SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 12, 2003
THE SINGING MACHINE COMPANY, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-24968 95-3795478
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(Commission File Number) (IRS Employer Identification No.)
6601 Lyons Road, Bldg. A-7
Coconut Creek, FL 33073
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(Address of Principal Executive Offices) (Zip Code)
(954) 596-1000
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Change Since Last Report)
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE
CREDIT AGREEMENT WITH LASALLE
On February 20, 2003, The Singing Machine Company, Inc. (the "Company")
entered into a seventh amendment to the Loan and Security Agreement with LaSalle
Business Credit, LLC ("LaSalle") dated April 26, 2001(the "Credit Agreement") in
which it amended the formula for determining the Company's borrowing base. On
March 14, 2003, the Company received a letter ("Letter") from LaSalle informing
the Company that it was in default of the minimum tangible net worth
requirement, set forth in subparagraph 11(o) of the Credit Agreement. In this
Letter, LaSalle informed the Company that as a result of this event of default,
it could accelerate payment of all amounts that had been advanced to the Company
under the Credit Agreement. The Company acknowledged receipt of this Letter and
since March 14, 2003, the Company has been accruing interest at the default rate
of 6.75%, which is the prime rate plus 2.5%. On March 18, 25 and 28, 2003, the
Company entered into three other amendments to the Credit Facility, two of which
reduced the Company's borrowing base and one amendment restated the Company's
business and collateral locations. Copies of these amendments and Letter have
been attached hereto as Exhibits 10.1 through 10.5.
CORRECTION OF PRESS RELEASE
On May 12, 2003, the Company issued a press release in which it stated
that it had achieved $100 million in sales milestone for the first time in its
history. A copy of this press release is attached as Exhibit 99.1. However, the
Company's auditors have not completed their audit of the Company's financial
statements for the fiscal year ended March 31, 2003 so at this time, the Company
can not confirm sales for fiscal 2003. The Company, therefore, wishes to qualify
the statement that it achieved the $100 million sales milestone. The Company
will have record sales for fiscal 2003. The exact dollar amount will be reported
in June 2003.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
10.1 Seventh Amendment dated February 20, 2003 to the Loan and
Security Agreement dated April 26, 2001 by and between LaSalle
Business Credit, LLC. and The Singing Machine Company, Inc.
10.2 Letter dated March 14, 2003 from LaSalle Business Credit, LLC
to The Singing Machine Company, Inc.
10.3 Eight Amendment dated March 18, 2003 to the Loan and Security
Agreement dated April 26, 2001 by and between LaSalle Business
Credit, LLC. and The Singing Machine Company, Inc.
10.4 Ninth Amendment dated March 25, 2003 to the Loan and Security
Agreement dated April 26, 2001 by and between LaSalle Business
Credit, LLC and The Singing Machine Company, Inc.
10.5 Tenth Amendment dated March 28, 2003 to the Loan and Security
Agreement dated April 26, 2001 by and between LaSalle Business
Credit, LLC. and The Singing Machine Company, Inc.
99.1 Press Release dated May 12, 2003 regarding strengthening and
expanding its sales and marketing team.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
THE SINGING MACHINE COMPANY, INC.
Date:May 21, 2003 By: /s/ April Green
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April Green
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
10.1 Seventh Amendment dated February 20, 2003 to the Loan and Security
Agreement dated April 26, 2001 by and between LaSalle Business Credit,
LLC. and The Singing Machine Company, Inc.
10.2 Letter dated March 14, 2003 from LaSalle Business Credit, LLC to
The Singing Machine Company, Inc.
10.3 Eight Amendment dated March 18, 2003 to the Loan and Security Agreement
dated April 26, 2001 by and between LaSalle Business Credit, LLC and
The Singing Machine Company, Inc.,
10.4 Ninth Amendment dated March 25, 2003 to the Loan and Security Agreement
dated April 26, 2001 by and between LaSalle Business Credit, LLC and
The Singing Machine Company, Inc.
10.5 Tenth Amendment dated March 28, 2003 to the Loan and Security Agreement
dated April 26, 2001 by and between LaSalle Business Credit, LLC and
The Singing Machine Company, Inc.
99.1 Press Release dated May 12, 2003 regarding the expansion of the
Company's sales and marketing team.