STOCK OPTIONS AND WARRANTS

6 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

STOCK OPTIONS AND WARRANTS

NOTE 8 - STOCK OPTIONS AND WARRANTS

During the six months ended September 30, 2021 and 2020 the Company issued 40,000 and 0 stock options, respectively at an exercise price of $.29 to directors as compensation for their service.

The fair value of each option grant was estimated on the date of the grant using the Black-Scholes option-pricing model with the assumptions outlined below. The expected volatility is based upon historical volatility of our stock and other contributing factors. The expected term is based upon observation of actual time elapsed between date of grant and exercise of options for all employees. The following inputs were used to value each option grant:

● For six months ended September 30, 2021: expected dividend yield of 0%, risk-free interest rate of 0.43%, volatility of 149.5% and an expected term of three years.

THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021 and 2020

(Unaudited)

A summary of stock option activity for the six months ended September 30, 2021 is summarized below:

	September 30, 2021
	Number of Options			Weighted Average Exercise Price
Stock Options:
Balance at beginning of period		1,680,000		$	0.32
Granted		40,000		$	0.29
Exercised		(20,000	)	$	0.24
Balance at end of period		1,700,000		$	0.32
Options exercisable at end of period		1,560,000		$	0.33

The following table summarizes information about employee stock options outstanding at September 30, 2021:

Range of Exercise Price		Number Outstanding at September 30, 2021		Weighted Average Remaining Contractural Life		Weighted Average Exercise Price		Number Exercisable at September 30, 2021		Weighted Average Exercise Price
$	.12 - $.38		1,150,000		3.1	$	0.24		1,010,000	$	0.23
$	.47 - $.55		550,000		5.4	$	0.50		550,000	$	0.50
	-*		1,700,000						1,560,000

* Total number of options outstanding as of September 30, 2021 includes 660,000 options issued to two current and four former directors as compensation, 1,040,000 options issued to key employees.

As per the execution of the August 2021 private placement as disclosed in Note 2 and Note 10, common warrants and pre-funded warrants issued and outstanding as of September 30, 2021 as follows: 

	Number of Shares
Warrants outstanding at March 31, 2021		-
Common warrants issued		34,666,667
Pre-funded warrants issued		16,833,333
Warrants outstanding at September 30, 2021		51,500,000

As of September 30, 2021, the Company’s warrants by expiration date were as follows:

Number of Common Warrants	Number of Pre-funded Warrants		Exercise Price		Expiration Date
34,666,667		-	$	0.35		9/15/2026
-		16,833,333	$	0.01		N/A *
34,666,667		16,833,333

* Pre-funded warrants expire on the dates they are exercised.

All outstanding warrants are fully vested.