STOCK OPTIONS AND WARRANTS

3 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

STOCK OPTIONS AND WARRANTS

NOTE 9 – STOCK OPTIONS AND WARRANTS

EQUITY INCENTIVE PLAN

On April 12, 2022, our Board of Directors approved The Singing Machine Company, Inc. 2022 Equity Incentive Plan, (the”2022 Plan”). The 2022 Plan provides for the issuance of equity incentive awards, such as stock options, stock appreciation rights, stock awards, restricted stock, stock units, performance awards and other stock or cash-based awards collectively, the “Awards.” Awards may be granted under the 2022 Plan to the Company’s employees, officers, directors, consultants, agents, advisors and independent contractors.

The maximum number of shares of common stock initially available for issuance under the 2022 Plan is 233,333 shares of common stock and thereafter an annual increase shall be added as of the first day of the Company’s fiscal year beginning in 2023, equal to the least of (i) 5% of the outstanding common stock on a fully diluted basis as of the end of the Company’s immediately preceding fiscal year, (ii) 33,334 shares, and (iii) a lesser amount as determined by the Board of Directors.

The shares of common stock subject to stock awards granted under the 2022 Plan that lapse, terminate, expire prior to exercise, are canceled or are forfeited, shall again become available for issuance under the 2022 Plan.

The 2022 Plan authorized an aggregate of 266,667 shares of the Company’s common stock available to the Company’s employees, officers, directors, consultants, agents, advisors and independent contractors. As of June 30, 2023, we had granted 24,446 shares of common stock and 107,752 common stock options under the 2022 Plan of which 54,668 stock options were vested leaving 134,469 shares available for issue.

COMMON STOCK OPTIONS

During the three months ended June 30, 2023, the Company did not issue any stock options.

THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 and 2022

(Unaudited)

A summary of stock option activity for the three months ended June 30, 2023 is summarized below:

	June 30, 2023
	Number of Options			Weighted Average Exercise Price		Weighted Average Contractual Life
Stock Options:
Balance at beginning of period		161,427		$	7.90		6.6
Forfeited		(11,750	)	$	8.11		-
Balance at end of period		149,677		$	7.88		6.4
Options exercisable at end of period		108,343		$	7.77

The following table summarizes information about employee stock options outstanding at June 30, 2023:

Range of Exercise Price		Number Outstanding at June 30, 2023		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at June 30, 2023		Weighted Average Exercise Price
	$2.35. - $7.20		58,669		3.9	$	5.00		57,335	$	4.95
	$8.10 - $9.60		69,336		8.4	$	8.27		29,336	$	8.37
	$11.40 – 16.50		21,672		3.8	$	14.42		21,672	$	14.42
	*		149,677						108,343	$	7.77

* Total number of options outstanding as of June 30, 2023 includes 23,343 options issued to six current and three former directors as compensation, and 73,334 options issued to Company officers as compensation and 64,750 issued to employees as part of an Employee Stock Incentive Plan.

As of June 30, 2023, there was unrecognized expense of approximately $259,000 remaining on options currently vesting over time with an approximate average of 23.4 months remaining until these options are fully vested. The vested options as of June 30, 2023 had no intrinsic value.

WARRANTS

Common warrants issued and outstanding as of June 30, 2023 are as follows:

	Number of Common Warrants		Weighted Average Exercise Price
Warrants:
Warrants outstanding at April 1, 2023		902,113	$	3.04
Warrants issued		-
Warrants exercised		-
Warrants outstanding at June 30, 2023		902,113	$	3.04
Warrants exercisable at June 30, 2023		902,113	$	3.04

As of June 30, 2023, the Company’s outstanding warrants by expiration date were as follows:

Number of CommonWarrants		Exercise Price		Expiration Date
	802,113	$	2.80	September 15, 2026
	100,000	$	5.00	May 23, 2027
	902,113

THE SINGING MACHINE COMPANY, INC AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 and 2022

(Unaudited)