Mon, Aug 19, 12:02 PM (148 days ago)
For the quarter ended June 30, 2024, The Singing Machine Company, Inc. reported a significant decline in financial performance, with net sales of $2,440,000, down 7% from $2,625,000 in the same period of 2023. Gross profit also decreased by 39% to $324,000, leading to a gross margin of 13.3%, a drop from 20.2% year-over-year. Operating expenses surged to $6,478,000, primarily due to a $3,878,000 impairment related to an abandoned hospitality lease. This resulted in a net loss of $6,119,000 compared to a loss of $2,460,000 in Q2 2023. Cash reserves dwindled to $1,245,000 from $6,703,000 at year-end 2023, raising concerns about liquidity and the company’s ability to sustain operations over the next year without additional financing. The company is exploring equity financing options, including an ATM offering to raise up to $3,100,000. The outlook remains uncertain due to ongoing operational losses and legal challenges related to lease agreements. Management expressed doubt about the company's ability to continue as a going concern without securing further funding.