STOCK COMPENSATION EXPENSE

6 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

STOCK COMPENSATION EXPENSE

NOTE 8 – STOCK COMPENSATION EXPENSE

Equity Incentive Plan

On April 12, 2022, the Company’s 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 was 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 Company’s 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 September 30, 2023, the Company had granted 24,446 shares of common stock and 107,752 common stock options under the 2022 Plan of which 54,252 stock options were vested leaving 134,469 shares available for issue.

THE SINGING MACHINE COMPANY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 and 2022

(Unaudited)

Common Stock Options

During the three and six months ended September 30, 2023, the Company did not issue any stock options.

A summary of stock option activity for the six months ended September 30, 2023 is summarized below:

	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		(47,666	)	$	7.26		-
Balance at end of period		113,761		$	8.08		6.2
Options exercisable at end of period		91,261		$	8.06

As of September 30, 2023, there was unrecognized expense of approximately $142,000 remaining on options currently vesting over time with an approximate average of 21 months remaining until these options are fully vested. The vested options as of September 30, 2023 had no intrinsic value.

For the three months ended September 30, 2023 and 2022, the stock compensation expense was approximately $36,000 and $70,000, respectively. For the six months ended September 30, 2023 and 2022, the stock compensation expense was approximately $99,000 and $231,000, respectively.

Warrants

As of both September 30, and March 31, 2023, there were 902,113 warrants outstanding at an average exercise price of $3.04. There were no changes in warrants outstanding during the period.

As of September 30, 2023, the Company’s outstanding warrants by expiration date were as follows:

Number of CommonWarrants		Exercise Price		Expiration Date
	802,113	$	2.80		September 15, 2026
	100,000	$	5.00		May 23, 2027
	902,113