Year-End Highlights:

On the heels of a tumultuous 2009 in the global economy and lack of consumer confidence in the domestic retail market, the Singing Machine reported net sales of approximately $31.8 million, down from approximately $34.1 million in fiscal-year ended March 31, 2008 (a decline of 6.7%). The Company also reported a net loss of approximately $2.2 million as compared to slight net income in the same period last year. As a result of the loss, the Company's shareholders' equity fell to approximately $2.6 million, down from approximately $4.0 million in fiscal-year ended 2008. In addition, the Company also had approximately $4.7 million in inventory as compared to approximately $3.5 million in inventory at the end of the same period last year (increase of approximately 34.3%).

The Company cites an overall decline in the world economic market, increased competitive pricing pressures, significant increase in returns, and quality issues with a supplier as primary reasons for the Company's financial results. More specifically, during fiscal 2009 the Company lost a major customer, Circuit City, to bankruptcy after shipping them approximately $150,000 in merchandise. In addition, the Company had manufactured goods for Circuit City, which was taken into inventory. The Company experienced an unusually high rate of returned merchandise after the holiday season which the Company believes is attributed to overstock returns, decreased consumer spending, buyer's remorse, and certain quality issues with a supplier. In light of the uncertain economic climate, the Company elected to increase its inventory reserves by approximately $250,000 over last year based upon management's concerns that the economic downturn will continue into next year. The reserve is reflected in the fiscal year ended March 31, 2009 financial statements.

Tony Handal, C.E.O. states, "We are all disappointed over these financial results, which we believe to be largely the result of forces beyond our control. Despite this, we were generally able to maintain our net sales as compared to last year. However, due to shrinking gross margins and higher-than-expected returns, we were not able to sustain profitability. However, I do not believe fiscal 2009 to be a complete loss. The Company has instituted a number of initiatives to improve performance and profitability which we were committed to finalizing regardless of the downturn in the economy. In spite of the challenging economic climate, last year the Company laid the foundation for an online retail store, put the final touches on its new download karaoke music store and signed new brand licensing deals. We believe that the changes and enhancements made in fiscal 2009 will position the company for improved top line revenue and increased profitability in the years to come." Handal continued, "By all indications, we don't anticipate the retail markets to fully recover by the upcoming holiday season and we want to be prepared for it. More than ever, we are committed to cutting overhead and expenses in all departments while trying to maintain gross margins. On the other hand, the launch of our various online projects should distinguish us from our competitors as we look to improve profitability in fiscal 2010."

About The Singing Machine

Incorporated in 1982, The Singing Machine Company develops and distributes a full line of consumer-oriented karaoke machines and music under The Singing Machine(TM), Disney(TM), Karoake for Dummies(TM), SoundX(TM), and Sound X Kids(TM) and other brand names. The first to provide karaoke systems for home entertainment in the United States, The Singing Machine sells its products in North America, Europe and Australia.

Forward-Looking Statements

This press release contains forwardlooking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forwardlooking statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management and include, but are not limited to statements about our financial statements for the fiscal year ended March 31, 2009. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict.