility. Note Payable Payroll Protection Plan On May 5, 2020, the Company received loan proceeds from Crestmark in the amount of approximately $444,000 under the Paycheck Protection Program (“PPP”). The PPP was established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest may be forgivable to the extent the Company uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness may be reduced if the borrower terminates employees or reduces salaries during the eligible period. The unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments until a forgiveness application has been accepted and reviewed by the SBA, and the SBA has provided Crestmark with the loan forgiveness amount. For the three months ended June 30, 2020 and 2019 the Company incurred interest expense of approximately $1,000 and $0, respectively. The Company currently expects to apply for forgiveness of the entire loan balance. Installment Notes Payable On June 18, 2019, the Company entered into a financing arrangement with Dimension Funding, LLC (“Dimension”) to finance the entire ERP System project over a term of 60 months at a cost of approximately $365,000. As of June 30, 2020 the Company executed three installment notes totaling approximately $365,000 for payments issued to the project vendor. The installment notes have 60 month terms with interest rates of 7.58%, 8.55% and 9.25%, respectively. The installment notes are payable in monthly installments of $7,459 which include principal and interest. As of June 30, 2020 and March 31, 2020 there was an outstanding balance on the installment notes of approximately $328,000 and $346,000, respectively. For three months ended June 30, 2020 and 2019 the Company incurred interest expense of approximately $7,000 and $0 respectively. Subordinated Debt/Note Payable to Related Party In conjunction with the PNC Revolving Credit Facility there was a subordination agreement on related party debt due to Starlight Marketing Development, Ltd. of approximately $803,000. On June 1, 2020 the remaining amount due on the subordinated debt of approximately $803,000 was converted to a note payable (“subordinated note payable”) which bears interest at 6%. As part of the agreement to convert the subordinated debt to a note payable it was agreed that interest expense would be accrued at the same 6% interest rate on the unpaid principal retroactively from the date that previously scheduled payments had been missed. During the three months ended June 30, 2020 and 2019 interest expense was approximately $12,000 and $2,000, respectively on the subordinated note payable and the related party subordinated debt, respectively. In connection with the Intercreditor Revolving Credit Facility the Company was required to subordinate the subordinated note payable. Both Crestmark and IHC facility agreements allow for the repayment of the subordinated note payable provided any amounts borrowed against these credit facilities are paid in full, the Company maintains a 1 : 1 debt coverage ratio and exhibits sufficient cash liquidity to support on-going operations. There is no set schedule with regards to repayment of the note and as such the subordinated note payable has been classified as a non-current liability as of June 30, 2020 and March 31, 2020 on the condensed consolidated balance sheets. As of June 30, 2020 and March 31, 2020 the remaining amount due on the subordinated debt was approximately $803,000.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	NOTE 7 - COMMITMENTS AND CONTINGENCIES LEGAL MATTERS As of August 19, 2020 management is not aware of any legal proceedings other than matters that arise in the ordinary course of business. LEASES Operating Leases We have operating lease agreements for offices and a warehouse facility in Florida, California and Macau expiring in various years through 2024. We entered into an operating lease agreement, effective October 1, 2017, for the corporate headquarters located in Fort Lauderdale, Florida where we lease approximately 6,500 square feet of office space. The lease expires on March 31, 2024. The base rent payment is approximately $8,800 per month, subject to annual adjustments. We entered into an operating lease agreement, effective June 1, 2013, for 86,000 square feet of warehouse space in Ontario, California for our logistics operations. The lease expires on August 31, 2020 (original lease term of 87 months). The base rent payment is approximately $43,700 per month for the remaining term of the lease. On June 15, 2020 we executed a three-year lease extension which will expire on August 31, 2023. The renewal base rent payment will be $65,300 with a 3% increase every 12 months for the remaining term of the extension. We entered into an operating lease agreement, effective May 1, 2018, for 424 square feet of office space in Macau. The rent is fixed at approximately $1,600 per month for the duration of the lease which expires on April 30, 2021. The lease provides for a renewal option to extend the lease. Lease expense for our operating leases is recognized on a straight-line basis over the lease terms. Finance Leases On May 25, 2018 and June 4, 2018, we entered into two long-term capital leasing arrangements with Wells Fargo Equipment Finance (“Wells Fargo”) to finance the leasing of two used forklift vehicles in the amount of approximately $44,000. The leases require monthly payments in the amount of $1,279 per month over a total lease term of 36 months which commenced on June 1, 2018. The agreement has an effective interest rate of 4.5% and the Company has the option to purchase the equipment at the end of the lease term for one dollar. As of June 30, 2020 and March 31, 2020 the remaining amounts due on these capital leasing arrangements was approximately $14,000 and $18,000, respectively. For the three months ended June 30, 2020 and 2019 the Company incurred interest expense of $154 and $274, respectively. Supplemental balance sheet information related to leases as of June 30, 2020 is as follows : Assets Operating lease - Right-of-use assets $ 2,618,513 Finance leases as a component of Property and equipment, net of accumulated depreciation of $13,472 30,054 Liabilities Current Current portion of operating leases $ 758,910 Current portion of finance leases 13,812 Noncurrent Operating lease liabilities, net of current portion $ 1,914,921 Supplemental statement of income information related to leases for the three months ended June 30, 2020 is as follows: Operating lease expense as a component of general and administrative expenses $ 148,724 Finance lease cost Depreciation of leased assets as a component of Depreciation $ 1,555 Interest on lease liabilities as a component of Interest Expense 154 Supplemental cash flow information related to leases for the three months ended June 30, 2020 is as follows: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow paid for operating leases $ 163,187 Financing cash flow paid for finance leases 3,691 Lease term and Discount Rate Weighted average remaining lease term (months) Operating leases 36.1 Finance leases 11.0 Weighted average discount rate Operating leases 6.66 % Finance leases 3.68 % Scheduled maturities of operating and finance lease liabilities outstanding as of June 30, 2020 are as follows: Year Operating Leases Finance Leases 2020, for the remaining 6 months $ 413,620 $ 7,673 2021 911,204 6,394 2022 931,949 - 2023 674,488 - 2024 30,739 - Total Minimum Future Payments 2,962,000 14,067 Less: Imputed Interest 288,169 255 Present Value of Lease Liabilities $ 2,673,831 $ 13,812

Stock Options

Stock Options	3 Months Ended
	Jun. 30, 2020
Stock Options
Stock Options	NOTE 8 - STOCK OPTIONS During the three months ended June 30, 2020 and 2019 the Company issued 0 and 100,000 stock options, respectively at an exercise price of $0 and $.38, respectively; to directors as compensation for their service. The fair value of each option grant was estimated on the date of the grant using the Black-Scholes option-pricing model with the assumptions outlined below. The expected volatility is based upon historical volatility of our stock and other contributing factors. The expected term is based upon observation of actual time elapsed between date of grant and exercise of options for all employees. A summary of stock option activity for the three months ended June 30, 2020 is summarized below: June 30, 2020 Number of Options Weighted Average Exercise Price Stock Options: Balance at beginning of period 2,230,000 $ 0.26 Granted - - Exercised - - Forfeited - - Balance at end of period 2,230,000 $ 0.26 Options exercisable at end of period 2,230,000 $ 0.26 The following table summarizes information about employee stock options outstanding at June 30, 2020 Range of Exercise Price Number Outstanding at June 30, 2020 Weighted Average Remaining Contractural Life Weighted Average Exercise Price Number Exercisable at June 30, 2020 Weighted Average Exercise Price $.04 - $.38 1,650,000 4.1 0.17 1,650,000 0.17 $.47 - $.55 580,000 7.6 0.50 580,000 0.50 * 2,230,000 2,230,000 * Total number of options outstanding as of June 30, 2020 includes 1,080,000 options issued to five current and two former directors as compensation and 1,150,000 options issue to key employees that were not issued from the Plan.

Geographical Information

Geographical Information	3 Months Ended
	Jun. 30, 2020
Segment Reporting [Abstract]
Geographical Information	NOTE 9 - GEOGRAPHICAL INFORMATION Sales to customers outside of the United States for the three months ended June 30, 2020 and 2019 were primarily made by the Macau Subsidiary in US dollars. Sales by geographic region for the periods presented are as follows: June 30, 2020 2019 North America $ 3,087,707 $ 4,613,772 Europe 182,812 99,424 Australia 53,024 95,844 $ 3,323,543 $ 4,809,040 The geographic area of sales was based on the location where the product is delivered.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Jun. 30, 2020
Related Party Transactions [Abstract]
Related Party Transactions	NOTE 10 – RELATED PARTY TRANSACTIONS All transactions listed below are related to the Company as they are all with affiliates of our Chairman of the Board, Mr. Phillip Lau. DUE TO/FROM RELATED PARTIES On June 30, 2020 and March 31, 2020, the Company had amounts due to related parties in the amounts of approximately $402,000 and $502,000, respectively for services provided by these companies and licensing fees for use of pedestal model molds and tools owned by the parent company. On June 30, 2020 and March 31, 2020, the Company had $0 and $100,000 due from a related party for goods sold to this company. TRADE During the three months ended June 30, 2020 and June 30, 2019 the Company sold approximately $0 and $74,000 respectively to Winglight Pacific, Ltd. (“Winglight”), a related party, at a discounted price, similar to prices granted to major direct import customers shipped internationally with freight prepaid. The average gross profit margin on sales to Winglight for the three months ended June 30, 2020 and 2019 was 0% and 21.7%, respectively. The product was shipped to Cosmo Communications of Canada (“Cosmo”), another related company and the Company’s primary distributor of its products to Canada at that time. These amounts were included as a component of net sales in the accompanying condensed consolidated statements of operations. During the three months ended June 30, 2020 and 2019 the Company sold approximately $0 and $71,000, respectively of product directly to Cosmo from its California warehouse facility. These amounts were included as a component of net sales in the accompanying condensed consolidated statements of operations. On July 30, 2020, the Company and Cosmo reached agreement that Cosmo would no longer be the Company’s Canadian distributor and the Company became the sole and exclusive distributor of the Company’s products in Canada. As part of the agreement, the companies executed a Purchase and Sales agreement whereby the Company acquired all of Cosmo’s karaoke inventory for approximately $685,000. The Company incurred service expenses from Starlight Electronics Co, Ltd, (“SLE”) a related party. The services from SLE for the three month ended June 30, 2020 and 2019 were approximately $91,000 and $101,000, respectively. These amounts were included as a component of general and administrative expenses in the accompanying condensed consolidated statements of operations.

Reserve for Sales Returns

Reserve for Sales Returns	3 Months Ended
	Jun. 30, 2020
First Priority Lien Percentage
Reserve for Sales Returns	NOTE 11 – RESERVE FOR SALES RETURNS A return program for defective goods is negotiated with each of our wholesale customers on a year-to-year basis. Customers are allowed to return defective goods within a specified period of time after shipment (between 6 and 9 months). The Company does make occasional exceptions to this return policy and accordingly records a sales return reserve based on historic return amounts, specific exceptions as identified and management estimates. The Company records a sales reserve for its return goods programs at the time of sale for estimated sales returns that may occur. The liability for defective goods is included in the reserve for sales returns on the condensed consolidated balance sheets. Changes in the Company’s reserve for sales returns are presented in the following table: Three Months Ended June 30, June 30, 2020 2019 Reserve for sales returns at beginning of the year $ 1,224,000 $ 896,154 Provision for estimated sales returns 284,362 415,234 Sales returns received (1,128,179 ) (863,711 ) Reserve for sales returns at end of the period $ 380,183 $ 447,677

Refunds Due to Customers

Refunds Due to Customers	3 Months Ended
	Jun. 30, 2020
Refunds Due To Customers Abstract
Refunds Due to Customers	NOTE 12 – REFUNDS DUE TO CUSTOMERS As of June 30, 2020 and March 31, 2020 the amount of refunds due to customers was approximately $391,000 and $807,000, respectively. Refunds due to customers at June 30, 2020 were primarily due to one major customer which reflects approximately $1,691,000 of chargebacks less approximately $1,381,000 that the customer had deducted on payment remittances to the Company as of June 30, 2020. The remaining $81,000 was primarily due to amounts due to another major customer for overstock returns. Refunds due to customers at March 31, 2020 were primarily due to one major customer which reflects approximately $1,691,000 of chargebacks less approximately $1,181,000 that the customer had deducted on payment remittances to the Company as of March 31, 2020. The remaining $297,000 was primarily due to amounts due to two major customers for overstock returns. (See Note 2 – LIQUIDITY).

Employee Benefit Plans

Employee Benefit Plans	3 Months Ended
	Jun. 30, 2020
Retirement Benefits [Abstract]
Employee Benefit Plans	NOTE 13 - EMPLOYEE BENEFIT PLANS The Company has a 401(k) plan for its employees to which the Company makes contributions at rates dependent on the level of each employee’s contributions. Contributions made by the Company are limited to the maximum allowable for federal income tax purposes. The amounts charged to operations for contributions to this plan and administrative costs during the three months ended June 30, 2020 and 2019 totaled approximately $14,000. The amounts are included as a component of general and administrative expense in the accompanying condensed consolidated statements of operations. The Company does not provide any post-employment benefits to retirees.

Concentrations of Credit and Sa

Concentrations of Credit and Sales Risk	3 Months Ended
	Jun. 30, 2020
Risks and Uncertainties [Abstract]
Concentrations of Credit and Sales Risk	NOTE 14 - CONCENTRATIONS OF CREDIT AND SALES RISK The Company derives a majority of its revenues from retailers of products in the United States. The Company’s allowance for doubtful accounts is based upon management’s estimates and historical experience and reflects the fact that accounts receivable are concentrated with several large customers. At June 30, 2020, 74% of accounts receivable were due from three customers in North America that individually owed over 10% of total accounts receivable. At March 31, 2020, 82% of accounts receivable were due from four customers in North America that individually owed over 10% of total accounts receivable. The Company generates most of its revenue from retailers of products in the United States with a significant amount of sales concentrated with several large customers the loss of which could have an adverse impact on the financial position of the Company. For the three months ended June 30, 2020, there were three customers who individually accounted for 10% or more of the company’s net sales. Revenue derived from these customers as a percentage of net sales were 35%, 27% and 15%, respectively. For the three months ended June 30, 2019, there were two customers who individually accounted for 10% or more of the company’s net sales. Revenue derived from these customers as a percentage of net sales were 80% and 15%, respectively.

Summary of Accounting Policies

Summary of Accounting Policies (Policies)	3 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Principles of Consolidation and Basis of Presentation	PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION The condensed consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in the condensed consolidated financial statements. The accompanying unaudited condensed financial statements for the three months ended June 30, 2020 and 2019 have been prepared in accordance with generally accepted accounting principles applicable to interim financial information and the requirements of Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States for complete consolidated financial statements. In the opinion of management, such condensed consolidated financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair presentation of the condensed consolidated financial position and the condensed consolidated results of operations. The condensed consolidated results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet information as of March 31, 2020 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2020. The interim condensed consolidated financial statements should be read in conjunction with that report.
Use of Estimates	USE OF ESTIMATES The Singing Machine makes estimates and assumptions in the ordinary course of business relating to sales returns and allowances, warranty reserves, inventory reserves and reserves for promotional incentives that affect the reported amounts of assets and liabilities and of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Future events and their effects cannot be determined with absolute certainty; therefore, the determination of estimates requires the exercise of judgment. Historically, past changes to these estimates have not had a material impact on the Company’s financial condition. However, circumstances could change which may alter future expectations.
Collectibility of Accounts Receivable	COLLECTIBILITY OF ACCOUNTS RECEIVABLE The Singing Machine’s allowance for doubtful accounts is based on management’s estimates of the creditworthiness of its customers, current economic conditions and historical information, and, in the opinion of management, is believed to be in an amount sufficient to respond to normal business conditions. Management sets 100% reserves for customers in bankruptcy and other reserves based upon historical collection experience. The Company is subject to chargebacks from customers for cooperative marketing programs, defective returns, return freight and handling charges that are deducted from open invoices and reduce collectability of open invoices. Should business conditions deteriorate or any major customer default on its obligations to the Company, this allowance may need to be significantly increased, which would have a negative impact on operations.
Foreign Currency Translation	FOREIGN CURRENCY TRANSLATION The functional currency of the Macau Subsidiary is the Hong Kong dollar. The financial statements of the subsidiary are translated to U.S. dollars using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are recorded in the condensed consolidated statement of operations and translations are recorded in a separate component of shareholders’ equity. Any such amounts were not material during the periods presented.
Concentration of Credit Risk	Concentration of Credit Risk At times, the Company maintains cash in United States bank accounts that are more than the Federal Deposit Insurance Corporation insured amounts. The Company also maintains cash balances in foreign financial institutions. The amounts at foreign financial institutions at June 30, 2020 and March 31, 2020 are approximately $70,000 and $217,000, respectively. Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of accounts receivable.
Inventory	INVENTORY Inventories are comprised primarily of electronic karaoke equipment, microphones and accessories, and are stated at the lower of cost or net realizable value, as determined using the first in, first out method. Inventories also include an estimate for the net realizable value of expected future inventory returns due to warranty and allowance programs. As of June 30, 2020 and March 31, 2020 the estimated amounts for these future inventory returns were approximately $784,000 and $1,367,000, respectively. The Company reduces inventory on hand to its net realizable value on an item-by-item basis when it is apparent that the expected realizable value of an inventory item falls below its original cost. A charge to cost of sales results when the estimated net realizable value of specific inventory items declines below cost. Management regularly reviews the Company’s investment in inventories for such declines in value. As of June 30, 2020 and March 31, 2020 the Company had inventory reserves of approximately $467,000 and approximately $434,000, respectively for estimated excess and obsolete inventory.
Deferred Financing Costs	DEFERRED FINANCING COSTS The Company classifies deferred financing costs incurred when obtaining or renewing revolving credit facilities as assets in the accompanying condensed consolidated balance sheets as it is likely that during certain periods during non-peak season there will be no balance due on these credit facilities to offset the deferred financing costs. In June 2020, the Company incurred approximately $74,000 in deferred financing costs associated with the closing of the Crestmark Facility and the IHC Facility which are being amortized over the term of the agreement and were classified as current assets on the accompanying condensed consolidated balance sheets.
Long-Lived Assets	LONG-LIVED ASSETS The Company reviews long-lived assets for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recoverable. If the undiscounted future cash flows attributable to the related assets are less than the carrying amount, the carrying amounts are reduced to fair value and an impairment loss is recognized in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10-05, “Accounting for the Impairment or Disposal of Long-Lived Assets.”
Leases	LEASES The Company follows FASB ASC 842, “Leases”. The ASC requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than twelve months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. (See Note 7– LEASES). The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date. The liability is equal to the present value of the remaining minimum lease payments. The asset is based on the liability, subject to certain adjustments. Operating leases result in straight-line expense (similar to operating leases under the prior accounting standard) while finance leases result in a front-loaded expense pattern (similar to capital leases under the prior accounting standard). As the interest rate implicit in the Company’s operating leases is not readily determinable, the Company utilizes its incremental borrowing rate to discount the lease payments. The Company utilizes the implicit rate for its finance leases.
Property and Equipment	PROPERTY AND EQUIPMENT Property and equipment are stated at cost, less accumulated depreciation. Expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to their estimated useful lives using accelerated and straight-line methods.
Fair Value of Financial Instruments	FAIR VALUE OF FINANCIAL INSTRUMENTS We follow FASB ASC 825, Financial Instruments, which requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate that value. For purposes of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts of the Company’s short-term financial instruments, including accounts receivable, accounts payable, accrued expenses, refunds due to customers and due to/from related parties approximates fair value due to the relatively short period to maturity for these instruments. The carrying amounts on the subordinated debt to Starlight Marketing Development, Ltd. (related party), finance leases approximate fair value due to the relatively short period to maturity and related interest accrued at a rate similar to market rates. The carrying amount on the revolving lines of credit approximate fair value due the relatively short period to maturity and related interest accrued at market rates. The carrying amount on the PPP note payable of credit approximate fair value due the relatively short period to maturity as management intends to apply for total forgiveness of the loan in the current fiscal year.
Revenue Recognition and Reserve for Sales Returns	REVENUE RECOGNITION AND RESERVE FOR SALES RETURNS The Company recognizes revenue in accordance with FASB ASC 606, “Revenue from Contracts with Customers”. All revenue is generated from contracts with customers. The Company recognizes revenue when the goods are delivered and control of the goods sold is transferred to the customer, in an amount, referred to as the transaction price, that reflects the consideration to which the Company is expected to be entitled in exchange for those goods. The Company determines revenue recognition utilizing the following five steps: (1) identification of the contract with a customer, (2) identification of the performance obligations in the contract (promised goods or services that are distinct), (3) determination of the transaction price, (4) allocation of the transaction price to the performance obligations, and (5) recognition of revenue when, or as, the Company transfers control of the product or service for each performance obligation. The Company’s contracts with customers consist of one performance obligation (the sale of the Company’s products). The Company’s contracts have no financing elements, payment terms are less than 120 days and have no further contract asset or liability obligations once control of goods is transferred to the customer. Revenue is recorded in the amount of consideration the Company expects to receive for the sale of these goods. Costs incurred in fulfilling contracts with customers include administrative costs associated with the procurement of goods are included in general and administrative expenses, in-bound freight costs are included in the cost of goods sold and accrued sales representative commissions are included in selling expenses in the accompanying condensed consolidated statements of operations as our underlying customer agreements are less than one year. The Company disaggregates revenues by product line and major geographic region as most of its revenue is generated by the sales of karaoke hardware and the Company has no other material business segments (See Note 9 – GEOGRAPHICAL INFORMATION). While the Company generally does not allow products to be returned, the Company does provide for variable consideration contingent upon the occurrence of uncertain future events. Variable consideration is estimated at the expected value or at the most likely amount depending on the type of consideration. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company estimates variable consideration under our return allowance programs for goods returned to the customer for various reasons, whereby a sales return reserve is recorded based on historic return amounts, specific events as identified and management estimates. The Company’s reserve for sales returns were approximately $380,000 and $1,224,000 as of June 30, 2020 and March 31, 2020, respectively. Revenue is derived from four different major product lines. Disaggregated approximate revenue from these product lines for the three months ended June 30, 2020 and 2019 consisted of the following: Revenue by Product Line Three Months Ended Product Line June 30, 2020 June 30, 2019 Classic Karaoke Machines $ 2,275,000 $ 4,156,000 Download Karaoke Machines 323,000 141,000 SMC Kids Toys 146,000 140,000 Music and Accessories 579,000 372,000 Total Net Sales $ 3,323,000 $ 4,809,000
Shipping and Handling Costs	SHIPPING AND HANDLING COSTS Shipping and handling costs are performed by both the Company and third party logistics companies. Shipping and handling activities are performed before the customer obtains control of the goods sold to them and are considered activities to fulfill the Company’s promise to transfer the goods. For the three months ended June 30, 2020 and 2019 shipping and handling expenses were approximately $83,000 and $89,000, respectively. These expenses are classified as a component of selling expenses in the accompanying condensed consolidated statements of operations.
Stock-Based Compensation	STOCK BASED COMPENSATION The Company follows the provisions of the FASB ASC 718-20, “Compensation – Stock Compensation Awards Classified as Equity”. ASC 718-20 requires all share-based payments to employees including grants of employee stock options, be measured at fair value and expensed in the condensed consolidated statements of operations over the service period (generally the vesting period). The Company uses the Black-Scholes option valuation model to value stock options. Employee stock option compensation expense for the three months ended June 30, 2020 and 2019 includes the estimated fair value of options granted, amortized on a straight-line basis over the requisite service period for the entire portion of the award. For the three months ended June 30, 2020 and 2019, the stock option expense was approximately $0 and $5,000, respectively.
Advertising	ADVERTISING Costs incurred for producing and publishing advertising of the Company are charged to operations the first time the advertising takes place. The Company has entered into cooperative advertising agreements with its major customers that specifically indicate that the customer must spend the cooperative advertising fund upon the occurrence of mutually agreed events. The percentage of the cooperative advertising allowance ranges from 1% to 13% of the purchase. The customers must advertise the Company’s products in the customer’s catalog, local newspaper and other advertising media. The customer must submit the proof of the performance (such as a copy of the advertising showing the Company’s products) to the Company to request for the allowance. The customer does not have the ability to spend the allowance at their discretion. The Company believes that the identifiable benefit from the cooperative advertising program and the fair value of the advertising benefit is equal or greater than the cooperative advertising expense. Advertising expense for the three months ended June 30, 2020 and 2019 was approximately $321,000 and $361,000, respectively. As of June 30, 2020 and March 31, 2020 there was an accrual for cooperative advertising allowances of $395,000 and $685,000, respectively. These amounts were a component of accrued expenses in the condensed consolidated balance sheets.
Research and Development Costs	RESEARCH AND DEVELOPMENT COSTS Research and development costs are charged to results of operations as incurred. These expenses are shown as a component of selling, general and administrative expenses in the condensed consolidated statements of income. For the three months ended June 30, 2020 and 2019, these amounts totaled approximately $13,000 and $5,000, respectively.
Income Taxes	INCOME TAXES T h C o m p n f o ll o w t h p o v isi on of F A S A S 74 A o un t i n f o n o m T x n d t h ss n li b ili t m t h o o A S 740 d f t s s t n li b ilit i og n i f o t h u t u t o n s q u n e tt i b u t t d i ff e n b t w e t h i n a n i st t e m e n r y i ng a m ou n t o x i s ti n s s t a n li b iliti n t h i s p t i v t b s f t s s e t n li b iliti e m s u u s i n e n t t t x p t t pp l t t a x b l i n o m i t h y i w h i t h o s t e m po r d i ff e n e x p t t b o v o s t t l d n d A S 740 t he f o d f t ss t a n li b iliti o h n g i t t i o gn i i i n o m i t h p i o t h i n l u d t h n t m e n d t i i m o li k l t h n o t h s o m po ti o o d f t ss w i l n o b li d v l u t i o ll o w a n i og n i d The Company analyzes its deferred tax assets and liabilities at the end of each interim period and, based on management’s best estimate of its full year effective tax rate, recognizes cumulative adjustments to its deferred tax assets and liabilities. For the three months ended June 30, 2020 and 2019 we estimated our effective tax rate to be approximately 27.6% and 21.5%, respectively. As of June 30, 2020, and March 31, 2020, the Singing Machine had net deferred tax assets of approximately $1,365,000 and $1,286,000, respectively. The Company recorded an income tax benefit of approximately $79,000 and $239,000 for the three months ended June 30, 2020 and 2019, respectively. The Company recognizes a liability for uncertain tax positions. An uncertain tax position is defined as a position in a previously filed tax return or a position expected to be taken in a future tax return that is not based on clear and unambiguous tax law and which is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company measures the tax benefits recognized based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. As of June 30, 2020, there were no uncertain tax positions that resulted in any adjustment to the Company’s provision for income taxes. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. The Company currently has no liabilities recorded for accrued interest or penalties related to uncertain tax provisions.
Computation of Loss per Common Share	COMPUTATION OF LOSS PER COMMON SHARE Loss per common share is computed by dividing the net loss by the weighted average of common shares outstanding during the period. As of June 30, 2020 and 2019 total potential dilutive shares from common stock options amounted to 2,230,000 and 2,310,000 shares, respectively. These shares were not included in the computation of diluted earnings per share for the three months ended June 30, 2020 and 2019 because their effect was anti-dilutive.
Recent Accounting Pronouncements	RECENT ACCOUNTING PRONOUNCEMENTS In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740). In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses” (Topic 326)

Summary of Accounting Policie_2

Summary of Accounting Policies (Tables)	3 Months Ended
	Jun. 30, 2020
Accounting Policies [Abstract]
Schedule of Disaggregation of Revenue	Revenue is derived from four different major product lines. Disaggregated approximate revenue from these product lines for the three months ended June 30, 2020 and 2019 consisted of the following: Revenue by Product Line Three Months Ended Product Line June 30, 2020 June 30, 2019 Classic Karaoke Machines $ 2,275,000 $ 4,156,000 Download Karaoke Machines 323,000 141,000 SMC Kids Toys 146,000 140,000 Music and Accessories 579,000 372,000 Total Net Sales $ 3,323,000 $ 4,809,000

Inventories, Net (Tables)

Inventories, Net (Tables)	3 Months Ended
	Jun. 30, 2020
Inventory Disclosure [Abstract]
Schedule of Inventory	Inventories are comprised of the following components: June 30, March 31, 2020 2020 Finished Goods $ 5,869,000 $ 6,595,000 Inventory in Transit 684,000 73,000 Estimated Cost of Future Returns 784,000 1,367,000 Subtotal 7,337,000 8,035,000 Less:Inventory Reserve 467,000 434,000 Inventories, net $ 6,870,000 $ 7,601,000

Property and Equipment (Tables)

Property and Equipment (Tables)	3 Months Ended
	Jun. 30, 2020
Property, Plant and Equipment [Abstract]
Summary of Property and Equipment	A summary of property and equipment is as follows: USEFUL June 30, March 31, Computer and office equipment 5-7 years $ 445,000 $ 445,000 Furniture and fixtures 7 years 98,000 98,000 Warehouse equipment 7 years 195,000 195,000 Molds and tooling 3-5 years 1,726,000 1,680,000 2,464,000 2,418,000 Less: Accumulated depreciation 1,718,000 1,647,000 $ 746,000 $ 771,000

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Schedule of Supplemental Information Related to Leases	Supplemental balance sheet information related to leases as of June 30, 2020 is as follows : Assets Operating lease - Right-of-use assets $ 2,618,513 Finance leases as a component of Property and equipment, net of accumulated depreciation of $13,472 30,054 Liabilities Current Current portion of operating leases $ 758,910 Current portion of finance leases 13,812 Noncurrent Operating lease liabilities, net of current portion $ 1,914,921
Schedule of Lease term and Discount Rate	Supplemental statement of income information related to leases for the three months ended June 30, 2020 is as follows: Operating lease expense as a component of general and administrative expenses $ 148,724 Finance lease cost Depreciation of leased assets as a component of Depreciation $ 1,555 Interest on lease liabilities as a component of Interest Expense 154 Supplemental cash flow information related to leases for the three months ended June 30, 2020 is as follows: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow paid for operating leases $ 163,187 Financing cash flow paid for finance leases 3,691 Lease term and Discount Rate Weighted average remaining lease term (months) Operating leases 36.1 Finance leases 11.0 Weighted average discount rate Operating leases 6.66 % Finance leases 3.68 %
Schedule of Future Minimum Rental Payments for Operating and Finance Leases	Scheduled maturities of operating and finance lease liabilities outstanding as of June 30, 2020 are as follows: Year Operating Leases Finance Leases 2020, for the remaining 6 months $ 413,620 $ 7,673 2021 911,204 6,394 2022 931,949 - 2023 674,488 - 2024 30,739 - Total Minimum Future Payments 2,962,000 14,067 Less: Imputed Interest 288,169 255 Present Value of Lease Liabilities $ 2,673,831 $ 13,812

Stock Options (Tables)

Stock Options (Tables)	3 Months Ended
	Jun. 30, 2020
Stock Options
Summary of Stock Option Activity	A summary of stock option activity for the three months ended June 30, 2020 is summarized below: June 30, 2020 Number of Options Weighted Average Exercise Price Stock Options: Balance at beginning of period 2,230,000 $ 0.26 Granted - - Exercised - - Forfeited - - Balance at end of period 2,230,000 $ 0.26 Options exercisable at end of period 2,230,000 $ 0.26
Schedule of Employee Stock Options Outstanding	The following table summarizes information about employee stock options outstanding at June 30, 2020 Range of Exercise Price Number Outstanding at June 30, 2020 Weighted Average Remaining Contractural Life Weighted Average Exercise Price Number Exercisable at June 30, 2020 Weighted Average Exercise Price $.04 - $.38 1,650,000 4.1 0.17 1,650,000 0.17 $.47 - $.55 580,000 7.6 0.50 580,000 0.50 * 2,230,000 2,230,000 * Total number of options outstanding as of June 30, 2020 includes 1,080,000 options issued to five current and two former directors as compensation and 1,150,000 options issue to key employees that were not issued from the Plan.

Geographical Information (Table

Geographical Information (Tables)	3 Months Ended
	Jun. 30, 2020
Segment Reporting [Abstract]
Schedule of Revenue by Geographical Region	Sales to customers outside of the United States for the three months ended June 30, 2020 and 2019 were primarily made by the Macau Subsidiary in US dollars. Sales by geographic region for the periods presented are as follows: June 30, 2020 2019 North America $ 3,087,707 $ 4,613,772 Europe 182,812 99,424 Australia 53,024 95,844 $ 3,323,543 $ 4,809,040

Reserve for Sales Returns (Tabl

Reserve for Sales Returns (Tables)	3 Months Ended
	Jun. 30, 2020
First Priority Lien Percentage
Schedule of Reserve for Sales Returns	Changes in the Company’s reserve for sales returns are presented in the following table: Three Months Ended June 30, June 30, 2020 2019 Reserve for sales returns at beginning of the year $ 1,224,000 $ 896,154 Provision for estimated sales returns 284,362 415,234 Sales returns received (1,128,179 ) (863,711 ) Reserve for sales returns at end of the period $ 380,183 $ 447,677

Liquidity (Details Narrative)

Liquidity (Details Narrative) - USD ($)	Aug. 19, 2020	May 05, 2020	Jul. 31, 2020	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020
Net income loss				$ (206,804)	$ (869,581)
Revenue				3,323,543	4,809,040	$ 1,559,000
Pocket expenses						849,000
Insurance claim receivable						$ 1,268,463
Gain from damaged goods insurance claim				131,292
Secured vendor invoice credits, value				390,000
Two-Year Loan and Security Agreement [Member]
Line of credit facility				10,000,000
Inventory financing				$ 2,500,000
Revolving credit facility expiration date				Jun. 15, 2022
Intecreditor revolving credit facility				$ 2,600,000
Paycheck Protection Program [Member]
Proceeds from loan		$ 444,000
Subsequent Event [Member]
Recovered from insurance coverage settlement	$ 2,245,000
Insurance claim receivable	$ 1,268,000
Remaining gain on recovery of claim			$ 846,000

Summary of Accounting Policie_3

Summary of Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020
Accounting Policies [Line Items]
Percentage of reserves for customers	100.00%
Foreign financial institutions actual deposits	$ 70,000		$ 217,000
Future inventory returns	784,000		1,367,000
Inventory reserves	467,000		434,000
Reserve for sales returns	391,088		806,475
Shipping and handling expenses	83,000	$ 89,000
Stock option expense	0	5,000
Advertising expense	321,000	361,000
Accrued cooperative advertising allowances	395,000		685,000
Research and development costs	13,000	$ 5,000
Valuation allowance of deferred tax assets	$ 88,000		88,000
Estimated effective tax rate, percentage	27.60%	21.50%
Net deferred tax assets	$ 1,365,000		$ 1,286,000
Income tax provision	$ (78,837)	$ (238,731)
Percentage of tax benefits recognized likelihood of being realized	Greater than 50%	Greater than 50%
Potentially dilutive securities	2,230,000	2,310,000
Crestmark Facility and IHC Facility [Member]
Accounting Policies [Line Items]
Deferred financing costs	$ 74,000

Summary of Accounting Policie_4

Summary of Accounting Policies - Schedule of Disaggregation of Revenue (Details) - USD ($)	3 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020
Total Net Sales	$ 3,323,543	$ 4,809,040	$ 1,559,000
Classic Karaoke Machines [Member]
Total Net Sales	2,275,000	4,156,000
Download Karaoke Machines [Member]
Total Net Sales	323,000	141,000
SMC Kids Toys [Member]
Total Net Sales	146,000	140,000
Music and Accessories [Member]
Total Net Sales	$ 579,000	$ 372,000

Inventories, Net - Schedule of

Inventories, Net - Schedule of Inventory (Details) - USD ($)	Jun. 30, 2020	Mar. 31, 2020
Inventory Disclosure [Abstract]
Finished Goods	$ 5,869,000	$ 6,595,000
Inventory in Transit	684,000	73,000
Estimated Cost of Future Returns	784,000	1,367,000
Subtotal	7,337,000	8,035,000
Less: Inventory Reserve	467,000	434,000
Inventories, net	$ 6,870,220	$ 7,601,277

Property and Equipment (Details

Property and Equipment (Details Narrative) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 71,107	$ 59,461

Property and Equipment - Summar

Property and Equipment - Summary of Property and Equipment (Details) - USD ($)	3 Months Ended	12 Months Ended
	Jun. 30, 2020	Mar. 31, 2020
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,464,000	$ 2,418,000
Less: Accumulated depreciation	1,718,000	1,647,000
Property and equipment, net	745,556	771,349
Computer and Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 445,000	$ 445,000
Computer and Office Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Average useful life (in years)	5 years	5 years
Computer and Office Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Average useful life (in years)	7 years	7 years
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Average useful life (in years)	7 years	7 years
Property and equipment, gross	$ 98,000	$ 98,000
Warehouse Equipment [Member]
Property, Plant and Equipment [Line Items]
Average useful life (in years)	7 years	7 years
Property and equipment, gross	$ 195,000	$ 195,000
Molds and Tooling [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,726,000	$ 1,680,000
Molds and Tooling [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Average useful life (in years)	3 years	3 years
Molds and Tooling [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Average useful life (in years)	5 years	5 years

Bank Financing (Details Narrati

Bank Financing (Details Narrative) - USD ($)	Jun. 16, 2020	May 05, 2020	Jun. 18, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 01, 2020	Mar. 31, 2020
Line of Credit Facility [Line Items]
Amortization of deferred financing costs				$ 6,405	$ 3,333
Interest expenses				29,590	2,875
Intercreditor Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Amortization of deferred financing costs				3,000
Two-Year Loan and Security Agreement [Member]
Line of Credit Facility [Line Items]
Inventory financing				2,500,000
Paycheck Protection Program [Member]
Line of Credit Facility [Line Items]
Interest expenses				1,000	0
Proceeds from loan		$ 444,000
Financing Agreement [Member] | Dimension Funding, LLC [Member]
Line of Credit Facility [Line Items]
Interest expenses				7,000	0
Debt instrument, term			60 months
Notes payable			$ 365,000	328,000			$ 346,000
Financing Agreement [Member] | Dimension Funding, LLC [Member] | Installment Note One [Member]
Line of Credit Facility [Line Items]
Debt instrument, interest rate			7.58%
Financing Agreement [Member] | Dimension Funding, LLC [Member] | Installment Note Two [Member]
Line of Credit Facility [Line Items]
Debt instrument, interest rate			8.55%
Financing Agreement [Member] | Dimension Funding, LLC [Member] | Installment Note Three [Member]
Line of Credit Facility [Line Items]
Debt instrument, interest rate			9.25%
Financing Agreement [Member] | Monthly Payments of Notes Payble with Principal and Interest [Member] | Dimension Funding, LLC [Member]
Line of Credit Facility [Line Items]
Repayments of notes payable			$ 7,459
Subordination Agreement [Member] | StarLight Marketing Development, Ltd [Member]
Line of Credit Facility [Line Items]
Notes payable				803,000			803,000
Interest expense, related party				12,000	2,000
Subordination Agreement [Member] | StarLight Marketing Development, Ltd [Member] | Subordinated Notes Payable [Member]
Line of Credit Facility [Line Items]
Debt instrument, interest rate						6.00%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum amount outstanding during period	$ 10,000,000
Line of credit facility, description	Advance rate shall not exceed 70% of Eligible Accounts Receivable aged less than 90 days from invoice date. Crestmark shall maintain a base dilution reserve of 1% for each 1% of dilution over 15%. Crestmark will implement an availability block of 20% of amounts due on Iron Horse Intercreditor Revolving Line of Credit. Mandatory pay-down of the loan to zero in January and February each year.
Revolving Credit Facility [Member] | Amortized Over One Year [Member]
Line of Credit Facility [Line Items]
Cost associated with Revolving credit facility deferred	$ 74,000
Crestmark Bank [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit facility, interest rate during period	5.50%
Minimum average loan balance	$ 2,000,000
Loan balance				0
Interest expenses				$ 0	0
Crestmark Bank [Member] | Revolving Credit Facility [Member] | Interest Rate Floor [Member]
Line of Credit Facility [Line Items]
Line of credit facility, interest rate during period	8.75%
Crestmark Bank [Member] | Revolving Credit Facility [Member] | Peak Selling Season Between July 1 and December 31 [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum amount outstanding during period	$ 10,000,000
Crestmark Bank [Member] | Revolving Credit Facility [Member] | Peak Selling Season Between January 1 and July 31 [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum amount outstanding during period	$ 5,000,000
IHC Facility [Member] | Two-Year Loan and Security Agreement [Member]
Line of Credit Facility [Line Items]
Line of credit facility, description				Advance rate shall not exceed the lower of (a) 70% of the inventory cost or (b) 85% of Net Orderly Liquidation Value (NOLV) as determined by an independent third-party appraiser engaged by Iron Horse. The Company must maintain a fixed charge coverage ratio test of 1:1 times measured on a rolling 12-month basis, defined as EBITDA less non-financed capital expenditures, cash dividends and distributions paid and cash taxes paid divided by the sum of interest and principal on all indebtedness. This financial covenant has been waived for the first six months of the IHC Facility.
Minimum average loan balance				$ 1,000,000
Loan balance				1,400,000			$ 0
Inventory financing				2,500,000
Interest expenses				$ 8,000	0
IHC Facility [Member] | Two-Year Loan and Security Agreement [Member] | Interest Rate Per Month [Member]
Line of Credit Facility [Line Items]
Line of credit facility, interest rate during period				1.292%
IHC Facility [Member] | Two-Year Loan and Security Agreement [Member] | Interest Rate Per Annually [Member]
Line of Credit Facility [Line Items]
Line of credit facility, interest rate during period				15.51%
PNC Bank [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Interest expenses				$ 0	$ 1,000

Commitments and Contingencies_2

Commitments and Contingencies (Details Narrative)	Jun. 15, 2020USD ($)	Jun. 04, 2018USD ($)	May 25, 2018USD ($)	May 01, 2018USD ($)ft²	Oct. 01, 2017USD ($)ft²	Jun. 01, 2013USD ($)ft²	Jun. 30, 2020USD ($)	Jun. 30, 2019USD ($)	Mar. 31, 2020USD ($)
Commitments And Contingencies [Line Items]
Monthly lease payments							$ 3,691
interest expense							29,590	$ 2,875
Operating Lease Agreement [Member]
Commitments And Contingencies [Line Items]
Operating lease space for office | ft²				424	6,500	86,000
Lease expiration date				Apr. 30, 2021	Mar. 31, 2024	Aug. 31, 2023
Rent expense				$ 1,600	$ 8,800	$ 43,700
Lease term						87 months
Lease extend term						We executed a three-year lease extension which will expire on August 31, 2023. The renewal base rent payment will be $65,300 with a 3% increase every 12 months for the remaining term of the extension.
Three Year Lease Extension Agreement [Member]
Commitments And Contingencies [Line Items]
Lease expiration date	Aug. 31, 2023
Rent expense	$ 65,300
Long-Term Capital Leasing Arrangements [Member] | Wells Fargo Equipment Finance [Member]
Commitments And Contingencies [Line Items]
Financing lease costs		$ 44,000	$ 44,000
Monthly lease payments		$ 1,279	$ 1,279
Financing lease term		36 months	36 months
Effective interest rate		4.50%	4.50%
Remaining capital lease arrangements							14,000		$ 32,000
interest expense							$ 154	$ 274

Commitments and Contingencies -

Commitments and Contingencies - Schedule of Supplemental Information Related to Leases (Details) - USD ($)	3 Months Ended
	Jun. 30, 2020	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Operating lease - right-of-use assets	$ 2,618,513	$ 573,874
Finance leases as a component of property and equipment, net of accumulated depreciation of $13,472	30,054
Current portion of operating leases	758,910	321,389
Current portion of finance leases	13,812	14,953
Operating lease liabilities, net of current portion	1,914,921	$ 322,263
Operating lease expense as a component of general and administrative expenses	148,724
Finance lease cost Depreciation of leased assets as a component of depreciation	1,555
Finance lease cost Interest on lease liabilities as a component of interest expense	154
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow paid for operating leases	163,187
Cash paid for amounts included in the measurement of lease liabilities: Financing cash flow paid for finance leases	$ 3,691

Commitments and Contingencies_3

Commitments and Contingencies - Schedule of Supplemental Information Related to Leases (Details) (Parenthetical)	Jun. 30, 2020USD ($)
Commitments and Contingencies Disclosure [Abstract]
Finance leases Property and equipment accumulated depreciation	$ 13,472

Commitments and Contingencies_4

Commitments and Contingencies - Schedule of Lease term and Discount Rate (Details)	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Weighted average remaining lease term (months), Operating leases	36 years 1 month 6 days
Weighted average remaining lease term (months), Finance leases	11 years
Weighted average discount rate, Operating leases	6.66%
Weighted average discount rate, Finance leases	3.68%

Commitments and Contingencies_5

Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating and Finance Leases (Details)	Jun. 30, 2020USD ($)
Commitments and Contingencies Disclosure [Abstract]
Operating Leases, 2020 for the remaining 6 months	$ 413,620
Operating Leases, 2021	911,204
Operating Leases, 2022	931,949
Operating Leases, 2023	674,488
Operating Leases, 2024	30,739
Operating Leases, Total Minimum Future Payments	2,962,000
Operating Leases, Less: Imputed Interest	288,169
Operating Leases, Present Value of Lease Liabilities	2,673,831
Finance Leases, 2020 for the remaining 6 months	7,673
Finance Leases, 2021	6,394
Finance Leases, 2022
Finance Leases, 2023
Finance Leases, 2024
Finance Leases, Total Minimum Future Payments	14,067
Finance Leases, Less: Imputed Interest	255
Finance Leases, Present Value of Lease Liabilities	$ 13,812

Stock Options (Details Narrativ

Stock Options (Details Narrative) - $ / shares	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Stock Options
Number of stock option issued during period	0	1,000,000
Stock option of exercise price	$ 0	$ 0.38

Stock Options - Summary of Stoc

Stock Options - Summary of Stock Option Activity (Details) - $ / shares	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Number of Options, Granted	0	1,000,000
Weighted Average Exercise Price, Granted	$ 0	$ 0.38
Stock Option [Member]
Number of Options, Balance at Beginning of Period	2,230,000
Number of Options, Granted
Number of Options, Exercised
Number of Options, Forfeited
Number of Options, Balance at End of Period	2,230,000
Number of Options, Exercisable at End of Period	2,230,000
Weighted Average Exercise Price, Balance at Beginning of Period	$ 0.26
Weighted Average Exercise Price, Granted
Weighted Average Exercise Price, Exercised
Weighted Average Exercise Price, Forfeited
Weighted Average Exercise Price, Balance at End of Period	0.26
Weighted Average Exercise Price, Options Exercisable at End of Period	$ 0.26

Stock Options - Schedule of Emp

Stock Options - Schedule of Employee Stock Options Outstanding (Details)	3 Months Ended
	Jun. 30, 2020$ / sharesshares
Stock Options Number Outstanding | shares	2,230,000	[1]
Stock Option Number Exercisable | shares	2,230,000	[1]
Exercise Price Range One [Member]
Stock Options Outstanding Exercise Price, Lower Range Limit	$ 0.04
Stock Options Outstanding Exercise Price, Upper Range Limit	$ 0.38
Stock Options Number Outstanding | shares	1,650,000
Stock Option Outstanding Weighted Average Remaining Contractual Life	4 years 1 month 6 days
Stock Option Outstanding Weighted Average Exercise Price	$ 0.17
Stock Option Number Exercisable | shares	1,650,000
Stock Option Exercisable Weighted Average Exercise Price	$ 0.17
Exercise Price Range Two [Member]
Stock Options Outstanding Exercise Price, Lower Range Limit	0.47
Stock Options Outstanding Exercise Price, Upper Range Limit	$ 0.55
Stock Options Number Outstanding | shares	580,000
Stock Option Outstanding Weighted Average Remaining Contractual Life	7 years 7 months 6 days
Stock Option Outstanding Weighted Average Exercise Price	$ 0.50
Stock Option Number Exercisable | shares	580,000
Stock Option Exercisable Weighted Average Exercise Price	$ 0.50
[1]	Total number of options outstanding as of June 30, 2020 includes 1,080,000 options issued to five current and two former directors as compensation and 1,150,000 options issue to key employees that were not issued from the Plan.

Stock Options - Schedule of E_2

Stock Options - Schedule of Employee Stock Options Outstanding (Details) (Parenthetical)	Jun. 30, 2020shares
Five Current and Two Former Directors [Member]
Stock options outstanding	1,080,000
Employees [Member]
Stock options outstanding	1,150,000

Geographical Information - Sche

Geographical Information - Schedule of Revenue by Geographical Region (Details) - USD ($)	3 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020
Segment Reporting Information [Line Items]
Net Sales	$ 3,323,543	$ 4,809,040	$ 1,559,000
North America [Member]
Segment Reporting Information [Line Items]
Net Sales	3,087,707	4,613,772
Europe [Member]
Segment Reporting Information [Line Items]
Net Sales	182,812	99,424
Australia [Member]
Segment Reporting Information [Line Items]
Net Sales	$ 53,024	$ 95,844

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jul. 30, 2020	Mar. 31, 2020
Related Party Transaction [Line Items]
Due to related parties	$ 402,000			$ 502,000
Due from related parties	0			100,000
Inventory	6,870,220			$ 7,601,277
Subsequent Event [Member] | Purchase and Sales Agreement [Member]
Related Party Transaction [Line Items]
Inventory			$ 685,000
Warehouse Facility [Member]
Related Party Transaction [Line Items]
Revenue from related parties	0	$ 71,000
Winglight Pacific Ltd [Member]
Related Party Transaction [Line Items]
Revenue from related parties	$ 0	$ 74,000
Related party gross margin percentage	0.00%	21.70%
StarLight Electronics Co, Ltd [Member]
Related Party Transaction [Line Items]
Service expenses	$ 91,000	$ 101,000

Reserve for Sales Returns - Sch

Reserve for Sales Returns - Schedule of Reserve for Sales Returns (Details) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
First Priority Lien Percentage
Reserve for sales returns at beginning of the year	$ 1,224,000	$ 896,154
Provision for estimated sales returns	284,362	415,234
Sales returns received	(1,128,179)	(863,711)
Reserve for sales returns at end of the period	$ 380,183	$ 447,677

Refunds Due to Customers (Detai

Refunds Due to Customers (Details Narrative) - USD ($)	Jun. 30, 2020	Mar. 31, 2020
Refund due to customer	$ 391,088	$ 806,475
One Major Customer [Member]
Refund due to customer	1,691,000	1,691,000
Deducted on payment remittances	1,381,000	1,181,000
Another Major Customer [Member]
Refund due to customer	$ 81,000
Two Major Customer [Member]
Refund due to customer		$ 297,000

Employee Benefit Plans (Details

Employee Benefit Plans (Details Narrative) - USD ($)	3 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Retirement Benefits [Abstract]
Defined contribution plan, administrative expenses	$ 14,000	$ 14,000

Concentrations of Credit and _2

Concentrations of Credit and Sales Risks (Details Narrative)	3 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020
Accounts Receivable [Member] | Three Customers [Member] | North America [Member]
Concentration of sales risk, percentage	74.00%
Accounts Receivable [Member] | Individual [Member] | North America [Member]
Concentration of sales risk, percentage	10.00%		10.00%
Accounts Receivable [Member] | Four Customers [Member] | North America [Member]
Concentration of sales risk, percentage			82.00%
Sales Revenue [Member] | Customers One [Member]
Concentration of sales risk, percentage	35.00%	80.00%
Sales Revenue [Member] | Customers Two [Member]
Concentration of sales risk, percentage	27.00%	15.00%
Sales Revenue [Member] | Customers Three [Member]
Concentration of sales risk, percentage	15.00%