Cover
Cover - shares | 3 Months Ended | |
Jun. 30, 2023 | Aug. 18, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
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 $0.01 | |
Trading Symbol | MICS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 4,220,259 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2023 | Mar. 31, 2023 |
Current Assets | ||
Cash | $ 1,890,014 | $ 2,894,574 |
Accounts receivable, net of allowances of $146,315 and $165,986, respectively | 713,152 | 2,075,086 |
Inventories, net | 10,607,610 | 9,639,992 |
Prepaid expenses and other current assets | 473,277 | 266,068 |
Deferred financing costs | 84,667 | 84,667 |
Total Current Assets | 13,964,323 | 15,199,465 |
Property and equipment, net | 492,253 | 633,207 |
Deferred financing costs, net of current portion | 109,361 | 130,528 |
Operating leases - right of use assets | 331,878 | 561,185 |
Other non-current assets | 124,201 | 124,212 |
Total Assets | 15,022,016 | 16,648,597 |
Current Liabilities | ||
Accounts payable | 2,644,691 | 1,769,348 |
Accrued expenses | 1,294,794 | 2,265,424 |
Refunds due to customers | 670,699 | 583,323 |
Reserve for sales returns | 331,754 | 900,000 |
Current portion of finance leases | 18,531 | 18,162 |
Current portion of installment notes | 82,506 | 80,795 |
Current portion of operating lease liabilities | 277,733 | 508,515 |
Total Current Liabilities | 5,320,708 | 6,125,567 |
Finance leases, net of current portion | 41,369 | 46,142 |
Installment notes, net of current portion | 36,575 | 57,855 |
Operating lease liabilities, net of current portion | 78,809 | 87,988 |
Total Liabilities | 5,477,461 | 6,317,552 |
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; 4,220,259 and 3,184,439 shares issued, 4,220,259 and 3,167,489 shares outstanding, respectively | 42,203 | 31,675 |
Additional paid-in capital | 31,478,977 | 29,822,205 |
Subscriptions receivable | (5,891) | |
Accumulated deficit | (21,976,625) | (19,516,944) |
Total Shareholders’ Equity | 9,544,555 | 10,331,045 |
Total Liabilities and Shareholders’ Equity | 15,022,016 | 16,648,597 |
Stingray Group Inc [Member] | ||
Current Assets | ||
Accounts receivable related party | 174,853 | 218,328 |
Ault Alliance Inc [Member] | ||
Current Assets | ||
Accounts receivable related party | $ 20,750 | $ 20,750 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2023 | Mar. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, net | $ 146,315 | $ 165,986 |
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 | 4,220,259 | 3,184,439 |
Common stock, shares outstanding | 4,220,259 | 3,167,489 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||
Net Sales | $ 2,625,003 | $ 11,692,054 |
Cost of Goods Sold | 1,776,153 | 8,511,524 |
Gross Profit | 848,850 | 3,180,530 |
Operating Expenses | ||
Selling expenses | 445,274 | 605,197 |
General and administrative expenses | 2,650,858 | 2,370,424 |
Depreciation | 183,454 | 58,067 |
Total Operating Expenses | 3,279,586 | 3,033,688 |
(Loss) Income from Operations | (2,430,736) | 146,842 |
Other Expenses | ||
Interest expense | (7,778) | (160,113) |
Finance costs | (21,167) | (7,813) |
Total Other Expenses | (28,945) | (167,926) |
Loss Before Income Tax Benefit | (2,459,681) | (21,084) |
Income Tax Benefit | 5,081 | |
Net Loss | $ (2,459,681) | $ (16,003) |
Net Loss per Common Share | ||
Basic | $ (0.64) | $ (0.01) |
Diluted | $ (0.64) | $ (0.01) |
Weighted Average Common and Common Equivalent Shares: | ||
Basic | 3,872,447 | 1,911,485 |
Diluted | 3,872,447 | 1,911,485 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities | ||
Net Loss | $ (2,459,681) | $ (16,003) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 183,454 | 58,067 |
Amortization of deferred financing costs | 21,167 | 7,813 |
Change in inventory reserve | 132,386 | |
Change in allowance for bad debts | (19,671) | 138,237 |
Stock based compensation | 63,406 | 35,565 |
Change in net deferred tax assets | (5,081) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,381,605 | (7,001,987) |
Due from banks | (340,810) | |
Accounts receivable - related parties | 43,475 | (90,043) |
Inventories | (1,100,004) | 1,205,145 |
Prepaid expenses and other current assets | (207,209) | 113,473 |
Other non-current assets | 11 | 3,032 |
Accounts payable | 875,343 | 1,390,942 |
Accrued expenses | (970,630) | 447,566 |
Refunds due to customers | 87,376 | 16,034 |
Reserve for sales returns | (568,246) | (108,341) |
Operating lease liabilities, net of operating leases - right of use assets | (10,654) | (2,913) |
Net cash used in operating activities | (2,547,872) | (4,149,304) |
Cash flows from investing activities | ||
Purchase of property and equipment | (42,500) | (21,801) |
Net cash used in investing activities | (42,500) | (21,801) |
Cash flows from financing activities | ||
Proceeds from issuance of stock - net of transaction expenses | 1,603,894 | 3,362,750 |
Collection of subscriptions receivable | 5,891 | |
Payments on installment notes | (19,569) | (17,995) |
Proceeds from exercise of common stock warrants | 647,422 | |
Proceeds from exercise of pre-funded warrants | 168,334 | |
Payments on finance leases | (4,404) | (1,832) |
Net cash provided by financing activities | 1,585,812 | 4,158,679 |
Net change in cash | (1,004,560) | (12,426) |
Cash at beginning of period | 2,894,574 | 2,290,483 |
Cash at end of period | 1,890,014 | 2,278,057 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | $ 6,280 | $ 158,490 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Receivables from Stockholder [Member] | Retained Earnings [Member] | Total |
Balance at Mar. 31, 2022 | $ 12,212 | $ 24,902,694 | $ (14,878,482) | $ 10,036,424 | |
Balance, shares at Mar. 31, 2022 | 1,221,209 | ||||
Net loss | (16,003) | (16,003) | |||
Payment of stock issuance expenses | (637,250) | (637,250) | |||
Employee compensation-stock option | 15,549 | 15,549 | |||
Issuance of common stock | $ 10,000 | 3,990,000 | 4,000,000 | ||
Issuance of common stock, shares | 1,000,000 | ||||
Issuance of pre-funded warrants | $ 5,611 | 162,723 | 168,334 | ||
Issuance of pre-funded warrants, shares | 561,113 | ||||
Exercise of common stock warrants | $ 2,312 | 645,110 | 647,422 | ||
Exercise of common stock warrants, shares | 231,222 | ||||
Issuance of common stock – directors | $ 25 | 19,991 | 20,016 | ||
Issuance of common stock - directors, shares | 2,468 | ||||
Rounding of common stock issued due to reverse split | $ 17 | (17) | |||
Rounding of common stock issued due to reverse split, shares | 1,688 | ||||
Balance at Jun. 30, 2022 | $ 30,177 | 29,098,800 | (14,894,485) | 14,234,492 | |
Balance, shares at Jun. 30, 2022 | 3,017,700 | ||||
Balance at Mar. 31, 2022 | $ 12,212 | 24,902,694 | (14,878,482) | 10,036,424 | |
Balance, shares at Mar. 31, 2022 | 1,221,209 | ||||
Balance at Mar. 31, 2023 | $ 31,675 | 29,822,205 | (5,891) | (19,516,944) | 10,331,045 |
Balance, shares at Mar. 31, 2023 | 3,167,489 | ||||
Net loss | (2,459,681) | (2,459,681) | |||
Issuance of common stock - at-the-market offering | $ 10,528 | 1,697,617 | 1,708,145 | ||
Issuance of common stock - at-the-market offering, shares | 1,052,770 | ||||
Payment of stock issuance expenses | (104,251) | (104,251) | |||
Employee compensation-stock option | 63,406 | 63,406 | |||
Collection of subscriptions receivable | 5,891 | 5,891 | |||
Balance at Jun. 30, 2023 | $ 42,203 | $ 31,478,977 | $ (21,976,625) | $ 9,544,555 | |
Balance, shares at Jun. 30, 2023 | 4,220,259 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | NOTE 1 – BASIS OF PRESENTATION OVERVIEW The Singing Machine Company, Inc., a Delaware corporation (the “Company,” “SMC”, “The Singing Machine”), and its 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. Our products are sold directly to distributors and retail customers. |
RECENT DEVELOPMENTS
RECENT DEVELOPMENTS | 3 Months Ended |
Jun. 30, 2023 | |
Recent Developments | |
RECENT DEVELOPMENTS | NOTE 2 - RECENT DEVELOPMENTS ATM Offering On February 15, 2023, we entered into an At-The-Market Issuance Sales Agreement (the “Sales Agreement”) with Aegis Capital Corp, as sales agent (the “Agent”), pursuant to which we could offer and sell, from time to time, through the Agent (the “ATM Offering”), up to approximately $ 1.8 During the fiscal year ended March 31, 2023, we received total net proceeds from the ATM Offering of approximately $ 36,000 on sales of 14,230 shares of common stock at an average price of $ 2.56 per share. Through May 12, 2023, we sold 1,067,000 1.64 1,745,000 1,690,000 Acquisition On June 13, 2022, Ault Alliance, Inc. (“Ault Alliance”) formerly known as Bitnile Holdings, Inc., Ault Lending, LLC (“Ault Lending”) formerly known as Digital Power Lending, LLC and a subsidiary of Ault Alliance and Milton C. Ault III (“Ault”), Founder and Executive Chairman of Ault Alliance (collectively the “Reporting Persons”) filed a joint Schedule 13D filing (the “Schedule 13D”) reporting that the Reporting Persons acquired, in the aggregate, 52.8 0.01 The Reporting Persons may be deemed to beneficially own an aggregate of 1,808,000 42.8 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) Public Offering 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 pursuant to which the Company sold to the Underwriter 1,000,000 4,000,000 637,000 4.00 3,363,000 Pursuant to the terms of the Underwriting Agreement, the Company issued to the Underwriter warrants to purchase up to 100,000 10 5.00 five years 244,000 2.90 3 176 0 2.63 |
LIQUIDITY
LIQUIDITY | 3 Months Ended |
Jun. 30, 2023 | |
Liquidity | |
LIQUIDITY | NOTE 3 – LIQUIDITY The Company reported a net loss of approximately $ 2,460,000 2,548,000 15.0 7.5 1.9 As of March 31, 2023, we were in default under the Credit Agreement due to non-compliance with the fixed charge coverage ratio covenant of 1:05 : 1.0. On May 19, 2023, we executed a Waiver and First Amendment agreement which provides for a waiver of previous defaults and agreed to new financial covenants. We must comply monthly with minimum liquidity (defined as excess loan availability plus cash on hand) of $ 2.5 4.0 1.4 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) The Company believes that our cash on hand, working capital (net of cash), cash expected to be generated from our operating forecast, along with the availability of cash from our credit facilities (See Note 7 –FINANCING) will be adequate to meet the Company’s liquidity requirements for at least twelve months from the date of this report. While the Company is optimistic that it will be successful in these efforts to achieve our plan, there can be no assurance that we will be successful in doing so. As such, the Company has a continued support letter from its largest stockholder, Ault Alliance, through August 31, 2024. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION The accompanying condensed consolidated financial statements include the accounts of the Company, its Macau Subsidiary, SMH, SMCL, and SMCM. All inter-company accounts and transactions have been eliminated in consolidation for all periods presented. The accompanying unaudited financial statements for the three months ended June 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by US GAAP for complete consolidated financial statements. In the opinion of management, such condensed consolidated financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair presentation of the condensed consolidated financial position and the condensed consolidated results of operations. The condensed consolidated results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet information as of March 31, 2023 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023. The interim condensed consolidated financial statements should be read in conjunction with that report. USE OF ESTIMATES The Singing Machine makes estimates and assumptions in the ordinary course of business relating to sales returns and allowances, warranty reserves, inventory reserves and reserves for promotional incentives that affect the reported amounts of assets and liabilities and of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Future events and their effects cannot be determined with absolute certainty; therefore, the determination of estimates requires the exercise of judgment. Historically, past changes to these estimates have not had a material impact on the Company’s financial statements. However, circumstances could change which may alter future expectations. COLLECTABILITY 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 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) FOREIGN CURRENCY TRANSLATION The functional currency of SMH 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 operations and translations would be recorded in a separate component of shareholders’ equity. Any such amounts were not material during the periods presented. SMC sells to distributors and retailers in the Canadian market, and is paid in Canadian dollars. We receive payment in the form of the Canadian dollar, simultaneously presenting these payments for deposit and requesting an immediate spot conversion by the financial institution that currently holds our operating accounts. Net gains and losses resulting from foreign exchange transactions are recorded in the statements of operations 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 more than the Federal Deposit Insurance Corporation insured amounts. The Company also maintains cash balances in foreign financial institutions. The amounts at foreign financial institutions as of June 30, 2023 and March 31, 2023 were approximately $ 23,000 and $ 174,000 , respectively. Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of accounts receivable. INVENTORY Inventories are comprised primarily of electronic karaoke equipment, microphones and accessories, and are stated at the lower of cost or net realizable value, as determined using the first in, first out method. Inventories also include an estimate for the net realizable value of expected future inventory returns due to warranty and allowance programs. As of June 30, 2023 and March 31, 2023, the estimated amounts for these future inventory returns were approximately $ 116,000 555,000 The Company reduces inventory on hand to its net realizable value on an item-by-item basis when it is apparent that the expected realizable value of an inventory item falls below its original cost. A charge to cost of sales results when the estimated net realizable value of specific inventory items declines below cost. Management regularly reviews the Company’s investment in inventories for such declines in value. As of June 30, 2023 and March 31, 2023, the Company had inventory reserves of approximately $ 710,000 900,000 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.” No During the first quarter ended June 30, 2023, we decided not to renew our lease on our California warehouse facility and have opted to transfer our logistics operations to a third-party logistics company and all assets located at this facility will be sold or otherwise disposed of by the end of August 2023. We recognized accelerated depreciation expense on certain assets to be sold in the amount of approximately $ 122,000 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) LEASES The Company follows FASB ASC 842, “Leases”. The ASC requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than twelve months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. (See Note 8– LEASES). The Company determines if an arrangement contains a lease at the inception of a contract. ROU 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. ROU 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 financing interest rate for its finance leases. PROPERTY AND EQUIPMENT Property and equipment are stated at cost, less accumulated depreciation. Expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to their estimated useful lives using accelerated and straight-line methods. FAIR VALUE OF FINANCIAL INSTRUMENTS We follow FASB ASC 825, “Financial Instruments”, which requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate that value. For purposes of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts of the Company’s short-term financial instruments, including accounts receivable, due from related parties, accounts payable, accrued expenses, customer deposits and refunds due to customers, approximates fair value due to the relatively short period to maturity for these instruments. The carrying amounts on the 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. For the three months ended June 30, 2023 and 2022, co-op promotion incentives were approximately $ 91,000 296,000 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) The Company’s contracts with customers consist of one performance obligation (the sale of the Company’s products). The Company’s contracts have no financing elements, payment terms are less than 120 days and have no further contract asset or liability obligations once control of goods is transferred to the customer. Revenue is recorded in the amount of consideration the Company expects to receive for the sale of these goods. Costs incurred in fulfilling contracts with customers include administrative costs associated with the procurement of goods are included in general and administrative expenses, in-bound freight costs are included in the cost of goods sold and accrued sales representative commissions are included in selling expenses in the accompanying condensed consolidated statements of operations as our underlying customer agreements are less than one year. 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 as of June 30, 2023 and March 31, 2023 were approximately $ 332,000 900,000 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 10 – SEGMENT INFORMATION). Revenue is derived from five different major product lines. Disaggregated revenue from these product lines for the three months ended June 30, 2023 and 2022 consisted of the following: SCHEDULE OF DISAGGREGATION OF REVENUE T hree Months Ended Product Line June 30, 2023 June 30, 2022 Karaoke Machines $ 1,463,000 $ 8,159,000 Microphones and Accessories 957,000 2,420,000 SMC Kids Toys 21,000 936,000 Licensed Products 8,000 45,000 Music Subscriptions 176,000 132,000 Total Net Sales $ 2,625,000 $ 11,692,000 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 the three months ended June 30, 2023 and 2022, shipping and handling expenses were approximately $ 60,000 46,000 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) STOCK BASED COMPENSATION The Company follows the provisions of the FASB ASC 718-20, “Compensation – Stock Compensation Awards Classified as Equity”. ASC 718-20 requires all stock-based payments to employees including grants of employee stock options, be measured at fair value and expensed in the condensed consolidated statements of operations over the service period (generally the vesting period). The Company uses the Black-Scholes option valuation model to value stock options. Employee stock option compensation expense for the three months ended June 30, 2023 and 2022 includes the estimated fair value of options granted, amortized on a straight-line basis over the requisite service period for the entire portion of the award. For the three months ended June 30, 2023 and 2022, the stock option expense was approximately $ 63,000 16,000 RESEARCH AND DEVELOPMENT COSTS 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 condensed consolidated statements of operations. For the three months ended June 30, 2023 and 2022, these amounts totaled approximately $ 42,000 17,000 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. As of June 30, 2023, and March 31, 2023, the Company had recognized a valuation allowance of the entire net deferred tax asset as management has determined it was more likely than not that the deferred tax asset would be realized. 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% As of June 30, 2023 and March 31, 2023, there were no uncertain tax positions that resulted in any adjustment to the Company’s provision for income taxes. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. The Company currently has no liabilities recorded for accrued interest or penalties related to uncertain tax provisions. THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) COMPUTATION OF EARNINGS PER SHARE Computation of dilutive shares for the three months ended June 30, 2023 and 2022 are as follows: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNING PER SHARE For the three For the three Basic weighted average common shares outstanding 3,872,447 1,911,485 Effect of dilutive stock options - - Diluted weighted average of common shares outstanding 3,872,447 1,911,485 Basic net income (loss) per share is based on the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share reflects the potential dilution assuming shares of common stock were issued upon the exercise of outstanding in-the-money options and the proceeds thereof were used to purchase shares of the Company’s common stock at the average market price during the period using the treasury stock method. For the three months ended June 30, 2023, options to purchase 108,343 902,113 For the three months ended June 30, 2022, options to purchase 50,007 924,334 RECENT ACCOUNTING PRONOUNCEMENTS In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses” (Topic 326) |
INVENTORIES, NET
INVENTORIES, NET | 3 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | NOTE 5 - INVENTORIES, NET Inventories are comprised of the following components: SCHEDULE OF INVENTORY June 30, 2023 March 31, 2023 Finished Goods $ 10,563,000 $ 9,364,000 Inventory in Transit 639,000 621,000 Estimated Amount of Future Returns 116,000 555,000 Subtotal 11,318,000 10,540,000 Less: Inventory Reserve 710,000 900,000 Total Inventories $ 10,608,000 $ 9,640,000 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 6 – PROPERTY AND EQUIPMENT A summary of property and equipment is as follows: SUMMARY OF PROPERTY AND EQUIPMENT USEFUL June 30, March 31, LIFE 2023 2023 Computer and office equipment 5 7 $ 497,000 $ 497,000 Furniture and fixtures 7 111,000 111,000 Warehouse equipment 7 251,000 251,000 Molds and tooling 3 5 2,202,000 2,160,000 Property and equipment, gross 3,061,000 3,019,000 Less: Accumulated depreciation 2,569,000 2,386,000 Property and equipment, net $ 492,000 $ 633,000 Depreciation expense for the three months ended June 30, 2023 and 2022 was approximately $ 183,000 58,000 122,000 |
FINANCING
FINANCING | 3 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
FINANCING | NOTE 7 – FINANCING Credit and Security Agreement with Fifth Third Bank, National Association: On October 14, 2022 the Company entered into the Credit Agreement with Fifth Third, as Lender replacing the Company’s credit facilities with Crestmark and IHC that were terminated by the Company on October 13, 2022. The Credit Agreement provides for a three-year secured revolving credit facility in an aggregate principal amount of up to $ 15,000,000 7,500,000 October 14, 2025 254,000 21,000 8,000 The revolving credit facility bears interest of (a) the Prime Rate plus 0.50 3.00 0.50 5.09 0.35 The obligations under the Credit Agreement are secured by all of the assets of the Company and SMC, presently owned or later acquired, and all cash and non-cash proceeds thereof (including, without limitation, insurance proceeds). During the three months ended June 30, 2023 and 2022, the Company incurred interest expense associated with the Fifth Third credit facility of approximately $ 4,000 0 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) Under the Credit Agreement: ● Accounts Receivable advance rate up to an 85% against eligible Accounts Receivable assuming dilution is under 5% of sales, plus ● Inventory advance of up to 85% of the Net Orderly Liquidation Value of eligible inventory as determined by an appraiser satisfactory to Fifth Third, with a sublimit to be determined based on Fifth Third’ s continuing due diligence. The inventory advance rate will increase to 95% of the Net Orderly Liquidation Value of eligible inventory from April through June (or another 3-month time frame to be determined based on Fifth Third’s continuing due diligence) each year to support seasonal working capital needs. ● The Company must maintain a Minimum Fixed Charge Coverage of 1.05 to 1. ● Covenants may also include reasonable limitations on dividends, distributions, and management fees. ● The first Fixed Charge Coverage test will be based on a trailing twelve months. As of March 31, 2023, the Company was in default under the Credit Facility due to non-compliance with the fixed charge coverage ratio covenant of 1:05 : 1.0. On May 19, 2023 the Company executed a Waiver and First Amendment agreement which provides for a waiver of previous defaults and new financial covenants. The Company must comply monthly with minimum liquidity (defined as excess loan availability plus cash on hand) of $ 2.5 4.0 As of the date of this report, the Company was in compliance with the amended covenants and there was approximately $ 1.5 1.9 Intercreditor Revolving Credit Facility Crestmark Bank and Iron Horse Credit: On June 16, 2020, the Company entered into a two-year Credit and Security Agreement for a $ 2.5 10.0 For the three months ended June 30, 2023 and 2022 the Company incurred approximately $ 0 8,000 0 53,000 Installment Notes Payable On June 18, 2019, the Company entered into a financing arrangement with Dimension Funding, LLC to finance an entire ERP System project over a term of 60 365,000 365,000 7.58 8.55 9.25 7,459 119,000 139,000 2,800 4,000 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 – COMMITMENTS AND CONTINGENCIES LEGAL MATTERS We are not a party to, and our property is not the subject of, any material legal proceedings. LEASES Operating Leases We have operating lease agreements for offices and a warehouse facility in Florida, California and Hong Kong expiring in various years through 2025. We entered into a operating lease agreement, effective October 15, 2022, for our administrative office located in Hong Kong. The office is approximately 1,900 October 14, 2025 4,900 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 9,700 We entered into an operating lease agreement, effective June 1, 2013 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. We have elected not to renew this lease and are in the process of migrating our North American logistics operations to an outsourced business partner specializing in these matters. 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 8,600 11,000 In February 2023, we entered into a financing leasing arrangement with Wells Fargo Equipment Finance to finance the leasing of two used forklifts in the amount of approximately $ 55,000 1,075 60 6.5 51,300 53,300 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) Supplemental balance sheet information related to leases as of June 30, 2023 is as follows: SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES Assets: Operating lease – right-of-use assets $ 331,878 Finance leases as a component of property and equipment 59,900 Liabilities Current Current portion of operating leases $ 277,733 Current portion of finance leases 18,531 Noncurrent Operating lease liabilities, net of current portion $ 78,809 Finance leases, net of current portion 41,369 Supplemental statement of operations information related to leases for the three months ended June 30, 2023 is as follows: SCHEDULE OF LEASE TERM AND DISCOUNT RATE Operating lease expense as a component of general and administrative expenses $ 237,007 Finance lease cost Depreciation of leased assets as a component of depreciation $ 58,765 Interest on finance lease liabilities as a component of interest expense $ 1,093 Supplemental cash flow information related to leases for the three months ended June 30, 2023 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 $ 252,313 Financing cash flow paid for finance leases $ 4,404 Scheduled maturities of operating and finance lease liabilities outstanding as of June 30, 2023 are as follows: Lease term and Discount Rate Weighted average remaining lease term (months) Operating leases 13.2 Finance leases 48.8 Weighted average discount rate Operating leases 6.50 % Finance leases 9.86 % THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) The following table summarizes information regarding lease maturities and balance due as follows: SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING AND FINANCE LEASES Year Operating Leases Finance Leases 2023 (remaining six months) $ 227,507 $ 10,984 2024 120,008 17,435 2025 48,774 12,903 2026 - 12,903 2027 and beyond - 13,978 Total Minimum Future Payments 396,289 68,203 Less: Imputed Interest 39,747 8,303 Present Value of Lease Liabilities $ 356,542 $ 59,900 |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 3 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK OPTIONS AND WARRANTS | NOTE 9 – STOCK OPTIONS AND WARRANTS EQUITY INCENTIVE PLAN On April 12, 2022, our Board of Directors approved The Singing Machine Company, Inc. 2022 Equity Incentive Plan, (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 maximum number of shares of common stock initially available for issuance under the 2022 Plan is 233,333 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. The 2022 Plan authorized an aggregate of 266,667 shares of the Company’s common stock available to the Company’s employees, officers, directors, consultants, agents, advisors and independent contractors. As of June 30, 2023, we had granted 24,446 shares of common stock and 107,752 54,668 134,469 COMMON STOCK OPTIONS During the three months ended June 30, 2023, the Company did not issue any stock options. THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) A summary of stock option activity for the three months ended June 30, 2023 is summarized below: SUMMARY OF STOCK OPTION ACTIVITY June 30, 2023 Number of Options Weighted Average Exercise Price Weighted Average Contractual Life Stock Options: Balance at beginning of period 161,427 $ 7.90 6.6 Forfeited (11,750 ) $ 8.11 - Balance at end of period 149,677 $ 7.88 6.4 Options exercisable at end of period 108,343 $ 7.77 The following table summarizes information about employee stock options outstanding at June 30, 2023: SCHEDULE OF EMPLOYEE STOCK OPTIONS OUTSTANDING Range of Exercise Price Number Outstanding at June 30, 2023 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable at June 30, 2023 Weighted Average Exercise Price $ 2.35 7.20 58,669 3.9 $ 5.00 57,335 $ 4.95 $ 8.10 9.60 69,336 8.4 $ 8.27 29,336 $ 8.37 $ 11.40 16.50 21,672 3.8 $ 14.42 21,672 $ 14.42 * 149,677 108,343 $ 7.77 * Total number of options outstanding as of June 30, 2023 includes 23,343 73,334 64,750 As of June 30, 2023, there was unrecognized expense of approximately $ 259,000 remaining on options currently vesting over time with an approximate average of 23.4 months remaining until these options are fully vested. The vested options as of June 30, 2023 had no intrinsic value. WARRANTS Common warrants issued and outstanding as of June 30, 2023 are as follows: SCHEDULE OF COMMON STOCK WARRANTS ISSUED AND OUTSTANDING Number of Weighted Average Warrants: Warrants outstanding at April 1, 2023 902,113 $ 3.04 Warrants issued - Warrants exercised - Warrants outstanding at June 30, 2023 902,113 $ 3.04 Warrants exercisable at June 30, 2023 902,113 $ 3.04 As of June 30, 2023, the Company’s outstanding warrants by expiration date were as follows: SCHEDULE OF WARRANTS EXPIRATION Number of Exercise Price Expiration Date 802,113 $ 2.80 September 15, 2026 100,000 $ 5.00 May 23, 2027 902,113 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 10 – SEGMENT INFORMATION There were no sales to customers outside of the North America for the three months ended June 30, 2023 and 2022. The geographic area of sales was based on the location where the product is delivered. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 – RELATED PARTY TRANSACTIONS The Company has an ongoing music subscription sharing agreement with Stingray, who has a minority interest in the Company, which enables subscribers to access a digital music library maintained by Stingray for the benefit of the Company and its retail customers. For the three months ended June 30, 2023 and 2022, the Company received music subscription revenue of approximately $ 176,000 132,000 175,000 218,000 |
RESERVE FOR SALES RETURNS
RESERVE FOR SALES RETURNS | 3 Months Ended |
Jun. 30, 2023 | |
Reserve For Sales Returns | |
RESERVE FOR SALES RETURNS | NOTE 12 – RESERVE FOR SALES RETURNS A return program for defective goods is negotiated with each of our wholesale customers on a year-to-year basis. Customers are allowed to return defective goods within a specified period of time after shipment (between 6 and 9 months). The Company does make occasional exceptions to this return policy and accordingly records a sales return reserve based on historic return amounts, specific exceptions as identified and management estimates. The Company records a sales reserve for its return goods programs at the time of sale for estimated sales returns that may occur. The liability for defective goods is included in the reserve for sales returns on the condensed consolidated balance sheets. Changes in the Company’s reserve for sales returns are presented in the following table: SCHEDULE OF RESERVE FOR SALES RETURNS Three Months Ended June 30, 2023 June 30, 2022 Reserve for sales returns at beginning of the fiscal year $ 900,000 $ 990,000 Provision for estimated sales returns 351,012 624,000 Sales returns received (919,258 ) (732,000 ) Reserve for sales returns at end of the period $ 331,754 $ 882,000 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 3 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | NOTE 13 – EMPLOYEE BENEFIT PLANS The Company has a 401(k) plan for its employees to which the Company makes contributions at rates dependent on the level of each employee’s contributions. Contributions made by the Company are limited to the maximum allowable for federal income tax purposes. The amounts charged to operations for contributions to this plan and administrative costs during the three months ended June 30, 2023 and 2022 totaled approximately $ 19,000 15,000 |
CONCENTRATIONS OF CREDIT AND SA
CONCENTRATIONS OF CREDIT AND SALES RISK | 3 Months Ended |
Jun. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF CREDIT AND SALES RISK | NOTE 14 – CONCENTRATIONS OF CREDIT AND SALES RISK The Company derives a majority of its revenues from retailers of products in the United States. The Company’s allowance for doubtful accounts is based upon management’s estimates and historical experience and reflects the fact that accounts receivable are concentrated with several large customers. At June 30, 2023, approximately 79 10 79 10 The Company generates most of its revenue from retailers of products in the United States with a significant amount of sales concentrated with several large customers, the loss of which could have an adverse impact on the financial position of the Company. For the three months ended June 30, 2023, there was one customer who individually accounted for 10 86 10 50 37 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION | PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION The accompanying condensed consolidated financial statements include the accounts of the Company, its Macau Subsidiary, SMH, SMCL, and SMCM. All inter-company accounts and transactions have been eliminated in consolidation for all periods presented. The accompanying unaudited financial statements for the three months ended June 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by US GAAP for complete consolidated financial statements. In the opinion of management, such condensed consolidated financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair presentation of the condensed consolidated financial position and the condensed consolidated results of operations. The condensed consolidated results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet information as of March 31, 2023 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023. The interim condensed consolidated financial statements should be read in conjunction with that report. |
USE OF ESTIMATES | USE OF ESTIMATES The Singing Machine makes estimates and assumptions in the ordinary course of business relating to sales returns and allowances, warranty reserves, inventory reserves and reserves for promotional incentives that affect the reported amounts of assets and liabilities and of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Future events and their effects cannot be determined with absolute certainty; therefore, the determination of estimates requires the exercise of judgment. Historically, past changes to these estimates have not had a material impact on the Company’s financial statements. However, circumstances could change which may alter future expectations. |
COLLECTABILITY OF ACCOUNTS RECEIVABLE | COLLECTABILITY 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 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) |
FOREIGN CURRENCY TRANSLATION | FOREIGN CURRENCY TRANSLATION The functional currency of SMH 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 operations and translations would be recorded in a separate component of shareholders’ equity. Any such amounts were not material during the periods presented. SMC sells to distributors and retailers in the Canadian market, and is paid in Canadian dollars. We receive payment in the form of the Canadian dollar, simultaneously presenting these payments for deposit and requesting an immediate spot conversion by the financial institution that currently holds our operating accounts. Net gains and losses resulting from foreign exchange transactions are recorded in the statements of operations 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 more than the Federal Deposit Insurance Corporation insured amounts. The Company also maintains cash balances in foreign financial institutions. The amounts at foreign financial institutions as of June 30, 2023 and March 31, 2023 were approximately $ 23,000 and $ 174,000 , respectively. Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of accounts receivable. |
INVENTORY | INVENTORY Inventories are comprised primarily of electronic karaoke equipment, microphones and accessories, and are stated at the lower of cost or net realizable value, as determined using the first in, first out method. Inventories also include an estimate for the net realizable value of expected future inventory returns due to warranty and allowance programs. As of June 30, 2023 and March 31, 2023, the estimated amounts for these future inventory returns were approximately $ 116,000 555,000 The Company reduces inventory on hand to its net realizable value on an item-by-item basis when it is apparent that the expected realizable value of an inventory item falls below its original cost. A charge to cost of sales results when the estimated net realizable value of specific inventory items declines below cost. Management regularly reviews the Company’s investment in inventories for such declines in value. As of June 30, 2023 and March 31, 2023, the Company had inventory reserves of approximately $ 710,000 900,000 |
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.” No During the first quarter ended June 30, 2023, we decided not to renew our lease on our California warehouse facility and have opted to transfer our logistics operations to a third-party logistics company and all assets located at this facility will be sold or otherwise disposed of by the end of August 2023. We recognized accelerated depreciation expense on certain assets to be sold in the amount of approximately $ 122,000 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) |
LEASES | LEASES The Company follows FASB ASC 842, “Leases”. The ASC requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than twelve months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. (See Note 8– LEASES). The Company determines if an arrangement contains a lease at the inception of a contract. ROU 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. ROU 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 financing interest rate for its finance leases. |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment are stated at cost, less accumulated depreciation. Expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to their estimated useful lives using accelerated and straight-line methods. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS We follow FASB ASC 825, “Financial Instruments”, which requires disclosures of information about the fair value of certain financial instruments for which it is practicable to estimate that value. For purposes of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts of the Company’s short-term financial instruments, including accounts receivable, due from related parties, accounts payable, accrued expenses, customer deposits and refunds due to customers, approximates fair value due to the relatively short period to maturity for these instruments. The carrying amounts on the 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. For the three months ended June 30, 2023 and 2022, co-op promotion incentives were approximately $ 91,000 296,000 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) The Company’s contracts with customers consist of one performance obligation (the sale of the Company’s products). The Company’s contracts have no financing elements, payment terms are less than 120 days and have no further contract asset or liability obligations once control of goods is transferred to the customer. Revenue is recorded in the amount of consideration the Company expects to receive for the sale of these goods. Costs incurred in fulfilling contracts with customers include administrative costs associated with the procurement of goods are included in general and administrative expenses, in-bound freight costs are included in the cost of goods sold and accrued sales representative commissions are included in selling expenses in the accompanying condensed consolidated statements of operations as our underlying customer agreements are less than one year. 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 as of June 30, 2023 and March 31, 2023 were approximately $ 332,000 900,000 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 10 – SEGMENT INFORMATION). Revenue is derived from five different major product lines. Disaggregated revenue from these product lines for the three months ended June 30, 2023 and 2022 consisted of the following: SCHEDULE OF DISAGGREGATION OF REVENUE T hree Months Ended Product Line June 30, 2023 June 30, 2022 Karaoke Machines $ 1,463,000 $ 8,159,000 Microphones and Accessories 957,000 2,420,000 SMC Kids Toys 21,000 936,000 Licensed Products 8,000 45,000 Music Subscriptions 176,000 132,000 Total Net Sales $ 2,625,000 $ 11,692,000 |
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 the three months ended June 30, 2023 and 2022, shipping and handling expenses were approximately $ 60,000 46,000 THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) |
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION The Company follows the provisions of the FASB ASC 718-20, “Compensation – Stock Compensation Awards Classified as Equity”. ASC 718-20 requires all stock-based payments to employees including grants of employee stock options, be measured at fair value and expensed in the condensed consolidated statements of operations over the service period (generally the vesting period). The Company uses the Black-Scholes option valuation model to value stock options. Employee stock option compensation expense for the three months ended June 30, 2023 and 2022 includes the estimated fair value of options granted, amortized on a straight-line basis over the requisite service period for the entire portion of the award. For the three months ended June 30, 2023 and 2022, the stock option expense was approximately $ 63,000 16,000 |
RESEARCH AND DEVELOPMENT COSTS | RESEARCH AND DEVELOPMENT COSTS Research and development costs are charged to results of operations as incurred. These expenses are shown as a component of general and administrative expenses in the condensed consolidated statements of operations. For the three months ended June 30, 2023 and 2022, these amounts totaled approximately $ 42,000 17,000 |
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. As of June 30, 2023, and March 31, 2023, the Company had recognized a valuation allowance of the entire net deferred tax asset as management has determined it was more likely than not that the deferred tax asset would be realized. 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% As of June 30, 2023 and March 31, 2023, there were no uncertain tax positions that resulted in any adjustment to the Company’s provision for income taxes. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. The Company currently has no liabilities recorded for accrued interest or penalties related to uncertain tax provisions. THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2023 and 2022 (Unaudited) |
COMPUTATION OF EARNINGS PER SHARE | COMPUTATION OF EARNINGS PER SHARE Computation of dilutive shares for the three months ended June 30, 2023 and 2022 are as follows: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNING PER SHARE For the three For the three Basic weighted average common shares outstanding 3,872,447 1,911,485 Effect of dilutive stock options - - Diluted weighted average of common shares outstanding 3,872,447 1,911,485 Basic net income (loss) per share is based on the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share reflects the potential dilution assuming shares of common stock were issued upon the exercise of outstanding in-the-money options and the proceeds thereof were used to purchase shares of the Company’s common stock at the average market price during the period using the treasury stock method. For the three months ended June 30, 2023, options to purchase 108,343 902,113 For the three months ended June 30, 2022, options to purchase 50,007 924,334 |
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) | 3 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF DISAGGREGATION OF REVENUE | Revenue is derived from five different major product lines. Disaggregated revenue from these product lines for the three months ended June 30, 2023 and 2022 consisted of the following: SCHEDULE OF DISAGGREGATION OF REVENUE T hree Months Ended Product Line June 30, 2023 June 30, 2022 Karaoke Machines $ 1,463,000 $ 8,159,000 Microphones and Accessories 957,000 2,420,000 SMC Kids Toys 21,000 936,000 Licensed Products 8,000 45,000 Music Subscriptions 176,000 132,000 Total Net Sales $ 2,625,000 $ 11,692,000 |
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNING PER SHARE | Computation of dilutive shares for the three months ended June 30, 2023 and 2022 are as follows: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNING PER SHARE For the three For the three Basic weighted average common shares outstanding 3,872,447 1,911,485 Effect of dilutive stock options - - Diluted weighted average of common shares outstanding 3,872,447 1,911,485 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORY | Inventories are comprised of the following components: SCHEDULE OF INVENTORY June 30, 2023 March 31, 2023 Finished Goods $ 10,563,000 $ 9,364,000 Inventory in Transit 639,000 621,000 Estimated Amount of Future Returns 116,000 555,000 Subtotal 11,318,000 10,540,000 Less: Inventory Reserve 710,000 900,000 Total Inventories $ 10,608,000 $ 9,640,000 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
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 June 30, March 31, LIFE 2023 2023 Computer and office equipment 5 7 $ 497,000 $ 497,000 Furniture and fixtures 7 111,000 111,000 Warehouse equipment 7 251,000 251,000 Molds and tooling 3 5 2,202,000 2,160,000 Property and equipment, gross 3,061,000 3,019,000 Less: Accumulated depreciation 2,569,000 2,386,000 Property and equipment, net $ 492,000 $ 633,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES | Supplemental balance sheet information related to leases as of June 30, 2023 is as follows: SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES Assets: Operating lease – right-of-use assets $ 331,878 Finance leases as a component of property and equipment 59,900 Liabilities Current Current portion of operating leases $ 277,733 Current portion of finance leases 18,531 Noncurrent Operating lease liabilities, net of current portion $ 78,809 Finance leases, net of current portion 41,369 |
SCHEDULE OF LEASE TERM AND DISCOUNT RATE | Supplemental statement of operations information related to leases for the three months ended June 30, 2023 is as follows: SCHEDULE OF LEASE TERM AND DISCOUNT RATE Operating lease expense as a component of general and administrative expenses $ 237,007 Finance lease cost Depreciation of leased assets as a component of depreciation $ 58,765 Interest on finance lease liabilities as a component of interest expense $ 1,093 |
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION | Supplemental cash flow information related to leases for the three months ended June 30, 2023 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 $ 252,313 Financing cash flow paid for finance leases $ 4,404 Scheduled maturities of operating and finance lease liabilities outstanding as of June 30, 2023 are as follows: Lease term and Discount Rate Weighted average remaining lease term (months) Operating leases 13.2 Finance leases 48.8 Weighted average discount rate Operating leases 6.50 % Finance leases 9.86 % |
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING AND FINANCE LEASES | The following table summarizes information regarding lease maturities and balance due as follows: SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING AND FINANCE LEASES Year Operating Leases Finance Leases 2023 (remaining six months) $ 227,507 $ 10,984 2024 120,008 17,435 2025 48,774 12,903 2026 - 12,903 2027 and beyond - 13,978 Total Minimum Future Payments 396,289 68,203 Less: Imputed Interest 39,747 8,303 Present Value of Lease Liabilities $ 356,542 $ 59,900 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SUMMARY OF STOCK OPTION ACTIVITY | A summary of stock option activity for the three months ended June 30, 2023 is summarized below: SUMMARY OF STOCK OPTION ACTIVITY June 30, 2023 Number of Options Weighted Average Exercise Price Weighted Average Contractual Life Stock Options: Balance at beginning of period 161,427 $ 7.90 6.6 Forfeited (11,750 ) $ 8.11 - Balance at end of period 149,677 $ 7.88 6.4 Options exercisable at end of period 108,343 $ 7.77 |
SCHEDULE OF EMPLOYEE STOCK OPTIONS OUTSTANDING | The following table summarizes information about employee stock options outstanding at June 30, 2023: SCHEDULE OF EMPLOYEE STOCK OPTIONS OUTSTANDING Range of Exercise Price Number Outstanding at June 30, 2023 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable at June 30, 2023 Weighted Average Exercise Price $ 2.35 7.20 58,669 3.9 $ 5.00 57,335 $ 4.95 $ 8.10 9.60 69,336 8.4 $ 8.27 29,336 $ 8.37 $ 11.40 16.50 21,672 3.8 $ 14.42 21,672 $ 14.42 * 149,677 108,343 $ 7.77 * Total number of options outstanding as of June 30, 2023 includes 23,343 73,334 64,750 |
SCHEDULE OF COMMON STOCK WARRANTS ISSUED AND OUTSTANDING | Common warrants issued and outstanding as of June 30, 2023 are as follows: SCHEDULE OF COMMON STOCK WARRANTS ISSUED AND OUTSTANDING Number of Weighted Average Warrants: Warrants outstanding at April 1, 2023 902,113 $ 3.04 Warrants issued - Warrants exercised - Warrants outstanding at June 30, 2023 902,113 $ 3.04 Warrants exercisable at June 30, 2023 902,113 $ 3.04 |
SCHEDULE OF WARRANTS EXPIRATION | As of June 30, 2023, the Company’s outstanding warrants by expiration date were as follows: SCHEDULE OF WARRANTS EXPIRATION Number of Exercise Price Expiration Date 802,113 $ 2.80 September 15, 2026 100,000 $ 5.00 May 23, 2027 902,113 |
RESERVE FOR SALES RETURNS (Tabl
RESERVE FOR SALES RETURNS (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Reserve For Sales Returns | |
SCHEDULE OF RESERVE FOR SALES RETURNS | SCHEDULE OF RESERVE FOR SALES RETURNS Three Months Ended June 30, 2023 June 30, 2022 Reserve for sales returns at beginning of the fiscal year $ 900,000 $ 990,000 Provision for estimated sales returns 351,012 624,000 Sales returns received (919,258 ) (732,000 ) Reserve for sales returns at end of the period $ 331,754 $ 882,000 |
RECENT DEVELOPMENTS (Details Na
RECENT DEVELOPMENTS (Details Narrative) | 3 Months Ended | 12 Months Ended | |||||
May 12, 2023 USD ($) $ / shares shares | Feb. 15, 2023 USD ($) | Jun. 13, 2022 $ / shares shares | May 23, 2022 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) $ / shares | Jun. 30, 2022 USD ($) shares | Mar. 31, 2023 USD ($) $ / shares shares | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | |||||
Gross proceeds from issuance of stock | $ 1,603,894 | $ 3,362,750 | |||||
Ault Alliance [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Ownership percentage | 52.80% | ||||||
Common stock, par value | $ / shares | $ 0.01 | ||||||
Ault Alliance, and Milton C. Ault, III [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Ownership percentage | 42.80% | ||||||
Number of shares beneficially owns | shares | 1,808,000 | ||||||
Common Stock [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Number of new shares issued | shares | 1,000,000 | ||||||
At the Market [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Proceeds from issuance or sale of equity | $ 1,745,000 | $ 36,000 | |||||
Net cash proceeds brokerage commissions and administrative fees | $ 1,690,000 | ||||||
At the Market [Member] | Common Stock [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Sale of stock consideration received per transaction | $ 1,800,000 | ||||||
Number of new shares issued | shares | 1,067,000 | 14,230 | |||||
Share price | $ / shares | $ 1.64 | $ 2.56 | |||||
Underwriting Agreement [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Sale of stock, number of shares issued in transaction | shares | 1,000,000 | ||||||
Gross proceeds from issuance of stock | $ 4,000,000 | ||||||
Underwriting discounts and commissions and other estimated offering expenses | $ 637,000 | ||||||
Sale of stock, price per share | $ / shares | $ 4 | ||||||
Net proceeds from issuance of stock | $ 3,363,000 | ||||||
Underwriter warrants to purchase | shares | 100,000 | ||||||
Sale of stock, percentage | 10% | ||||||
Exercise price per share | $ / shares | $ 5 | ||||||
Warrant term | 5 years | ||||||
Fair value adjustment of warrants | $ 244,000 | ||||||
Underwriting Agreement [Member] | Measurement Input, Exercise Price [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Warrant measurement input | 2.90 | ||||||
Underwriting Agreement [Member] | Measurement Input, Expected Term [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Warrant term | 3 years | ||||||
Underwriting Agreement [Member] | Measurement Input, Price Volatility [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Warrant measurement input | 176 | ||||||
Underwriting Agreement [Member] | Measurement Input, Expected Dividend Rate [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Warrant measurement input | 0 | ||||||
Underwriting Agreement [Member] | Measurement Input, Risk Free Interest Rate [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Warrant measurement input | 2.63 |
LIQUIDITY (Details Narrative)
LIQUIDITY (Details Narrative) - USD ($) | 3 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | May 19, 2023 | Mar. 31, 2023 | |
Net income (loss) | $ 2,459,681 | $ 16,003 | ||
Cash used in (provided by) operating activities | 2,547,872 | $ 4,149,304 | ||
Outstanding balance of credit facility | $ 1,400,000 | |||
February and July [Member] | ||||
Excess loan availability plus cash on hand | $ 2,500,000 | |||
September and June [Member] | ||||
Excess loan availability plus cash on hand | $ 4,000,000 | |||
Revolving Credit Facility [Member] | ||||
Borrow on revolving credit facility | 1,900,000 | |||
Maximum [Member] | ||||
Debt instrument aggregate principal amount | 15,000,000 | |||
Minimum [Member] | ||||
Debt instrument aggregate principal amount | $ 7,500,000 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Product Information [Line Items] | ||
Total Net Sales | $ 2,625,000 | $ 11,692,000 |
Classic Karaoke Machines [Member] | ||
Product Information [Line Items] | ||
Total Net Sales | 1,463,000 | 8,159,000 |
Microphones and Accessories [Member] | ||
Product Information [Line Items] | ||
Total Net Sales | 957,000 | 2,420,000 |
SMC Kids Toys [Member] | ||
Product Information [Line Items] | ||
Total Net Sales | 21,000 | 936,000 |
License [Member] | ||
Product Information [Line Items] | ||
Total Net Sales | 8,000 | 45,000 |
Music Subscription [Member] | ||
Product Information [Line Items] | ||
Total Net Sales | $ 176,000 | $ 132,000 |
SCHEDULE OF ANTIDILUTIVE SECURI
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNING PER SHARE (Details) - shares | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Accounting Policies [Abstract] | ||
Basic weighted average common shares outstanding | 3,872,447 | 1,911,485 |
Effect of dilutive stock options | ||
Diluted weighted average of common shares outstanding | 3,872,447 | 1,911,485 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | |
Property, Plant and Equipment [Line Items] | |||
Percentage of reserves for customers | 100% | ||
Foreign Financial Institutions, Actual Deposits | $ 23,000 | $ 174,000 | |
Future inventory returns | 116,000 | 555,000 | |
Inventory reserves | 710,000 | 900,000 | |
Impairment charges | 0 | $ 0 | |
Accelerated depreciation expense | 183,454 | 58,067 | |
Co-op promotion incentives | 91,000 | 296,000 | |
Reserve for sales returns | 332,000 | $ 900,000 | |
Shipping and handling expenses | 60,000 | 46,000 | |
Stock option expense | 63,000 | 16,000 | |
Research and development costs | $ 42,000 | $ 17,000 | |
Percentage of tax benefits recognized likelihood of being realized | greater than 50% | ||
Share-Based Payment Arrangement, Option [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Potentially dilutive securities | 108,343 | 50,007 | |
Share-Based Payment Arrangement, Option [Member] | Warrant [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Potentially dilutive securities | 902,113 | 924,334 | |
California Warehouse Facility [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Accelerated depreciation expense | $ 122,000 |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Jun. 30, 2023 | Mar. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Finished Goods | $ 10,563,000 | $ 9,364,000 |
Inventory in Transit | 639,000 | 621,000 |
Estimated Amount of Future Returns | 116,000 | 555,000 |
Subtotal | 11,318,000 | 10,540,000 |
Less: Inventory Reserve | 710,000 | 900,000 |
Total Inventories | $ 10,607,610 | $ 9,639,992 |
SUMMARY OF PROPERTY AND EQUIPME
SUMMARY OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2023 | Mar. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,061,000 | $ 3,019,000 |
Less: Accumulated depreciation | 2,569,000 | 2,386,000 |
Property and equipment, net | 492,253 | 633,207 |
Computer and Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 497,000 | $ 497,000 |
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] | ||
Property and equipment, gross | 111,000 | $ 111,000 |
Average useful life (in years) | 7 years | |
Warehouse Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 251,000 | $ 251,000 |
Average useful life (in years) | 7 years | |
Molds and tooling [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,202,000 | $ 2,160,000 |
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 ($) | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 183,000 | $ 58,000 |
Accelerated depreciation expense | 183,454 | $ 58,067 |
California Warehouse Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Accelerated depreciation expense | $ 122,000 |
FINANCING (Details Narrative)
FINANCING (Details Narrative) - USD ($) | 3 Months Ended | ||||||
Oct. 14, 2022 | Jun. 18, 2019 | Jun. 30, 2023 | Jun. 30, 2022 | May 19, 2023 | Mar. 31, 2023 | Jun. 16, 2020 | |
Debt Instrument [Line Items] | |||||||
Amortization expense | $ 21,000 | $ 8,000 | |||||
Unused line fee | 5.09% | ||||||
Interest expenses | $ 4,000 | 0 | |||||
February and July [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Excess loan availability plus cash on hand | $ 2,500,000 | ||||||
September and June [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Excess loan availability plus cash on hand | $ 4,000,000 | ||||||
Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Credit agreement borrowings | 1,900,000 | ||||||
Credit Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument maturity date | Oct. 14, 2025 | ||||||
Deferred cost | $ 254,000 | ||||||
Credit agreement borrowings | 1,500,000 | ||||||
Additional borrowing capacity | 1,900,000 | ||||||
Revolving Credit Facility [Member] | Crestmark Bank [Member] | |||||||
Debt Instrument [Line Items] | |||||||
SOFR rate plus | 0.50% | ||||||
Unused line fee | 0.35% | ||||||
Revolving Credit Facility [Member] | Crestmark Bank [Member] | Prime Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
SOFR rate plus | 0.50% | ||||||
Revolving Credit Facility [Member] | Crestmark Bank [Member] | SOFR Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
SOFR rate plus | 3% | ||||||
Two Year Credit and Security Agreement [Member] | Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing amount | $ 2,500,000 | ||||||
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 | ||||||
Credit and Security Agreements [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Amortization expense | 0 | 8,000 | |||||
Interest expenses | 0 | 53,000 | |||||
Financing Agreement [Member] | Dimension Funding LLC [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 365,000 | ||||||
Interest expenses | 2,800 | $ 4,000 | |||||
Debt instrument, term | 60 months | ||||||
Debt monthly payments | 7,459 | ||||||
Notes payable | 119,000 | $ 139,000 | |||||
Financing Agreement [Member] | Dimension Funding LLC [Member] | Three Installment Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt principal payments | $ 365,000 | ||||||
Financing Agreement [Member] | Dimension Funding LLC [Member] | Installment Note One [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate | 7.58% | ||||||
Financing Agreement [Member] | Dimension Funding LLC [Member] | Installment Note Two [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate | 8.55% | ||||||
Financing Agreement [Member] | Dimension Funding LLC [Member] | Installment Note Three [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate | 9.25% | ||||||
Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | 15,000,000 | ||||||
Maximum [Member] | Credit Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 15,000,000 | ||||||
Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 7,500,000 | ||||||
Minimum [Member] | Credit Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt face amount | $ 7,500,000 |
SCHEDULE OF SUPPLEMENTAL INFORM
SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES (Details) - USD ($) | Jun. 30, 2023 | Mar. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease – right-of-use assets | $ 331,878 | $ 561,185 |
Finance leases as a component of property and equipment | 59,900 | |
Current portion of operating leases | 277,733 | 508,515 |
Current portion of finance leases | 18,531 | 18,162 |
Operating lease liabilities, net of current portion | 78,809 | 87,988 |
Finance leases, net of current portion | $ 41,369 | $ 46,142 |
SCHEDULE OF LEASE TERM AND DISC
SCHEDULE OF LEASE TERM AND DISCOUNT RATE (Details) | 3 Months Ended |
Jun. 30, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease expense as a component of general and administrative expenses | $ 237,007 |
Depreciation of leased assets as a component of depreciation | 58,765 |
Interest on finance lease liabilities as a component of interest expense | $ 1,093 |
SCHEDULE OF SUPPLEMENTAL CASH F
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION (Details) | 3 Months Ended |
Jun. 30, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Lease, Payments | $ 252,313 |
Finance Lease, Principal Payments | $ 4,404 |
Lessee, Finance Lease, Remaining Lease Term | 13 months 6 days |
Lessee, Operating Lease, Remaining Lease Term | 48 months 24 days |
Lessee, Operating Lease, Discount Rate | 6.50% |
Lessee, Finance Lease, Discount Rate | 9.86% |
SCHEDULE OF FUTURE MINIMUM RENT
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS FOR OPERATING AND FINANCE LEASES (Details) | Jun. 30, 2023 USD ($) |
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | |
Operating Leases 2023 | $ 227,507 |
Operating Leases 2024 | 120,008 |
Operating Leases 2025 | 48,774 |
Operating Leases 2026 | |
Operating Leases 2027 and beyond | |
Operating Leases Total Minimum Future Payments | 396,289 |
Operating Leases Less: Imputed Interest | 39,747 |
Operating Leases Present Value of Lease Liabilities | 356,542 |
Finance Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | |
Finance Leases 2023 | 10,984 |
Finance Leases 2024 | 17,435 |
Finance Leases 2025 | 12,903 |
Finance Leases 2026 | 12,903 |
Finance Leases 2027 and beyond | 13,978 |
Finance Leases Total Minimum Future Payments | 68,203 |
Finance Leases Less: Imputed Interest | 8,303 |
Finance Leases Present Value of Lease Liabilities | $ 59,900 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 1 Months Ended | |||||
Oct. 15, 2022 USD ($) ft² | Jul. 02, 2021 USD ($) | Oct. 01, 2017 USD ($) | Feb. 28, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Finance lease interest expense | $ 59,900 | |||||
Lease term | 13 months 6 days | |||||
Operating Lease Agreement [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Rent expense | ft² | 1,900 | |||||
Lease expiration date | Oct. 14, 2025 | Mar. 31, 2024 | ||||
Rent expense | $ 4,900 | $ 9,700 | ||||
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 | |||||
Lease term | 36 months | |||||
Effective nterest rate | 9.90% | |||||
Remaining capital lease arrangements | $ 8,600 | $ 11,000 | ||||
Financing Leasing Arrangement [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Finance lease interest expense | $ 55,000 | |||||
Finance lease monthly payments | $ 1,075 | |||||
Lease term | 60 months | |||||
Effective nterest rate | 6.50% | |||||
Remaining capital lease arrangements | $ 51,300 | $ 53,300 |
SUMMARY OF STOCK OPTION ACTIVIT
SUMMARY OF STOCK OPTION ACTIVITY (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Mar. 31, 2023 | |
Equity Option [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Weighted Average contractual life | 6 years 4 months 24 days | 6 years 7 months 6 days |
Share-Based Payment Arrangement, Option [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Options, Balance at beginning of period | 161,427 | |
Weighted Average Exercise Price, Balance at beginning of period | $ 7.90 | |
Number of Options, Forfeited | (11,750) | |
Weighted Average Exercise Price, Forfeited | $ 8.11 | |
Number of Options, Balance at end of period | 149,677 | 161,427 |
Weighted Average Exercise Price, Balance at end of period | $ 7.88 | $ 7.90 |
Number of Options, exercisable at end of period | 108,343 | |
Weighted Average Exercise Price, Options exercisable at end of period | $ 7.77 |
SCHEDULE OF EMPLOYEE STOCK OPTI
SCHEDULE OF EMPLOYEE STOCK OPTIONS OUTSTANDING (Details) | 3 Months Ended | |
Jun. 30, 2023 $ / shares shares | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock options number outstanding | shares | 149,677 | [1] |
Stock option number exercisable | shares | 108,343 | [1] |
Stock Option Exercisable Weighted Average Exercise Price | $ 7.77 | |
Exercise Price Range One [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock options outstanding exercise price, lower range limit | 2.35 | |
Stock options outstanding exercise price, upper range limit | $ 7.20 | |
Stock options number outstanding | shares | 58,669 | |
Stock option outstanding weighted average remaining contractual life | 3 years 10 months 24 days | |
Stock option outstanding weighted average exercise price | $ 5 | |
Stock option number exercisable | shares | 57,335 | |
Stock Option Exercisable Weighted Average Exercise Price | $ 4.95 | |
Exercise Price Range Two [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock options outstanding exercise price, lower range limit | 8.10 | |
Stock options outstanding exercise price, upper range limit | $ 9.60 | |
Stock options number outstanding | shares | 69,336 | |
Stock option outstanding weighted average remaining contractual life | 8 years 4 months 24 days | |
Stock option outstanding weighted average exercise price | $ 8.27 | |
Stock option number exercisable | shares | 29,336 | |
Stock Option Exercisable Weighted Average Exercise Price | $ 8.37 | |
Exercise Price Range Three [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock options outstanding exercise price, lower range limit | 11.40 | |
Stock options outstanding exercise price, upper range limit | $ 16.50 | |
Stock options number outstanding | shares | 21,672 | |
Stock option outstanding weighted average remaining contractual life | 3 years 9 months 18 days | |
Stock option outstanding weighted average exercise price | $ 14.42 | |
Stock option number exercisable | shares | 21,672 | |
Stock Option Exercisable Weighted Average Exercise Price | $ 14.42 | |
[1]Total number of options outstanding as of June 30, 2023 includes 23,343 73,334 64,750 |
SCHEDULE OF EMPLOYEE STOCK OP_2
SCHEDULE OF EMPLOYEE STOCK OPTIONS OUTSTANDING (Details) (Parenthetical) | Jun. 30, 2023 shares |
Six Current and Three Former Directors [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Option issued | 23,343 |
Officer [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Option issued | 73,334 |
Employees [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Option issued | 64,750 |
SCHEDULE OF COMMON STOCK WARRAN
SCHEDULE OF COMMON STOCK WARRANTS ISSUED AND OUTSTANDING (Details) | 3 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Number of common warrants outstanding beginning balance | 902,113 |
Weighted average exercise price outstanding beginning balance | $ / shares | $ 3.04 |
Number of common warrants issued | |
Number of common warrants exercised | |
Number of common warrants outstanding ending balance | 902,113 |
Weighted average exercise price outstanding ending balance | $ / shares | $ 3.04 |
Number of common warrants exercisable | 902,113 |
Weighted average exercise price warrants exercisable | $ / shares | $ 3.04 |
SCHEDULE OF WARRANTS EXPIRATION
SCHEDULE OF WARRANTS EXPIRATION (Details) | 3 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of common warrants | 902,113 |
Exercise Price Range One [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of common warrants | 802,113 |
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 | 100,000 |
Warrant Exercise Price | $ / shares | $ 5 |
Expiration Date | May 23, 2027 |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) | 3 Months Ended | ||
Apr. 12, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount | $ 259,000 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 0 | ||
Common Stock [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of shares issued | 1,000,000 | ||
2022 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 233,333 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 | ||
Number of shares authorized | 266,667 | ||
2022 Plan [Member] | Common Stock [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share based payment award options grants in period gross | 24,446 | ||
Number of shares issued | 107,752 | ||
Number of shares issued | 54,668 | ||
Number of shares granted | 134,469 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | |
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 2,625,000 | $ 11,692,000 | |
Related Party [Member] | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | 176,000 | $ 132,000 | |
Stingray Group Inc [Member] | |||
Related Party Transaction [Line Items] | |||
Other Receivables | $ 175,000 | $ 218,000 |
SCHEDULE OF RESERVE FOR SALES R
SCHEDULE OF RESERVE FOR SALES RETURNS (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Reserve For Sales Returns | ||
Reserve for sales returns at beginning of the year | $ 900,000 | $ 990,000 |
Provision for estimated sales returns | 351,012 | 624,000 |
Sales returns received | (919,258) | (732,000) |
Reserve for sales returns at end of the period | $ 331,754 | $ 882,000 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan, administrative expenses | $ 19,000 | $ 15,000 |
CONCENTRATIONS OF CREDIT AND _2
CONCENTRATIONS OF CREDIT AND SALES RISK (Details Narrative) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | |||
Concentration Risk [Line Items] | |||
Concentration of sales risk, percentage | 79% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Individuals [Member] | |||
Concentration Risk [Line Items] | |||
Concentration of sales risk, percentage | 10% | 10% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Four Customers [Member] | |||
Concentration Risk [Line Items] | |||
Concentration of sales risk, percentage | 79% | ||
Purchases [Member] | Geographic Concentration Risk [Member] | Customer [Member] | |||
Concentration Risk [Line Items] | |||
Concentration of sales risk, percentage | 10% | 10% | |
Sales Revenue [Member] | Customer Concentration Risk [Member] | Customers One [Member] | |||
Concentration Risk [Line Items] | |||
Concentration of sales risk, percentage | 86% | 50% | |
Sales Revenue [Member] | Customer Concentration Risk [Member] | Customers Two [Member] | |||
Concentration Risk [Line Items] | |||
Concentration of sales risk, percentage | 37% |