Item
2. Registrant Information and Employee Plan Annual Information.
Upon
written or oral request, any of the documents incorporated by reference in
Item
3 of Part II of this Registration Statement (which documents are incorporated
by
reference in this Section 10(a) Prospectus), other documents required to
be
delivered to eligible employees, non-employee directors and consultants,
pursuant to Rule 428(b) are available without charge by contacting:
Danny
Zheng, Interim Chief Executive Officer and Chief Financial
Officer
The
Singing Machine Company, Inc.
6601
Lyons Road, Building A-7
Coconut
Creek, FL 33073
(954)
596-1000
Prospectus
The
Singing Machine Company, Inc.
292,800
SHARES OF COMMON STOCK
issued
pursuant to the
Year
2001
Stock Option Plan, as amended
This
prospectus relates to the sale of up to 292,800 shares of common stock
of The
Singing Machine Company, Inc. offered by certain holders of our securities
issued to such persons pursuant to our Year 2001 Stock Option Plan, as
amended.
The shares may be offered by the selling stockholders from time to time
in
regular brokerage transactions, in transactions directly with market makers
or
in certain privately negotiated transactions. For additional information
on the
methods of sale, you should refer to the section entitled "Plan of
Distribution." We will not receive any of the proceeds from the sale of
the
shares by the selling stockholders.
Our
common stock trades on The American Stock Exchange under the symbol
"SMD." On
March
2,
2007,
the
closing sale price of the common stock was $0.82 per share.
The
securities offered hereby are speculative and involve a high degree of risk
and
substantial dilution. Only investors who can bear the risk of loss of their
entire investment should invest. See "Risk Factors" beginning on page
7.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
is
truthful or complete. Any representation to the contrary is a criminal
offense.
The
date
of this prospectus is March 5, 2007.
TABLE
OF CONTENTS
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Page
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Prospectus
Summary
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6
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Risk
Factors
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7
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Selling
Stockholders
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15
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Plan
of Distribution
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16
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Interests
of Named Experts and Counsel
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16
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Incorporation
of Certain Documents by Reference
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16
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Disclosure
of Commission Position on Indemnification For Securities Act
Liabilities
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17
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Available
Information
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18
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NO
PERSON
HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS,
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFERING
MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL
UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION
IS
NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION.
Prospectus
Summary
Overview
We
are
primarily engaged in the design, marketing, and sale of consumer karaoke
audio
equipment, accessories, and musical recordings. Our products are sold directly
to distributors and retail customers. Our electronic karaoke machines and
audio
software products are marketed under The Singing Machine(R) and Motown
trademarks.
Our
products are sold throughout the United States, primarily through department
stores, lifestyle merchants, mass merchandisers, direct mail catalogs and
showrooms, music and record stores, national chains, specialty stores and
warehouse clubs.
Our
karaoke machines and karaoke software are currently sold in such major retail
outlets as Best Buy, Costco, Kohl's, J.C. Penney, Radio Shack, Wal-Mart and
Sam's Club.
Our
corporate offices are located at 6601 Lyons Road, Building A-7, Coconut Creek,
Florida 33073, and our telephone number is (954) 596-1000.
This
Offering
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Shares
of common stock outstanding prior to this offering
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27,286,199
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as of March 1, 2007 |
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Shares
offered in this prospectus
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292,800
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Total
shares outstanding after this offering
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27,578,999
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Use
of proceeds
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We
will not receive any proceeds from the sale of the shares of common
stock
offered in this prospectus. We will receive proceeds to the extent
that
currently outstanding options are exercised for cash. We will use
the
exercise proceeds, if any, for working capital and general corporate
purposes.
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Risk
Factors
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The
purchase of our common stock involves a high degree of risk. You
should
carefully review and consider "Risk Factors" beginning on page
7.
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American
Stock Exchange Symbol
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SMD
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Risk
Factors
Investment
in our common stock involves a high degree of risk. You should consider the
following discussion of risks as well as other information in this prospectus.
The risks and uncertainties described below are not the only ones. Additional
risks and uncertainties not presently known to us or that we currently deem
immaterial also may impair our business operations. If any of the following
risks actually occur, our business could be harmed. In such case, the trading
price of our common stock could decline.
Except
for historical information, the information contained in this prospectus
are
"forward-looking" statements about our expected future business and performance.
Our actual operating results and financial performance may prove to be very
different from what we might have predicted as of the date of this prospectus.
RISKS
ASSOCIATED WITH OUR BUSINESS
OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM RAISED SUBSTANTIAL DOUBT ABOUT
OUR
ABILITY TO CONTINUE AS A GOING CONCERN AS OF MARCH 31, 2006.
We
received a report dated May 26, 2006 from our independent certified public
accountants covering the consolidated financial statements for our fiscal
year
ended March 31, 2006 that included an explanatory paragraph which stated
that
the financial statements were prepared assuming that the Singing Machine
would
continue as a going concern. This report stated that our operating performance
in fiscal 2006 and our minimal liquidity raised substantial doubt about our
ability to continue as a going concern. If we are not able to raise additional
capital, we may need to curtail or stop our business operations. We may be
required to file a petition for bankruptcy under Chapter 11 of the U.S.
Bankruptcy Code or enter into some other form of liquidation or reorganization
proceedings.
A
SMALL NUMBER OF OUR CUSTOMERS ACCOUNT FOR A SUBSTANTIAL PORTION OF OUR REVENUES,
AND THE LOSS OF ONE OR MORE OF THESE KEY CUSTOMERS COULD SIGNIFICANTLY REDUCE
OUR REVENUES AND CASH FLOW.
We
rely
on a few large customers to provide a substantial portion of our revenues.
As a
percentage of total revenues, our net sales to our five largest customers
during
the year ended March 31, 2006 and year ended March 31, 2005 were approximately
56% and 40%, respectively. We do not have long-term contractual arrangements
with any of our customers and they can cancel their orders at any time prior
to
delivery. A substantial reduction in or termination of orders from any of
our
largest customers would decrease our revenues and cash flow.
WE
ARE RELYING ON ONE FACTORY TO MANUFACTURE AND PRODUCE THE MAJORITY OF OUR
KARAOKE MACHINES FOR FISCAL 2007, AND IF THE RELATIONSHIP WITH THIS FACTORY
IS
DAMAGED OR INJURED IN ANY WAY, IT WOULD REDUCE OUR REVENUES AND PROFITABILITY.
We
have
worked out a written agreement with a factory in China to produce most
of our
karaoke machines for fiscal 2007. If the factory is unwilling or unable
to
deliver our karaoke machines to us, our business will be adversely affected.
Because our cash on hand is minimal, we are relying on revenues received
from
the sale of our ordered karaoke machines to provide cash flow for our
operations. If we do not receive cash from these sales, we may not be able
to
continue our business operations.
WE
ARE RELYING ON ONE DISTRIBUTOR TO DISTRIBUTE OUR MUSIC PRODUCTS, IF THE
DISTRIBUTION AGREEMENT IS TERMINATED, IT WOULD REDUCE OUR REVENUES AND
PROFITABILITY.
We
are
relying on Warner Elektra Atlantic Corporation (WEA) to distribute our music
products in fiscal 2007, if the distribution agreement is terminated, our
music
revenues might decrease as well as our profitability.
WE
ARE SUBJECT TO THE RISK THAT SOME OF OUR LARGE CUSTOMERS MAY RETURN KARAOKE
PRODUCTS THAT THEY HAVE PURCHASED FROM US AND IF THIS HAPPENS, IT WOULD REDUCE
OUR REVENUES AND PROFITABILITY.
In
fiscal
2006 and 2005, a number of our customers and distributors returned karaoke
products that they had purchased from us. Our customers returned goods
valued at
$2.4 million or 7.4% of our net sales in fiscal 2006. Some of the returns
resulted from customer's overstock of our products. Although we were not
contractually obligated to accept this return of the products, we accepted
the
return of the products because we valued our relationship with our customers.
Because we are dependent upon a few large customers, we are subject to
the risk
that any of these customers may elect to return unsold karaoke products
to us in
the future. If any of our customers were to return karaoke products to
us, it
would reduce our revenues and profitability.
WE
ARE SUBJECT TO PRESSURE FROM OUR CUSTOMERS RELATING TO PRICE REDUCTION AND
FINANCIAL INCENTIVES AND IF WE ARE PRESSURED TO MAKE THESE CONCESSIONS TO
OUR
CUSTOMERS, IT WILL REDUCE OUR REVENUES AND PROFITABILITY.
Because
there is intense competition in the karaoke industry, we are subject to
pricing
pressure from our customers. Many of our customers have demanded that we
lower
our prices or they will buy our competitor's products. If we do not meet
our
customer's demands for lower prices, we will not sell as many karaoke products.
In the fiscal year ended March 31, 2006, our sales to customers in the
United
States decreased because of increased price competition. We are also subject
to
pressure from our customers regarding certain financial incentives, such
as
return credits, large advertising or cooperative advertising allowances,
which
effectively reduce our profit. We gave advertising allowances in the amount
of
$0.2 million during fiscal 2006 and $0.6 million during fiscal 2005. We
have
historically offered advertising allowances to our customers because it
is
standard practice in the retail industry.
WE
EXPERIENCE DIFFICULTY FORECASTING THE DEMAND FOR OUR KARAOKE PRODUCTS AND
IF WE
DO NOT ACCURATELY FORECAST DEMAND, OUR REVENUES, NET INCOME AND CASH FLOW
MAY BE
AFFECTED.
Because
of our reliance on manufacturers in China for our machine production, our
production lead times range from one to four months. Therefore, we must commit
to production in advance of customers orders. It is difficult to forecast
customer demand because we do not have any scientific or quantitative method
to
predict this demand. Our forecasting is based on management's general
expectations about customer demand, the general strength of the retail market
and management's historical experiences. We overestimated demand for our
products in fiscal 2003 and 2004 and had $5.9 million in inventory as of
March
31, 2004. Because of this excess inventory, we had liquidity problems in
fiscal
2005 and our revenues, net income and cash flow were adversely affected.
WE
ARE SUBJECT TO THE COSTS AND RISKS OF CARRYING INVENTORY FOR OUR CUSTOMERS
AND
IF WE HAVE TOO MUCH INVENTORY, IT WILL AFFECT OUR REVENUES AND NET INCOME.
Many
of
our customers place orders with us several months prior to the holiday
season,
but they schedule delivery two or three weeks before the holiday season
begins.
As such, we are subject to the risks and costs of carrying inventory during
the
time period between the placement or the order and the delivery date, which
reduces our cash flow. As of December 31, 2006 we had $1.95 million in
inventory
on hand. It is important that we sell this inventory during fiscal 2007,
so we
have sufficient cash flow for operations.
OUR
GROSS PROFIT MARGINS HAVE DECREASED OVER THE PAST YEAR AND WE EXPECT A
COMPETITIVE MARKET.
Over
the
past year, our gross profit margins have generally decreased due to the
competition except for fiscal 2005 when we had developed several new models,
which were in demand and yielded higher profit margins. We expect that our
gross
profit margin might decrease under downward pressure in fiscal 2007.
OUR
BUSINESS IS SEASONAL AND THEREFORE OUR ANNUAL OPERATING RESULTS WILL DEPEND,
IN
LARGE PART, ON OUR SALES DURING THE RELATIVELY BRIEF HOLIDAY SEASON.
Sales
of
consumer electronics and toy products in the retail channel are highly seasonal,
with a majority of retail sales occurring during the period from September
through December in anticipation of the holiday season, which includes
Christmas. A substantial majority of our sales occur during the second quarter
ending September 30 and the third quarter ending December 31. Sales in our
second and third quarter, combined, accounted for approximately 87.9%, 86.7%
and
87.2% of net sales in fiscal 2006, 2005 and 2004, respectively.
IF
WE ARE UNABLE TO COMPETE IN THE KARAOKE PRODUCTS CATEGORY, OUR REVENUES AND
NET
PROFITABILITY WILL BE REDUCED.
Our
major
competitor for karaoke machines and related products is Memorex. We believe
that
competition for karaoke machines is based primarily on price, product features,
reputation, delivery times, and customer support. Our primary competitors
for
producing karaoke music are Compass, Pocket Songs, Sybersound, UAV and Sound
Choice. We believe that competition for karaoke music is based primarily
on
popularity of song titles, price, reputation, and delivery times. To the
extent
that we lower prices to attempt to enhance or retain market share, we may
adversely impact our operating margins. Conversely, if we opt not to match
competitor's price reductions we may lose market share, resulting in decreased
volume and revenue. To the extent our leading competitors reduce prices on
their
karaoke machines and music; we must remain flexible to reduce our prices.
If we
are forced to reduce our prices, it will result in lower margins and reduced
profitability. Because of intense competition in the karaoke industry in
the
United States during fiscal 2006, we expect that the intense pricing pressure
in
the low end of the market will continue in the karaoke market in the United
States in fiscal 2007. In addition, we must compete with all the other existing
forms of entertainment including, but not limited to: motion pictures, video
arcade games, home video games, theme parks, nightclubs, television, prerecorded
tapes, CD's and video cassettes.
IF
WE ARE UNABLE TO DEVELOP NEW KARAOKE PRODUCTS, OUR REVENUES MAY NOT CONTINUE
TO
GROW.
The
karaoke industry is characterized by rapid technological change, frequent
new
product introductions and enhancements and ongoing customer demands for greater
performance. In addition, the average selling price of any karaoke machine
has
historically decreased over its life, and we expect that trend to continue.
As a
result, our products may not be competitive if we fail to introduce new products
or product enhancements that meet evolving customer demands. The development
of
new products is complex, and we may not be able to complete development in
a
timely manner. To introduce products on a timely basis, we must:
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accurately
define and design new products to meet market needs;
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design
features that continue to differentiate our products from those
of our
competitors;
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transition
our products to new manufacturing process technologies;
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identify
emerging technological trends in our target markets;
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anticipate
changes in end-user preferences with respect to our customers'
products;
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bring
products to market on a timely basis at competitive prices; and
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respond
effectively to technological changes or product announcements
by others.
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We
believe that we will need to continue to enhance our karaoke machines and
develop new machines to keep pace with competitive and technological
developments and to achieve market acceptance for our products. At the same
time, we need to identify and develop other products which may be different
from
karaoke machines.
OUR
PRODUCTS ARE SHIPPED FROM CHINA AND ANY DISRUPTION OF SHIPPING COULD PREVENT
OR
DELAY OUR CUSTOMERS' RECEIPT OF INVENTORY.
We
rely
principally on four contract ocean carriers to ship virtually all of the
products that we import to our warehouse facility in Compton, California.
Retailers that take delivery of our products in China rely on a variety of
carriers to import those products. Any disruptions in shipping, whether in
California or China, caused by labor strikes, other labor disputes, terrorism,
and international incidents may prevent or delay our customers' receipt of
inventory. If our customers do not receive their inventory on a timely basis,
they may cancel their orders or return products to us. Consequently, our
revenues and net income would be reduced.
OUR
MANUFACTURING OPERATIONS ARE LOCATED IN THE PEOPLE'S REPUBLIC OF CHINA,
SUBJECTING US TO RISKS COMMON IN INTERNATIONAL OPERATIONS. IF THERE IS ANY
PROBLEM WITH THE MANUFACTURING PROCESS, OUR REVENUES AND NET PROFITABILITY
MAY
BE REDUCED.
We
are
using six factories in the People's Republic of China to manufacture the
majority of our karaoke machines. These factories will be producing
approximately 98% of our karaoke products in fiscal 2007. Our arrangements
with
these factories are subject to the risks of doing business abroad, such
as
import duties, trade restrictions, work stoppages, and foreign currency
fluctuations, limitations on the repatriation of earnings and political
instability, which could have an adverse impact on our business. Furthermore,
we
have limited control over the manufacturing processes themselves. As a
result,
any difficulties encountered by our third-party manufacturers that result
in
product defects, production delays, cost overruns or the inability to fulfill
orders on a timely basis could adversely affect our revenues, profitability
and
cash flow.
WE
DEPEND ON THIRD PARTY SUPPLIERS FOR PARTS FOR OUR KARAOKE MACHINES AND RELATED
PRODUCTS, AND IF WE CANNOT OBTAIN SUPPLIES AS NEEDED, OUR OPERATIONS WILL
BE
SEVERELY DAMAGED.
Our
growth and ability to meet customer demand depends in part on our capability
to
obtain timely deliveries of karaoke machines and our electronic products.
We
rely on third party suppliers to produce the parts and materials we use to
manufacture and produce these products. If our suppliers are unable to provide
our factories with the parts and supplies, we will be unable to produce our
products. We cannot guarantee that we will be able to purchase the parts
we need
at reasonable prices or in a timely fashion. In the last several years, there
have been shortages of certain chips that we use in our karaoke machines.
If we
are unable to anticipate any shortages of parts and materials in the future,
we
may experience severe production problems, which would impact our sales.
CONSUMER
DISCRETIONARY SPENDING MAY AFFECT KARAOKE PURCHASES AND IS AFFECTED BY VARIOUS
ECONOMIC CONDITIONS AND CHANGES.
Our
business and financial performance may be damaged more than most companies
by
adverse financial conditions affecting our business or by a general weakening
of
the economy. Purchases of karaoke machines and music are considered
discretionary for consumers. Our success will therefore be influenced by
a
number of economic factors affecting discretionary and consumer spending,
such
as employment levels, business, interest rates, and taxation rates, all of
which
are not under our control. Additionally, other extraordinary events such
as
terrorist attacks or military engagements, which adversely affect the retail
environment may restrict consumer spending and thereby adversely affect our
sales growth and profitability.
WE
MAY HAVE INFRINGED THE COPYRIGHTS OF CERTAIN MUSIC PUBLISHERS AND IF WE VIOLATE
FEDERAL COPYRIGHT LAWS, WE WILL BE SUBJECT TO MONETARY PENALTIES.
Over
the
past several years, we (like our competitors) has received notices from
certain
music publishers alleging that the full range of necessary rights in their
copyrighted works has not been properly licensed in order to sell those
works as
part of products known as “compact discs with graphics” ("CDGss”). CDG's are
compact discs which contain the musical recordings of karaoke songs and
graphics
which contain the lyrics of the songs. We have negotiated licenses with
the
complaining parties, or is in the process of settling such claims, with
each one
of the complaining copyright owners. As with any alleged copyright violations,
unlicensed users may be subject to damages under the U.S. Copyright Act.
Such
damages and claims could have a negative effect on our ability to sell
its music
products to its customers if left unchecked or unresolved. This is the
reason
why Singing Machine pursues licenses so diligently.
WE
MAY BE SUBJECT TO CLAIMS FROM THIRD PARTIES FOR UNAUTHORIZED USE OF THEIR
PROPRIETARY TECHNOLOGY, COPYRIGHTS OR TRADE SECRETS AND ANY CLAIMS ASSERTED
AGAINST US COULD AFFECT OUR NET PROFITABILITY.
We
believe that we independently developed the technology used in our electronic
and audio software products and that it does not infringe on the proprietary
rights, copyrights or trade secrets of others. However, we cannot assure
you
that we have not infringed on the proprietary rights of third parties or
that
those third parties will not make infringement violation claims against
us.
During fiscal 2000, Tanashin Denki, Ltd., a Japanese company that holds
a patent
on a cassette tape drive mechanism alleged that some of our karaoke machines
violated their patents. We settled the matters with Tanashin in December 1999.
Subsequently in December 2002, Tanashin again alleged that some of our
karaoke
machines violated their patents. We entered into another settlement agreement
with them in May 2003. In addition to Tanashin, we could receive infringement
claims from other third parties. Any infringement claims may have a negative
effect on our profitability and financial condition.
WE
ARE EXPOSED TO THE CREDIT RISK OF OUR CUSTOMERS, WHO ARE EXPERIENCING FINANCIAL
DIFFICULTIES, AND IF THESE CUSTOMERS ARE UNABLE TO PAY US, OUR REVENUES AND
PROFITABILITY WILL BE REDUCED.
We
sell
products to retailers, including department stores, lifestyle merchants,
direct
mail retailers, which are catalogs and showrooms, national chains, specialty
stores, and warehouse clubs. Some of these retailers, such as K-Mart, FAO
Schwarz and KB Toys, have engaged in leveraged buyouts or transactions
in which
they incurred a significant amount of debt, and operated under the protection
of
bankruptcy laws. As of December 31, 2006, we are aware of only three customers,
FAO Schwarz, Musicland and KB Toys, which are operating under the protection
of
bankruptcy laws. Deterioration in the financial condition of our customers
could
result in bad debt expense to us and have a material adverse effect on
our
revenues and future profitability.
A
DISRUPTION IN THE OPERATION OF OUR WAREHOUSE CENTERS IN CALIFORNIA OR FLORIDA
COULD IMPACT OUR ABILITY TO DELIVER MERCHANDISE TO OUR STORES, WHICH COULD
ADVERSELY AFFECT OUR REVENUES AND PROFITABILITY.
A
significant amount of our merchandise is shipped to our customers from one
of
our two warehouses, which are located in Compton, California, and Coconut
Creek,
Florida. Events such as fire or other catastrophic events, any malfunction
or
disruption of our centralized information systems or shipping problems may
result in delays or disruptions in the timely distribution of merchandise
to our
customers, which could substantially decrease our revenues and profitability.
OUR
BUSINESS OPERATIONS COULD BE DISRUPTED IF THERE ARE LABOR PROBLEMS ON THE
WEST
COAST.
During
fiscal 2006, approximately 33% of our sales were domestic warehouse sales,
which
were made from our warehouses in California and Florida. During the third
quarter of fiscal 2003, the dock strike on the West Coast affected sales
of two
of our karaoke products and we estimate that we lost between $3 and $5 million
in orders because we could not get the containers of these products off the
pier. If another strike or work slow-down occurs and we do not have a sufficient
level of inventory, a strike or work slow-down would result in increased
costs
to us and may reduce our profitability.
CURRENCY
EXCHANGE RATE RISK
Our
major
suppliers are located in China. The Chinese local currency has appreciated
over
3% against the US dollars in 2006. If this trend continues, our costs may
increase in the future. This may decrease our profit margin.
RISKS
ASSOCIATED WITH OUR CAPITAL STRUCTURE
THE
MARKET PRICE OF OUR COMMON STOCK MAY BE VOLATILE WHICH MAY CAUSE INVESTORS
TO
LOSE ALL OR A PORTION OF THEIR INVESTMENT.
From
December 1, 2004 through December 31, 2006, our common stock has traded
between
a high of $.95 and a low of $0.22. During this period, we had liquidity
problems
and incurred a net loss of approximately $1.9 million in fiscal 2006 and
loss of
approximately $3.6 million in fiscal 2005. Our stock price may continue
to be
volatile based on similar or other adverse developments in our business.
In
addition, the stock market periodically experiences significant adverse
price
and volume fluctuations which may be unrelated to the operating performance
of
particular companies.
IF
INVESTORS SHORT OUR SECURITIES, IT MAY CAUSE OUR STOCK PRICE TO DECLINE.
During
the past year, a number of investors have held a short position in our
common
stock. As of December 12, 2006, investors hold a short position in approximately
170,600 shares of our common stock which represents .70% of our public
float.
The anticipated downward pressure on our stock price due to actual or
anticipated sales of our stock by some institutions or individuals who
engage in
short sales of our common stock could cause our stock price to decline.
Additionally, if our stock price declines, it may be more difficult for
us to
raise capital.
OUR
COMMON STOCK MAY BE DELISTED FROM THE AMERICAN STOCK EXCHANGE, WHICH MAY
HAVE A
MATERIAL ADVERSE IMPACT ON THE PRICING AND TRADING OF OUR COMMON
STOCK.
On
September 6, 2006, we received notice from The American Stock Exchange
(the
"Amex") that we have fallen below the continued listing standards of the
Amex
and that its listing is being continued pursuant to an
extension.
Specifically,
for the fiscal year ended March 31, 2006, we were not in compliance with
Section
1003(a)(ii) of the Amex Company Guide with shareholders' equity of less
than
$4,000,000 and net losses in three of its four most recent fiscal years.
We
were
previously added to the list of issuers that are not in compliance with
the
Amex's continued listing standards, and our trading symbol SMD remains
subject
to the extension .BC to denote our noncompliance. This indicator will remain
in
effect until such time as we have regained compliance with all applicable
continued listing standards.
If
our
common stock is removed from listing on Amex, it may become more difficult
for
us to raise funds through the sales of our common stock or
securities.
IF
OUR OUTSTANDING DERIVATIVE SECURITIES ARE EXERCISED OR CONVERTED, OUR EXISTING
SHAREHOLDERS WILL SUFFER DILUTION.
As
of
December 31, 2006, there were outstanding stock options to purchase an
aggregate
of 1,730,690 shares of common stock at exercise prices ranging from $.32
to
$11.09 per share, not all of which are immediately exercisable. The weighted
average exercise price of the outstanding stock options is approximately
$1.13
per share. As of December 31, 2006, there were outstanding immediately
exercisable options to purchase an aggregate of 556,707 shares of our common
stock. There were outstanding stock warrants to purchase 5,000,000 shares
of
common stock at exercise prices ranging from $.23 to $.35 per share, all
of
which are exercisable. The weighted average exercise price of the outstanding
stock warrants is approximately $0.27 per share.
FUTURE
SALES OF OUR COMMON STOCK HELD BY CURRENT STOCKHOLDERS AND INVESTORS MAY
DEPRESS
OUR STOCK PRICE.
As
of
December 31, 2006, there were 25,274,883 shares of our common stock outstanding.
We have filed two registration statements registering an aggregate 3,794,250
of
shares of our common stock (a registration statement on Form S-8 to register
the
sale of 1,844,250 shares underlying options granted under our 1994 Stock
Option
Plan and a registration statement on Form S-8 to register 1,950,000 shares
of
our common stock underlying options granted under our Year 2001 Stock Option
Plan). An additional registration statement on Form S-1 was filed in October
2003, registering an aggregate of 2,795,465 shares of our common stock.
We filed
S-3 registration statement on October 25, 2006 to register an aggregate
of
9,882,464 shares of our common stock. The market price of our common stock
could
drop due to the sale of the aforementioned shares of our common stock,
such as
the shares sold pursuant to the registration statements or under Rule 144,
or
the perception that these sales could occur.
OUR
STOCK PRICE MAY DECREASE IF WE ISSUE ADDITIONAL SHARES OF OUR COMMON STOCK.
Our
Certificate of Incorporation authorizes the issuance of 100,000,000 shares
of
common stock as amended in January 2006. As of December 31, 2006, we had
25,274,883 shares of common stock issued and outstanding and an aggregate
of
6,730,690 shares issuable under our outstanding options and warrants. As
such,
our Board of Directors has the power, without stockholder approval, to
issue up
to 67,994,427 shares of common stock.
Any
issuance of additional shares of common stock, whether by us to new stockholders
or the exercise of outstanding warrants or options, may result in a reduction
of
the book value or market price of our outstanding common stock. Issuance
of
additional shares will reduce the proportionate ownership and voting power
of
our then existing stockholders.
PROVISIONS
IN OUR CHARTER DOCUMENTS AND DELAWARE LAW MAKE IT DIFFICULT FOR A THIRD PARTY
TO
ACQUIRE OUR COMPANY AND COULD DEPRESS THE PRICE OF OUR COMMON STOCK.
Delaware
law and our certificate of incorporation and bylaws contain provisions that
could delay, defer or prevent a change in control of our company or a change
in
our management. These provisions could also discourage proxy contests and
make
it more difficult for you and other stockholders to elect directors and take
other corporate actions. These provisions of our restated certificate of
incorporation include: authorizing our board of directors to issue additional
preferred stock, limiting the persons who may call special meetings of
stockholders, and establishing advance notice requirements for nominations
for
election to our board of directors or for proposing matters that can be acted
on
by stockholders at stockholder meetings.
FORWARD-LOOKING
STATEMENTS
We
and
our representatives may from time to time make written or oral statements
that
are "forward-looking," including statements contained in this prospectus
and
other filings with the Securities and Exchange Commission, reports to our
stockholders and news releases. All statements that express expectations,
estimates, forecasts or projections are forward-looking statements within
the
meaning of the Act. In addition, other written or oral statements which
constitute forward-looking statements may be made by us or on our behalf.
Words
such as "expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," "projects," "forecasts," "may," "should," variations of such
words
and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and
involve risks, uncertainties and assumptions which are difficult to predict.
Therefore, actual outcomes and results may differ materially from what is
expressed or forecasted in or suggested by such forward-looking statements.
We
undertake no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.
Selling
Stockholders
The
table
below sets forth information concerning the resale of the shares of common
stock
by the selling stockholders. We will not receive any proceeds from the resale
of
the common stock by the selling stockholders.
The
following table also sets forth the name of each person who is offering the
resale of shares of common stock by this prospectus, the number of shares
of
common stock beneficially owned by each person, the number of shares of common
stock that may be sold in this offering and the number of shares of common
stock
each person will own after the offering, assuming they sell all of the shares
offered.
| |
|
Shares
Beneficially Owned
Prior
to the Offering(1)
|
|
|
|
Shares
Beneficially Owned
After
the Offering
|
|
|
Name
|
|
Number
|
|
Percent
|
|
Total
Shares
Offered
|
|
Number
|
|
Percent
|
|
|
Marc
Goldberg
|
|
|
40,000
|
|
|
*
|
|
|
40,000
|
(2)
|
|
0
|
|
|
*
|
|
|
Y.P.
Chan
|
|
|
252,800
|
|
|
*
|
|
|
252,800
|
(2)
|
|
0
|
|
|
*
|
|
*
Less
than one percent.
|
|
(1) |
The
number and percentage of shares beneficially owned is determined
in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934,
and the information is not necessarily indicative of beneficial
ownership
for any other purpose. Under such rule, beneficial ownership includes
any
shares as to which the selling stockholder has sole or shared voting
power
or investment power and also any shares, which the selling stockholder
has
the right to acquire within 60 days. The actual number of shares
of common
stock issuable upon the conversion of the debentures and exercise
of the
debenture warrants is subject to adjustment depending on, among
other
factors, the future market price of the common stock, and could
be
materially less or more than the number estimated in the
table.
|
|
|
(2) |
Includes
shares underlying stock options issued under our Year 2001 Stock
Option
Plan, as amended.
|
Plan
of Distribution
Sales
of
the shares may be effected by or for the account of the selling stockholders
from time to time in transactions (which may include block transactions)
on the
American Stock Exchange, in negotiated transactions, through a combination
of
such methods of sale, or otherwise, at fixed prices that may be changed,
at
market prices prevailing at the time of sale or at negotiated prices. The
selling stockholders may effect such transactions by selling the shares directly
to purchasers, through broker-dealers acting as agents of the selling
stockholders, or to broker-dealers acting as agents for the selling
stockholders, or to broker-dealers who may purchase shares as principals
and
thereafter sell the shares from time to time in transactions (which may include
block transactions) on the American Stock Exchange, in negotiated transactions,
through a combination of such methods of sale, or otherwise. In effecting
sales,
broker-dealers engaged by a selling stockholder may arrange for other
broker-dealers to participate. Such broker-dealers, if any, may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholders and/or the purchasers of the shares for whom such
broker-dealers may act as agents or to whom they may sell as principals,
or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions).
The
selling stockholders and any broker-dealers or agents that participate with
the
selling stockholders in the distribution of the shares may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933. Any commissions
paid or any discounts or concessions allowed to any such persons, and any
profits received on the resale of the shares purchased by them may be deemed
to
be underwriting commissions or discounts under the Securities Act of
1933.
We
have
agreed to bear all expenses of registration of the shares other than legal
fees
and expenses, if any, of counsel or other advisors of the selling stockholders.
The selling stockholders will bear any commissions, discounts, concessions
or
other fees, if any, payable to broker-dealers in connection with any sale
of
their shares.
We
have
agreed to indemnify the selling stockholders, or their transferees or assignees,
against certain liabilities, including liabilities under the Securities Act
of
1933 or to contribute to payments the selling stockholders or their respective
pledgees, donees, transferees or other successors in interest, may be required
to make in respect thereof.
Interests
of Named Experts and Counsel
The
validity of the shares of common stock offered hereby will be passed upon
for
the Registrant by Sichenzia Ross Friedman Ference LLP, 1065 Avenue of the
Americas, 21st
Floor,
New York, NY 10018.
Information
Incorporated by Reference
The
Securities and Exchange Commission allows us to incorporate by reference
certain
of our publicly-filed documents into this prospectus, which means that such
information is considered part of this prospectus. Information that we file
with
the SEC subsequent to the date of this prospectus will automatically update
and
supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under all documents subsequently
filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 until the selling stockholders have sold all of the
shares
offered hereby or such shares have been deregistered.
The
following documents filed with the SEC are incorporated herein by reference:
|
|
· |
Reference
is made to the Registrant’s annual report on Form 10-K for the fiscal
year ended March 31, 2006 filed with the SEC on July 14,
2006;
|
|
|
· |
Reference
is made to the Registrant’s quarterly report on Form 10-Q for the fiscal
quarter ended June 30, 2006 filed with the SEC on August 14, 2006;
|
|
|
· |
Reference
is made to the Registrant’s quarterly report on Form 10-Q for the fiscal
quarter ended September 30, 2006 filed with the SEC on November
20, 2006;
|
|
|
· |
Reference
is made to the Registrant’s quarterly report on Form 10-Q for the fiscal
quarter ended December 31, 2006 filed with the SEC on February
14, 2007;
|
|
|
· |
Reference
is made to the Registrant’s current reports on Form 8-K filed on February
7, 2007, January 19, 2007, January 18, 2007, December 22, 2006,
October 6,
2006, October 4, 2006, September 6, 2006, August 14, 2006, July
31, 2006,
and July 25, 2006; and
|
|
|
· |
Reference
is made to the description of the Registrant’s common stock contained in
our Registration Statement on Form 8-A filed with the SEC on March
2,
2001.
|
We
will
provide without charge to each person to whom a copy of this prospectus
has been
delivered, on written or oral request a copy of any or all of the documents
incorporated by reference in this prospectus, other than exhibits to such
documents. Written or oral requests for such copies should be directed
to Danny
Zheng, The Singing Machine Company, Inc., 6601 Lyons Road, Bldg. A-7, Coconut
Creek, Florida 33073, Telephone: (954) 596 -1000.
Disclosure
of Commission Position On Indemnification For Securities Act
Liabilities
Our
Certificate of Incorporation, as amended and restated, provide to the fullest
extent permitted by Section 145 of the General Corporation Law of the State
of
Delaware, that our directors or officers shall not be personally liable to
us or
our shareholders for damages for breach of such director's or officer's
fiduciary duty. The effect of this provision of our Certificate of
Incorporation, as amended and restated, is to eliminate our rights and our
shareholders (through shareholders' derivative suits on behalf of our company)
to recover damages against a director or officer for breach of the fiduciary
duty of care as a director or officer (including breaches resulting from
negligent or grossly negligent behavior), except under certain situations
defined by statute. We believe that the indemnification provisions in our
Articles of Incorporation, as amended, are necessary to attract and retain
qualified persons as directors and officers.
Our
By
Laws also provide that the Board of Directors may also authorize us to indemnify
our employees or agents, and to advance the reasonable expenses of such persons,
to the same extent, following the same determinations and upon the same
conditions as are required for the indemnification of and advancement of
expenses to our directors and officers. As of the date of this Registration
Statement, the Board of Directors has not extended indemnification rights
to
persons other than directors and officers.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to directors, officers or persons controlling us pursuant to
the
foregoing provisions, or otherwise, we have been advised that in the opinion
of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable.
Additional
Information Available to You
This
prospectus is part of a Registration Statement on Form S-8 that we filed
with
the SEC. Certain information in the Registration Statement has been omitted
from
this prospectus in accordance with the rules of the SEC. We file annual,
quarterly and special reports, proxy statements and other information with
the
SEC. You can inspect and copy the Registration Statement as well as reports,
proxy statements and other information we have filed with the SEC at the
public
reference room maintained by the SEC at 100 F Street N.E. Washington, D.C.
20549, You can obtain copies from the public reference room of the SEC at
100 F
Street N.E. Washington, D.C. 20549, upon payment of certain fees. You can
call
the SEC at 1-800-732-0330 for further information about the public reference
room. We are also required to file electronic versions of these documents
with
the SEC, which may be accessed through the SEC's World Wide Web site at
http://www.sec.gov. No dealer, salesperson or other person is authorized
to give
any information or to make any representations other than those contained
in
this prospectus, and, if given or made, such information or representations
must
not be relied upon as having been authorized by us. This prospectus does
not
constitute an offer to buy any security other than the securities offered
by
this prospectus, or an offer to sell or a solicitation of an offer to buy
any
securities by any person in any jurisdiction where such offer or solicitation
is
not authorized or is unlawful. Neither delivery of this prospectus nor any
sale
hereunder shall, under any circumstances, create any implication that there
has
been no change in the affairs of our company since the date hereof.
292,800
SHARES OF COMMON STOCK
PROSPECTUS
March
5,
2007
PART
II
INFORMATION
REQUIRED IN THE REGISTRATION STATEMENT
Item
3. Incorporation of Documents by Reference.
The
Registrant hereby incorporates by reference into this Registration Statement
the
documents listed below. In addition, all documents subsequently filed pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934
(the "Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters
all
securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the
date
of filing of such documents:
|
|
· |
Reference
is made to the Registrant’s annual report on Form 10-K for the fiscal
year ended March 31, 2006 filed with the SEC on July 14,
2006;
|
|
|
· |
Reference
is made to the Registrant’s quarterly report on Form 10-Q for the fiscal
quarter ended June 30, 2006 filed with the SEC on August 14, 2006;
|
|
|
· |
Reference
is made to the Registrant’s quarterly report on Form 10-Q for the fiscal
quarter ended September 30, 2006 filed with the SEC on November
20, 2006;
|
|
|
· |
Reference
is made to the Registrant’s quarterly report on Form 10-Q for the fiscal
quarter ended December 31, 2006 filed with the SEC on February
14, 2007;
|
|
|
· |
Reference
is made to the Registrant’s current reports on Form 8-K filed on February
7, 2007, January 19, 2007, January 18, 2007, December 22, 2006,
October 6,
2006, October 4, 2006, September 6, 2006, August 14, 2006, July
31, 2006,
and July 25, 2006; and
|
|
|
· |
Reference
is made to the description of the Registrant’s common stock contained in
our Registration Statement on Form 8-A filed with the SEC on March
2,
2001.
|
Item
4. Description of Securities.
Not
Applicable.
Item
5. Interests of Named Experts and Counsel.
The
validity of the shares of common stock offered hereby will be passed upon
for
the Registrant by Sichenzia Ross Friedman Ference LLP, 1065 Avenue of Americas,
21st
flr.,
New York, NY 10018.
Item
6. Indemnification of Directors and Officers.
Our
Certificate of Incorporation, as amended and restated, provide to the fullest
extent permitted by Section 145 of the General Corporation Law of the State
of
Delaware, that our directors or officers shall not be personally liable to
us or
our shareholders for damages for breach of such director's or officer's
fiduciary duty. The effect of this provision of our Certificate of
Incorporation, as amended and restated, is to eliminate our rights and our
shareholders (through shareholders' derivative suits on behalf of our company)
to recover damages against a director or officer for breach of the fiduciary
duty of care as a director or officer (including breaches resulting from
negligent or grossly negligent behavior), except under certain situations
defined by statute. We believe that the indemnification provisions in our
Articles of Incorporation, as amended, are necessary to attract and retain
qualified persons as directors and officers.
Our
By
Laws also provide that the Board of Directors may also authorize us to indemnify
our employees or agents, and to advance the reasonable expenses of such persons,
to the same extent, following the same determinations and upon the same
conditions as are required for the indemnification of and advancement of
expenses to our directors and officers. As of the date of this Registration
Statement, the Board of Directors has not extended indemnification rights
to
persons other than directors and officers.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to directors, officers or persons controlling us pursuant to
the
foregoing provisions, or otherwise, we have been advised that in the opinion
of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable.
Item
7. Exemption from Registration Claimed.
Not
Applicable.
Item
8. Exhibits.
|
EXHIBIT
|
|
|
|
NUMBER
|
|
EXHIBIT
|
| |
|
|
|
4.1
|
|
Year
2001 Stock Option Plan, as amended (incorporated by reference to
the
Company’s Post
Effective Amendment No. 1 on Form S-8 filed on April 20,
2004).
|
| |
|
|
|
5.1
|
|
Opinion
of Sichenzia Ross Friedman Ference LLP
|
| |
|
|
|
23.1
|
|
Consent
of Sichenzia Ross Friedman Ference LLP is contained in Exhibit
5.1
|
| |
|
|
|
23.2
|
|
Consent
of Accountants
|
| |
|
|
|
24.1
|
|
Power
of Attorney (included in the Signature
Page)
|
Item
9. Undertakings.
(a)
The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective
date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change
in the information set forth in the registration statement. Notwithstanding
the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the “Calculation of Registration Fee”
table in the effective registration statement;
(iii) To
include any material information with respect to the plan of distribution
not
previously disclosed in the registration statement or any material change
to
such information in the registration statement;
Provided,
however,
that
paragraphs (1)(i), and (1)(ii) do not apply if
the
Registration Statement is on Form S-8 and if
the
information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the Commission
by
the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That,
for the purpose of determining any liability under the Securities Act of
1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such
securities at that time shall be deemed to be the initial bona
fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) That,
for purposes of determining any liability under the Securities Act of 1933,
each
filing of the registrant’s annual report pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an
employee benefit plan’s annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering
thereof.
(5) That,
for the purpose of determining liability under the Securities Act of 1933
to any
purchaser:
(A) Each
prospectus filed by a Registrant pursuant to Rule 424(b)(3) shall be deemed
to be part of the registration statement as of the date the filed prospectus
was
deemed part of and included in the registration statement; and
(B) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or
(b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or
(x) for the purpose of providing the information required by Section 10(a)
of the Securities Act of 1933 shall be deemed to be part of and included
in the
registration statement as of the earlier of the date such form of prospectus
is
first used after effectiveness or the date of the first contract of sale
of
securities in the offering described in the prospectus. As provided in
Rule 430B, for liability purposes of the issuer and any person that is at
that date an underwriter, such date shall be deemed to be a new effective
date
of the registration statement relating to the securities in the registration
statement to which the prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering
thereof. Provided,
however,
that no
statement made in a registration statement or prospectus that is part of
the
registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of
the
registration statement will, as to a purchaser with a time of contract of
sale
prior to such effective date, supersede or modify any statement that was
made in
the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such effective
date.
(6)
That,
for the purpose of determining liability of a Registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the securities,
each
undersigned Registrant undertakes that in a primary offering of securities
of an
undersigned Registrant pursuant to this registration statement, regardless
of
the underwriting method used to sell the securities to the purchaser, if
the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned Registrant will be a seller to
the
purchaser and will be considered to offer or sell such securities to such
purchaser:
(i) Any
preliminary prospectus or prospectus of an undersigned Registrant relating
to
the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf
of an
undersigned Registrant or used or referred to by an undersigned Registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about an undersigned Registrant or its securities provided
by or on behalf of an undersigned Registrant; and
(iv) Any
other communication that is an offer in the offering made by an undersigned
Registrant to the purchaser.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and
is, therefore, unenforceable.
In
the
event that a claim for indemnification against such liabilities (other than
the
payment by the registrant of expenses incurred or paid by a director, officer
or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person
in connection with the securities being registered, the registrant will,
unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the Registrant certifies
that
it has reasonable grounds to believe that it meets all of the requirements
for
filing on Form S-8 and has duly caused this registration statement to be
signed
on its behalf by the undersigned, thereunto duly authorized, in Coconut
Creek,
State of Florida on March 5, 2007.
| |
|
|
| |
THE
SINGING MACHINE COMPANY, INC.
|
|
|
|
|
|
By: |
/s/
Danny Zheng
|
| |
Danny
Zheng
Interim
Chief Executive Officer (Principal Executive Officer) and Chief
Financial
Officer
(Principal
Accounting and Financial
Officer)
|
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
on Form S-8 has been signed below by the following persons in the capacities
and
on the dates indicated:
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/
Danny
Zheng
|
|
Interim
Chief Executive Officer
|
|
March
5, 2007
|
|
|
|
and
Chief Financial Officer
|
|
|
| |
|
|
|
|
|
/s/
Josef A.
Bauer
|
|
Director
|
|
March
5, 2007
|
|
Josef
A. Bauer
|
|
|
|
|
| |
|
|
|
|
|
/s/
Harvey
Judkowitz
|
|
Director
|
|
March
5, 2007
|
|
Harvey
Judkowitz
|
|
|
|
|
| |
|
|
|
|
|
/s/
Bernard Appel
|
|
Director
|
|
March
5, 2007
|
|
Bernard
Appel
|
|
|
|
|
| |
|
|
|
|
|
/s/
Stewart Merkin
|
|
Director
|
|
March
5, 2007
|
|
Stewart
Merkin
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
/s/
Carol Lau
|
|
Director
|
|
March
5, 2007
|
|
Carol
Lau
|
|
|
|
|
| |
|
|
|
|
|
|
|
Director
|
|
|
|
Yat
Tung Lau
|
|
|
|
|
| |
|
|
|
|
|
/s/
Peter Hon
|
|
Director
|
|
March
5, 2007
|
|
Peter
Hon
|
|
|
|
|
|
EXHIBIT
|
|
|
|
NUMBER
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EXHIBIT
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4.1
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Year
2001 Stock Option Plan, as amended (incorporated by reference to
the
Company’s Post
Effective Amendment No. 1 on Form S-8 filed on April 20,
2004).
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5.1
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Opinion
of Sichenzia Ross Friedman Ference LLP
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23.1
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Consent
of Sichenzia Ross Friedman Ference LLP is contained in Exhibit
5.1.
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23.2
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Consent
of Auditors
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24.1
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Power
of Attorney (included in the Signature
Page).
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