Cover
Cover - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Jul. 14, 2022 | Sep. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Mar. 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --03-31 | ||
Entity File Number | 001-41405 | ||
Entity Registrant Name | SINGING MACHINE CO INC | ||
Entity Central Index Key | 0000923601 | ||
Entity Tax Identification Number | 95-3795478 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 6301 NW | ||
Entity Address, Address Line Two | 5th Way | ||
Entity Address, Address Line Three | Suite 2900 | ||
Entity Address, City or Town | Fort Lauderdale | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33309 | ||
City Area Code | (954) | ||
Local Phone Number | 596-1000 | ||
Title of 12(b) Security | Common Stock, Par Value $0.01 | ||
Trading Symbol | MICS | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 5,239,111 | ||
Entity Common Stock, Shares Outstanding | 3,017,700 | ||
Documents Incorporated By Reference | None | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Firm ID | 274 | ||
Auditor Name | EISNERAMPER LLP | ||
Auditor Location | Iselin, New Jersey |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Current Assets | ||
Cash | $ 2,290,483 | $ 396,579 |
Accounts receivable, net of allowances of $122,550 and $138,580, respectively | 2,785,038 | 2,210,881 |
Due from Crestmark Bank | 100,822 | 4,557,120 |
Accounts receivable related party - Stingray Group, Inc. | 152,212 | 88,041 |
Inventories, net | 14,161,636 | 5,490,255 |
Prepaid expenses and other current assets | 344,409 | 221,071 |
Deferred financing costs | 7,813 | 15,359 |
Total Current Assets | 19,842,413 | 12,979,306 |
Property and equipment, net | 565,094 | 674,153 |
Deferred tax assets | 892,559 | 887,164 |
Operating Leases - right of use assets | 1,279,347 | 2,074,115 |
Other non-current assets | 86,441 | 147,173 |
Total Assets | 22,665,854 | 16,761,911 |
Current Liabilities | ||
Accounts payable | 5,328,215 | 2,461,103 |
Accrued expenses | 1,732,355 | 1,659,499 |
Due to related party - Starlight Consumer Electronics Co., Ltd. | 14,400 | 14,400 |
Due to related party - Starlight R&D, Ltd. | 48,650 | 48,650 |
Revolving line of credit - Iron Horse Credit | 2,500,000 | 64,915 |
Customer deposits | 139,064 | |
Refunds due to customers | 97,968 | 145,408 |
Reserve for sales returns | 990,000 | 960,000 |
Current portion of finance leases | 7,605 | 2,546 |
Current portion of installment notes | 74,300 | 68,332 |
Current portion of note payable - Paycheck Protection Program | 172,685 | |
Current portion of operating lease liabilities | 876,259 | 794,938 |
Current portion of related party subordinated note payable - Starlight Marketing Development, Ltd. | 352,659 | 502,659 |
Total Current Liabilities | 12,022,411 | 7,034,199 |
Finance leases, net of current portion | 10,620 | |
Installment notes, net of current portion | 138,649 | 212,949 |
Note payable - Payroll Protection Program, net of current portion | 271,215 | |
Operating lease liabilities, net of current portion | 457,750 | 1,334,010 |
Total Liabilities | 12,629,430 | 8,852,373 |
Commitments and Contingencies | ||
Shareholders’ Equity | ||
Preferred stock, $1.00 par value; 1,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.01 par value;100,000,000 shares authorized; 1,221,209 and 1,301,358 shares issued and outstanding, respectively | 12,212 | 13,014 |
Additional paid-in capital | 24,902,694 | 20,150,715 |
Accumulated deficit | (14,878,482) | (12,254,191) |
Total Shareholders’ Equity | 10,036,424 | 7,909,538 |
Total Liabilities and Shareholders’ Equity | $ 22,665,854 | $ 16,761,911 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, net | $ 122,550 | $ 138,580 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 1,221,209 | 1,301,358 |
Common stock, shares outstanding | 1,221,209 | 1,301,358 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Net Sales | $ 47,512,161 | $ 45,802,574 |
Cost of Goods Sold | 36,697,383 | 33,505,356 |
Gross Profit | 10,814,778 | 12,297,218 |
Operating Expenses | ||
Selling expenses | 3,588,276 | 3,976,523 |
General and administrative expenses | 6,911,377 | 6,596,987 |
Depreciation | 245,890 | 298,357 |
Total Operating Expenses | 10,745,543 | 10,871,867 |
Income from Operations | 69,235 | 1,425,351 |
Other Income (Expense) | ||
Gain from Paycheck Protection Plan loan forgiveness | 448,242 | |
Gain - related party | 11,236 | 220,023 |
Gain from damaged goods insurance claim | 1,067,829 | |
Gain from settlement of accounts payable | 339,311 | 390,000 |
Interest expense | (535,202) | (412,270) |
Finance costs | (45,047) | (61,699) |
Total Other Income (Expense), net | 218,540 | 1,203,883 |
Income Before Income Tax Provision | 287,775 | 2,629,234 |
Income Tax Provision | (57,304) | (456,869) |
Net Income | $ 230,471 | $ 2,172,365 |
Net Income per Common Share | ||
Basic | $ 0.14 | $ 1.68 |
Diluted | $ 0.14 | $ 1.67 |
Equivalent Shares: | ||
Basic | 1,614,506 | 1,292,003 |
Diluted | 1,623,397 | 1,304,288 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net Income | $ 230,471 | $ 2,172,365 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation | 245,890 | 298,357 |
Amortization of deferred financing costs | 45,047 | 61,699 |
Change in inventory reserve | (271,892) | 202,339 |
Change in allowance for bad debts | (16,030) | (198,881) |
Loss from disposal of property and equipment | 4,394 | |
Stock based compensation | 44,287 | 22,710 |
Change in net deferred tax assets | (5,395) | 398,557 |
Paycheck Protection Plan loan forgiveness | (448,242) | |
Gain - related party | 11,236 | 220,023 |
Gain from extinguishment of accounts payable | 339,311 | 390,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (558,127) | (151,500) |
Due from banks | 4,456,298 | (2,168,682) |
Accounts receivable - related parties | (64,171) | 11,959 |
Insurance receivable | 1,268,463 | |
Inventories | (8,399,489) | 1,908,683 |
Prepaid expenses and other current assets | (123,338) | 31,402 |
Other non-current assets | 60,732 | 3,336 |
Accounts payable | 2,516,565 | (3,190,530) |
Accrued expenses | 77,198 | 130,331 |
Due to related parties | (438,666) | |
Customer deposits | (139,064) | 139,064 |
Refunds due to customers | (47,440) | (661,067) |
Reserve for sales returns | 30,000 | (264,000) |
Operating lease liabilities, net of operating leases - right of use assets | (171) | (14,945) |
Net cash (used in) provided by operating activities | (2,011,930) | 171,017 |
Cash flows from investing activities | ||
Purchase of property and equipment | (117,573) | (201,161) |
Net cash used in investing activities | (117,573) | (201,161) |
Cash flows from financing activities | ||
Proceeds from Issuance of stock - net of transaction expenses | 9,000,579 | |
Payment of redemption and retirement of treasury stock | (7,162,451) | |
Net Proceeds from revolving lines of credit | 2,435,085 | 64,915 |
Proceeds from note payable - Payroll Protection Program | 443,900 | |
Payment of deferred financing charges | (37,501) | (73,725) |
Payments on installment notes | (68,332) | (65,010) |
Proceeds from exercise of stock options | 14,000 | 26,400 |
Payment on subordinated note payable - related party | (150,000) | (300,000) |
Payments on finance leases | (7,973) | (14,957) |
Net cash provided by financing activities | 4,023,407 | 81,523 |
Net change in cash | 1,893,904 | 51,379 |
Cash at beginning of year | 396,579 | 345,200 |
Cash at end of year | 2,290,483 | 396,579 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 546,545 | 461,080 |
Equipment purchased under capital lease | 23,651 | |
Issuance of common stock and warrants for stock issuance expenses | 547,838 | |
Operating leases - right of use assets and lease liabilities at inception of lease | $ 16,364 | $ 2,184,105 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Mar. 31, 2020 | $ 12,853 | $ 20,101,766 | $ (14,426,556) | $ 5,688,063 |
Balance, shares at Mar. 31, 2020 | 1,285,255 | |||
Net income | 2,172,365 | 2,172,365 | ||
Employee compensation-stock option | 10,210 | 10,210 | ||
Exercise of stock options | $ 147 | 26,253 | 26,400 | |
Exercise of stock options, shares | 14,667 | |||
Issuance of common stock - directors | $ 14 | 12,486 | 12,500 | |
Issuance of common stock - directors, shares | 1,437 | |||
Ending balance, value at Mar. 31, 2021 | $ 13,014 | 20,150,715 | (12,254,191) | 7,909,538 |
Balance, shares at Mar. 31, 2021 | 1,301,358 | |||
Net income | 230,471 | 230,471 | ||
Employee compensation-stock option | 22,287 | 22,287 | ||
Exercise of stock options | $ 27 | 13,973 | 14,000 | |
Exercise of stock options, shares | 2,667 | |||
Issuance of common stock - directors | $ 6 | 4,994 | 5,000 | |
Issuance of common stock - directors, shares | 575 | |||
Issuance of stock | $ 5,500 | 4,944,500 | 4,950,000 | |
Issuance of stock, shares | 550,000 | |||
Issuance of pre-funded warrants | 4,881,667 | 4,881,667 | ||
Payment of stock issuance expenses | (831,088) | (831,088) | ||
Issuance of stock for stock issuance expenses | $ 190 | (190) | ||
Issuance of stock for stock issuance expenses, shares | 19,048 | |||
Redemption and retirement of treasury shares | $ (6,542) | (4,301,147) | (2,854,762) | (7,162,451) |
Redemption and retirement of treasury shares, shares | (654,105) | |||
Issuance of common stock - non-employee | $ 17 | 16,983 | 17,000 | |
Issuance of common stock - non-employee, shares | 1,667 | |||
Collection of subscription receivable | ||||
Ending balance, value at Mar. 31, 2022 | $ 12,212 | $ 24,902,694 | $ (14,878,482) | $ 10,036,424 |
Balance, shares at Mar. 31, 2022 | 1,221,209 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Mar. 31, 2022 | |
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 wholly-owned subsidiaries SMC (Comercial Offshore De Macau) Limitada (“Macau Subsidiary”), SMC Logistics, Inc. (“SMCL”), SMC-Music, Inc. (“SMCM”) and SMC (HK) Limited (“SMH”), are primarily engaged in the development, marketing, and sale of consumer karaoke audio equipment, accessories and musical recordings. The products are sold directly to distributors and retail customers. RECENT EQUITY EVENTS On May 23, 2022, the Company effected a reverse stock split of its shares of common stock in a ratio of 1:30. The reverse stock split was affected to meet The Nasdaq Capital Market’s minimum bid price requirement. All information in these consolidated financial statements have been retroactively adjusted to give effect to this 1-for-30 On August 5, 2021, the Company entered into a stock redemption agreement (the “Redemption Agreement”) with koncepts International Limited (“koncepts”)and Treasure Green Holdings Ltd. (“Treasure Green”) (entities that are principally owned by the Company’s former Chairman, Philip Lau) pursuant to which the Company redeemed 654,105 7,162,000 49% 2% 51% Pursuant to the Redemption Agreement, neither koncepts nor Treasure Green remained shareholders of the Company and SLRD, SCE, Cosmo, Winglight and SLE are no longer related parties. Prior to August 10, 2021 we did business with a number of entities that are principally owned by the Company’s former Chairman, Philip Lau , including Starlight R&D Ltd (“SLRD”), Starlight Consumer Electronics USA, Inc., (“SCE”), Cosmo Communications Corporation of Canada, Inc. (“Cosmo”), Winglight Pacific, Ltd (“Winglight”) and Starlight Electronics Company Ltd (“SLE”), among others. On May 23, 2022, the “Company entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp., who acted as the sole underwriter (the “Underwriter”), in a firm commitment underwritten public offering (the “Offering”) pursuant to which the Company sold to the Underwriter 1,000,000 0.01 4.0 0.7 4.00 Pursuant to the terms of the Underwriting Agreement, the Company agreed to issue to the Underwriter warrants to purchase up to 100,000 10.0% 5.00 The Common Stock was approved to list on the Nasdaq Capital Market under the symbol “MICS” and began trading on the Nasdaq Capital Market on May 24, 2022. The Shares were offered and sold to the public pursuant to the Company’s registration statement on Form S-1 (File No. 333-264277), initially filed by the Company with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”) on April 13, 2022 and declared effective by the SEC on May 23, 2022. THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 |
LIQUIDITY
LIQUIDITY | 12 Months Ended |
Mar. 31, 2022 | |
Liquidity | |
LIQUIDITY | NOTE 2 – LIQUIDITY The Company reported net income of approximately $ 0.2 2.0 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements include the accounts of the Company, its Macau Subsidiary, SMCL, and SMCM. All inter-company accounts and transactions have been eliminated in consolidation for all periods presented. 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 statements. 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% 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 statements of income and translations would be 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 in excess of the Federal Deposit Insurance Corporation insured amounts. The Company maintains cash balances in foreign financial institutions. The amounts at foreign financial institutions at March 31, 2022 and 2021 were approximately $ 0.1 0.2 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 March 31, 2022 and 2021 the estimated amounts for these future inventory returns were approximately $ 0.6 0.7 0.4 0.6 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 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.” 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, customer deposits, refunds due to customers, and due to related parties approximates fair value due to the relatively short period to maturity for these instruments. The carrying amounts on the notes payable, finance leases and installment notes approximate fair value either due to the relatively short period to maturity or the related interest is accrued at a rate similar to market rates. The carrying amounts on the revolving line of credit approximates fair value due the relatively short period to maturity and related interest accrued at market rates. 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 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 selectively participates in a retailer’s co-op promotion incentives to maximize sales of the Company’s products on the retail floor or to assist in developing consumer awareness of new product launches, by providing marketing fund allowances to our customers. As these co-op promotion initiatives are not a distinct good or service and the Company cannot reasonably estimate the fair value of the benefit it receives from these arrangements, the cost of these allowances at the time they are offered to the customers are recorded as a reduction to net sales. Co-op promotion incentives were approximately $ 1.7 2.0 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 consolidated statements of income as our underlying customer agreements are less than one year. While the Company has no overstock return privileges in its vendor agreements with its customers, 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 from 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 $ 1.0 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 13 – SEGMENT INFORMATION). THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 During fiscal 2022 and 2021 revenue was derived from five different major product lines. Disaggregated approximate revenue from these product lines consisted of the following: SCHEDULE OF DISAGGREGATION OF REVENUE March 31, 2022 March 31, 2021 Revenue by Product Line Fiscal Years Ended Product Line March 31, 2022 March 31, 2021 Karaoke Machines $ 38,900,000 $ 34,700,000 Microphones and Accessories 4,200,000 4,700,000 SMC Kids Toys 2,300,000 1,300,000 Licensed Products 1,600,000 4,700,000 Music Subscriptions 500,000 400,000 Total Net Sales $ 47,500,000 $ 45,800,000 SHIPPING AND HANDLING COSTS 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 Fiscal 2022 and 2021 shipping and handling expenses were approximately $ 0.9 1.2 STOCK-BASED COMPENSATION The Company follows the provisions of 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 consolidated statements of income 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 in fiscal years ended March 31, 2022 and 2021 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 fiscal years ended March 31, 2022 and 2021, the stock option expense was approximately $ 22,000 10,000 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. ● For the year ended March 31, 2022: expected dividend yield of 0% 0.43% 0.96% 149.5% 157.0% three years ● For the year ended March 31, 2021: expected dividend yield of 0% .18% 254.1% three years The Company’s directors were issued shares of stock as compensation for their service. For the years ended March 31, 2022 and 2021, the stock compensation expense to directors was $ 5,000 12,500 RESEARCH AND DEVELOPMENT COSTS All research and development costs are charged to results of operations as incurred. These expenses are shown as a component of general and administrative expenses in the consolidated statements of income. For both years ended March 31, 2022 and 2021, these amounts totaled approximately $ 0.1 INCOME TAXES The Company follows the provisions of FASB ASC 740 “Accounting for Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If it is more likely than not that some portion of a deferred tax asset will not be realized, a valuation allowance is recognized. 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% THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 COMPUTATION OF EARNINGS (LOSS) PER SHARE Computation of dilutive shares for fiscal years ended March 31, 2022 and 2021 are as follows: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNING PER SHARE Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 Basic weighted average common shares outstanding 1,614,506 1,292,003 Effect of dilutive stock options 8,891 12,285 Diluted weighted average of common shares outstanding 1,623,397 1,304,288 Basic net income per share is based on the weighted average number of shares of common stock outstanding during the period. Pre-funded warrants to purchase 561,111 9,000 12,000 56,000 25,000 RECENT ACCOUNTING PRONOUNCEMENTS In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses” (Topic 326) |
INVENTORIES, NET
INVENTORIES, NET | 12 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | NOTE 4 – INVENTORIES, NET Inventories are comprised of the following components: SCHEDULE OF INVENTORY March 31, March 31, 2022 2021 Finished Goods $ 10,600,000 $ 5,400,000 Inventory in Transit 3,300,000 200,000 Estimated Amount of Future Returns 700,000 500,000 Subtotal 14,600,000 6,100,000 Less: Inventory Reserve 400,000 600,000 Total Inventories $ 14,200,000 $ 5,500,000 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 - PROPERTY AND EQUIPMENT A summary of property and equipment is as follows: SUMMARY OF PROPERTY AND EQUIPMENT USEFUL MARCH 31, MARCH 31, LIFE 2022 2021 Computer and office equipment 5 7 $ 400,000 $ 400,000 Furniture and fixtures 7 100,000 100,000 Warehouse equipment 7 200,000 200,000 Molds and tooling 3 5 2,000,000 1,900,000 2,700,000 2,600,000 Less: Accumulated depreciation 2,100,000 1,900,000 $ 600,000 $ 700,000 Depreciation expense for fiscal years ended 2022 and 2021 was approximately $ 0.2 0.2 |
FINANCING
FINANCING | 12 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
FINANCING | NOTE 6 – 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 10.0 5.0 74,000 45,000 62,000 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 Credit (“IHC”) Intercreditor Revolving Credit Facility. See below. The Crestmark Facility is secured by a perfected 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 8.75 2.0 0.3 0.4 2.5 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 IHC. ● The Company must maintain a fixed charge coverage ratio test of 1:1 times measured on a rolling 12-month basis, defined as earnings before interest, taxes, depreciation and amortization (“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 was waived for the first six months of the IHC Facility. As of March 31, 2022, the Company was in compliance with this covenant. The IHC Facility is secured by a perfected security interest in the Company’s inventory. The IHC Facility bears interest at 1.292 15.51 1,000,000 0.2 0.1 2.5 0.1 2.0 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 Note Payable Payroll Protection Plan On May 5, 2020, the Company received loan proceeds from Crestmark in the amount of approximately $ 444,000 448,000 Installment Notes Payable On June 18, 2019, the Company entered into a financing arrangement with Dimension Funding, LLC (“Dimension”) to finance an ERP System project over a term of 60 365,000 0.4 7.58 8.55 9.25 7,459 0.2 0.3 21,000 26,000 Subordinated Debt/Note Payable to Related Party In conjunction with the Crestmark Facility and IHC Facility there is a subordination agreement on related party debt due to Starlight Marketing Development, Ltd. On June 1, 2020, the remaining amount due on the subordinated debt of approximately $ 0.8 6 6 20,000 47,000 Both the Crestmark Facility 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. As of March 31, 2022, the Company met repayment requirements of the Intercreditor Revolving Credit Facility and has made cumulative principal payments totaling approximately $ 0.4 As of March 31, 2022 and 2021 the remaining amount due on the Subordinated Note Payable was approximately $ 0.3 0.5 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 - COMMITMENTS AND CONTINGENCIES LEGAL MATTERS On September 11, 2020 a complaint was filed against the Company’s SMCL subsidiary and various staffing agencies used by SMCL in a Superior Court of San Bernadino County. The complaint alleges an employee of the Company committed employment practice violations against a former temporary employee not employed by us. Management has investigated the allegation and has engaged an employment attorney to defend the lawsuit. The case is still in discovery and no trial date has been set. Management does not believe the claims have merit and does not believe the lawsuit will have a material adverse effect on our financial results. On April 29, 2022, a complaint was filed by Tunnel IP LLC against the Company in the U.S District Court for the Southern District of Florida. The Complaint alleges that one of the Company’s products, SDL2093, infringes on U.S. Patent No. 7,916,877. On June 24, 2022, Tunnel IP agreed to dismiss all claims against the Company with prejudice. Other than as disclosed above, we are not a party to, and our property is not the subject of, any material legal proceedings. THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 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. 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 . The lease expires on March 31, 2024 9,400 We entered into an operating lease agreement, effective June 1, 2013, for warehouse space in Ontario, California for our logistics operations. On June 15, 2020 we executed a three-year lease extension which will expire on August 31, 2023 65,300 We entered into an operating lease agreement, effective May 1, 2018, for office space in Macau. The rent is fixed at approximately $ 1,600 April 30, 2021 April 30, 2022 1,700 30,000 Lease expense for our operating leases is recognized on a straight-line basis over the lease terms. Finance Leases On July 1, 2021, we entered into a long-term capital leasing arrangement with Union Credit Corporation to finance the leasing of a used forklift in the amount of approximately $ 24,000 755 36 9.9 18,000 20,000 1,160 0 Supplemental balance sheet information related to leases as of March 31, 2022 is as follows: SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES Assets: Operating lease - right-of-use assets $ 1,279,347 Finance leases as a component of property and equipment, net of accumulated depreciation of $ 2,776 15,449 Liabilities Current Current portion of operating leases $ 876,259 Current portion of finance leases 7,605 Noncurrent Operating lease liabilities, net of current portion $ 457,750 Finance leases, net of current portion 10,620 Supplemental statement of operations information related to leases for the fiscal year ended March 31, 2022 is as follows: SCHEDULE OF LEASE TERM AND DISCOUNT RATE Fiscal Year Ended March 31, 2022 Operating lease expense as a component of general and administrative expenses $ 813,292 Finance lease cost Depreciation of leased assets as a component of depreciation $ 2,776 Interest on finance lease liabilities as a component of interest expense $ 1,547 Supplemental cash flow information related to leases for the nine months ended March 31, 2022 is as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow paid for operating leases $ 928,640 Financing cash flow paid for finance leases $ 7,973 Lease term and Discount Rate Weighted average remaining lease term (months) Operating leases 18.2 Finance leases 28.0 Weighted average discount rate Operating leases 6.25 % Finance leases 9.86 % THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 Scheduled maturities of operating and finance lease liabilities outstanding as of March 31, 2022 are as follows: SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING AND FINANCE LEASES Fiscal Year Operating Leases Finance Leases 2023 $ 940,282 $ 9,065 2024 467,552 9,065 2025 2,267 Total Minimum Future Payments 1,407,834 20,397 Less: Imputed Interest 128,487 2,172 Present Value of Lease Liabilities $ 1,279,347 $ 18,225 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 12 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHAREHOLDERS’ EQUITY | NOTE 8 – SHAREHOLDERS’ EQUITY COMMON STOCK ISSUANCES During the years ended March 31, 2022 and 2021 the Company issued the following common stock shares: Fiscal 2022: On May 17, 2021 the Company issued 667 7.20 On August 20, 2021 the Company issued 575 8.70 On December 31, 2021 the Company issued 2,000 4.50 Fiscal 2021: On October 30, 2020 the Company issued 14,667 1.80 On November 6, 2020, the Company issued 1,437 8.70 STOCK OPTIONS During the years ended March 31, 2022 and 2021 the Company issued the following stock options: Fiscal 2022: On August 23, 2021, the Company issued 1,334 8.70 On December 1, 2021, the Company issued 667 8.10 On December 22, 2021 the Company issued 1,667 8.10 ● For the year ended March 31, 2022: expected dividend yield of 0 0.43 0.96 149.5 157.0 three years Fiscal 2021: On November 4, 2020, the Company issued 3,334 8.70 ● For the year ended March 31, 2021: expected dividend yield of 0 .18 254.1 three years THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 A summary of stock option activity for each of the years presented is summarized below. SUMMARY OF STOCK OPTION ACTIVITY Fiscal 2022 Fiscal 2021 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Stock Options: Balance at beginning of year 56,000 $ 9.60 74,333 $ 7.80 Granted 3,667 $ 7.80 3,333 $ 8.70 Exercised (2,667 ) $ 5.40 (14,667 ) $ 1.80 Forfeited (667 ) $ 3.60 (7,000 ) $ 5.10 Balance at end of year * 56,333 $ 9.90 56,000 $ 9.60 Options exercisable at end of year 52,667 $ 9.90 52,667 $ 9.90 The following table summarizes information about employee stock options outstanding at March 31, 2022: SCHEDULE OF EMPLOYEE STOCK OPTIONS OUTSTANDING Range of Exercise Price Number Outstanding at March 31, 2022 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable at March 31, 2022 Weighted Average Exercise Price $ 3.60 11.40 38,000 3.7 $ 7.50 34,333 $ 7.20 $ 14.10 16.50 18,333 4.9 $ 15.00 18,333 $ 15.00 * 56,333 52,667 * Total number of options outstanding as of March 31, 2022 includes 20,000 36,333 As of March 31, 2022, there was unrecognized expense of approximately $ 12,000 The vested options as of March 31, 2022 had no As per the execution of the August 2021 private placement as disclosed in Note 2 and Note 10, common warrants and pre-funded warrants issued and outstanding as of March 31, 2022 are as follows: SCHEDULE OF COMMON STOCK WARRANTS ISSUED AND OUTSTANDING Number of Shares Warrants outstanding at March 31, 2021 - Common warrants issued 1,155,556 Pre-funded warrants issued 561,111 Warrants outstanding at March 31, 2022 1,716,667 As of March 31, 2022, the Company’s warrants by expiration date were as follows: SCHEDULE OF WARRANTS EXPIRATION Number of Number of Pre-funded Warrants Exercise Price Expiration Date 1,155,556 - * $ 2.80 9/15/2026 - 561,111 $ 0.30 N/A * 1,155,556 561,111 * Effective with the opening of trading on the Nasdaq Stock Market on May 24, 2022, the exercise price of certain warrants issued by the Company pursuant to the terms of that certain Securities Purchase Agreement dated August 5, 2021, was adjusted so that the exercise price is $ 2.80 On April 12, 2022, the Board of Directors approved The Singing Machine Company, Inc. 2022 Equity Incentive Plan, or the 2022 Plan. The 2022 Plan provides for the issuance of equity incentive awards, such as stock options, stock appreciation rights, stock awards, restricted stock, stock units, performance awards and other stock or cash-based awards collectively, the “Awards.” Awards may be granted under the 2022 Plan to the Company’s employees, officers, directors, consultants, agents, advisors and independent contractors. THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 The maximum number of shares of common stock initially available for issuance under the 2022 Plan is 233,334 shares of common stock and thereafter an annual increase shall be added as of the first day of the Company’s fiscal year beginning in 2023, equal to the least of (i) 5% of the outstanding common stock on a fully diluted basis as of the end of the Company’s immediately preceding fiscal year, (ii) 33,334 shares, and (iii) a lesser amount as determined by the Board of Directors. The shares of common stock subject to stock awards granted under the 2022 Plan that lapse, terminate, expire prior to exercise, are canceled or are forfeited, shall again become available for issuance under the 2022 Plan subject to a stock award under the 2022 Plan shall not again be made available for issuance or delivery under the 2022 Plan if such shares are (i) shares tendered by a participant or retained by the Company as full or partial payment to the Company for the exercise or purchase price of an award or (ii) shares used to satisfy tax withholding obligations in connection with an award. Notwithstanding any other provision of the 2022 Plan to the contrary, unless the plan administrator determines otherwise with respect to a particular award, in the event of a change of control, if and to the extent an outstanding award is not converted, assumed, substituted for or replaced by the successor company, then such award will terminate upon effectiveness of the change of control. Prior to the change of control, the plan administrator may approve accelerated vesting and/or lapse of forfeiture or repurchase restrictions with respect to all or a portion of the unvested portions of such awards, any such determinations to be made by the plan administrator in its sole discretion. A change in control includes: ● certain acquisitions of beneficial ownership of more than 50 ● a change in the composition of the board of directors during any two-year period such that the individuals who, as of the beginning of such two-year period, constitute the board of directors cease for any reason to constitute at least a majority of the board, as defined in the 2022 Plan; and ● the consummation of a company transaction, as defined in the 2022 Plan. The Board of Directors may amend, suspend or terminate the 2022 Plan or a portion of it at any time; however, to the extent required by applicable law, regulation or stock exchange rule, stockholder approval shall be required for any amendment to the 2022 Plan. The 2022 Plan is scheduled to terminate automatically in ten (10) years following the earlier of (a) the date the Board of Directors adopted the 2022 Plan and (b) the date the shareholders approved the 2022 Plan. |
AUGUST 2021 STOCK REDEMPTION
AUGUST 2021 STOCK REDEMPTION | 12 Months Ended |
Mar. 31, 2022 | |
August 2021 Stock Redemption | |
AUGUST 2021 STOCK REDEMPTION | NOTE 9 – AUGUST 2021 STOCK REDEMPTION On August 5, 2021, the Company entered into the Redemption Agreement with koncepts and Treasure Green, pursuant to which the Company redeemed 654,105 7,162,000 Pursuant to the Redemption Agreement, neither koncepts nor Treasure Green remained shareholders of the Company. |
AUGUST 2021 PRIVATE PLACEMENT
AUGUST 2021 PRIVATE PLACEMENT | 12 Months Ended |
Mar. 31, 2022 | |
August 2021 Private Placement | |
AUGUST 2021 PRIVATE PLACEMENT | NOTE 10 – AUGUST 2021 PRIVATE PLACEMENT On August 5, 2021, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with large institutional investors and the strategic investor for private placement of (i) 550,000 550,000 10.50 561,111 0.01 561,111 10.50 The Common Warrants and Pre-Funded Warrants are collectively referred to as (the “Warrants”). The Warrants are exercisable at any time at the option of the holder, have a term of 5 years from the issuance date and provide for cashless exercise under certain conditions. The Company determined that the Warrants meet the conditions for equity classification. Shares issuable upon exercise of the Warrants are hereinafter referred to as the “Warrant Shares”. The exercise price and number of the Warrant Shares are subject to anti-dilution and other adjustments for certain stock dividends, stock splits, subsequent rights offerings, pro rata distributions or certain equity structure changes. Pursuant to the terms of the Purchase Agreement, on September 3, 2021, the Company filed a registration statement providing for the resale by the purchasers of the Shares and Warrant Shares sold in the Private Placement, which registration statement became effective on September 15, 2021. Additionally, under the terms of the Purchase Agreement, the Company was obligated to use its reasonable best efforts to submit an application to have the Company’s common stock listed on a national exchange by December 31, 2021, and to use its reasonable best efforts to have the Shares and Warrant Shares listed on such national exchange as soon as practicable following the submission of such application. As indicated, the Common Stock was approved to list on the Nasdaq Capital Market under the symbol “MICS” and began trading on the Nasdaq Capital Market on May 24, 2022. THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 The closing of the Private Placement took place on August 10, 2021, when the Shares and Warrants were delivered to the purchasers and funds, in the amount of approximately $ 9,832,000 7,162,000 Stingray Group Inc. (“Stingray” or the “strategic investor”), a leading music, media and technology is part of the group of investors who participated in the Private Placement and have acquired a minority interest in the Company. Stingray is a long-standing business partner with the Company that provides our customers with music content from their extensive library of expertly produced and licensed karaoke content and is now a related party (see Note 15- Related Party Transactions). In connection with the Private Placement, on July 6, 2021, the Company entered into a Placement Agency Agreement with A.G.P./Alliance Global Partners (“AGP”), which provided for AGP to serve as the exclusive placement agent, advisor or underwriter (the “placement agent services”). Pursuant to the Placement Agency Agreement, upon closing of the Private Placement, the Company paid AGP placement fees of $ 630,000 (representing 7% of the gross proceeds raised in the Private Placement excluding proceeds raised from the strategic investor, plus 3.5% of the aggregate gross proceeds raised from the strategic investor) 44,445 5 10.50 359,000 9.90 2.5 168 0 2.65 In addition to the placement fees paid to AGP, the Company incurred additional offering costs for direct incremental legal, consulting, accounting and filing fees related to the Private Placement of approximately $ 390,000 1,905 189,000 100,000 831,000 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 - INCOME TAXES The Company files separate tax returns in the United States and in Macau. The Macau Subsidiary has received approval from the Macau government to operate its business as a Macau Offshore Company (MOC), and is exempt from the Macau income tax. For the fiscal years ended March 31, 2022 and 2021, the Macau Subsidiary recorded no tax provision. The U.S. Federal net operating loss carryforward is subject to an IRS Section 382 limitation. As of both March 31, 2022 and 2021, the Company had net deferred tax assets of approximately $ 0.9 20.0 0.1 78,000 17.4 0.5 23,000 13,000 The income tax provision (benefit) for federal, foreign, and state income taxes in the consolidated statements of income consisted of the following components for 2022 and 2021: SCHEDULE OF PROVISION FOR INCOME TAXES 2022 2021 Income tax provision: Current: Federal $ 62,699 $ 54,487 State - 3,825 Total current Federal and State tax provision $ 62,699 $ 58,312 Deferred: Federal $ (59,434 ) $ 417,477 State 54,039 (18,920 ) Total Deferred Federal and State (5,395 ) 398,557 Total income tax provision $ 57,304 $ 456,869 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS March 31, 2022 and 2021 The United States and foreign components of income (loss) before income taxes are as follows: SCHEDULE OF INCOME LOSS BEFORE INCOME TAX 2022 2021 United States $ (260,911 ) $ 1,922,947 Foreign 548,686 706,287 total $ 287,775 $ 2,629,234 The actual tax provision differs from the “expected” tax for the years ended March 31, 2022 and 2021 (computed by applying the U.S. Federal Corporate tax rate of 21 percent to income before taxes) as follows: SCHEDULE OF TAX PROVISION 2022 2021 Expected tax provision $ 60,324 $ 551,982 State income taxes, net of Federal income tax provision 13,816 128,699 Permanent differences 10,290 (6,578 ) Tax rate differential on foreign earnings (83,954 ) (108,690 ) Change in valuation allowance 55,375 (65,193 ) Other 1,453 (43,351 ) Tax provision $ 57,304 $ 456,869 The tax effects of temporary differences that give rise to significant portions of deferred tax assets and (liabilities) are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2022 2021 NOL Federal Carryforward $ 238,955 $ 246,769 State NOL Carryforward 181,943 194,388 Inventory differences 415,404 348,921 Stock option compensation expense 117,159 115,730 Section 163(j) 62,801 - Allowance for doubtful accounts 31,619 35,877 Reserve for estimated returns 79,109 111,887 Accrued vacation 10,143 13,186 Total 1,137,133 1,066,758 Less: valuation allowance (78,024 ) (22,649 ) Net deferred tax asset 1,059,109 1,044,109 Depreciable and amortizable assets (117,595 ) (119,242 ) Prepaid expenses (48,955 ) (37,703 ) Net deferred tax liability (166,550 ) (156,945 ) Total $ 892,559 $ 887,164 The Company performed an analysis in accordance with the provisions of ASC 740, which requires an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. The analysis performed to assess the realizability of the deferred tax assets included an evaluation of the pattern and timing of the reversals of temporary differences and the length of carryback and carryforward periods available under the applicable federal and state laws; and the amount and timing of future taxable income. At March 31, 2022, the Company evaluated the realizability of its deferred tax assets in accordance with accounting principles generally accepted in the United States of America and concluded that a $ 78,024 At March 31, 2022, the Company has federal tax net operating loss carryforwards in the amount of approximately $ 1.1 0.15 3.4 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 12 - SEGMENT INFORMATION The Company operates in one SCHEDULE OF REVENUE BY GEOGRAPHICAL REGION 2022 2021 FOR THE FISCAL YEARS ENDED March 31, March 31, 2022 2021 North America $ 46,400,000 $ 44,200,000 Europe 700,000 1,200,000 Australia 400,000 400,000 Net sales $ 47,500,000 $ 45,800,000 The geographic area of sales is based primarily on where the product was delivered. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Mar. 31, 2022 | |
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 fiscal years ended March 31, 2022 and 2021 totaled approximately $ 70,000 74,000 |
CONCENTRATIONS OF CREDIT RISK,
CONCENTRATIONS OF CREDIT RISK, CUSTOMERS, AND SUPPLIERS | 12 Months Ended |
Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF CREDIT RISK, CUSTOMERS, AND SUPPLIERS | NOTE 14 - CONCENTRATIONS OF CREDIT RISK, CUSTOMERS, AND SUPPLIERS The Company derives a majority of its revenues from retailers 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 March 31, 2022, 53 10 79 10% Revenues derived from our top three customers in 2022 and 2021 were 72 69 10 37 18 17 12 36 20 13 12 The Macau Subsidiary recorded net sales of approximately $ 3.4 4.4 The Company is dependent upon foreign companies for the manufacture of all its electronic products. The Company’s arrangements with manufacturers are subject to the risk of doing business abroad, such as import duties, trade restrictions, work stoppages, foreign currency fluctuations, political instability, and other factors, which could have an adverse impact on its business. The Company believes that the loss of any one or more of their suppliers would not have a long-term material adverse effect because other manufacturers with whom the Company does business would be able to increase production to fulfill their requirements. However, the loss of certain suppliers in the short-term could adversely affect business until alternative supply arrangements are secured. During fiscal years 2022 and 2021, manufacturers in the People’s Republic of China accounted for 100 the U.S. government-imposed tariffs of up to 25% on certain goods imported from China. All of our products are manufactured and imported from China however, only our microphones are currently subject to a 7.5% tariff currently in place The COVID-19 pandemic has significantly affected U.S. consumer shopping patterns and caused the health of the U.S. and world economy to deteriorate in fiscal year 2022. While many of the restrictions and measures initially implemented in response to the pandemic have since been softened or lifted in varying degrees in different locations around the world, the uncertainty regarding existing and new potential variants of COVID-19 and the success of any vaccines in respect thereof, may in the future cause a reduction in global economic activity or prompt, the re-imposition of certain restrictions and measures. The Company is dependent upon foreign companies for the manufacture of all its electronic THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 products. The Company’s arrangements with manufacturers are subject to the risk of doing business abroad, such as import duties, trade restrictions, work stoppages, foreign currency fluctuations, political instability, and other factors, which could have an adverse impact on its business. The Company believes that the loss of any one or more of their suppliers would not have a long-term material adverse effect because other manufacturers with whom the Company does business would be able to increase production to fulfill their requirements. However, the loss of certain suppliers in the short-term could adversely affect business until alternative supply arrangements are secured. Additionally, in late calendar 2021, the increased demand for consumer electronics products and current economic recovery continued to increase worldwide demand for products using semiconductor “chip” components in the production of most consumer electronics which has resulted in an international shortage of chips available to fulfill demand. As a result, the Company has experienced longer delivery lead times and some unavailability of these components which have delayed delivery of some of our products. The Company has also experienced delays in delivery schedules due to new outbreaks of COVID-19 in Southern China that have forced temporary closures of some key shipping ports. The port closures have also led to a temporary shortage of shipping containers which have resulted in significant price increases due to increased demand. While we have seen the easing of COVID-19 restrictions and the impact on our business, we cannot predict the impact of the resurgence of variants of COVID-19 and other factors affecting local and global economies, specifically China. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15 – RELATED PARTY TRANSACTIONS DUE TO/FROM RELATED PARTIES On both March 31, 2022 and 2021 the Company had approximately $ 0.1 During our fiscal year ended March 31, 2022 and 2021, the Company did business with entities owned by our former Chairman, Philip Lau. Those entities were: Starlight R&D Ltd (“SLRD”), Starlight Consumer Electronics USA, Inc. (“SCE”), Cosmo Communications Corporation of Canada, Inc. (“Cosmo”), Winglight Pacific, Ltd. (“Winglight”), and Starlight Electronics Company Ltd. (“SLE”). On March 31, 2022 and 2021 the Company had approximately $ 0.1 Mr. Lau resigned as Chairman effective August 10, 2021. During our fiscal year ended March 31, 2022 and 2021, the Company did business with Stingray Group Inc (“Stingray”) who is part of a group of investors who participated in the Private Placement and have acquired a minority interest in the Company (see Note 10 – August 2021 Private Placement ). On March 31, 2022 and 2021, the Company had approximately $ 0.2 0.1 TRADE During both Fiscal 2022 and 2021 the Company paid approximately $ 0.4 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 $ 0.7 0.0 0.2 The Company has a music subscription sharing agreement with Stingray. For the fiscal years ended March 31, 2022 and 2021 the Company received music subscription revenue of approximately $ 0.5 0.4 |
RESERVE FOR SALES RETURNS
RESERVE FOR SALES RETURNS | 12 Months Ended |
Mar. 31, 2022 | |
Reserve For Sales Returns | |
RESERVE FOR SALES RETURNS | NOTE 16 – 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 either allowed to return defective goods within a specified period of time after shipment (between 6 and 9 months) or granted a “defective allowance” consisting of a fixed percentage (between 1% and 5%) off of invoice price in lieu of returning defective products. 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 consolidated balance sheets. THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 Changes in the Company’s reserve for sales returns are presented in the following table: SCHEDULE OF RESERVE FOR SALES RETURNS Fiscal Year Ended March 31, March 31, 2022 2021 Reserve for sales returns at beginning of the fiscal year $ 960,000 $ 1,224,000 Provision for estimated sales returns 3,643,000 3,881,000 Sales returns received (3,613,000 ) (4,145,000 ) Reserve for sales returns at end of the year $ 990,000 $ 960,000 |
DAMAGED GOODS INCIDENT RECOVERY
DAMAGED GOODS INCIDENT RECOVERY | 12 Months Ended |
Mar. 31, 2022 | |
Environmental Remediation Obligations [Abstract] | |
DAMAGED GOODS INCIDENT RECOVERY | NOTE 17 – DAMAGED GOODS INCIDENT RECOVERY For the fiscal year ended March 31, 2022 we recognized a one-time gain of approximately $ 0.3 2.3 1.6 0.1 0.6 1.1 0.4 |
RESERVES
RESERVES | 12 Months Ended |
Mar. 31, 2022 | |
Reserves | |
RESERVES | NOTE 18 – RESERVES Asset reserves and allowances for years ended March 31, 2022 and 2021 are presented in the following table : SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS Description Balance at Beginning of Year Charged to Costs and Expenses Reduction to Allowance for Write off Credited to Costs and Expenses Balance at End of Year Year ended March 31, 2021 Reserves deducted from assets to which they apply: Allowance for doubtful accounts $ 138,580 $ (5,086 ) $ (10,944 ) $ - $ 122,550 Inventory reserve $ 636,339 $ 351,661 $ (623,553 ) $ - $ 364,447 Year ended March 31, 2020 Reserves deducted from assets to which they apply: Allowance for doubtful accounts $ 337,461 $ 16,086 $ (227,184 ) $ 12,217 $ 138,580 Inventory reserve $ 434,000 $ 688,200 $ (485,861 ) $ - $ 636,339 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 19 - Subsequent Events Exercise of Pre-Funded Warrants Immediately subsequent to the Company’s listing on Nasdaq, the Company received exercises notices on 561,311 Change of Control On June 13, 2022, BitNile Holdings, Inc. (“BitNile Holdings”), a Delaware corporation, Digital Power Lending, LLC (“Digital Power Lending”), a California limited liability company and subsidiary of BitNile Holdings, and Milton C. Ault, III (“Ault”), Founder and Executive Chairman of BitNile Holdings (collectively the “Reporting Persons”) filed a joint Schedule 13D filing (the “Schedule 13D”) reporting that the Reporting Persons acquired, in the aggregate, 52.0 0.01 Pursuant to the Schedule 13D and subsequent amended Schedule 13D filings, Digital Power Lending beneficially owns and BitNile Holdings and Ault may be deemed to beneficially own an aggregate of 1,568,849 shares of the Common Stock (the “Shares”), or approximately 52.0 % of the outstanding shares of Common Stock. As these purchases were made in the open market, control of the Company was not assumed from a particular person or group of persons. The Schedule 13D reported “Mr. Ault expresses an interest in adding one or more shareholder representatives to the Issuer’s board of directors.” Other than the foregoing, the Company is not aware of any arrangement or understanding between or among BitNile Holdings, Digital Power Lending and Ault or any of their respective associates with respect to election of directors of the Company or other matters. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements include the accounts of the Company, its Macau Subsidiary, SMCL, and SMCM. All inter-company accounts and transactions have been eliminated in consolidation for all periods presented. |
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 statements. 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% |
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 statements of income and translations would be 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 in excess of the Federal Deposit Insurance Corporation insured amounts. The Company maintains cash balances in foreign financial institutions. The amounts at foreign financial institutions at March 31, 2022 and 2021 were approximately $ 0.1 0.2 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 March 31, 2022 and 2021 the estimated amounts for these future inventory returns were approximately $ 0.6 0.7 0.4 0.6 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 |
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.” |
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, customer deposits, refunds due to customers, and due to related parties approximates fair value due to the relatively short period to maturity for these instruments. The carrying amounts on the notes payable, finance leases and installment notes approximate fair value either due to the relatively short period to maturity or the related interest is accrued at a rate similar to market rates. The carrying amounts on the revolving line of credit approximates fair value due the relatively short period to maturity and related interest accrued at market rates. |
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 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 selectively participates in a retailer’s co-op promotion incentives to maximize sales of the Company’s products on the retail floor or to assist in developing consumer awareness of new product launches, by providing marketing fund allowances to our customers. As these co-op promotion initiatives are not a distinct good or service and the Company cannot reasonably estimate the fair value of the benefit it receives from these arrangements, the cost of these allowances at the time they are offered to the customers are recorded as a reduction to net sales. Co-op promotion incentives were approximately $ 1.7 2.0 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 consolidated statements of income as our underlying customer agreements are less than one year. While the Company has no overstock return privileges in its vendor agreements with its customers, 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 from 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 $ 1.0 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 13 – SEGMENT INFORMATION). THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 During fiscal 2022 and 2021 revenue was derived from five different major product lines. Disaggregated approximate revenue from these product lines consisted of the following: SCHEDULE OF DISAGGREGATION OF REVENUE March 31, 2022 March 31, 2021 Revenue by Product Line Fiscal Years Ended Product Line March 31, 2022 March 31, 2021 Karaoke Machines $ 38,900,000 $ 34,700,000 Microphones and Accessories 4,200,000 4,700,000 SMC Kids Toys 2,300,000 1,300,000 Licensed Products 1,600,000 4,700,000 Music Subscriptions 500,000 400,000 Total Net Sales $ 47,500,000 $ 45,800,000 |
SHIPPING AND HANDLING COSTS | SHIPPING AND HANDLING COSTS 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 Fiscal 2022 and 2021 shipping and handling expenses were approximately $ 0.9 1.2 |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company follows the provisions of 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 consolidated statements of income 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 in fiscal years ended March 31, 2022 and 2021 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 fiscal years ended March 31, 2022 and 2021, the stock option expense was approximately $ 22,000 10,000 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. ● For the year ended March 31, 2022: expected dividend yield of 0% 0.43% 0.96% 149.5% 157.0% three years ● For the year ended March 31, 2021: expected dividend yield of 0% .18% 254.1% three years The Company’s directors were issued shares of stock as compensation for their service. For the years ended March 31, 2022 and 2021, the stock compensation expense to directors was $ 5,000 12,500 |
RESEARCH AND DEVELOPMENT COSTS | RESEARCH AND DEVELOPMENT COSTS All research and development costs are charged to results of operations as incurred. These expenses are shown as a component of general and administrative expenses in the consolidated statements of income. For both years ended March 31, 2022 and 2021, these amounts totaled approximately $ 0.1 |
INCOME TAXES | INCOME TAXES The Company follows the provisions of FASB ASC 740 “Accounting for Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If it is more likely than not that some portion of a deferred tax asset will not be realized, a valuation allowance is recognized. 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% THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2022 and 2021 |
COMPUTATION OF EARNINGS (LOSS) PER SHARE | COMPUTATION OF EARNINGS (LOSS) PER SHARE Computation of dilutive shares for fiscal years ended March 31, 2022 and 2021 are as follows: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNING PER SHARE Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 Basic weighted average common shares outstanding 1,614,506 1,292,003 Effect of dilutive stock options 8,891 12,285 Diluted weighted average of common shares outstanding 1,623,397 1,304,288 Basic net income per share is based on the weighted average number of shares of common stock outstanding during the period. Pre-funded warrants to purchase 561,111 9,000 12,000 56,000 25,000 |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses” (Topic 326) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF DISAGGREGATION OF REVENUE | During fiscal 2022 and 2021 revenue was derived from five different major product lines. Disaggregated approximate revenue from these product lines consisted of the following: SCHEDULE OF DISAGGREGATION OF REVENUE March 31, 2022 March 31, 2021 Revenue by Product Line Fiscal Years Ended Product Line March 31, 2022 March 31, 2021 Karaoke Machines $ 38,900,000 $ 34,700,000 Microphones and Accessories 4,200,000 4,700,000 SMC Kids Toys 2,300,000 1,300,000 Licensed Products 1,600,000 4,700,000 Music Subscriptions 500,000 400,000 Total Net Sales $ 47,500,000 $ 45,800,000 |
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNING PER SHARE | Computation of dilutive shares for fiscal years ended March 31, 2022 and 2021 are as follows: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNING PER SHARE Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 Basic weighted average common shares outstanding 1,614,506 1,292,003 Effect of dilutive stock options 8,891 12,285 Diluted weighted average of common shares outstanding 1,623,397 1,304,288 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORY | Inventories are comprised of the following components: SCHEDULE OF INVENTORY March 31, March 31, 2022 2021 Finished Goods $ 10,600,000 $ 5,400,000 Inventory in Transit 3,300,000 200,000 Estimated Amount of Future Returns 700,000 500,000 Subtotal 14,600,000 6,100,000 Less: Inventory Reserve 400,000 600,000 Total Inventories $ 14,200,000 $ 5,500,000 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
SUMMARY OF PROPERTY AND EQUIPMENT | A summary of property and equipment is as follows: SUMMARY OF PROPERTY AND EQUIPMENT USEFUL MARCH 31, MARCH 31, LIFE 2022 2021 Computer and office equipment 5 7 $ 400,000 $ 400,000 Furniture and fixtures 7 100,000 100,000 Warehouse equipment 7 200,000 200,000 Molds and tooling 3 5 2,000,000 1,900,000 2,700,000 2,600,000 Less: Accumulated depreciation 2,100,000 1,900,000 $ 600,000 $ 700,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES | Supplemental balance sheet information related to leases as of March 31, 2022 is as follows: SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES Assets: Operating lease - right-of-use assets $ 1,279,347 Finance leases as a component of property and equipment, net of accumulated depreciation of $ 2,776 15,449 Liabilities Current Current portion of operating leases $ 876,259 Current portion of finance leases 7,605 Noncurrent Operating lease liabilities, net of current portion $ 457,750 Finance leases, net of current portion 10,620 |
SCHEDULE OF LEASE TERM AND DISCOUNT RATE | Supplemental statement of operations information related to leases for the fiscal year ended March 31, 2022 is as follows: SCHEDULE OF LEASE TERM AND DISCOUNT RATE Fiscal Year Ended March 31, 2022 Operating lease expense as a component of general and administrative expenses $ 813,292 Finance lease cost Depreciation of leased assets as a component of depreciation $ 2,776 Interest on finance lease liabilities as a component of interest expense $ 1,547 |
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION | Supplemental cash flow information related to leases for the nine months ended March 31, 2022 is as follows: SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow paid for operating leases $ 928,640 Financing cash flow paid for finance leases $ 7,973 Lease term and Discount Rate Weighted average remaining lease term (months) Operating leases 18.2 Finance leases 28.0 Weighted average discount rate Operating leases 6.25 % Finance leases 9.86 % |
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING AND FINANCE LEASES | Scheduled maturities of operating and finance lease liabilities outstanding as of March 31, 2022 are as follows: SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING AND FINANCE LEASES Fiscal Year Operating Leases Finance Leases 2023 $ 940,282 $ 9,065 2024 467,552 9,065 2025 2,267 Total Minimum Future Payments 1,407,834 20,397 Less: Imputed Interest 128,487 2,172 Present Value of Lease Liabilities $ 1,279,347 $ 18,225 |
SHAREHOLDERS_ EQUITY (Tables)
SHAREHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SUMMARY OF STOCK OPTION ACTIVITY | A summary of stock option activity for each of the years presented is summarized below. SUMMARY OF STOCK OPTION ACTIVITY Fiscal 2022 Fiscal 2021 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Stock Options: Balance at beginning of year 56,000 $ 9.60 74,333 $ 7.80 Granted 3,667 $ 7.80 3,333 $ 8.70 Exercised (2,667 ) $ 5.40 (14,667 ) $ 1.80 Forfeited (667 ) $ 3.60 (7,000 ) $ 5.10 Balance at end of year * 56,333 $ 9.90 56,000 $ 9.60 Options exercisable at end of year 52,667 $ 9.90 52,667 $ 9.90 |
SCHEDULE OF EMPLOYEE STOCK OPTIONS OUTSTANDING | The following table summarizes information about employee stock options outstanding at March 31, 2022: SCHEDULE OF EMPLOYEE STOCK OPTIONS OUTSTANDING Range of Exercise Price Number Outstanding at March 31, 2022 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable at March 31, 2022 Weighted Average Exercise Price $ 3.60 11.40 38,000 3.7 $ 7.50 34,333 $ 7.20 $ 14.10 16.50 18,333 4.9 $ 15.00 18,333 $ 15.00 * 56,333 52,667 * Total number of options outstanding as of March 31, 2022 includes 20,000 36,333 |
SCHEDULE OF COMMON STOCK WARRANTS ISSUED AND OUTSTANDING | As per the execution of the August 2021 private placement as disclosed in Note 2 and Note 10, common warrants and pre-funded warrants issued and outstanding as of March 31, 2022 are as follows: SCHEDULE OF COMMON STOCK WARRANTS ISSUED AND OUTSTANDING Number of Shares Warrants outstanding at March 31, 2021 - Common warrants issued 1,155,556 Pre-funded warrants issued 561,111 Warrants outstanding at March 31, 2022 1,716,667 |
SCHEDULE OF WARRANTS EXPIRATION | As of March 31, 2022, the Company’s warrants by expiration date were as follows: SCHEDULE OF WARRANTS EXPIRATION Number of Number of Pre-funded Warrants Exercise Price Expiration Date 1,155,556 - * $ 2.80 9/15/2026 - 561,111 $ 0.30 N/A * 1,155,556 561,111 * Effective with the opening of trading on the Nasdaq Stock Market on May 24, 2022, the exercise price of certain warrants issued by the Company pursuant to the terms of that certain Securities Purchase Agreement dated August 5, 2021, was adjusted so that the exercise price is $ 2.80 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF PROVISION FOR INCOME TAXES | The income tax provision (benefit) for federal, foreign, and state income taxes in the consolidated statements of income consisted of the following components for 2022 and 2021: SCHEDULE OF PROVISION FOR INCOME TAXES 2022 2021 Income tax provision: Current: Federal $ 62,699 $ 54,487 State - 3,825 Total current Federal and State tax provision $ 62,699 $ 58,312 Deferred: Federal $ (59,434 ) $ 417,477 State 54,039 (18,920 ) Total Deferred Federal and State (5,395 ) 398,557 Total income tax provision $ 57,304 $ 456,869 |
SCHEDULE OF INCOME LOSS BEFORE INCOME TAX | The United States and foreign components of income (loss) before income taxes are as follows: SCHEDULE OF INCOME LOSS BEFORE INCOME TAX 2022 2021 United States $ (260,911 ) $ 1,922,947 Foreign 548,686 706,287 total $ 287,775 $ 2,629,234 |
SCHEDULE OF TAX PROVISION | The actual tax provision differs from the “expected” tax for the years ended March 31, 2022 and 2021 (computed by applying the U.S. Federal Corporate tax rate of 21 percent to income before taxes) as follows: SCHEDULE OF TAX PROVISION 2022 2021 Expected tax provision $ 60,324 $ 551,982 State income taxes, net of Federal income tax provision 13,816 128,699 Permanent differences 10,290 (6,578 ) Tax rate differential on foreign earnings (83,954 ) (108,690 ) Change in valuation allowance 55,375 (65,193 ) Other 1,453 (43,351 ) Tax provision $ 57,304 $ 456,869 |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | The tax effects of temporary differences that give rise to significant portions of deferred tax assets and (liabilities) are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2022 2021 NOL Federal Carryforward $ 238,955 $ 246,769 State NOL Carryforward 181,943 194,388 Inventory differences 415,404 348,921 Stock option compensation expense 117,159 115,730 Section 163(j) 62,801 - Allowance for doubtful accounts 31,619 35,877 Reserve for estimated returns 79,109 111,887 Accrued vacation 10,143 13,186 Total 1,137,133 1,066,758 Less: valuation allowance (78,024 ) (22,649 ) Net deferred tax asset 1,059,109 1,044,109 Depreciable and amortizable assets (117,595 ) (119,242 ) Prepaid expenses (48,955 ) (37,703 ) Net deferred tax liability (166,550 ) (156,945 ) Total $ 892,559 $ 887,164 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
SCHEDULE OF REVENUE BY GEOGRAPHICAL REGION | The Company operates in one SCHEDULE OF REVENUE BY GEOGRAPHICAL REGION 2022 2021 FOR THE FISCAL YEARS ENDED March 31, March 31, 2022 2021 North America $ 46,400,000 $ 44,200,000 Europe 700,000 1,200,000 Australia 400,000 400,000 Net sales $ 47,500,000 $ 45,800,000 |
RESERVE FOR SALES RETURNS (Tabl
RESERVE FOR SALES RETURNS (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Reserve For Sales Returns | |
SCHEDULE OF RESERVE FOR SALES RETURNS | Changes in the Company’s reserve for sales returns are presented in the following table: SCHEDULE OF RESERVE FOR SALES RETURNS Fiscal Year Ended March 31, March 31, 2022 2021 Reserve for sales returns at beginning of the fiscal year $ 960,000 $ 1,224,000 Provision for estimated sales returns 3,643,000 3,881,000 Sales returns received (3,613,000 ) (4,145,000 ) Reserve for sales returns at end of the year $ 990,000 $ 960,000 |
RESERVES (Tables)
RESERVES (Tables) | 12 Months Ended |
Mar. 31, 2022 | |
Reserves | |
SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS | Asset reserves and allowances for years ended March 31, 2022 and 2021 are presented in the following table : SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS Description Balance at Beginning of Year Charged to Costs and Expenses Reduction to Allowance for Write off Credited to Costs and Expenses Balance at End of Year Year ended March 31, 2021 Reserves deducted from assets to which they apply: Allowance for doubtful accounts $ 138,580 $ (5,086 ) $ (10,944 ) $ - $ 122,550 Inventory reserve $ 636,339 $ 351,661 $ (623,553 ) $ - $ 364,447 Year ended March 31, 2020 Reserves deducted from assets to which they apply: Allowance for doubtful accounts $ 337,461 $ 16,086 $ (227,184 ) $ 12,217 $ 138,580 Inventory reserve $ 434,000 $ 688,200 $ (485,861 ) $ - $ 636,339 |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) - USD ($) | 12 Months Ended | |||||
May 23, 2022 | Aug. 10, 2021 | Aug. 10, 2021 | Aug. 05, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Proceeds from Issuance of stock gross proceeds | $ 9,000,579 | |||||
Underwriter warrants to purchase | 561,111 | |||||
Exercise price per share | $ 5 | |||||
Over-Allotment Option [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Underwriter warrants to purchase | 100,000 | |||||
Class of warrant or right exercise price of warrants or rights percentage | 10% | |||||
Koncepts International Limited and Treasure Green [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Equity method investment, ownership percentage | 51% | |||||
Koncepts International Limited and Treasure Green [Member] | Common Stock [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Equity method investment, ownership percentage | 49% | |||||
Treasure Green Holdings Ltd [Member] | Common Stock [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Equity method investment, ownership percentage | 2% | |||||
Redemption Agreement [Member] | Koncepts and Treasure Green [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares redeemed | 654,105 | |||||
Conversion of stock, amount issued | $ 7,162,000 | $ 7,162,000 | $ 7,162,000 | |||
Underwriting Agreement [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Sale of stock, number of shares issued in transaction | 1,000,000 | |||||
Sale of stock, price per share | $ 0.01 | |||||
Proceeds from Issuance of stock gross proceeds | $ 4,000,000 | |||||
Underwriting discounts and commissions and other estimated offering expenses | $ 700,000 | |||||
Public offering Shares issued per share | $ 4 | |||||
Subsequent Event [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Reverse stock split | 1-for-30 |
LIQUIDITY (Details Narrative)
LIQUIDITY (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Liquidity | ||
Net income | $ 230,471 | $ 2,172,365 |
Cash used in (provided by) operating activities | $ 2,011,930 | $ (171,017) |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Product Information [Line Items] | ||
Total Net Sales | $ 47,500,000 | $ 45,800,000 |
Karaoke Machines [Member] | ||
Product Information [Line Items] | ||
Total Net Sales | 38,900,000 | 34,700,000 |
Microphones and Accessories [Member] | ||
Product Information [Line Items] | ||
Total Net Sales | 4,200,000 | 4,700,000 |
SMC Kids Toys [Member] | ||
Product Information [Line Items] | ||
Total Net Sales | 2,300,000 | 1,300,000 |
License [Member] | ||
Product Information [Line Items] | ||
Total Net Sales | 1,600,000 | 4,700,000 |
Music Subscription [Member] | ||
Product Information [Line Items] | ||
Total Net Sales | $ 500,000 | $ 400,000 |
SCHEDULE OF ANTIDILUTIVE SECURI
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNING PER SHARE (Details) - shares | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounting Policies [Abstract] | ||
Basic weighted average common shares outstanding | 1,614,506 | 1,292,003 |
Effect of dilutive stock options | 8,891 | 12,285 |
Diluted weighted average of common shares outstanding | 1,623,397 | 1,304,288 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Jul. 06, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Percentage of reserves for customers | 100% | ||
Foreign financial institutions actual deposits | $ 100,000 | $ 200,000 | |
Future inventory returns | 600,000 | 700,000 | |
Inventory reserves | 400,000 | 600,000 | |
Co-op promotion incentives | 1,700,000 | 2,000,000 | |
Reserve for sales returns | 1,000,000 | 1,000,000 | |
Shipping and handling expenses | 900,000 | 1,200,000 | |
Stock option expense | $ 22,000 | $ 10,000 | |
Stock option, expected dividend yield | 0% | 0% | 0% |
Stock option, risk free interest rate | 2.65% | 0.18% | |
Stock option, volatility | 168% | 254.10% | |
Stock option, expected term | 3 years | 3 years | |
Stock compensation expense | $ 5,000 | $ 12,500 | |
Research and development costs | $ 100,000 | $ 100,000 | |
Percentage of tax benefits recognized likelihood of being realized | greater than 50% | ||
Warrants to purchase | 561,111 | ||
Potentially dilutive securities | 9,000 | 12,000 | |
Options And Warrants [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Potentially dilutive securities | 56,000 | 25,000 | |
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Stock option, risk free interest rate | 0.43% | ||
Stock option, volatility | 149.50% | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Stock option, risk free interest rate | 0.96% | ||
Stock option, volatility | 157% |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished Goods | $ 10,600,000 | $ 5,400,000 |
Inventory in Transit | 3,300,000 | 200,000 |
Estimated Amount of Future Returns | 700,000 | 500,000 |
Subtotal | 14,600,000 | 6,100,000 |
Less: Inventory Reserve | 400,000 | 600,000 |
Total Inventories | $ 14,200,000 | $ 5,500,000 |
SUMMARY OF PROPERTY AND EQUIPME
SUMMARY OF PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,700,000 | $ 2,600,000 |
Less: Accumulated depreciation | 2,100,000 | 1,900,000 |
Property and equipment, net | 600,000 | 700,000 |
Computer and Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 400,000 | 400,000 |
Computer and Office Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Average useful life (in years) | 5 years | |
Computer and Office Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Average useful life (in years) | 7 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Average useful life (in years) | 7 years | |
Property and equipment, gross | $ 100,000 | 100,000 |
Warehouse Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Average useful life (in years) | 7 years | |
Property and equipment, gross | $ 200,000 | 200,000 |
Molds and tooling [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,000,000 | $ 1,900,000 |
Molds and tooling [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Average useful life (in years) | 3 years | |
Molds and tooling [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Average useful life (in years) | 5 years |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 0.2 | $ 0.2 |
FINANCING (Details Narrative)
FINANCING (Details Narrative) - USD ($) | 12 Months Ended | |||||
Jun. 16, 2020 | Jun. 01, 2020 | May 05, 2020 | Jun. 18, 2019 | Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Instrument [Line Items] | ||||||
Amortization expense | $ 45,000 | $ 62,000 | ||||
Paycheck Protection Program [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt forgiveness | 448,000 | |||||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt principal payments | 400,000 | |||||
Revolving Credit Facility [Member] | Amortized Over One Year [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Cost associated with Revolving credit facility deferred | $ 74,000 | |||||
Revolving Credit Facility [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum amount outstanding during period | 10,000,000 | |||||
Crestmark Bank [Member] | Paycheck Protection Program [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from loan | $ 444,000 | |||||
IHC Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest expenses | 200,000 | 100,000 | ||||
Borrowings | 2,000,000 | |||||
Two-Year Loan and Security Agreement [Member] | Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing amount | 10,000,000 | |||||
Two-Year Loan and Security Agreement [Member] | IHC Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest expenses | $ 1,000,000 | |||||
Loan balance | 2,500,000 | 100,000 | ||||
Two-Year Loan and Security Agreement [Member] | IHC Facility [Member] | Interest Rate Per Month [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, interest rate during period | 1.292% | |||||
Two-Year Loan and Security Agreement [Member] | IHC Facility [Member] | Interest Rate Per Annually [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, interest rate during period | 15.51% | |||||
Revolving Credit Facility [Member] | Crestmark Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, interest rate during period | 8.75% | |||||
Average loan balance | $ 2,000,000 | |||||
Interest expenses | 300,000 | 400,000 | ||||
Revolving Credit Facility [Member] | Crestmark Bank [Member] | Prime Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, interest rate during period | 5.50% | |||||
Revolving Credit Facility [Member] | Crestmark Bank [Member] | Peak Selling Season Between January 1 and July 31 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum amount outstanding during period | $ 5,000,000 | |||||
IHCMember | Crestmark Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit | 2,500,000 | |||||
Financing Agreement [Member] | Dimension Funding LLC [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest expenses | 21,000 | 26,000 | ||||
Debt instrument, term | 60 months | |||||
Debt face amount | $ 365,000 | |||||
Debt monthly payments | 7,459 | |||||
Notes payable | 200,000 | 300,000 | ||||
Financing Agreement [Member] | Three Installment Notes [Member] | Dimension Funding LLC [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt principal payments | $ 400,000 | |||||
Financing Agreement [Member] | Installment Note One [Member] | Dimension Funding LLC [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate | 7.58% | |||||
Financing Agreement [Member] | Installment Note Two [Member] | Dimension Funding LLC [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate | 8.55% | |||||
Financing Agreement [Member] | Installment Note Three [Member] | Dimension Funding LLC [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, interest rate | 9.25% | |||||
Subordination Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable | 300,000 | $ 500,000 | ||||
Subordination Agreement [Member] | Starlight Marketing Development, Ltd [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Conversion of debt | $ 800,000 | |||||
Interest expense, related party | $ 20,000 | $ 47,000 | ||||
Subordination Agreement [Member] | Subordinated Notes Payable [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Conversion of debt percentage | 6% |
SCHEDULE OF SUPPLEMENTAL INFORM
SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES (Details) - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease - right-of-use assets | $ 1,279,347 | $ 2,074,115 |
Finance leases as a component of property and equipment, net of accumulated depreciation of $2,776 | 15,449 | |
Current portion of operating leases | 876,259 | 794,938 |
Current portion of finance leases | 7,605 | 2,546 |
Operating lease liabilities, net of current portion | 457,750 | 1,334,010 |
Finance leases, net of current portion | $ 10,620 |
SCHEDULE OF SUPPLEMENTAL INFO_2
SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES (Details) (Parenthetical) | Mar. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Property, plant and equipment and finance lease right-of-use asset | $ 2,776 |
SCHEDULE OF LEASE TERM AND DISC
SCHEDULE OF LEASE TERM AND DISCOUNT RATE (Details) | 12 Months Ended |
Mar. 31, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease expense as a component of general and administrative expenses | $ 813,292 |
Depreciation of leased assets as a component of depreciation | 2,776 |
Interest on finance lease liabilities as a component of interest expense | $ 1,547 |
SCHEDULE OF SUPPLEMENTAL CASH F
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION (Details) | 8 Months Ended |
Mar. 31, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Lease, Payments | $ 928,640 |
Financing cash flow paid for finance leases | $ 7,973 |
Operating lease term | 18 months 6 days |
Finance lease term | 28 months |
Operating lease discount rate | 6.25% |
Finance lease discount rate | 9.86% |
SCHEDULE OF FUTURE MINIMUM RENT
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING AND FINANCE LEASES (Details) | Mar. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Leases 2022 | $ 940,282 |
Finance Leases 2022 | 9,065 |
Operating Leases 2023 | 467,552 |
Finance Leases 2023 | 9,065 |
Finance Leases 2024 | 2,267 |
Operating Leases Total Minimum Future Payments | 1,407,834 |
Finance Leases Total Minimum Future Payments | 20,397 |
Operating Leases Less: Imputed Interest | 128,487 |
Finance Leases Less: Imputed Interest | 2,172 |
Operating Leases Present Value of Lease Liabilities | 1,279,347 |
Finance Leases Present Value of Lease Liabilities | $ 18,225 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||
Jul. 02, 2021 | May 01, 2021 | Jun. 15, 2020 | Jun. 15, 2020 | May 01, 2018 | May 01, 2018 | Oct. 01, 2017 | May 30, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Rent expense | $ 1,600 | $ 1,700 | ||||||||
Finance lease interest expense | $ 18,225 | |||||||||
Lease term | 28 months | |||||||||
Interest expense | $ 1,547 | |||||||||
Finance Leases [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Lease term | 36 months | |||||||||
SELAxis [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Rent expense | $ 30,000 | |||||||||
Operating Lease Agreement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Lease expiration date | Apr. 30, 2022 | Mar. 31, 2024 | ||||||||
Rent expense | $ 9,400 | |||||||||
Lease extend term | we executed a three-year lease extension which will expire on August 31, 2023. The renewal base rent payment is $65,300 per month with a 3% increase every 12 months for the remaining term of the extension | |||||||||
Three Year Lease Extension Agreement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Lease expiration date | Aug. 31, 2023 | Apr. 30, 2021 | ||||||||
Rent expense | $ 65,300 | |||||||||
Long Term Capital Leasing Arrangement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Finance lease interest expense | $ 24,000 | |||||||||
Finance lease monthly payments | $ 755 | |||||||||
Effective nterest rate | 9.90% | |||||||||
Remaining capital lease arrangements | 18,000 | $ 20,000 | ||||||||
Interest expense | $ 1,160 | $ 0 |
SUMMARY OF STOCK OPTION ACTIVIT
SUMMARY OF STOCK OPTION ACTIVITY (Details) - Equity Option [Member] - $ / shares | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Number of Options, Balance at end of period | 56,000 | 74,333 |
Weighted Average Exercise Price, Balance at beginning of period | $ 9.60 | $ 7.80 |
Number of Options, Granted | 3,667 | 3,333 |
Weighted Average Exercise Price, Granted | $ 7.80 | $ 8.70 |
Number of Options, Exercised | (2,667) | (14,667) |
Weighted Average Exercise Price, Exercised | $ 5.40 | $ 1.80 |
Number of Options, Forfeited | (667) | (7,000) |
Weighted Average Exercise Price, Forfeited | $ 3.60 | $ 5.10 |
Number of Options, Balance at end of period | 56,333 | 56,000 |
Weighted Average Exercise Price, Balance at end of period | $ 9.90 | $ 9.60 |
Number of Options, exercisable at end of period | 52,667 | 52,667 |
Weighted Average Exercise Price, Options exercisable at end of period | $ 9.90 | $ 9.90 |
SCHEDULE OF EMPLOYEE STOCK OPTI
SCHEDULE OF EMPLOYEE STOCK OPTIONS OUTSTANDING (Details) | 12 Months Ended |
Mar. 31, 2022 $ / shares shares | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Stock Options Number Outstanding | shares | 56,333 |
Stock Option Number Exercisable | shares | 52,667 |
Exercise Price Range One [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Stock Options Outstanding Exercise Price | $ 3.60 |
Stock Options Outstanding Exercise Price | $ 11.40 |
Stock Options Number Outstanding | shares | 38,000 |
Stock Option Outstanding Weighted Average Remaining Contractual Life | 3 years 8 months 12 days |
Stock Option Outstanding Weighted Average Exercise Price | $ 7.50 |
Stock Option Number Exercisable | shares | 34,333 |
Stock Option Exercisable Weighted Average Exercise Price | $ 7.20 |
Exercise Price Range Two [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Stock Options Outstanding Exercise Price | 14.10 |
Stock Options Outstanding Exercise Price | $ 16.50 |
Stock Options Number Outstanding | shares | 18,333 |
Stock Option Outstanding Weighted Average Remaining Contractual Life | 4 years 10 months 24 days |
Stock Option Outstanding Weighted Average Exercise Price | $ 15 |
Stock Option Number Exercisable | shares | 18,333 |
Stock Option Exercisable Weighted Average Exercise Price | $ 15 |
SCHEDULE OF EMPLOYEE STOCK OP_2
SCHEDULE OF EMPLOYEE STOCK OPTIONS OUTSTANDING (Details) (Parenthetical) | Mar. 31, 2022 shares |
Three Current and Four Former Directors [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Option issued | 20,000 |
Employees [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Option issued | 36,333 |
SCHEDULE OF COMMON STOCK WARRAN
SCHEDULE OF COMMON STOCK WARRANTS ISSUED AND OUTSTANDING (Details) | 12 Months Ended |
Mar. 31, 2022 shares | |
Share-Based Payment Arrangement [Abstract] | |
Warrants outstanding beginning balance | |
Common warrants issued | 1,155,556 |
Pre-funded warrants issued | 561,111 |
Warrants outstanding Ending balance | 1,716,667 |
SCHEDULE OF WARRANTS EXPIRATION
SCHEDULE OF WARRANTS EXPIRATION (Details) | 12 Months Ended | |
Mar. 31, 2022 $ / shares shares | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of common warrants | 1,155,556 | |
Number of pre-funded warrants | 561,111 | |
Warrant Exercise Price | $ / shares | $ 2.80 | |
Exercise Price Range One [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of common warrants | 1,155,556 | |
Number of pre-funded warrants | [1] | |
Warrant Exercise Price | $ / shares | $ 2.80 | |
Expiration Date | Sep. 15, 2026 | |
Exercise Price Range Two [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Number of common warrants | ||
Number of pre-funded warrants | 561,111 | |
Warrant Exercise Price | $ / shares | $ 0.30 | |
[1]Effective with the opening of trading on the Nasdaq Stock Market on May 24, 2022, the exercise price of certain warrants issued by the Company pursuant to the terms of that certain Securities Purchase Agreement dated August 5, 2021, was adjusted so that the exercise price is $ 2.80 |
SCHEDULE OF WARRANTS EXPIRATI_2
SCHEDULE OF WARRANTS EXPIRATION (Details) (Parenthetical) | 12 Months Ended |
Mar. 31, 2022 $ / shares | |
Share-Based Payment Arrangement [Abstract] | |
Warrant Exercise Price | $ 2.80 |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||||
Apr. 12, 2022 | Jan. 03, 2022 | Dec. 31, 2021 | Dec. 22, 2021 | Aug. 23, 2021 | Aug. 20, 2021 | Jul. 06, 2021 | May 17, 2021 | Nov. 06, 2020 | Nov. 04, 2020 | Oct. 30, 2020 | Jan. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Stock option, expected dividend yield | 0% | 0% | 0% | |||||||||||
Stock option, risk free interest rate | 2.65% | 0.18% | ||||||||||||
Stock option, volatility | 168% | 254.10% | ||||||||||||
Stock option, expected term | 3 years | 3 years | ||||||||||||
Unrecognised expense | $ 12,000 | |||||||||||||
Vested options | $ 0 | |||||||||||||
Ownership [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Beneficial ownership percentage | 50% | |||||||||||||
Two Thousand Twenty Two Plan [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Sale of stock description | The maximum number of shares of common stock initially available for issuance under the 2022 Plan is 233,334 shares of common stock and thereafter an annual increase shall be added as of the first day of the Company’s fiscal year beginning in 2023, equal to the least of (i) 5% of the outstanding common stock on a fully diluted basis as of the end of the Company’s immediately preceding fiscal year, (ii) 33,334 shares, and (iii) a lesser amount as determined by the Board of Directors. The shares of common stock subject to stock awards granted under the 2022 Plan that lapse, terminate, expire prior to exercise, are canceled or are forfeited, shall again become available for issuance under the 2022 Plan | |||||||||||||
Minimum [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Stock option, risk free interest rate | 0.43% | |||||||||||||
Stock option, volatility | 149.50% | |||||||||||||
Maximum [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Stock option, risk free interest rate | 0.96% | |||||||||||||
Stock option, volatility | 157% | |||||||||||||
Former Director [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of shares of common stock | 667 | |||||||||||||
Shares exercise price per share | $ 7.20 | |||||||||||||
Board of Directors [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of shares of common stock | 2,000 | 575 | 1,437 | |||||||||||
Shares exercise price per share | $ 4.50 | $ 8.70 | $ 8.70 | |||||||||||
Number of stock option issued during period | 3,334 | |||||||||||||
Stock option of exercise price | $ 8.70 | |||||||||||||
Stock option, expected dividend yield | 0% | |||||||||||||
Stock option, risk free interest rate | 0.18% | |||||||||||||
Stock option, expected term | 3 years | |||||||||||||
Stock option, risk free interest rate | 254.10% | |||||||||||||
Three Executive Officers [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of shares of common stock | 14,667 | |||||||||||||
Shares exercise price per share | $ 1.80 | |||||||||||||
Two Director [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of stock option issued during period | 1,334 | |||||||||||||
Stock option of exercise price | $ 8.70 | |||||||||||||
New Director [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of stock option issued during period | 667 | |||||||||||||
Stock option of exercise price | $ 8.10 | |||||||||||||
Chief Revenue Officer [Member] | ||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||||||
Number of stock option issued during period | 1,667 | |||||||||||||
Stock option of exercise price | $ 8.10 |
AUGUST 2021 STOCK REDEMPTION (D
AUGUST 2021 STOCK REDEMPTION (Details Narrative) - Redemption Agreement [Member] - Koncepts and Treasure Green [Member] - USD ($) | Aug. 10, 2021 | Aug. 10, 2021 | Aug. 05, 2021 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Shares redeemed | 654,105 | ||
Conversion of stock, amount issued | $ 7,162,000 | $ 7,162,000 | $ 7,162,000 |
AUGUST 2021 PRIVATE PLACEMENT (
AUGUST 2021 PRIVATE PLACEMENT (Details Narrative) - USD ($) | 12 Months Ended | |||||
Aug. 10, 2021 | Aug. 10, 2021 | Aug. 05, 2021 | Jul. 06, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Common stock, shares, issued | 1,221,209 | 1,301,358 | ||||
Proceeds from issuance of private placement | 561,111 | |||||
Exercise price of warrants | $ 5 | |||||
Proceeds from Warrant Exercises | $ 9,832,000 | |||||
Derivative, description of terms | (representing 7% of the gross proceeds raised in the Private Placement excluding proceeds raised from the strategic investor, plus 3.5% of the aggregate gross proceeds raised from the strategic investor) | |||||
Aggregate number of shares | 5% | |||||
Exercise price | $ 10.50 | |||||
Equity fair value disclosure | $ 359,000 | |||||
Common stock price | $ 9.90 | |||||
Expected life of the warrants | 2 years 6 months | |||||
Stock option, volatility | 168% | 254.10% | ||||
Expected dividend rate | 0% | 0% | 0% | |||
Stock option, risk free interest rate | 2.65% | 0.18% | ||||
Stock issued for restricted shares, value | $ 189,000 | |||||
Cash | 100,000 | |||||
Offering costs | $ 831,000 | |||||
AGP Warrants [Member] | ||||||
Proceeds from issuance of private placement | 44,445 | |||||
Private Placement [Member] | ||||||
Proceeds from issuance of private placement | 561,111 | |||||
Exercise price of warrants | $ 10.50 | |||||
Payments for repurchase of private placement | $ 630,000 | |||||
Legal fees | $ 390,000 | |||||
Stock issued for restricted shares | 1,905 | |||||
Pre-Funded Warrants [Member] | ||||||
Exercise price of warrants | $ 0.01 | |||||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 561,111 | |||||
Purchase Agreement [Member] | ||||||
Common stock, shares, issued | 550,000 | |||||
Proceeds from issuance of private placement | 550,000 | |||||
Exercise price of warrants | $ 10.50 | |||||
Redemption Agreement [Member] | Koncepts and Treasure Green [Member] | ||||||
Conversion of stock, amount issued | $ 7,162,000 | $ 7,162,000 | $ 7,162,000 |
SCHEDULE OF PROVISION FOR INCOM
SCHEDULE OF PROVISION FOR INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Federal | $ 62,699 | $ 54,487 |
State | 3,825 | |
Total current Federal and State tax provision | 62,699 | 58,312 |
Federal | (59,434) | 417,477 |
State | 54,039 | (18,920) |
Total Deferred Federal and State | (5,395) | 398,557 |
Total income tax provision | $ 57,304 | $ 456,869 |
SCHEDULE OF INCOME LOSS BEFORE
SCHEDULE OF INCOME LOSS BEFORE INCOME TAX (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (260,911) | $ 1,922,947 |
Foreign | 548,686 | 706,287 |
total | $ 287,775 | $ 2,629,234 |
SCHEDULE OF TAX PROVISION (Deta
SCHEDULE OF TAX PROVISION (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Expected tax provision | $ 60,324 | $ 551,982 |
State income taxes, net of Federal income tax provision | 13,816 | 128,699 |
Permanent differences | 10,290 | (6,578) |
Tax rate differential on foreign earnings | (83,954) | (108,690) |
Change in valuation allowance | 55,375 | (65,193) |
Other | 1,453 | (43,351) |
Total income tax provision | $ 57,304 | $ 456,869 |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Mar. 31, 2022 | Mar. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
NOL Federal Carryforward | $ 238,955 | $ 246,769 |
State NOL Carryforward | 181,943 | 194,388 |
Inventory differences | 415,404 | 348,921 |
Stock option compensation expense | 117,159 | 115,730 |
Section 163(j) | 62,801 | |
Allowance for doubtful accounts | 31,619 | 35,877 |
Reserve for estimated returns | 79,109 | 111,887 |
Accrued vacation | 10,143 | 13,186 |
Total | 1,137,133 | 1,066,758 |
Less: valuation allowance | (78,024) | (22,649) |
Net deferred tax asset | 1,059,109 | 1,044,109 |
Depreciable and amortizable assets | (117,595) | (119,242) |
Prepaid expenses | (48,955) | (37,703) |
Net deferred tax liability | (166,550) | (156,945) |
Total | $ 892,559 | $ 887,164 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax asets net | $ 892,559 | $ 887,164 |
Federal statutory income tax rate, percent | 20% | 17.40% |
Income tax provision | $ 57,304 | $ 456,869 |
Valuation allowance | 78,000 | 23,000 |
Income tax receivables | 13,000 | |
Deferred tax asset valuation allowance | 78,024 | $ 22,649 |
Fedral tax net | 1,100,000 | |
State net operating loss carryforwards | 3,400,000 | |
Internal Revenue Service (IRS) [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss | $ 150,000 |
SCHEDULE OF REVENUE BY GEOGRAPH
SCHEDULE OF REVENUE BY GEOGRAPHICAL REGION (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | $ 47,500,000 | $ 45,800,000 |
North America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 46,400,000 | 44,200,000 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 700,000 | 1,200,000 |
AUSTRALIA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | $ 400,000 | $ 400,000 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan, administrative expenses | $ 70,000 | $ 74,000 |
CONCENTRATIONS OF CREDIT RISK_2
CONCENTRATIONS OF CREDIT RISK, CUSTOMERS, AND SUPPLIERS (Details Narrative) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Concentration Risk [Line Items] | ||
Total net sale | $ 47,512,161 | $ 45,802,574 |
Republic of China [Member] | ||
Concentration Risk [Line Items] | ||
Debt instrument, description | the U.S. government-imposed tariffs of up to 25% on certain goods imported from China. All of our products are manufactured and imported from China however, only our microphones are currently subject to a 7.5% tariff currently in place | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Four Customers [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of sales risk, percentage | 53% | 79% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Individuals [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of sales risk, percentage | 10% | 10% |
Sales Revenue [Member] | Three Customers [Member] | Customers concentration risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of sales risk, percentage | 72% | 69% |
Sales Revenue [Member] | Customers [Member] | Customers concentration risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of sales risk, percentage | 10% | |
Sales Revenue [Member] | Customers One [Member] | Customers concentration risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of sales risk, percentage | 37% | 36% |
Sales Revenue [Member] | Customers Two [Member] | Customers concentration risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of sales risk, percentage | 18% | 20% |
Sales Revenue [Member] | Customers Three [Member] | Customers concentration risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of sales risk, percentage | 17% | 13% |
Sales Revenue [Member] | Customers Four [Member] | Customers concentration risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of sales risk, percentage | 12% | 12% |
Sales Revenue [Member] | Macau Subsidiary [Member] | ||
Concentration Risk [Line Items] | ||
Total net sale | $ 3,400,000 | $ 4,400,000 |
Purchases [Member] | Republic of China [Member] | Customers concentration risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration of sales risk, percentage | 100% | 100% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Jun. 30, 2020 | |
Related Party Transaction [Line Items] | |||
Due to related parties | $ 100,000 | $ 100,000 | |
Inventory, net | 14,161,636 | 5,490,255 | |
Purchase and Sale Agreement [Member] | |||
Related Party Transaction [Line Items] | |||
Inventory, net | $ 700,000 | ||
Revenue from related parties | 0 | 200,000 | |
Stingray [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties | 200,000 | 100,000 | |
Revenue from related parties | 500,000 | 400,000 | |
Starlight Electronics Co Ltd [Member] | |||
Related Party Transaction [Line Items] | |||
Repayments of related party debt | 400,000 | 400,000 | |
Licensing Agreements [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties | $ 100,000 | $ 100,000 |
SCHEDULE OF RESERVE FOR SALES R
SCHEDULE OF RESERVE FOR SALES RETURNS (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Reserve For Sales Returns | ||
Reserve for sales returns at beginning of the year | $ 960,000 | $ 1,224,000 |
Provision for estimated sales returns | 3,643,000 | 3,881,000 |
Sales returns received | (3,613,000) | (4,145,000) |
Reserve for sales returns at end of the period | $ 990,000 | $ 960,000 |
DAMAGED GOODS INCIDENT RECOVE_2
DAMAGED GOODS INCIDENT RECOVERY (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Environmental Remediation Obligations [Abstract] | ||
Gain on settlement of accounts payable | $ 0.3 | $ 0.4 |
Damaged goods | 2.3 | |
Reduction of net sales | 1.6 | |
Freight charges | 0.1 | |
Additional related expenses | 0.6 | |
Insurance claim receivable | $ 1.1 |
SCHEDULE OF VALUATION AND QUALI
SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
SEC Schedule, 12-09, Allowance, Credit Loss [Member] | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Balance at Beginning of Year | $ 138,580 | $ 337,461 |
Charged to Costs and Expenses | (5,086) | 16,086 |
Reduction to Allowance for Write off | (10,944) | (227,184) |
Credited to Costs and Expenses | 12,217 | |
Balance at End of Year | 122,550 | 138,580 |
SEC Schedule, 12-09, Reserve, Inventory [Member] | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Balance at Beginning of Year | 636,339 | 434,000 |
Charged to Costs and Expenses | 351,661 | 688,200 |
Reduction to Allowance for Write off | (623,553) | (485,861) |
Credited to Costs and Expenses | ||
Balance at End of Year | $ 364,447 | $ 636,339 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - $ / shares | Jun. 13, 2022 | Mar. 31, 2022 | Aug. 31, 2021 | Mar. 31, 2021 |
Subsequent Event [Line Items] | ||||
Common stock, par or stated value per share | $ 0.01 | $ 0.01 | ||
Ownership [Member] | ||||
Subsequent Event [Line Items] | ||||
Ownership Percentage | 50% | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Own-share Lending Arrangement, Shares, Outstanding | 1,568,849 | |||
Subsequent Event [Member] | BitNile and MiltonCAult [Member] | ||||
Subsequent Event [Line Items] | ||||
Common stock, par or stated value per share | $ 0.01 | |||
Subsequent Event [Member] | BitNile Holdings, Inc [Member] | ||||
Subsequent Event [Line Items] | ||||
Ownership Percentage | 52% | |||
Subsequent Event [Member] | Ownership [Member] | ||||
Subsequent Event [Line Items] | ||||
Ownership Percentage | 52% | |||
Pre-Funded Warrants [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of shares issued | 561,311 |