Singing Machine Company Inc (MICS)

[NobleRoman]

Just a Recap on the TOXIC Penny Warrant in my eyes:

Looking back at in this CC in the Q&A now makes a lot more sense in retrospect. I think I understand better what this analyst is referring to now within the context of the penny pre-funded warrant. As I interpret it the execerpt below (emphasis mine):


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https://seekingalpha.com/article/4450251-singing-machine-company-inc-smdm-ceo-gary-atkinson-on-q1-2022-results-earnings-call

I represent an institution, and we have almost 5% of the Company already, and I’ve been around for a long time, and nobody offered me this deal. How to jump down with both feet? Probably about $0.5 million to $1 million on the table to buy that unit of $0.30. So, I think you gave a sweet deal there. And I think I know who’s shorting the stock, by the way, Brendan, if those guys that are getting their shares, they’re going to cover with the shares they get and do less with the warrants for free.

Gary Atkinson

Well, I can’t speculate…

Unidentified Analyst

Don’t get me wrong here, Gary. Overall, I’m pleased with what’s going, I really am. And you did fine…

Gary Atkinson

I mean, I think, Eric, the way we look at this is -- you can look at it from a short-term perspective, but we’re generally long-minded on this. And I think the short-term price that we paid to buy back control and to bring in these very well-known, reputable U.S.-based funds to help us fuel growth in the future. From the long-term, I just don’t think you can put a price on that. I think, the Company, over the course of the coming years, will have a lot more doors open to us and a lot more access to capital than we’ve ever had in the past. And I just really think that there’s obviously a cost to everything. And so, we weighed the pros and the cons, and we felt like long-term for all of the shareholders, that this was the price worth paying to unlock a lot of this potential growth in the future.

Unidentified Analyst

Yes. Okay. Like I said, I’m with you on this. Like I said, few little details rankle a bit, but I think you did the right thing, and I’m glad it happened. And I think you’re making the right assessment of what the future looks like. So, I am done. Thanks very much. Good quarter.



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He says, "I just don’t think you can put a price on that.." Yeah, well, easy for him to say that. I don't think looking at what your peer group is doing is really a good excuse. Reminds me of a former tenant of mine that kept putting his trash outside his door, rather than the dumpster, and I'd get warnings from HOA because of it, which I'd pass on to him. And his answer was, everybody is else is doing it. Well, first of all, they weren't. But even if they were, would you jump off a bridge if everybody else was doing it? What kind of talk is that?

I don't like the bad taste of that penny warrant, but I'll let everyone make up their own mind. It should be dragged out from under the carpet, examined, and kicked, and put up for display. And made a mockery of, since our insiders deccided to *not* to put any details in the PR about it and just wanted to hide it, it seems, to my vantage point.

I'm going to swallow it with this analyst and the insiders. But I expect better behavior going forward. Make your peer group the Nasdaq, please! If you watnt to be Nasdaq, start acting like it before you get there. Please!

In the *same* link above, same Q&A, our company representative doesn't shoot straight in my opinion with this answer;

Lionel Marquis

That’s correct. So, we sold the unit as being a -- 1 unit of common stock and 1 unit of a common warrant at $0.30.

Actually, NOOOO, that is incomplete. It's 16.8 million units of common stock bought at .30, with. Those units translate into 16.8 million common shares for the buyers, with 16.8 million toxic penny warrants attached that can be excerised at 1 cent, and another 35 million anti-dillutive (at this the current price this post is written) that can be exercised at .35.

The 35 million warrants at .35 were generous enough. The 1 cent is greed, and very TOXIC. And should be illegal, if you ask me. But that let me in at 15 cents, and shareholders should burn somebody at the stake for that. But that is just my two-cents worth. Just because your peer group lives in the ghetto, and gangs rape and pillage their neighbors, doesn't mean it's right and that you are excused from acting in the same manner.