Blog: SINGING MACHINE CO INC : Change in Directors or Principal Officers, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) – Marketscreener.com

Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Effective July 27, 2022, the Board of Directors (the “Board”) of The Singing
Machine Company, Inc. (the “Company”) increased the number of directors to eight
and appointed Messrs. Bernardo Melo, James Turner and Kenneth Cragun as
directors, effective immediately. Messrs. Melo, Turner and Cragun will serve as
members of the Board until the next annual meeting of the Company’s
stockholders, and until their successors are elected and qualified or until
their earlier death, resignation or removal.

Following are the resumes of our new directors:

Bernardo Melo, age 45, has been with the Company since February 2003. Mr. Melo
was appointed as Chief Revenue Officer on April 22, 2022 and has served as the
Vice President of Global Sales and Marketing (“VP of Sales”) since 2008. During
his tenure at the Singing Machine, Mr. Melo has overseen the sales and
operations of the music division as well as managed the customer service
department. Before taking over the responsibility of VP of Sales, Mr. Melo held
dual roles with the Company managing the operations, licensing and sales of the
music division while concentrating on hardware sales for the Latin America and
Canada market as well as key U.S. accounts such as Walmart. Prior to joining the
Company, Mr. Melo held a consulting role for Rewards Network formerly Idine. Mr.
Melo’s assignment during his tenure was improving their operational procedures
while increasing efficiencies and lowering operating cost. Mr. Melo also worked
at Coverall North America as Director of Sales managing a startup initiative for
the company covering 15 regional office and 40 sales reps across North America
focusing on franchise sales. Overall Mr. Melo has over 15 years of sales,
marketing and management experience.

The Board has concluded that Mr. Melo is qualified to serve on the Board of
Directors because of his extensive sales experience and industry knowledge.

James M. Turner, age 46, has served as the Deputy General Counsel and Vice
President of Legal Affairs at BitNile Holdings, Inc. (“BitNile”) since April
2021. Mr. Turner has also served on a part-time basis as the Deputy General
Counsel and Vice President of Legal Affairs at Alzamend Neuro, Inc. and
Avalanche International, Corporation since April 2021.

Prior to joining BitNile, Mr. Turner spent approximately 19 years practicing
law, including the last 10 as a partner, at Sichenzia Ross Ference LLP, a law
firm in New York. His firm practice focused on corporate and securities law,
including initial public offerings and secondary transactions, mergers and
acquisitions, private investment fund formations, corporate governance and
securities law compliance. Mr. Turner represented numerous public and private
companies in private equity financing transactions, debt and venture capital
offerings, domestic mergers, stock and assets acquisitions and other
reorganization transactions. Mr. Turner received B.A. degrees from Elmira
College in political science and international relations, and his J.D. degree
from American University, Washington College of Law, where he was a member of
the American University International Law Review.

The Board has concluded that Mr. Turner is qualified to serve on the Board of
Directors because of his extensive legal experience involving corporate
transactions and comprehensive knowledge of securities laws and corporate
governance requirements applicable to listed companies.

Kenneth S. Cragun, age 61, has served as Chief Financial Officer of BitNile
since August 19, 2020. Prior to his appointment as Chief Financial Officer, Mr.
Cragun served as BitNile’s Chief Accounting Officer since October 1, 2018. Mr.
Cragun has served as the Chief Financial Officer of Ault Disruptive Technologies
Corporation, an NYSE listed SPAC, since its incorporation in February 2021. Mr.
Cragun has been the Senior Vice President of Finance or Chief Financial Officer
of Alzamend Neuro, Inc., a development stage entity seeking to prevent, treat
and cure Alzheimer’s Disease, since October of 2018. He served as a CFO Partner
at Hardesty, LLC, a national executive services firm since October 2016. His
assignments at Hardesty included serving as CFO of CorVel Corporation, a $1.1
billion market cap publicly traded company (NASDAQ: CRVL) and a nationwide
leader in technology driven, healthcare-related, risk management programs and of
RISA Tech, Inc. a private structural design and optimization software company.
Mr. Cragun was also CFO of two NASDAQ-listed companies, Local Corporation, from
April 2009 to September 2016, which operated Local.com, a U.S. top 100 website,
and Modtech Holdings, Inc., from June 2006 to March 2009, a supplier of modular
buildings. Prior thereto, he had financial leadership roles with increasing
responsibilities at MIVA, Inc., ImproveNet, Inc., NetCharge Inc., C-Cube
Microsystems, Inc, and 3-Com Corporation. Mr. Cragun serves on the board of
directors and Chairman of the Audit Committee of Verb Technology Company, Inc.
(NASDAQ: VERB). Mr. Cragun began his professional career at Deloitte. Mr. Cragun
holds a Bachelor of Science degree in accounting from Colorado State
University-Pueblo. Mr. Cragun’s industry experience is vast, with extensive
experience in fast-growth environments and building teams in more than 20
countries. Mr. Cragun has led multiple financing transactions, including IPOs,
PIPEs, convertible debt, term loans and lines of credit.

The Board has concluded that Mr. Cragun is qualified to serve on the Board of
Directors because of his extensive financial and accounting experience in
diversified industries as well as his history serving on the boards of public
companies.

In accordance with the Company’s compensation package for non-employee
directors, Messrs. Turner and Cragun are eligible to participate in the
Company’s standard compensation arrangements for non-employee directors which
consists of cash and equity compensation for service on the Board. The Board has
determined that Messrs. Turner and Cragun satisfies the definition of
“independent” director, including, without limitation, the applicable
requirements of the Nasdaq Listing Rules and the Securities Exchange Act of
1934, as amended.

Messrs. Turner and Cragun were recommended for nomination by BitNile, the
Company’s majority stockholder, and evaluated and nominated by the Company’s
Nominating and Corporate Governance Committee. There are no arrangements or
understandings between Messrs. Melo, Turner and Cragun and any other persons
pursuant to which Messrs. Melo, Turner and Cragun were appointed directors of
the Company, and there are no family relationships between Messrs. Melo, Turner
and Cragun and any director or executive officer of the Company.

The Company will enter into its standard form of indemnification agreement with
Messrs. Melo, Turner and Cragun, a copy of which is filed as Exhibit 10.1 to the
Company’s Form 8-K filed on May 27, 2022. Other than the indemnification
agreement, Messrs. Melo, Turner and Cragun have no direct or indirect material
interest in any transaction required to be disclosed pursuant to Item 404(a) of
Regulation S-K promulgated under the Securities Exchange Act of 1934, as
amended, nor are any such transactions currently proposed.

Item 7.01 Regulation FD Disclosure.

On July 28, 2022, the Company issued a press release announcing the appointment
of Messrs. Melo, Turner and Cragun to the Board. A copy of the press release is
furnished herewith as Exhibit 99.1 and is incorporated by reference herein.

In accordance with General Instruction B.2 of Form 8-K, the information under
this item shall not be deemed filed for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, nor shall such information be deemed
incorporated by reference in any filing under the Securities Act of 1933, as
amended, except as shall be expressly set forth by specific reference in such a
filing. This report will not be deemed an admission as to the materiality of any
information required to be disclosed solely to satisfy the requirements of
Regulation FD.

Item 9.01 Financial Statements and Exhibits.


(d) Exhibits

Exhibit
No.       Description

99.1        Press Release, issued on July 28, 2022.
101       Pursuant to Rule 406 of Regulation S-T, the cover page is formatted in
          Inline XBRL (Inline eXtensible Business Reporting Language).
104       Cover Page Interactive Data File (embedded within the Inline XBRL
          document and included in Exhibit 101).

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