Singing Machine

Kurta Law is investigating broker recommendations of Singing Machine stocks (NASDAQ: MICS) These stocks came with high risk, making them unsuitable for many investors. Unsuitable investments violate FINRA Rule 2111, which requires brokers to consider their investor’s risk tolerance, among other crucial investor characteristics.  

If you believe you suffered investment losses due to broker fraud or misconduct, contact Kurta Law today for a free case evaluation. Call (877) 600-0098 or email info@kurtalawfirm.com.  

The Offering  

The prospectus dated May 23, 2022, announced that Singing Machine was offering 1,000,000 shares of common stock for $4.00 per share. As of April 15, 2024, stocks are $0.85 per share.  

About Singing Machine 

According to the prospectus, Singing Machine is a leading global karaoke and music entertainment company that specializes in designing and producing karaoke products.  

Risk Factor Summary  

The following risks are disclosed in the prospectus. The prospectus is the document that companies file with the Securities and Exchange Commission (SEC) when they register their securities. Any broker or brokerage firm offering shares of Singing Machine should have been familiar with these risks.  

Market Shortages  

Shortages in raw materials or electric components would materially affect the business. Singing Machine relies on third-party manufacturers in China, and the Covid-19 pandemic could place restrictions on manufacturing efforts.  

Revenue Based on a Small Number of Customers 

Singing Machine relies on a few large customers for a substantial portion of its revenues. The business has no long-term contracts with any of their customers and they can cancel their orders at any time before delivery. Returned products could also reduce profitability.  

Price Pressure from Customers  

The prospectus reveals that Singing Machine is subject to intense competition from the karaoke industry, which means that they can be pressured by customers to reduce their prices.  

Geopolitical Factors 

Singing Machine could be adversely affected by the military conflict between Russia and Ukraine, as well as other geopolitical tensions.  

Aegis Capital Corp. Underwriting     

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.   

Kurta Law Can Help  

Contact Kurta Law today for a free case evaluation – keep in mind that you have a limited time to file a claim. Our attorneys do not collect a fee unless we win your case. If you have any questions, call (877) 600-0098 or email info@kurtalawfirm.com.