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Case Status:    SETTLED
On or around 12/27/2005 (Date of order of final judgment)

Filing Date: July 02, 2003

According to a Press Release dated April 13, 2004, a settlement of the class action and derivative lawsuits filed against the company in 2003 was reached. The settlement is subject to documentation and final approval by the Court. Terms include the issuance of up to 400,000 shares of common stock and a cash payment totaling $1,275,000, which includes $800,000 to be paid by The Singing Machine and $475,000 to be paid by the company's former auditor. The Singing Machine expects that its portion of the cash payment will be covered by its liability insurance. In addition, the settlement obligates The Singing Machine to implement certain corporate governance changes, including an expansion of its Board of Directors to six members with independent directors comprising at least 2/3 of the total Board seats, and may also involve other non-cash consideration.

The Complaint alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, by issuing a series of material misrepresentations to the
market between August 9, 2001 and June 27, 2003. The Complaint alleges
that Singing Machine emerged from bankruptcy in 1998, and issued a
series of press releases emphasizing "record" net income to foster the
impression that the Company had profitably emerged from bankruptcy and
had successfully completed its corporate turnaround. In response to the
Company's barrage of press release and public filings reporting strong
financial results, Singing Machine's stock price soared to over $26 per
share in March 2002.

The Complaint further alleges that on June 27, 2003, Singing Machine shocked the market by announcing it
would restate 2002 and possibly 2001 financial results, and would not
be able to timely file its Annual Report on Form 10-K for the fiscal
year ended March 31, 2003 in order to properly account for income tax
provisions for fiscal 2003, and to report an inventory reserve for
fiscal 2003. As a results, defendants revealed that net income for
fiscal 2003 will be significantly below prior expectations. Singing
Machine announced that the restatement will have the effect of reducing
net income for fiscal 2002 and possibly fiscal 2001. On June 27, 2003,
in late afternoon trading alone Singing Machine stock lost over 30% of
its value on enormous trading volumes of over 460,000 shares traded -
in contrast to average trading volumes of around 50,000 shares. The Company alleges that the financial statements issued by the Company
made during the class Period, all of which implicitly and/or expressly
were prepared in conformity with generally accepted accounting
principles (GAAP), were materially false and misleading because the
Company materially overstated its net income in its publicly issued
financial statements. As a result of the Company's misrepresentations,
Singing Machine investors have sustained tremendous losses, and stand
to lose much more as the full extent and magnitude of the restatement
is disclosed.

Note: According to a Press Release dated July 15, 2003, the class period was expanded to include the purchasers of the securities of The Singing Machine, Inc. between February 14, 2001 and July 14, 2003. Originally, the class period included the purchasers of the securities of The Singing Machine between August 9, 2001 and June 27, 2003.

COMPANY INFORMATION:

Sector: Consumer Cyclical
Industry: Recreational Products
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: SMD
Company Market: American SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. Florida
DOCKET #: 03-CV-80596
JUDGE: Hon. William J. Zloch
DATE FILED: 07/02/2003
CLASS PERIOD START: 08/09/2001
CLASS PERIOD END: 06/27/2003
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Litowitz Berger & Grossmann LLP (Former New York)
    1285 Avenue of the Americas, 33rd Floor, Bernstein Litowitz Berger & Grossmann LLP (Former New York), NY 10019
    212.554.1400 212.554.1444 · blbg@blbglaw.com
  2. Cauley Geller, Bowman Coates & Rudman, LLP (Boca Raton, FL)
    One Boca Place. 2255 Glades Road, Suite 421A, Cauley Geller, Bowman Coates & Rudman, LLP (Boca Raton, FL), FL 33431
    561.750.3000 561.750.3364 ·
  3. Kirby McInerney & Squire LLP
    830 Third Avenue 10th Floor, Kirby McInerney & Squire LLP, NY 10022
    212.317.2300 ·
  4. Milberg Weiss Bershad Hynes & Lerach LLP (Boca Raton)
    The Plaza, Suite 900, 5355 Town Center Road, Milberg Weiss Bershad Hynes & Lerach LLP (Boca Raton), FL 33486
    561.361.5000 ·
  5. Seeger Weiss LLP (New York Old Address)
    40 Wall Street. The Trump Building, Seeger Weiss LLP (New York Old Address), NY 10005
    212.584.0700 · info@seegerweiss.com
  6. Vianale & Vianale LLP (former Boca Raton)
    The Plaza - Suite 801, 5355 Town Center Road., Vianale & Vianale LLP (former Boca Raton), FL 33486
    561.391.4900 561.368.9274 · info@vianalelaw.com
No Document Title Filing Date
COURT: S.D. Florida
DOCKET #: 03-CV-80596
JUDGE: Hon. William J. Zloch
DATE FILED: 11/21/2003
CLASS PERIOD START: 02/14/2001
CLASS PERIOD END: 06/27/2003
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Shalov Stone & Bonner LLP (New York)
    485 Seventh Avenue, Suite 1000, Shalov Stone & Bonner LLP (New York), NY 10018
    212.239.4340 212.239.4310 · lawyer@lawssb.com
  2. Vianale & Vianale LLP (former Boca Raton)
    The Plaza - Suite 801, 5355 Town Center Road., Vianale & Vianale LLP (former Boca Raton), FL 33486
    561.391.4900 561.368.9274 · info@vianalelaw.com
No Document Title Filing Date
No Document Title Filing Date