What changed in Algorhythm Holdings, Inc.'s 2025 10-K compared to 2024?

Across the narrative sections we track, Algorhythm Holdings, Inc. (RIME) added 326 paragraphs, removed 469, and edited 111 between the 2024 and 2025 10-K filings. The biggest movers are Item 1A. Risk Factors (+122/−217), Item 1. Business (+79/−95), Item 5. Market for Registrant's Common Equity (+2/−127).

Did Algorhythm Holdings, Inc. add new Risk Factors in the 2025 10-K?

Yes — Item 1A Risk Factors shows 122 new/edited paragraphs and 217 removed paragraphs versus the 2024 10-K.

What changed in Algorhythm Holdings, Inc.'s MD&A (Item 7) in 2025?

Item 7 Management's Discussion & Analysis shows 114 new/edited paragraphs and 12 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did Algorhythm Holdings, Inc. update its Cybersecurity disclosure (Item 1C) in 2025?

Item 1C Cybersecurity has 3 paragraph-level changes between the 2024 and 2025 filings.

Did Algorhythm Holdings, Inc.'s Legal Proceedings (Item 3) change in 2025?

Item 3 shows 3 added/edited paragraphs and 10 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this RIME 10-K diff come from?

The source filings are Algorhythm Holdings, Inc.'s official 2024 and 2025 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in Algorhythm Holdings, Inc.'s 10-K — 2024 vs 2025

Paragraph-level year-over-year comparison of Algorhythm Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+326 added−469 removedSource: 10-K (2026-04-02) vs 10-K (2025-04-15)

Top changes in Algorhythm Holdings, Inc.'s 2025 10-K

326 paragraphs added · 469 removed · 111 edited across 8 sections

Item 1A. Risk Factors+122 / −217 · 79 edited
Item 1. Business+79 / −95 · 22 edited
Item 5. Market for Registrant's Common Equity+2 / −127 · 2 edited
Item 7. Management's Discussion & Analysis+114 / −12 · 1 edited
Item 3. Legal Proceedings+3 / −10 · 1 edited

Item 1. Business

Business — how the company describes what it does

22 edited+57 added−73 removed2 unchanged

2024 filing

2025 filing

Biggest changeOur operations include our wholly-owned subsidiaries, SMC Logistics, Inc., a California corporation (“SMCL”), SMC-Music, Inc., a Florida corporation (“SMCM”), SMC (HK) Limited, a Hong Kong company (“SMH”), The Singing Machine Company, Inc., a Delaware corporation (“Singing Machine”), MICS Hospitality Holdings, Inc., a Delaware corporation (“MICS Hospitality”), MICS Hospitality Management, LLC, a Delaware limited liability company (“MICS Hospitality Management”), and MICS Nomad, LLC, a Delaware limited liability company (“MICS NY”), and our 80%-owned subsidiary, SemiCab Holdings, LLC, a Nevada limited liability company (“SemiCab Holdings”). 2 SemiCab SemiCab is a cloud-based Collaborative Transportation Platform built to achieve the scalability required to predict and optimize loads and the use of trucks.

Item 1. Business. Unless the context requires otherwise, references in this Annual Report to “we,” “us,” “our,” and Algorhythm refer to Algorhythm Holdings, Inc. and its consolidated subsidiaries.

Item 1. Business. Unless the context requires otherwise, references in this Annual Report to “we,” “us,” and “our,” refer to Algorhythm Holdings, Inc. and its consolidated subsidiaries.

We make available free of charge through our website at https://ir.algoholdings.com/investor-filings#/ all materials that we file electronically with the SEC as soon as reasonably practicable after electronically filing or furnishing such material with the SEC. These materials are also available on the SEC’s website at www.sec.gov.

We make available free of charge through our website at https://algoholdings.com/filings all materials that we file electronically with the SEC as soon as reasonably practicable after electronically filing or furnishing such material with the SEC. These materials are also available on the SEC’s website at www.sec.gov.

Reverse Stock Split and Increase in Authorized Shares On January 13, 2025, our stockholders voted to authorize our board of directors to effect a reverse stock split of the outstanding shares of our common stock at a specific ratio within a range of 1-for-10 to a maximum of 1-for-250 and to amend our certificate of incorporation to increase the number of authorized common stock from 100,000,000 to 800,000,000 shares.

Recent Events and Developments Reverse Stock Split and Increase in Authorized Shares On January 13, 2025, our stockholders voted to authorize our board of directors to effect a reverse stock split of the outstanding shares of our common stock at a specific ratio within a range of 1-for-10 to a maximum of 1-for-250 and to amend our certificate of incorporation to increase the number of authorized common stock from 100,000,000 to 800,000,000 shares.

While the transportation services contracts are signed for longer durations, generally up to a year, revenue from these services is recognized only after the loads from shippers are executed and delivered by us. Our platform subscriptions are sold through resellers. Sales are recognized on a rolling monthly basis aligned with SaaS revenue models.

While the transportation services contracts are signed for longer durations, generally up to a year, revenue from these services is recognized only after the loads from shippers are executed and delivered by us. Our platform subscriptions are sold through a direct sales team. Sales are recognized on a rolling monthly basis aligned with SaaS revenue models.

SemiCab AI Logistics and Distribution Services Our SemiCab logistics and distribution services are sold through our direct sales team who work with shippers, participate in preparing and submitting transportation bids, and onboard shippers and customers to start operations.

Sales and Marketing Our SemiCab logistics and distribution services are sold through our direct sales team who work with shippers, participate in preparing and submitting transportation bids, and onboard shippers and customers to start operations.

On January 14, 2025, our board of directors approved a reverse stock split of 1-for-200 ratio and approved the filing of a certificate of amendment to our certificate of incorporation to effect the reverse stock split and to increase our authorized shares of common stock from 100,000,000 to 800,000,000. The reverse stock split took effect on February 10, 2025.

SemiCab AI Logistics and Distribution Services In the AI logistics and distribution space, we compete with traditional and non-traditional logistics companies, including transportation providers that own equipment, third-party freight brokers, technology matching services, internet freight brokers, carriers offering logistics services, and on-demand transportation service providers.

We compete with traditional and non-traditional logistics companies, including transportation providers that own equipment, third-party freight brokers, technology matching services, internet freight brokers, carriers offering logistics services, and on-demand transportation service providers.

These bids are typically awarded for a selected number of routes for a pre-determined period of time, normally up to a year.

Our services are sold directly to shippers via bids for transportation services. These bids are typically awarded for a selected number of routes for a pre-determined period of time, normally up to a year.

However, trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained.

The duration of our trademark registrations varies from country to country. However, trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained.

We win business by providing reliable services at lower costs and creating an industry-wide network that can operate more efficiently with less empty miles than the industry norm, thus creating a more sustainable transportation network for the entire industry. 10 Intellectual Property We rely on a combination of word and design mark trademarks and trade secrets to protect our intellectual property.

SaaS Subscription for Shippers This service category consists of a SaaS based platform subscription for shippers that enables them to better manage their freight network by creating optimal lane bundles for bidding and optimized execution of loads with better control over their data and analytics.

Our software enables shippers and carriers to better manage their freight network by creating optimal lane bundles for bidding and optimized execution of loads with better control over their data and analytics.

None of our employees are represented by a collective bargaining unit or is a party to a collective bargaining agreement. Available Information We file reports and other materials with the Securities and Exchange Commission (“SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements.

Available Information We file reports and other materials with the Securities and Exchange Commission (“SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements.

This will make us more efficient, lower the costs of operation, provide consistent and reliable services, and reduce potential human error in its processes targeting the transportation execution and billing.

The objective of these additions and enhancements is to build additional functionality and improve or automate existing functions. This will make us more efficient, lower our costs of operation, enable us to provide more consistent and reliable services, and reduce potential human error in our processes targeting transportation execution and billing.

SemiCab uses limited marketing and promotions at this time as it is primarily focused on creating name recognition and visibility through appropriate social media channels, blogs, and press releases to share industry awards and customer acquisition news.

We engage in only limited marketing and promotions at this time as we are primarily focused on creating name recognition and visibility through appropriate social media channels, blogs, and press releases to share industry awards and customer acquisition news. 8 Customers Our customers are comprised primarily of large, fast-moving consumer products companies in India.

Prior to August 1, 2025, we had a second business, which was Singing Machine. Singing Machine was a home karaoke consumer products business that designed and distributed karaoke products to retailers and ecommerce partners globally through our subsidiary, The Singing Machine Company, Inc. We sold our Singing Machine business on August 1, 2025.

In certain circumstances, we will partner with third parties to develop proprietary products, and, where appropriate, we have license agreements related to the use of third-party innovation in our products. The duration of our trademark registrations varies from country to country.

Intellectual Property We rely on a combination of cybersecurity, trademarks, copyrights, trade secrets, and nondisclosure and non-competition agreements to establish and protect our intellectual property and proprietary technology. In certain circumstances, we will partner with third parties to develop proprietary technology, and, where appropriate, we have license agreements related to the use of third-party innovation in our technology.

Saas Subscription for Brokers SemiCab also offers a software-as-a-service (“SaaS”) based platform subscription for logistics brokers that enables them to better manage their operations for transportation execution. The subscription primarily covers shipper management, carrier management, document management, load operations management, invoicing, integration services, and reporting and analytics.

Our software enables 3PLs to better manage their operations for transportation execution by assisting them with shipper management, carrier management, document management, load operations management, invoicing, integration services, and reporting and analytics. Apex optimizes both visible and predicted demand across the entire freight ecosystem, completely redefining the efficiencies that can be achieved within a logistics network.

SemiCab AI Logistics and Distribution Services For our SemiCab logistics and distribution services, we are focused on expanding and enhancing our SemiCab platform to provide better transportation services to our customers as well as to automate operational processes. The objective of these additions and enhancements is to build additional functionality and improve or automate existing functions.

By automating network-level decision-making, the platform allows organizations to scale throughput without proportional increases in labor, infrastructure, or overhead. We are focused on expanding and enhancing our SemiCab technology platform to provide better transportation services to our customers as well as to automate operational processes.

Overview We are an AI technology and consumer electronics holding company with two primary business units – SemiCab and Singing Machine. SemiCab is an artificial intelligence (“AI”) enabled software logistics business operated through our subsidiary, SemiCab Holdings, LLC.

Overview We are an artificial intelligence (“AI”) technology company focused on the growth and development of SemiCab. SemiCab is an AI-enabled software logistics and distribution business that utilizes our SemiCab technology platform to enable retailers, brands and transportation providers to address common supply chain problems globally. We operate our SemiCab business through our subsidiary, SemiCab Holdings, LLC.

We currently offer almost 20,000 licensed karaoke songs in the catalog. 7 SemiCab AI Logistics and Distribution Services Transportation Services SemiCab offers transportation services to shippers and brokers that deliver products for retailers and manufacturers. SemiCab primarily focuses on full truck load and over-the-road transportation services. SemiCab’s services are sold directly to shippers via bids for transportation services.

We currently provide our services in India and are actively marketing our services in the United States and Europe. 7 Managed Services In India, we offer our services through a managed services model to retailers, suppliers and manufacturers and other shippers through our own network of shippers and brokers. We primarily focus on full truck load and over-the-road transportation services.

Univest Securities served as our exclusive placement agent in connection with the offering. We paid Univest Securities a cash fee equal to eight percent of the aggregate gross proceeds received in the offering. We reimbursed Univest Securities for various expenses incurred in connection with the offering.

We agreed to pay Univest a cash fee equal to eight percent of the aggregate gross proceeds that we receive from any Pre-Paid Purchases that we complete and reimburse Univest for legal fees in the amount of $40,000.

Removed

To orchestrate collaboration across manufacturers, retailers, distributors, and their carriers, SemiCab uses real-time data from AI-based load tendering and pre-built integrations with TMS and ELD partners. To build fully loaded round trips, SemiCab uses AI/ML techniques and advanced predictive optimization models. Since 2020, SemiCab has enabled major retailers, brands and transportation providers to address their transportation needs.

Added

Accordingly, we no longer own or operate the Singing Machine business.

Removed

SemiCab’s Orchestrated Collaboration™ AI model has proven to increase transportation capacity, improve asset utilization, reduce empty miles, lower logistics costs, and provide visibility into the entire transportation network. Models show that the technology has the capability of reducing costs through optimization. Additionally, SemiCab’s technology has the potential to play a key role in the improved sustainability model.

Added

The reverse stock split took effect on February 10, 2025. 2 Acquisition of SMCB On May 2, 2025, we and SemiCab Holdings entered into an equity purchase agreement with SemiCab Inc. pursuant to which: (i) SemiCab Holdings purchased 9,999 shares of the issued and outstanding equity shares, Rs. 10 par value, of SMCB, representing 99.99% of the issued and outstanding equity shares of SMCB, for $1,750,000, the payment of which amount was evidenced by the issuance of a promissory note by us to SemiCab, Inc., and (ii) we purchased the 20% membership interest in SemiCab Holdings then held by SemiCab, Inc. for aggregate consideration consisting of 119,742 shares of our common stock.

Removed

Based on its proven ability to improve truck utilization rates, this could result in a dramatic reduction in the carbon footprint of the industry. The optimization of existing truck utilization can add trucking capacity without adding more trucks, drivers or driven miles which addresses common problems plaguing the industry like severe driver shortage and road congestion.

Added

The transactions closed on May 2, 2025. The promissory note provides that $1,500,000 is due and payable by us on the first anniversary of the closing date and the remaining $250,000 is due and payable by us on the 18-month anniversary of the closing date. The promissory note bears interest at six percent per annum.

Removed

Trucking optimization could also reduce carbon emissions attributable to road freight. Singing Machine Through Singing Machine, we engage in the development, marketing, and sale of consumer karaoke audio equipment, accessories, and musical recordings.

Added

On the closing date, we and SemiCab Holdings entered into an amended and restated employment agreement with each of Ajesh Kapoor and Vivek Sehgal pursuant to which Mr. Kapoor agreed to serve as the Chief Executive Officer and Chief Technology Officer of SemiCab Holdings and Mr. Sehgal agreed to serve as the Chief Product Officer of SemiCab Holdings.

Removed

We are a leading global karaoke and music entertainment company that specializes in the design and production of quality karaoke and music enabled consumer products for adults and children. Our products are among the most widely available karaoke products internationally. Our mission is to “create joy through music.” To deliver on this mission, we are focused on a multi-prong approach.

Added

Pursuant to the terms of the employment agreements, SemiCab Holdings granted Messrs. Kapoor and Sehgal a membership interest in SemiCab Holdings with three quarters of each such grant subject to certain forfeiture rights tied to continued employment with SemiCab Holdings. Additionally, Mr.

Removed

In the short-term, we seek to improve profitability by optimizing operations and continue to expand gross margins. In the mid-to-long-term, we seek to continue to expand our business into new verticals including automotive and connected-TV devices and grow our global distribution for our consumer karaoke products.

Added

Kapoor was granted the right to serve as a member of our board of directors and the right to appoint an additional member of our board of directors upon the occurrence of certain specified events.

Removed

Recent Events and Developments Change in Fiscal Year During 2023, our board of directors approved a change in our fiscal year end from March 31 to December 31.

Added

Also on the closing date, we, SemiCab Holdings, Ajesh Kapoor and Vivek Sehgal entered into an amended and restated limited liability company agreement for SemiCab Holdings which sets forth the terms and conditions governing the operation and management of SemiCab Holdings.

Removed

Asset Purchase On July 3, 2024, we completed the acquisition of substantially all of the assets and the assumption of certain liabilities of SemiCab, Inc. for a purchase price consisting of 3,210 shares of our common stock and a 20% membership interest in SemiCab Holdings. 3 Hospitality Lease On August 23, 2023, MICS NY entered into an agreement of lease with OAC 111 Flatiron, LLC and OAC Adelphi, LLC (collectively, the “Landlord”) pursuant to which MICS NY agreed to lease 10,000 square feet of ground floor retail space and a portion of the basement underneath the ground floor retail space in the property located at 111 West 24 th Street, New York, New York.

Added

In January 2026, the Indian government approved the purchase of the remaining outstanding equity share of SMCB, representing 0.01% of the issued and outstanding equity shares of SMCB, from Sudheer Srinivas Kadandale for $10. 3 Sale of Singing Machine On August 1, 2025, we entered into an asset purchase agreement with SMC and Stingray Music USA, Inc.

Removed

It was our intention to use this space as a new karaoke venue, offering immersive karaoke technology and audio-visual capabilities, with restaurant and bar offerings. Due to a lack of funding, however, we initiated termination of the lease in March 2024.

Added

(“Stingray USA”), a related party and subsidiary of the Stingray Group, Inc. (“Stingray Group”), pursuant to which Stingray USA purchased substantially all of the assets, and assumed most of the liabilities, associated with our Singing Machine business for $500,000. The transaction closed on August 1, 2025.

Removed

On July 26, 2024, the Landlord filed a civil action in the Supreme Court of the State of New York against us and MICS NY for alleged breach of lease, seeking monetary damages including unpaid rent, future unpaid rent, and other expenses related to the lease.

Added

Streeterville Capital Transaction On August 21, 2025, we entered into a securities purchase agreement with Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”), pursuant to which we agreed to issue and sell to Streeterville shares of our common stock in one or more pre-paid purchases (each, a “Pre-Paid Purchase” and collectively, the “Pre-Paid Purchases”) for an aggregate purchase price of up to $20,000,000 (the “Streeterville Transaction”).

Removed

The complaint alleged that we and MICS NY breached the lease in various material respects.

Added

We also agreed to issue an additional 95,694 shares of our common stock to Streeterville as a commitment fee for the pre-paid purchase facility established under the securities purchase agreement (the “Commitment Shares”).

Removed

On September 25, 2024, we and MICS NY entered into a settlement agreement with OAC Flatiron and OAC Adelphi for a full release and dismissal of the complaint that became effective within five business days of our payment of $250,000 to OAC Flatiron and OAC Adelphi.

Added

The securities purchase agreement provides for a two-year commitment period during which, subject to certain specified conditions, we may request additional Pre-Paid Purchases from Streeterville provided that the amount requested is no less than $250,000 and the total outstanding balance of all Pre-Paid Purchases does not exceed $3,000,000.

Removed

We made full payment of the settlement amount on October 25, 2024, and OAC Flatiron and OAC Adelphi filed a discontinuance with prejudice with the court on October 29, 2024. Oxford Credit Facility On March 28, 2024, we entered into a loan agreement and related revolving credit note with Oxford Commercial Finance (“Oxford”) for a $2,000,000 revolving line of credit.

Added

The original issue discount for each additional Pre-Paid Purchase will be nine percent of the amount set forth in the applicable request and each additional Pre-Paid Purchase will accrue interest at the rate of nine percent per annum.

Removed

On October 17, 2024, we terminated the loan agreement and note and paid them a termination fee of $40,000. As of the date of termination, we had no outstanding amounts owed to Oxford.

Added

We also executed a guaranty, a security agreement, and intellectual property security agreement in favor of Streeterville as part of the Streeterville Transaction. The Streeterville Transaction closed on August 21, 2025.

Removed

Name and Symbol Change Effective September 5, 2024, our Certificate of Incorporation was amended to change our name from “The Singing Machine Company, Inc.” to “Algorhythm Holdings, Inc.” In addition, effective September 8, 2024, our ticker symbol was changed from “MICS” to “RIME.” Amended Bylaws On October 18, 2024, we amended our bylaws to reduce the quorum necessary to hold stockholder meetings from a majority of the voting power of the shares of our common stock that are issued and outstanding to 33 1/3% of the voting power of the shares of our common stock that are issued and outstanding. 4 Private Placement On October 22, 2024, we entered into a securities purchase agreement pursuant to which we agreed to issue and sell to each purchaser: (i) an original issue discount senior secured note with a principal amount equal to such purchaser’s subscription amount divided by 0.85, and (ii) a number of shares of our common stock equal to (x) 2,300,000, multiplied by (y) such purchaser’s subscription amount, divided by (z) $2,000,000.

Added

Following the funding of each Pre-Paid Purchase, Streeterville has the right, but not the obligation, to purchase from us that number of shares of common stock up to the lesser of: (i) a number of shares of common stock equal in value to the outstanding balance of the funded amount, and (ii) that number of shares of common stock such that Streeterville will not beneficially own greater than 9.99% of our outstanding shares of common stock.

Removed

The Offering closed on October 24, 2024. At the closing, we issued to the purchasers an aggregate of 2,300,000 shares of our common stock and notes in the aggregate principal amount of $2,352,941 for total proceeds of $2,000,000 net of original issue discount of $352,941.

Added

The purchase price of the shares of common stock will be 90% of the lowest daily volume weighted average price during the 10 trading days immediately prior to the purchase notice date, but not less than the floor price, which is the greater of: (i) 20% of the “Minimum Price” as defined under Nasdaq Listing Rule 5635(d) prior to the applicable closing of the Pre-Paid Purchase, and (ii) $0.10.

Removed

Univest Securities served as the placement agent in the offering and received seven percent of the gross proceeds received by us and reimbursement of the legal fees of its counsel. We repaid all of the notes in December 2024.

Added

Pursuant to the terms of the securities purchase agreement, we filed a registration statement on Form S-1 under the Securities Act with the SEC to register the resale of the Commitment Shares and all shares of common stock issuable pursuant to the Pre-Paid Purchases. The registration statement became effective on November 10, 2025.

Removed

Regalia Ventures Share Repurchase On November 1, 2024, we entered into a stock repurchase agreement with Regalia Ventures LLC, a Delaware limited liability company (“Regalia Ventures”), pursuant to which we agreed to pay $472,527 to repurchase 5,495 shares of our common stock that Regalia Ventures had previously purchased from us on November 20, 2023.

Added

Nasdaq Listing Rule 5635(d) provides that shareholder approval is required prior to the issuance of shares of our common stock equal or greater in number to 20% of the number of shares of our common stock issued and outstanding immediately prior to the completion of the proposed issuance at a price that is less than the “Minimum Price” as such term is defined under Nasdaq Listing Rule 5635(d) in a transaction that is not a public offering.

Removed

We agreed to issue a promissory note to Regalia Holdings in the principal amount of the purchase price of the shares at the closing of the transaction. On February 18, 2025, the date of the closing of the transaction, we issued a promissory note to Regalia Holdings in the amount of $472,527.

Added

We obtained the requisite shareholder approval for the Streeterville Transaction on November 20, 2025. 4 We may at any time prepay all or any portion of the outstanding balance of a Pre-Paid Purchase.

Removed

On February 27, 2025, we paid off the note in full. Regalia Ventures is owned and controlled by Jay B. Foreman, who serves as a member of our board of directors.

Added

In the event we elect to do so, we must pay Streeterville an amount equal to 110% multiplied by the portion of the outstanding balance we elected to prepay. If an event of default occurs under a Pre-Paid Purchase, the outstanding balance will become immediately due and payable.

Removed

Stingray Group Share Repurchase On December 3, 2024, we entered into a stock repurchase agreement with Stingray Group, Inc., a Canadian corporation (the “Stingray Group”), pursuant to which we agreed to pay $285,714 to repurchase 5,495 shares of our common stock that Stingray Group had previously purchased from us on November 20, 2023.

Added

At anytime thereafter, upon written notice given by Streeterville, the outstanding balance will increase by seven-and-a half percent and interest will begin accruing at a rate of the lesser of 18% per annum or the maximum rate permitted under applicable law.

Removed

We agreed to issue a promissory note to Stingray Group in the principal amount of the purchase price of the shares at the closing of the transaction. On February 18, 2025, the date of the closing of the transaction, we issued a promissory note to Stingray Group in the amount of $285,714.

Added

Our obligations are secured by all of our assets pursuant to a security agreement and have been guaranteed by our operating subsidiaries pursuant to a guarantee, each entered into with Streeterville on August 21, 2025. Univest Securities, LLC served as the placement agent in the offering (“Univest”).

Removed

On April 3, 2025, we paid off the note in full. Mathieu Peloquin is the Senior Vice-President, Marketing and Communications of Stingray Group and serves as a member of our board of directors.

Added

Pre-Paid Purchase #1 The securities purchase agreement provides for an initial Secured Pre-Paid Purchase in the principal amount of $4,390,000, before deducting an original issue discount of $360,000 and transaction expenses of $30,000 (the “First Pre-Paid Purchase”), the terms of which are set forth on secured prepaid purchase #1 (“Pre-Paid Purchase #1”).

Removed

Public Offering of Securities On December 4, 2024, we sold 21,000 shares of our common stock and pre-funded warrants to purchase 258,412 shares of our common stock in lieu of receiving shares of common stock to accredited investors.

Added

The First Pre-Paid Purchase accrues interest at the rate of nine percent per annum and has a maturity date of three years. We paid Univest a cash fee equal to eight percent of the aggregate gross proceeds that we received from the First Pre-Paid Purchase.

Removed

Each share of our common stock, or pre-funded warrant in lieu thereof, was sold together with a Series A warrant to purchase one share of our common stock and a Series B warrant to purchase one share of our common stock, at an offering price of $34 per share of common stock or pre-funded warrant.

Added

We currently have principal in the amount of approximately $1,085,000 outstanding under the First Pre-Paid Purchase. Pre-Paid Purchase #2 On November 13, 2025, we entered into Secured Pre-Paid Purchase #2 with Streeterville (“Pre-Paid Purchase #2”).

Removed

Univest Securities, LLC (“Univest Securities”) served as our exclusive placement agent in connection with the offering. We paid Univest Securities a cash fee equal to seven percent of the aggregate gross proceeds received in the offering and a non-accountable expense allowance equal to one percent of the aggregate gross proceeds received in the offering.

Added

Pre-Paid Purchase #2 provides for a second Pre-Paid Purchase in the principal amount of $5,450,000, before deducting an original issue discount of $450,000 (the “Second Pre-Paid Purchase”). The Second Pre-Paid Purchase accrues interest at the rate of nine percent per annum and has a maturity date of three years.

Removed

We also reimbursed Univest Securities for various expenses incurred in connection with the offering.

Added

The Second Pre-Paid Purchase was similar to the First Pre-Paid Purchase, however the Second Pre-Paid Purchase is secured by cash in an amount not less than the lesser of: (i) $4,500,000, and (ii) 90% of the then-current outstanding balance of the Second Pre-Paid Purchase (the “PPP2 Minimum Balance Amount”).

Removed

We received net proceeds of $8,565,000 from the offering, after deducting placement agent fees and other offering expenses. 5 Registered Direct Offering of Securities On December 18, 2024, we sold 120,337 shares of our common stock to institutional investors in a registered direct offering at a purchase price of $16.62 per share.

Added

The secured funds are being held in a deposit account (the “DACA Account”) held by RIME Holdings, LLC, a Utah limited liability company and wholly-owned subsidiary of ours that we formed in connection with this transaction (“RIME Holdings”), pursuant to a Deposit Account Control Agreement, dated November 13, 2025, by and among RIME Holdings, Lakeside Bank, an Illinois banking company (“Lakeside Bank”), and Streeterville.

Removed

We received net proceeds of $1,665,000 from the offering, after deducting placement agent fees and other offering expenses.

Added

Accordingly, of the $5,000,000 proceeds that we received from the Second Pre-Paid Purchase, $4,500,000 were placed in the DACA Account. 5 We have the right to use funds in the DACA Account to repay any portion of the outstanding balance of the Second Pre-Paid Purchase, but only so long as the payment does not cause the outstanding balance to drop below the PPP2 Minimum Balance Amount.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

79 edited+43 added−138 removed116 unchanged

2024 filing

2025 filing

Biggest changeAs a result of the offering, shareholders who owned shares immediately prior to the completion of the offering experienced immediate and substantial dilution as a result of the issuance of the shares of common stock on December 6, 2024 and the subsequent exercise of the pre-funded warrants and Class B warrants.

Biggest changeAs of March 27, 2026, we had completed Pre-Paid Purchases for the aggregate amount of $21,285,000 and had repaid Pre-Paid Purchases in the aggregate amount of $9,845,000 as a result of Streeterville electing to exercise its right to purchase a total of 11,303,264 shares of our common stock under the First Pre-Paid Purchase, Second Pre-Paid Purchase and Third Pre-Paid Purchase. 26 Shareholders who owned shares of our common stock immediately prior to the completion of the December 6, 2024 securities offering experienced immediate and substantial dilution as a result of the issuance of the shares of common stock on December 6, 2024 and the subsequent exercise of the pre-funded warrants and Class B warrants.

Any acquisition or development transaction that we pursue, whether or not successfully completed, will subject us to numerous risks and uncertainties, including: ● our ability to accurately assess the value, growth potential, strengths, weaknesses, contingent and other liabilities, and potential profitability of the target businesses and assets; ● our ability to complete the transaction and integrate the operations, technologies, services and personnel of any businesses or assets acquired; ● the costs associated with the completion of the transaction and the integration of the businesses or assets acquired; ● our ability to generate sufficient revenue to offset the transaction costs and achieve projected economic and operating synergies; ● the diversion of financial and management resources from existing operations and potential loss of key personnel; ● the risks associated with entering new domestic markets and conducting operations where we have little or no prior experience; 14 ● the possible negative impact of the transaction on our reputation and the reputation of the business that we acquire; and ● the effect of any limitations imposed by federal and state tax laws on our ability to use all or a portion of our pre-transaction net operating losses against post-transaction income.

Any acquisition or development transaction that we pursue, whether or not successfully completed, will subject us to numerous risks and uncertainties, including: ● our ability to accurately assess the value, growth potential, strengths, weaknesses, contingent and other liabilities, and potential profitability of the target businesses and assets; ● our ability to complete the transaction and integrate the operations, technologies, services and personnel of any businesses or assets acquired; ● the costs associated with the completion of the transaction and the integration of the businesses or assets acquired; ● our ability to generate sufficient revenue to offset the transaction costs and achieve projected economic and operating synergies; 14 ● the diversion of financial and management resources from existing operations and potential loss of key personnel; ● the risks associated with entering new domestic markets and conducting operations where we have little or no prior experience; ● the possible negative impact of the transaction on our reputation and the reputation of the business that we acquire; and ● the effect of any limitations imposed by federal and state tax laws on our ability to use all or a portion of our pre-transaction net operating losses against post-transaction income.

Debt financing may involve agreements containing covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, issuing equity securities, making capital expenditures for certain purposes or above a certain amount, or declaring dividends.

Factors may include, among others: ● a significant decline in our expected future cash flows; ● a sustained, significant decline in our stock price and market capitalization 23 ● a significant adverse change in legal factors or in the business climate; ● unanticipated competition ● the testing for recoverability of a significant asset group within a reporting unit; and ● slower growth rates.

Factors may include, among others: ● a significant decline in our expected future cash flows; 23 ● a sustained, significant decline in our stock price and market capitalization ● a significant adverse change in legal factors or in the business climate; ● unanticipated competition; ● the testing for recoverability of a significant asset group within a reporting unit; and ● slower growth rates.

If we raise additional funds by issuing securities exercisable or convertible into shares of our common stock, our stockholders will experience dilution in the event the securities are exercised or converted, as the case may be, into shares of our common stock.

On December 30, 2024, we received notice from the Nasdaq indicating that the bid price for our common stock had closed below $0.10 per share for the 13-consecutive trading day period ended December 27, 2024 and, accordingly, we would be subject to the provisions contemplated under Nasdaq Listing Rule 5810(c)(3)(A)(iii) and its securities would be subject to delisting from Nasdaq unless we timely request a hearing before the Nasdaq hearings panel.

On December 30, 2024, we received notice from the Nasdaq indicating that the bid price for our common stock had closed below $0.10 per share for the 13-consecutive trading day period ended December 27, 2024 and, accordingly, we would be subject to the provisions contemplated under Nasdaq Listing Rule 5810(c)(3)(A)(iii) and our securities would be subject to delisting from Nasdaq unless we timely request a hearing before the Nasdaq hearings panel.

Any such acts could result in: ● unauthorized access to, disclosure, modification, misuse, loss, or destruction of company, customer, or other third-party data or systems; ● theft of sensitive, regulated, or confidential data including personal information and intellectual property; ● the loss of access to critical data or systems through ransomware, destructive attacks or other means; and ● business delays, service or system disruptions or denials of service.

Any such acts could result in: ● unauthorized access to, disclosure, modification, misuse, loss, or destruction of company, customer, or other third-party data or systems; 17 ● theft of sensitive, regulated, or confidential data including personal information and intellectual property; ● the loss of access to critical data or systems through ransomware, destructive attacks or other means; and ● business delays, service or system disruptions or denials of service.

Any payments of damages or adverse publicity could have a material adverse effect on our business, financial condition and results of operations. 21 Our charter provides limitations of director liability and indemnification of directors and officers and employees. Our certificate of incorporation limits the liability of directors to the maximum extent permitted by Delaware law.

Any payments of damages or adverse publicity could have a material adverse effect on our business, financial condition and results of operations. 21 Our certificate of incorporation provides limitations on director liability and indemnification of directors and officers and employees. Our certificate of incorporation limits the liability of directors to the maximum extent permitted by Delaware law.

We could be party to litigation that could adversely affect us by diverting management attention, increasing our expenses and subjecting us to significant monetary damages and other remedies. We are subject to various claims and legal actions arising in the ordinary course of our business.

We could be a party to litigation that could adversely affect us by diverting management attention, increasing our expenses and subjecting us to significant monetary damages and other remedies. We are subject to various claims and legal actions arising in the ordinary course of our business.

Our management team and other personnel will need to devote a substantial amount of time to new compliance initiatives and to meeting the obligations that are associated with being a public company, which may divert attention from other business concerns and have a material adverse effect on our business, financial condition and results of operations. 41 If we are not able to comply with the applicable continued listing requirements of the Nasdaq, it could delist us, which may adversely affect the market price and liquidity of our common stock.

Our management team and other personnel will need to devote a substantial amount of time to new compliance initiatives and to meeting the obligations that are associated with being a public company, which may divert attention from other business concerns and have a material adverse effect on our business, financial condition and results of operations. 31 If we are not able to comply with the applicable continued listing requirements of the Nasdaq, it could delist us, which may adversely affect the market price and liquidity of our common stock.

The occurrence of any of these acts could have a material adverse effect on our business, financial condition and results of operations. 17 The failure of our information technology systems could significantly disrupt the operation of our business. We rely on information technology systems and networks as part of our business.

The occurrence of any of these acts could have a material adverse effect on our business, financial condition and results of operations. The failure of our information technology systems could significantly disrupt the operation of our business. We rely on information technology systems and networks as part of our business.

Continued shipping line disruptions and delays may impact the availability and cost of shipping containers during peak shipping season. 19 While we have not experienced any direct impact from the conflicts in the Ukraine and the Middle East, the extent and duration of the military action, sanctions and resulting market and shipping lane disruptions are impossible to predict but could be substantial and could adversely affect our operating results as they impact the global economy in the future.

Continued shipping line disruptions and delays may impact the availability and cost of shipping containers during peak shipping season. 19 While we have not experienced any direct impact from the conflicts in and around Ukraine, the Middle East and elsewhere, the extent and duration of the military action, sanctions and resulting market and shipping lane disruptions are impossible to predict but could be substantial and could adversely affect our operating results as they impact the global economy in the future.

On that day, the closing price of our common stock was $2.98 per share and the closing bid of our common stock remained above $1.00 for the next 10 consecutive business days. 42 On March 25, 2025, we received a letter from the Nasdaq stating that we had regained compliance with the minimum bid price requirement of $1.00 per share for continued listing on the Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2).

On that day, the closing price of our common stock was $2.98 per share and the closing bid of our common stock remained above $1.00 for the next 10 consecutive business days. 32 On March 25, 2025, we received a letter from the Nasdaq stating that we had regained compliance with the minimum bid price requirement of $1.00 per share for continued listing on the Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2).

Our management, in consultation with our independent registered public accounting firm, concluded that the following material weaknesses existed in the following areas as of December 31, 2024: ● We lack sufficient resources in our accounting department restricting our ability to review and approve certain material journal entries which increases the likelihood that a material misstatement of interim or annual financial statements might not be prevented.

Our management, in consultation with our independent registered public accounting firm, concluded that the following material weaknesses existed in the following areas as of December 31, 2025: ● We lack sufficient resources in our accounting department restricting our ability to review and approve certain material journal entries which increases the likelihood that a material misstatement of interim or annual financial statements might not be prevented.

Future assessments may require us to incur substantial costs and may require a significant amount of time and attention of management, which could seriously harm our business, financial condition and results of operations. 40 If we are unable to establish and maintain an effective system of internal control, we may not be able to accurately report our financial results on a timely basis or prevent fraud.

Future assessments may require us to incur substantial costs and may require a significant amount of time and attention of management, which could seriously harm our business, financial condition and results of operations. 30 If we are unable to establish and maintain an effective system of internal control, we may not be able to accurately report our financial results on a timely basis or prevent fraud.

Potential investors should carefully consider whether such a speculative investment is suitable for their financial situation and investment objectives before purchasing securities. 39 We identified material weaknesses in our internal control over financial reporting during the assessment of our internal control that we performed in connection with the preparation of our audited consolidated financial statements included herein.

Potential investors should carefully consider whether such a speculative investment is suitable for their financial situation and investment objectives before purchasing securities. 29 We identified material weaknesses in our internal control over financial reporting during the assessment of our internal control that we performed in connection with the preparation of our audited consolidated financial statements included herein.

We reported a stockholders’ deficit of $872,000 on June 30 th in that quarterly report. Pursuant to the listing rule and instructions from Nasdaq, we submitted a plan to regain compliance with the listing rule and were given an extension until November 14, 2024 to evidence compliance through a public filing.

We reported a stockholders’ deficit of approximately $872,000 on June 30, 2024 in that quarterly report. Pursuant to the listing rule and instructions from Nasdaq, we submitted a plan to regain compliance with the listing rule and were given an extension until November 14, 2024 to evidence compliance through a public filing.

The success of our business and the ability to achieve our business goals and objectives, as outlined in this prospectus, are subject to numerous uncertainties, contingencies and risks. As such, there is no assurance that investors will realize a return on their investment or that they will not lose their entire investment.

The success of our business and the ability to achieve our business goals and objectives, as outlined in this report, are subject to numerous uncertainties, contingencies and risks. As such, there is no assurance that investors will realize a return on their investment or that they will not lose their entire investment.

Our ability to obtain additional capital will be subject to a number of factors, including maintenance of our listing on the Nasdaq Stock Market (“Nasdaq”), market conditions and our operating performance. These factors may make the timing, amount, terms or conditions of any proposed future financing transactions unattractive to us.

Our ability to obtain additional capital will be subject to a number of factors, including maintenance of our listing on the Nasdaq, market conditions and our operating performance. These factors may make the timing, amount, terms or conditions of any proposed future financing transactions unattractive to us.

In particular, a significant deterioration in economic conditions, including economic slowdowns or recessions, increased unemployment levels, inflationary pressures or disruptions to credit and capital markets, could lead to decreased consumer confidence and consumer spending more generally, thus reducing consumer demand for our products.

Competitors may use our technologies in jurisdictions where we have not obtained intellectual property rights to develop their own products and, further, may export otherwise infringing products to territories where we have intellectual property rights, but where enforcement is not as strong as that in the U.S.

Competitors may use our technologies in jurisdictions where we have not obtained intellectual property rights to develop their own technology and, further, may export otherwise infringing technology to territories where we have intellectual property rights, but where enforcement is not as strong as that in the U.S.

In addition, to the extent we hire personnel from competitors, we may be subject to allegations that such personnel have been improperly solicited or that they have divulged proprietary or other confidential information, or that their former employers own their product or service ideas.

During the preparation of our audited consolidated financial statements for the year ended December 31, 2024, we identified several control deficiencies that have been classified as material weaknesses in our internal control over financial reporting.

During the preparation of our audited consolidated financial statements for the year ended December 31, 2025, we identified several control deficiencies that have been classified as material weaknesses in our internal control over financial reporting.

As a result, any such claim could have a material adverse effect on our business, financial condition and results of operations. We may not be able to protect our intellectual property rights throughout the world. Filing, prosecuting, and defending intellectual property rights on our products in international jurisdictions is prohibitively expensive.

As a result, any such claim could have a material adverse effect on our business, financial condition and results of operations. 16 We may not be able to protect our intellectual property rights throughout the world. Filing, prosecuting, and defending intellectual property rights on our technology in international jurisdictions is prohibitively expensive.

If our results of operations do not meet the expectations of our stockholders or the investment community, the price of our common stock may decline. 38 Our common stock may be affected by price fluctuations, which could adversely impact the value of our common stock.

If our results of operations do not meet the expectations of our stockholders or the investment community, the price of our common stock may decline. 28 Our common stock may be affected by price fluctuations, which could adversely impact the value of our common stock.

On November 13, 2024, we filed our Quarterly Report on Form 10-Q for our fiscal quarter ended September 30, 2024 with the SEC. Therein, we reported stockholders’ equity of $2,700,000. That same day we filed a Form 8-K with the SEC stating that we believed we had regained compliance with the stockholders’ equity requirement.

On November 19, 2024, we filed our Quarterly Report on Form 10-Q for our fiscal quarter ended September 30, 2024 with the SEC. Therein, we reported stockholders’ equity of approximately $2,700,000. That same day we filed a Form 8-K with the SEC stating that we believed we had regained compliance with the stockholders’ equity requirement.

Based on the material weaknesses identified, management concluded that our internal control over financial reporting was not effective as of December 31, 2024.

Based on the material weaknesses identified, management concluded that our internal control over financial reporting was not effective as of December 31, 2025.

Additionally, the conflict in the Middle East between Israel and the government of Hamas in Gaza has caused disruptions in shipping lanes in the Red Sea where some major cargo lines have opted to route their vessels away from the region which has increased the time required to reach their destinations as well as increased time for vessels to return to their port of origin with empty containers.

Additionally, the conflict in the Middle East between Israel and the government of Hamas in Gaza, Hezbollah in Lebanon, as well as groups in Syria and Iran, have caused disruptions in shipping lanes in the Red Sea where some major cargo lines have opted to route their vessels away from the region which has increased the time required to reach their destinations as well as increased time for vessels to return to their port of origin with empty containers.

An investment in our securities is speculative, and there can be no assurance of any return on any such investment. Investors are cautioned that an investment in the securities offered hereby is highly speculative and involves a significant degree of risk.

An investment in our securities is speculative, and there can be no assurance of any return on any such investment. Investors are cautioned that an investment in our securities is highly speculative and involves a significant degree of risk.

We believe that we have benefited substantially from the leadership and experience of our executive officers, including Gary Atkinson, who is our Chief Executive Officer, Alex Andre, who is our Chief Financial Officer and General Counsel, and Bernardo Melo, who is our Chief Revenue Officer.

We believe that we have benefited substantially from the leadership and experience of our executive officers, including Gary Atkinson, who is our Chief Executive Officer, and Alex Andre, who is our Chief Financial Officer and General Counsel.

These products may compete with our products in jurisdictions where we do not have any issued or licensed patents and our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from competing. 16 Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

Their technology may compete with our technology in jurisdictions where we do not have any issued or licensed patents and our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

In addition, the initiation of any such action could cause the price of our common stock to decline Our quarterly and annual operating results may fluctuate due to increases and decreases in sales, raw material and supply costs, and other factors.

The market price of our common stock may fluctuate significantly in response to a number of factors, many of which we cannot control, including: ● fluctuations in our annual or quarterly operating results; ● changes in capital market conditions or other adverse economic conditions; ● upgrades or downgrades by securities analysts following our stock; ● changes in estimates of our future financial results by securities analysts following our stock; ● our achievement, or our failure to achieve, projected financial results; ● future sales of our stock by our officers, directors or significant stockholders; ● investors’ perceptions of our business and prospects relative to other investment alternatives; ● acquisitions, joint ventures, capital commitments or other significant transactions by us or our competitors; ● global economic, legal and regulatory factors unrelated to our performance; and ● the other risks and uncertainties set forth herein. 37 The stock market experiences significant price and volume fluctuations that affect the market price of the stock of many companies and that are often unrelated or disproportionate to the operating performance of these companies.

The market price of our common stock may fluctuate significantly in response to a number of factors, many of which we cannot control, including: ● fluctuations in our annual or quarterly operating results; ● changes in capital market conditions or other adverse economic conditions; ● upgrades or downgrades by securities analysts following our stock; ● changes in estimates of our future financial results by securities analysts following our stock; ● our achievement, or our failure to achieve, projected financial results; ● future sales of our stock by our officers, directors or significant stockholders; ● investors’ perceptions of our business and prospects relative to other investment alternatives; ● acquisitions, joint ventures, capital commitments or other significant transactions by us or our competitors; 27 ● global economic, legal and regulatory factors unrelated to our performance; and ● the other risks and uncertainties set forth herein.

Immediately prior to the completion of the offering, we had 14,215,176 shares of our common stock outstanding. Additionally, due to price adjustment provisions contained in the Series A and Series B warrants, the Series A warrants became exercisable into 1,133,652 shares of common stock and the Series B warrants became exercisable into 1,910,975 shares of our common stock.

Immediately prior to the completion of the offering, we had 71,076 shares of our common stock outstanding. Additionally, due to price adjustment provisions contained in the Series A and Series B warrants, the Series A warrants became exercisable into 1,133,652 shares of common stock and the Series B warrants became exercisable into 1,910,975 shares of our common stock.

Our quarterly and annual operating results may fluctuate significantly because of a variety of factors, including: ● increases or decreases in sales of our products and services; ● our ability to operate effectively in new markets; ● labor availability and costs for management and other personnel; ● changes in consumer preferences and competitive conditions; ● negative publicity relating to us, our vendors or the products we sell; ● disruptions in the type and delivery of our raw materials and supplies; ● changes consumer confidence and fluctuations in discretionary spending; ● changes in raw material and supply costs, labor costs or other variable costs and expenses; ● potential distractions or unusual expenses associated with our expansion plans; ● the impact of inclement weather, natural disasters, and other calamities; and ● economic conditions in the jurisdictions in which we operate and nationally.

Our quarterly and annual operating results may fluctuate significantly because of a variety of factors, including: ● increases or decreases in sales of our services; ● our ability to operate effectively in new markets; ● labor availability and costs for management and other personnel; ● changes in consumer preferences and competitive conditions; ● negative publicity relating to us, our vendors or the services we sell; ● disruptions in the availability of trucks needed to complete shipments; ● changes consumer confidence and fluctuations in discretionary spending; ● changes in labor costs or other variable costs and expenses; ● potential distractions or unusual expenses associated with our expansion plans; ● the impact of inclement weather, natural disasters, and other calamities; and ● economic conditions in the jurisdictions in which we operate and nationally.

Our karaoke products are manufactured in southern China. In recent years, the U.S. government has implemented substantial changes to U.S. trade policies, including import restrictions, increased import tariffs and changes in U.S. participation in multilateral trade agreements, such as the United States-Mexico-Canada Agreement to replace the former North American Free Trade Agreement.

In recent years, the U.S. government has implemented substantial changes to U.S. trade policies, including import restrictions, increased import tariffs and changes in U.S. participation in multilateral trade agreements, such as the United States-Mexico-Canada Agreement to replace the former North American Free Trade Agreement.

We may have trouble hiring additional qualified personnel. As we expand our product development and marketing activities, we will need to hire additional personnel and could experience difficulties attracting and retaining qualified employees. Competition for qualified personnel could be intense due to the limited number of individuals who possess the skills and experience required by such an industry.

As we expand our technology development, service offerings and marketing activities, we will need to hire additional personnel and could experience difficulties attracting and retaining qualified employees. Competition for qualified personnel could be intense due to the limited number of individuals who possess the skills and experience required by such an industry.

Accordingly, the realization of a gain on stockholders’ investments in our common stock will depend on the appreciation of the price of our common stock. We can provide no assurance that our common stock will appreciate in value or even maintain the price at which stockholders purchased their shares. Item 1B. Unresolved Staff Comments. None.

Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine has lead to market disruptions, including significant volatility in credit and capital markets. Russia’s military interventions in Ukraine have led to sanctions and other penalties being levied by the U.S., European Union and other countries against Russia.

Although the length and impact of any potential or ongoing military conflict is highly unpredictable, such conflicts have led to market disruptions, including significant volatility in credit and capital markets. For example, Russia’s military interventions in Ukraine have led to sanctions and other penalties being levied by the U.S., European Union and other countries against Russia.

On November 22, 2024, we received a letter from the Nasdaq indicating that, based on the Form 8-K filed on November 13, 2024, the Nasdaq had determined that we were in compliance with the stockholders’ equity rule.

On November 22, 2024, we received a letter from the Nasdaq indicating that, based on the Form 10-Q that we filed on November 19, 2024, the Nasdaq had determined that we were in compliance with the stockholders’ equity rule.

The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.

The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for us to stop the infringement of any patents we may have in the future, or the use of competing technologies in violation of our proprietary rights generally.

As a smaller reporting company, we are permitted to comply with reduced disclosure obligations in our SEC filings compared to larger public companies. This includes, but is not limited to, simplified executive compensation disclosures, reduced financial statement requirements, and less stringent narrative disclosure obligations.

We are a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act. As a smaller reporting company, we are permitted to comply with reduced disclosure obligations in our SEC filings compared to larger public companies. This includes, but is not limited to, simplified executive compensation disclosures, reduced financial statement requirements, and less stringent narrative disclosure obligations.

We can provide no assurance that we will be able to sustain or increase profitability on a quarterly or annual basis. Accordingly, we may continue to generate losses in the future and, in the extreme case, may need to discontinue operations.

Our future profitability is dependent upon our ability to successfully execute upon our business plan. We can provide no assurance that we will be able to sustain or increase profitability on a quarterly or annual basis. Accordingly, we may continue to generate losses in the future and, in the extreme case, may need to discontinue operations.

Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business.

Proceedings to enforce any patent rights we may have in the future in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business.

On July 3, 2024, we completed the acquisition of substantially all of the assets and the assumption of certain liabilities of SemiCab, Inc., which was the owner of the United States component of our AI logistics and distribution business. We may continue to expand our business through the acquisition of additional businesses in the future.

Other risks associated with the use of social media include improper disclosure of proprietary information, personal identifiable information and out-of-date information, as well as fraud, by our customers, employees, franchisees and business partners.

The dissemination of such information online, regardless of its accuracy, could harm our business, reputation and brands. Other risks associated with the use of social media include improper disclosure of proprietary information, personal identifiable information and out-of-date information, as well as fraud, by our customers, employees, franchisees and business partners.

Our existing management systems, financial and management controls, and information and reporting systems and procedures may not be adequate to support our expansion. Our ability to manage our growth effectively will require us to continue to enhance these systems, controls and procedures and to locate, hire, train and retain qualified management and operating personnel.

Our ability to manage our growth effectively will require us to continue to enhance these systems, controls and procedures and to locate, hire, train and retain qualified management and operating personnel.

Such losses could have a material adverse effect on our business and results of operations. Unanticipated changes in the actuarial assumptions and management estimates underlying our reserves for these losses could result in materially different amounts of expense under these programs, which could have a material adverse effect on our business, financial condition and results of operations.

Unanticipated changes in the actuarial assumptions and management estimates underlying our reserves for these losses could result in materially different amounts of expense under these programs, which could have a material adverse effect on our business, financial condition and results of operations. 22 Our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media could materially adversely impact our business.

Consequently, the designation as a smaller reporting company under the SEC rules increases the risk to investors, as it may limit the amount of publicly available information to assess our performance, prospects, and financial health. Potential investors should consider the implications of these reduced disclosure requirements when making an investment decision.

The inappropriate use of social media by our customers, employees, franchisees or business partners could increase our costs, lead to litigation or result in negative publicity that could damage our business, reputation and brands. An impairment in the carrying value of our fixed assets, intangible assets or goodwill could adversely affect our financial condition and results of operations.

If our security and information systems are compromised or our franchisees or employees fail to comply with these laws and regulations and this information is obtained by unauthorized persons or used inappropriately, it could adversely affect our reputation and results of operations and could result in litigation against us or the imposition of fines and penalties. 18 Any significant changes in U.S. trade or other policies that block, or restrict imports or increase import tariffs could have a material adverse effect on results of operations.

If such an action is instituted against us, we may incur substantial costs and a diversion of management attention and resources, which would seriously harm our business, financial condition and results of operations.

Further, securities Series Action suits have been filed against companies following periods of market volatility in the price of their securities. If such an action is instituted against us, we may incur substantial costs and a diversion of management attention and resources, which would seriously harm our business, financial condition and results of operations.

All of the pre-funded warrants and Class B warrants were exercised in their entirety.

All of the pre-funded warrants and Class B warrants were exercised in their entirety. On August 21, 2025, we completed the Streeterville Transaction.

If we commence litigation to enforce our intellectual property and proprietary rights, we will incur significant legal fees and may not be successful in enforcing our rights. Moreover, we cannot assure you that third parties will not claim infringement by us of their intellectual property and proprietary rights in the future.

Moreover, we cannot assure you that third parties will not claim infringement by us of their intellectual property and proprietary rights in the future.

This may adversely affect our business, financial condition and results of operations and, in the extreme case, cause us to discontinue operations. 13 Risks Related to Our Company Our growth could strain our personnel and infrastructure resources.

This may adversely affect our business, financial condition and results of operations and, in the extreme case, cause us to discontinue operations. 13 Our growth could strain our personnel and infrastructure resources. We expect to enter a stage of rapid growth in our operations which could place a significant strain on our management, administrative, operational and financial infrastructure.

The occurrence of any such events in the future could cause substantial damage to our business and subject us to substantial repair costs that could have a material adverse effect on our business, financial condition and results of operations. 24 Risks Related to the Streeterville Transaction The sale of a substantial number of our securities in the public market by Streeterville and/or by our existing security holders could cause the price of our common stock to fall.

An impairment in the carrying value of our fixed assets, intangible assets or goodwill could adversely affect our financial condition and results of operations We evaluate the useful lives of our fixed assets and intangible assets to determine if they are definite- or indefinite-lived assets.

We evaluate the useful lives of our fixed assets and intangible assets to determine if they are definite- or indefinite-lived assets.

If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us, and our business may be adversely affected. 33 As a “smaller reporting company” under applicable law, we are subject to lessened disclosure requirements, which could leave our stockholders without information or rights available to stockholders of more mature companies.

We believe that our trademarks, trade secrets and other proprietary rights have significant value and are important to our business and competitive position. We, therefore, devote time and resources to the protection of these rights. Our policy is to pursue registration of our important trademarks whenever feasible and to oppose vigorously any infringement of our trademarks.

We also have common law trademark rights for certain of our proprietary marks and rely upon trade secrets to protect certain of our rights. We believe that our trademarks, trade secrets and other proprietary rights have significant value and are important to our business and competitive position. We, therefore, devote time and resources to the protection of these rights.

Potential investors should consider the implications of these reduced disclosure requirements when making an investment decision. 43 Applicable SEC rules governing the trading of “penny stocks” may limit the trading and liquidity of our common stock, which may affect the trading price of our common stock.

Applicable SEC rules governing the trading of “penny stocks” may limit the trading and liquidity of our common stock, which may affect the trading price of our common stock.

In addition, any equity or debt securities that we issue may have rights, preferences and privileges senior to those of the securities held by our stockholders. Future acquisition and development transactions could also result in us assuming debt obligations and liabilities and incurring impairment charges related to goodwill, investments and other intangible assets.

In addition, any equity or debt securities that we issue may have rights, preferences and privileges senior to those of the securities held by our stockholders.

Retaliatory tariff and trade measures imposed by other countries could affect our ability to export products and therefore adversely affect sales. Any significant changes in current U.S. trade or other policies that restrict imports or increase import tariffs could have a material adverse effect upon results of our operations.

Any significant changes in U.S. trade or other policies that block or restrict imports or increase import tariffs could have a material adverse effect on results of operations.

Many of our competitors are expanding their use of social media and new social medial platforms are rapidly being developed, potentially making more traditional social media platforms obsolete.

Many of our competitors are expanding their use of social media and new social medial platforms are rapidly being developed, potentially making more traditional social media platforms obsolete. As a result, we need to continuously innovate and develop our social media strategies in order to maintain broad appeal with customers and brand relevance.

We will be required to record a non-cash impairment charge if the testing performed indicates that goodwill has been impaired. Significant adverse weather conditions and other disasters could negatively impact our results of operations.

We will be required to record a non-cash impairment charge if the testing performed indicates that goodwill has been impaired. We are subject to risks related to the sale of our Singing Machine business.

We cannot assure you that the protective actions that we have taken will successfully prevent unauthorized use or imitation of our intellectual property and proprietary rights by other parties. In the event third parties unlawfully use or imitate our intellectual property and proprietary rights, we could suffer harm to our image, brands and competitive position.

We also seek to preserve the integrity and confidentiality of our proprietary information by maintaining physical security of our premises and physical and electronic security of our information technology systems. We cannot assure you that the protective actions that we have taken will successfully prevent unauthorized use or imitation of our intellectual property and proprietary rights by other parties.

In addition, the invasion of Ukraine and the resulting sanctions imposed on Russia have resulted in increased volatility in the financial markets and the markets for certain commodities including oil, which may significantly impact the manufacturers that we rely on.

In addition, acts of war, terrorism or political instability in oil producing countries (e.g. the invasion of Ukraine by Russia and conflicts in the Middle East, including the recent escalation involving Iran, and recent U.S. intervention in Venezuela) have resulted in increased volatility in the financial markets and the markets for certain commodities including oil, which may significantly impact the manufacturers that we rely on.

We sell products to retailers, including national chains, warehouse clubs, department stores, lifestyle merchants, specialty stores, and direct mail catalogs and showrooms. Deterioration in the financial condition of our customers could result in these customers not being able to pay us for our products and services. This would have a negative impact on our revenue and results of operations.

We sell our services primarily to large, fast-moving consumer goods companies. Deterioration in the financial condition of our customers could result in these customers not being able to pay us for our services. This would have a negative impact on our revenue and results of operations. We may have trouble hiring additional qualified personnel.

We incurred net losses available to common stockholders of $23,257,000 ended December 31, 2023, and had accumulated deficits of $49,172,000 and $25,915,000 as of December 31, 2024 and 2023, respectively. In addition, net cash used by operating activities was $8,556,000 for the year ended December 31, 2024.

We incurred net losses available to common stockholders of $15,900,000 and $23,257,000 for our fiscal years ended December 31, 2025 and 2024, respectively, and had accumulated deficits of $65,072,000 and $49,172,000 as of December 31, 2025 and 2024, respectively.

We own U.S. registered trademarks for many of the signs, designs and expressions that identify the products and services that we use in our business, including “The Singing Machine” and “SemiCab”. We also have common law trademark rights for certain of our proprietary marks and rely upon trade secrets to protect certain of our rights.

Our failure or inability to enforce our trademarks, trade secrets and other proprietary rights could adversely affect our image, brands and competitive position. We own U.S. registered trademarks for many of the signs, designs and expressions that identify the services that we use in our business, including “SemiCab”.

No assurance can be given that SemiCab will be able to pass these increased costs on to its customers in the form of rate increases or surcharges, and its operations and results of operations may be materially and adversely affected as a result. 36 Risks Related to Ownership of Our Securities We may raise additional funds in the future through the issuance of equity securities or debt, which funding may be dilutive to stockholders or impose operational restrictions on us.

Risks Related to Ownership of Our Securities We may raise additional funds in the future through the issuance of equity securities or debt, which funding may be dilutive to stockholders or impose operational restrictions on us.

Information posted on such platforms may be inaccurate or adverse to our interests, and we may have little or no opportunity to redress or correct the information. The dissemination of such information online, regardless of its accuracy, could harm our business, reputation and brands.

Many social media platforms immediately publish the content their subscribers and participants post, often without filters or checks on accuracy of the content posted. Information posted on such platforms may be inaccurate or adverse to our interests, and we may have little or no opportunity to redress or correct the information.

We depend upon our executive officers and may not be able to retain or replace these individuals or recruit additional personnel, which could harm our business.

Future acquisition and development transactions could also result in us assuming debt obligations and liabilities and incurring impairment charges related to goodwill, investments and other intangible assets. 15 We depend upon our executive officers and may not be able to retain or replace these individuals or recruit additional personnel if they leave, which could harm our business.

We protect our trade secrets and proprietary information, in part, by entering into confidentiality agreements with our employees and consultants. We also seek to preserve the integrity and confidentiality of our proprietary information by maintaining physical security of our premises and physical and electronic security of our information technology systems.

Our policy is to pursue registration of our important trademarks whenever feasible and to oppose vigorously any infringement of our trademarks. We protect our trade secrets and proprietary information, in part, by entering into confidentiality agreements with our employees and consultants.

U.S. and global markets are experiencing volatility and disruption as a result of the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported.

U.S. and global markets are experiencing volatility and disruption as a result of the escalation of geopolitical tensions and military conflicts in and around Ukraine, Israel, and other areas of the world.

Our inability to attract and retain qualified executive officers could impair our growth and have an adverse effect on our business, financial condition and results of operations. 15 Our failure or inability to enforce our trademarks, trade secrets and other proprietary rights could adversely affect our competitive position or the value of our brands.

Our inability to attract and retain qualified executive officers could impair our growth and have an adverse effect on our business, financial condition and results of operations. Our success depends on our SemiCab technology platform attaining market acceptance by transportation providers.

We expect to enter a stage of rapid growth in our operations which could place a significant strain on our management, administrative, operational and financial infrastructure. Our future success will depend in part upon the ability of our management to manage growth effectively.

Our future success will depend in part upon the ability of our management to manage growth effectively. Our existing management systems, financial and management controls, and information and reporting systems and procedures may not be adequate to support our expansion.

Based upon this and our internally generated cash flow projections, our auditors concluded that there is substantial doubt about our ability to continue as a going concern for the next 12 months. Our future profitability is dependent upon our ability to successfully execute upon our business plan.

Based upon this, our current cash resources and our internally generated cash flow projections, the audit report issued by M&K CPAS, PLLC in connection with our audited financial statements as of and for the year ended December 31, 2025 includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

Any such events would have an adverse affect on our revenue and results of operations. 28 If our third-party logistics provider experiences disruptions to the operation of its distribution centers, it could have a material adverse effect on our business, financial condition and results of operations.

Such losses could have a material adverse effect on our business and results of operations.

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If any of these or other risks actually occurs, our business may be adversely affected, the trading price of our common stock may decline and you may lose all or part of your investment. 12 Risks Related to Our Financial Condition We have a history of losses, we can provide no assurance that we will ever become profitable, and our auditors concluded that there is substantial doubt about our ability to continue as a going concern.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe primarily rely on expert third-party managed IT service providers to protect our IT systems from cybersecurity threats. 44 Managing Material Risks & Integrated Overall Risk Management As one of the critical elements of our overall risk management program, our cybersecurity program is focused on the following key areas: ● Technical Safeguards : We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, anti-malware software, and monitoring software agents that are installed on our devices. ● Third-Party Management : Our financial data and primary operational systems are hosted off-site in virtual cloud environments which get periodically backed up and can be restored in the event of a cybersecurity incident.

Biggest changeManaging Material Risks & Integrated Overall Risk Management As one of the critical elements of our overall risk management program, our cybersecurity program is focused on the following key areas: ● Technical Safeguards : We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, anti-malware software, and monitoring software agents that are installed on our devices. 35 ● Third-Party Management : Our financial data and primary operational systems are hosted off-site in virtual cloud environments which get periodically backed up and can be restored in the event of a cybersecurity incident.

Our management team works closely with our third-party IT service provider to continuously evaluate and address cybersecurity risks in alignment with our business objectives and operational needs. Oversee Third-Party Risk We conduct annual assessments of the SOC reports of our providers because we are aware of the risks associated with third-party service providers.

Our management team works closely with our third-party IT service provider to continuously evaluate and address cybersecurity risks in alignment with our business objectives and operational needs. Oversight of Third-Party Risk We conduct annual assessments of the SOC reports of our providers because we are aware of the risks associated with third-party service providers.

Item 1C. Cybersecurity. Risk Management and Strategy We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data. We primarily rely on expert third-party managed IT service providers to protect our IT systems from cybersecurity threats.

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Our music subscription service is managed by our content provider, Stingray Group, who processes payments, and our e-commerce website payment processing is handled by Shopify.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. We lease 6,500 square feet of office space in Fort Lauderdale, Florida for our corporate headquarters. We also lease 1,890 square feet of office space in Hong Kong for our operations there. We believe that each of these locations is adequate to support our operations for the next 12 months.

Biggest changeItem 2. Properties. We lease office space in Fort Lauderdale, Florida for our corporate headquarters and lease office space in Bangalore, India for our India operations. We believe these locations are adequate to support our operations for the next 12 months.

We also believe that these facilities are not unique and could be replaced, if necessary, at the end of the term of the existing leases. 45

We also believe that these facilities are not unique and could be replaced, if necessary, at the end of the term of the existing leases.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest change(“Blue Yonder”) filed a civil action in the Superior Court of the State of Arizona against us for breach of contract and to enforce a stipulated judgment entered against SemiCab, Inc.

Biggest changeItem 3. Legal Proceedings. On February 11, 2025, Blue Yonder, Inc. (“Blue Yonder”) filed a civil action in the Superior Court of the State of Arizona against us for breach of contract and to enforce a stipulated judgment entered against SemiCab, Inc. in connection with the liabilities related to Blue Yonder that we assumed when it acquired SemiCab, Inc.’s business.

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Derivative Litigation On December 21, 2023, Ault Lending, LLC (“Ault Lending”), a wholly owned subsidiary of Ault Alliance, Inc., which was at one time one of our largest stockholders, filed a derivative shareholder action in Delaware Chancery Court against us, our board of directors, Stingray Group and Regalia Ventures for alleged breach of fiduciary duty in approving a recent above-market private placement equity transaction.

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Blue Yonder alleges that, because we assumed these liabilities, Blue Yonder can enforce the judgment against us. The judgment was in the amount of $509,119. On August 1, 2025, we filed an answer to the complaint and counterclaims against Blue Yonder for breach of contract. On January 30, 3026, the court granted Blue Yonder’s motion for judgment on the pleadings.

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The complaint alleges that we and our board of directors followed an inadequate process in evaluating the private placement transaction that we completed in November 2023 and that we and our board of directors entered into the transaction with an intent to dilute Ault’s ownership stake in us.

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The outcome of this matter is uncertain. Item 4. Mine Safety Disclosures. Not applicable. 36 PART II

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Ault Lending is seeking the following relief from the Court: (i) declarations that the defendant directors breached their fiduciary duties, and that Stingray Group and Regalia Ventures aided and abetted those breaches, (ii) rescinding our sale of shares to Stingray Group and Regalia Ventures, and (iii) awarding damages and attorney’s fees to Ault Lending.

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The defendants have retained Delaware counsel to represent them in this matter and we have filed a motion to dismiss the suit.

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OAC Flatiron & OAC Adelphi Litigation On July 26, 2024, OAC 111 Flatiron, LLC and OAC Adelphi, LLC, filed a civil action in the Supreme Court of the State of New York against MICS Nomad LLC, a subsidiary of ours, and us for alleged breach of lease, seeking monetary damages including unpaid rent, future unpaid rent, and other expenses related to the lease.

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The complaint alleges the defendants breached the lease in various material respects. On September 25, 2024, we entered into a Settlement Agreement for a full release and dismissal of the complaint within five business days of our payment of $250,000.

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We made full payment of the settlement amount on October 25, 2024, and OAC Flatiron and OAC Adelphi filed a discontinuance with prejudice with the court on October 29, 2024. Blue Yonder Litigation On February 11, 2025, Blue Yonder, Inc.

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In connection with the acquisition of the SemiCab business from SemiCab, Inc., we assumed a judgment against SemiCab in favor of Blue Yonder, Inc. associated with damages resulting from a breach of contract for IT subscription-based services. The judgment was in the amount of $509,119.

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The complaint alleges that because we assumed SemiCab, Inc.’s liabilities related to Blue Yonder, Blue Yonder can enforce the judgment against us. We have retained counsel to represent us in this matter. Item 4. Mine Safety Disclosures. Not applicable. 46 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeEquity Compensation Information The information required by this item regarding equity compensation plans is incorporated by reference to the information set forth in Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters of this report. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved]. 47 Item 7.

Item 5. Market For Registrant’s Common Equity And Related Stockholder Matters And Issuer Purchases Of Equity Securities. Market Information Our common stock is listed on the Nasdaq under the trading symbol “RIME.” Record Holders As of April 14, 2025, based upon information received from our transfer agent, there were 83 record holders of our outstanding common stock.

Item 5. Market For Registrant’s Common Equity And Related Stockholder Matters And Issuer Purchases Of Equity Securities. Market Information Our common stock is listed on the Nasdaq under the trading symbol “RIME.” Record Holders As of March 27, 2026, based upon information received from our transfer agent, there were 36 record holders of our outstanding common stock.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations. This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other parts of this report contain forward-looking statements that involve risks and uncertainties.

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All forward-looking statements included in this report are based on information available to us on the date hereof, and, except as required by law, we assume no obligation to update any such forward-looking statements.

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Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth herein under Item 1A. Risk Factors and elsewhere in this report. See also “Special Note Regarding Forward-Looking Statements” beginning on page 1 of this report.

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The following should be read in conjunction with our consolidated financial statements beginning on page F-1 of this report. Overview We are an AI technology and consumer electronics holding company with two primary business units – SemiCab and Singing Machine. SemiCab is an AI-enabled software logistics business operated through our subsidiary, SemiCab Holdings, LLC.

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Singing Machine is a home karaoke consumer products business that designs and distributes karaoke products globally to retailers and ecommerce partners through our subsidiary, The Singing Machine Company, Inc. SemiCab SemiCab is a cloud-based Collaborative Transportation Platform built to achieve the scalability required to predict and optimize loads and the use of trucks.

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To orchestrate collaboration across manufacturers, retailers, distributors, and their carriers, SemiCab uses real-time data from API-based load tendering and pre-built integrations with TMS and ELD partners. To build fully loaded round trips, SemiCab uses AI/ML techniques and advanced predictive optimization models. Since 2020, SemiCab has enabled major retailers, brands and transportation providers to address their transportation needs.

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We are a leading global karaoke and music entertainment company that specializes in the design and production of quality karaoke and music enabled consumer products for adults and children.

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Our products are among the most widely available karaoke products internationally. 48 Our mission is to “create joy through music.” To deliver on this mission, we are focused on a multi-prong approach. In the short-term, we seek to improve profitability by optimizing operations and continue to expand gross margins.

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In the mid-to-long-term, we seek to continue to expand our business into new verticals including automotive and connected-TV devices and grow our global distribution for our consumer karaoke products. Recent Corporate Events Change in Fiscal Year During 2023, our board of directors approved a change in our fiscal year end from March 31 to December 31.

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In accordance with SEC regulations, our consolidated financial statements are comprised of our balance sheets at December 31, 2024 and 2023 and our statements of operations, stockholders’ deficit and cash flows for the year ended December 31, 2024 and the nine-month period ended December 31, 2023.

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As a result, this Management’s Discussion and Analysis of Financial Condition and Results of Operations is comparing our results of operations for the full year ended December 31, 2024 with our results of operations for only the nine-month period ended December 31, 2023.

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In accordance with SEC rules and regulations, all share numbers and prices throughout this report and our consolidated financial statements reflect post-reverse stock split numbers. Strategy Our SemiCab and Singing Machine businesses are each in very different stages of development.

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Accordingly, our plans for growing each of them are very different. 49 SemiCab is an early-stage business that is not yet contributing a material amount of revenue to us. We intend to invest in our SemiCab business to develop and grow it into a significant revenue producer for us.

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This will involve investments in the continued research and development of its technology, the hiring of additional qualified employees, marketing and advertising initiatives, and back-office support. While SemiCab is a nascent business, it has already acquired some multinational consumer products companies as customers.

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We believe that as existing customers experience the benefits of our SemiCab logistics and distribution solutions, they will begin to increase their use of SemiCab.

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We also believe that SemiCab’s proven ability to improve truck utilization rates and improve trucking capacity without adding more trucks, drivers or driven miles will be of substantial interest to additional companies that can benefit from SemiCab. We acquired the United States component of our SemiCab business on July 3, 2024.

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We may make additional investments in companies operating in the AI distribution and logistics space that we believe are complementary to our SemiCab business. Our investments could involve an acquisition of the assets or equity of complementary companies or businesses, or could involve a strategic partnership or joint venture with complementary companies or businesses.

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We believe that additional investments could provide us with new AI logistics and distribution technologies, services and resources that we can implement across our entire SemiCab business, or could help us to more quickly expand our SemiCab footprint into other parts of the world.

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We are actively evaluating additional opportunities to expand our SemiCab business through investments in complementary AI logistics and distribution businesses and companies. In contrast to our SemiCab business, our Singing Machine business has been successfully operating worldwide for decades. Our karaoke products are well-known and established with retailers and consumers in the countries in which we sell them.

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Our plan for Singing Machine is to continue to focus on customer retention through loyalty programs for the online and brick-and-mortar retailers offering our products and compelling offer promotions, discounts, and special deals to attract customers and increase conversions.

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We also intend to reduce costs through overhead trimming and the use of new selling and marketing methodologies, leverage data analytics to better understand new trends in consumer preferences for our products, explore new product features and product offerings, and support our new and existing products with fun and exciting digital marketing and advertising initiatives.

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We may also explore entering new markets that may offer more profitable avenues for our products. Financial Results We generated net sales of $23,494,000 for the year ended December 31, 2024, compared to $29,198,000 for the nine-month transition period ended December 31, 2023.

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The decrease was primarily due to decreases in sales to Walmart that resulted from us not participating in Walmart’s national Black Friday promotion and decreases in sales due to the loss of retail shelf space at Target.

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Gross profit decreased $1,409,000 to $4,781,000, or 20.4% of net sales, for the year ended December 31, 2024 compared to $6,190,000, or 21.2% of net sales, for the nine-month transition period ended December 31, 2023.

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The decrease was due primarily to the decrease of $5,704,000 for net sales, partially offset by a corresponding decrease of $4,295,000 for cost of goods sold associated with less products being manufactured for sale.

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Our operating expenses increased $6,373,000 to $18,706,000 for the year ended December 31, 2024 from $12,333,000 for the nine-month transition period ended December 31, 2023, primarily due to an increase in general and administrative expenses incurred for the growth and development of our SemiCab business, a loss on the issuance of warrants incurred in connection with our December 2024 public offering of securities, legal and accounting expenses incurred in connection with the acquisition of SemiCab, Inc.’s business in July 2024 and the capital raising activities that we engaged in during 2024, and impairment of goodwill recorded in connection with the acquisition of the SemiCab, Inc.’s business.

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As a result, we incurred a loss from operations of $13,925,000 during the year ended December 31, 2024.

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We generated net losses available to common stockholders of $23,257,000, or $353.87 per share of common stock, for the year ended December 31, 2024, compared to $6,398,000, or $263.04 per share of common stock, for the nine-month transition period ended December 31, 2023. We had total assets of $18,302,000 and $27,715,000 at December 31, 2024 and 2023, respectively.

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Net cash used by operating activities was $8,556,000 for the year ended December 31, 2024 compared to net cash provided by operating activities of $411,000 for the nine- month transition period ended December 31, 2023. 50 The most significant contributors to the increase in our net loss available to common stockholders were a one-time, non-cash charge of $3,592,000 for impairment of goodwill and a one-time, non-cash loss of $8,889,000 on the issuance of warrants.

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We incurred a one-time, non-cash charge of $3,592,000 for impairment of goodwill in connection with our acquisition of SemiCab, Inc.’s business on July 3, 2024. We tested the recorded amount of goodwill for impairment on December 31, 2024 to see if the carrying amount of goodwill exceeded its carried value.

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We calculated a market-based valuation utilizing inputs classified as level 3 on the fair value hierarchy by multiplying one by projected 2025 revenue for the SemiCab, Inc.’s business and determined an impairment charge of $3,592,000 should be recorded as of December 31, 2024.

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We incurred a one-time, non-cash loss of $8,889,000 in connection with the public offering of securities that we completed on December 6, 2024.

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In that offering, we sold Series A warrants and Series B warrants that had certain features and were subject to certain contingencies that resulted in us having to record a warrant liability of $16,603,000 on our balance sheet and a loss on the issuance of warrants of $8,889,000 on our income statement.

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All of the contingencies that the Series A warrants were subject to were satisfied in January 2025, and of the Class B warrants were exercised in full in January 2025. As a result, we expect that the warrant liability will be reclassified as equity on our balance sheet for our fiscal quarter ended March 31, 2025.

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Outlook We expect net sales of our Singing Machine karaoke products to decrease over the next 12 months due to the negative impact on our business of recently implemented tariffs on our products manufactured in China.

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However, we expect revenue generated from our SemiCab business to increase over the next 12 months as we generate more business from our growing customer base in the United States. As a result, total net sales are expected to increase over the next 12 months.

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We expect gross profit to improve over the next 12 months as costs of goods sold remain at similar levels, subject to uncertainty surrounding the recently implemented tariffs on our products manufactured in China, and sales of our higher margin, newer streaming technology karaoke machines increase as a percentage of total net sales.

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We expect operating expenses to remain flat, if not decrease, over the next 12 months as we implement initiatives designed to reduce general and administrative expenses, particularly those related to marketing and advertising initiatives.

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The reductions achieved may be partially offset by legal and accounting expenses that we incur as we engage in additional capital-raising activities as needed to fund our business and expenses that we incur to fund the growth and development of our SemiCab business.

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Net loss available to common stockholders is expected to decrease substantially during the next 12 months primarily due to the fact that we do not expect to incur any non-cash losses in connection with the issuance of warrants requiring liability classification.

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We also expect net loss available to common stockholders to decrease due to the aforementioned improvements in gross profit that we expect to realize and the decreases in general and administrative expenses that we intend to generate. 51 Notwithstanding the foregoing, in the event we complete additional acquisitions of controlling or non-controlling financial interests in other complementary businesses or companies through mergers, acquisitions, joint ventures or other strategic initiatives, such as the acquisition of the United States component of our SemiCab business on July 3, 2024, our financial results will include and reflect the financial results of the target entities.

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Accordingly, the completion of any such transactions in the future may have a substantial beneficial or negative impact on our business, financial condition and results of operations.

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Critical Accounting Estimates This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our audited consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“GAAP”).

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The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

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When making these estimates and assumptions, we consider our historical experience, our knowledge of economic and market factors and various other factors, that we believe to be reasonable under the circumstances. Actual results may differ under different estimates and assumptions.

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The accounting estimates and assumptions discussed in this section are those that we consider to be the most critical to an understanding of our consolidated financial statements because they inherently involve significant judgments and uncertainties. For a more complete discussion of our accounting policies and procedures, see our consolidated financial statements beginning on page F-1 of this report.

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Reserve for Sales Returns and Returns Asset While we have no overstock return privileges in its vendor agreements with its customers, we do accept defective returns, warranty exchanges and overstock from seasonal customers.

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We estimate the sales value of goods to be returned from our allowance programs for goods returned from the customer for various reasons, whereby a reserve for sales returns is recorded based on historic return amounts, specific events as identified and management estimates. We estimate the net realizable value of these expected future sales returns.

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The net realizable value of these estimated returns is classified as return assets as part of current assets on the accompanying consolidated financial statements. 52 Inventory Inventory is comprised primarily of electronic karaoke equipment, microphones, and accessories, and are stated at the lower of cost or net realizable value, as determined using the first in, first out method.

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We reduce inventory on hand to its net realizable value on an item-by-item basis when it is apparent that the expected realizable value of an inventory item falls below its original cost. A charge to cost of sales results when the estimated net realizable value of specific inventory items declines below cost.

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Management regularly reviews our investment in inventories for such declines in value. Warrant Liability We classify the Series A and B warrants issued in our December 2024 public offering as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date.

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With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in our statement of operations. The fair value of these warrants requires significate estimates by management derived from unobservable inputs. Deviations from these estimates could result in a significate difference to our financial results.

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Recent Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023- 07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). This ASU requires disclosure of significant segment expenses that are regularly reviewed by the chief operating decision maker and included within each reported measure of segment profit or loss.

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The standard also requires disclosure of the composition of other segment items included in the measure of segment profit or loss that are not separately disclosed. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment.

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The ASU is effective for our Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. We adopted ASU 2023-07 effective December 31, 2024 with additional disclosures detailed in the subsequent notes. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures .

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This ASU is intended to enhance the usefulness of income tax disclosures by requiring entities to disclose specific rate reconciliations, amount of income taxes separate by federal and individual tax jurisdictions, and the amount of income (loss) from continuing operations before income tax expense (benefit) disaggregated between federal, state and foreign.

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ASU 2023-09 is effective for us for our fiscal year beginning January 1, 2025, with early adoption permitted. We are currently evaluating the impact of adopting this standard on our consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) .

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This ASU requires disclosure on an annual and interim basis, in the notes to the financial statements, of disaggregated information about specific categories underlying certain income statement expense line items. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods with annual reporting periods beginning after December 15, 2027, on a retrospective basis.

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We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-04, Debt – Debt with Conversion and Other Options (Subtopic 470-20) . This ASU clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

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ASU 2024-04 is effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in Update 2020-06. Adoption can be on a prospective or retrospective basis.

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We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

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We reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to our operations or that no material effect is expected on our consolidated financial statements as a result of future adoption. 53 Comparison of the Year Ended December 31, 2024 and the Nine-Month Transition Period Ended December 31, 2023 Net Sales Net sales consist primarily of sales of our Singing Machine karaoke products.

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We generated only a minimal amount of sales from our SemiCab business. Net sales decreased $5,704,000 to $23,494,000 for the year ended December 31, 2024 compared to $29,198,000 for the nine-month transition period ended December 31, 2023.

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The decrease in net sales was due primarily to decreases of $7,700,000 in sales to Walmart that resulted from us not participating in Walmart’s national Black Friday promotion and $1,200,000 in sales due to the loss of retail shelf space at Target.

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The decrease of $8,900,000 from those two customers was partially offset by an increase of $3,196,000 in sales to Costco and other customers. We expect net sales of our Singing Machine karaoke products to decrease over the next 12 months due to the negative impact on our business of recently implemented tariffs on our products manufactured in China.

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However, we expect revenue generated from our SemiCab business to increase over the next 12 months as we generate more business from our growing customer base. As a result, total net sales are expected to increase over the next 12 months.

Removed

Cost of Goods Sold Cost of goods sold consists primarily of costs for raw materials and the manufacturing of our Singing Machine karaoke products. We incurred only a minimal amount of costs in connection with our SemiCab business.

Removed

Cost of goods sold decreased $4,295,000 to $18,713,000 for the year ended December 31, 2024 compared to $23,008,000 for the nine-month transition period ended December 31, 2023. The decrease in cost of goods sold was due primarily to a decrease of $3,553,000 for product manufacturing costs.

Removed

Our decrease in net sales resulted in a corresponding decrease in products manufactured, resulting in lower manufacturing costs. The decrease was also due to a non-cash inventory impairment charge of $1,827,000 that we recorded during the nine-month transition period ended December 31, 2023 that negatively impacted our cost of goods sold during the nine-month transition period ended December 31, 2023.

Removed

This was partially offset by an increase of $1,663,000 for our inventory reserve. We expect cost of goods sold to remain at similar levels over the next 12 months, subject to uncertainty surrounding the recently implemented tariffs on our products manufactured in China.

Removed

Gross Profit Gross profit decreased $1,409,000 to $4,781,000, or 20.4% of net sales, for the year ended December 31, 2024 compared to $6,190,000, or 21.2% of net sales, for the nine-month transition period ended December 31, 2023.

Removed

The decrease in gross profit was primarily due to a decrease of $5,704,000 for net sales, partially offset by a decrease of $4,295,000 in cost of goods sold. This decrease was partially offset by an increase in higher margin sales of newer streaming technology karaoke machines as a percentage of total net sales.

Removed

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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2024 filing

2025 filing

Biggest changeItem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and in our consolidated financial statements beginning on page F-1 of this report. (2) On September 5, 2024, Messrs.

Biggest changeItem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other parts of this report contain forward-looking statements that involve risks and uncertainties.

Removed

Turner, Cragun and Nisser resigned from our board of directors. 70 We compensate the members of our board of directors as follows: ● An annual cash payment of $15,000 for each completed full year of service or prorated for a partial year. ● An annual stock grant of stock equivalent in value to $10,000 for each completed full year of service or prorated for a partial year.

Added

Removed

The stock price at grant will be determined at the closing price on the day of the annual stockholder meeting. ● A $1,000 fee for each board meeting and annual meeting attended.

Added

Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth herein under Item 1A. Risk Factors and elsewhere in this report. See also “Disclosure Regarding Forward-Looking Statements” beginning on page 1 of this report.

Removed

Committee meetings and telephone board meetings will be compensated for with a $500 fee. ● All expenses are reimbursed for attending board, committee and annual meetings or when their presence at a location away from home is requested. 401(k) Plan Effective January 1, 2001, we adopted a voluntary 401(k) plan.

Added

The following should be read in conjunction with our consolidated financial statements beginning on page F-1 of this report. Overview We are an AI technology company focused on the growth and development of SemiCab.

Removed

All employees with at least 90 days of service are eligible to participate in our 401(k) plan. We make a matching contribution of 100% of the first three percent of salary deferral contributions, plus 50% of the next two percent of salary deferral contributions, for each payroll period. The matching contributions that we make are vested in full immediately.

Added

SemiCab is an AI-enabled software logistics and distribution business that utilizes our SemiCab technology platform to enable retailers, brands and transportation providers to address common supply chain problems globally. We operate our SemiCab business through our subsidiary, SemiCab Holdings. Prior to August 1, 2025, we had a second business, which was Singing Machine.

Removed

Policies and Practices related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information We have a strict policy of not granting securities to our executive officers, directors and employees when material nonpublic information is known or a material transaction is anticipated to occur.

Added

Singing Machine was a home karaoke consumer products business that designed and distributed karaoke products to retailers and ecommerce partners globally through our subsidiary, The Singing Machine Company, Inc. We sold our Singing Machine business on August 1, 2025. Accordingly, we no longer own or operate the Singing Machine business.

Removed

The timing of equity award grants is determined with consideration to a variety of factors, including but not limited to, the achievement of pre-established performance targets, market conditions and internal milestones. We do not follow a predetermined schedule for the granting of equity awards.

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SemiCab SemiCab is an AI-enabled, cloud-based collaborative transportation platform built to achieve the scalability required to predict and optimize loads and the use of trucks. To orchestrate collaboration across manufacturers, retailers, distributors, and their carriers, SemiCab uses real-time data from API-based load tendering and pre-built integrations with TMS and ELD partners.

Removed

Instead, each grant is considered on a case-by-case basis to align with our strategic objectives and to ensure the competitiveness of our compensation packages. In determining the timing and terms of an equity award, our board of directors and compensation committee consider material nonpublic information to ensure that such grants are made in compliance with applicable laws and regulations.

Added

To build fully loaded round trips, SemiCab uses AI/ML techniques and advanced predictive optimization models. Since 2020, SemiCab has enabled major retailers, brands and transportation providers to address their transportation needs. SemiCab’s Orchestrated Collaboration™ AI model has proven to increase transportation capacity, improve asset utilization, reduce empty miles, lower logistics costs, and provide visibility into the entire transportation network.

Removed

Procedures utilized by our board of directors and compensation committee to prevent the improper use of material nonpublic information in connection with the granting of equity awards include consultation with legal counsel and, where appropriate, the delay of the grant of applicable equity awards until the public disclosure of such material nonpublic information has been completed.

Added

Models show that our SemiCab technology has the capability of reducing costs through optimization. Additionally, our SemiCab technology has the potential to play a key role in the improved sustainability model. Based on our proven ability to improve truck utilization rates, this could result in a dramatic reduction in the carbon footprint of the industry.

Removed

We are committed to maintaining transparency in its executive compensation practices and to making equity awards in a manner that is not influenced by the timing of the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.

Added

The optimization of existing truck utilization can add trucking capacity without adding more trucks, drivers or driven miles which addresses common problems plaguing the industry like severe driver shortage and road congestion.

Removed

We regularly review our policies and practices related to equity awards to ensure that they meet the evolving standards of corporate governance and continue to serve the best interests of us and our stockholders.

Added

Trucking optimization could also reduce carbon emissions attributable to road freight. 38 Singing Machine Through Singing Machine, we engaged in the development, marketing, and sale of consumer karaoke audio equipment, accessories, and musical recordings.

Removed

During the year ended December 31, 2024, no securities were granted to our named executive officers within four business days prior to, or one business day following, the filing or furnishing of a periodic or current report by us that disclosed material nonpublic information. 71

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We were a leading global karaoke and music entertainment company that specializes in the design and production of quality karaoke and music enabled consumer products for adults and children. Our products were among the most widely available karaoke products internationally. We sold our Singing Machine business on August 1, 2025.

Added

Accordingly, we no longer own or operate the Singing Machine business line. Strategy We intend to invest in our SemiCab AI logistics and distribution business to develop and grow it into a significant revenue producer for us.

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This will involve investments in the continued research and development of our technology, the hiring of additional qualified employees, marketing and advertising initiatives, and back-office support. While this is a nascent business, it has already acquired several large, fast-moving consumer products companies as customers.

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We believe that as existing customers experience the benefits of our SemiCab logistics and distribution solutions, they will begin to increase their use of our services.

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We also believe that our ability to improve truck utilization rates and improve trucking capacity without adding more trucks, drivers or driven miles will be of substantial interest to additional companies that can benefit from our service.

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We acquired the United States component of our SemiCab business on July 3, 2024 and acquired the India component of our SemiCab business on May 2, 2025. We may make additional investments in companies operating in the AI distribution and logistics space that we believe are complementary to our business.

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Our investments could involve an acquisition of the assets or equity of complementary companies or businesses or could involve a strategic partnership or joint venture with complementary companies or businesses or digital asset treasury strategies.

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We believe that additional investments could provide us with new AI logistics and distribution technologies, services and resources that we can implement across our entire business or could help us to more quickly expand our footprint into other parts of the world.

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We are actively evaluating additional opportunities to expand our SemiCab business through investments in complementary AI logistics and distribution businesses and companies. Financial Results We generated net sales of $4,391,000 for the year ended December 31, 2025, compared to $297,000 for the year ended December 31, 2024.

Added

The increase in revenue was due primarily to the addition of net sales generated by our SemiCab business resulting from our acquisition of SMCB on May 2, 2025. Cost of sales was $5,706,000 for the year ended December 31, 2025, compared to $491,000 for the year ended December 31, 2024.

Added

The increase in cost of sales was due primarily to the addition of freight, handling and servicing costs incurred by SMCB resulting from our acquisition of SMCB on May 2, 2025. 39 Our operating expenses were $6,629,000 for the year ended December 31, 2025, compared to $8,248,000 for the year ended December 31, 2024.

Added

The decrease in operating expenses was due primarily to a decrease of $3,592,000 related to the impairment of goodwill recorded in connection with the acquisition of SemiCab, Inc’s business during the year ended December 31, 2024, partially offset by the increase in general and administrative expenses incurred in the growth and development of the SemiCab business during the year ended December 31, 2025.

Added

We incurred a net loss from continuing operations of $15,210,000 for the year ended December 31, 2025, compared to $18,884,000 for the year ended December 31, 2024.

Added

The most significant contributors to the decrease in the net loss from continuing operations were decreases in non-cash charges of $3,592,000 for impairment of goodwill and $8,889,000 for loss on the issuance of warrants.

Added

This decrease was partially offset by an increase of $6,468,000 for non-cash charges for changes in the fair value of warrants liability and increases in general and administrative expenses incurred in the growth and development of the SemiCab business.

Added

We generated net loss from continuing operations of $15,210,000, or $5.86 per share of common stock, for the year ended December 31, 2025, compared to $18,884,000, or $270.44 per share of common stock, for the year ended December 31, 2024.

Added

The decrease was due primarily to an increase of $4,094,000 for net sales and a decrease of $3,592,000 for impairment of goodwill. This was partially offset by an increase of $5,215,000 for cost of sales. We had total assets of $12,724,000 and $18,302,000 at December 31, 2025, and 2024, respectively.

Added

Net cash used by operating activities attributable to continuing operations was $7,309,000 for the year ended December 31, 2025, compared to $3,985,000 for the year ended December 31, 2024.

Added

Outlook We expect net sales to increase substantially over the next 12 months as we generate more business through our growing customer base in India and as we begin to generate business in the United States and Europe.

Added

We expect costs of sales to increase over the next 12 months in connection with the increase in net sales that we expect to generate from our SemiCab business. We expect operating expenses and net loss available to common stockholders to increase over the next 12 months as we continue to fund the growth and development of our SemiCab business.

Added

Notwithstanding the foregoing, in the event we complete additional acquisitions of controlling or non-controlling financial interests in other complementary businesses or companies through mergers, acquisitions, joint ventures or other strategic initiatives, such as the acquisition of the United States component of our SemiCab business on July 3, 2024 and the acquisition of the India component of our SemiCab business on May 2, 2025, our financial results will include and reflect the financial results of the target entities.

Added

Accordingly, the completion of any such transactions in the future may have a substantial beneficial or negative impact on our business, financial condition and results of operations. 40 Critical Accounting Estimates This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our audited consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“GAAP”).

Added

Revenue Recognition We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers. All revenue is generated from contracts with customers. We recognize revenue when services are performed for the customer in an amount, referred to as the transaction price, that reflects the consideration to which we are expected to be entitled in exchange for those services.

Added

We determine revenue recognition utilizing the following five steps: (i) identification of the contract with a customer; (ii) identification of the performance obligations in the contract (promised services that are distinct); (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as, we transfer control of the service for each performance obligation.

Added

Our performance obligations are established when a customer submits a purchase order notification and we accept the order. We identify performance obligations as the delivery of the requested service at the location specified in the customer’s contract and/or purchase order.

Added

Revenue from sales of services is recognized at the point in time when we transfer control to the customer, typically at the time when the services are performed in full, at which time there are no further performance obligations remaining. Our contracts with customers consist of one performance obligation, which is the performance of services.

Added

Our contracts have no financing elements. Payment terms are generally less than 90 days and have no further contract asset or liability obligations once control of the service is transferred to the customer. Revenue is recorded in the amount of consideration we expect to receive for the sale of the service.

Added

We utilize independent contractors and third-party carriers to perform transportation services in connection with our SemiCab business. In accordance with ASC Topic 606, Revenue Recognition: Principal Agent Considerations, we evaluate the terms of agreements with customers and vendors to determine whether we act as principal or agent in each arrangement.

Added

This assessment focuses on whether control of the transportation service is obtained prior to transferring the service to the customer. Based on this evaluation of the control model, we concluded that it acts as the principal and, accordingly we recognize revenue on a gross basis.

Added

In the event we act as an agent, such revenue will be recognized net of the cost of purchased transportation. All revenue earned from contracts are presented net of discounts, allowances, and applicable taxes 41 Warrant Liability We classify the Series A and B warrants issued in our December 2024 public offering as a liability at its fair value.

Added

This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in our statement of operations. The fair value of these warrants requires significate estimates by management derived from unobservable inputs.

Added

Deviations from these estimates could have a significant affect on our financial results. Recent Accounting Pronouncements In May 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810).

Added

This ASU provides that a reporting entity involved in a business combination effected primarily by the exchange of equity interests must consider the factors in Accounting Standards Codification (“ASC”) 805-10-55-12 through 55-15 to determine which entity is the accounting acquirer regardless of whether the legal acquiree is a Variable Interest Entity (“VIE”).

Added

The amendments in ASU 2025-03 must be applied prospectively to any business combination that occurs after the initial adoption date. ASU 2025-03 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

Added

In May 2025, the FASB issued ASU 2025-04, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) , which clarifies the guidance in both ASC 718 and ASC 606 on the accounting for share-based payment awards that are granted by an entity as consideration payable to its customer.

Added

The ASU is intended to reduce diversity in practice and improve existing guidance, primarily by revising the definition of a “performance condition” and eliminating a forfeiture policy election for service conditions associated with share-based consideration payable to a customer.

Added

In addition, the ASU clarifies that the guidance in ASC 606 on the variable consideration constraint does not apply to share-based consideration payable to a customer “regardless of whether an award’s grant date has occurred” (as determined under ASC 718). ASU 2025-04 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years.

Added

Early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

Added

In July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326), which provides a practical expedient for measuring expected credit losses on current receivables and contract assets arising under Topic 606, Revenue from Contracts with Customers .

Added

The ASU allows entities to assume that the macroeconomic conditions existing at the balance sheet date will remain unchanged over the remaining life of those assets. The amendments are effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted.

Added

We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. 42 In August 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40). This ASU simplifies the accounting for costs incurred in the development of internal-use software by removing the concept of multiple project stages.

Added

Under the new guidance, capitalization begins when management authorizes and commits funding to the project and it is probable that the project will be completed and the software placed into service. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim periods within those years. Early adoption is permitted.

Added

We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815). This ASU clarifies the scope of derivative accounting for certain contracts and provides guidance on share-based, non-cash consideration received from a customer under Topic 606.

Added

The amendments expand a scope exception for contracts whose underlying is based on an entity’s own operations or activities, reducing the number of arrangements that qualify as derivatives. The ASU also clarifies the accounting for share-based consideration received from a customer. The amendments are effective for fiscal years beginning after December 15, 2026, including interim periods within those years.

Added

Early adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11) .

Added

The purpose of this ASU is to improve the guidance of Topic 270, Interim Reporting, by providing clarity on the current interim reporting requirements. This amendment also provides additional guidance on what disclosures should be provided in interim reporting periods.

Added

The amendments in this ASU also add to Topic 270 a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the reporting entity. The amendments in this ASU are effective for all public companies for interim reporting periods within annual reporting periods beginning after December 31, 2027.

Added

Early adoption is permitted. The amendments in this ASU can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

Added

We reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to our operations or that no material effect is expected on our consolidated financial statements as a result of future adoption. 43 Comparison of the Years Ended December 31, 2025 and 2024 Net Sales Net sales consist of sales generated by our SemiCab business.

Added

Net sales increased $4,094,000 to $4,391,000 for the year ended December 31, 2025, compared to $297,000 for the year ended December 31, 2024. The increase in net sales was due primarily to the addition of net sales generated by SMCB, which we acquired on May 2, 2025.

Added

We expect net sales to increase over the next 12 months as we generate more business through our growing customer base in India and as we begin to generate business in the United States and Europe. Cost of Sales Cost of sales consists primarily of freight, handling and servicing costs that we incur in connection with our SemiCab business.

Added

Cost of sales increased $5,215,000 to $5,706,000 for the year ended December 31, 2025, compared to $491,000 for the year ended December 31, 2024. The increase in cost of sales was due primarily to the addition of freight, handling and servicing costs incurred by SMCB, which we acquired on May 2, 2025.

Added

We expect costs of sales to increase over the next 12 months in connection with the increase in net sales that we expect to generate from our SemiCab business. Operating Expenses Operating expenses consist of selling expenses, general and administrative expenses, and impairment of goodwill.

Added

Selling Expenses Selling expenses consist primarily of marketing and advertising activities that we engage in from time to time in connection with our SemiCab business. Selling expenses were $4,000 for the year ended December 31, 2025. We did not incur any selling expenses for the year ended December 31, 2024.

Added

We expect selling expenses to increase substantially over the next 12 months as we being to devote more resources to marketing and advertising activities to support the growth of our SemiCab business in India, the United States and Europe. General and Administrative Expenses General and administrative expenses consist primarily of payroll expenses, legal and accounting expenses, and other corporate expenses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−1 removed1 unchanged

2024 filing

2025 filing

Biggest changeOur audited consolidated financial statements at and for the year ended December 31, 2024 and the nine-month period ended December 31, 2023, respectively, begin on page F-1 of this report located immediately after the signature page hereto. As a smaller reporting company, we are not required to provide supplementary financial information. 59 Item 9.

Biggest changeOur audited consolidated financial statements at and for the years ended December 31, 2025 and 2024, respectively, begin on page F-1 of this report located immediately after the signature page hereto. As a smaller reporting company, we are not required to provide supplementary financial information. 48

Removed

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.

Top changes in Algorhythm Holdings, Inc.'s 2025 10-K

Item 1. Business

Item 1A. Risk Factors

Item 1C. Cybersecurity

Item 2. Properties

Item 3. Legal Proceedings

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Other RIME 10-K year-over-year comparisons