Singing Machine Company Inc (MICS)

[NobleRoman]

The Private Placement

The unit cost is a mystery to me. I don't see it in the filings. I see the exercise price of the warrants at .35. That's good. I can only work backwards from Stingray's latest quarter which sheds some light (expressed in $1,000 units):

On August 11, 2021, the Corporation announced that it has acquired a minority interest of 20% in The Singing Machine
Company Inc., for a cash consideration of US$2,000 ($2,508).


Source, Page 25: https://www.stingray.com/sites/www.stingray.com/files/investors/files/stingray_quaterly_report_-_q3_2022_en.pdf

So if it's 20% on the 35 million shares, that would be 7 million they own. But if it's on teh 55 million shares, before retiring the buyout of the previous owners, then it would be 11 million shares. I'm not clear which way they are calculating that.

Stringray is inferred 2 conference calls back to have participated in the private placement. Their percentage was not disclosed, but now we know from Stringray's own filing. But I never do see a unit price on the private placement given.

The simple formula is 7M*X=$2 million. Or, if the latter, it's 11M*X=$2 million.

So a unit was either .18 or .28, correct? Anyone with better intel here?

Either way, we should be below the unit price, which would be a good thing, *to my understanding*. IFF .18, that could explain why the analyst 2 conference calls back was happy with the deal, but not happy about its short-term prospects, accusing one of the participants as shorting the stock. That would give them a happy way to instantly profit by selling their newly acquired shares at a profit. Which would be why they might not have disclosed it. Not exactly high intergrity, but got the previous owners out. And they really lose nothing because they have warants that exercise at .35, so they win regardless in any scenario.

But, that's just my understanding. And I'd think maybe we are in a good price point. Please feel free to correct me where I'm wrong here. I have to infer things in the details here. As the analyst two conference calls back, he did say the "devil was in the details," paraphrasing by memory. But overall, he was happy about the *long term* prospects of the deal; but not the short term, and he said he wasn't offered the deal and felt he should have been since he owns 5% of the company if I recall correctly and been here for years. I agree with his sentiments to my understanding.