Mr. Gary Atkinson of Singing Machine reports

COMPANY GENERATES RECORD SUBSCRIPTIONS SALES FOR 2023 HOLIDAY SEASON

The Singing Machine Company Inc. has achieved a significant new milestone in its partnership with leading music, media and technology company Stingray Group Inc. for their shared karaoke subscription service. For 2023, the Stingray-Singing Machine subscription service generated a record $3.28-million in gross sales, representing a 34.8-per-cent increase over subscription sales in the prior calendar year. As part of its agreement with Stingray, the company's profit share is calculated after deducting all costs of goods sold (COGS) and expenses associated with maintaining this service. Consequently, the company records net sales on music subscription sales at approximately 100-per-cent gross margin.

"We are excited to report that subscription sales generated very strong results for the company in 2023," commented Gary Atkinson, chief executive officer of The Singing Machine Company. "We launched the first subscription-based music service in a pilot product offered only at Costco for the Christmas of 2021, and we have been very encouraged by the rapid acceptance of this service by consumers as we expanded the product placement in more retail locations globally."

Mr. Atkinson added: "I'm pleased with the adoption of our karaoke music subscription service, powered by our strategic partner, Stingray. This milestone in subscription revenue supports our belief that consumers are willing to pay for high-quality ad-free karaoke videos and unique karaoke features like turning lead vocals on/off, a companion app to remotely control your karaoke party and access to over 100,000 songs across 25 different languages.

"In 2023, approximately 5 per cent of our hardware unit sales included this integrated Wi-Fi streaming music subscription service. In 2024, we see the mix of Wi-Fi streaming products doubling to approximately 10 per cent, led by stronger retail demand for higher-priced, higher-featured karaoke products. With the expansion of our Wi-Fi streaming line, we project our net music subscription sales, which have virtually no COGS or SG&A [sales, general and administrative] expenses associated with it, to grow proportionally with the forecasted increase in unit sales," concluded Mr. Atkinson.

About Stingray Group Inc.

Stingray, a global music, media and technology company, is an industry leader in TV broadcasting, streaming, radio, business services and advertising. Stingray provides an array of music, digital and advertising services to enterprise brands worldwide, including audio and video channels, over 100 radio stations, subscription video-on-demand content, FAST (free ad-supported streaming TV) channels, karaoke products and music apps, and in-vehicle and on-board infotainment content. Stingray Business, a division of Stingray, provides commercial solutions in music, in-store advertising solutions, digital signage and AI-driven (artificial intelligence) consumer insights and feedback. Stingray Advertising is North America's largest retail audio advertising network, delivering digital audio messaging to more than 20,000 major retail locations. Stingray has over 1,000 employees worldwide and reaches 540 million consumers in 160 countries.