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ALGORHYTHM HOLDINGS, INC. DE 3652 95-3795478 6301 NW 5th Way Suite 2900 Fort Lauderdale FL 33309 (954) 596-1000 Gary Atkinson 6301 NW 5th Way Suite 2900 Fort Lauderdale FL 33309 (954) 596-1000 Non-accelerated Filer true false This registration statement contains two prospectuses, as set forth below. ● Resale Prospectus. A prospectus to be used for the resale by the selling stockholder (the “Selling Stockholder”) set forth in the section of the resale prospectus (the “Resale Prospectus”) entitled “Selling Stockholder” of up to 10,095,694 shares of common stock, $0.01 par value, of Algorhythm Holdings, Inc., a Delaware corporation (the “Company”). ● Public Offering Prospectus. A prospectus to be used for the public offering (the “Public Offering Prospectus”) of up to 1,133,652 shares of common stock issuable upon the exercise of outstanding Series A warrants (the “Series A Warrants”). The Public Offering Prospectus is substantively identical to the Resale Offering Prospectus, except for the following principal points: ● they contain different outside and inside front covers and back covers; ● they contain different “Offering” summaries in the “Prospectus Summary” section; ● they contain different “Summary of the Offering” sections; ● within the “Risk Factors” sections, the “Risks Related to this Offering and the Selling Stockholder” and “Risks Related to the Transactions Under the Securities Purchase Agreement” sections have been deleted from the Public Offering Prospectus and a “Risks Related to This Offering” section has been added in their place in the Public Offering Prospectus; ● they contain different “Use of Proceeds” sections; ● a “Capitalization” section that does not appear in the Resale Prospectus has been added to the Public Offering Prospectus; ● the “Selling Stockholders” section has been removed from the Public Offering Prospectus; and ● the “Plan of Distribution” section from the Resale Prospectus has been deleted from the Public Offering Prospectus and a “Public Offering Plan of Distribution” has been added in its place in the Public Offering Prospectus. The Company has included in this registration statement a set of alternate pages after the back cover page of the Resale Prospectus (the “Alternate Pages”) to reflect the foregoing differences in the Public Offering Prospectus as compared to the Resale Prospectus. The Resale Prospectus will include the Alternate Pages and will be used for the resale of shares of common stock by the Selling Stockholder. The Public Offering Prospectus will be substantively identical to the Resale Prospectus except for the addition or substitution of the Alternate Pages, and such other changes as may be necessary to clarify references to the public offering or the resale offering and will be used for the public offering by the Company.

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Note 1 – Nature of Business Algorhythm Holdings, Inc. (f/k/a The Singing Machine Company, Inc.) (the “Company”) is an artificial intelligence (“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 the Company’s subsidiary, SemiCab Holdings, LLC. Singing Machine is a home karaoke consumer products business that designs and distributes karaoke products globally to retailers and ecommerce partners through the Company’s subsidiary, The Singing Machine Company, Inc. The Company’s operations include its 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 (“SMC”), 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 its 80%-owned subsidiaries, SemiCab Holdings, LLC, a Nevada limited liability company (“SemiCab Holdings”) and SMCB Solutions Private Limited, an Indian Company (“SMCB”). Effective September 5, 2024, the Company’s Certificate of Incorporation was amended to change the name of the Company from “The Singing Machine Company, Inc.” to “Algorhythm Holdings, Inc.” On January 13, 2025, the Company’s stockholders voted to authorize the Company’s board of directors to effect a reverse stock split of the Company’s outstanding shares of common stock at a specific ratio within a range of 1-for-10 to a maximum of 1-for-250 and to amend the Company’s certificate of incorporation to increase the number of authorized common stock from 100,000,000 to 800,000,000 shares. On January 14, 2025, the Company’s board of directors approved a reverse stock split of 1-for-200 ratio and approved the filing of a certificate of amendment to the Company’s certificate of incorporation to effect the reverse stock split and to increase the Company’s authorized shares of common stock from 100,000,000 to 800,000,000. The reverse stock split took effect on February 10, 2025. All current and prior year balances have been adjusted to reflect the reverse stock split. On May 2, 2025, the Company and SemiCab Holdings entered into an equity purchase agreement with SemiCab Inc. pursuant to which: (i) SemiCab Holdings purchased <span id="xdx_906_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_c20250502__20250502__us-gaap--BusinessAcquisitionAxis__custom--SemiCabHoldingsMember__us-gaap--TypeOfArrangementAxis__custom--EquityPurchaseAgreementMember_zynkXDE4XBMd" title="Stock issued during period shares acquisitions">9,999 shares of the issued and outstanding equity shares, Rs. <span id="xdx_90F_eus-gaap--CommonStockParOrStatedValuePerShare_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SemiCabHoldingsMember__us-gaap--TypeOfArrangementAxis__custom--EquityPurchaseAgreementMember_zO861pP79JE1" title="Common stock, par value">10 par value, of SMCB, representing 99.99% of the issued and outstanding equity shares of SMCB, for $<span id="xdx_904_eus-gaap--DebtInstrumentFaceAmount_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SemiCabIncMember__us-gaap--TypeOfArrangementAxis__custom--EquityPurchaseAgreementMember_zEnh8dXSYx4k">1,750,000, the payment of which was evidenced by the issuance of a promissory note by the Company to the SemiCab, Inc., and (ii) the Company purchased the <span id="xdx_905_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_dp_uPure_c20250502__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--SemiCabIncMember__us-gaap--TypeOfArrangementAxis__custom--EquityPurchaseAgreementMember_zRtUn7q03AMh" title="Membership interest percentage">20% membership interest in SemiCab Holdings then held by SemiCab, Inc. for aggregate consideration consisting of <span id="xdx_90B_eus-gaap--NoncashOrPartNoncashAcquisitionNoncashFinancialOrEquityInstrumentConsiderationSharesIssued1_c20250502__20250502__us-gaap--BusinessAcquisitionAxis__custom--SemiCabIncMember__us-gaap--TypeOfArrangementAxis__custom--EquityPurchaseAgreementMember_zA3Fgex74S9a" title="Aggregate consideration consisting shares">119,742 shares of the Company’s common stock. The acquisition was completed on May 2, 2025. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

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the Company’s stockholders voted to authorize the Company’s board of directors to effect a reverse stock split of the Company’s outstanding shares of common stock at a specific ratio within a range of 1-for-10 to a maximum of 1-for-250 and to amend the Company’s certificate of incorporation to increase the number of authorized common stock from 100,000,000 to 800,000,000 shares. On January 14, 2025, the Company’s board of directors approved a reverse stock split of 1-for-200 ratio and approved the filing of a certificate of amendment to the Company’s certificate of incorporation to effect the reverse stock split and to increase the Company’s authorized shares of common stock from 100,000,000 to 800,000,000. The reverse stock split took effect on February 10, 2025. All current and prior year balances have been adjusted to reflect the reverse stock split.

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Note 2 – Liquidity, Going Concern and Management Plans Going Concern Analysis As of June 30, 2025, the Company’s cash balance was $1,134,000. This will not be sufficient to fund the Company’s planned operations for at least one year after the date the condensed consolidated financial statements are issued. The Company has a recent history of recurring operating losses and decreases in working capital. These factors create substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date that the Company’s condensed consolidated financial statements are issued. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the condensed consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern and that the realization of assets and satisfaction of liabilities and commitments will continue in the ordinary course of business. The Company plans to finance operations by obtaining additional capital through external sources of financing. It may attempt to obtain additional capital through the sale of equity securities or the issuance of debt securities. The Company has not made arrangements to obtain additional capital and can provide no assurance that additional financing will be available in an amount or on terms acceptable to the Company, if at all. In making this assessment, management performed a comprehensive analysis of the Company’s current circumstances including its financial position, cash flow and outflow forecasts, and obligations and debts. Although management has a recent history of successful capital raises, the analysis used to determine the Company’s ability to continue as a going concern does not include cash resources outside the Company’s direct control that management expects to be available within the next 12 months.

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Note 3 – Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025 and 2024 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and disclosures required by US GAAP for complete consolidated financial statements. In the opinion of management, the condensed consolidated financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair presentation of the condensed consolidated financial position and the condensed consolidated results of operations. The condensed consolidated results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet as of June 30, 2025 and condensed financial statement information for the three and six months ended June 30, 2025 and 2024 are unaudited, whereas the condensed consolidated balance sheet as of December 31, 2024 is derived from the audited consolidated balance sheet as of that date. The condensed consolidated financial statements and notes hereto should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2024. There have been no changes to the Company’s significant accounting policies as disclosed on the Company’s annual report on Form 10-K for the year ended December 31, 2024. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 Segment Reporting Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting (“ASC 280”), the Company’s Chief Executive Officer serves as the Company’s Chief Operating Decision Maker (“CODM”) for the purposes of ASC 280. The CODM concluded that the Company operates two reportable segments. One segment consists of its SemiCab business and the other segment consists of its Singing Machine business. The CODM manages the Company’s operations and business separately for each operating segment and uses net loss to allocate resources, making operating decisions and evaluating financial performance. The CODM also uses net loss, along with non-financial inputs and qualitative information, to evaluate the Company’s performance, establish compensation, monitor budget versus actual results, and decide the level of investment in various operating activities and other capital allocation activities. See Note 14 – Segment Information and Revenue Disaggregation – Segment Information. Recent Accounting Pronouncements In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the usefulness of income tax disclosures by requiring entities to disclose specific rate reconciliations, the amount of income taxes separated by federal and individual tax jurisdictions, and the amount of income (loss) from continuing operations before income tax expense (benefit) disaggregated among federal, state and foreign. ASU 2023-09 is effective for the Company for its fiscal year beginning January 1, 2025. The adoption of ASU 2023-09 did not have a material impact on the Company’s 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). 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. The Company is currently evaluating the impact of this standard on its 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. 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 ASU 2020-06. Adoption can be on a prospective or retrospective basis. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810). 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 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”). 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. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. 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. 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. 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. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

Basis of Presentation The accompanying unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025 and 2024 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and disclosures required by US GAAP for complete consolidated financial statements. In the opinion of management, the condensed consolidated financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair presentation of the condensed consolidated financial position and the condensed consolidated results of operations. The condensed consolidated results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet as of June 30, 2025 and condensed financial statement information for the three and six months ended June 30, 2025 and 2024 are unaudited, whereas the condensed consolidated balance sheet as of December 31, 2024 is derived from the audited consolidated balance sheet as of that date. The condensed consolidated financial statements and notes hereto should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2024. There have been no changes to the Company’s significant accounting policies as disclosed on the Company’s annual report on Form 10-K for the year ended December 31, 2024. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

Segment Reporting Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting (“ASC 280”), the Company’s Chief Executive Officer serves as the Company’s Chief Operating Decision Maker (“CODM”) for the purposes of ASC 280. The CODM concluded that the Company operates two reportable segments. One segment consists of its SemiCab business and the other segment consists of its Singing Machine business. The CODM manages the Company’s operations and business separately for each operating segment and uses net loss to allocate resources, making operating decisions and evaluating financial performance. The CODM also uses net loss, along with non-financial inputs and qualitative information, to evaluate the Company’s performance, establish compensation, monitor budget versus actual results, and decide the level of investment in various operating activities and other capital allocation activities. See Note 14 – Segment Information and Revenue Disaggregation – Segment Information.

Recent Accounting Pronouncements In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the usefulness of income tax disclosures by requiring entities to disclose specific rate reconciliations, the amount of income taxes separated by federal and individual tax jurisdictions, and the amount of income (loss) from continuing operations before income tax expense (benefit) disaggregated among federal, state and foreign. ASU 2023-09 is effective for the Company for its fiscal year beginning January 1, 2025. The adoption of ASU 2023-09 did not have a material impact on the Company’s 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). 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. The Company is currently evaluating the impact of this standard on its 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. 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 ASU 2020-06. Adoption can be on a prospective or retrospective basis. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810). 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 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”). 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. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. 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. 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. 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. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

Note 4 – Variable Interest Entities The Company determined that SMCB was a VIE because the Company provided financial support to SMCB in the form of a loan agreement to fund SMCB’s operations. The Company further determined that it was not the primary beneficiary of SMCB because the Company did not have the power to direct or control SMCB’s significant activities related to its business. Accordingly, the Company had not consolidated SMCB’s results of operations and financial position in its condensed consolidated financial statements prior to May 2, 2025. On May 2, 2025, the Company and SemiCab Holdings acquired <span id="xdx_908_eus-gaap--MinorityInterestOwnershipPercentageByParent_iI_dp_c20250502__srt--OwnershipAxis__custom--SemiCabIncMember_z2y3IqJ40UZ6" title="Common stock issued for purchase ownership percentage">99.99% of the equity shares of SMCB from SemiCab, Inc. As a result, on May 2, 2025, the Company consolidated SMCB’s results of operations and financial position in its condensed consolidated financial statements. A discussion of this transaction is set forth herein in Note 17 – Acquisition of SMCB ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

0.9999

Note 5 – Property and Equipment, Intangible Assets and Goodwill A summary of the Company’s property and equipment at June 30, 2025 and December 31, 2024 is as follows: Schedule of Property and Equipment <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" style="text-align: center">Useful</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_491_20250630_zjkqNlQMZbfa" style="text-align: center">June 30,</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_494_20241231_zVF4ukPIIjgb" style="text-align: center">December 31,</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Life</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_404_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerAndOfficeEquipmentMember_zkqLeo6nEukh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">Computer and office equipment</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right"><span id="xdx_90C_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20250630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerAndOfficeEquipmentMember__srt--RangeAxis__srt--MinimumMember_zcktzxPeL7Gk" title="Useful life">5-<span id="xdx_90B_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20250630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerAndOfficeEquipmentMember__srt--RangeAxis__srt--MaximumMember_zNFBRgCkOTgf" title="Useful life">7 years</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">462,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">412,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_zmTkpbS7c7q6" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Furniture and fixtures</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">7 years</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">107,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">107,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MoldsAndToolingMember_z9e1UM0d48v5" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Molds and tooling</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"><span id="xdx_90F_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20250630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MoldsAndToolingMember__srt--RangeAxis__srt--MinimumMember_zBYlFbGpM7K2" title="Useful life">3-<span id="xdx_90F_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20250630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MoldsAndToolingMember__srt--RangeAxis__srt--MaximumMember_zOwNcV3WDOCf" title="Useful life">5 years</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,312,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,297,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--PropertyPlantAndEquipmentGross_iI_maPPAENzUMn_znsrHsuFadHk" style="vertical-align: bottom; background-color: White"> <td>Property and equipment gross</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,881,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,816,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iI_msPPAENzUMn_zTCG5UyyUcvk" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Less: accumulated depreciation</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,629,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,532,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--PropertyPlantAndEquipmentNet_iTI_mtPPAENzUMn_zNG56S8WOJub" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Property and equipment net</td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">252,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">284,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Depreciation expense was $31,000 and $64,000 for the three and six months ended June 30, 2025, respectively, and $53,000 and $105,000 for the three and six months ended June 30, 2024, respectively. <p id="xdx_89C_eus-gaap--ScheduleOfAcquiredFiniteLivedIntangibleAssetsByMajorClassTextBlock_zQXEeRdWGBJc" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-indent: 0.5in; text-align: justify">A summary of the Company’s intangible assets at June 30, 2025 and December 31, 2024 is as follows: Schedule of Intangible Assets <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" style="text-align: center">Useful</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_49A_20250630_zGvDr09Mn8N7" style="text-align: center">June 30,</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_492_20241231_zRFNJgoP07T2" style="text-align: center">December 31,</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Life</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_40A_eus-gaap--FiniteLivedCustomerRelationshipsGross_iI_maFLIAGz9zC_zDzZiDtbL5i2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">Customer relationships</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right"><span id="xdx_90E_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20250630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--CustomerRelationshipsMember__srt--RangeAxis__srt--MinimumMember_z5si7mLTadZb" title="Useful life">5-<span id="xdx_900_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20250630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--CustomerRelationshipsMember__srt--RangeAxis__srt--MaximumMember_zpi8XwHqQAt2" title="Useful life">7 years</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">25,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">25,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--FiniteLivedTradeNamesGross_iI_maFLIAGz9zC_zrcx9DQA7uy5" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Trade names</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">7 years</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--OtherFiniteLivedIntangibleAssetsGross_iI_maFLIAGz9zC_zHQs2bL5ce3j" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Developed technology</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"><span id="xdx_900_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20250630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--DevelopedTechnologyRightsMember__srt--RangeAxis__srt--MinimumMember_z8ja5Uc2O2Z8" title="Useful life">3-<span id="xdx_900_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20250630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--DevelopedTechnologyRightsMember__srt--RangeAxis__srt--MaximumMember_zymRQRWKbMll" title="Useful life">5 years</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">325,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">325,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--FiniteLivedIntangibleAssetsGross_iTI_mtFLIAGz9zC_maIANEGzUOz_zdC5VzRLPG17" style="vertical-align: bottom; background-color: White"> <td>Intangible assets gross</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">375,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">375,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--FiniteLivedIntangibleAssetsAccumulatedAmortization_iI_msIANEGzUOz_zhFhmYFX6NRl" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Less: accumulated amortization</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">60,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">30,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--IntangibleAssetsNetExcludingGoodwill_iTI_mtIANEGzUOz_z2t25lS7ORGj" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Intangible assets net</td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">315,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">345,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Amortization expense was $17,000 and $32,000 for the three and six months ended June 30, 2025, respectively. The Company did not have any intangible assets or goodwill during the six months ended June 30, 2024. On June 30, 2025, the Company tested the amount of goodwill that it recorded in connection with the acquisition of SemiCab, Inc.’s business on July 3, 2025 for impairment to see if the carrying amount of goodwill exceeded its carried value. The Company 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 business. The Company determined that no impairment of goodwill needed to be recorded with respect to that goodwill during the six months ended June 30, 2025. Accordingly, the balance of that goodwill was $786,000 on June 30, 2025. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 On May 2, 2025, the Company and SemiCab Holdings acquired <span id="xdx_908_eus-gaap--MinorityInterestOwnershipPercentageByParent_iI_dp_c20250502__srt--OwnershipAxis__custom--SemiCabIncMember_zD77MIzyGq5f" title="Common stock issued for purchase ownership percentage">99.99% of the equity shares of SMCB from SemiCab, Inc. In connection with the acquisition, the Company recorded additional goodwill in the amount of $3,632,000. As a result, the balance of the Company’s goodwill was $4,418,000 on June 30, 2025.

A summary of the Company’s property and equipment at June 30, 2025 and December 31, 2024 is as follows: Schedule of Property and Equipment <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" style="text-align: center">Useful</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_491_20250630_zjkqNlQMZbfa" style="text-align: center">June 30,</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_494_20241231_zVF4ukPIIjgb" style="text-align: center">December 31,</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Life</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_404_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerAndOfficeEquipmentMember_zkqLeo6nEukh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">Computer and office equipment</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right"><span id="xdx_90C_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20250630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerAndOfficeEquipmentMember__srt--RangeAxis__srt--MinimumMember_zcktzxPeL7Gk" title="Useful life">5-<span id="xdx_90B_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20250630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerAndOfficeEquipmentMember__srt--RangeAxis__srt--MaximumMember_zNFBRgCkOTgf" title="Useful life">7 years</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">462,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">412,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_zmTkpbS7c7q6" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Furniture and fixtures</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">7 years</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">107,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">107,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MoldsAndToolingMember_z9e1UM0d48v5" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Molds and tooling</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"><span id="xdx_90F_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20250630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MoldsAndToolingMember__srt--RangeAxis__srt--MinimumMember_zBYlFbGpM7K2" title="Useful life">3-<span id="xdx_90F_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20250630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MoldsAndToolingMember__srt--RangeAxis__srt--MaximumMember_zOwNcV3WDOCf" title="Useful life">5 years</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,312,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,297,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--PropertyPlantAndEquipmentGross_iI_maPPAENzUMn_znsrHsuFadHk" style="vertical-align: bottom; background-color: White"> <td>Property and equipment gross</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,881,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,816,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iI_msPPAENzUMn_zTCG5UyyUcvk" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Less: accumulated depreciation</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,629,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,532,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--PropertyPlantAndEquipmentNet_iTI_mtPPAENzUMn_zNG56S8WOJub" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Property and equipment net</td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">252,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">284,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

P5Y

P7Y

462000

412000

P7Y

107000

P3Y

P5Y

2312000

2297000

2881000

2816000

2629000

2532000

252000

284000

31000

64000

53000

105000

<p id="xdx_89C_eus-gaap--ScheduleOfAcquiredFiniteLivedIntangibleAssetsByMajorClassTextBlock_zQXEeRdWGBJc" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-indent: 0.5in; text-align: justify">A summary of the Company’s intangible assets at June 30, 2025 and December 31, 2024 is as follows: Schedule of Intangible Assets <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" style="text-align: center">Useful</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_49A_20250630_zGvDr09Mn8N7" style="text-align: center">June 30,</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_492_20241231_zRFNJgoP07T2" style="text-align: center">December 31,</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Life</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_40A_eus-gaap--FiniteLivedCustomerRelationshipsGross_iI_maFLIAGz9zC_zDzZiDtbL5i2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">Customer relationships</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right"><span id="xdx_90E_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20250630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--CustomerRelationshipsMember__srt--RangeAxis__srt--MinimumMember_z5si7mLTadZb" title="Useful life">5-<span id="xdx_900_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20250630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--CustomerRelationshipsMember__srt--RangeAxis__srt--MaximumMember_zpi8XwHqQAt2" title="Useful life">7 years</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">25,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">25,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--FiniteLivedTradeNamesGross_iI_maFLIAGz9zC_zrcx9DQA7uy5" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Trade names</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">7 years</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--OtherFiniteLivedIntangibleAssetsGross_iI_maFLIAGz9zC_zHQs2bL5ce3j" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Developed technology</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"><span id="xdx_900_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20250630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--DevelopedTechnologyRightsMember__srt--RangeAxis__srt--MinimumMember_z8ja5Uc2O2Z8" title="Useful life">3-<span id="xdx_900_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20250630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--DevelopedTechnologyRightsMember__srt--RangeAxis__srt--MaximumMember_zymRQRWKbMll" title="Useful life">5 years</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">325,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">325,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--FiniteLivedIntangibleAssetsGross_iTI_mtFLIAGz9zC_maIANEGzUOz_zdC5VzRLPG17" style="vertical-align: bottom; background-color: White"> <td>Intangible assets gross</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">375,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">375,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--FiniteLivedIntangibleAssetsAccumulatedAmortization_iI_msIANEGzUOz_zhFhmYFX6NRl" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Less: accumulated amortization</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">60,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">30,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--IntangibleAssetsNetExcludingGoodwill_iTI_mtIANEGzUOz_z2t25lS7ORGj" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Intangible assets net</td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">315,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">345,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

P5Y

P7Y

25000

P7Y

25000

P3Y

P5Y

325000

375000

60000

30000

315000

345000

17000

32000

786000

0.9999

3632000

4418000

Note 6 – Notes Payable to Related Parties SemiCab Holdings assumed several unsecured loans from Ajesh Kapoor and Vivek Sehgal in the acquisition of SemiCab, Inc.’s business. The Company had accrued interest payable of $5,000 as of June 30, 2025 that was included as a component of accrued expenses on the Company’s condensed consolidated balance sheets. The Company incurred interest expense on these loans of $15,000 and $31,000 for the three and six months ended June 30, 2025, respectively. The terms of each loan are summarized in the table below: Schedule of Notes Payable to Related Parties Loan <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" style="text-align: center">Issue</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Maturity</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Interest</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_495_20250630_zGGy7QALro1j" style="text-align: center"> </td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: left">Note Holder</td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Date</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Date</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Status</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Rate</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Principal</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 35%; text-align: left">Ajesh Kapoor</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">7/10/2021</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">7/10/2026</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">Current</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><span id="xdx_90F_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20210710__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_z0PZRmS23wYc" title="Interest rate">9</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--NotesPayable_iI_c20210710__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_zUQuuvTL5v23" style="width: 9%; text-align: right" title="Principal amount">150,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Ajesh Kapoor</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">8/27/2021</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">8/26/2026</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">Current</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90A_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20210827__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_z2rhNjKXOKH5" title="Interest rate">9</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--NotesPayable_iI_c20210827__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_z0UfZlPN2XDk" style="text-align: right" title="Principal amount">235,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Vivek Sehgal</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4/17/2023</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2/1/2026</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">Current</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_901_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20230417__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivekSeghalMember_ztNghPKSWZL5" title="Interest rate">10</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--NotesPayable_iI_c20230417__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivekSeghalMember_zWHRuRTJkkV" style="text-align: right" title="Principal amount">50,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Ajesh Kapoor</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">5/5/2023</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2/1/2026</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">Current</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_908_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20230505__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_zhByE8vRi4u1" title="Interest rate">10</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--NotesPayable_iI_c20230505__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_zM7hLi1zFzUj" style="text-align: right" title="Principal amount">50,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Ajesh Kapoor</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right">5/17/2023</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right">2/1/2026</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right">Current</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: right"><span id="xdx_908_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20230517__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_z7eYdZphxe8j" title="Interest rate">10</td><td style="padding-bottom: 1pt; text-align: left">%</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_988_eus-gaap--NotesPayable_iI_c20230517__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_zeEajOoHtrFa" style="border-bottom: Black 1pt solid; text-align: right" title="Principal amount">165,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--NotesPayable_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_z1a7cFshwroh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Balance as of June 30, 2025</td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">650,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--NotesPayable_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zrDEOvmtPfT4" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="display: none; padding-bottom: 2.5pt">Balance</td><td style="display: none; padding-bottom: 2.5pt"> </td> <td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: right"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt"> </td> <td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: right"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt"> </td> <td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: right"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt"> </td> <td style="display: none; padding-bottom: 2.5pt; text-align: right"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: right"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; display: none; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; display: none; text-align: right">650,000</td><td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--NotesPayableCurrentAndNonCurrent_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_z0ho18ywuLI6" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Less: current portion of notes payable to related parties</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">265,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LongTermNotesPayable_iTI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zWdcL75EOj4h" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; text-align: left">Notes payable to related parties, net of current portion</td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">385,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> As of December 31, 2024, the loans described above that were issued between April 17, 2023 and May 17, 2023 were in default. Subsequent to December 31, 2024, the Company entered into waivers and amendments with each of the note holders who are parties to those loans to extend the maturity dates of the loans to February 1, 2026. On February 18, 2025, the Company issued a promissory note to each of Stingray Group and Regalia Ventures in the amount of $286,000 and $472,000, respectively. A discussion of these transactions and the terms of the promissory notes is set forth herein in Note 11 – Securities Transactions. On May 2, 2025, the Company and SemiCab Holdings acquired <span id="xdx_908_eus-gaap--MinorityInterestOwnershipPercentageByParent_iI_dp_c20250502__srt--OwnershipAxis__custom--SemiCabIncMember_z8GC3VMJd5R7" title="Common stock issued for purchase ownership percentage">99.99% of the equity shares of SMCB from SemiCab, Inc. pursuant to which, in part, the Company issued a promissory note to SemiCab, Inc. in the principal amount of $<span id="xdx_906_eus-gaap--DebtInstrumentFaceAmount_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SemiCabIncMember__us-gaap--TypeOfArrangementAxis__custom--EquityPurchaseAgreementMember_zKtWopqKi5pk">1,750,000. A discussion of this transaction and the terms of the promissory note is set forth herein in Note 17 – Acquisition of SMCB. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

5000

15000

31000

The terms of each loan are summarized in the table below: Schedule of Notes Payable to Related Parties Loan <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" style="text-align: center">Issue</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Maturity</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Interest</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_495_20250630_zGGy7QALro1j" style="text-align: center"> </td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: left">Note Holder</td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Date</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Date</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Status</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Rate</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Principal</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 35%; text-align: left">Ajesh Kapoor</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">7/10/2021</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">7/10/2026</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">Current</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><span id="xdx_90F_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20210710__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_z0PZRmS23wYc" title="Interest rate">9</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_989_eus-gaap--NotesPayable_iI_c20210710__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_zUQuuvTL5v23" style="width: 9%; text-align: right" title="Principal amount">150,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Ajesh Kapoor</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">8/27/2021</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">8/26/2026</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">Current</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90A_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20210827__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_z2rhNjKXOKH5" title="Interest rate">9</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--NotesPayable_iI_c20210827__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_z0UfZlPN2XDk" style="text-align: right" title="Principal amount">235,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Vivek Sehgal</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4/17/2023</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2/1/2026</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">Current</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_901_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20230417__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivekSeghalMember_ztNghPKSWZL5" title="Interest rate">10</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--NotesPayable_iI_c20230417__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivekSeghalMember_zWHRuRTJkkV" style="text-align: right" title="Principal amount">50,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Ajesh Kapoor</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">5/5/2023</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2/1/2026</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">Current</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_908_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20230505__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_zhByE8vRi4u1" title="Interest rate">10</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--NotesPayable_iI_c20230505__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_zM7hLi1zFzUj" style="text-align: right" title="Principal amount">50,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Ajesh Kapoor</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right">5/17/2023</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right">2/1/2026</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right">Current</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: right"><span id="xdx_908_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20230517__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_z7eYdZphxe8j" title="Interest rate">10</td><td style="padding-bottom: 1pt; text-align: left">%</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_988_eus-gaap--NotesPayable_iI_c20230517__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorMember_zeEajOoHtrFa" style="border-bottom: Black 1pt solid; text-align: right" title="Principal amount">165,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--NotesPayable_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_z1a7cFshwroh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Balance as of June 30, 2025</td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">650,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--NotesPayable_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zrDEOvmtPfT4" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="display: none; padding-bottom: 2.5pt">Balance</td><td style="display: none; padding-bottom: 2.5pt"> </td> <td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: right"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt"> </td> <td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: right"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt"> </td> <td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: right"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt"> </td> <td style="display: none; padding-bottom: 2.5pt; text-align: right"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: right"> </td><td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td><td style="display: none; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; display: none; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; display: none; text-align: right">650,000</td><td style="display: none; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--NotesPayableCurrentAndNonCurrent_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_z0ho18ywuLI6" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Less: current portion of notes payable to related parties</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">265,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LongTermNotesPayable_iTI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zWdcL75EOj4h" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; text-align: left">Notes payable to related parties, net of current portion</td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">385,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

2026-07-10

0.09

150000

2026-08-26

0.09

235000

2026-02-01

0.10

50000

2026-02-01

0.10

50000

2026-02-01

0.10

165000

650000

265000

385000

286000

472000

0.9999

1750000

Note 7 – Credit Facilities and Other Financing Arrangements Oxford Credit Facility On March 28, 2024, the Company entered into a loan agreement and related revolving credit note with Oxford Commercial Finance (“Oxford”). The agreement was for a two-year term and established a secured asset-backed revolving credit facility that was comprised of a maximum $<span id="xdx_902_eus-gaap--LineOfCreditFacilityMaximumBorrowingCapacity_iI_c20240328__us-gaap--CreditFacilityAxis__us-gaap--RevolvingCreditFacilityMember__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember_zbBGH8zhzVt1" title="Revolving credit facility maximum amount">2,000,000 revolving credit facility. Availability under the credit facility was determined monthly by a borrowing base comprised of a percentage of eligible accounts receivable of the borrowers. The Company’s obligations under the credit agreement were secured by a continuing security interest in all property of each Loan Party, subject to certain excluded collateral. As of June 30, 2024, there was no availability under the Credit Facility as there were no eligible accounts receivable. On October 17, 2024, the Company terminated the loan agreement and note and paid Oxford a termination fee of $<span id="xdx_902_eus-gaap--LineOfCreditFacilityCommitmentFeeAmount_c20241017__20241017__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__us-gaap--CreditFacilityAxis__us-gaap--RevolvingCreditFacilityMember_zWmevOVQQM1g" title="Credit facility termination fee">40,000. As of the date of termination, the Company had no outstanding amounts owed to Oxford. Agile Capital Merchant Cash Advance In connection with the acquisition of SemiCab, Inc.’s business, the Company assumed a merchant cash advance that was payable to Agile Capital Funding, LLC that had been incurred under a financing agreement that SemiCab, Inc. had entered into on March 22, 2024. The initial amount borrowed was $315,000, with net proceeds to SemiCab, Inc. in the amount of $<span id="xdx_904_eus-gaap--ProceedsFromShortTermDebt_c20240322__20240322__us-gaap--ShortTermDebtTypeAxis__custom--AgileCapilalMerchantCashAdvanceMember_zEUxJCQOE775" title="Net proceeds from short term debt">300,000. Repayment terms consisted of weekly payments in the amount of $16,200 for 28 weeks for a total repayment of $<span id="xdx_901_eus-gaap--RepaymentsOfShortTermDebt_c20240322__20240322__us-gaap--ShortTermDebtTypeAxis__custom--AgileCapilalMerchantCashAdvanceMember_zJP0SXOdajB3" title="Total short term debt to be repaid">453,600. The effective interest rate for the borrowings was <span id="xdx_905_eus-gaap--DebtInstrumentInterestRateEffectivePercentage_iI_dp_c20240322__us-gaap--ShortTermDebtTypeAxis__custom--AgileCapilalMerchantCashAdvanceMember_zfaK13G47OV6" title="Effective Interest rate">15% per year. As of December 31, 2024, the merchant cash advance had been repaid in full. Cedar Advance Merchant Cash Advance In connection with the acquisition of SemiCab, Inc.’s business, the Company assumed a merchant cash advance that was payable to Cedar Advance, LLC that had been incurred under a financing agreement that SemiCab, Inc. had entered into on May 8, 2024. The initial amount borrowed was $215,000, with net proceeds to SemiCab, Inc. in the amount of $204,300. Repayment terms consisted of weekly payments in the amount of $11,100 for 28 weeks for a total repayment of $312,000. The effective interest rate for the borrowings was <span id="xdx_90D_eus-gaap--DebtInstrumentInterestRateEffectivePercentage_iI_dp_c20240508__us-gaap--ShortTermDebtTypeAxis__custom--CedarAdvanceMerchantCashAdvanceMember_zHRhOAZ8DeAg" title="Effective interest rate">18% per year. As of December 31, 2024, the merchant cash advance had been repaid in full.

2000000

40000

315000

300000

16200

453600

0.15

215000

204300

11100

312000

0.18

Note 8 – Commitments and Contingencies The Company is subject to claims, suits and other proceedings from time to time in the ordinary course of business that could result in fines, civil penalties, or other adverse consequences. In accordance with the provisions of ASC Topic 450, Contingencies, the Company records a liability when it believes that it is probable that a loss has been incurred and the amount can be reasonably estimated. If the Company determines that it is probable that a loss has been incurred and the loss or range of loss can be estimated, the Company discloses the estimated amount of the loss. The Company evaluates developments in its legal matters that could affect the amount of liability that has been previously accrued and makes adjustments as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 Efficient Capital Labs Settlement Agreement On May 18, 2023, SemiCab, Inc. entered into an installment business loan agreement with Efficient Capital Labs, Inc. (“ECL”) pursuant to which SemiCab, Inc. borrowed the principal amount of $1,000,000. Repayments were originally scheduled to begin in June 2023 in equal installments of $91,667 for 13 months with an effective interest rate of 17.97%. The loan had a maturity date of May 17, 2024. On May 18, 2024, SemiCab, Inc. defaulted on the loan for non-payment. On May 18, 2024, SemiCab, Inc. entered into a settlement agreement with ECL pursuant to which SemiCab, Inc. agreed to pay ECL $946,666 as follows: (i) $25,000 on or before May 20, 2024; (ii) $75,000 on or before June 3, 2024; and (iii) $84,666 on or before the first business day of each of the following 10 calendar months starting on July 1, 2024. In connection with the acquisition of SemiCab, Inc.’s business, the Company assumed this settlement liability. The final payment of the settlement was made during the six months ended June 30, 2025. Accordingly, there was no unpaid balance at June 30, 2025. As of December 31, 2024, the remaining unpaid balance of the settlement was $325,000 and was included as a component of accrued expenses on the Company’s condensed consolidated balance sheets. Derivative Litigation On December 21, 2023, Ault Lending, LLC (“Ault Lending”), a wholly-owned subsidiary of Ault Alliance, Inc., a former shareholder of the Company, filed a derivative shareholder action in Delaware Chancery Court against the Company, its board of directors, Stingray Group, LLC (“Stingray Group”) and Regalia Ventures, LLC (“Regalia Ventures”) for alleged breach of fiduciary duty in approving a recent above-market private placement equity transaction. The complaint alleged that the Company and its board of directors followed an inadequate process in evaluating the private placement transaction that the Company completed in November 2023 and that the Company and its board of directors entered into the transaction with an intent to dilute Ault’s ownership stake in the Company. Ault Lending was 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) rescission of the Company’s sale of shares to Stingray Group and Regalia Ventures; and (iii) damages and attorney’s fees. On April 30, 2025, Ault Lending filed a motion with the court requesting that the claims be dismissed without prejudice and on that same date, the court approved the dismissal of the claims without prejudice. OAC Flatiron & OAC Adelphi Litigation On August 23, 2023, MICS NY entered into an Agreement of Lease (the “Lease Agreement”) with OAC 111 Flatiron, LLC and OAC Adelphi, LLC (the “Landlord”), pursuant to which MICS NY agreed to lease approximately 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 24th Street, New York, New York (the “Premises”). ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 During the year ended December 31, 2024, the Company abandoned its plans to continue use of the leased space and exercised its early termination provision of the Lease Agreement which was not accepted by the Landlord. Due to the abandonment of the lease, all assets related to the lease were impaired. Assets including security deposits, rent deposits and right of use assets of approximately $3,878,000 were written off during the year ended December 31, 2024. On July 26, 2024, the Landlord filed a civil action in the Supreme Court of the State of New York against MICS NY and the Company (“the Defendants”) for alleged breach of lease, seeking monetary damages including unpaid rent, future unpaid rent, and other expenses related to the lease. The complaint alleged the Defendants breached the lease in various material respects. On September 25, 2024, the Company entered into a settlement agreement for a full release and dismissal of the complaint within five business days of the Company’s payment of $250,000. Pursuant to the settlement agreement, the Company made the first payment of $150,000 on September 25, 2024 and a final payment of $100,000 on October 25, 2024. The remaining lease liability was written off upon settlement, resulting in a loss upon termination of the lease of $4,000, net of the write off of the related lease asset discussed above. On October 29, 2024, the Landlord filed a discontinuance with prejudice. Blue Yonder Liability Pursuant to the asset purchase agreement with SemiCab, Inc., the Company assumed a judgement against SemiCab, Inc. regarding damages resulting from contract breach for IT subscription-based services. On March 28, 2020, SemiCab, Inc. entered into a service contract and agreement with Blue Yonder, Inc. (“Blue Yonder”) for certain IT subscription-based services. The original term of the agreement was for three years, at a price of $100,000 per year, for a total of $300,000. On June 21, 2023, Blue Yonder filed a lawsuit claiming damages in the amount of $275,000 with the Maricopa County Superior Court in Arizona. The suit was found in favor of Blue Yonder in the amount of $509,119, subject to two separate milestone payments that would otherwise deem the entire balance due satisfied if either milestone payment is made by the Company. The first milestone payment for $175,000 and was due on July 1, 2024 and was not made. In the event this payment is made, the remaining settlement shall be deemed satisfied. If this payment is not made, the Company shall owe a total of $225,000 by October 1, 2024. In the event this payment is made, the remaining settlement shall be deemed satisfied. If neither payment is made, Blue Yonder shall be entitled to execute the full $509,119 beginning January 1, 2025. As of the date of this filing, none of the scheduled payments have been made. A liability of $509,119 has been recorded as a component of accrued expenses on the accompanying condensed consolidated balance sheets. On February 11, 2025, Blue Yonder filed a civil action in the Superior Court of the State of Arizona against the Company for breach of contract and to enforce a stipulated judgment entered against SemiCab, Inc. in connection with the liabilities related to Blue Yonder that the Company assumed when it acquired SemiCab, Inc.’s business. Blue Yonder alleges that, because the Company assumed these liabilities, Blue Yonder can enforce the judgment against the Company. The judgement was in the amount of $509,119. On August 1, 2025, the Company filed an answer to the complaint and counterclaims against Blue Yonder for breach of contract. The outcome of this matter is uncertain. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

1000000

91667

0.1797

946666

25000

75000

84666

325000

10000

3878000

250000

150000 100000

4000

100000

300000

275000

509119

175000

225000

509119

Note 9 – Stock Compensation Expense Equity Incentive Plan On April 12, 2022, the Company’s board of directors approved The Singing Machine Company, Inc. 2022 Equity Incentive Plan. The equity plan provides for the issuance of equity incentive awards, such as stock options, stock appreciation rights, stock awards, restricted stock, stock units, performance awards and other stock or cash-based awards to the Company’s employees, officers, directors, consultants, agents, advisors and independent contractors. As of June 30, 2025, there were <span id="xdx_907_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAuthorized_iI_c20250630__us-gaap--PlanNameAxis__custom--TwoThousandTwentyTwoPlanMember_zR9GUWTidT2g" title="Number of shares common stock authorized">1,667 shares of common stock authorized for issuance under the plan. Of this amount, awards representing <span id="xdx_904_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardSharesIssuedInPeriod_c20250101__20250630__us-gaap--PlanNameAxis__custom--TwoThousandTwentyTwoPlanMember_ziGGfFQIAk88" title="Share base compensation issued shares">1,183 shares of common stock had been granted under the plan and <span id="xdx_90B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAvailableForGrant_iI_c20250630__us-gaap--PlanNameAxis__custom--TwoThousandTwentyTwoPlanMember_z2QbI5cYwgfh" title="Number of shares available to issued">484 shares remained available for issuance under the plan. The Company did not issue any share-based awards under the plan during the six months ended June 30, 2025 and 2024, and no shares were forfeited during the three and six months ended June 30, 2025. As of June 30, 2025, there was an unrecognized expense of $60,000 remaining on stock options currently vesting over time with an approximate weighted average of three years and nine months remaining until the options would be fully vested. The vested options outstanding as of June 30, 2025, had no intrinsic value.

1667

1183

484

60000

Note 10 – Net Loss Per Share <p id="xdx_896_eus-gaap--ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock_zM8jqUTNXXe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The computations of basic and dilutive loss per share of commons stock outstanding for the three and six months ended June 30, 2025 and 2024 are as follows: Schedule of Basic and Diluted Loss Per Share <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" id="xdx_49E_20250401__20250630_zaEj3lFm88Oa" style="text-align: center">Three Months</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_499_20240401__20240630_zZTugGQDmfei" style="text-align: center">Three Months</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_493_20250101__20250630_zodT67Po24Q" style="text-align: center">Six Months</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_495_20240101__20240630_zyBo9rMWLBA6" style="text-align: center">Six Months</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">Ended</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">Ended</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">Ended</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">Ended</td><td style="padding-bottom: 1pt; text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_406_eus-gaap--NetIncomeLossAvailableToCommonStockholdersBasic_zMC2iJlq5Kvi" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; text-align: left">Net loss available to common shareholders</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">(585,000</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">(6,119,000</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">(9,776,000</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">(8,486,000</td><td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; text-align: left">Basic and diluted weighted average of common stock outstanding</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,472,464</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">32,090</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,224,047</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">32,090</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Loss per common share</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.24</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(190.68</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(4.40</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(264.44</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table> <p id="xdx_89F_eus-gaap--ScheduleOfWeightedAverageNumberOfSharesTableTextBlock_ziAvau79U4ja" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The computation of the fully diluted weighted average number of shares of common stock outstanding for the three and six months ended June 30, 2025 and 2024 is as follows: Schedule of Diluted Weighted Average Number of Shares <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" id="xdx_495_20250401__20250630_zOoZZZtfv5fh" style="text-align: center">Three Months</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_493_20240401__20240630_zf2AmmMg0S84" style="text-align: center">Three Months</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_49C_20250101__20250630_zdjf3w6HEn7l" style="text-align: center">Six Months</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_499_20240101__20240630_zbkvGZJCcmRl" style="text-align: center">Six Months</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Ended</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Ended</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Ended</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Ended</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_409_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_pid_zXitj0Ksw7bd" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%">Basic weighted average common shares outstanding</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">2,472,464</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">32,090</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">2,224,047</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">32,090</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--WeightedAverageNumberDilutedSharesOutstandingAdjustment_pid_zqskiY7Ehhal" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; text-align: left">Effect of dilutive stock options and warrants</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--WeightedAverageNumberOfDilutedSharesOutstanding_pid_zlVr4LJeovp7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Diluted weighted average of common shares outstanding</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: right"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">2,472,464</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: right"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">32,090</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: right"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">2,224,047</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: right"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">32,090</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Basic net loss per share is based on the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share reflects the potential dilution assuming shares of common stock underlying in-the-money options and warrants have been issued upon the exercise of the options and warrants and the proceeds thereof were used to purchase shares of the Company’s common stock at the average market price during the period using the treasury stock method. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 For the three and six months ended June 30, 2025, <span id="xdx_908_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20250401__20250630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_zegh5jHtypW5" title="Potentially dilutive securities"><span id="xdx_908_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20250101__20250630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_zDfvUYRX6XB8" title="Potentially dilutive securities">484 shares of common stock underlying stock options, respectively, and <span id="xdx_900_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20250401__20250630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockWarrantsMember_zjC1ZFlFJIXk" title="Potentially dilutive securities"><span id="xdx_906_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20250101__20250630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockWarrantsMember_zq5zDvKjiYph" title="Potentially dilutive securities">1,138,163 shares of common stock underlying warrants were excluded from the calculation of diluted net loss per share as the result would have been anti-dilutive. For the three and six months ended June 30, 2024, <span id="xdx_908_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20240401__20240630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_zZLFpufj3dM6" title="Potentially dilutive securities"><span id="xdx_90D_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20240101__20240630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_z3SfsrMg7T92" title="Potentially dilutive securities">543 shares of common stock underlying stock options and <span id="xdx_90D_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20240401__20240630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockWarrantsMember_zEDzUSAIiGu9" title="Potentially dilutive securities"><span id="xdx_909_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20240101__20240630__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockWarrantsMember_zqJlFc9WTH5c" title="Potentially dilutive securities">4,511 shares of common stock underlying warrants were excluded from the calculation of diluted net loss per share as the result would have been anti-dilutive.

<p id="xdx_896_eus-gaap--ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock_zM8jqUTNXXe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The computations of basic and dilutive loss per share of commons stock outstanding for the three and six months ended June 30, 2025 and 2024 are as follows: Schedule of Basic and Diluted Loss Per Share <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" id="xdx_49E_20250401__20250630_zaEj3lFm88Oa" style="text-align: center">Three Months</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_499_20240401__20240630_zZTugGQDmfei" style="text-align: center">Three Months</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_493_20250101__20250630_zodT67Po24Q" style="text-align: center">Six Months</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_495_20240101__20240630_zyBo9rMWLBA6" style="text-align: center">Six Months</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">Ended</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">Ended</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">Ended</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">Ended</td><td style="padding-bottom: 1pt; text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_406_eus-gaap--NetIncomeLossAvailableToCommonStockholdersBasic_zMC2iJlq5Kvi" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; text-align: left">Net loss available to common shareholders</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">(585,000</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">(6,119,000</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">(9,776,000</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">(8,486,000</td><td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; text-align: left">Basic and diluted weighted average of common stock outstanding</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,472,464</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">32,090</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,224,047</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">32,090</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Loss per common share</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.24</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(190.68</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(4.40</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(264.44</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table>

-585000

-6119000

-9776000

-8486000

2472464

32090

2224047

32090

-0.24

-190.68

-4.40

-264.44

<p id="xdx_89F_eus-gaap--ScheduleOfWeightedAverageNumberOfSharesTableTextBlock_ziAvau79U4ja" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The computation of the fully diluted weighted average number of shares of common stock outstanding for the three and six months ended June 30, 2025 and 2024 is as follows: Schedule of Diluted Weighted Average Number of Shares <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" id="xdx_495_20250401__20250630_zOoZZZtfv5fh" style="text-align: center">Three Months</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_493_20240401__20240630_zf2AmmMg0S84" style="text-align: center">Three Months</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_49C_20250101__20250630_zdjf3w6HEn7l" style="text-align: center">Six Months</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_499_20240101__20240630_zbkvGZJCcmRl" style="text-align: center">Six Months</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Ended</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Ended</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Ended</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Ended</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_409_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_pid_zXitj0Ksw7bd" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%">Basic weighted average common shares outstanding</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">2,472,464</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">32,090</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">2,224,047</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">32,090</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--WeightedAverageNumberDilutedSharesOutstandingAdjustment_pid_zqskiY7Ehhal" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; text-align: left">Effect of dilutive stock options and warrants</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--WeightedAverageNumberOfDilutedSharesOutstanding_pid_zlVr4LJeovp7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Diluted weighted average of common shares outstanding</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: right"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">2,472,464</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: right"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">32,090</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: right"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">2,224,047</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: right"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">32,090</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

2472464

32090

2224047

32090

2472464

32090

2224047

32090

484

1138163

543

4511

Note 11 – Securities Transactions Regalia Ventures Stock Repurchase Transaction On November 1, 2024, the Company entered into a stock repurchase agreement with Regalia Ventures pursuant to which the Company agreed to repurchase the <span id="xdx_905_eus-gaap--StockRepurchasedDuringPeriodShares_pid_c20241101__20241101__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--RegaliaVenturesMember_z0yzvEMiYIif" title="Stock repurchased">5,495 shares from Regalia Ventures at a price per share equal to the higher of: (i) the closing price of the common stock on the last trading day immediately preceding the date of the repurchase agreement; or (ii) the highest volume weighted average price (VWAP) of the common stock during a pricing period of 10 consecutive trading days prior to the date of the repurchase agreement. The shares of common stock to be repurchased were originally issued to Regalia Ventures on November 21, 2023, pursuant to a certain stock purchase agreement dated November 20, 2023. The Company recorded an accrued liability in the amount of the repurchase price, which was $<span id="xdx_907_eus-gaap--StockRepurchasedDuringPeriodValue_pid_c20240101__20241231__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--RegaliaVenturesMember_zEWumjS3MUK9" title="Stock repurchased, value">472,000, as of December 31, 2024 as there were no further conditions that needed to be satisfied prior to the closing date other than the issuance of the promissory note and the delivery of the shares. On February 18, 2025, the date of the closing of the transaction, the Company issued a promissory note to Regalia Ventures in the amount of $<span id="xdx_90E_ecustom--PromissoryNote_iI_c20250218__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--RegaliaVenturesMember_zgYiu5TU662b" title="Promissory note">472,000, which was the principal amount of the purchase price. The note was due and payable on demand and accrued interest at the rate of <span id="xdx_906_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_pid_dp_uPure_c20250218__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--RegaliaVenturesMember_zO4KNWucgcT5" title="Accrued interest rate">10% per year. The Company incurred $<span id="xdx_904_eus-gaap--InterestExpense_c20250101__20250630__us-gaap--SubsidiarySaleOfStockAxis__custom--RegaliaVenturesMember__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember_z2WiQyKDXdIj" title="Interest expense">1,000 for interest expense for the six months ended June 30, 2025 related to this promissory note. On February 27, 2025, the Company paid off the note in full. Regalia Ventures is owned and controlled by Jay B. Foreman, who serves as a member of the Company’s board of directors. Stingray Group Stock Repurchase Transaction On December 3, 2024, the Company entered into a stock repurchase agreement with Stingray Group pursuant to which the Company agreed to repurchase the <span id="xdx_908_eus-gaap--StockRepurchasedDuringPeriodShares_pid_c20241203__20241203__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--StingrayGroupMember_z69SUoKNWLBb" title="Stock repurchased">5,495 shares from Stingray Group at a price per share equal to the higher of: (i) the closing price of the common stock on the last trading day immediately preceding the date of the repurchase agreement; or (ii) the highest VWAP of the common stock during a pricing period of 10 consecutive trading days prior to the date of the repurchase agreement. The shares of common stock to be repurchased were originally issued to the Stingray Group on November 21, 2023, pursuant to a certain stock purchase agreement dated November 20, 2023. The Company recorded an accrued liability in the amount of the repurchase price, which was $<span id="xdx_900_eus-gaap--StockRepurchasedDuringPeriodValue_pid_c20231121__20231121__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--StingrayGroupMember_zjeOm519dyN7" title="Stock repurchased, value">286,000, as of December 31, 2024 as there were no further conditions that needed to be satisfied prior to the closing date other than the issuance of the promissory note and the delivery of the shares. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 On February 18, 2025, the date of the closing of the transaction, the Company issued a promissory note to Stingray Group in the amount of $<span id="xdx_903_eus-gaap--DebtInstrumentFaceAmount_iI_c20250218__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--StingrayGroupMember__us-gaap--DebtInstrumentAxis__custom--PromissoryNoteMember_z1lWgHF7Xkw4" title="Principal amount">286,000, which was the principal amount of the purchase price. The note was due and payable on demand and accrued interest at the rate of 10% per year. The Company incurred $<span id="xdx_90B_eus-gaap--InterestExpense_c20250101__20250630__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--StingrayGroupMember_zhzKr2sw8P8" title="Interest expense">3,000 for interest expense for the six months ended June 30, 2025 related to this promissory note. On April 3, 2025, the Company 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 the Company’s board of directors. December 2024 Public Offering On December 4, 2024, the Company entered into a securities purchase agreement in connection with a public offering of an aggregate of <span id="xdx_907_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20241204__20241204__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_ziBceUe88TYi" title="Common stock issued">21,000 shares of its common stock, pre-funded warrants to purchase up to <span id="xdx_903_ecustom--StockIssuedDuringPeriodSharesExerciseOfPrefundedWarrants_c20241204__20241204__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_zMxzuDLh5N02" title="Common stock prefunded warrants">258,412 shares of common stock, Series A warrants to purchase up to <span id="xdx_905_eus-gaap--SaleOfStockNumberOfSharesIssuedInTransaction_c20241204__20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zxzgHIPO0oOb" title="Series A warrant purchased">279,412 shares of common stock, and Series B warrants to purchase up to <span id="xdx_905_eus-gaap--SaleOfStockNumberOfSharesIssuedInTransaction_c20241204__20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zEkjICWhwd59" title="Series B warrant purchased">279,412 shares of common stock. Each share of common stock, or a pre-funded warrant in lieu thereof, was sold together with the accompanying warrants to purchase one share of common stock. The Company received aggregate gross proceeds upon the closing of the offering of approximately $<span id="xdx_909_ecustom--ProceedsFromIssuanceInitialPublicOfferingGross_c20241204__20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_zQyO6ajONNVk" title="Gross proceeds">9,000,000, before deducting placement agents’ fees and other offering expenses. The Series A and B warrants were exercisable only upon receipt of such shareholder approval as may be required by the applicable rules and regulations of the Nasdaq Stock Market, LLC (the “Nasdaq”) to permit the exercise of the Series A and B warrants. The Series A and B warrants include an exercise price adjustment feature upon shareholder approval, whereby the exercise price will adjust to the greater of the lowest daily volume weighted average price during the reset period or the floor price, which was $<span id="xdx_908_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAAndBWarrantMember_zPsdWhnnT3Wl" title="Warrant exercise price">6.84 per share, with a proportional increase in the number of warrant shares. The Company assessed the Series A and B warrants under ASC 480 and ASC 815 and determined that the Series A and B warrants needed to be classified as liabilities as they did not meet the requirements to be considered indexed to the Company’s own stock, due to: (a) the adjustment to the exercise price tied to shareholder approval, and (b) the potential change in the settlement amount of the Series B warrants upon an alternative cashless exercise election. Additionally, the Company concluded at issuance that it would not have sufficient authorized and available shares of common stock to settle the Series A and B warrants. See Note 12 – Derivative Liability. On January 13, 2025, the Company’s stockholders approved the issuance of the Series A and B warrants, at which time all of the Series A and B warrants became exercisable. This approval triggered an adjustment to the exercise price of the Series A warrants to $<span id="xdx_904_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20250113__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantMember_zMvyFHQJ8tO">8.38. In connection with this approval, the holders of the Series B warrants exercised their warrants in full under the alternative cashless exercise provision, resulting in the issuance of <span id="xdx_90E_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20250113__20250113__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_zFmfcuwDja5c">1,910,975 shares of common stock and no additional proceeds received by the Company. The warrant liability reflected on the Company’s consolidated balance sheet at December 31, 2024 was reclassified to additional paid-in capital on the Company’s condensed consolidated balance sheet at June 30, 2025. The Company recognized a loss of $6,468,000 for the change in the fair value measurement of the warrant liability as of the date the warrant liability was reclassified to equity. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 1800 Diagonal Financing Transactions On June 17, 2025, the Company entered into a securities purchase agreement with 1800 Diagonal Lending, LLC (“1800 Diagonal”) pursuant to which the Company issued a promissory note to 1800 Diagonal in the principal amount of $<span id="xdx_90C_eus-gaap--DebtInstrumentFaceAmount_iI_c20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_zcP2cUoNbkK8" title="Face value">120,000. The note is subject to a one-time interest charge of <span id="xdx_907_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_zmlq5i8jbSp8" title="One time interest charge, percent">12%, or approximately $<span id="xdx_906_eus-gaap--DebtInstrumentPeriodicPaymentInterest_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_ztPHQR0W8M2j" title="Debt instrument, periodic payment, interest">14,000, and is payable in <span id="xdx_904_eus-gaap--DebtInstrumentFrequencyOfPeriodicPayment_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_zFogNikfct0j" title="Monthly payments">12 monthly installments of $<span id="xdx_90F_eus-gaap--InterestExpenseLongTermDebt_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_zJCy4EfnKwY2" title="Interest expense">11,000 commencing on July 15, 2025. The security purchase agreement has a contingent default feature that the Company has determined to be nominal and is not applicable unless an event of default occurs. The Company received net proceeds of $<span id="xdx_902_eus-gaap--ProceedsFromDebtNetOfIssuanceCosts_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_zI7loImt1G6k" title="Net proceeds amount">84,000 after deductions of $<span id="xdx_903_ecustom--DebtInstrumentOriginalInterestDiscount_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_zGcikZQthaU3" title="Original interest discount">15,000 for original issue discount, $<span id="xdx_90C_ecustom--PlacementAgentFees_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_zEb2yCj7lsI" title="Placement agent fees">16,000 for placement agent fees and $<span id="xdx_909_eus-gaap--LegalFees_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_z1oJp6ZZX6Aj" title="Legal fees">5,000 for legal and due diligence fees. On June 17, 2025, the Company entered into a second securities purchase agreement with 1800 Diagonal pursuant to which the Company issued a promissory note to 1800 Diagonal in the principal amount of $<span id="xdx_90D_eus-gaap--DebtInstrumentFaceAmount_iI_c20250617__us-gaap--TypeOfArrangementAxis__custom--SecondSecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_zx1bq8KWfF9c" title="Face value">240,000. The note is subject to a one-time interest charge of <span id="xdx_900_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecondSecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_zON8VDDb54s4" title="One time interest charge, percent">12%, or approximately $<span id="xdx_90E_eus-gaap--DebtInstrumentPeriodicPaymentInterest_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecondSecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_zdWBbagmjSD8" title="Debt instrument, periodic payment, interest">29,000. An initial payment of $<span id="xdx_905_eus-gaap--DebtInstrumentAnnualPrincipalPayment_iI_c20250617__us-gaap--TypeOfArrangementAxis__custom--SecondSecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_z8eWvsGMAYs8" title="Principal and interest amount">134,000 is due on December 15, 2025. Thereafter, the remainder is payable in six monthly installments of $<span id="xdx_904_eus-gaap--InterestExpenseLongTermDebt_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecondSecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_z9bUfhCLVFVh" title="Interest expense">22,000 commencing on January 15, 2026. The security purchase agreement has a contingent default feature that the Company has determined to be nominal and is not applicable unless an event of default occurs. The Company received net proceeds of $<span id="xdx_908_eus-gaap--ProceedsFromDebtNetOfIssuanceCosts_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecondSecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_z3fuoU7kLmG8" title="Net proceeds amount">189,000 after deductions of $<span id="xdx_905_ecustom--DebtInstrumentOriginalInterestDiscount_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecondSecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_za329tcx2MRh" title="Original interest discount">30,000 for original issue discount, $<span id="xdx_90A_ecustom--PlacementAgentFees_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecondSecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_zjxdgP8SRwf5" title="Placement agent fees">16,000 for placement agent fees and $<span id="xdx_900_eus-gaap--LegalFees_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecondSecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--ThousandEightHundredDiagonalLendingLLCMember_zc2OJoszH54k" title="Legal fees">5,000 for legal and due diligence fees. Boot Capital Financing Transaction On June 17, 2025, the Company entered into a securities purchase agreement with Boot Capital, LLC (“Boot Capital”) pursuant to which the Company issued a promissory note to Boot Capital in the principal amount of $<span id="xdx_908_eus-gaap--DebtInstrumentFaceAmount_iI_c20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--BootCapitalLLCMember_zkVDSNTLdVjc" title="Face value">120,000. The note is subject to a one-time interest charge of <span id="xdx_902_eus-gaap--DebtInstrumentInterestRateDuringPeriod_dp_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--BootCapitalLLCMember_ztbtULDXDsE" title="One time interest charge, percent">12%, or approximately $<span id="xdx_902_eus-gaap--DebtInstrumentPeriodicPaymentInterest_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--BootCapitalLLCMember_zNStv36YZOQ4" title="Debt instrument, periodic payment, interest">14,000, and is payable in <span id="xdx_900_eus-gaap--DebtInstrumentFrequencyOfPeriodicPayment_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--BootCapitalLLCMember_zLWufrFTNG48" title="Monthly payments">12 monthly installments of $<span id="xdx_90A_eus-gaap--InterestExpenseLongTermDebt_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--BootCapitalLLCMember_zH2pddebd9p7" title="Interest expense">11,000 commencing on July 15, 2025. The security purchase agreement has a contingent default feature that the Company has determined to be nominal and is not applicable unless an event of default occurs. The Company received net proceeds of $<span id="xdx_90C_eus-gaap--ProceedsFromDebtNetOfIssuanceCosts_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--BootCapitalLLCMember_zIFVyXv3hCbh" title="Net proceeds amount">105,000 after deductions of $<span id="xdx_905_ecustom--DebtInstrumentOriginalInterestDiscount_c20250617__20250617__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__dei--LegalEntityAxis__custom--BootCapitalLLCMember_zV18Oilh0lMh" title="Original interest discount">15,000 for original issue discount.

5495

472000

0.10

1000

5495

286000

3000

21000

258412

279412

9000000

6.84

8.38

1910975

6468000

120000

0.12

14000

12 monthly installments

11000

84000

15000 16000

5000

240000

0.12

29000

134000

22000

189000

30000 16000

5000

120000

0.12

14000

12 monthly installments

11000

105000

15000

Note 12 – Derivative Liability During the six months ended June 30, 2025, the Company had derivative warrant liabilities that were measured at fair value on a recurring basis. These fair value measurements were estimated using a Monte Carlo simulation model, with the key inputs described below. Each of these fair value measurements was considered to be a Level 3 measurement by the Company as they used significant unobservable inputs, including the probability and expected date of stockholder approval. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 The key inputs for the Series A warrant liabilities were as follows: Schedule of Derivative Warrant Liabilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid">Warrant Liability – Series A Warrants</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">January 17, 2025</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Stock price on valuation date</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_984_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20250117__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zz8N4MgqrVTg" style="width: 14%; text-align: right" title="Stock price on valuation date">8.38</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zW4crAVEXPn1" style="width: 14%; text-align: right" title="Stock price on valuation date">18.00</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Exercise price</td><td> </td> <td style="text-align: left">$</td><td id="xdx_987_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20250117__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExercisePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zE2cnfK5idai" style="text-align: right" title="Exercise price">8.38</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_989_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExercisePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zLXMAJ5lqye" style="text-align: right" title="Exercise price">34.00</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Number of warrants</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20250117__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputNumberOfWarrantsMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zYqdx2K5vMt9" style="text-align: right" title="Number of warrants">1,133,652</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputNumberOfWarrantsMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zT0NbXIOKJLa" style="text-align: right" title="Number of warrants">279,412</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Remaining term (years)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20250117__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zgCQPdGAR7Oc" style="text-align: right" title="Remaining term (years)">4.88</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zhoFUvLZ5pqj" style="text-align: right" title="Remaining term (years)">4.93</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Annual equity volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20250117__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualEquityVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_z29UV7tT6vDa" style="text-align: right" title="Warrants and rights outstanding, measurement Input">126.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualEquityVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zc153OnzDXi4" style="text-align: right" title="Warrants and rights outstanding, measurement Input">113.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Annual volume volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20250117__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualVolumeVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zTfmqJsDwree" style="text-align: right" title="Warrants and rights outstanding, measurement Input">377.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualVolumeVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zH2KCStzz10c" style="text-align: right" title="Warrants and rights outstanding, measurement Input">379.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Risk-free interest rate</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20250117__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zd7ClNK3Nlse" style="text-align: right" title="Warrants and rights outstanding, measurement Input">4.32</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zknGnqX5JaH" style="text-align: right" title="Warrants and rights outstanding, measurement Input">4.29</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Expected stockholder approval date</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90D_eus-gaap--WarrantsAndRightsOutstandingMaturityDate_iI_dd_c20250117__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputMaturityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zUX48tV3dR8f" title="Expected stockholder approval date">January 13, 2025</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_901_eus-gaap--WarrantsAndRightsOutstandingMaturityDate_iI_dd_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputMaturityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_z14ervMhizC3" title="Expected stockholder approval date">January 14, 2025</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected stockholder approval probability</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20250117__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputApprovalProbabilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zkhS6JLPUV46" style="text-align: right" title="Warrants and rights outstanding, measurement Input">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputApprovalProbabilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zQ4qSj7P4807" style="text-align: right" title="Warrants and rights outstanding, measurement Input">50</td><td style="text-align: left">%</td></tr> </table> The Series B warrant liabilities were remeasured on each exercise date based on the closing price of the Company’s common stock on the date the warrants were exercised. On January 13, 2025, the Company’s shareholders approved the issuance of the Series A and Series B warrants. This approval triggered the adjustment to the exercise price described above. In connection with this approval, the holders of the Series B warrants exercised their warrants in full under the alternative cashless exercise provision, resulting in the issuance of 1,910,975 shares of common stock and no additional proceeds received by the Company. The Series A warrants became exercisable for 1,133,652 shares of common stock at an exercise price of $8.38 per share after the shareholder approval adjustment was finalized on March 17, 2025. In addition, the Company reassessed the classification of the Series A warrants after the shareholder approval adjustment was finalized, concluding that the Series A warrants now met the requirements for equity classification under ASC 480 and ASC 815. The Company adjusted the Series A warrants to fair value upon reclassification and reclassified that value to additional paid-in capital during the six months ended June 30, 2025. <p id="xdx_893_eus-gaap--ScheduleOfDerivativeLiabilitiesAtFairValueTableTextBlock_zS9y9uDV9Mr1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table provides a roll-forward of the fair value of the derivative liabilities described above during the six months ended June 30, 2025: Schedule of Fair Value of the Derivative Liabilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4B3_us-gaap--StatementClassOfStockAxis_custom--SeriesAWarrantMember_z5f5NMVuDbSa" style="border-bottom: Black 1pt solid; text-align: center">Series A Warrants</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_4B6_us-gaap--StatementClassOfStockAxis_custom--SeriesBWarrantMember_ztY0U7Q0vaB7" style="border-bottom: Black 1pt solid; text-align: center">Series B Warrants</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_4BD_zxtsD0j3dWHf" style="border-bottom: Black 1pt solid; text-align: center">Total Warrant Liabilities</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_43A_c20250101__20250630_ecustom--WarrantLiability_iS_zLAUnWPHyonh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%">Balance at December 31, 2024</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">5,456,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">11,147,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">16,603,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_438_c20250101__20250630_ecustom--WarrantLiability_iS_zlgZvU9JWjj3" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">5,456,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">11,147,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">16,603,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--ProceedsFromWarrantExercises_iN_di_zRrPfBK05Un3" style="vertical-align: bottom; background-color: White"> <td>Exercises</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(15,214,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(15,214,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_40D_eus-gaap--FairValueAdjustmentOfWarrants_znDdsAEl6pZf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Loss on change in fair value</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,401,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,067,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">6,468,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_ecustom--FairValueOfReclassificationToEquity_zOitC0sO8gd3" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; text-align: left">Reclassification to equity</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(7,857,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(7,857,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_430_c20250101__20250630_ecustom--WarrantLiability_iE_zZiDox3lQg0k" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance at June 30, 2025</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td></tr> <tr id="xdx_430_c20250101__20250630_ecustom--WarrantLiability_iE_zPFD3mn7cON8" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td></tr> </table> ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 <p id="xdx_899_eus-gaap--ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock_zZFWClcsXFii" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table provides a roll-forward of the number of shares of common stock underlying warrants issued during the six months ended June 30, 2025: Schedule of Shares of Common Stock Underlying Warrants <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4BF_us-gaap--StatementEquityComponentsAxis_custom--SeriesAWarrantsMember_zWfg7WkhKscd" style="border-bottom: Black 1pt solid; text-align: center">Series A Warrants</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_4B4_us-gaap--StatementEquityComponentsAxis_custom--SeriesBWarrantsMember_zFc9QcQrG5Bh" style="border-bottom: Black 1pt solid; text-align: center">Series B Warrants</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_4BD_us-gaap--StatementEquityComponentsAxis_custom--OtherWarrantsMember_zi36s0WXt905" style="border-bottom: Black 1pt solid; text-align: center">Other Warrants</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_4B0_us-gaap--StatementEquityComponentsAxis_us-gaap--WarrantMember_zrIEGk4boFAj" style="border-bottom: Black 1pt solid; text-align: center">Total</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_43B_c20250101__20250630_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iS_zfzvXkcUT4X" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%">Balance at December 31, 2024</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">279,412</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">279,412</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">4,511</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">563,335</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_431_c20250101__20250630_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iS_zcfivCd440w5" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,511</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">563,335</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--ProceedsFromWarrantExercises_zpKSVGrx0wX" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Exercises</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(279,412</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(279,412</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_435_c20250101__20250630_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iE_zl7Xe3smCgv1" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance at June 30, 2025</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,511</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">283,923</td><td style="text-align: left"> </td></tr> <tr id="xdx_43D_c20250101__20250630_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iE_zrBQrmy7KT81" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,511</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">283,923</td><td style="text-align: left"> </td></tr> </table> The Company did not issue any warrants during the three and six months ended June 30, 2024 and did not have any warrants outstanding as of June 30, 2024.

The key inputs for the Series A warrant liabilities were as follows: Schedule of Derivative Warrant Liabilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid">Warrant Liability – Series A Warrants</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">January 17, 2025</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Stock price on valuation date</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_984_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20250117__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zz8N4MgqrVTg" style="width: 14%; text-align: right" title="Stock price on valuation date">8.38</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zW4crAVEXPn1" style="width: 14%; text-align: right" title="Stock price on valuation date">18.00</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Exercise price</td><td> </td> <td style="text-align: left">$</td><td id="xdx_987_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20250117__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExercisePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zE2cnfK5idai" style="text-align: right" title="Exercise price">8.38</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_989_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExercisePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zLXMAJ5lqye" style="text-align: right" title="Exercise price">34.00</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Number of warrants</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20250117__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputNumberOfWarrantsMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zYqdx2K5vMt9" style="text-align: right" title="Number of warrants">1,133,652</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputNumberOfWarrantsMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zT0NbXIOKJLa" style="text-align: right" title="Number of warrants">279,412</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Remaining term (years)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20250117__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zgCQPdGAR7Oc" style="text-align: right" title="Remaining term (years)">4.88</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zhoFUvLZ5pqj" style="text-align: right" title="Remaining term (years)">4.93</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Annual equity volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20250117__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualEquityVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_z29UV7tT6vDa" style="text-align: right" title="Warrants and rights outstanding, measurement Input">126.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualEquityVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zc153OnzDXi4" style="text-align: right" title="Warrants and rights outstanding, measurement Input">113.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Annual volume volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20250117__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualVolumeVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zTfmqJsDwree" style="text-align: right" title="Warrants and rights outstanding, measurement Input">377.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualVolumeVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zH2KCStzz10c" style="text-align: right" title="Warrants and rights outstanding, measurement Input">379.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Risk-free interest rate</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20250117__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zd7ClNK3Nlse" style="text-align: right" title="Warrants and rights outstanding, measurement Input">4.32</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zknGnqX5JaH" style="text-align: right" title="Warrants and rights outstanding, measurement Input">4.29</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Expected stockholder approval date</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90D_eus-gaap--WarrantsAndRightsOutstandingMaturityDate_iI_dd_c20250117__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputMaturityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zUX48tV3dR8f" title="Expected stockholder approval date">January 13, 2025</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_901_eus-gaap--WarrantsAndRightsOutstandingMaturityDate_iI_dd_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputMaturityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_z14ervMhizC3" title="Expected stockholder approval date">January 14, 2025</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected stockholder approval probability</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20250117__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputApprovalProbabilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zkhS6JLPUV46" style="text-align: right" title="Warrants and rights outstanding, measurement Input">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputApprovalProbabilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zQ4qSj7P4807" style="text-align: right" title="Warrants and rights outstanding, measurement Input">50</td><td style="text-align: left">%</td></tr> </table>

8.38

18.00

8.38

34.00

1133652

279412

P4Y10M17D

P4Y11M4D

126.0

113.0

377.0

379.0

4.32

4.29

2025-01-13

2025-01-14

100

1910975

1133652

8.38

<p id="xdx_893_eus-gaap--ScheduleOfDerivativeLiabilitiesAtFairValueTableTextBlock_zS9y9uDV9Mr1" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table provides a roll-forward of the fair value of the derivative liabilities described above during the six months ended June 30, 2025: Schedule of Fair Value of the Derivative Liabilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4B3_us-gaap--StatementClassOfStockAxis_custom--SeriesAWarrantMember_z5f5NMVuDbSa" style="border-bottom: Black 1pt solid; text-align: center">Series A Warrants</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_4B6_us-gaap--StatementClassOfStockAxis_custom--SeriesBWarrantMember_ztY0U7Q0vaB7" style="border-bottom: Black 1pt solid; text-align: center">Series B Warrants</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_4BD_zxtsD0j3dWHf" style="border-bottom: Black 1pt solid; text-align: center">Total Warrant Liabilities</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_43A_c20250101__20250630_ecustom--WarrantLiability_iS_zLAUnWPHyonh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%">Balance at December 31, 2024</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">5,456,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">11,147,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">16,603,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_438_c20250101__20250630_ecustom--WarrantLiability_iS_zlgZvU9JWjj3" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">5,456,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">11,147,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">16,603,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--ProceedsFromWarrantExercises_iN_di_zRrPfBK05Un3" style="vertical-align: bottom; background-color: White"> <td>Exercises</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(15,214,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(15,214,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_40D_eus-gaap--FairValueAdjustmentOfWarrants_znDdsAEl6pZf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Loss on change in fair value</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,401,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,067,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">6,468,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_ecustom--FairValueOfReclassificationToEquity_zOitC0sO8gd3" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; text-align: left">Reclassification to equity</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(7,857,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(7,857,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_430_c20250101__20250630_ecustom--WarrantLiability_iE_zZiDox3lQg0k" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance at June 30, 2025</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td></tr> <tr id="xdx_430_c20250101__20250630_ecustom--WarrantLiability_iE_zPFD3mn7cON8" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td></tr> </table>

5456000 11147000 16603000 5456000 11147000 16603000

15214000

2401000

4067000

6468000

-7857000 -7857000

<p id="xdx_899_eus-gaap--ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock_zZFWClcsXFii" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table provides a roll-forward of the number of shares of common stock underlying warrants issued during the six months ended June 30, 2025: Schedule of Shares of Common Stock Underlying Warrants <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4BF_us-gaap--StatementEquityComponentsAxis_custom--SeriesAWarrantsMember_zWfg7WkhKscd" style="border-bottom: Black 1pt solid; text-align: center">Series A Warrants</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_4B4_us-gaap--StatementEquityComponentsAxis_custom--SeriesBWarrantsMember_zFc9QcQrG5Bh" style="border-bottom: Black 1pt solid; text-align: center">Series B Warrants</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_4BD_us-gaap--StatementEquityComponentsAxis_custom--OtherWarrantsMember_zi36s0WXt905" style="border-bottom: Black 1pt solid; text-align: center">Other Warrants</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_4B0_us-gaap--StatementEquityComponentsAxis_us-gaap--WarrantMember_zrIEGk4boFAj" style="border-bottom: Black 1pt solid; text-align: center">Total</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_43B_c20250101__20250630_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iS_zfzvXkcUT4X" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%">Balance at December 31, 2024</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">279,412</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">279,412</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">4,511</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right">563,335</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_431_c20250101__20250630_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iS_zcfivCd440w5" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,511</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">563,335</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--ProceedsFromWarrantExercises_zpKSVGrx0wX" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Exercises</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(279,412</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(279,412</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_435_c20250101__20250630_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iE_zl7Xe3smCgv1" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance at June 30, 2025</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,511</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">283,923</td><td style="text-align: left"> </td></tr> <tr id="xdx_43D_c20250101__20250630_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iE_zrBQrmy7KT81" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,511</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">283,923</td><td style="text-align: left"> </td></tr> </table>

279412

4511

563335

279412

4511

563335

-279412

279412

4511

283923

279412

4511

283923

Note 13 – Income Taxes The Company’s income tax provision for the three and six months ended June 30, 2024, was approximately $52,000 due to income taxes due on amended federal tax returns filed for 2020 and 2021 which took into account the one-time refunds received from the Employee Retention Credit program. The Company did not have any provision for income taxes for the three and six months ended June 30, 2025. The Company’s income tax expense differs from the expected tax expense based on statutory rates primarily due to full valuation allowance for all of its subsidiaries for the three and six months ended June 30, 2025 and 2024.

52000

Note 14 – Segment Information and Revenue Disaggregation Segment Information Pursuant to ASC 280, the Company’s Chief Executive Officer serves as the Company’s Chief Operating Decision Maker (“CODM”) for the purposes of ASC 280. The CODM concluded that the Company operates two reportable segments. One segment consists of its Singing Machine business and the other segment consists of its SemiCab business. The CODM manages the Company’s operations and business separately for each operating segment and uses net sales and net loss to allocate resources, making operating decisions and evaluating financial performance. The CODM also uses net sales and net loss, along with non-financial inputs and qualitative information, to evaluate the Company’s performance, establish compensation, monitor budget versus actual results, and decide the level of investment in various operating activities and other capital allocation activities. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 <p id="xdx_89D_eus-gaap--ScheduleOfSegmentReportingInformationBySegmentTextBlock_z3pweSEJesU" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table details the revenues, significant expenses and other segment items regularly provided to the CODM: Schedule of Details the Revenue, Significant expenses and Other Segment <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="display: none; vertical-align: bottom; background-color: White"> <td style="display: none"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_494_20250401__20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zz0SL5wfFyyi" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_490_20250401__20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_z7l5OBB3EMy7" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_49E_20250401__20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zEc5ub2eMMY9" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_496_20240401__20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zkpUG1Dmprnh" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_494_20240401__20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zmKusYD72Ga6" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_493_20240401__20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_z2HbQElyFYu1" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_49E_20250101__20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zcuQDLfFvm89" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_49E_20250101__20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zhGggJt7jb45" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_498_20250101__20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_z3anAmXp89L2" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_498_20240101__20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zGdagx3xj0Ag" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_497_20240101__20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zGt7jgwVUb13" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_49B_20240101__20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_z3sfilfHWYal" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="10" style="border-bottom: Black 1pt solid; white-space: nowrap; text-align: center">Three Months Ended June 30, 2025</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="10" style="border-bottom: Black 1pt solid; white-space: nowrap; text-align: center">Three Months Ended June 30, 2024</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="10" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2025</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="10" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2024</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Singing</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Singing</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Singing</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Singing</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Machine</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">SemiCab</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Machine</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">SemiCab</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Machine</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">SemiCab</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Machine</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">SemiCab</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total</td><td> </td></tr> <tr id="xdx_40B_eus-gaap--Revenues_maILFCOzyiF_zRSjy0gu2C1g" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 16%">Revenues</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">1,564,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">1,152,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">2,716,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">2,440,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right"> -</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">2,440,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">3,434,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">1,275,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">4,709,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">4,866,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right"> -</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">4,866,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Less:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--CostOfRevenue_msILFCOzyiF_z9eb2CYszaK9" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Adjusted cost of revenues</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">270,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,492,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,762,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,116,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,116,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,634,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,621,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,255,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,040,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,040,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--SellingAndMarketingExpense_msILFCOzyiF_z24FCmDk2Go1" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Adjusted sales and marketing</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">234,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">234,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">547,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">547,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">998,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">998,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,177,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,177,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--GeneralAndAdministrativeExpense_msILFCOzyiF_z7pdPEa7iN1g" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Adjusted general and administrative (1)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">751,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">744,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,495,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,982,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,982,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,684,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,224,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,908,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,070,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,070,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--DepreciationAndAmortization_msILFCOzyiF_zPWyr8XTQtWe" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Adjusted depreciation and amortization</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">28,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">54,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">54,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">61,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">32,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">93,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">106,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">106,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--AssetImpairmentCharges_msILFCOzyiF_z8CcQoxPEL95" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Adjusted impairement of ROU lease</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,878,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,878,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,878,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,878,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--ShareBasedCompensation_msILFCOzyiF_zzX2fasQYsge" style="vertical-align: bottom; background-color: White"> <td>Share based compensation</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(38,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(38,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">47,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">47,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">36,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">36,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--FairValueAdjustmentOfWarrants_msILFCOzyiF_zraNwMRGDTW6" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Change in fair value of warrant liability</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">6,468,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">6,468,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--GainLossOnSaleOfOtherAssets_iN_di_maILFCOzyiF_zgqfibBDjCE3" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Gain on disposal of fixed assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_ecustom--GainLossOnIssuanceOfWarrants_msILFCOzyiF_zGOaqn54l289" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Loss on issuance of warrants</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--InterestExpense_msILFCOzyiF_zuo01vvqd2Jh" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Interest expense</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">18,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">27,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">34,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">43,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--OtherNonoperatingIncomeExpense_maILFCOzyiF_zJZ5NKB8W0V4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Other income (expense), net</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--IncomeTaxExpenseBenefit_msILFCOzyiF_zctvoteGuIzd" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Income tax provision</td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(52,000</td><td style="text-align: left">)</td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(52,000</td><td style="text-align: left">)</td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--NetIncomeLoss_iT_mtILFCOzyiF_z5dDgXFD4QT7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; text-align: left">Segment net loss</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">310,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(1,119,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(809,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(6,119,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(6,119,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(8,467,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(1,636,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(10,103,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(8,486,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(8,486,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total segment assets</td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--Assets_iI_c20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zk2WfkdY5rha" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">5,244,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_988_eus-gaap--Assets_iI_c20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zDlNgoCCMDi1" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">3,033,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--Assets_iI_c20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zUcUAucJsVJ1" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">8,277,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_987_eus-gaap--Assets_iI_c20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zxppD4D4qMK8" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">12,367,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_983_eus-gaap--Assets_iI_c20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zEeuAndgbBm8" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_981_eus-gaap--Assets_iI_c20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zZ6JKMOgjGXa" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">12,367,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--Assets_iI_c20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zxalzpVKpzgj" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">5,244,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_988_eus-gaap--Assets_iI_c20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_znWIXj6MOMP1" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">3,033,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98C_eus-gaap--Assets_iI_c20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zMlMb2jxcwe1" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">8,277,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_987_eus-gaap--Assets_iI_c20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zcFETsaR85Ad" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">12,367,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_983_eus-gaap--Assets_iI_c20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zgBNBn1hLEzi" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_981_eus-gaap--Assets_iI_c20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zhV9ID8US8i7" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">12,367,000</td><td style="text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 15pt; text-align: right">(1)</td><td style="width: 5pt"></td><td style="text-align: justify">Excludes depreciation and amortization, share-based compensation, impairment of goodwill and impairment of a note receivable.</td> </tr></table> <p id="xdx_895_eus-gaap--ReconciliationOfAssetsFromSegmentToConsolidatedTextBlock_zoZiz41ulIK4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following reconciles total segment assets to consolidated total assets as of June 30, 2025: Schedule of Reconcilation of Segment Assets to Consolidated <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" id="xdx_496_20250630_zhg8IsNtT0dl" style="text-align: center">June 30,</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_499_20241231_zyrHQetl8mV1" style="text-align: center">December 31,</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2025</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_409_eus-gaap--Assets_iI_hsrt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--NetAssetsSegmentMember_z2aCdyKEgwx1" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left; padding-left: 1.5pt">Total segment assets</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">8,277,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">17,516,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--Goodwill_iI_hus-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--NetAssetsSegmentMember_zNEefb2ZOPJj" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; padding-left: 1.5pt">Goodwill</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,418,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">786,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--Assets_iTI_hus-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--NetAssetsSegmentMember_zzonRfjrvhQf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 1.5pt">Total assets</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">12,695,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">18,302,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The total segment assets of $17,516,000 at December 31, 2024 were comprised of $<span id="xdx_90A_eus-gaap--Assets_iI_c20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zV9kMD597HQe" title="Total segment assets">16,301,000 for the Singing Machine segment and $<span id="xdx_903_eus-gaap--Assets_iI_c20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zLhbPo1UUHr5" title="Total segment assets">1,215,000 for the SemiCab segment. Revenue Disaggregation The Company disaggregates revenues by product line and major geographic region. The Company’s product lines consist of AI-enabled software logistics services and home karaoke consumer products. Revenue by product line for the three and six months ended June 30, 2025 and 2024 was as follows: Schedule of Revenue by Product Line <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="display: none; vertical-align: bottom"> <td style="display: none"> </td><td style="display: none"> </td> <td colspan="2" id="xdx_492_20250401__20250630_zSCh4ORCv00i" style="display: none"> </td><td style="display: none"> </td><td style="display: none"> </td> <td colspan="2" id="xdx_49E_20240401__20240630_zpGweoHhu0Li" style="display: none"> </td><td style="display: none"> </td><td style="display: none"> </td> <td colspan="2" id="xdx_499_20250101__20250630_zQEeX7E9oWS4" style="display: none"> </td><td style="display: none"> </td><td style="display: none"> </td> <td colspan="2" id="xdx_49C_20240101__20240630_zB46UJ2HHnRl" style="display: none"> </td><td style="display: none"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center">Three Months Ended</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended</td><td style="text-align: center; padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: center">Product Line</td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_405_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--KaraokeMachinesMember_zMRGQkKyrow5" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; text-align: left; padding-left: 1.5pt">Karaoke machines</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">1,533,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">1,257,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">2,275,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">2,308,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--LicensedProductsMember_z6JNkF8FNUl1" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 1.5pt">Licensed products</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">107,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">15,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">198,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--KidsYouthElectronicsMember_zFDSyTRVt3cf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 1.5pt">Kids youth electronics</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">103,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">102,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">170,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">171,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--MicrophonesAndAccessoriesMember_zoaR0170FcAl" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 1.5pt">Microphones and accessories</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(260,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">865,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">523,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,818,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--MusicSubscriptionsMember_zScdiJrKU7Tl" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 1.5pt">Music subscriptions</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">187,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">109,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">451,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">371,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--LogisticsServicesMember_zYsL4W25xAth" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 1.5pt">Logistics services</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,152,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,275,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--Revenues_zlMqIHRFqzV" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 1.5pt"> Total revenue</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,716,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,440,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,709,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,866,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 <p id="xdx_893_ecustom--GeographicRegionDisaggregationOfRevenueinTableTextBlock_z3EvtOjfdjt7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The geographic region of sales is based primarily on where the product and services were delivered. Revenue by geographic region for the three and six months ended June 30, 2025 and 2024 was: Schedule of Revenue by Revenue by Geographic Region <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="display: none; vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; display: none; font-weight: normal; font-style: normal">Geographic Area</td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" id="xdx_492_20250401__20250630_zEb24EUNeVwc" style="border-bottom: Black 1pt solid; display: none; text-align: center; font-weight: normal; font-style: normal">June 30, 2025</td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" id="xdx_49E_20240401__20240630_zqG36hQKniV4" style="border-bottom: Black 1pt solid; display: none; text-align: center; font-weight: normal; font-style: normal">June 30, 2024</td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" id="xdx_499_20250101__20250630_zKQYUTuKjb5a" style="border-bottom: Black 1pt solid; display: none; text-align: center; font-weight: normal; font-style: normal">June 30, 2025</td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" id="xdx_49C_20240101__20240630_zTpHXMqj11Pj" style="border-bottom: Black 1pt solid; display: none; text-align: center; font-weight: normal; font-style: normal">June 30, 2024</td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center; font-weight: normal; font-style: normal">Three Months Ended</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center; font-weight: normal; font-style: normal">Six Months Ended</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal">Geographic Area</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center; font-weight: normal; font-style: normal">June 30, 2025</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center; font-weight: normal; font-style: normal">June 30, 2024</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center; font-weight: normal; font-style: normal">June 30, 2025</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center; font-weight: normal; font-style: normal">June 30, 2024</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td></tr> <tr id="xdx_403_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__srt--NorthAmericaMember_zc1fMpkytjS9" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; font-weight: normal; font-style: normal; text-align: left">North America</td><td style="width: 2%; font-weight: normal; font-style: normal"> </td> <td style="width: 1%; font-weight: normal; font-style: normal; text-align: left">$</td><td style="width: 11%; font-weight: normal; font-style: normal; text-align: right">1,410,000</td><td style="width: 1%; font-weight: normal; font-style: normal; text-align: left"> </td><td style="width: 2%; font-weight: normal; font-style: normal"> </td> <td style="width: 1%; font-weight: normal; font-style: normal; text-align: left">$</td><td style="width: 11%; font-weight: normal; font-style: normal; text-align: right">2,316,000</td><td style="width: 1%; font-weight: normal; font-style: normal; text-align: left"> </td><td style="width: 2%; font-weight: normal; font-style: normal"> </td> <td style="width: 1%; font-weight: normal; font-style: normal; text-align: left">$</td><td style="width: 11%; font-weight: normal; font-style: normal; text-align: right">3,403,000</td><td style="width: 1%; font-weight: normal; font-style: normal; text-align: left"> </td><td style="width: 2%; font-weight: normal; font-style: normal"> </td> <td style="width: 1%; font-weight: normal; font-style: normal; text-align: left">$</td><td style="width: 11%; font-weight: normal; font-style: normal; text-align: right">4,742,000</td><td style="width: 1%; font-weight: normal; font-style: normal; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__country--AU_zsUHzurxx2m5" style="vertical-align: bottom; background-color: White"> <td style="font-weight: normal; font-style: normal">Australia</td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">46,000</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">124,000</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">46,000</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">124,000</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__country--IN_zwwk2uDl2LEg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: normal; font-style: normal">India</td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">1,137,000</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">-</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">1,137,000</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">-</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__custom--AllOtherMember_z8a2v0f2TyS8" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; font-weight: normal; font-style: normal; text-align: left">All Others</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: right">123,000</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal; text-align: left"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: right">-</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal; text-align: left"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: right">123,000</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal; text-align: left"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: right">-</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--Revenues_zmqYj7uvrZHf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal"> Total revenue</td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: right">2,716,000</td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal; text-align: left"> </td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: right">2,440,000</td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal; text-align: left"> </td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: right">4,709,000</td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal; text-align: left"> </td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: right">4,866,000</td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal; text-align: left"> </td></tr> </table>

<p id="xdx_89D_eus-gaap--ScheduleOfSegmentReportingInformationBySegmentTextBlock_z3pweSEJesU" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table details the revenues, significant expenses and other segment items regularly provided to the CODM: Schedule of Details the Revenue, Significant expenses and Other Segment <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="display: none; vertical-align: bottom; background-color: White"> <td style="display: none"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_494_20250401__20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zz0SL5wfFyyi" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_490_20250401__20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_z7l5OBB3EMy7" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_49E_20250401__20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zEc5ub2eMMY9" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_496_20240401__20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zkpUG1Dmprnh" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_494_20240401__20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zmKusYD72Ga6" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_493_20240401__20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_z2HbQElyFYu1" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_49E_20250101__20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zcuQDLfFvm89" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_49E_20250101__20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zhGggJt7jb45" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_498_20250101__20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_z3anAmXp89L2" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_498_20240101__20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zGdagx3xj0Ag" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_497_20240101__20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zGt7jgwVUb13" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_49B_20240101__20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_z3sfilfHWYal" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="10" style="border-bottom: Black 1pt solid; white-space: nowrap; text-align: center">Three Months Ended June 30, 2025</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="10" style="border-bottom: Black 1pt solid; white-space: nowrap; text-align: center">Three Months Ended June 30, 2024</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="10" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2025</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="10" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2024</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Singing</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Singing</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Singing</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Singing</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center"> </td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Machine</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">SemiCab</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Machine</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">SemiCab</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Machine</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">SemiCab</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Machine</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">SemiCab</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total</td><td> </td></tr> <tr id="xdx_40B_eus-gaap--Revenues_maILFCOzyiF_zRSjy0gu2C1g" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 16%">Revenues</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">1,564,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">1,152,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">2,716,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">2,440,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right"> -</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">2,440,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">3,434,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">1,275,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">4,709,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">4,866,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right"> -</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 4%; text-align: right">4,866,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Less:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--CostOfRevenue_msILFCOzyiF_z9eb2CYszaK9" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Adjusted cost of revenues</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">270,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,492,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,762,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,116,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,116,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,634,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,621,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,255,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,040,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,040,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--SellingAndMarketingExpense_msILFCOzyiF_z24FCmDk2Go1" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Adjusted sales and marketing</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">234,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">234,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">547,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">547,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">998,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">998,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,177,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,177,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--GeneralAndAdministrativeExpense_msILFCOzyiF_z7pdPEa7iN1g" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Adjusted general and administrative (1)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">751,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">744,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,495,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,982,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,982,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,684,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,224,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,908,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,070,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,070,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--DepreciationAndAmortization_msILFCOzyiF_zPWyr8XTQtWe" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Adjusted depreciation and amortization</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">28,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">54,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">54,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">61,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">32,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">93,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">106,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">106,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--AssetImpairmentCharges_msILFCOzyiF_z8CcQoxPEL95" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Adjusted impairement of ROU lease</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,878,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,878,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,878,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,878,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--ShareBasedCompensation_msILFCOzyiF_zzX2fasQYsge" style="vertical-align: bottom; background-color: White"> <td>Share based compensation</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(38,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(38,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">47,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">47,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">36,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">36,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--FairValueAdjustmentOfWarrants_msILFCOzyiF_zraNwMRGDTW6" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Change in fair value of warrant liability</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">6,468,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">6,468,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--GainLossOnSaleOfOtherAssets_iN_di_maILFCOzyiF_zgqfibBDjCE3" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Gain on disposal of fixed assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_ecustom--GainLossOnIssuanceOfWarrants_msILFCOzyiF_zGOaqn54l289" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Loss on issuance of warrants</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--InterestExpense_msILFCOzyiF_zuo01vvqd2Jh" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Interest expense</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">18,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">27,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">34,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">43,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--OtherNonoperatingIncomeExpense_maILFCOzyiF_zJZ5NKB8W0V4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Other income (expense), net</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--IncomeTaxExpenseBenefit_msILFCOzyiF_zctvoteGuIzd" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Income tax provision</td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(52,000</td><td style="text-align: left">)</td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(52,000</td><td style="text-align: left">)</td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--NetIncomeLoss_iT_mtILFCOzyiF_z5dDgXFD4QT7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; text-align: left">Segment net loss</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">310,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(1,119,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(809,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(6,119,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(6,119,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(8,467,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(1,636,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(10,103,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(8,486,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(8,486,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total segment assets</td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--Assets_iI_c20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zk2WfkdY5rha" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">5,244,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_988_eus-gaap--Assets_iI_c20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zDlNgoCCMDi1" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">3,033,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--Assets_iI_c20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zUcUAucJsVJ1" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">8,277,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_987_eus-gaap--Assets_iI_c20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zxppD4D4qMK8" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">12,367,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_983_eus-gaap--Assets_iI_c20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zEeuAndgbBm8" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_981_eus-gaap--Assets_iI_c20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zZ6JKMOgjGXa" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">12,367,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--Assets_iI_c20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zxalzpVKpzgj" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">5,244,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_988_eus-gaap--Assets_iI_c20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_znWIXj6MOMP1" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">3,033,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98C_eus-gaap--Assets_iI_c20250630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zMlMb2jxcwe1" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">8,277,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_987_eus-gaap--Assets_iI_c20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zcFETsaR85Ad" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">12,367,000</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_983_eus-gaap--Assets_iI_c20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zgBNBn1hLEzi" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">-</td><td style="text-align: left"> </td><td> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_981_eus-gaap--Assets_iI_c20240630__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zhV9ID8US8i7" style="border-bottom: Black 2.5pt double; text-align: right" title="Total segment assets">12,367,000</td><td style="text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 15pt; text-align: right">(1)</td><td style="width: 5pt"></td><td style="text-align: justify">Excludes depreciation and amortization, share-based compensation, impairment of goodwill and impairment of a note receivable.</td> </tr></table>

1564000

1152000

2716000

2440000

3434000

1275000

4709000

4866000

270000

1492000

1762000

2116000

1634000

1621000

3255000

4040000

234000

547000

998000

1177000

751000

744000

1495000

1982000

2684000

1224000

3908000

4070000

28000

17000

45000

54000

61000

32000

93000

106000

3878000

-38000

17000

47000

36000

6468000

9000

18000

27000

17000

9000

34000

43000

45000

-52000

310000

-1119000

-809000

-6119000

-8467000

-1636000

-10103000

-8486000

5244000

3033000

8277000

12367000

5244000

3033000

8277000

12367000

<p id="xdx_895_eus-gaap--ReconciliationOfAssetsFromSegmentToConsolidatedTextBlock_zoZiz41ulIK4" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following reconciles total segment assets to consolidated total assets as of June 30, 2025: Schedule of Reconcilation of Segment Assets to Consolidated <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" id="xdx_496_20250630_zhg8IsNtT0dl" style="text-align: center">June 30,</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_499_20241231_zyrHQetl8mV1" style="text-align: center">December 31,</td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2025</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_409_eus-gaap--Assets_iI_hsrt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--NetAssetsSegmentMember_z2aCdyKEgwx1" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left; padding-left: 1.5pt">Total segment assets</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">8,277,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">17,516,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--Goodwill_iI_hus-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--NetAssetsSegmentMember_zNEefb2ZOPJj" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; padding-left: 1.5pt">Goodwill</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,418,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">786,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--Assets_iTI_hus-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--NetAssetsSegmentMember_zzonRfjrvhQf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 1.5pt">Total assets</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">12,695,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">18,302,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

8277000

17516000

4418000

786000

12695000

18302000

17516000

16301000

1215000

The Company’s product lines consist of AI-enabled software logistics services and home karaoke consumer products. Revenue by product line for the three and six months ended June 30, 2025 and 2024 was as follows: Schedule of Revenue by Product Line <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="display: none; vertical-align: bottom"> <td style="display: none"> </td><td style="display: none"> </td> <td colspan="2" id="xdx_492_20250401__20250630_zSCh4ORCv00i" style="display: none"> </td><td style="display: none"> </td><td style="display: none"> </td> <td colspan="2" id="xdx_49E_20240401__20240630_zpGweoHhu0Li" style="display: none"> </td><td style="display: none"> </td><td style="display: none"> </td> <td colspan="2" id="xdx_499_20250101__20250630_zQEeX7E9oWS4" style="display: none"> </td><td style="display: none"> </td><td style="display: none"> </td> <td colspan="2" id="xdx_49C_20240101__20240630_zB46UJ2HHnRl" style="display: none"> </td><td style="display: none"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center">Three Months Ended</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended</td><td style="text-align: center; padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: center">Product Line</td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_405_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--KaraokeMachinesMember_zMRGQkKyrow5" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; text-align: left; padding-left: 1.5pt">Karaoke machines</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">1,533,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">1,257,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">2,275,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">2,308,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--LicensedProductsMember_z6JNkF8FNUl1" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 1.5pt">Licensed products</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">107,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">15,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">198,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--KidsYouthElectronicsMember_zFDSyTRVt3cf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 1.5pt">Kids youth electronics</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">103,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">102,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">170,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">171,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--MicrophonesAndAccessoriesMember_zoaR0170FcAl" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 1.5pt">Microphones and accessories</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(260,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">865,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">523,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,818,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--MusicSubscriptionsMember_zScdiJrKU7Tl" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 1.5pt">Music subscriptions</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">187,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">109,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">451,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">371,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--LogisticsServicesMember_zYsL4W25xAth" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 1.5pt">Logistics services</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,152,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,275,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--Revenues_zlMqIHRFqzV" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 1.5pt"> Total revenue</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,716,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,440,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,709,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,866,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

1533000

1257000

2275000

2308000

1000

107000

15000

198000

103000

102000

170000

171000

-260000

865000

523000

1818000

187000

109000

451000

371000

1152000

1275000

2716000

2440000

4709000

4866000

<p id="xdx_893_ecustom--GeographicRegionDisaggregationOfRevenueinTableTextBlock_z3EvtOjfdjt7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The geographic region of sales is based primarily on where the product and services were delivered. Revenue by geographic region for the three and six months ended June 30, 2025 and 2024 was: Schedule of Revenue by Revenue by Geographic Region <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="display: none; vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; display: none; font-weight: normal; font-style: normal">Geographic Area</td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" id="xdx_492_20250401__20250630_zEb24EUNeVwc" style="border-bottom: Black 1pt solid; display: none; text-align: center; font-weight: normal; font-style: normal">June 30, 2025</td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" id="xdx_49E_20240401__20240630_zqG36hQKniV4" style="border-bottom: Black 1pt solid; display: none; text-align: center; font-weight: normal; font-style: normal">June 30, 2024</td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" id="xdx_499_20250101__20250630_zKQYUTuKjb5a" style="border-bottom: Black 1pt solid; display: none; text-align: center; font-weight: normal; font-style: normal">June 30, 2025</td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" id="xdx_49C_20240101__20240630_zTpHXMqj11Pj" style="border-bottom: Black 1pt solid; display: none; text-align: center; font-weight: normal; font-style: normal">June 30, 2024</td><td style="display: none; padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center; font-weight: normal; font-style: normal">Three Months Ended</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center; font-weight: normal; font-style: normal">Six Months Ended</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal">Geographic Area</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center; font-weight: normal; font-style: normal">June 30, 2025</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center; font-weight: normal; font-style: normal">June 30, 2024</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center; font-weight: normal; font-style: normal">June 30, 2025</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center; font-weight: normal; font-style: normal">June 30, 2024</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td></tr> <tr id="xdx_403_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__srt--NorthAmericaMember_zc1fMpkytjS9" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; font-weight: normal; font-style: normal; text-align: left">North America</td><td style="width: 2%; font-weight: normal; font-style: normal"> </td> <td style="width: 1%; font-weight: normal; font-style: normal; text-align: left">$</td><td style="width: 11%; font-weight: normal; font-style: normal; text-align: right">1,410,000</td><td style="width: 1%; font-weight: normal; font-style: normal; text-align: left"> </td><td style="width: 2%; font-weight: normal; font-style: normal"> </td> <td style="width: 1%; font-weight: normal; font-style: normal; text-align: left">$</td><td style="width: 11%; font-weight: normal; font-style: normal; text-align: right">2,316,000</td><td style="width: 1%; font-weight: normal; font-style: normal; text-align: left"> </td><td style="width: 2%; font-weight: normal; font-style: normal"> </td> <td style="width: 1%; font-weight: normal; font-style: normal; text-align: left">$</td><td style="width: 11%; font-weight: normal; font-style: normal; text-align: right">3,403,000</td><td style="width: 1%; font-weight: normal; font-style: normal; text-align: left"> </td><td style="width: 2%; font-weight: normal; font-style: normal"> </td> <td style="width: 1%; font-weight: normal; font-style: normal; text-align: left">$</td><td style="width: 11%; font-weight: normal; font-style: normal; text-align: right">4,742,000</td><td style="width: 1%; font-weight: normal; font-style: normal; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__country--AU_zsUHzurxx2m5" style="vertical-align: bottom; background-color: White"> <td style="font-weight: normal; font-style: normal">Australia</td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">46,000</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">124,000</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">46,000</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">124,000</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__country--IN_zwwk2uDl2LEg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: normal; font-style: normal">India</td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">1,137,000</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">-</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">1,137,000</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal"> </td> <td style="font-weight: normal; font-style: normal; text-align: left"> </td><td style="font-weight: normal; font-style: normal; text-align: right">-</td><td style="font-weight: normal; font-style: normal; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__custom--AllOtherMember_z8a2v0f2TyS8" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; font-weight: normal; font-style: normal; text-align: left">All Others</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: right">123,000</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal; text-align: left"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: right">-</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal; text-align: left"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: right">123,000</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal; text-align: left"> </td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-weight: normal; font-style: normal; text-align: right">-</td><td style="padding-bottom: 1pt; font-weight: normal; font-style: normal; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--Revenues_zmqYj7uvrZHf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal"> Total revenue</td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: right">2,716,000</td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal; text-align: left"> </td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: right">2,440,000</td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal; text-align: left"> </td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: right">4,709,000</td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal; text-align: left"> </td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: normal; font-style: normal; text-align: right">4,866,000</td><td style="padding-bottom: 2.5pt; font-weight: normal; font-style: normal; text-align: left"> </td></tr> </table>

1410000

2316000

3403000

4742000

46000

124000

46000

124000

1137000

123000

2716000

2440000

4709000

4866000

Notes 15 – Concentrations, Risks and Uncertainties Bank Liquidity and Financial Stability At times, the Company maintains cash in United States bank accounts that are more than the Federal Deposit Insurance Corporation insured amounts. The Company maintains cash balances in foreign financial institutions. The Company regularly monitors the financial stability of this financial institution and believes that it is not exposed to any significant credit risk in cash and cash equivalents. However, in March and April 2023, certain U.S. government banking regulators took steps to intervene in the operations of certain financial institutions due to liquidity concerns, which caused general heightened uncertainties in financial markets. While these events have not had a material direct impact on the Company’s operations, if further liquidity and financial stability concerns arise with respect to banks and financial institutions, either nationally or in specific regions, the Company’s ability to access cash or enter into new financing arrangements may be threatened, which could have a material adverse effect on its business, financial condition and results of operations. U.S. Trade Policies U.S. government administration and members of the U.S. Congress have recently implemented significant changes in U.S. trade policy and taken certain actions that are impacting the Company’s business, including imposing tariffs on certain goods imported into the United States. Some of these changes have triggered retaliatory actions by affected countries and may result in “trade wars” and increased costs for goods imported into the United States. All of the Company’s products are manufactured and imported from China and the Company sells its products in Canada and other countries. The implementation of tariffs has resulted in an increase in the cost of the Company’s products. If the Company is unable to mitigate these increased costs through price increases, it may experience lower sales which would negatively impact its revenue, gross profit margin and results of operations. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 Revenue Concentration The Company derives a majority of its revenue from sales by retailers of its home karaoke consumer products in North America sales of its AI-enabled software logistics services in India. The Company’s allowance for credit losses is based upon management’s estimates and historical experience and reflects the fact that accounts receivable is concentrated with several large customers. As of June 30, 2025, <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--ThreeCustomersMember__srt--StatementGeographicalAxis__srt--NorthAmericaMember_zI7IeCHHXDMh">17% of accounts receivable were due from one customer in North America and <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--ThreeCustomersMember__srt--StatementGeographicalAxis__country--IN_zFOU9WysINO6">16% of accounts receivable were due from one customer in India that each individually owed more than 10% of the Company’s total accounts receivable. At December 31, 2024, <span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20241231__20241231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--FourCustomersMember__srt--StatementGeographicalAxis__srt--NorthAmericaMember_zYqthXKDu9Lh">68% of accounts receivable were due from three customers in North America that each individually owed more than 10% of the Company’s total accounts receivable. Revenue derived from the Company’s top customer and top three customers collectively as a percentage of total net sales was <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_dp_c20250401__20250630__srt--MajorCustomersAxis__custom--TopThreeCustomersMember__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zY5p3g21DQcg" title="Concentration of risk, percentage">11% and <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_dp_c20240401__20240630__srt--MajorCustomersAxis__custom--TopThreeCustomersMember__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_z4s6UxREVgTa" title="Concentration of risk, percentage">66% of the Company’s revenue, respectively, for the three months ended June 30, 2025 and 2024, respectively. Revenue derived from the Company’s top three customers collectively as a percentage of total net sales was <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_dp_c20250101__20250630__srt--MajorCustomersAxis__custom--TopThreeCustomersMember__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_z2hxXjy7QJM7" title="Concentration of risk, percentage">37% and <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_dp_c20240101__20240630__srt--MajorCustomersAxis__custom--TopThreeCustomersMember__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zTqZxk13g4e7" title="Concentration of risk, percentage">71% of the Company’s revenue, respectively, for the six months ended June 30, 2025 and 2024, respectively. The loss of any of these customers could have an adverse impact on the Company. Revenue from customers representing greater than 10% of total net sales that were derived from the Company’s top customer as a percentage of total net sales for the three months ended June 30, 2025 was 11%. Revenue from customers representing greater than 10% of total net sales that were derived from the Company’s top three customers as a percentage of total net sales for the three months ended June 30, 2024 was <span id="xdx_90A_eus-gaap--ConcentrationRiskPercentage1_dp_c20240401__20240630__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zLP6GuYpOUAj" title="Concentration of risk, percentage">39%, <span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_dp_c20240401__20240630__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zPJHSgwUmwPa" title="Concentration of risk, percentage">14%, and <span id="xdx_904_eus-gaap--ConcentrationRiskPercentage1_dp_c20240401__20240630__srt--MajorCustomersAxis__custom--CustomerThreeMember__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zULI6j5RdApi" title="Concentration of risk, percentage">13%. Revenue from customers representing greater than 10% of total net sales that were derived from the Company’s top three customers as a percentage of total net sales for the six months ended June 30, 2025 was <span id="xdx_90A_eus-gaap--ConcentrationRiskPercentage1_dp_c20250101__20250630__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zYNI0u4c8K9f" title="Concentration of risk, percentage">10%, <span id="xdx_90F_eus-gaap--ConcentrationRiskPercentage1_dp_c20250101__20250630__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zq0TVIfqZiY2" title="Concentration of risk, percentage">11% and <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_dp_c20250101__20250630__srt--MajorCustomersAxis__custom--CustomerThreeMember__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zRLSQRDlY9Di" title="Concentration of risk, percentage">16%. Revenue from customers representing greater than 10% of total net sales that were derived from the Company’s top three customers as a percentage of total net sales for the six months ended June 30, 2024 was <span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_dp_c20240101__20240630__srt--MajorCustomersAxis__custom--CustomerOneMember__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zt3uctNZBrO6" title="Concentration of risk, percentage">50%, <span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_dp_c20240101__20240630__srt--MajorCustomersAxis__custom--CustomerTwoMember__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zRlljoa4BYK9" title="Concentration of risk, percentage">11%, and <span id="xdx_90D_eus-gaap--ConcentrationRiskPercentage1_dp_c20240101__20240630__srt--MajorCustomersAxis__custom--CustomerThreeMember__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zruDPXcWsxUf" title="Concentration of risk, percentage">10%. The loss of any of these customers could have an adverse impact on the Company.

0.17

0.16

0.68

0.11

0.66

0.37

0.71

0.39

0.14

0.13

0.10

0.11

0.16

0.50

0.11

0.10

Note 16 – Related Party Transactions Stingray Group Subscription Payments The Company has a music subscription sharing agreement with Stingray Group. For the three and six months ended June 30, 2025, the Company received music subscription revenue of $<span id="xdx_90F_eus-gaap--Revenues_c20250401__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--StingrayGroupMember__us-gaap--TypeOfArrangementAxis__custom--SubscriptionSharingAgreementMember_zP6ZNjasxebj" title="Revenue from related parties">187,000 and $<span id="xdx_90B_eus-gaap--Revenues_c20250101__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--StingrayGroupMember__us-gaap--TypeOfArrangementAxis__custom--SubscriptionSharingAgreementMember_zDWK762ESyEl" title="Revenue from related parties">451,000, respectively, from Stingray Group. For the three and six months ended June 30, 2024, the Company received music subscription revenue of $<span id="xdx_907_eus-gaap--Revenues_c20240401__20240630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--StingrayGroupMember__us-gaap--TypeOfArrangementAxis__custom--SubscriptionSharingAgreementMember_ztujsSzqxyOi" title="Revenue from related parties">109,000 and $<span id="xdx_901_eus-gaap--Revenues_c20240101__20240630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--StingrayGroupMember__us-gaap--TypeOfArrangementAxis__custom--SubscriptionSharingAgreementMember_zBx3YIFkbAha" title="Revenue from related parties">349,000, respectively, from Stingray Group. As of June 30, 2025 and December 31, 2024, the Company had $<span id="xdx_901_eus-gaap--OtherReceivables_iI_c20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--StingrayGroupMember__us-gaap--TypeOfArrangementAxis__custom--SubscriptionSharingAgreementMember_z0SdYeDeqCsb" title="Due from related parties">124,000 and $<span id="xdx_90D_eus-gaap--OtherReceivables_iI_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--StingrayGroupMember__us-gaap--TypeOfArrangementAxis__custom--SubscriptionSharingAgreementMember_zqfe1tlG1Qkd" title="Due from related parties">212,000, respectively, due from Stingray Group for music subscription reimbursement. SMCB VIE Analysis The Company determined that SMCB, which was a subsidiary of SemiCab, Inc. prior to the SemiCab Holdings’ acquisition of <span id="xdx_908_eus-gaap--MinorityInterestOwnershipPercentageByParent_iI_dp_c20250502__srt--OwnershipAxis__custom--SemiCabIncMember_zfDHQ57loHxh" title="Common stock issued for purchase ownership percentage">99.99% of the equity shares of SMCB on May 2, 2025, was a VIE as the Company provides financial support to SMCB. While not contractually obligated, SMCB currently relies on the Company’s reimbursement of certain costs under an intercompany services agreement (“MSA”) whereby SMCB agrees to provide IT software development services to SemiCab, Inc. In exchange, under the MSA, the Company grants intellectual property rights to SMCB to use the software platform in India. Compensation for services is invoiced and paid on a monthly or quarterly basis as agreed by both parties, with rates subject to periodic review and revision. The agreement is for a term of two years ending on April 1, 2025 and automatically renews for additional 12-month periods unless prior notice is given by the terminating party. The agreement automatically renewed for an additional 12-month period on April 1, 2025. As a result of this relationship and the financial support provided by the Company to SMCB under the loan agreement described below to fund SMCB’s operations, SMCB has been determined to be a VIE prior to May 2, 2025. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 The Company further determined that it was not the primary beneficiary of SMCB because the Company did not have the power to direct or control SMCB’s significant activities related to its business. Accordingly, the Company has not consolidated SMCB’s results of operations and financial position in its condensed consolidated financial statements. Pursuant to the terms of the asset purchase agreement that the Company entered into on June 11, 2024, the Company entered into an option agreement that granted SemiCab Holdings the right to acquire all of the issued and outstanding equity securities of SMCB for <span id="xdx_90C_eus-gaap--StockIssuedDuringPeriodSharesIssuedForServices_c20240611__20240611__us-gaap--RelatedPartyTransactionAxis__custom--SemiCabHoldingsMember_zRThiHCi5Okl" title="Number of shares issued for service">1,605 shares of the Company’s common stock. The Company did not exercise this right and the option agreement expired on August 31, 2024. Loan Agreement The Company is a party to a loan agreement with SMCB dated March 22, 2024. Under the loan agreement, the Company agreed to loan up to $<span id="xdx_905_eus-gaap--ProceedsFromLoans_c20240322__20240322__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--SMCBMember_zDa7EM6IQf8b" title="Proceeds from loan">2,500,000 to SMCB. The loans are anticipated to be made in tranches. Disbursements of any tranches are fully at the discretion of the Company. Each tranche has a repayment period of five years. The loans can be repaid at any time prior to the five-year maturity date without penalty. Interest on the loans accrues at a rate of six percent per year and is payable quarterly. At December 31, 2024, a total of $1,140,000 was outstanding under the loan agreement. During the period beginning January 1, 2025 and ending May 2, 2025, the date the Company acquired <span id="xdx_908_eus-gaap--MinorityInterestOwnershipPercentageByParent_iI_dp_c20250502__srt--OwnershipAxis__custom--SemiCabIncMember_zJFIHeaeam0g" title="Common stock issued for purchase ownership percentage">99.99% of the equity shares of SMCB, the Company made advances to SMCB in the amount of $<span id="xdx_90B_ecustom--AdvancesToSmcb_c20250101__20250630__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--SMBCMember_zyJ3FwKFkKUl" title="Advances to Smcb">1,172,000. During the same period, SMCB charged $<span id="xdx_906_ecustom--SoftwareInfrastructureDevelopmentAndMaintenanceServices_c20250101__20250630__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--SMBCMember_zjlA5jt3i4ih" title="Software and infrastructure development and maintenance services">304,000 for services to the Company that were performed under the MSA, which charges offset amounts due under the loan with SMCB. As a result, as of May 2, 2025, a total of $2,008,000 of loans were outstanding under the loan agreement, and a total of $<span id="xdx_906_eus-gaap--DebtInstrumentCarryingAmount_iI_c20250630__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--SMCBMember_z7y6u8T2Vkyj" title="Loan remaining">492,000 remained available for future borrowings under the loan agreement as of May 2, 2025. As of May 2, 2025, SMCB had not made any interest payments due under the loan agreement. As a result, the loans were in default as of May 2, 2025. On May 2, 2025, the loan payable of $2,008,000 of SMCB and the loan receivable of $2,008,000 of the Company were eliminated in consolidation. As a result, no such loans payable and loans receivable were outstanding on the Company’s condensed consolidated balance sheet at June 30, 2025. Also on May 2, 2025, revenue generated by SMCB for services performed by SMCB under the MSA of $304,000, and expenses for the Company for services performed by SMCB under the MSA of $304,000, during the period commencing January 1, 2025 and ending May 2, 2025 were eliminated in consolidation on May 2, 2025. As a result, no such revenue and expenses were reflected on the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2025. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

187000

451000

109000

349000

124000

212000

0.9999

1605

2500000

1140000

0.9999

1172000 304000

2008000

492000

2008000

-304000 304000

Note 17 – Acquisition of SMCB On May 2, 2025, the Company and SemiCab Holdings entered into an equity purchase agreement with SemiCab, Inc. pursuant to which: (i) SemiCab Holdings purchased <span id="xdx_909_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_c20250502__20250502__us-gaap--BusinessAcquisitionAxis__custom--SemiCabHoldingsMember__us-gaap--TypeOfArrangementAxis__custom--EquityPurchaseAgreementMember_zZKmmhtakAp6" title="Stock issued during period shares acquisitions">9,999 shares of the issued and outstanding equity shares, Rs. <span id="xdx_90F_eus-gaap--CommonStockParOrStatedValuePerShare_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SemiCabHoldingsMember__us-gaap--TypeOfArrangementAxis__custom--EquityPurchaseAgreementMember_zIvBoys98Q1g" title="Common stock, par value">10 par value, of SMCB, representing 99.99% of the issued and outstanding equity shares of SMCB, for $<span id="xdx_90C_eus-gaap--DebtInstrumentFaceAmount_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SemiCabIncMember__us-gaap--TypeOfArrangementAxis__custom--EquityPurchaseAgreementMember_z7fDl1y99sV6" title="Debt instrument face amount">1,750,000, the payment of which amount was evidenced by the issuance of a promissory note by the Company to the SemiCab, Inc., and (ii) the Company purchased the <span id="xdx_904_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_dp_uPure_c20250502__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--SemiCabIncMember__us-gaap--TypeOfArrangementAxis__custom--EquityPurchaseAgreementMember_zUOoGs4S6ZCd" title="Membership interest percentage">20% membership interest in SemiCab Holdings then held by SemiCab, Inc. for aggregate consideration consisting of <span id="xdx_90A_eus-gaap--NoncashOrPartNoncashAcquisitionNoncashFinancialOrEquityInstrumentConsiderationSharesIssued1_c20250502__20250502__us-gaap--BusinessAcquisitionAxis__custom--SemiCabIncMember__us-gaap--TypeOfArrangementAxis__custom--EquityPurchaseAgreementMember_zcRe8RQCZG0c" title="Aggregate consideration consisting shares">119,742 shares of the Company’s common stock. The acquisition was completed on May 2, 2025 (the “Closing Date”). The promissory note provides that $<span id="xdx_906_eus-gaap--NotesPayable_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SemiCabIncMember__us-gaap--TypeOfArrangementAxis__custom--EquityPurchaseAgreementMember_zoeuB6hQ5hs" title="Notes payable">1,500,000 is due and payable by the Company on the first anniversary of the Closing Date and the remaining $<span id="xdx_900_eus-gaap--DebtInstrumentCarryingAmount_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SemiCabIncMember__us-gaap--TypeOfArrangementAxis__custom--EquityPurchaseAgreementMember_zQq46wSRYn8h" title="Remaining debt amount">250,000 is due and payable by the Company on the 18-month anniversary of the Closing Date. The promissory note bears interest at six percent per annum. The Company completed the acquisition to expand its AI logistics and distribution into India. On the Closing Date, the Company 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. Pursuant to the terms of the employment agreements, SemiCab Holdings granted Messrs. Kapoor and Sehgal a membership interest in SemiCab Holdings of <span id="xdx_904_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_dp_uPure_c20250502__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--MessrsKapoorAndSehgalMember__us-gaap--TypeOfArrangementAxis__custom--AmendedAndRestatedEmploymentAgreementMember_zcPgytqucrQl" title="Membership interest percentage">15% and five percent, respectively. Of these amounts, one quarter of each such grant vested in full on the date of grant, and the remaining amounts vest evenly over three years. The Company has performed a preliminary valuation analysis of the fair market value of SMCB assets acquired and liabilities assumed. Using the total consideration for the acquisition, the Company has estimated the allocations to such assets and liabilities. The following table summarizes the allocation of the preliminary purchase price as May 2, 2025, the date the acquisition was completed: <p id="xdx_89A_eus-gaap--ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock_zDXV2GJr8khb" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"> Schedule of Business Acquisition <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold">Consideration:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 80%; text-align: left">Promissory note</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_984_ecustom--PromissoryNoteIssuedForAcquisitionOfSmcb_c20250502__20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zbqDVvQqClY4" style="width: 16%; text-align: right" title="Promissory note">1,750,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIEJ1c2luZXNzIEFjcXVpc2l0aW9uIChEZXRhaWxzKSAoUGFyZW50aGV0aWNhbCkA" id="xdx_901_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_c20250502__20250502__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zDjW9HPFPkT3" title="Share of common stock issue">119,742 shares of common stock</td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_ecustom--CommonStockIssuedForAcquisitionOfSmcb_c20250502__20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zj0M1cKHVyC8" style="text-align: right" title="Shares of common stock">316,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Assumption of debt</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98A_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedNoncurrentLiabilitiesLongTermDebt_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zuVhFm3VhM99" style="border-bottom: Black 1pt solid; text-align: right" title="Assumption of debt">2,008,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_982_eus-gaap--BusinessCombinationConsiderationTransferred1_c20250502__20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zFaDGUpdmOqb" style="border-bottom: Black 2.5pt double; text-align: right" title="Consideration">4,074,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Identifiable net assets acquired:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Cash and cash equivalents</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98D_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCashAndEquivalents_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zGD6s20U7FVb" style="text-align: right" title="Cash and cash equivalents">593,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Accounts receivable, net</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsReceivables_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zHZjDTjXoaT2" style="text-align: right" title="Accounts receivable, net">319,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Prepaid expenses and other current assets</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsPrepaidExpenseAndOtherAssets_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zZWvaclEMlTa" style="text-align: right" title="Prepaid expenses and other current assets">377,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Property and equipment, net</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedPropertyPlantAndEquipment_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zeQlZ2XBBVWi" style="text-align: right" title="Property and equipment, net">11,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Other non-current assets</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedOtherNoncurrentAssets_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_z5VI23IjpXE3" style="text-align: right" title="Other non-current assets">489,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Accounts payable and accrued expenses</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccountsPayable_iNI_di_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zFX7Brs95US6" style="text-align: right" title="Accounts payable and accrued expenses">(372,000</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; text-align: left">Other current liabilities</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98E_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesOther_iNI_di_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zc0MfuWn5zDf" style="border-bottom: Black 1pt solid; text-align: right" title="Other current liabilities">(975,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Net assets acquired</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_982_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedNet_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zumPpTpJdYMf" style="border-bottom: Black 1pt solid; text-align: right" title="Net assets acquired">442,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt; font-weight: bold">Goodwill</td><td style="padding-bottom: 2.5pt; font-weight: bold"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_980_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredGoodwillAndLiabilitiesAssumedNet_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_ztiGG5w5giDh" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Goodwill">3,632,000</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 This preliminary purchase price allocation has been used to prepare the transaction accounting adjustments in the pro forma balance sheet and income statement. The fair values of assets and liabilities acquired represent the Company’s estimates of fair values as of the acquisition date. Management believes that the fair values recognized for the assets and liabilities acquired are based on reasonable estimates and assumptions. The final purchase price allocation will be determined when the Company has completed the detailed valuations and necessary calculations. The final allocation could differ materially from the preliminary allocation used in the transaction accounting adjustments. The final allocation may include: (i) changes in fair values of property and equipment, (ii) changes in allocations to goodwill, and (iii) other changes to assets and liabilities. Pro Forma Information The unaudited pro forma financial information below presents the effects of the acquisition as though it had been completed on January 1, 2024. The pro forma adjustments are derived from the historically reported transactions of the respective companies. The pro forma results do not include anticipated combined effects or other expected benefits of the acquisition. The pro forma results for the six months ended June 30, 2025 and 2024 reflect the combined performance of the Company and the SMCB business for that period. The unaudited pro forma information is based on available data and certain assumptions that the Company believes are reasonable given the circumstances. However, actual results may differ materially from the assumptions used in the accompanying unaudited pro forma financial information. This selected unaudited pro forma condensed combined financial information is presented for illustrative purposes only and is not intended to represent what the actual consolidated results of operations would have been had the acquisition date occurred on January 1, 2024, nor does it attempt to forecast future consolidated results of operations. Schedule of Pro Forma Financial Information <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="display: none; vertical-align: bottom"> <td style="display: none; padding-bottom: 1pt; text-align: center"> </td><td style="display: none; padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_495_20250101__20250630_zSXFdq2EIuIf" style="border-bottom: Black 1pt solid; display: none; text-align: center">June 30, 2025</td><td style="display: none; padding-bottom: 1pt; text-align: center"> </td><td style="display: none; padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_49E_20240101__20240630_ze6Tm28dDjJ4" style="border-bottom: Black 1pt solid; display: none; text-align: center">June 30, 2024</td><td style="display: none; padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended</td><td style="padding-bottom: 1pt; text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_403_eus-gaap--BusinessAcquisitionsProFormaRevenue_zjXJKBAwHOrf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Net revenue</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">7,438,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">6,135,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--BusinessAcquisitionsProFormaIncomeLossFromContinuingOperationsBeforeChangesInAccountingAndExtraordinaryItemsNetOfTax_zmUGhMlOs02k" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; text-align: left">Operating loss from continuing operations</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(4,539,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(8,689,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_400_eus-gaap--BusinessAcquisitionsProFormaNetIncomeLoss_zkQUGVZgY9m5" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; text-align: left">Net loss</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(11,313,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(8,735,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table>

9999

1750000

0.20

119742

1500000

250000

0.15

<p id="xdx_89A_eus-gaap--ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock_zDXV2GJr8khb" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in"> Schedule of Business Acquisition <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold">Consideration:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 80%; text-align: left">Promissory note</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_984_ecustom--PromissoryNoteIssuedForAcquisitionOfSmcb_c20250502__20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zbqDVvQqClY4" style="width: 16%; text-align: right" title="Promissory note">1,750,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td><span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIEJ1c2luZXNzIEFjcXVpc2l0aW9uIChEZXRhaWxzKSAoUGFyZW50aGV0aWNhbCkA" id="xdx_901_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_c20250502__20250502__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zDjW9HPFPkT3" title="Share of common stock issue">119,742 shares of common stock</td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_ecustom--CommonStockIssuedForAcquisitionOfSmcb_c20250502__20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zj0M1cKHVyC8" style="text-align: right" title="Shares of common stock">316,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Assumption of debt</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98A_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedNoncurrentLiabilitiesLongTermDebt_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zuVhFm3VhM99" style="border-bottom: Black 1pt solid; text-align: right" title="Assumption of debt">2,008,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_982_eus-gaap--BusinessCombinationConsiderationTransferred1_c20250502__20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zFaDGUpdmOqb" style="border-bottom: Black 2.5pt double; text-align: right" title="Consideration">4,074,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Identifiable net assets acquired:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Cash and cash equivalents</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98D_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCashAndEquivalents_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zGD6s20U7FVb" style="text-align: right" title="Cash and cash equivalents">593,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Accounts receivable, net</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsReceivables_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zHZjDTjXoaT2" style="text-align: right" title="Accounts receivable, net">319,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Prepaid expenses and other current assets</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsPrepaidExpenseAndOtherAssets_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zZWvaclEMlTa" style="text-align: right" title="Prepaid expenses and other current assets">377,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Property and equipment, net</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedPropertyPlantAndEquipment_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zeQlZ2XBBVWi" style="text-align: right" title="Property and equipment, net">11,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Other non-current assets</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedOtherNoncurrentAssets_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_z5VI23IjpXE3" style="text-align: right" title="Other non-current assets">489,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Accounts payable and accrued expenses</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccountsPayable_iNI_di_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zFX7Brs95US6" style="text-align: right" title="Accounts payable and accrued expenses">(372,000</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; text-align: left">Other current liabilities</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98E_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesOther_iNI_di_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zc0MfuWn5zDf" style="border-bottom: Black 1pt solid; text-align: right" title="Other current liabilities">(975,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: left">Net assets acquired</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_982_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedNet_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_zumPpTpJdYMf" style="border-bottom: Black 1pt solid; text-align: right" title="Net assets acquired">442,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt; font-weight: bold">Goodwill</td><td style="padding-bottom: 2.5pt; font-weight: bold"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_980_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredGoodwillAndLiabilitiesAssumedNet_iI_c20250502__us-gaap--BusinessAcquisitionAxis__custom--SMCBAcquisitionMember_ztiGG5w5giDh" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Goodwill">3,632,000</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table>

1750000

119742

316000

2008000

4074000

593000

319000

377000

11000

489000

372000

975000

442000

3632000

Schedule of Pro Forma Financial Information <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="display: none; vertical-align: bottom"> <td style="display: none; padding-bottom: 1pt; text-align: center"> </td><td style="display: none; padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_495_20250101__20250630_zSXFdq2EIuIf" style="border-bottom: Black 1pt solid; display: none; text-align: center">June 30, 2025</td><td style="display: none; padding-bottom: 1pt; text-align: center"> </td><td style="display: none; padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_49E_20240101__20240630_ze6Tm28dDjJ4" style="border-bottom: Black 1pt solid; display: none; text-align: center">June 30, 2024</td><td style="display: none; padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended</td><td style="padding-bottom: 1pt; text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_403_eus-gaap--BusinessAcquisitionsProFormaRevenue_zjXJKBAwHOrf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Net revenue</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">7,438,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">6,135,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--BusinessAcquisitionsProFormaIncomeLossFromContinuingOperationsBeforeChangesInAccountingAndExtraordinaryItemsNetOfTax_zmUGhMlOs02k" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt; text-align: left">Operating loss from continuing operations</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(4,539,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(8,689,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_400_eus-gaap--BusinessAcquisitionsProFormaNetIncomeLoss_zkQUGVZgY9m5" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; text-align: left">Net loss</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(11,313,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(8,735,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table>

7438000

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Note 18. Subsequent Events Agile Capital Financing Transaction In July 2025, the Company entered into a business loan and security agreement with Agile Capital Funding, LLC (“Agile Funding”) pursuant to which it issued a promissory note to Agile Funding in the principal amount of $<span id="xdx_90C_eus-gaap--ProceedsFromOtherShortTermDebt_c20250701__20250730__us-gaap--TypeOfArrangementAxis__custom--BusinessLoanAndSecurityAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--AgileCapitalFundindLLCMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zfbBaEiQVOrl" title="Promissory note">368,000. The note is subject to a one-time interest charge of $<span id="xdx_90B_eus-gaap--DebtInstrumentPeriodicPaymentInterest_c20250701__20250730__us-gaap--TypeOfArrangementAxis__custom--BusinessLoanAndSecurityAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--AgileCapitalFundindLLCMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zt0vdcZHboql" title="One-time interest charge">162,000 and is payable in 28 weekly installments of $<span id="xdx_902_ecustom--DebtInstrumentPeriodicPaymentInterestWeekly_c20250701__20250730__us-gaap--TypeOfArrangementAxis__custom--BusinessLoanAndSecurityAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--AgileCapitalFundindLLCMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_z1cnnPosy7Df" title="Weekly installment amount">19,000 commencing on July 14, 2025. The Company received net proceeds of $<span id="xdx_901_eus-gaap--ProceedsFromIssuanceOfDebt_c20250701__20250730__us-gaap--TypeOfArrangementAxis__custom--BusinessLoanAndSecurityAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--AgileCapitalFundindLLCMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zEtGOuNHMWCd" title="Proceeds from issue of promissory note">350,000 after deductions of $<span id="xdx_90A_eus-gaap--AdministrativeFeesExpense_c20250701__20250730__us-gaap--TypeOfArrangementAxis__custom--BusinessLoanAndSecurityAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--AgileCapitalFundindLLCMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zlkSLjpR5NE8" title="Administrative agent fees">18,000 for administrative agent fees. Sale of Singing Machine Business On August 1, 2025, the <span id="xdx_90D_ecustom--BusinessAcquisitionDescriptionDescriptionOfSaleOfMachineBusiness_c20250801__20250801__us-gaap--TypeOfArrangementAxis__custom--AssetPurchaseAgreementMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zsKxchpQKr4d" title="Description related to sale of machine business">Company entered into an asset purchase agreement with SMC and Stingray Music USA, Inc. (“Stingray USA”) pursuant to which Stingray USA purchased substantially all of the assets, and assumed most of the liabilities, associated with the Company’s Singing Machine business for $500,000. The transaction closed on August 1, 2025.

368000

162000

19000

350000

18000

Company entered into an asset purchase agreement with SMC and Stingray Music USA, Inc. (“Stingray USA”) pursuant to which Stingray USA purchased substantially all of the assets, and assumed most of the liabilities, associated with the Company’s Singing Machine business for $500,000.

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Note 1 – Nature of Business Algorhythm Holdings, Inc. (f/k/a The Singing Machine Company, Inc.) (the “Company”) is an artificial intelligence (“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 the Company’s subsidiary, SemiCab Holdings, LLC. Singing Machine is a home karaoke consumer products business that designs and distributes karaoke products globally to retailers and ecommerce partners through the Company’s subsidiary, The Singing Machine Company, Inc. The Company’s operations include its 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 its 80%-owned subsidiary, SemiCab Holdings, LLC, a Nevada limited liability company (“SemiCab Holdings”). During 2023, the Company’s board of directors approved a change in the Company’s fiscal year end from March 31 to December 31. Effective September 5, 2024, the Company’s Certificate of Incorporation was amended to change the name of the Company from “The Singing Machine Company, Inc.” to “Algorhythm Holdings, Inc.” On January 13, 2025, <span id="xdx_909_eus-gaap--StockholdersEquityReverseStockSplit_c20250113__20250113__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_z5MIixc1Nda" title="Stockholders equity reverse stock split">the Company’s stockholders voted to authorize the Company’s board of directors to effect a reverse stock split of the Company’s outstanding shares of common stock at a specific ratio within a range of 1-for-10 to a maximum of 1-for-250 and to amend the Company’s certificate of incorporation to increase the number of authorized common stock from 100,000,000 to 800,000,000 shares. On January 14, 2025, the Company’s board of directors approved a reverse stock split of 1-for-200 ratio and approved the filing of a certificate of amendment to the Company’s certificate of incorporation to effect the reverse stock split and to increase the Company’s authorized shares of common stock from 100,000,000 to 800,000,000. The reverse stock split took effect on Monday February 10, 2025. All current and prior year balances have been adjusted to reflect the reverse stock split.

0.80

the Company’s stockholders voted to authorize the Company’s board of directors to effect a reverse stock split of the Company’s outstanding shares of common stock at a specific ratio within a range of 1-for-10 to a maximum of 1-for-250 and to amend the Company’s certificate of incorporation to increase the number of authorized common stock from 100,000,000 to 800,000,000 shares. On January 14, 2025, the Company’s board of directors approved a reverse stock split of 1-for-200 ratio and approved the filing of a certificate of amendment to the Company’s certificate of incorporation to effect the reverse stock split and to increase the Company’s authorized shares of common stock from 100,000,000 to 800,000,000. The reverse stock split took effect on Monday February 10, 2025. All current and prior year balances have been adjusted to reflect the reverse stock split.

Note 2 – Liquidity, Going Concern and Management Plans As of December 31, 2024, the Company’s cash balance was $7,550,000. This will not be sufficient to fund its planned operations for at least one year after the date the consolidated financial statements are issued. The Company has a recent history of recurring operating losses and decreases in working capital. These factors create substantial doubt about the Company’s ability to continue as a going concern for at least one year after the date that the Company’s audited consolidated financial statements are issued. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern and that the realization of assets and satisfaction of liabilities and commitments will continue in the ordinary course of business. The Company plans to finance operations by obtaining additional capital through external sources of financing. It may attempt to obtain additional capital through the sale of equity securities or the issuance of debt securities. The Company has not made arrangements to obtain additional capital and can provide no assurance that additional financing will be available in an amount or on terms acceptable to the Company, if at all. In making this assessment, management performed a comprehensive analysis of the Company’s current circumstances including its financial position, cash flow and outflow forecasts, and obligations and debts. Although management has a recent history of successful capital raises, the analysis used to determine the Company’s ability to continue as a going concern does not include cash resources outside the Company’s direct control that management expects to be available within the next 12 months. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

7550000

Note 3 – Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries SMCL, SMCM, SMH, Singing Machine”, MICS Hospitality, MICS, MICS Hospitality Management, MICS NY, and its eighty percent (80%)-owned subsidiary, SemiCab Holdings. All intercompany accounts and transactions have been eliminated in consolidation for all periods presented. The Company evaluates its business relationships with related parties to identify potential Variable Interest Entities (“VIEs”) under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation. The Company will consolidate any VIE in which it is deemed to be the primary beneficiary of the VIE. The Company will be deemed to be the primary beneficiary of the VIE if the Company has a controlling financial interest in the VIE. A controlling financial interest has the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact its economic performance; and (ii) the obligation to absorb losses of the VIE that could be significant to the VIE or the right to receive benefits from the VIE that could be significant to the VIE. If both characteristics are met and, then the Company will consolidate that VIE into its consolidated financial statements. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 As prescribed by ASC 810, if the Company holds a variable interest in an entity that is a VIE, but the Company is not the entity’s primary beneficiary, then the Company must disclose the methodology (e.g., significant judgments and assumptions made) that it used to determine that it is not the primary beneficiary of the VIE. Additional information required includes information about the types of involvement considered significant, and those considered in the determination of whether the reporting entity is the primary beneficiary. Furthermore, if the Company provides or intends to provide financial or other support, whether explicitly or implicitly, to the VIE when not contractually required to, the Company must disclose the type and amount of the support along with the primary reasons for providing the support. Both qualitative and quantitative information about the Company’s involvement with the VIE must be disclosed, including the nature, purpose, size, and activities of the VIE and how the VIE is financed. The Company determined that SMCB Solutions Private Limited, an Indian Company (“SMCB”), is a VIE because the Company provides financial support to SMCB in the form of a loan agreement to fund SMCB’s operations. The Company further determined that it is not the primary beneficiary of SMCB because the Company does not have the power to direct or control SMCB’s significant activities related to its business. Accordingly, the Company has not consolidated SMCB’s results of operations and financial position in its consolidated financial statements. Reclassification of Prior Periods Presentation Certain prior period amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ materially from these estimates. Estimates are assessed each period and updated to reflect current information. Significant estimates include allowance for credit losses, provision for excess and obsolete inventory, reserve for sales returns, co-op promotion incentives, accruals relating to litigation, goodwill, share-based compensation expense and warrant liability. Segment Reporting Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting (“ASC 280”), the Company’s Chief Executive Officer serves as the Company’s Chief Operating Decision Maker (“CODM”) for the purposes of ASC 280. The CODM concluded that the Company operates two reportable segments. One segment consists of its SemiCab business and the other segment consists of its Singing Machine business. The CODM manages the Company’s operations and business separately for each operating segment and uses net loss to allocate resources, making operating decisions and evaluating financial performance. The CODM also uses net loss, along with non-financial inputs and qualitative information, to evaluate the Company’s performance, establish compensation, monitor budget versus actual results, and decide the level of investment in various operating activities and other capital allocation activities. See Note 15 – Segment Information and Revenue Disaggregation – Segment Information. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 Accounts Receivable and Allowances for Expected Credit Losses The Company recognizes credit losses in accordance with Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326). The Company recognizes an allowance for credit losses at the time a receivable is recorded based on its estimate of expected credit losses and adjusts this estimate over the life of the receivable as needed. The Company evaluates specific identified risks and the aggregation and risk characteristics of a receivable pool and develops loss rates that reflect historical collections, current forecasts of future economic conditions over the time horizon the Company is exposed to credit risk, and payment terms or conditions that may materially affect future forecasts. As needed, amounts are written-off when determined to be uncollectible. 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. The Company reduces 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. In addition, the Company reports an estimated amount for the net realizable value of expected future inventory returns (returns asset) related to the Company’s defective allowance, overstock, and warranty policies. Substantially all of the Company’s inventory consists of finished goods. Property and Equipment, Net Property and equipment are stated at cost, less accumulated depreciation. Expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to their estimated useful lives using straight-line methods. Leases The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date. The liability is equal to the present value of the remaining minimum lease payments. The asset is based on the liability, subject to certain adjustments. Operating leases result in straight-line expense (similar to operating leases under the prior accounting standard) while finance leases result in a front-loaded expense pattern (similar to capital leases under the prior accounting standard). As the interest rate implicit in the Company’s operating leases is not readily determinable, the Company utilizes its incremental borrowing rate to discount the lease payments. The Company utilizes the implicit rate for its finance leases. Business Combinations The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. The Company allocates the purchase price of an acquired business to the tangible and intangible assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The purchase price allocation process requires management to make significant estimates and assumptions at the acquisition date with respect to intangible assets. The allocation of the consideration transferred in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. Direct transaction costs associated with the business combination are expensed as incurred. The Company includes the results of operations of the business that it has acquired in its consolidated results prospectively from the date of acquisition. Goodwill The Company evaluates its goodwill for impairment in accordance with FASB Accounting Standards Update (“ASU”) 350, Intangibles – Goodwill and Other. Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. The Company tests the recorded amount of goodwill for impairment on an annual basis on December 31 or more frequently if there are indicators that the carrying amount of goodwill exceeds its carried value. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 Long Lived and Intangible Assets The Company reviews long-lived assets and intangible assets for impairment in accordance with ASC Topic 360, Property, Plant and Equipment (“ASC 360”). The Company reviews long-lived assets and intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset or intangible asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the asset to its carrying value. An impairment loss is recognized when the estimated undiscounted future cash flows expected to result from the use of the asset is less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. The Company had no impairment loss related to long-lived assets or intangible assets for the year ended December 31, 2024 or the nine months ended December 31, 2023. Fair Value Measurements In accordance with ASC 820, Fair Value Measurements and Disclosures, fair value is defined as the exit price, or the amount that would be received for the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs include those that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0; background-color: white"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">●</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 1: Quoted market prices in active markets for identical assets or liabilities.</td></tr><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">●</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or model-derived valuations. All significant inputs used in the Company’s valuations are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include quoted prices that were adjusted for security-specific restrictions which are compared to output from internally developed models such as a discounted cash flow model.</td></tr><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">●</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.</td></tr></table> The carrying amounts of financial instruments carried at cost, including cash, accounts receivables and accounts receivable – related party, trade payables advances and notes payables and notes payable – related party approximate their fair value due to the short-term maturities of such instruments. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. Finally, the Company determines if the warrants meet the definition of a derivative based on their contractual terms. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance, as of each subsequent quarterly period end date while the warrants are outstanding and at interim dates if circumstances warrant such analysis. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and at each balance sheet date thereafter. Changes in the estimated fair value of the liability classified warrants are recognized as a non-cash gain or loss on the consolidated statements of operations. The Company also evaluates if changes in contractual terms or other considerations would result in the reclassification of outstanding warrants from liabilities to stockholders’ equity (or vice versa). Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. All revenue is generated from contracts with customers. The Company recognizes revenue when the control of the goods sold is transferred to the customer, in an amount, referred to as the transaction price, that reflects the consideration to which the Company expected to be entitled in exchange for those goods. The Company determines 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 goods or 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, the Company transfers control of the product or service for each performance obligation. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 The Company’s performance obligations are established when a customer submits a purchase order notification and the Company accepts the order. The Company identifies performance obligations as the delivery of the requested product or service in appropriate quantities and to the location specified in the customer’s contract and/or purchase order. Revenue from sales of products is recognized at a point in time when the Company transfers control to the customer, typically at the time when the product is delivered or shipped, at which time, title passes to the customer and there are no further performance obligations with regard to the product. The Company selectively participates in retailers’ co-op promotion incentives to maximize sales of the Company’s products on the retail floor and to assist in developing consumer awareness of new product launches by providing marketing fund allowances to its customers. As these co-op promotion initiatives are not a distinct good or service and the Company cannot reasonably estimate the fair value of the benefit it receives from these arrangements, the cost of these allowances at the time they are offered to the customers is recorded as a reduction to net sales. Co-op promotion incentives were $2,059,000 during the year ended December 31, 2024 and $2,648,000 during the nine months ended December 31, 2023. The Company’s contracts with customers consist of one performance obligation, which is the sale of its products. The Company’s contracts have no financing elements. Payment terms are generally less than 120 days and have no further contract asset or liability obligations once control of goods is transferred to the customer. Revenue is recorded in the amount of consideration the Company expects to receive for the sale of these goods. Costs incurred in fulfilling contracts with customers include administrative costs associated with the procurement of goods are included in general and administrative expenses, in-bound freight costs are included in the cost of goods sold and accrued sales representative commissions are included in selling expenses in the accompanying consolidated statements of operations as the Company’s underlying customer agreements are less than one year. Reserve for Sales Returns and Returns Asset While the Company has no overstock return privileges in its vendor agreements with its customers, it does accept defective returns, warranty exchanges and overstock from seasonal customers. The Company estimates the sales value of goods to be returned from its 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. The Company’s reserve for sales returns was $3,355,000 and $3,390,000 as of December 31, 2024 and 2023, respectively. The Company estimates the net realizable value of these expected future sales returns. The net realizable value of these estimated returns is classified as return assets as part of current assets on the Company’s consolidated financial statements. The Company’s return assets were $1,621,000 and $1,919,000 as of December 31, 2024 and 2023, respectively. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 Shipping and Handling Costs Shipping and handling activities are performed before the customer obtains control of the goods sold to them and are considered activities to fulfill the Company’s promise to transfer the goods. Shipping and handling expenses were $592,000 and $561,000 for the year ended December 31, 2024 and the nine months ended December 31, 2023, respectively. These expenses are classified as a component of selling expenses in the Company’s consolidated statements of operations. Share-Based Compensation The Company has granted stock options, warrants, restricted stock awards and restricted stock units to employees, non-employee consultants and non-employee members of its board of directors. The Company also has an equity incentive plan that provides for the issuance of equity incentive awards, such as stock options, warrants, stock appreciation rights, stock awards, restricted stock, stock units, performance awards and other stock or cash-based awards to the Company’s employees, officers, directors, consultants, agents, advisors and independent contractors. The Company measures the compensation cost associated with all share-based payments based on grant date fair values. The fair value of each stock option and stock purchase right is estimated on the date of grant using an option pricing model that meets certain requirements. The Company generally uses the Black-Scholes option pricing model to estimate the fair value of its stock options and stock purchase rights. The determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by the Company’s stock price and several assumptions, including expected volatility, expected term, risk-free interest rate and expected dividends. For grants of stock options, the Company uses a blend of historical and implied volatility for traded options on its stock to estimate the expected volatility assumption required in the Black-Scholes model. The Company’s use of blended volatility estimates in computing the expected volatility assumption for stock options is based on its belief that while the implied volatility is representative of expected future volatility, the historical volatility over the expected term of the award is also an indicator of expected future volatility. The Company utilizes a blended volatility estimate that consists of implied volatility and historical volatility in order to estimate the expected volatility assumption of the Black-Scholes model. The expected term of stock options granted is estimated using historical experience. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected terms of the Company’s stock options and stock purchase rights. The dividend yield assumption is based on the Company’s history and expectation of no dividend payouts. The Company estimates forfeitures at the time of grant and revises these estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates its forfeiture rate assumption for all types of share-based compensation awards based on historical forfeiture rates related to each category of award. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 Compensation costs associated with grants of restricted stock awards and restricted stock units are measured at fair value, which has historically been the closing price of the Company’s common stock on the date of grant. The Company recognizes share-based compensation expense over the requisite service period of each individual award, which generally equals the vesting period, using the straight-line method for awards that contain only service conditions. For awards that contain performance conditions, the Company recognizes the share-based compensation expense on a straight-line basis for each vesting tranche, when achievement of that tranche is considered probable. The Company evaluates the assumptions used to value stock awards on the grant date. If there are any modifications or cancellations of the underlying unvested securities, the Company may be required to accelerate, increase or cancel any remaining unearned share-based compensation expense. Income Taxes The Company follows the provisions of FASB ASC 740, Accounting for Income Taxes (“ASC 740”). Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If it is more likely than not that some portion of a deferred tax asset will not be realized, a valuation allowance is recognized. The Company recognizes a liability for uncertain tax positions. An uncertain tax position is defined as a position in a previously filed tax return or a position expected to be taken in a future tax return that is not based on clear and unambiguous tax law and that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company measures the tax benefits recognized based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. As of December 31, 2024 and 2023, there were no uncertain tax positions that resulted in any adjustment to the Company’s provision for income taxes. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. The Company currently has no liabilities recorded for accrued interest or penalties related to uncertain tax provisions. Net Loss Per Common Share Net loss available to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares that were outstanding during the period. Diluted net loss available to common stockholders reflects the potential dilution that could occur if securities or other contracts to acquire common stock were exercised or converted into common stock. Potentially dilutive securities are excluded from the diluted net loss available to common stockholders computation in loss periods as their effect would be anti-dilutive. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 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”), that 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. 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. The ASU is effective for the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. The Company 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. ASU 2023-09 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. ASU 2023-09 is effective for the Company for its fiscal year beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its 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). 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. The Company is currently evaluating the impact of this standard on its 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. 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. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. The Company reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to the Company’s operations or that no material effect is expected on its consolidated financial statements as a result of future adoption.

Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries SMCL, SMCM, SMH, Singing Machine”, MICS Hospitality, MICS, MICS Hospitality Management, MICS NY, and its eighty percent (80%)-owned subsidiary, SemiCab Holdings. All intercompany accounts and transactions have been eliminated in consolidation for all periods presented. The Company evaluates its business relationships with related parties to identify potential Variable Interest Entities (“VIEs”) under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation. The Company will consolidate any VIE in which it is deemed to be the primary beneficiary of the VIE. The Company will be deemed to be the primary beneficiary of the VIE if the Company has a controlling financial interest in the VIE. A controlling financial interest has the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact its economic performance; and (ii) the obligation to absorb losses of the VIE that could be significant to the VIE or the right to receive benefits from the VIE that could be significant to the VIE. If both characteristics are met and, then the Company will consolidate that VIE into its consolidated financial statements. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 As prescribed by ASC 810, if the Company holds a variable interest in an entity that is a VIE, but the Company is not the entity’s primary beneficiary, then the Company must disclose the methodology (e.g., significant judgments and assumptions made) that it used to determine that it is not the primary beneficiary of the VIE. Additional information required includes information about the types of involvement considered significant, and those considered in the determination of whether the reporting entity is the primary beneficiary. Furthermore, if the Company provides or intends to provide financial or other support, whether explicitly or implicitly, to the VIE when not contractually required to, the Company must disclose the type and amount of the support along with the primary reasons for providing the support. Both qualitative and quantitative information about the Company’s involvement with the VIE must be disclosed, including the nature, purpose, size, and activities of the VIE and how the VIE is financed. The Company determined that SMCB Solutions Private Limited, an Indian Company (“SMCB”), is a VIE because the Company provides financial support to SMCB in the form of a loan agreement to fund SMCB’s operations. The Company further determined that it is not the primary beneficiary of SMCB because the Company does not have the power to direct or control SMCB’s significant activities related to its business. Accordingly, the Company has not consolidated SMCB’s results of operations and financial position in its consolidated financial statements.

0.80

Reclassification of Prior Periods Presentation Certain prior period amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ materially from these estimates. Estimates are assessed each period and updated to reflect current information. Significant estimates include allowance for credit losses, provision for excess and obsolete inventory, reserve for sales returns, co-op promotion incentives, accruals relating to litigation, goodwill, share-based compensation expense and warrant liability.

Segment Reporting Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting (“ASC 280”), the Company’s Chief Executive Officer serves as the Company’s Chief Operating Decision Maker (“CODM”) for the purposes of ASC 280. The CODM concluded that the Company operates two reportable segments. One segment consists of its SemiCab business and the other segment consists of its Singing Machine business. The CODM manages the Company’s operations and business separately for each operating segment and uses net loss to allocate resources, making operating decisions and evaluating financial performance. The CODM also uses net loss, along with non-financial inputs and qualitative information, to evaluate the Company’s performance, establish compensation, monitor budget versus actual results, and decide the level of investment in various operating activities and other capital allocation activities. See Note 15 – Segment Information and Revenue Disaggregation – Segment Information. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

Accounts Receivable and Allowances for Expected Credit Losses The Company recognizes credit losses in accordance with Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326). The Company recognizes an allowance for credit losses at the time a receivable is recorded based on its estimate of expected credit losses and adjusts this estimate over the life of the receivable as needed. The Company evaluates specific identified risks and the aggregation and risk characteristics of a receivable pool and develops loss rates that reflect historical collections, current forecasts of future economic conditions over the time horizon the Company is exposed to credit risk, and payment terms or conditions that may materially affect future forecasts. As needed, amounts are written-off when determined to be uncollectible.

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. The Company reduces 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. In addition, the Company reports an estimated amount for the net realizable value of expected future inventory returns (returns asset) related to the Company’s defective allowance, overstock, and warranty policies. Substantially all of the Company’s inventory consists of finished goods.

Property and Equipment, Net Property and equipment are stated at cost, less accumulated depreciation. Expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to their estimated useful lives using straight-line methods.

Leases The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date. The liability is equal to the present value of the remaining minimum lease payments. The asset is based on the liability, subject to certain adjustments. Operating leases result in straight-line expense (similar to operating leases under the prior accounting standard) while finance leases result in a front-loaded expense pattern (similar to capital leases under the prior accounting standard). As the interest rate implicit in the Company’s operating leases is not readily determinable, the Company utilizes its incremental borrowing rate to discount the lease payments. The Company utilizes the implicit rate for its finance leases.

Business Combinations The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. The Company allocates the purchase price of an acquired business to the tangible and intangible assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. The purchase price allocation process requires management to make significant estimates and assumptions at the acquisition date with respect to intangible assets. The allocation of the consideration transferred in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. Direct transaction costs associated with the business combination are expensed as incurred. The Company includes the results of operations of the business that it has acquired in its consolidated results prospectively from the date of acquisition.

Goodwill The Company evaluates its goodwill for impairment in accordance with FASB Accounting Standards Update (“ASU”) 350, Intangibles – Goodwill and Other. Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. The Company tests the recorded amount of goodwill for impairment on an annual basis on December 31 or more frequently if there are indicators that the carrying amount of goodwill exceeds its carried value. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

Long Lived and Intangible Assets The Company reviews long-lived assets and intangible assets for impairment in accordance with ASC Topic 360, Property, Plant and Equipment (“ASC 360”). The Company reviews long-lived assets and intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset or intangible asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the asset to its carrying value. An impairment loss is recognized when the estimated undiscounted future cash flows expected to result from the use of the asset is less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. The Company had no impairment loss related to long-lived assets or intangible assets for the year ended December 31, 2024 or the nine months ended December 31, 2023.

Fair Value Measurements In accordance with ASC 820, Fair Value Measurements and Disclosures, fair value is defined as the exit price, or the amount that would be received for the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs include those that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0; background-color: white"><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">●</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 1: Quoted market prices in active markets for identical assets or liabilities.</td></tr><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">●</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or model-derived valuations. All significant inputs used in the Company’s valuations are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include quoted prices that were adjusted for security-specific restrictions which are compared to output from internally developed models such as a discounted cash flow model.</td></tr><tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></td><td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">●</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.</td></tr></table> The carrying amounts of financial instruments carried at cost, including cash, accounts receivables and accounts receivable – related party, trade payables advances and notes payables and notes payable – related party approximate their fair value due to the short-term maturities of such instruments. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. Finally, the Company determines if the warrants meet the definition of a derivative based on their contractual terms. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance, as of each subsequent quarterly period end date while the warrants are outstanding and at interim dates if circumstances warrant such analysis. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and at each balance sheet date thereafter. Changes in the estimated fair value of the liability classified warrants are recognized as a non-cash gain or loss on the consolidated statements of operations. The Company also evaluates if changes in contractual terms or other considerations would result in the reclassification of outstanding warrants from liabilities to stockholders’ equity (or vice versa).

Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. All revenue is generated from contracts with customers. The Company recognizes revenue when the control of the goods sold is transferred to the customer, in an amount, referred to as the transaction price, that reflects the consideration to which the Company expected to be entitled in exchange for those goods. The Company determines 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 goods or 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, the Company transfers control of the product or service for each performance obligation. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 The Company’s performance obligations are established when a customer submits a purchase order notification and the Company accepts the order. The Company identifies performance obligations as the delivery of the requested product or service in appropriate quantities and to the location specified in the customer’s contract and/or purchase order. Revenue from sales of products is recognized at a point in time when the Company transfers control to the customer, typically at the time when the product is delivered or shipped, at which time, title passes to the customer and there are no further performance obligations with regard to the product. The Company selectively participates in retailers’ co-op promotion incentives to maximize sales of the Company’s products on the retail floor and to assist in developing consumer awareness of new product launches by providing marketing fund allowances to its customers. As these co-op promotion initiatives are not a distinct good or service and the Company cannot reasonably estimate the fair value of the benefit it receives from these arrangements, the cost of these allowances at the time they are offered to the customers is recorded as a reduction to net sales. Co-op promotion incentives were $2,059,000 during the year ended December 31, 2024 and $2,648,000 during the nine months ended December 31, 2023. The Company’s contracts with customers consist of one performance obligation, which is the sale of its products. The Company’s contracts have no financing elements. Payment terms are generally less than 120 days and have no further contract asset or liability obligations once control of goods is transferred to the customer. Revenue is recorded in the amount of consideration the Company expects to receive for the sale of these goods. Costs incurred in fulfilling contracts with customers include administrative costs associated with the procurement of goods are included in general and administrative expenses, in-bound freight costs are included in the cost of goods sold and accrued sales representative commissions are included in selling expenses in the accompanying consolidated statements of operations as the Company’s underlying customer agreements are less than one year. Reserve for Sales Returns and Returns Asset While the Company has no overstock return privileges in its vendor agreements with its customers, it does accept defective returns, warranty exchanges and overstock from seasonal customers. The Company estimates the sales value of goods to be returned from its 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. The Company’s reserve for sales returns was $3,355,000 and $3,390,000 as of December 31, 2024 and 2023, respectively. The Company estimates the net realizable value of these expected future sales returns. The net realizable value of these estimated returns is classified as return assets as part of current assets on the Company’s consolidated financial statements. The Company’s return assets were $1,621,000 and $1,919,000 as of December 31, 2024 and 2023, respectively. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

2059000

2648000

3355000 3390000 1621000 1919000 Shipping and Handling Costs Shipping and handling activities are performed before the customer obtains control of the goods sold to them and are considered activities to fulfill the Company’s promise to transfer the goods. Shipping and handling expenses were $592,000 and $561,000 for the year ended December 31, 2024 and the nine months ended December 31, 2023, respectively. These expenses are classified as a component of selling expenses in the Company’s consolidated statements of operations.

592000

561000

Share-Based Compensation The Company has granted stock options, warrants, restricted stock awards and restricted stock units to employees, non-employee consultants and non-employee members of its board of directors. The Company also has an equity incentive plan that provides for the issuance of equity incentive awards, such as stock options, warrants, stock appreciation rights, stock awards, restricted stock, stock units, performance awards and other stock or cash-based awards to the Company’s employees, officers, directors, consultants, agents, advisors and independent contractors. The Company measures the compensation cost associated with all share-based payments based on grant date fair values. The fair value of each stock option and stock purchase right is estimated on the date of grant using an option pricing model that meets certain requirements. The Company generally uses the Black-Scholes option pricing model to estimate the fair value of its stock options and stock purchase rights. The determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by the Company’s stock price and several assumptions, including expected volatility, expected term, risk-free interest rate and expected dividends. For grants of stock options, the Company uses a blend of historical and implied volatility for traded options on its stock to estimate the expected volatility assumption required in the Black-Scholes model. The Company’s use of blended volatility estimates in computing the expected volatility assumption for stock options is based on its belief that while the implied volatility is representative of expected future volatility, the historical volatility over the expected term of the award is also an indicator of expected future volatility. The Company utilizes a blended volatility estimate that consists of implied volatility and historical volatility in order to estimate the expected volatility assumption of the Black-Scholes model. The expected term of stock options granted is estimated using historical experience. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected terms of the Company’s stock options and stock purchase rights. The dividend yield assumption is based on the Company’s history and expectation of no dividend payouts. The Company estimates forfeitures at the time of grant and revises these estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates its forfeiture rate assumption for all types of share-based compensation awards based on historical forfeiture rates related to each category of award. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 Compensation costs associated with grants of restricted stock awards and restricted stock units are measured at fair value, which has historically been the closing price of the Company’s common stock on the date of grant. The Company recognizes share-based compensation expense over the requisite service period of each individual award, which generally equals the vesting period, using the straight-line method for awards that contain only service conditions. For awards that contain performance conditions, the Company recognizes the share-based compensation expense on a straight-line basis for each vesting tranche, when achievement of that tranche is considered probable. The Company evaluates the assumptions used to value stock awards on the grant date. If there are any modifications or cancellations of the underlying unvested securities, the Company may be required to accelerate, increase or cancel any remaining unearned share-based compensation expense.

Income Taxes The Company follows the provisions of FASB ASC 740, Accounting for Income Taxes (“ASC 740”). Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If it is more likely than not that some portion of a deferred tax asset will not be realized, a valuation allowance is recognized. The Company recognizes a liability for uncertain tax positions. An uncertain tax position is defined as a position in a previously filed tax return or a position expected to be taken in a future tax return that is not based on clear and unambiguous tax law and that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company measures the tax benefits recognized based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. As of December 31, 2024 and 2023, there were no uncertain tax positions that resulted in any adjustment to the Company’s provision for income taxes. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. The Company currently has no liabilities recorded for accrued interest or penalties related to uncertain tax provisions.

greater than 50% likelihood

Net Loss Per Common Share Net loss available to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares that were outstanding during the period. Diluted net loss available to common stockholders reflects the potential dilution that could occur if securities or other contracts to acquire common stock were exercised or converted into common stock. Potentially dilutive securities are excluded from the diluted net loss available to common stockholders computation in loss periods as their effect would be anti-dilutive. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

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”), that 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. 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. The ASU is effective for the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. The Company 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. ASU 2023-09 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. ASU 2023-09 is effective for the Company for its fiscal year beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its 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). 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. The Company is currently evaluating the impact of this standard on its 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. 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. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. The Company reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to the Company’s operations or that no material effect is expected on its consolidated financial statements as a result of future adoption.

Note 4 – Business Combination On June 11, 2024, the Company, its wholly-owned subsidiary, SemiCab Holdings, SemiCab, Inc., Ajesh Kapoor and Vivek Sehgal entered into an asset purchase agreement pursuant to which the Company agreed to purchase substantially all of the assets, and assume certain specified liabilities, of SemiCab, Inc. On July 3, 2024 (the “Acquisition Date”), the parties completed the acquisition and, on that date, the Company issued <span id="xdx_90F_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_pid_c20240611__20240611__dei--LegalEntityAxis__custom--SemiCabHoldingsLLCMember__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember_zxhCzTkbJvl4" title="Common stock issued for purchase of shares">3,209 shares of the Company’s common stock and a <span id="xdx_90C_eus-gaap--MinorityInterestOwnershipPercentageByParent_iI_dp_c20240611__srt--OwnershipAxis__custom--SemiCabHoldingsLLCMember__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember_zi8S6jM5pGW3" title="Common stock issued for purchase ownership percentage">20% membership interest in SemiCab Holdings to SemiCab, Inc. The Company acquired SemiCab, Inc.’s business to diversify the Company’s business. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 Pursuant to the terms of the asset purchase agreement that the Company entered into on June 11, 2024, the Company entered into an option agreement that granted SemiCab Holdings the right to acquire all of the issued and outstanding equity securities of SMCB, which is a subsidiary of SemiCab, Inc., for <span id="xdx_90F_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_pid_c20240611__20240611__dei--LegalEntityAxis__custom--SemiCabHoldingsLLCMember__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--TypeOfArrangementAxis__custom--AssetPurchaseAgreementMember_zVlaMYJlKGG4" title="Common stock issued for purchase of shares">1,605 shares of the Company’s common stock. The Company did not exercise this right and the option agreement expired unexercised on August 31, 2024. In connection with the asset purchase agreement, effective July 3, 2024, SemiCab Holdings entered into employment agreements with Ajesh Kapoor and Vivek Sehgal. Mr. Kapoor’s agreement is for a term of three years with an annual base salary of $<span id="xdx_901_eus-gaap--SalariesAndWages_c20240703__20240703__srt--StatementScenarioAxis__custom--TwoThousandTwentyFourMember__srt--TitleOfIndividualAxis__custom--AjeshKapoorMember__us-gaap--TypeOfArrangementAxis__custom--EmploymentAgreementsMember_zzkyISrjIyi2">140,000 for 2024, $<span id="xdx_90C_eus-gaap--SalariesAndWages_c20240703__20240703__srt--StatementScenarioAxis__custom--TwoThousandTwentyFiveMember__srt--TitleOfIndividualAxis__custom--AjeshKapoorMember__us-gaap--TypeOfArrangementAxis__custom--EmploymentAgreementsMember_zUJuuoB5qQrb">240,000 for 2025, and $<span id="xdx_905_eus-gaap--SalariesAndWages_c20240703__20240703__srt--StatementScenarioAxis__custom--SubsequentYearsMember__srt--TitleOfIndividualAxis__custom--AjeshKapoorMember__us-gaap--TypeOfArrangementAxis__custom--EmploymentAgreementsMember_zho2eWSupbZ">300,000 for 2026. Mr. Sehgal’s agreement is for a term of three years with an annual base salary of $<span id="xdx_90E_eus-gaap--SalariesAndWages_c20240703__20240703__srt--StatementScenarioAxis__custom--TwoThousandTwentyFourMember__srt--TitleOfIndividualAxis__custom--VivekSeghalMember__us-gaap--TypeOfArrangementAxis__custom--EmploymentAgreementsMember_zdkqzZuJ6Df2">105,000 for 2024, $<span id="xdx_905_eus-gaap--SalariesAndWages_c20240703__20240703__srt--StatementScenarioAxis__custom--TwoThousandTwentyFiveMember__srt--TitleOfIndividualAxis__custom--VivekSeghalMember__us-gaap--TypeOfArrangementAxis__custom--EmploymentAgreementsMember_zaWPYf8V91Zi">210,000 for 2025, and $<span id="xdx_90A_eus-gaap--SalariesAndWages_c20240703__20240703__srt--StatementScenarioAxis__custom--TwoThousandTwentySixMember__srt--TitleOfIndividualAxis__custom--VivekSeghalMember__us-gaap--TypeOfArrangementAxis__custom--EmploymentAgreementsMember_zSl9DQbwDyYg">240,000 for 2026. Both executives’ salaries are subject to annual review by the board of managers of SemiCab Holdings. The value of the consideration paid by the Company to SemiCab, Inc. for the SemiCab business was $983,000. The <span id="xdx_906_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_pid_c20240611__20240611__dei--LegalEntityAxis__custom--SemiCabHoldingsLLCMember__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember_zbpVnsVYRLW5" title="Common stock issued for purchase of shares">3,209 shares issued to SemiCab, Inc. were valued at $<span id="xdx_909_eus-gaap--StockIssuedDuringPeriodValueAcquisitions_c20240611__20240611__dei--LegalEntityAxis__custom--SemiCabHoldingsLLCMember__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember_zqqldMlnUkjl" title="Common stock issued for purchase of shares. value">494,000 on the Acquisition Date based on the trading price of the Company’s common stock on the Acquisition Date discounted for a lack of marketability. The Company recognized a non-controlling interest at fair value as of the Acquisition Date in the amount of $74,000, representing the value of the 20% membership interest in SemiCab Holdings that was issued to SemiCab, Inc. in the transaction. The 20% membership interest was valued at the Acquisition Date based on the fair value of the implied value of SemiCab Holdings based on the value of the Company’s common stock issued on the Acquisition Date. The Company recorded a measurement period adjustment during the fourth quarter of 2024 that reduced the value of finite lived intangible assets acquired in the transaction by $1,050,000. This had the effect of increasing goodwill by $1,050,000. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 <p id="xdx_893_eus-gaap--ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock_zyxmctFIYLbe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table presents the allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values: Schedule of Consideration Transferred to the Assets Acquired and Liabilities Assumed <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_49E_20240703__us-gaap--BusinessAcquisitionAxis__custom--SemiCabIncMember_zlQl75aNJqrl" style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold">Consideration:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 84%; text-align: left">Equity consideration</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98A_eus-gaap--AssetAcquisitionConsiderationTransferredEquityInterestIssuedAndIssuable_c20240703__20240703__us-gaap--AssetAcquisitionAxis__custom--SemiCabIncMember_z4QKIEp7nN92" style="width: 12%; text-align: right" title="Equity consideration">494,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Fair value of non-controlling interest</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_983_ecustom--AssetAcquisitionFairValueOfNonControllingInterest_c20240703__20240703__us-gaap--AssetAcquisitionAxis__custom--SemiCabIncMember_zQ3lQD6IZSFa" style="border-bottom: Black 1pt solid; text-align: right" title="Fair value of non-controlling interest">74,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Total equity consideration</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--AssetAcquisitionConsiderationTransferredContingentConsideration_c20240703__20240703__us-gaap--AssetAcquisitionAxis__custom--SemiCabIncMember_z5mycbIIwoal" style="text-align: right" title="Total Equity Consideration">568,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Effective extinguishment of advances to SemiCab, Inc.</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_ecustom--AssetAcquisitionExtinguishmentOfAdvances_c20240703__20240703__us-gaap--AssetAcquisitionAxis__custom--SemiCabIncMember_z9G3cxXhZ0Ze" style="border-bottom: Black 1pt solid; text-align: right" title="Debt Extinguishment">415,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total consideration</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_980_eus-gaap--AssetAcquisitionConsiderationTransferred_c20240703__20240703__us-gaap--AssetAcquisitionAxis__custom--SemiCabIncMember_zyqsOupIBQgg" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Total consideration">983,000</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Identifiable net assets acquired:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCashAndEquivalents_iI_zuTCjzYx3zz4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Cash</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">17,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsReceivables_iI_zmpE7AEjlHk2" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accounts receivable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">193,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsPrepaidExpenseAndOtherAssets_iI_zL44wHqWJX1k" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Prepaid expenses and other current assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">13,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedPropertyPlantAndEquipment_iI_zrQw6JW3pcPe" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Property and equipment, net</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedOtherNoncurrentAssets_iI_zeQHzdOMmnue" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Other non-current assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">14,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCustomerRelationships_iI_zGnH6Rvfqcvg" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Customer relationships (nine<span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIENvbnNpZGVyYXRpb24gVHJhbnNmZXJyZWQgdG8gdGhlIEFzc2V0cyBBY3F1aXJlZCBhbmQgTGlhYmlsaXRpZXMgQXNzdW1lZCAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_90F_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20240703__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--CustomerRelationshipsMember_zYrxUMAZfjMf" style="display: none" title="Estimated useful life">9 year estimated useful life)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedTradeName_iI_zER87Q2QueA2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Trade name (nine<span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIENvbnNpZGVyYXRpb24gVHJhbnNmZXJyZWQgdG8gdGhlIEFzc2V0cyBBY3F1aXJlZCBhbmQgTGlhYmlsaXRpZXMgQXNzdW1lZCAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_90A_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20240703__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--TradeNamesMember_zQQh6t4xDwLl" style="display: none" title="Estimated useful life">9 year estimated useful life)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_408_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedDevelopedTechnology_iI_z6nVYx0lOX8l" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Developed technology (six<span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIENvbnNpZGVyYXRpb24gVHJhbnNmZXJyZWQgdG8gdGhlIEFzc2V0cyBBY3F1aXJlZCBhbmQgTGlhYmlsaXRpZXMgQXNzdW1lZCAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_90C_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20240703__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--DevelopedTechnologyRightsMember_zhPJwaB4OSya" style="display: none" title="Estimated useful life">6 year estimated useful life)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">325,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccountsPayable_iNI_di_zNduMWnbLE0k" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Accounts payable and accrued expenses</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(2,679,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_40A_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesLoansPayable_iNI_di_zyoIwb3Obl2b" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Merchant cash advances payable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(631,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_403_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesNotesPayableRelatedParties_iI_zLLnsVoMODuf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Notes payable to related parties</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(650,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_40E_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesOtherCurrentLiabilities_zxTQHovjIQPf" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Other current liabilities</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(50,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedNet_iI_zsFXnYvsICj7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Net assets acquired</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(3,395,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--Goodwill_iI_zvDAEKnzioxe" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; padding-bottom: 2.5pt">Goodwill</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">4,378,000</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table>

3209

0.20

1605

140000

240000

300000

105000

210000

240000

983000

3209

494000

74000

0.20

1050000

<p id="xdx_893_eus-gaap--ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock_zyxmctFIYLbe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table presents the allocation of the consideration transferred to the assets acquired and liabilities assumed based on their fair values: Schedule of Consideration Transferred to the Assets Acquired and Liabilities Assumed <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_49E_20240703__us-gaap--BusinessAcquisitionAxis__custom--SemiCabIncMember_zlQl75aNJqrl" style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold">Consideration:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 84%; text-align: left">Equity consideration</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98A_eus-gaap--AssetAcquisitionConsiderationTransferredEquityInterestIssuedAndIssuable_c20240703__20240703__us-gaap--AssetAcquisitionAxis__custom--SemiCabIncMember_z4QKIEp7nN92" style="width: 12%; text-align: right" title="Equity consideration">494,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Fair value of non-controlling interest</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_983_ecustom--AssetAcquisitionFairValueOfNonControllingInterest_c20240703__20240703__us-gaap--AssetAcquisitionAxis__custom--SemiCabIncMember_zQ3lQD6IZSFa" style="border-bottom: Black 1pt solid; text-align: right" title="Fair value of non-controlling interest">74,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Total equity consideration</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--AssetAcquisitionConsiderationTransferredContingentConsideration_c20240703__20240703__us-gaap--AssetAcquisitionAxis__custom--SemiCabIncMember_z5mycbIIwoal" style="text-align: right" title="Total Equity Consideration">568,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Effective extinguishment of advances to SemiCab, Inc.</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_ecustom--AssetAcquisitionExtinguishmentOfAdvances_c20240703__20240703__us-gaap--AssetAcquisitionAxis__custom--SemiCabIncMember_z9G3cxXhZ0Ze" style="border-bottom: Black 1pt solid; text-align: right" title="Debt Extinguishment">415,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total consideration</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_980_eus-gaap--AssetAcquisitionConsiderationTransferred_c20240703__20240703__us-gaap--AssetAcquisitionAxis__custom--SemiCabIncMember_zyqsOupIBQgg" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Total consideration">983,000</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Identifiable net assets acquired:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCashAndEquivalents_iI_zuTCjzYx3zz4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Cash</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">17,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsReceivables_iI_zmpE7AEjlHk2" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accounts receivable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">193,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsPrepaidExpenseAndOtherAssets_iI_zL44wHqWJX1k" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Prepaid expenses and other current assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">13,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedPropertyPlantAndEquipment_iI_zrQw6JW3pcPe" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Property and equipment, net</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedOtherNoncurrentAssets_iI_zeQHzdOMmnue" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Other non-current assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">14,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCustomerRelationships_iI_zGnH6Rvfqcvg" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Customer relationships (nine<span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIENvbnNpZGVyYXRpb24gVHJhbnNmZXJyZWQgdG8gdGhlIEFzc2V0cyBBY3F1aXJlZCBhbmQgTGlhYmlsaXRpZXMgQXNzdW1lZCAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_90F_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20240703__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--CustomerRelationshipsMember_zYrxUMAZfjMf" style="display: none" title="Estimated useful life">9 year estimated useful life)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedTradeName_iI_zER87Q2QueA2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Trade name (nine<span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIENvbnNpZGVyYXRpb24gVHJhbnNmZXJyZWQgdG8gdGhlIEFzc2V0cyBBY3F1aXJlZCBhbmQgTGlhYmlsaXRpZXMgQXNzdW1lZCAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_90A_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20240703__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--TradeNamesMember_zQQh6t4xDwLl" style="display: none" title="Estimated useful life">9 year estimated useful life)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_408_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedDevelopedTechnology_iI_z6nVYx0lOX8l" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Developed technology (six<span class="xdx_phnt_RGlzY2xvc3VyZSAtIFNjaGVkdWxlIG9mIENvbnNpZGVyYXRpb24gVHJhbnNmZXJyZWQgdG8gdGhlIEFzc2V0cyBBY3F1aXJlZCBhbmQgTGlhYmlsaXRpZXMgQXNzdW1lZCAoRGV0YWlscykgKFBhcmVudGhldGljYWwpAA__" id="xdx_90C_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20240703__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--DevelopedTechnologyRightsMember_zhPJwaB4OSya" style="display: none" title="Estimated useful life">6 year estimated useful life)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">325,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccountsPayable_iNI_di_zNduMWnbLE0k" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Accounts payable and accrued expenses</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(2,679,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_40A_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesLoansPayable_iNI_di_zyoIwb3Obl2b" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Merchant cash advances payable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(631,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_403_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesNotesPayableRelatedParties_iI_zLLnsVoMODuf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Notes payable to related parties</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(650,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_40E_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesOtherCurrentLiabilities_zxTQHovjIQPf" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Other current liabilities</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(50,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedNet_iI_zsFXnYvsICj7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Net assets acquired</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(3,395,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--Goodwill_iI_zvDAEKnzioxe" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; padding-bottom: 2.5pt">Goodwill</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">4,378,000</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table>

494000

74000

568000

415000

983000

17000

193000

13000

3000

14000

P9Y

25000

P9Y

25000

P6Y

325000

2679000

631000 650000 -50000

3395000

4378000

Note 5 – Property and Equipment, Intangible Assets and Goodwill A summary of the Company’s property and equipment at December 31, 2024 and 2023 is as follows: Schedule of Property and Equipment <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td style="text-align: center">Useful</td><td> </td> <td colspan="2" id="xdx_494_20241231_zZBXe6v1CW0l" style="text-align: center">December 31,</td><td> </td><td> </td> <td colspan="2" id="xdx_495_20231231_z5QuwALrvn9g" style="text-align: center">December 31,</td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center">Life</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_404_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerAndOfficeEquipmentMember_z99nAI7Ovwei" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 54%; text-align: left">Computer and office equipment</td><td style="width: 2%"> </td> <td style="text-align: center; width: 12%"><span id="xdx_90F_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20241231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerAndOfficeEquipmentMember__srt--RangeAxis__srt--MinimumMember_zfQxH8N7yNH6" title="Useful life">5-<span id="xdx_902_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20241231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerAndOfficeEquipmentMember__srt--RangeAxis__srt--MaximumMember_zPJruYjl8Cr6" title="Useful life">7 years</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">412,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">404,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_zFnORnKNh3T3" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Furniture and fixtures</td><td> </td> <td style="text-align: center">7 years</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">107,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">107,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MoldsAndToolingMember_zZRjvjskYkn9" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Molds and tooling</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt"><span id="xdx_905_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20241231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MoldsAndToolingMember__srt--RangeAxis__srt--MinimumMember_zEZO1ceTyvfh" title="Useful life">3-<span id="xdx_908_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20241231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MoldsAndToolingMember__srt--RangeAxis__srt--MaximumMember_zHoPA7hJg9qb" title="Useful life">5 years</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,297,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,228,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--PropertyPlantAndEquipmentGross_iI_maPPAENzUMn_zL05sSoYx2x7" style="vertical-align: bottom; background-color: White"> <td>Property and equipment gross</td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,816,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,739,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iI_msPPAENzUMn_z3IV3uphRm08" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Less: Accumulated depreciation</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,532,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,335,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--PropertyPlantAndEquipmentNet_iTI_mtPPAENzUMn_zcSgk25J1IF7" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Property and equipment net</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">284,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">404,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Depreciation expense was $192,000 and $287,000 for the year ended December 2024 and nine months ended December 31, 2023, respectively. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 <p id="xdx_89C_eus-gaap--ScheduleOfAcquiredFiniteLivedIntangibleAssetsByMajorClassTextBlock_zPpUdhrU9R6l" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">A summary of the Company’s intangible assets at December 31, 2024 and 2023 is as follows: Schedule of Intangible Assets <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td style="text-align: center">Useful</td><td> </td> <td colspan="2" id="xdx_492_20241231_zbHKmvzqteqd" style="text-align: center">December 31,</td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center">Life</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_40A_eus-gaap--FiniteLivedCustomerRelationshipsGross_iI_maFLIAGz9zC_zogInof5cm7a" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 62%; text-align: left">Customer relationships</td><td style="width: 2%"> </td> <td style="text-align: center; width: 16%"><span id="xdx_90B_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20241231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--CustomerRelationshipsMember_zhnlneNm8gf5" title="Useful life">9 years</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">25,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--FiniteLivedTradeNamesGross_iI_maFLIAGz9zC_zpeBLcffpNWe" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Trade name</td><td> </td> <td style="text-align: center">9 years</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--OtherFiniteLivedIntangibleAssetsGross_iI_maFLIAGz9zC_zAB1JhjQ67a3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Developed technology</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt"><span id="xdx_903_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20241231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--DevelopedTechnologyRightsMember_z15U91ic9ga" title="Useful life">6 years</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">325,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--FiniteLivedIntangibleAssetsGross_iTI_mtFLIAGz9zC_maIANEGzUOz_zZsIKTDvgQv9" style="vertical-align: bottom; background-color: White"> <td>Intangible assets gross</td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">375,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--FiniteLivedIntangibleAssetsAccumulatedAmortization_iI_msIANEGzUOz_zabuUGo9jUj7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Less: Accumulated amortization</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">30,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--IntangibleAssetsNetExcludingGoodwill_iTI_mtIANEGzUOz_zSnJhZbG6MQd" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Intangible assets net</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">345,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Amortization expense was $30,000 for the year ended December 31, 2024. The Company did not have any intangible assets or goodwill at December 31, 2023. The Company tested the recorded amount of goodwill for impairment on December 31, 2024 to see if the carrying amount of goodwill exceeded its carried value. The Company 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 business. The Company determined that, as a result of the SemiCab generating less revenue than anticipated, an impairment charge of $3,592,000 should be recorded as of December 31, 2024. The following table presents the changes in the value of the goodwill recognized in connection with the acquisition of SemiCab business: Schedule of Changes in Goodwill <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance at January 1, 2024</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right" title="Goodwill">-0-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 80%">Goodwill from acquisition of SemiCab, Inc. on July 3, 2024</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_984_eus-gaap--GoodwillAcquiredDuringPeriod_c20240101__20241231_zniGbpWyuvn4" style="width: 16%; text-align: right" title="Goodwill from acquisition of SemiCab, Inc">4,378,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Impairment of goodwill</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98E_eus-gaap--GoodwillImpairmentLoss_iN_di_c20240703__20241231_zcGQ4TOaWbk7" style="border-bottom: Black 1pt solid; text-align: right" title="Impairment of goodwill">(3,592,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Balance at December 31, 2024</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98A_eus-gaap--Goodwill_iE_c20240703__20241231_zVX7VVmWERk7" style="border-bottom: Black 2.5pt double; text-align: right" title="Goodwill">786,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

A summary of the Company’s property and equipment at December 31, 2024 and 2023 is as follows: Schedule of Property and Equipment <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td style="text-align: center">Useful</td><td> </td> <td colspan="2" id="xdx_494_20241231_zZBXe6v1CW0l" style="text-align: center">December 31,</td><td> </td><td> </td> <td colspan="2" id="xdx_495_20231231_z5QuwALrvn9g" style="text-align: center">December 31,</td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center">Life</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_404_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerAndOfficeEquipmentMember_z99nAI7Ovwei" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 54%; text-align: left">Computer and office equipment</td><td style="width: 2%"> </td> <td style="text-align: center; width: 12%"><span id="xdx_90F_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20241231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerAndOfficeEquipmentMember__srt--RangeAxis__srt--MinimumMember_zfQxH8N7yNH6" title="Useful life">5-<span id="xdx_902_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20241231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ComputerAndOfficeEquipmentMember__srt--RangeAxis__srt--MaximumMember_zPJruYjl8Cr6" title="Useful life">7 years</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">412,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">404,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--FurnitureAndFixturesMember_zFnORnKNh3T3" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Furniture and fixtures</td><td> </td> <td style="text-align: center">7 years</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">107,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">107,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MoldsAndToolingMember_zZRjvjskYkn9" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Molds and tooling</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt"><span id="xdx_905_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20241231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MoldsAndToolingMember__srt--RangeAxis__srt--MinimumMember_zEZO1ceTyvfh" title="Useful life">3-<span id="xdx_908_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20241231__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MoldsAndToolingMember__srt--RangeAxis__srt--MaximumMember_zHoPA7hJg9qb" title="Useful life">5 years</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,297,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,228,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--PropertyPlantAndEquipmentGross_iI_maPPAENzUMn_zL05sSoYx2x7" style="vertical-align: bottom; background-color: White"> <td>Property and equipment gross</td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,816,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,739,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iI_msPPAENzUMn_z3IV3uphRm08" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Less: Accumulated depreciation</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,532,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,335,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--PropertyPlantAndEquipmentNet_iTI_mtPPAENzUMn_zcSgk25J1IF7" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Property and equipment net</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">284,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">404,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

P5Y

P7Y

412000

404000

P7Y

107000

P3Y

P5Y

2297000

2228000

2816000

2739000

2532000

2335000

284000

404000

192000

287000

<p id="xdx_89C_eus-gaap--ScheduleOfAcquiredFiniteLivedIntangibleAssetsByMajorClassTextBlock_zPpUdhrU9R6l" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">A summary of the Company’s intangible assets at December 31, 2024 and 2023 is as follows: Schedule of Intangible Assets <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td style="text-align: center">Useful</td><td> </td> <td colspan="2" id="xdx_492_20241231_zbHKmvzqteqd" style="text-align: center">December 31,</td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center">Life</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_40A_eus-gaap--FiniteLivedCustomerRelationshipsGross_iI_maFLIAGz9zC_zogInof5cm7a" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 62%; text-align: left">Customer relationships</td><td style="width: 2%"> </td> <td style="text-align: center; width: 16%"><span id="xdx_90B_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20241231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--CustomerRelationshipsMember_zhnlneNm8gf5" title="Useful life">9 years</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">25,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--FiniteLivedTradeNamesGross_iI_maFLIAGz9zC_zpeBLcffpNWe" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Trade name</td><td> </td> <td style="text-align: center">9 years</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--OtherFiniteLivedIntangibleAssetsGross_iI_maFLIAGz9zC_zAB1JhjQ67a3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Developed technology</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt"><span id="xdx_903_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_iI_dtY_c20241231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--DevelopedTechnologyRightsMember_z15U91ic9ga" title="Useful life">6 years</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">325,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--FiniteLivedIntangibleAssetsGross_iTI_mtFLIAGz9zC_maIANEGzUOz_zZsIKTDvgQv9" style="vertical-align: bottom; background-color: White"> <td>Intangible assets gross</td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">375,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--FiniteLivedIntangibleAssetsAccumulatedAmortization_iI_msIANEGzUOz_zabuUGo9jUj7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Less: Accumulated amortization</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">30,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--IntangibleAssetsNetExcludingGoodwill_iTI_mtIANEGzUOz_zSnJhZbG6MQd" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Intangible assets net</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">345,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

P9Y

25000

P9Y

25000

P6Y

325000

375000

30000

345000

30000

3592000

The following table presents the changes in the value of the goodwill recognized in connection with the acquisition of SemiCab business: Schedule of Changes in Goodwill <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Balance at January 1, 2024</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right" title="Goodwill">-0-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 80%">Goodwill from acquisition of SemiCab, Inc. on July 3, 2024</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_984_eus-gaap--GoodwillAcquiredDuringPeriod_c20240101__20241231_zniGbpWyuvn4" style="width: 16%; text-align: right" title="Goodwill from acquisition of SemiCab, Inc">4,378,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Impairment of goodwill</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98E_eus-gaap--GoodwillImpairmentLoss_iN_di_c20240703__20241231_zcGQ4TOaWbk7" style="border-bottom: Black 1pt solid; text-align: right" title="Impairment of goodwill">(3,592,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Balance at December 31, 2024</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98A_eus-gaap--Goodwill_iE_c20240703__20241231_zVX7VVmWERk7" style="border-bottom: Black 2.5pt double; text-align: right" title="Goodwill">786,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

4378000

3592000

786000

Note 6 – Notes Payable to Related Parties SemiCab Holdings assumed several unsecured loans from Ajesh Kapoor and Vivek Sehgal in the acquisition of SemiCab, Inc.’s business. The Company had accrued interest payable of $6,000 as of December 31, 2024 that was included as a component of accrued expenses on the Company’s consolidated balance sheets. The Company incurred interest expense on these loans of $36,000 for the year ended December 31, 2024. The terms of each loan are summarized in the table below: Schedule of Notes Payable to Related Parties Loan <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td style="text-align: center">Issue</td><td style="text-align: center"> </td> <td style="text-align: center">Maturity</td><td style="text-align: center"> </td> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Interest</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_499_20241231_zbulWqUC2FL4" style="text-align: center"> </td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: left">Note Holder</td><td style="text-align: center; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center">Date</td><td style="text-align: center; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center">Date</td><td style="text-align: center; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center">Status</td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Rate</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Principal</td><td style="text-align: center; padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 35%; text-align: left">Ajesh Kapoor</td><td style="width: 2%"> </td> <td style="width: 11%; text-align: center">7/10/2021</td><td style="width: 2%"> </td> <td style="width: 11%; text-align: center">7/10/2026</td><td style="width: 2%"> </td> <td style="width: 11%; text-align: center">Current</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><span id="xdx_903_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorOneMember_zmPlmWziu0si" title="Interest rate">9</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--NotesPayable_iI_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorOneMember_zLe1OxIqpbP" style="width: 9%; text-align: right" title="Principal amount">150,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Ajesh Kapoor</td><td> </td> <td style="text-align: center">8/27/2021</td><td> </td> <td style="text-align: center">8/26/2026</td><td> </td> <td style="text-align: center">Current</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_906_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorTwoMember_zBCnFraRmi09" title="Interest rate">9</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--NotesPayable_iI_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorTwoMember_zgBbrVePvD24" style="text-align: right" title="Principal amount">235,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Vivek Sehgal</td><td> </td> <td style="text-align: center">4/17/2023</td><td> </td> <td style="text-align: center">10/13/2023</td><td> </td> <td style="text-align: center">Default</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90E_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivekSeghalMember_z5OwbzykDEXb" title="Interest rate">10</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--NotesPayable_iI_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivekSeghalMember_zPX2kl0XlOQ8" style="text-align: right" title="Principal amount">50,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Ajesh Kapoor</td><td> </td> <td style="text-align: center">5/5/2023</td><td> </td> <td style="text-align: center">5/4/2024</td><td> </td> <td style="text-align: center">Default</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90F_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorThreeMember_zTWa8LQe6TE8" title="Interest rate">10</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--NotesPayable_iI_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorThreeMember_zfYjDECT73Qe" style="text-align: right" title="Principal amount">50,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Ajesh Kapoor</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt">5/17/2023</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt">5/16/2024</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt">Default</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"><span id="xdx_906_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorFourMember_zP9ayDxj1649" title="Interest rate">10</td><td style="padding-bottom: 1pt; text-align: left">%</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_983_eus-gaap--NotesPayable_iI_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorFourMember_zp1C4j5A683i" style="border-bottom: Black 1pt solid; text-align: right" title="Principal amount">165,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--NotesPayable_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zDbrEDKqMjPe" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Balance as of December 31, 2024</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">650,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--NotesPayable_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zs6uxQkOzJ25" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Balance</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">650,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--NotesPayableCurrentAndNonCurrent_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zfWyC3Cj5Wfl" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Less: current portion of notes payable to related parties</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">265,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LongTermNotesPayable_iTI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zIHrsBpeqPFl" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Notes payable to related parties, net of current portion</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">385,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Subsequent to December 31, 2024, the Company entered into waivers and amendments with each of the note holders who are parties to the loans described above that were in default at December 31, 2024 pursuant to which the maturity dates of the loans were extended to February 1, 2026. As a result of the execution of the waivers and amendments, the Company cured the defaults that had existed at December 31, 2024 due to non-payment on the original maturity dates of the notes. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

6000

36000

The terms of each loan are summarized in the table below: Schedule of Notes Payable to Related Parties Loan <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td style="text-align: center">Issue</td><td style="text-align: center"> </td> <td style="text-align: center">Maturity</td><td style="text-align: center"> </td> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" style="text-align: center">Interest</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_499_20241231_zbulWqUC2FL4" style="text-align: center"> </td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: left">Note Holder</td><td style="text-align: center; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center">Date</td><td style="text-align: center; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center">Date</td><td style="text-align: center; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center">Status</td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Rate</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Principal</td><td style="text-align: center; padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 35%; text-align: left">Ajesh Kapoor</td><td style="width: 2%"> </td> <td style="width: 11%; text-align: center">7/10/2021</td><td style="width: 2%"> </td> <td style="width: 11%; text-align: center">7/10/2026</td><td style="width: 2%"> </td> <td style="width: 11%; text-align: center">Current</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><span id="xdx_903_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorOneMember_zmPlmWziu0si" title="Interest rate">9</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--NotesPayable_iI_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorOneMember_zLe1OxIqpbP" style="width: 9%; text-align: right" title="Principal amount">150,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Ajesh Kapoor</td><td> </td> <td style="text-align: center">8/27/2021</td><td> </td> <td style="text-align: center">8/26/2026</td><td> </td> <td style="text-align: center">Current</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_906_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorTwoMember_zBCnFraRmi09" title="Interest rate">9</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--NotesPayable_iI_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorTwoMember_zgBbrVePvD24" style="text-align: right" title="Principal amount">235,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Vivek Sehgal</td><td> </td> <td style="text-align: center">4/17/2023</td><td> </td> <td style="text-align: center">10/13/2023</td><td> </td> <td style="text-align: center">Default</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90E_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivekSeghalMember_z5OwbzykDEXb" title="Interest rate">10</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--NotesPayable_iI_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--VivekSeghalMember_zPX2kl0XlOQ8" style="text-align: right" title="Principal amount">50,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Ajesh Kapoor</td><td> </td> <td style="text-align: center">5/5/2023</td><td> </td> <td style="text-align: center">5/4/2024</td><td> </td> <td style="text-align: center">Default</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90F_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorThreeMember_zTWa8LQe6TE8" title="Interest rate">10</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--NotesPayable_iI_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorThreeMember_zfYjDECT73Qe" style="text-align: right" title="Principal amount">50,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Ajesh Kapoor</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt">5/17/2023</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt">5/16/2024</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt">Default</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"><span id="xdx_906_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_uPure_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorFourMember_zP9ayDxj1649" title="Interest rate">10</td><td style="padding-bottom: 1pt; text-align: left">%</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_983_eus-gaap--NotesPayable_iI_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--AjeshKapoorFourMember_zp1C4j5A683i" style="border-bottom: Black 1pt solid; text-align: right" title="Principal amount">165,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--NotesPayable_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zDbrEDKqMjPe" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Balance as of December 31, 2024</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">650,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--NotesPayable_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zs6uxQkOzJ25" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Balance</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">650,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--NotesPayableCurrentAndNonCurrent_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zfWyC3Cj5Wfl" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Less: current portion of notes payable to related parties</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">265,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--LongTermNotesPayable_iTI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_zIHrsBpeqPFl" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Notes payable to related parties, net of current portion</td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="text-align: center; padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">385,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

2021-07-10

2026-07-10

0.09

150000

2021-08-27

2026-08-26

0.09

235000

2023-04-17

2023-10-13

0.10

50000

2023-05-05

2024-05-04

0.10

50000

2023-05-17

2024-05-16

0.10

165000

650000

265000

385000

Note 7 – Credit Facilities and Other Financing Arrangements Fifth Third Bank Asset-Backed Revolving Credit Facility On October 14, 2022, the Company entered into a loan and security agreement with Fifth Third Financial Corporation. The credit agreement established a secured asset-backed revolving credit facility that was comprised of a maximum $15,000,000 revolving credit facility. Availability under the credit facility was determined monthly by a borrowing base comprised of a percentage of eligible accounts receivable and eligible inventory of the Company. The Company’s obligations under the credit agreement are secured by a continuing security interest in all property of each loan party, subject to certain excluded collateral. Costs associated with the closing of the credit agreement of $254,000 were deferred and amortized over life of the loan. During the nine months ended December 31, 2023, the Company incurred amortization expense of $<span id="xdx_906_eus-gaap--AmortizationOfFinancingCosts_c20230401__20231231__us-gaap--CreditFacilityAxis__us-gaap--RevolvingCreditFacilityMember_zyIUUYdf1AM5" title="Amortization of deferred financing costs">215,000 associated with the amortization of deferred financing costs from the credit agreement. Borrowings under the credit facility took the form of base rate loans at interest rates of the greater of either: (a) the Prime Rate plus 0.50%, or (b) the Secured Overnight Financing Rate 30-day term rate plus 3%, subject to a minimum of 0.050% in either case. The Company incurred interest expense of 43,000 for the nine months ended December 31, 2023. On May 19, 2023, the Company executed a Waiver and First Amendment agreement which provided for a waiver of previous defaults and instituted new covenants. On November 17, 2023, the Company voluntarily terminated the credit agreement as the Company could not comply with the debt coverage financial covenant effective September 30, 2023. There was no balance outstanding on the credit agreement as of the termination date. Oxford Credit Facility On March 28, 2024, the Company entered into a loan agreement and related revolving credit note with Oxford Commercial Finance (“Oxford”). The agreement was for a two-year term and established a secured asset-backed revolving credit facility that was comprised of a maximum $<span id="xdx_908_eus-gaap--LineOfCreditFacilityMaximumBorrowingCapacity_iI_c20240328__us-gaap--CreditFacilityAxis__us-gaap--RevolvingCreditFacilityMember__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember_zQ8F5J6dQFxg" title="Revolving credit facility maximum amount">2,000,000 revolving credit facility. Availability under the credit facility was determined monthly by a borrowing base comprised of a percentage of eligible accounts receivable of the borrowers. The Company’s obligations under the credit agreement were secured by a continuing security interest in all property of each Loan Party, subject to certain excluded collateral. On October 17, 2024, the Company terminated the loan agreement and note and paid Oxford a termination fee of $<span id="xdx_909_eus-gaap--LineOfCreditFacilityCommitmentFeeAmount_c20241017__20241017__us-gaap--CreditFacilityAxis__us-gaap--RevolvingCreditFacilityMember__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember_zl7Uh2ESOizd" title="Credit facility termination fee">40,000. As of the date of termination, the Company had no outstanding amounts owed to Oxford. During the year ended December 31, 2024, the Company incurred interest expense of $77,000 for financing costs associated with the credit agreement. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 Agile Capital Merchant Cash Advance In connection with the acquisition of SemiCab, Inc.’s business, the Company assumed a merchant cash advance that was payable to Agile Capital Funding, LLC that had been incurred under a financing agreement that SemiCab, Inc. had entered into on March 22, 2024. The initial amount borrowed was $315,000, with net proceeds to SemiCab, Inc. in the amount of $<span id="xdx_904_eus-gaap--ProceedsFromShortTermDebt_c20240322__20240322__us-gaap--ShortTermDebtTypeAxis__custom--AgileCapilalMerchantCashAdvanceMember_zUQI7cJM28mg" title="Net proceeds from short term debt">300,000. Repayment terms consisted of weekly payments in the amount of $<span id="xdx_908_eus-gaap--DebtInstrumentPeriodicPayment_c20240322__20240322__us-gaap--ShortTermDebtTypeAxis__custom--AgileCapilalMerchantCashAdvanceMember_z0CHg185pThh" title="Stipulated periodic payment of short term debt">16,200 for 28 weeks for a total repayment of $<span id="xdx_901_eus-gaap--RepaymentsOfShortTermDebt_c20240322__20240322__us-gaap--ShortTermDebtTypeAxis__custom--AgileCapilalMerchantCashAdvanceMember_zltsCaO4Pn1d" title="Total short term debt to be repaid">453,600. The effective interest rate for the borrowings is <span id="xdx_905_eus-gaap--DebtInstrumentInterestRateEffectivePercentage_iI_dp_c20240322__us-gaap--ShortTermDebtTypeAxis__custom--AgileCapilalMerchantCashAdvanceMember_z9IjBTQFtxw9" title="Effective Interest rate">15% per year. The Company incurred $<span id="xdx_900_eus-gaap--InterestExpenseCapitalSecurities_c20240101__20241231__us-gaap--ShortTermDebtTypeAxis__custom--AgileCapilalMerchantCashAdvanceMember_z09c690NmXll" title="interest expense under financing agreement">105,400 of interest expense under this financing agreement during the year ended December 31, 2024. As of December 31, 2024, the merchant cash advance had been repaid in full. Cedar Advance Merchant Cash Advance In connection with the acquisition of SemiCab, Inc.’s business, the Company assumed a merchant cash advance that was payable to Cedar Advance, LLC that had been incurred under a financing agreement that SemiCab, Inc. had entered into on May 8, 2024. The initial amount borrowed was $215,000, with net proceeds to SemiCab, Inc. in the amount of $204,300. Repayment terms consisted of weekly payments in the amount of $11,100 for 28 weeks for a total repayment of $312,000. The effective interest rate for the borrowings is 18% per year. The Company incurred $88,800 of interest expense under this financing agreement during the year ended December 31, 2024. As of December 31, 2024, the merchant cash advance had been repaid in full.

15000000

254000

215000

(a) the Prime Rate plus 0.50%, or (b) the Secured Overnight Financing Rate 30-day term rate plus 3%, subject to a minimum of 0.050% in either case. The Company incurred interest expense of 43,000 for the nine months ended December 31,

2000000

40000

77000

315000

300000

16200

453600

0.15

105400

215000

204300

11100

312000

0.18

Note 8 – Commitments and Contingencies The Company is subject to claims, suits and other proceedings from time to time in the ordinary course of business that could result in fines, civil penalties, or other adverse consequences. In accordance with the provisions of ASC Topic 450, Contingencies, the Company records a liability when it believes that it is probable that a loss has been incurred and the amount can be reasonably estimated. If the Company determines that it is probable that a loss has been incurred and the loss or range of loss can be estimated, the Company discloses the estimated amount of the loss. The Company evaluates developments in its legal matters that could affect the amount of liability that has been previously accrued and makes adjustments as appropriate. Significant judgment is required to determine both likelihood of there being and the estimated amount of a loss related to such matters. Efficient Capital Labs Settlement Agreement On May 18, 2023, SemiCab, Inc. entered into an installment business loan agreement with Efficient Capital Labs, Inc. (“ECL”) pursuant to which SemiCab, Inc. borrowed the principal amount of $1,000,000. Repayments were originally scheduled to begin in June 2023 in equal installments of $91,667 for 13 months with an effective interest rate of 17.97%. The loan had a maturity date of May 17, 2024. On May 18, 2024, SemiCab, Inc. defaulted on the loan for non-payment. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 On May 18, 2024, SemiCab, Inc. entered into a settlement agreement with ECL pursuant to which SemiCab, Inc. agreed to pay ECL $946,666 as follows: (i) $25,000 on or before May 20, 2024; (ii) $75,000 on or before June 3, 2024; and (iii) $84,666 on or before the first business day of each of the following 10 calendar months starting on July 1, 2024. In connection with the acquisition of the SemiCab, Inc.’s business, the Company assumed this settlement liability. As of December 31, 2024, the remaining unpaid balance of the settlement was $325,000 and was included as a component of accrued expenses on the Company’s consolidated balance sheets. The Company was in compliance with the terms of the settlement at December 31, 2024. Derivative Litigation On December 21, 2023, Ault Lending, LLC (“Ault Lending”), a wholly-owned subsidiary of Ault Alliance, Inc., a former shareholder of the Company, filed a derivative shareholder action in Delaware Chancery Court against the Company, its board of directors, Stingray Group, LLC (“Stingray Group”) and Regalia Ventures, LLC (“Regalia Ventures”) for alleged breach of fiduciary duty in approving a recent above-market private placement equity transaction. The complaint alleges that the Company and its board of directors followed an inadequate process in evaluating the private placement transaction that the Company completed in November 2023 and that the Company and its board of directors entered into the transaction with an intent to dilute Ault’s ownership stake in the Company. 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) rescission of the Company’s sale of shares to Stingray Group and Regalia Ventures; and (iii) damages and attorney’s fees. The Company filed a motion to dismiss the complaint. Based on the Company’s assessment of the facts underlying the claims, the uncertainty of the litigation and the preliminary stage of the case, the Company cannot reasonably estimate the potential loss or range of loss that may result from this action. OAC Flatiron & OAC Adelphi Litigation On August 23, 2023, MICS NY entered into an Agreement of Lease (the “Lease Agreement”) with OAC 111 Flatiron, LLC and OAC Adelphi, LLC (the “Landlord”), pursuant to which MICS NY agreed to lease approximately 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 24th Street, New York, New York (the “Premises”). During the year ended December 31, 2024, the Company abandoned its plans to continue use of the leased space and exercised its early termination provision of the Lease Agreement which was not accepted by the Landlord. Due to the abandonment of the lease, all assets related to the lease were impaired. Assets including security deposits, rent deposits and right of use assets of approximately $3,878,000 were written off during the year ended December 31, 2024. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 On July 26, 2024, the Landlord filed a civil action in the Supreme Court of the State of New York against MICS NY and the Company (“the Defendants”) for alleged breach of lease, seeking monetary damages including unpaid rent, future unpaid rent, and other expenses related to the lease. The complaint alleged the Defendants breached the lease in various material respects. On September 25, 2024, the Company entered into a settlement agreement for a full release and dismissal of the complaint within five business days of the Company’s payment of $250,000. Pursuant to the settlement agreement, the Company made the first payment of $150,000 on September 25, 2024 and a final payment of $100,000 on October 25, 2024. The remaining lease liability was written off upon settlement, resulting in a loss upon termination of the lease of $4,000, net of the write off of the related lease asset discussed above. On October 29, 2024, the Landlord filed a discontinuance with prejudice. Blue Yonder Liability Pursuant to the asset purchase agreement with SemiCab, Inc., the Company assumed a judgement against SemiCab, Inc. regarding damages resulting from contract breach for IT subscription-based services. On March 28, 2020, SemiCab, Inc. entered into a service contract and agreement with Blue Yonder, Inc. (“Blue Yonder”) for certain IT subscription-based services. The original term of the agreement was for three years, at a price of $100,000 per year, for a total of $300,000. On June 21, 2023, Blue Yonder filed a lawsuit claiming damages in the amount of $275,000 with the Maricopa County Superior Court in Arizona. The suit was found in favor of Blue Yonder in the amount of $509,119, subject to two separate milestone payments that would otherwise deem the entire balance due satisfied if either milestone payment is made by the Company. The first milestone payment for $175,000 and was due on July 1, 2024 and was not made. In the event this payment is made, the remaining settlement shall be deemed satisfied. If this payment is not made, the Company shall owe a total of $225,000 by October 1, 2024. In the event this payment is made, the remaining settlement shall be deemed satisfied. If neither payment is made, Blue Yonder shall be entitled to execute the full $<span id="xdx_90A_eus-gaap--LossContingencyDamagesAwardedValue_c20250101__20250101__dei--LegalEntityAxis__custom--BlueYonderIncMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zoQEnhFPAD59" title="Loss contingency damages awarded value">509,119 beginning January 1, 2025. As of the date of this filing, none of the scheduled payments have been made. A liability of $509,119 has been recorded as a component of accrued expenses on the accompanying consolidated balance sheets. On February 11, 2025, Blue Yonder filed a civil action in the Superior Court of the State of Arizona against the Company for breach of contract and to enforce a stipulated judgment entered against SemiCab, Inc. in connection with the liabilities related to Blue Yonder that the Company assumed when it acquired SemiCab, Inc.’s business. Blue Yonder alleges that, because the Company assumed these liabilities, Blue Yonder can enforce the judgment against the Company. The judgement was in the amount of $<span id="xdx_90E_eus-gaap--LossContingencyDamagesAwardedValue_c20250211__20250211__dei--LegalEntityAxis__custom--BlueYonderIncMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_z8PXQxdG4RB1" title="Milestone payments">509,119. The Company have retained counsel to represent them in this matter. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

1000000

91667

0.1797

2024-05-17

946666

25000

75000

84666

325000

10000

3878000

250000

150000 100000

4000

100000

300000

275000

509119

175000

225000

509119

Note 9 – Operating Leases The Company is a party to various operating leases with rent ranging from $4,900 to $10,000 per month. All of the leases have remaining terms of less than one year. Lease expense for the Company’s operating leases is recognized on a straight-line basis over the lease terms. The following table presents supplemental information about the Company’s operating leases and future minimum annual lease payments under its operating leases as of December 31, 2024. Supplemental balance sheet information related to leases as of December 31, 2024 and 2023 is as follows: Schedule of Supplemental Information Related To Leases <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_490_20241231__srt--RestatementAxis__srt--ScenarioPreviouslyReportedMember_zKORjHYYp4uc" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49F_20231231__srt--RestatementAxis__srt--ScenarioPreviouslyReportedMember_zutzReSzuED6" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Assets:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--OperatingLeaseRightOfUseAsset_iI_pp0p0_zXRDYDGPoSwi" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 64%; text-align: left">Operating lease - right-of-use assets</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">95,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">3,926,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--OperatingLeaseLiabilityAbstract_iB_zOrStOZGofof" style="vertical-align: bottom; background-color: White"> <td>Liabilities</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Current</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_ecustom--CurrentPortionOfOperatingLeases_i01I_pp0p0_zG6626Xbbryl" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Current portion of operating leases</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">92,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">84,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--OperatingLeaseLiabilityNoncurrent_i01I_pp0p0_zlvFZlAq9bV2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">Operating lease liabilities, net of current portion</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">3,925,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> </table> Supplemental statement of operations information related to operating leases is as follows: Schedule of Operating Lease Term and Discount Rate <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" id="xdx_494_20240101__20241231_zaB9ATbl7G9l" style="text-align: center">Twelve Months Ended</td><td> </td><td> </td> <td colspan="2" id="xdx_492_20230401__20231231_zlKCbWxXmDT9" style="text-align: center">Nine Months Ended</td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_405_eus-gaap--OperatingLeaseExpense_zSxyjxFY6dHa" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Operating lease expense as a component of general and administrative expenses</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">489,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">717,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--CashFlowOperatingActivitiesLesseeAbstract_iB_zMKM3Ynh2rkc" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Supplemental cash flow information related to operating leases is as follows:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Cash paid for amounts included in the measurement of lease liabilities:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--OperatingLeasePayments_i01_zM228fzyKvc6" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">Operating cash flow paid for operating leases</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">181,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">656,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--LeaseCostAbstract_iB_zdE7cUXB1B05" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Lease term and Discount Rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Weighted average remaining lease term (years)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_eus-gaap--OperatingLeaseWeightedAverageRemainingLeaseTerm1_i01I_dtY_c20241231_zF4Zf9NK6vH2" style="text-align: right" title="Weighted average remaining lease term (months)">0.6</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--OperatingLeaseWeightedAverageRemainingLeaseTerm1_i01I_dtY_c20231231_zZbSalRH2ec7" style="text-align: right" title="Weighted average remaining lease term (months)">15.0</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt">Weighted average discount rate</td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--OperatingLeaseWeightedAverageDiscountRatePercent_i01I_dp_uPure_c20241231_zCq2wcZ8qXof" style="text-align: right" title="Weighted average discount rate">9.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--OperatingLeaseWeightedAverageDiscountRatePercent_i01I_dp_uPure_c20231231_z8bj9rLUd9hf" style="text-align: right" title="Weighted average discount rate">12.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> </table> The following table summarizes information regarding lease maturities and balance due as follows: Schedule of Operating Lease Lease Maturities and Balance Due <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: left">Payments due by period</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_493_20241231_zrR8rPDNpfh5" style="border-bottom: Black 1pt solid; text-align: center">Amount</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_40E_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_zK78SkMuFLok" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 84%; text-align: left">2025</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">94,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--LesseeOperatingLeaseLiabilityUndiscountedExcessAmount_iI_zQpgXsAb9L1c" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Less: Interest</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">Total operating lease liabilities</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--OperatingLeaseLiability_iI_z8iCbdOvFnM1" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Total operating lease liabilities</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">92,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

4900 10000 Supplemental balance sheet information related to leases as of December 31, 2024 and 2023 is as follows: Schedule of Supplemental Information Related To Leases <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_490_20241231__srt--RestatementAxis__srt--ScenarioPreviouslyReportedMember_zKORjHYYp4uc" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49F_20231231__srt--RestatementAxis__srt--ScenarioPreviouslyReportedMember_zutzReSzuED6" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Assets:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--OperatingLeaseRightOfUseAsset_iI_pp0p0_zXRDYDGPoSwi" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 64%; text-align: left">Operating lease - right-of-use assets</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">95,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">3,926,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--OperatingLeaseLiabilityAbstract_iB_zOrStOZGofof" style="vertical-align: bottom; background-color: White"> <td>Liabilities</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Current</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_ecustom--CurrentPortionOfOperatingLeases_i01I_pp0p0_zG6626Xbbryl" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Current portion of operating leases</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">92,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">84,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--OperatingLeaseLiabilityNoncurrent_i01I_pp0p0_zlvFZlAq9bV2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">Operating lease liabilities, net of current portion</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">3,925,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> </table>

95000

3926000

92000 84000

3925000

Supplemental statement of operations information related to operating leases is as follows: Schedule of Operating Lease Term and Discount Rate <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" id="xdx_494_20240101__20241231_zaB9ATbl7G9l" style="text-align: center">Twelve Months Ended</td><td> </td><td> </td> <td colspan="2" id="xdx_492_20230401__20231231_zlKCbWxXmDT9" style="text-align: center">Nine Months Ended</td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_405_eus-gaap--OperatingLeaseExpense_zSxyjxFY6dHa" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Operating lease expense as a component of general and administrative expenses</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">489,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">717,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--CashFlowOperatingActivitiesLesseeAbstract_iB_zMKM3Ynh2rkc" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Supplemental cash flow information related to operating leases is as follows:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Cash paid for amounts included in the measurement of lease liabilities:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--OperatingLeasePayments_i01_zM228fzyKvc6" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">Operating cash flow paid for operating leases</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">181,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">656,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--LeaseCostAbstract_iB_zdE7cUXB1B05" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Lease term and Discount Rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Weighted average remaining lease term (years)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_eus-gaap--OperatingLeaseWeightedAverageRemainingLeaseTerm1_i01I_dtY_c20241231_zF4Zf9NK6vH2" style="text-align: right" title="Weighted average remaining lease term (months)">0.6</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--OperatingLeaseWeightedAverageRemainingLeaseTerm1_i01I_dtY_c20231231_zZbSalRH2ec7" style="text-align: right" title="Weighted average remaining lease term (months)">15.0</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt">Weighted average discount rate</td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--OperatingLeaseWeightedAverageDiscountRatePercent_i01I_dp_uPure_c20241231_zCq2wcZ8qXof" style="text-align: right" title="Weighted average discount rate">9.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--OperatingLeaseWeightedAverageDiscountRatePercent_i01I_dp_uPure_c20231231_z8bj9rLUd9hf" style="text-align: right" title="Weighted average discount rate">12.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> </table>

489000

717000

181000

656000

P0Y7M6D

P15Y

0.090

0.120

The following table summarizes information regarding lease maturities and balance due as follows: Schedule of Operating Lease Lease Maturities and Balance Due <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: left">Payments due by period</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_493_20241231_zrR8rPDNpfh5" style="border-bottom: Black 1pt solid; text-align: center">Amount</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_40E_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_zK78SkMuFLok" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 84%; text-align: left">2025</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">94,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--LesseeOperatingLeaseLiabilityUndiscountedExcessAmount_iI_zQpgXsAb9L1c" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Less: Interest</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">Total operating lease liabilities</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--OperatingLeaseLiability_iI_z8iCbdOvFnM1" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Total operating lease liabilities</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">92,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

94000

2000

92000

Note 10 – Stock Compensation Expense Equity Incentive Plan On April 12, 2022, the Company’s board of directors approved The Singing Machine Company, Inc. 2022 Equity Incentive Plan. The equity plan provides for the issuance of equity incentive awards, such as stock options, stock appreciation rights, stock awards, restricted stock, stock units, performance awards and other stock or cash-based awards to the Company’s employees, officers, directors, consultants, agents, advisors and independent contractors. The maximum number of shares of common stock initially available for issuance under the plan was 1,167 shares of common stock and thereafter, beginning in 2023, an annual increase would occur as of the first day of the Company’s applicable fiscal equal to the lesser of: (i) five percent of the outstanding shares of common stock calculated on a fully diluted basis as of the end of the Company’s immediately preceding fiscal year; (ii) 167 shares; and (iii) a lesser amount as determined by the Company’s board of directors. The shares of common stock subject to stock awards granted under the equity plan that lapse, terminate, expire prior to exercise, are canceled, or are forfeited, become available for issuance again under the equity plan. Shares subject to a stock award under the equity plan do not become available for issuance or delivery again under the equity plan if such shares are: (i) shares tendered by a participant or retained by the Company as full or partial payment to the Company for the exercise or purchase price of an award; or (ii) shares used to satisfy tax withholding obligations in connection with an award. The Company’s board of directors may amend, suspend or terminate the plan or a portion of it at any time; provided, however, that to the extent required by applicable law, regulation or stock exchange rule, stockholder approval will be required for any amendment to the plan. The plan is scheduled to terminate automatically in 10 years following the earlier of: (i) the date the Company’s board of directors adopted the plan; and (ii) the date the stockholders approved the plan. As of December 31, 2024, there were <span id="xdx_907_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAuthorized_iI_c20241231__us-gaap--PlanNameAxis__custom--TwoThousandTwentyTwoPlanMember_zIsk8tVQeM3c" title="Number of shares common stock authorized">1,500 shares of common stock authorized for issuance under the plan. Of this amount, awards representing <span id="xdx_903_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardSharesIssuedInPeriod_c20240101__20241231__us-gaap--PlanNameAxis__custom--TwoThousandTwentyTwoPlanMember_zFzSJhXttzml" title="Share base compensation issued shares">1,183 shares of common stock had been granted under the plan and <span id="xdx_90C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAvailableForGrant_iI_c20241231__us-gaap--PlanNameAxis__custom--TwoThousandTwentyTwoPlanMember_zj2DOgA3g0Ge" title="Number of shares available to issued">317 shares remained available for issuance under the plan. The Company did not issue any share-based compensation during the year ended December 31, 2024 or the nine months ended December 31, 2023. There were <span id="xdx_90C_eus-gaap--StockIssuedDuringPeriodSharesShareBasedCompensationForfeited_c20240101__20241231__us-gaap--PlanNameAxis__custom--TwoThousandTwentyTwoPlanMember_zPhPnWPt8ghj" title="Share base compensation forfeited shares">33 and <span id="xdx_901_eus-gaap--StockIssuedDuringPeriodSharesShareBasedCompensationForfeited_c20230401__20231231__us-gaap--PlanNameAxis__custom--TwoThousandTwentyTwoPlanMember_zPkAIN2qeTw8" title="Share base compensation forfeited shares">238 shares forfeited during the year ended December 31, 2024 and the nine months ended December 31, 2023, respectively. There were 351 and 384 shares of common stock underlying share-based awards that were outstanding at December 31, 2024 and 2023, respectively. Employee share-based compensation expense for the year ended December 31, 2024 and the nine months ended December 31, 2023 includes the estimated fair value of share-based awards granted, amortized on a straight-line basis over the requisite service period for the entire portion of the award. For the year ended December 31, 2024 and the nine months ended December 31, 2023, the Company recognized share-based compensation expense of $69,000 and $110,000, respectively. As of December 31, 2024, there was an unrecognized expense of $33,000 remaining on stock options currently vesting over time with approximate weighted average of six months remaining until these options are fully vested. The vested options as of December 31, 2024, had <span id="xdx_90F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingAggregateIntrinsicValue_iI_do_c20241231_zHNsj70cgrY" title="Vested options intrinsic value">no intrinsic value. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 Other Equity Compensation During the year ended December 31, 2024, the Company issued 3,873 shares of its common stock to three vendors as payment for consulting services rendered and issued 472 shares of common stock to Vivek Sehgal as bonus compensation earned under his employment agreement with SemiCab Holdings. The Company recognized compensation expense of $<span id="xdx_907_eus-gaap--StockIssuedDuringPeriodValueNewIssues_c20240101__20241231__us-gaap--IncomeStatementLocationAxis__us-gaap--GeneralAndAdministrativeExpenseMember_z7cVLvyfILha" title="New shares issued">478,000 during the year ended December 31, 2024 in connection with these share issuances, all of which was recorded in general and administrative expenses in the Company statement of operations.

The maximum number of shares of common stock initially available for issuance under the plan was 1,167 shares of common stock and thereafter, beginning in 2023, an annual increase would occur as of the first day of the Company’s applicable fiscal equal to the lesser of: (i) five percent of the outstanding shares of common stock calculated on a fully diluted basis as of the end of the Company’s immediately preceding fiscal year; (ii) 167 shares; and (iii) a lesser amount as determined by the Company’s board of directors.

1500

1183

317

238

351

384

69000

110000

33000

P6M

3873

472

478000

Note 11 – Net Loss Per Share <p id="xdx_896_eus-gaap--ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock_zLE45JKKhGCf" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The computations of basic and dilutive loss per share of commons stock outstanding for the year ended December 31, 2024 and the nine months ended December 31, 2023 are as follows: Schedule of Basic and Diluted Loss Per Share <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_498_20240101__20241231_zfQczr5MwkA3" style="border-bottom: Black 1pt solid; text-align: center">Year Ended December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_490_20230401__20231231_z1kI8oBKBIWb" style="border-bottom: Black 1pt solid; text-align: center">Nine Months Ended December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_406_eus-gaap--NetIncomeLossAvailableToCommonStockholdersBasic_zatVTQEWG786" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Net loss available to common shareholders</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">(23,257,000</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">(6,398,000</td><td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Basic and fully diluted weighted average shares of common stock outstanding</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">65,722</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">24,323</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Basic and fully diluted net loss per share of common stock</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(353.87</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(263.04</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table> <p id="xdx_89F_eus-gaap--ScheduleOfWeightedAverageNumberOfSharesTableTextBlock_zxMOfPWz5s9b" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The computation of the fully diluted weighted average number of shares of common stock outstanding for the year ended December 31, 2024 and the nine months ended December 31, 2023 is as follows: Schedule of Diluted Weighted Average Number of Shares <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_498_20240101__20241231_zwasX00d6eQf" style="border-bottom: Black 1pt solid; text-align: center">Year Ended December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_494_20230401__20231231_zCa0ceklqKAi" style="border-bottom: Black 1pt solid; text-align: center">Nine Months Ended December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_409_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_pid_zRJZAF7qLUt2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Basic weighted average common shares outstanding</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">65,722</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">24,323</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--WeightedAverageNumberDilutedSharesOutstandingAdjustment_pid_z8lKDk9NNpzc" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Effect of dilutive stock options</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--WeightedAverageNumberOfDilutedSharesOutstanding_pid_zpnDZEfw21Lc" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Diluted weighted average of common shares outstanding</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">65,722</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">24,323</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Basic net loss per share is based on the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share reflects the potential dilution assuming shares of common stock underlying in-the-money options and warrants have been issued upon the exercise of the options and warrants and the proceeds thereof were used to purchase shares of the Company’s common stock at the average market price during the period using the treasury stock method. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 For the year ended December 31, 2024, <span id="xdx_909_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20240101__20241231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_zmSTjhc1LeDa" title="Potentially dilutive securities">536 shares of common stock underlying stock options and <span id="xdx_907_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20240101__20241231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockWarrantsMember_zFmpg0xyexph" title="Potentially dilutive securities">563,335 shares of common stock underlying warrants were excluded from the calculation of diluted net loss per share as the result would have been anti-dilutive. For the nine months ended December 31, 2023, <span id="xdx_90D_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20230401__20231231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__us-gaap--EmployeeStockOptionMember_zHHamL3VLLyd" title="Potentially dilutive securities">569 shares of common stock underlying stock options and <span id="xdx_90F_eus-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount_pid_c20230401__20231231__us-gaap--AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareByAntidilutiveSecuritiesAxis__custom--CommonStockWarrantsMember_zv855y45Drba" title="Potentially dilutive securities">4,511 shares of common stock underlying warrants were excluded from the calculation of diluted net loss per share as the result would have been anti-dilutive.

<p id="xdx_896_eus-gaap--ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock_zLE45JKKhGCf" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The computations of basic and dilutive loss per share of commons stock outstanding for the year ended December 31, 2024 and the nine months ended December 31, 2023 are as follows: Schedule of Basic and Diluted Loss Per Share <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_498_20240101__20241231_zfQczr5MwkA3" style="border-bottom: Black 1pt solid; text-align: center">Year Ended December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_490_20230401__20231231_z1kI8oBKBIWb" style="border-bottom: Black 1pt solid; text-align: center">Nine Months Ended December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_406_eus-gaap--NetIncomeLossAvailableToCommonStockholdersBasic_zatVTQEWG786" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Net loss available to common shareholders</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">(23,257,000</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 14%; text-align: right">(6,398,000</td><td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Basic and fully diluted weighted average shares of common stock outstanding</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">65,722</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">24,323</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Basic and fully diluted net loss per share of common stock</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(353.87</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(263.04</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table>

-23257000

-6398000

65722

24323

-353.87

-263.04

<p id="xdx_89F_eus-gaap--ScheduleOfWeightedAverageNumberOfSharesTableTextBlock_zxMOfPWz5s9b" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The computation of the fully diluted weighted average number of shares of common stock outstanding for the year ended December 31, 2024 and the nine months ended December 31, 2023 is as follows: Schedule of Diluted Weighted Average Number of Shares <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_498_20240101__20241231_zwasX00d6eQf" style="border-bottom: Black 1pt solid; text-align: center">Year Ended December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_494_20230401__20231231_zCa0ceklqKAi" style="border-bottom: Black 1pt solid; text-align: center">Nine Months Ended December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_409_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_pid_zRJZAF7qLUt2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Basic weighted average common shares outstanding</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">65,722</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">24,323</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--WeightedAverageNumberDilutedSharesOutstandingAdjustment_pid_z8lKDk9NNpzc" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Effect of dilutive stock options</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--WeightedAverageNumberOfDilutedSharesOutstanding_pid_zpnDZEfw21Lc" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Diluted weighted average of common shares outstanding</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">65,722</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">24,323</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

65722

24323

65722

24323

536

563335

569

4511

Note 12 – Securities Transactions 2023 Private Placement On November 20, 2023, the Company entered into an agreement to sell $<span id="xdx_90F_eus-gaap--SaleOfStockConsiderationReceivedOnTransaction_c20231120__20231120__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--PrivatePlacementMember_zdJAi3YRKGKc" title="Number of stock sold, value">2,000,000 of common stock through a private placement of common stock with Stingray Group and Jay Foreman, both of which were existing shareholders with representation on the Company’s board of directors. The shares of common stock were sold at $182 per share of common stock. A total of 10,990 shares of common stock were issued to them by the Company. Net proceeds from the transaction were approximately $1,900,000, net of transaction fees of approximately $100,000. During the six-month period after the closing date, the investors had the right to make a written request for registration under the Securities Act of all or any portion of the shares purchased. Neither of them exercised this right. 2023 ATM Offering On February 15, 2023, the Company entered into an at-the-market issuance sales agreement with Aegis Capital Corp as sales agent pursuant to which the Company could offer and sell, from time to time, through the sales agent, up to $<span id="xdx_908_eus-gaap--SaleOfStockConsiderationReceivedOnTransaction_c20230215__20230215__us-gaap--SubsidiarySaleOfStockAxis__custom--TwoThousandTwentyThreeATMOfferingMember__us-gaap--TypeOfArrangementAxis__custom--IssuanceSalesAgreementMember_z0ZFb01mZdU1" title="Number of stock sold, value">1,800,000 in shares of the Company’s common stock. For the nine months ended December 31, 2023, the Company received net proceeds of $<span id="xdx_90A_eus-gaap--ProceedsFromIssuanceOrSaleOfEquity_c20230401__20231231__us-gaap--SubsidiarySaleOfStockAxis__custom--TwoThousandTwentyThreeATMOfferingMember__us-gaap--TypeOfArrangementAxis__custom--IssuanceSalesAgreementMember_zYg06dymZvD8" title="Proceeds from sale of equity">1,654,000 from the sale of its common stock in this offering after payment of $<span id="xdx_904_eus-gaap--PaymentsForBrokerageFees_c20230401__20231231__us-gaap--SubsidiarySaleOfStockAxis__custom--TwoThousandTwentyThreeATMOfferingMember__us-gaap--TypeOfArrangementAxis__custom--IssuanceSalesAgreementMember_z33jaxu0roei" title="brokerage commissions and administrative fees">146,000 for brokerage commissions and administrative fees to the agent. The at-the-market issuance sales agreement was terminated on May 12, 2023. Regalia Ventures Stock Repurchase Transaction On November 1, 2024, the Company entered into a stock repurchase agreement with Regalia Ventures pursuant to which the Company agreed to repurchase the <span id="xdx_905_eus-gaap--StockRepurchasedDuringPeriodShares_pid_c20241101__20241101__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--RegaliaVenturesMember_zAldSc6Hh2z9" title="Stock repurchased">5,495 shares from Regalia Ventures at a price per share equal to the higher of: (i) the closing price of the common stock on the last trading day immediately preceding the date of the repurchase agreement; or (ii) the highest volume weighted average price (VWAP) of the common stock during a pricing period of 10 consecutive trading days prior to the date of the repurchase agreement. The shares of common stock to be repurchased were originally issued to Regalia Ventures on November 21, 2023, pursuant to a certain stock purchase agreement dated November 20, 2023. The Company recorded an accrued liability in the amount of the repurchase price, which was $<span id="xdx_908_eus-gaap--StockRepurchasedDuringPeriodValue_pid_c20231121__20231121__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--RegaliaVenturesMember_zsJ3P4vKOgf7" title="Stock repurchased, value">472,527, as of December 31, 2024 as there were no further conditions that needed to be satisfied prior to the closing date other than the issuance of the promissory note and the delivery of the shares. On February 18, 2025, the date of the closing of the transaction, the Company issued a promissory note to Regalia Ventures in the amount of $<span id="xdx_90C_ecustom--PromissoryNote_iI_c20250218__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--RegaliaVenturesMember__us-gaap--DebtInstrumentAxis__custom--PromissoryNoteMember_zaZL5B79hMSi" title="Promissory note">472,527, which was the principal amount of the purchase price. The note was due and payable on demand and accrued interest at the rate of 10% per year. On February 27, 2025, the Company paid off the note in full. Regalia Ventures is owned and controlled by Jay B. Foreman, who serves as a member of the Company’s board of directors. Stingray Group Stock Repurchase Transaction On December 3, 2024, the Company entered into a stock repurchase agreement with Stingray Group pursuant to which the Company agreed to repurchase the <span id="xdx_908_eus-gaap--StockRepurchasedDuringPeriodShares_pid_c20241203__20241203__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--StingrayGroupMember_zVv3DEoy41U9" title="Stock repurchased">5,495 shares from Stingray Group at a price per share equal to the higher of: (i) the closing price of the common stock on the last trading day immediately preceding the date of the repurchase agreement; or (ii) the highest VWAP of the common stock during a pricing period of 10 consecutive trading days prior to the date of the repurchase agreement. The shares of common stock to be repurchased were originally issued to the Stingray Group on November 21, 2023, pursuant to a certain stock purchase agreement dated November 20, 2023. The Company recorded an accrued liability in the amount of the repurchase price, which was $<span id="xdx_901_eus-gaap--StockRepurchasedDuringPeriodValue_pid_c20240101__20241231__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--StingrayGroupMember_zTReplpX9qpi" title="Stock repurchased, value">285,714, as of December 31, 2024 as there were no further conditions that needed to be satisfied prior to the closing date other than the issuance of the promissory note and the delivery of the shares. On February 18, 2025, the date of the closing of the transaction, the Company issued a promissory note to Stingray Group in the amount of $<span id="xdx_905_ecustom--PromissoryNote_iI_c20250218__us-gaap--TypeOfArrangementAxis__custom--StockRepurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--StingrayGroupMember_z6Pr6E3EVbK2" title="Promissory note">285,714, which was the principal amount of the purchase price. The note was due and payable on demand and accrued interest at the rate of 10% per year. On April 3, 2025, the Company 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 the Company’s board of directors. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 October 2024 Private Placement On October 22, 2024, the Company entered into a securities purchase agreement pursuant to which the Company agreed to issue and sell to each purchaser: <span id="xdx_908_eus-gaap--DerivativeDescriptionOfTerms_c20241022__20241022__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--OctoberTwoThousandTwentyFourPrivatePlacementMember_zGHMIh08ptGh" title="Derivative description of terms">(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 the Company’s common stock equal to (x) 11,500, multiplied by (y) such purchaser’s subscription amount, and divided by (z) $2,000,000. No interest would accrue on the notes unless and until an event of default occurred, upon which interest would accrue at a rate of 14% per year. The notes had a maturity date of January 22, 2025. The Offering closed on October 24, 2024. At closing, the Company issued an aggregate of <span id="xdx_90E_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20241024__20241024__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--OctoberTwoThousandTwentyFourPrivatePlacementMember_z3HIAabeFlbf" title="Common stock issued">11,500 shares of its common stock and notes in the aggregate principal amount of $<span id="xdx_90D_eus-gaap--DebtInstrumentFaceAmount_iI_c20241024__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--OctoberTwoThousandTwentyFourPrivatePlacementMember_zpNSmkLoINXd" title="Principal amount">2,352,941 to the purchasers for total proceeds of $<span id="xdx_907_eus-gaap--ProceedsFromIssuanceOfCommonStock_c20241024__20241024__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--OctoberTwoThousandTwentyFourPrivatePlacementMember_zFY0icIFsU28" title="Net proceeds">2,000,000 net of original issue discount of $<span id="xdx_903_eus-gaap--DebtInstrumentUnamortizedDiscount_iI_c20241024__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--OctoberTwoThousandTwentyFourPrivatePlacementMember_z0BgK7LhaaEf" title="Discount issued">352,941. The Company recorded amortization of original issue discount in the amount of $<span id="xdx_903_eus-gaap--AmortizationOfDebtDiscountPremium_c20240101__20241231__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--OctoberTwoThousandTwentyFourPrivatePlacementMember_zuD0TrQuEMS1" title="Amortization of original issue discount">352,941 during the year ended December 31, 2024, which was recorded in interest expense in other expense in the Company’s statement of operations. The <span id="xdx_909_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20240101__20241231__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--OctoberTwoThousandTwentyFourPrivatePlacementMember_z04oR3PgyXG2" title="Stock issued during period shares new issues">11,500 shares of common stock were valued at $<span id="xdx_906_eus-gaap--StockIssuedDuringPeriodValueNewIssues_c20240101__20241231__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--OctoberTwoThousandTwentyFourPrivatePlacementMember_zr23mko8lsRg" title="Stock issued during period value new issues">943,000 on the date of issuance and were recorded as a debt issuance cost, fully amortized to interest expense during the year ended December 31, 2024. The Company repaid the notes in full during the 2024 year. Univest Securities served as the placement agent in the offering and received seven percent of the gross proceeds received by the Company and reimbursement of the legal fees of its counsel. December 2024 Public Offering On December 4, 2024, the Company entered into a securities purchase agreement in connection with a public offering of an aggregate of <span id="xdx_907_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20241204__20241204__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_zmT33Gs8ymHf" title="Common stock issued">21,000 shares of its common stock, pre-funded warrants to purchase up to <span id="xdx_903_ecustom--StockIssuedDuringPeriodSharesExerciseOfPrefundedWarrants_c20241204__20241204__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_zHXRCRaP00Pj" title="Common stock prefunded warrants">258,412 shares of common stock, Series A warrants to purchase up to <span id="xdx_905_eus-gaap--SaleOfStockNumberOfSharesIssuedInTransaction_c20241204__20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_znMO0N2gTjOk" title="Series A warrant purchased">279,412 shares of common stock, and Series B warrants to purchase up to <span id="xdx_905_eus-gaap--SaleOfStockNumberOfSharesIssuedInTransaction_c20241204__20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zMm5tzWeGmQe" title="Series B warrant purchased">279,412 shares of common stock. Each share of common stock, or a pre-funded warrant in lieu thereof, was sold together with the accompanying warrants to purchase one share of common stock. The public offering price for each share of common stock and one accompanying Series A warrant and Series B warrants was $<span id="xdx_90C_eus-gaap--SaleOfStockPricePerShare_iI_c20241204__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_znJyuxDctAU4" title="Common stock price per share">34.00. The public offering price of each pre-funded warrant and one accompanying Series A warrant and Series B warrant was $<span id="xdx_906_eus-gaap--SaleOfStockPricePerShare_iI_c20241204__us-gaap--StatementEquityComponentsAxis__us-gaap--WarrantMember__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_zpMrhWy9kLs6" title="Common stock price per share">32.00. The exercise price of each pre-funded warrant is $<span id="xdx_90F_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_zW7PiDStflXd" title="Warrant exercise price">2.00 per share. Each Series A warrant is exercisable for one share of common stock and has an initial exercise price equal to $<span id="xdx_901_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantMember_z2FwUnBiTaN" title="Warrant exercise price">34.00. Each Series B warrant is exercisable for one share of common stock and has an initial exercise price equal to $<span id="xdx_909_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantMember_zcig2HicKyqe" title="Warrant exercise price">68.00. The Series A and B warrants have a term of five and two and one-half years, respectively, from the date the issuance of the warrants was approved by shareholders. The Company received aggregate gross proceeds upon the closing of the offering of approximately $<span id="xdx_906_ecustom--ProceedsFromIssuanceInitialPublicOfferingGross_c20241204__20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_zWBjkgOUfuh7" title="Gross proceeds">9,000,000, before deducting placement agents’ fees and other offering expenses. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 The pre-funded warrants are immediately exercisable upon issuance and may be exercised at any time until all pre-funded warrants are exercised in full. The Series A and B warrants will be exercisable only upon receipt of such shareholder approval as may be required by the applicable rules and regulations of the Nasdaq to permit the exercise of the Series A and B warrants, after which the Series A warrants will be exercisable for a period of five years and the Series B warrants will be exercisable for two and one-half years. The pre-funded warrants and Series A and B warrants contain standard adjustments to the exercise price, including for stock splits, stock dividends and pro rata distributions and contain customary terms regarding the treatment of such pre-funded warrants or the Series A and B warrants in the event of a fundamental transaction, which include but are not limited to a merger or consolidation involving the Company, a sale of all or substantially all of the assets of the Company or a business combination resulting in any person acquiring more than 50% of the outstanding shares of common stock of the Company. Additionally, the pre-funded warrants, Series A warrants, and Series B warrants include restrictions on exercise in the event the purchaser’s beneficial ownership of the Company’s common stock would exceed 4.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise. The Series A and B warrants include an exercise price adjustment feature upon shareholder approval, whereby the exercise price will adjust to the greater of the lowest daily volume weighted average price during the reset period or the floor price ($<span id="xdx_907_ecustom--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights_iI_pid_c20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAAndBWarrantMember_zNdk2uD43PI1" title="Exercise price of warrants">6.844 per share), with a proportional increase in the number of warrant shares. The Series A and B warrants can be settled by a cash exercise or by cashless exercise, and the Series B warrants specifically can be settled by way of an alternative cashless exercise after shareholder approval is obtained, in which the Series B warrant holders can receive the same number of shares of common stock that would be issuable under a cash exercise. Upon meeting certain stock price requirements, the Company has the right to redeem any outstanding Series A and Series B warrants for $<span id="xdx_90A_eus-gaap--SharesIssuedPricePerShare_iI_c20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAAndBWarrantMember_zHXOcGByHAl7" title="Outstanding redemption">2.00 per share, provided the holders do not elect to exercise prior to redemption. The Company assessed the pre-funded warrants under ASC 480 and ASC 815 and determined that the pre-funded warrants met the requirements to be classified in stockholders’ equity. The Company assessed the Series A and B warrants under ASC 480 and ASC 815 and determined that the Series A and B warrants will be classified as liabilities as they do not meet the requirements to be considered indexed to the Company’s own stock, due to (a) the adjustment to the exercise price tied to shareholder approval, and (b) the potential change in the settlement amount of the Series B warrants upon an alternative cashless exercise election. Additionally, the Company concluded at issuance that it would not have sufficient authorized and available shares of common stock to settle the Series A and B warrants. See Note 13 – Derivative Liability. At inception, the estimated fair value of the Series A warrants was $<span id="xdx_906_eus-gaap--DebtInstrumentFairValue_iI_c20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantMember_zkvEYxBRPh03" title="Estimated fair value">5,900,000 and the Series B warrants was $<span id="xdx_908_eus-gaap--DebtInstrumentFairValue_iI_c20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantMember_zMr381rCPnJa" title="Estimated fair value">11,000,000, for a total estimated fair value of $<span id="xdx_904_eus-gaap--DebtInstrumentFairValue_iI_c20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_zJG4PkwMh713" title="Estimated fair value">16,900,000. The total fair value exceeded the proceeds received in the offering by $<span id="xdx_90B_eus-gaap--ProceedsFromIssuanceOfWarrants_c20241204__20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_zvjLvVAeOtD7" title="Proceeds from issuance of warrants">8,000,000, which the Company recorded as a loss upon issuance of warrants. The Company also expensed approximately $<span id="xdx_909_eus-gaap--ProceedsFromIssuanceInitialPublicOffering_c20241204__20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_ziiRVKelUzba" title="Proceeds from issuance of offering">900,000 of issuance costs incurred in the offering, resulting in a total loss on issuance of $<span id="xdx_900_eus-gaap--ProceedsFromIssuanceOrSaleOfEquity_c20241204__20241204__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_z9Mokk5BSpaf" title="Proceeds from issuance of sale of equity">8,889,000. The estimated fair values of the Series A and B warrants have been recorded as a derivative liability at issuance and at December 31, 2024. In the Company’s consolidated statement of operations for the year ended December 31, 2024, the Company recognized a gain of $334,000 for the change in the fair value measurement of the warrant liability. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 During December 2024, the <span id="xdx_905_ecustom--StockIssuedDuringPeriodSharesExerciseOfPrefundedWarrants_c20241201__20241231__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_zdL6NWTVxWG3" title="Common stock prefunded warrants">258,412 pre-funded warrants were exercised in full, resulting in the Company receiving $<span id="xdx_90A_ecustom--StockIssuedDuringPeriodValueExerciseOfPrefundedWarrants_c20241201__20241231__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--TypeOfArrangementAxis__custom--SecuritiesPurchaseAgreementMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember_zruF8jASg5Q" title="Common stock prefunded warrants">500,000 in cash proceeds. On January 14, 2025, the Company’s stockholders approved the issuance of the Series A and B warrants that had been issued by the Company in the public offering of securities that the Company had completed on December 6, 2024, at which time all of the Series A and B warrants became exercisable. This approval triggered the adjustment to the exercise price. In connection with this approval, the holders of the Series B warrants exercised their warrants in full under the alternative cashless exercise provision, resulting in the issuance of <span id="xdx_907_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20250114__20250114__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--SubsidiarySaleOfStockAxis__custom--DecemberTwoThousandTwentyFourPrivatePlacementMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zI9LGFPBwT1g">1,910,975 shares of common stock and no additional proceeds received by the Company. Registered Direct Offering On December 18, 2024, the Company sold <span id="xdx_904_eus-gaap--SaleOfStockNumberOfSharesIssuedInTransaction_c20241218__20241218__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--SubsidiarySaleOfStockAxis__custom--RegisteredDirectOfferingMember_zTYT0vdQgLL5" title="Sale of stock">120,337 shares of its common stock to accredited investors in a registered direct offering at a purchase price of $<span id="xdx_90F_eus-gaap--SaleOfStockPricePerShare_iI_c20241218__us-gaap--StatementEquityComponentsAxis__us-gaap--CommonStockMember__us-gaap--SubsidiarySaleOfStockAxis__custom--RegisteredDirectOfferingMember_zZA4fTt8vjkd" title="Sale of stock price per share">16.62 per share. The Company engaged Univest Securities to serve as its exclusive placement agent in connection with the offering. The Company agreed to pay Univest Securities a cash fee equal to eight percent of the aggregate gross proceeds received in the offering. It also agreed to reimburse Univest Securities for various expenses incurred in connection with the offering. The Company received net proceeds of $<span id="xdx_905_eus-gaap--ProceedsFromIssuanceInitialPublicOffering_c20241218__20241218__us-gaap--SubsidiarySaleOfStockAxis__custom--RegisteredDirectOfferingMember_ztMX7c7nRfA8" title="Proceeds from offering">1,665,000 from the offering after deducting placement agent fees and other offering expenses of $335,000.

2000000

182

10990

1900000

100000

1800000

1654000

146000

5495

472527

5495

285714

(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 the Company’s common stock equal to (x) 11,500, multiplied by (y) such purchaser’s subscription amount, and divided by (z) $2,000,000. No interest would accrue on the notes unless and until an event of default occurred, upon which interest would accrue at a rate of 14% per year.

11500

2352941

2000000

352941

11500

943000

21000

258412

279412

34.00

32.00

2.00

34.00

68.00

9000000 6.844

2.00

5900000

11000000

16900000

8000000

900000

8889000

334000

258412 500000

1910975

120337

16.62

1665000

335000

Note 13 – Derivative Liability During the year ended December 31, 2024, the Company had derivative warrant liabilities that were measured at fair value on a recurring basis. These fair value measurements were estimated using a Monte Carlo simulation model, with the key inputs described below. Each of these fair value measurements was considered to be a Level 3 measurement by the Company as they used significant unobservable inputs, including the probability and expected date of stockholder approval. The key inputs for each of these warrant liabilities were as follows: Schedule of Derivative Warrant Liabilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: justify">Warrant Liability – Series A Warrants</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Issuance Date</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: justify">Stock price on valuation date</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98A_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zJJA5l5SwGn" style="width: 16%; text-align: right" title="Stock price on valuation date">18.00</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_z7LKstxPq3al" style="width: 16%; text-align: right" title="Stock price on valuation date">18.00</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Exercise price</td><td> </td> <td style="text-align: left">$</td><td id="xdx_988_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExercisePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zqtSFUtJbOJh" style="text-align: right" title="Exercise price">34.00</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_989_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExercisePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zqDFz1O0oiW7" style="text-align: right" title="Exercise price">34.00</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Number of warrants</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputNumberOfWarrantsMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zxSXpkEW3gX4" style="text-align: right" title="Number of warrants">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputNumberOfWarrantsMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zuBOib3RaEDa" style="text-align: right" title="Number of warrants">279,412</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Remaining term (years)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_z7g7iYQaqLll" style="text-align: right" title="Remaining term (years)">5.00</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zoOMLZPiMNQb" style="text-align: right" title="Remaining term (years)">4.93</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Annual equity volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualEquityVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zEX0vdt8tVc6" style="text-align: right" title="Annual equity volatility">113.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualEquityVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zWaFjHDERFTl" style="text-align: right" title="Annual equity volatility">114.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Annual volume volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualVolumeVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zRWWKfShcxMe" style="text-align: right" title="Annual equity volatility">377.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualVolumeVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zn7e7Ng7ix99" style="text-align: right" title="Annual equity volatility">379.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Risk-free interest rate</td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zab67gNqOZP7" style="text-align: right" title="Risk-free interest rate">3.95</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zKsKk1Yi6yH9" style="text-align: right" title="Risk-free interest rate">4.29</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Expected stockholder approval date</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90F_eus-gaap--WarrantsAndRightsOutstandingMaturityDate_iI_dd_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputMaturityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zt46CwUKF219" title="Expected stockholder approval date">January 14, 2025</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_901_eus-gaap--WarrantsAndRightsOutstandingMaturityDate_iI_dd_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputMaturityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zUc6dGtP7k1i" title="Expected stockholder approval date">January 14, 2025</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Expected stockholder approval probability</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputApprovalProbabilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zKHaVUbpgY96" style="text-align: right" title="Warrants and rights outstanding, measurement Input">50</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputApprovalProbabilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zwrqmA9SyRJh" style="text-align: right" title="Warrants and rights outstanding, measurement Input">50</td><td style="text-align: left">%</td></tr> </table> ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: justify">Warrant Liability – Series B Warrants</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Issuance Date</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: justify">Stock price on valuation date</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zlbaXIeMwrbe" style="width: 16%; text-align: right" title="Stock price on valuation date">18.00</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_981_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_z7aQQXudu5fk" style="width: 16%; text-align: right" title="Stock price on valuation date">18.00</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Exercise price</td><td> </td> <td style="text-align: left">$</td><td id="xdx_987_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExercisePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zG5RS9ToGrE6" style="text-align: right" title="Exercise price">68.00</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExercisePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_z38LuOZ76CAa" style="text-align: right" title="Exercise price">68.00</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Number of warrants</td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputNumberOfWarrantsMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zKhS8qiAtBv" style="text-align: right" title="Number of warrants">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputNumberOfWarrantsMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zgUrqOxQ6wpi" style="text-align: right" title="Number of warrants">279,412</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Remaining term (years)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zOkFKfhSKJKg" style="text-align: right" title="Remaining term (years)">2.50</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zi3z4hui6lpa" style="text-align: right" title="Remaining term (years)">2.43</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Annual equity volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualEquityVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zqBp9koM8Tm6" style="text-align: right" title="Annual equity volatility">126.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualEquityVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zQuMTWBMttf7" style="text-align: right" title="Annual equity volatility">120.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Annual volume volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualVolumeVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zyZaMK3idKOg" style="text-align: right" title="Annual equity volatility">409.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualVolumeVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zNH4HfCLdxjj" style="text-align: right" title="Annual equity volatility">416.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Risk-free interest rate</td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_znf5vxD9abU" style="text-align: right" title="Risk-free interest rate">4.00</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zcsCzMi6yLm" style="text-align: right" title="Risk-free interest rate">4.17</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Expected stockholder approval date</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_909_eus-gaap--WarrantsAndRightsOutstandingMaturityDate_iI_dd_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputMaturityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zGil0QAc0q35" title="Expected stockholder approval date">January 14, 2025</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_902_eus-gaap--WarrantsAndRightsOutstandingMaturityDate_iI_dd_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputMaturityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_z1KrqRhNsgvh" title="Expected stockholder approval date">January 14, 2025</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Expected stockholder approval probability</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputApprovalProbabilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zhbpmBSF2UWi" style="text-align: right" title="Warrants and rights outstanding, measurement Input">50</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_dp_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputApprovalProbabilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zb7oDnPkBxYc" style="text-align: right" title="Warrants and rights outstanding, measurement Input">50</td><td style="text-align: left">%</td></tr> </table> <p id="xdx_89F_eus-gaap--ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock_zqTizUy6nywe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table details the Company’s financial instruments that are required to be remeasured at fair value on a recurring basis and their fair value hierarchy as of December 31, 2024: Schedule of fair value on a recurring basis <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: justify">December 31, 2024</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_499_20241231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member_zY6kRmCl2n7i" style="border-bottom: Black 1pt solid; text-align: center">Level 1</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49A_20241231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member_zxwyyH1ew7ab" style="border-bottom: Black 1pt solid; text-align: center">Level 2</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49A_20241231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member_zYVbN2obut8h" style="border-bottom: Black 1pt solid; text-align: center">Level 3</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Liabilities</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_406_ecustom--WarrantLiability_iI_zLJMDpS4DHp1" style="vertical-align: bottom; background-color: White"> <td style="width: 46%; text-align: justify; padding-bottom: 1pt">Warrant liabilities</td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 14%; text-align: right">—</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 14%; text-align: right">—</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 14%; text-align: right">16,603,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40C_ecustom--WarrantLiability_iI_z72kkrEIPCck" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Total liabilities</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">16,603,000</td><td style="text-align: left"> </td></tr> </table> <p id="xdx_893_eus-gaap--ScheduleOfDerivativeLiabilitiesAtFairValueTableTextBlock_zv90K8TWrX68" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table provides a roll-forward of the fair value of the derivative liabilities described above: Schedule of fair value of the Derivative Liabilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4B3_us-gaap--StatementClassOfStockAxis_custom--SeriesAWarrantMember_zt5V3Rvju8Ga" style="border-bottom: Black 1pt solid; text-align: center">Series A Warrants</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4B6_us-gaap--StatementClassOfStockAxis_custom--SeriesBWarrantMember_z6jAAizcfPXi" style="border-bottom: Black 1pt solid; text-align: center">Series B Warrants</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4BD_zAyHlFYfVTFk" style="border-bottom: Black 1pt solid; text-align: center">Total Warrant Liabilities</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_439_c20240101__20241231_ecustom--WarrantLiability_iS_zxJ76p6NAs8d" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Balance at December 31, 2023</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--ProceedsFromIssuanceOfWarrants_zcIQ0uQbYkHf" style="vertical-align: bottom; background-color: White"> <td style="width: 46%; text-align: justify">Issuances</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">5,901,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">11,036,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">16,937,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--ProceedsFromWarrantExercises_zRUvatYc4UEl" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Exercises</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--FairValueAdjustmentOfWarrants_zQakpp9g30hj" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1pt">Loss (gain) on change in fair value</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(445,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">111,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(334,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_434_c20240101__20241231_ecustom--WarrantLiability_iE_zOzpMW3EDET4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Balance at December 31, 2024</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">5,456,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">11,147,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">16,603,000</td><td style="text-align: left"> </td></tr> </table> ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 <p id="xdx_899_eus-gaap--ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock_zwjrl9l6Wy7c" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table provides a roll-forward of the number of shares of common stock underlying warrants issued during the year ended December 31, 2024 and the nine months ended December 31, 2023: Schedule of Shares of Common Stock Underlying Warrants <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td> <td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_4B9_us-gaap--StatementEquityComponentsAxis_custom--PreFundedWarrantsMember_zN8Msw2jRoX" style="border-bottom: Black 1pt solid; text-align: center">Pre-Funded Warrants</td> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4BF_us-gaap--StatementEquityComponentsAxis_custom--SeriesAWarrantsMember_zQRKqTsrJ9ka" style="border-bottom: Black 1pt solid; text-align: center">Series A Warrants</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4B4_us-gaap--StatementEquityComponentsAxis_custom--SeriesBWarrantsMember_ztgJotzeqbSk" style="border-bottom: Black 1pt solid; text-align: center">Series B Warrants</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4BD_us-gaap--StatementEquityComponentsAxis_custom--OtherWarrantsMember_zh0JzcqeXG7a" style="border-bottom: Black 1pt solid; text-align: center">Other Warrants</td> <td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4B0_us-gaap--StatementEquityComponentsAxis_us-gaap--WarrantMember_zBZGZmyK6VQk" style="border-bottom: Black 1pt solid; text-align: center">Total</td><td style="text-align: center; padding-bottom: 1pt"> </td></tr> <tr id="xdx_432_c20230101__20231231_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iS_zjzWA0u5uO58" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Balance at March 31, 2023</td> <td> </td> <td> </td> <td style="text-align: right">—</td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td> </td> <td style="text-align: right">4,511</td> <td> </td> <td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,511</td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--ProceedsFromIssuanceOfWarrants_ztS5aWdpOVFf" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Issuances</td> <td> </td> <td> </td> <td style="text-align: right">—</td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td> </td> <td style="text-align: right">—</td> <td> </td> <td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--ProceedsFromWarrantExercises_zaAY0yxZ87Qd" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: justify">Exercises</td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">—</td> <td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">—</td> <td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_43B_c20240101__20241231_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iS_z8OoqyVKLfd9" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Balance at December 31, 2023</td> <td> </td> <td> </td> <td style="text-align: right">—</td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td> </td> <td style="text-align: right">4,511</td> <td> </td> <td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,511</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--ProceedsFromIssuanceOfWarrants_zEMGxpk36vx3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 20%; text-align: justify">Issuances</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="text-align: right; width: 12%">258,412</td> <td style="width: 1%"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right">279,412</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right">279,412</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="text-align: right; width: 12%">—</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right">817,236</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--ProceedsFromWarrantExercises_zPtdmiEu8uW9" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1pt">Exercises</td> <td> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">(258,412</td> <td>)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"></td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">—</td> <td> </td> <td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(258,412</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_43C_c20240101__20241231_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iE_zjrrMOM341r2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Balance at December 31, 2024</td> <td> </td> <td> </td> <td style="text-align: right">—</td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,412</td><td style="text-align: left"> </td><td> </td> <td> </td> <td style="text-align: right">4,511</td> <td> </td> <td> </td> <td style="text-align: left"> </td><td style="text-align: right">563,335</td><td style="text-align: left"> </td></tr> </table> The Company did not issue any warrants during the nine month transition period ended December 31, 2023 and did not have any warrants outstanding as of December 31, 2023.

Schedule of Derivative Warrant Liabilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: justify">Warrant Liability – Series A Warrants</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Issuance Date</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: justify">Stock price on valuation date</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98A_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zJJA5l5SwGn" style="width: 16%; text-align: right" title="Stock price on valuation date">18.00</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_988_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_z7LKstxPq3al" style="width: 16%; text-align: right" title="Stock price on valuation date">18.00</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Exercise price</td><td> </td> <td style="text-align: left">$</td><td id="xdx_988_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExercisePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zqtSFUtJbOJh" style="text-align: right" title="Exercise price">34.00</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_989_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExercisePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zqDFz1O0oiW7" style="text-align: right" title="Exercise price">34.00</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Number of warrants</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputNumberOfWarrantsMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zxSXpkEW3gX4" style="text-align: right" title="Number of warrants">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputNumberOfWarrantsMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zuBOib3RaEDa" style="text-align: right" title="Number of warrants">279,412</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Remaining term (years)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_z7g7iYQaqLll" style="text-align: right" title="Remaining term (years)">5.00</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zoOMLZPiMNQb" style="text-align: right" title="Remaining term (years)">4.93</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Annual equity volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualEquityVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zEX0vdt8tVc6" style="text-align: right" title="Annual equity volatility">113.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualEquityVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zWaFjHDERFTl" style="text-align: right" title="Annual equity volatility">114.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Annual volume volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualVolumeVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zRWWKfShcxMe" style="text-align: right" title="Annual equity volatility">377.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualVolumeVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zn7e7Ng7ix99" style="text-align: right" title="Annual equity volatility">379.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Risk-free interest rate</td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zab67gNqOZP7" style="text-align: right" title="Risk-free interest rate">3.95</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_980_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zKsKk1Yi6yH9" style="text-align: right" title="Risk-free interest rate">4.29</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Expected stockholder approval date</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90F_eus-gaap--WarrantsAndRightsOutstandingMaturityDate_iI_dd_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputMaturityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zt46CwUKF219" title="Expected stockholder approval date">January 14, 2025</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_901_eus-gaap--WarrantsAndRightsOutstandingMaturityDate_iI_dd_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputMaturityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zUc6dGtP7k1i" title="Expected stockholder approval date">January 14, 2025</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Expected stockholder approval probability</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputApprovalProbabilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zKHaVUbpgY96" style="text-align: right" title="Warrants and rights outstanding, measurement Input">50</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputApprovalProbabilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAWarrantsMember_zwrqmA9SyRJh" style="text-align: right" title="Warrants and rights outstanding, measurement Input">50</td><td style="text-align: left">%</td></tr> </table> ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: justify">Warrant Liability – Series B Warrants</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Issuance Date</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: justify">Stock price on valuation date</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zlbaXIeMwrbe" style="width: 16%; text-align: right" title="Stock price on valuation date">18.00</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_981_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputSharePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_z7aQQXudu5fk" style="width: 16%; text-align: right" title="Stock price on valuation date">18.00</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Exercise price</td><td> </td> <td style="text-align: left">$</td><td id="xdx_987_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExercisePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zG5RS9ToGrE6" style="text-align: right" title="Exercise price">68.00</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98E_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExercisePriceMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_z38LuOZ76CAa" style="text-align: right" title="Exercise price">68.00</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Number of warrants</td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputNumberOfWarrantsMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zKhS8qiAtBv" style="text-align: right" title="Number of warrants">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_eus-gaap--ClassOfWarrantOrRightOutstanding_iI_pid_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputNumberOfWarrantsMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zgUrqOxQ6wpi" style="text-align: right" title="Number of warrants">279,412</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Remaining term (years)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zOkFKfhSKJKg" style="text-align: right" title="Remaining term (years)">2.50</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zi3z4hui6lpa" style="text-align: right" title="Remaining term (years)">2.43</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Annual equity volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualEquityVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zqBp9koM8Tm6" style="text-align: right" title="Annual equity volatility">126.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_981_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualEquityVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zQuMTWBMttf7" style="text-align: right" title="Annual equity volatility">120.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Annual volume volatility</td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualVolumeVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zyZaMK3idKOg" style="text-align: right" title="Annual equity volatility">409.0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputPriceAnnualVolumeVolatilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zNH4HfCLdxjj" style="text-align: right" title="Annual equity volatility">416.0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Risk-free interest rate</td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_znf5vxD9abU" style="text-align: right" title="Risk-free interest rate">4.00</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zcsCzMi6yLm" style="text-align: right" title="Risk-free interest rate">4.17</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Expected stockholder approval date</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_909_eus-gaap--WarrantsAndRightsOutstandingMaturityDate_iI_dd_c20241206__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputMaturityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zGil0QAc0q35" title="Expected stockholder approval date">January 14, 2025</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_902_eus-gaap--WarrantsAndRightsOutstandingMaturityDate_iI_dd_c20241231__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputMaturityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_z1KrqRhNsgvh" title="Expected stockholder approval date">January 14, 2025</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Expected stockholder approval probability</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_uPure_c20241206__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputApprovalProbabilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zhbpmBSF2UWi" style="text-align: right" title="Warrants and rights outstanding, measurement Input">50</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--WarrantsAndRightsOutstandingMeasurementInput_iI_pid_dp_uPure_c20241231__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputApprovalProbabilityMember__us-gaap--StatementClassOfStockAxis__custom--SeriesBWarrantsMember_zb7oDnPkBxYc" style="text-align: right" title="Warrants and rights outstanding, measurement Input">50</td><td style="text-align: left">%</td></tr> </table>

18.00

34.00

279412

P5Y

P4Y11M4D

113.0

114.0

377.0

379.0

3.95

4.29

2025-01-14

18.00

68.00

279412

P2Y6M

P2Y5M4D

126.0

120.0

409.0

416.0

4.00

4.17

2025-01-14

0.50

<p id="xdx_89F_eus-gaap--ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock_zqTizUy6nywe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table details the Company’s financial instruments that are required to be remeasured at fair value on a recurring basis and their fair value hierarchy as of December 31, 2024: Schedule of fair value on a recurring basis <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: justify">December 31, 2024</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_499_20241231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member_zY6kRmCl2n7i" style="border-bottom: Black 1pt solid; text-align: center">Level 1</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49A_20241231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member_zxwyyH1ew7ab" style="border-bottom: Black 1pt solid; text-align: center">Level 2</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49A_20241231__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member_zYVbN2obut8h" style="border-bottom: Black 1pt solid; text-align: center">Level 3</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Liabilities</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_406_ecustom--WarrantLiability_iI_zLJMDpS4DHp1" style="vertical-align: bottom; background-color: White"> <td style="width: 46%; text-align: justify; padding-bottom: 1pt">Warrant liabilities</td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 14%; text-align: right">—</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 14%; text-align: right">—</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 14%; text-align: right">16,603,000</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40C_ecustom--WarrantLiability_iI_z72kkrEIPCck" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Total liabilities</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">16,603,000</td><td style="text-align: left"> </td></tr> </table>

16603000 16603000

<p id="xdx_893_eus-gaap--ScheduleOfDerivativeLiabilitiesAtFairValueTableTextBlock_zv90K8TWrX68" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table provides a roll-forward of the fair value of the derivative liabilities described above: Schedule of fair value of the Derivative Liabilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4B3_us-gaap--StatementClassOfStockAxis_custom--SeriesAWarrantMember_zt5V3Rvju8Ga" style="border-bottom: Black 1pt solid; text-align: center">Series A Warrants</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4B6_us-gaap--StatementClassOfStockAxis_custom--SeriesBWarrantMember_z6jAAizcfPXi" style="border-bottom: Black 1pt solid; text-align: center">Series B Warrants</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4BD_zAyHlFYfVTFk" style="border-bottom: Black 1pt solid; text-align: center">Total Warrant Liabilities</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_439_c20240101__20241231_ecustom--WarrantLiability_iS_zxJ76p6NAs8d" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Balance at December 31, 2023</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--ProceedsFromIssuanceOfWarrants_zcIQ0uQbYkHf" style="vertical-align: bottom; background-color: White"> <td style="width: 46%; text-align: justify">Issuances</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">5,901,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">11,036,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 14%; text-align: right">16,937,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--ProceedsFromWarrantExercises_zRUvatYc4UEl" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Exercises</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--FairValueAdjustmentOfWarrants_zQakpp9g30hj" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1pt">Loss (gain) on change in fair value</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(445,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">111,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(334,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_434_c20240101__20241231_ecustom--WarrantLiability_iE_zOzpMW3EDET4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Balance at December 31, 2024</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">5,456,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">11,147,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">16,603,000</td><td style="text-align: left"> </td></tr> </table>

5901000

11036000

16937000

-445000

111000

-334000

5456000 11147000 16603000

<p id="xdx_899_eus-gaap--ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock_zwjrl9l6Wy7c" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table provides a roll-forward of the number of shares of common stock underlying warrants issued during the year ended December 31, 2024 and the nine months ended December 31, 2023: Schedule of Shares of Common Stock Underlying Warrants <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center"> </td> <td style="padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_4B9_us-gaap--StatementEquityComponentsAxis_custom--PreFundedWarrantsMember_zN8Msw2jRoX" style="border-bottom: Black 1pt solid; text-align: center">Pre-Funded Warrants</td> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4BF_us-gaap--StatementEquityComponentsAxis_custom--SeriesAWarrantsMember_zQRKqTsrJ9ka" style="border-bottom: Black 1pt solid; text-align: center">Series A Warrants</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4B4_us-gaap--StatementEquityComponentsAxis_custom--SeriesBWarrantsMember_ztgJotzeqbSk" style="border-bottom: Black 1pt solid; text-align: center">Series B Warrants</td><td style="text-align: center; padding-bottom: 1pt"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4BD_us-gaap--StatementEquityComponentsAxis_custom--OtherWarrantsMember_zh0JzcqeXG7a" style="border-bottom: Black 1pt solid; text-align: center">Other Warrants</td> <td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_4B0_us-gaap--StatementEquityComponentsAxis_us-gaap--WarrantMember_zBZGZmyK6VQk" style="border-bottom: Black 1pt solid; text-align: center">Total</td><td style="text-align: center; padding-bottom: 1pt"> </td></tr> <tr id="xdx_432_c20230101__20231231_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iS_zjzWA0u5uO58" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Balance at March 31, 2023</td> <td> </td> <td> </td> <td style="text-align: right">—</td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td> </td> <td style="text-align: right">4,511</td> <td> </td> <td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,511</td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--ProceedsFromIssuanceOfWarrants_ztS5aWdpOVFf" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Issuances</td> <td> </td> <td> </td> <td style="text-align: right">—</td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td> </td> <td style="text-align: right">—</td> <td> </td> <td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--ProceedsFromWarrantExercises_zaAY0yxZ87Qd" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt; text-align: justify">Exercises</td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">—</td> <td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">—</td> <td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_43B_c20240101__20241231_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iS_z8OoqyVKLfd9" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Balance at December 31, 2023</td> <td> </td> <td> </td> <td style="text-align: right">—</td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td> <td> </td> <td style="text-align: right">4,511</td> <td> </td> <td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,511</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--ProceedsFromIssuanceOfWarrants_zEMGxpk36vx3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 20%; text-align: justify">Issuances</td> <td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="text-align: right; width: 12%">258,412</td> <td style="width: 1%"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right">279,412</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right">279,412</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%"> </td> <td style="text-align: right; width: 12%">—</td> <td style="width: 1%"> </td> <td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 12%; text-align: right">817,236</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--ProceedsFromWarrantExercises_zPtdmiEu8uW9" style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1pt">Exercises</td> <td> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">(258,412</td> <td>)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="padding-bottom: 1pt; text-align: left"></td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: right"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">—</td> <td> </td> <td> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(258,412</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_43C_c20240101__20241231_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iE_zjrrMOM341r2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Balance at December 31, 2024</td> <td> </td> <td> </td> <td style="text-align: right">—</td> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,412</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,412</td><td style="text-align: left"> </td><td> </td> <td> </td> <td style="text-align: right">4,511</td> <td> </td> <td> </td> <td style="text-align: left"> </td><td style="text-align: right">563,335</td><td style="text-align: left"> </td></tr> </table>

4511

258412

279412

817236

-258412

279412

4511

563335

Note 14 – Income Taxes The Company’s loss before income taxes for the year ended December 31, 2024 and the nine months ended December 31, 2023 is as follows: Schedule of Loss Before Income Taxes <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49D_20240101__20241231_zgzGZ65LWjOj" style="border-bottom: Black 1pt solid; text-align: center">2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_490_20230401__20231231_zhSO5OBQSjI6" style="border-bottom: Black 1pt solid; text-align: center">2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_402_eus-gaap--IncomeLossFromContinuingOperationsBeforeIncomeTaxesDomestic_maILFCOzcXM_zWavxfyrsht6" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">United States</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">(24,414,000</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">(6,173,000</td><td style="width: 1%; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--IncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign_maILFCOzcXM_zZOaRR4tcv7b" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Foreign</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">47,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(225,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40D_ecustom--IncomeLossFromContinuingOperationsBeforeIncomeTaxes_iT_mtILFCOzcXM_zqwLtrnLa704" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(24,367,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(6,398,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table> <p id="xdx_899_eus-gaap--ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock_zTSI0rbGJvK9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The Company did not have any provision for income taxes for the year ended December 31, 2024 or the nine months ended December 31, 2023. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 <p id="xdx_892_eus-gaap--ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock_zbSs1oPyLdrl" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The Company’s net deferred tax assets as of December 31, 2024 and 2023 are as follows: Schedule of Deferred Tax Assets and Liabilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_494_20241231_z5zmIifJFwg7" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_490_20231231_zdZktwbQ0Syi" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_400_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwardsDomestic_iI_maDTAGzivM_ziUuFKECiaX6" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">NOL Federal Carryforward</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">4,085,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">1,291,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwardsStateAndLocal_iI_maDTAGzivM_zsfwuZl1oVPl" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">State NOL Carryforward</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,426,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">469,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsInventory_iI_maDTAGzivM_zHX43my4tYT3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Inventory differences</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">355,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,173,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsGoodwillAndIntangibleAssets_iI_maDTAGzivM_z4RwppLUiFt3" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Impairment of GoodWIll - Semi Cab</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">674,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseCompensationAndBenefitsShareBasedCompensationCost_iI_maDTAGzivM_zyCNjEu7C1Jh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Stock option compensation expense (SFAS 123R)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">179,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">159,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_ecustom--DeferredTaxAssetsIntangibleAssetsAcquired_iI_maDTAGzivM_zzSKDricc7S2" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Intangibles - Semi Cab</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">253,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_ecustom--DeferredTaxAssetsRightUseOfLiability_iI_maDTAGzivM_zYd22j6X9AP9" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">ROU Liability</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">14,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,022,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_ecustom--DeferredTaxAssetsBusinessInterestLimitation_iI_maDTAGzivM_z4hrWMkYx9Cd" style="vertical-align: bottom; background-color: White"> <td>Section 163(j)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">694,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">151,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--DeferredTaxAssetsAllowanceForDoubtFulAccounts_iI_maDTAGzivM_zfd1RFvnuUQ4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Allowance for doubtful accounts</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">40,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseReservesAndAccrualsReturnsAndAllowances_iI_maDTAGzivM_zgPJxFUlnar5" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Reserve for estimated returns</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">476,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">384,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseReservesAndAccruals_iI_maDTAGzivM_z8hRp7uC1yfg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Accrued vacation</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">20,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">8,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--DeferredTaxAssetsGross_iTI_mtDTAGzivM_maDTANzPgj_zpdXkMczOm22" style="vertical-align: bottom; background-color: White"> <td>Deferred Tax Assets Gross</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">8,216,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">4,702,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--DeferredTaxAssetsValuationAllowance_iNI_di_msDTANzPgj_zjzoraVElGDc" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Less: valuation allowance</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(8,039,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(3,600,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--DeferredTaxAssetsNet_iTI_mtDTANzPgj_maDTALNz4zk_zlg4w0RS1rrg" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Net deferred tax asset</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">176,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">1,103,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--DeferredTaxLiabilitiesPropertyPlantAndEquipment_iNI_di_maDTLzjgo_zU00x5iE9Rlb" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Depreciable and amortizable assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(39,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(67,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_406_ecustom--DeferredTaxLiabilitiesRightUseOfAsset_iNI_di_maDTLzjgo_zHOXfAWFuKuh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">ROU Asset</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(14,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(1,000,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_40E_ecustom--DeferredTaxLiabilitiesWarrantLiability_iNI_di_maDTLzjgo_zezDsWkQFQS9" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Warrant Liability</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(92,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxLiabilitiesPrepaidExpenses_iNI_di_maDTLzjgo_zBljFUmKdSdj" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Prepaid expenses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(32,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(35,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxLiabilities_iNTI_di_mtDTLzjgo_msDTALNz4zk_z53QM1ULJFa1" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Net deferred tax liability</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">(176,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">(1,103,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_404_eus-gaap--DeferredTaxAssetsLiabilitiesNet_iTI_mtDTALNz4zk_zqC68TsEPKpc" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Net Deferred Tax Assets and Liabilities</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The Company recognizes federal, state and foreign current tax liabilities or assets based on its estimate of taxes payable to or refundable by tax authorities in the current fiscal year. The Company also recognizes federal, state and foreign deferred tax liabilities or assets based on the Company’s estimate of future tax effects attributable to temporary differences and carryforwards. The Company records a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized. The Company performed an analysis in accordance with the provisions of ASC 740, which requires an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. The analysis performed to assess the realizability of the deferred tax assets included an evaluation of the pattern and timing of the reversals of temporary differences and the length of carryback and carryforward periods available under the applicable federal, state and foreign laws; and the amount and timing of future taxable income. The Company evaluated the realizability of its deferred tax assets as of December 31, 2024 and 2023 in accordance with accounting principles generally accepted in the United States of America and concluded that a valuation allowance against all of the Company’s deferred tax assets was necessary based upon the Company’s conclusions regarding, among other considerations, the Company’s recent history of losses and projected losses for fiscal year 2024 and in the future. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 <p id="xdx_890_eus-gaap--ScheduleOfUnrecognizedTaxBenefitsRollForwardTableTextBlock_zg9jpSoPOeC5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The actual tax provision differs from the “expected” tax for the year ended December 31, 2024 and the nine months ended December 31, 2023 (computed by applying the U.S. Federal Corporate tax rate of 21% to income before taxes) as follows: Schedule of Tax Provision <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49C_20240101__20241231_zCCe9zUQseqd" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49D_20230401__20231231_z3EhUzqrr7A6" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_408_eus-gaap--IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate_iN_di_maITEBzTNi_zBE4DrPTdkzf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">Expected tax expense (benefit)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">(5,117,000</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">(1,344,000</td><td style="width: 1%; text-align: left">)</td></tr> <tr id="xdx_408_eus-gaap--IncomeTaxReconciliationStateAndLocalIncomeTaxes_iN_di_maITEBzTNi_zcdCto62HJc9" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">State income taxes, net of Federal income tax effect</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(1,574,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(326,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_40B_eus-gaap--IncomeTaxReconciliationChangeInEnactedTaxRate_iN_di_maITEBzTNi_zCti2wbAZOP6" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Permanent differences</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(441,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">104,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_ecustom--IncomeTaxReconciliationChangeDueToIssuanceOfWarrants_maITEBzTNi_zDPz0rLs9LYe" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Permanent difference loss on issuance of warrants</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,441,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left">-</td></tr> <tr id="xdx_40E_eus-gaap--IncomeTaxReconciliationForeignIncomeTaxRateDifferential_maITEBzTNi_zxbAH3uzdKIb" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Tax rate differential on foreign earnings</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">13,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">59,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--IncomeTaxReconciliationChangeInDeferredTaxAssetsValuationAllowance_maITEBzTNi_z3A9qu3lBzN6" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Change in valuation allowance</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,428,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,495,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--IncomeTaxReconciliationOtherReconcilingItems_maITEBzTNi_zKj9aGGx4uCd" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Other</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">250,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">11,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--IncomeTaxExpenseBenefit_iT_mtITEBzTNi_zMGjoj1oTw1b" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Actual tax (benefit) provision</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> At December 31, 2024 and 2023, the Company had federal tax net operating loss carryforwards in the amount of $19,452,000 and $6,149,000, respectively, that begin to expire in the year 2025. The net operating loss carryforward is subject to an IRS Section 382 limitation that limited the amount available to use beginning in fiscal 2020 to $150,000 per year. In addition, the Company had state tax net operating loss carryforwards during those periods of $23,100,000 and $2,453,000, respectively that began to expire in 2024. These tax net operating loss carryforwards may be subject to further adjustment based on future changes in ownership. At December 31, 2024, the Company evaluated the realizability of its deferred tax assets in accordance with GAAP and concluded that a valuation allowance of $8,039,000 against deferred tax assets is necessary. The change in valuation allowance increased $4,439,000 to $8,039,000 as of December 31, 2024 from $3,600,000 as of December 31, 2023. The recognition of the remaining net deferred tax asset and corresponding tax benefit is based upon the Company’s conclusions regarding, among other considerations, the Company’s current and anticipated customers, contracts and product introductions, and recent operating results.

The Company’s loss before income taxes for the year ended December 31, 2024 and the nine months ended December 31, 2023 is as follows: Schedule of Loss Before Income Taxes <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49D_20240101__20241231_zgzGZ65LWjOj" style="border-bottom: Black 1pt solid; text-align: center">2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_490_20230401__20231231_zhSO5OBQSjI6" style="border-bottom: Black 1pt solid; text-align: center">2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_402_eus-gaap--IncomeLossFromContinuingOperationsBeforeIncomeTaxesDomestic_maILFCOzcXM_zWavxfyrsht6" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">United States</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">(24,414,000</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">(6,173,000</td><td style="width: 1%; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--IncomeLossFromContinuingOperationsBeforeIncomeTaxesForeign_maILFCOzcXM_zZOaRR4tcv7b" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Foreign</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">47,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(225,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40D_ecustom--IncomeLossFromContinuingOperationsBeforeIncomeTaxes_iT_mtILFCOzcXM_zqwLtrnLa704" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(24,367,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(6,398,000</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table>

24414000

6173000

47000

225000

24367000 6398000

<p id="xdx_899_eus-gaap--ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock_zTSI0rbGJvK9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The Company did not have any provision for income taxes for the year ended December 31, 2024 or the nine months ended December 31, 2023. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 <p id="xdx_892_eus-gaap--ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock_zbSs1oPyLdrl" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The Company’s net deferred tax assets as of December 31, 2024 and 2023 are as follows: Schedule of Deferred Tax Assets and Liabilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_494_20241231_z5zmIifJFwg7" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_490_20231231_zdZktwbQ0Syi" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_400_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwardsDomestic_iI_maDTAGzivM_ziUuFKECiaX6" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">NOL Federal Carryforward</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">4,085,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">1,291,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwardsStateAndLocal_iI_maDTAGzivM_zsfwuZl1oVPl" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">State NOL Carryforward</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,426,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">469,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsInventory_iI_maDTAGzivM_zHX43my4tYT3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Inventory differences</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">355,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,173,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsGoodwillAndIntangibleAssets_iI_maDTAGzivM_z4RwppLUiFt3" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Impairment of GoodWIll - Semi Cab</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">674,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseCompensationAndBenefitsShareBasedCompensationCost_iI_maDTAGzivM_zyCNjEu7C1Jh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Stock option compensation expense (SFAS 123R)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">179,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">159,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_ecustom--DeferredTaxAssetsIntangibleAssetsAcquired_iI_maDTAGzivM_zzSKDricc7S2" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Intangibles - Semi Cab</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">253,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_ecustom--DeferredTaxAssetsRightUseOfLiability_iI_maDTAGzivM_zYd22j6X9AP9" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">ROU Liability</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">14,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,022,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_ecustom--DeferredTaxAssetsBusinessInterestLimitation_iI_maDTAGzivM_z4hrWMkYx9Cd" style="vertical-align: bottom; background-color: White"> <td>Section 163(j)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">694,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">151,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--DeferredTaxAssetsAllowanceForDoubtFulAccounts_iI_maDTAGzivM_zfd1RFvnuUQ4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Allowance for doubtful accounts</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">40,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseReservesAndAccrualsReturnsAndAllowances_iI_maDTAGzivM_zgPJxFUlnar5" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Reserve for estimated returns</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">476,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">384,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseReservesAndAccruals_iI_maDTAGzivM_z8hRp7uC1yfg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Accrued vacation</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">20,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">8,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--DeferredTaxAssetsGross_iTI_mtDTAGzivM_maDTANzPgj_zpdXkMczOm22" style="vertical-align: bottom; background-color: White"> <td>Deferred Tax Assets Gross</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">8,216,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">4,702,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--DeferredTaxAssetsValuationAllowance_iNI_di_msDTANzPgj_zjzoraVElGDc" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Less: valuation allowance</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(8,039,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(3,600,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--DeferredTaxAssetsNet_iTI_mtDTANzPgj_maDTALNz4zk_zlg4w0RS1rrg" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Net deferred tax asset</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">176,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">1,103,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--DeferredTaxLiabilitiesPropertyPlantAndEquipment_iNI_di_maDTLzjgo_zU00x5iE9Rlb" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Depreciable and amortizable assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(39,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(67,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_406_ecustom--DeferredTaxLiabilitiesRightUseOfAsset_iNI_di_maDTLzjgo_zHOXfAWFuKuh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">ROU Asset</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(14,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(1,000,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_40E_ecustom--DeferredTaxLiabilitiesWarrantLiability_iNI_di_maDTLzjgo_zezDsWkQFQS9" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Warrant Liability</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(92,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxLiabilitiesPrepaidExpenses_iNI_di_maDTLzjgo_zBljFUmKdSdj" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Prepaid expenses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(32,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(35,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxLiabilities_iNTI_di_mtDTLzjgo_msDTALNz4zk_z53QM1ULJFa1" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Net deferred tax liability</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">(176,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">(1,103,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_404_eus-gaap--DeferredTaxAssetsLiabilitiesNet_iTI_mtDTALNz4zk_zqC68TsEPKpc" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Net Deferred Tax Assets and Liabilities</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

<p id="xdx_892_eus-gaap--ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock_zbSs1oPyLdrl" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The Company’s net deferred tax assets as of December 31, 2024 and 2023 are as follows: Schedule of Deferred Tax Assets and Liabilities <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_494_20241231_z5zmIifJFwg7" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_490_20231231_zdZktwbQ0Syi" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_400_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwardsDomestic_iI_maDTAGzivM_ziUuFKECiaX6" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">NOL Federal Carryforward</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">4,085,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">1,291,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwardsStateAndLocal_iI_maDTAGzivM_zsfwuZl1oVPl" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">State NOL Carryforward</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,426,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">469,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsInventory_iI_maDTAGzivM_zHX43my4tYT3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Inventory differences</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">355,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,173,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsGoodwillAndIntangibleAssets_iI_maDTAGzivM_z4RwppLUiFt3" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Impairment of GoodWIll - Semi Cab</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">674,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseCompensationAndBenefitsShareBasedCompensationCost_iI_maDTAGzivM_zyCNjEu7C1Jh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Stock option compensation expense (SFAS 123R)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">179,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">159,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_ecustom--DeferredTaxAssetsIntangibleAssetsAcquired_iI_maDTAGzivM_zzSKDricc7S2" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Intangibles - Semi Cab</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">253,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_ecustom--DeferredTaxAssetsRightUseOfLiability_iI_maDTAGzivM_zYd22j6X9AP9" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">ROU Liability</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">14,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,022,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_ecustom--DeferredTaxAssetsBusinessInterestLimitation_iI_maDTAGzivM_z4hrWMkYx9Cd" style="vertical-align: bottom; background-color: White"> <td>Section 163(j)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">694,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">151,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--DeferredTaxAssetsAllowanceForDoubtFulAccounts_iI_maDTAGzivM_zfd1RFvnuUQ4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Allowance for doubtful accounts</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">40,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseReservesAndAccrualsReturnsAndAllowances_iI_maDTAGzivM_zgPJxFUlnar5" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Reserve for estimated returns</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">476,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">384,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseReservesAndAccruals_iI_maDTAGzivM_z8hRp7uC1yfg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Accrued vacation</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">20,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">8,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--DeferredTaxAssetsGross_iTI_mtDTAGzivM_maDTANzPgj_zpdXkMczOm22" style="vertical-align: bottom; background-color: White"> <td>Deferred Tax Assets Gross</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">8,216,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">4,702,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--DeferredTaxAssetsValuationAllowance_iNI_di_msDTANzPgj_zjzoraVElGDc" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Less: valuation allowance</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(8,039,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(3,600,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40E_eus-gaap--DeferredTaxAssetsNet_iTI_mtDTANzPgj_maDTALNz4zk_zlg4w0RS1rrg" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Net deferred tax asset</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">176,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">1,103,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--DeferredTaxLiabilitiesPropertyPlantAndEquipment_iNI_di_maDTLzjgo_zU00x5iE9Rlb" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Depreciable and amortizable assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(39,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(67,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_406_ecustom--DeferredTaxLiabilitiesRightUseOfAsset_iNI_di_maDTLzjgo_zHOXfAWFuKuh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">ROU Asset</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(14,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(1,000,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_40E_ecustom--DeferredTaxLiabilitiesWarrantLiability_iNI_di_maDTLzjgo_zezDsWkQFQS9" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Warrant Liability</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(92,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxLiabilitiesPrepaidExpenses_iNI_di_maDTLzjgo_zBljFUmKdSdj" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Prepaid expenses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(32,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(35,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxLiabilities_iNTI_di_mtDTLzjgo_msDTALNz4zk_z53QM1ULJFa1" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Net deferred tax liability</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">(176,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">(1,103,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_404_eus-gaap--DeferredTaxAssetsLiabilitiesNet_iTI_mtDTALNz4zk_zqC68TsEPKpc" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Net Deferred Tax Assets and Liabilities</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

4085000

1291000

1426000

469000

355000

1173000

674000

179000

159000

253000 14000 1022000 694000 151000 40000 45000

476000

384000

20000

8000

8216000

4702000

8039000

3600000

176000

1103000

39000

67000

14000 1000000 92000

32000

35000

176000

1103000

<p id="xdx_890_eus-gaap--ScheduleOfUnrecognizedTaxBenefitsRollForwardTableTextBlock_zg9jpSoPOeC5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The actual tax provision differs from the “expected” tax for the year ended December 31, 2024 and the nine months ended December 31, 2023 (computed by applying the U.S. Federal Corporate tax rate of 21% to income before taxes) as follows: Schedule of Tax Provision <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49C_20240101__20241231_zCCe9zUQseqd" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49D_20230401__20231231_z3EhUzqrr7A6" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_408_eus-gaap--IncomeTaxReconciliationIncomeTaxExpenseBenefitAtFederalStatutoryIncomeTaxRate_iN_di_maITEBzTNi_zBE4DrPTdkzf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">Expected tax expense (benefit)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">(5,117,000</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">(1,344,000</td><td style="width: 1%; text-align: left">)</td></tr> <tr id="xdx_408_eus-gaap--IncomeTaxReconciliationStateAndLocalIncomeTaxes_iN_di_maITEBzTNi_zcdCto62HJc9" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">State income taxes, net of Federal income tax effect</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(1,574,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(326,000</td><td style="text-align: left">)</td></tr> <tr id="xdx_40B_eus-gaap--IncomeTaxReconciliationChangeInEnactedTaxRate_iN_di_maITEBzTNi_zCti2wbAZOP6" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Permanent differences</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(441,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">104,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_ecustom--IncomeTaxReconciliationChangeDueToIssuanceOfWarrants_maITEBzTNi_zDPz0rLs9LYe" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Permanent difference loss on issuance of warrants</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,441,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left">-</td></tr> <tr id="xdx_40E_eus-gaap--IncomeTaxReconciliationForeignIncomeTaxRateDifferential_maITEBzTNi_zxbAH3uzdKIb" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Tax rate differential on foreign earnings</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">13,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">59,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--IncomeTaxReconciliationChangeInDeferredTaxAssetsValuationAllowance_maITEBzTNi_z3A9qu3lBzN6" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Change in valuation allowance</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,428,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,495,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--IncomeTaxReconciliationOtherReconcilingItems_maITEBzTNi_zKj9aGGx4uCd" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Other</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">250,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">11,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--IncomeTaxExpenseBenefit_iT_mtITEBzTNi_zMGjoj1oTw1b" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Actual tax (benefit) provision</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

-5117000

-1344000

-1574000

-326000

-441000

-104000

2441000

13000

59000

4428000

1495000

250000

11000

19452000

6149000

150000

23100000

2453000

8039000

4439000

8039000

3600000

Note 15 – Segment Information and Revenue Disaggregation Segment Information As previously detailed in Note 3 – Summary of Significant Accounting Policies – Segment Reporting, pursuant to ASC 280, the Company’s Chief Executive Officer serves as the Company’s Chief Operating Decision Maker (“CODM”) for the purposes of ASC 280. The CODM concluded that the Company operates two reportable segments. One segment consists of its Singing Machine business and the other segment consists of its SemiCab business. The CODM manages the Company’s operations and business separately for each operating segment and uses net sales and net loss to allocate resources, making operating decisions and evaluating financial performance. The CODM also uses net sales and net loss, along with non-financial inputs and qualitative information, to evaluate the Company’s performance, establish compensation, monitor budget versus actual results, and decide the level of investment in various operating activities and other capital allocation activities. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 <p id="xdx_89D_eus-gaap--ScheduleOfSegmentReportingInformationBySegmentTextBlock_zUTYY1cElvYc" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table details the revenues, significant expenses and other segment items regularly provided to the CODM: Schedule of Details the Revenue, Significant expenses and Other Segment <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_491_20240101__20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zs4TMDiKvCm3" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_498_20240101__20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zLp6YLpgOBHg" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_496_20240101__20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_z1m9yLivSam5" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_49A_20230401__20231231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_z5tBzbklQpEe" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_492_20230401__20231231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zwoZvi6pzhcl" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_49F_20230401__20231231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zNTww5Q9hg0l" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="10" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Year Ended December 31, 2024</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="10" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Nine Months Ended December 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Singing Machine</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">SemiCab</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Total</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Singing Machine</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">SemiCab</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Total</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td></tr> <tr id="xdx_40B_eus-gaap--Revenues_maILFCOzyiF_zmd0hUGnOqY1" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 40%">Revenues</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 6%; text-align: right">23,197,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 6%; text-align: right">297,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 6%; text-align: right">23,494,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 6%; text-align: right">29,198,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 6%; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 6%; text-align: right">29,198,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Less:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--CostOfRevenue_msILFCOzyiF_zcOPzMXhyGeh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Adjusted cost of revenues</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">18,222,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">491,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">18,713,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">23,008,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">23,008,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--SellingAndMarketingExpense_msILFCOzyiF_zKHxEbV9CUml" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Adjusted sales and marketing</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">2,874,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">2,874,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,717,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,717,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--GeneralAndAdministrativeExpense_msILFCOzyiF_zsxvyajBOuT8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Adjusted general and administrative (1)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">9,935,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,014,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">10,949,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">8,219,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">8,219,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--DepreciationAndAmortization_msILFCOzyiF_z9pvIIdOYC5k" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Adjusted depreciation and amortization</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">191,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">31,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">222,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">287,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">287,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--ShareBasedCompensation_msILFCOzyiF_zK9f6LXwcY0g" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Share based compensation</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">578,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">52,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">630,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">110,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">110,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--GoodwillImpairmentLoss_msILFCOzyiF_zO45NCBSLcHh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Impairment of goodwill</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,592,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,592,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--OtherAssetImpairmentCharges_msILFCOzyiF_zA8RgU8J6Jrk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Impairment of note receivable</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">439,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">439,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--FairValueAdjustmentOfWarrants_msILFCOzyiF_z9ak276LgI09" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Change in fair value of warrant liability</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(334,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(334,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--GainLossOnSaleOfOtherAssets_iN_di_maILFCOzyiF_zvs2vqLIk1i2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Gain on disposal of fixed assets</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(44,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(44,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr id="xdx_404_ecustom--GainLossOnIssuanceOfWarrants_msILFCOzyiF_zJ9PJHV39mef" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Loss on issuance of warrants</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">8,889,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">8,889,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--InterestExpense_msILFCOzyiF_zYzwIAY5uy4a" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Interest expense</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,660,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">227,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,887,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">299,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">299,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--NetIncomeLoss_iT_mtILFCOzyiF_zsqZi7p0mIvh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Segment net loss</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(18,818,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(5,549,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(24,367,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(6,398,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(6,398,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Total segment assets</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_989_ecustom--TotalSegmentAssets_iI_c20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zpcFauWruXx5" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total segment assets">16,301,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_983_ecustom--TotalSegmentAssets_iI_c20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zWJAo43F2Anc" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total segment assets">1,215,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_ecustom--TotalSegmentAssets_iI_c20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zq1e4pVmOPg1" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total segment assets">17,516,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in; vertical-align: top">(1)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Excludes depreciation and amortization, share-based compensation, impairment of goodwill and impairment of a note receivable.</td></tr> </table> <p id="xdx_895_eus-gaap--ReconciliationOfAssetsFromSegmentToConsolidatedTextBlock_zELD0gDcRyYg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following reconciles total segment assets to consolidated total assets as of December 31, 2024: Schedule of Reconcilation of Segment Assets to Consolidated <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_493_20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zhXbHY1DIVH" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2024</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: center"> </td></tr> <tr id="xdx_401_ecustom--TotalSegmentAssets_iI_zdqihVPmKyDf" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 78%">Total segment assets</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 1%">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right; width: 18%">17,516,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 1%"> </td></tr> <tr id="xdx_40A_eus-gaap--Goodwill_iI_zMDK8tvJRo1a" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">Goodwill</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">786,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--Assets_iTI_zOyJMWVVs6ii" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Total assets</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,302,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The Company only had one reportable segment for the nine months ended December 31, 2023, which consisted of its Singing Machine business. As the Company only had one reportable segment, the measure of segment assets at December 31, 2023 is reported on the balance sheet as total consolidated assets. Revenue Disaggregation The Company disaggregates revenues by product line and major geographic region as most of its revenue is generated by the sales of karaoke products. Revenue by product line is as follows: Schedule of Revenue by Product Line <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid">Product Line</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_497_20240101__20241231_zb5jHeKCUpTh" style="border-bottom: Black 1pt solid; text-align: center">Year Ended December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49B_20230401__20231231_zfQWy1N2jyl1" style="border-bottom: Black 1pt solid; text-align: center">Nine Months Ended December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_408_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--ClassicKaraokeMachinesMember_zTpHp4vKXrR" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">Classic Karaoke Machines</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">16,516,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">24,189,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--LicensedProductsMember_zFqQYdwzd4T" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Licensed Products</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">486,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">549,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--KidsYouthElectronicsMember_zAKNMrh4oqRe" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Kids Youth Electronics</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">959,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">565,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--MicrophonesAndAccessoriesMember_zEiSqzGMKTq1" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Microphones and Accessories</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,411,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,283,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--MusicSubscriptionsMember_z08duvHiga46" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Music Subscriptions</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">825,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">612,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--LogisticsServicesMember_zJ7HX6vayNP9" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Logistics Services</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">297,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--Revenues_zFqc9Ih7aH4e" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 2.5pt">Total Net Sales</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">23,494,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">29,198,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023 <p id="xdx_89B_ecustom--GeographicRegionDisaggregationOfRevenueinTableTextBlock_zbb5R5tulLF" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">Revenue by geographic region is as follows: Schedule of Revenue by Revenue by Geographic Region <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_497_20240101__20241231_z75QlcMQnOf" style="border-bottom: Black 1pt solid; text-align: center">Year Ended December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49B_20230401__20231231_zXoG1KaFGUEi" style="border-bottom: Black 1pt solid; text-align: center">Nine Months Ended December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_40E_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__srt--NorthAmericaMember_zrdKGCeLxumf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">North America</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">22,191,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 18%; text-align: right">28,763,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__country--AU_zCBGxorWj1Oc" style="vertical-align: bottom; background-color: White"> <td>Australia</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,075,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">205,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__custom--EuropeAndUnitedKingdomMember_zq4ulZQExFf7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Europe and United Kingdom</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">184,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">226,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__custom--OthersMember_zunWafxnEdL" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">All Others</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">44,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--Revenues_zCrv9wyOm9Hd" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 2.5pt">Total Net Sales</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">23,494,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">29,198,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The geographic area of sales is based primarily on where the product was delivered. The Company’s accounts receivable balance, net of an allowance of $139,182, was$7,305,920 as of December 31, 2022.

<p id="xdx_89D_eus-gaap--ScheduleOfSegmentReportingInformationBySegmentTextBlock_zUTYY1cElvYc" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following table details the revenues, significant expenses and other segment items regularly provided to the CODM: Schedule of Details the Revenue, Significant expenses and Other Segment <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; display: none; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_491_20240101__20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zs4TMDiKvCm3" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_498_20240101__20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zLp6YLpgOBHg" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_496_20240101__20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_z1m9yLivSam5" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_49A_20230401__20231231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_z5tBzbklQpEe" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_492_20230401__20231231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zwoZvi6pzhcl" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td id="xdx_49F_20230401__20231231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zNTww5Q9hg0l" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="10" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Year Ended December 31, 2024</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="10" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Nine Months Ended December 31, 2023</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Singing Machine</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">SemiCab</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Total</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Singing Machine</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">SemiCab</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Total</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: center"> </td></tr> <tr id="xdx_40B_eus-gaap--Revenues_maILFCOzyiF_zmd0hUGnOqY1" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 40%">Revenues</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 6%; text-align: right">23,197,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 6%; text-align: right">297,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 6%; text-align: right">23,494,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 6%; text-align: right">29,198,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 6%; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; width: 6%; text-align: right">29,198,000</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Less:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--CostOfRevenue_msILFCOzyiF_zcOPzMXhyGeh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Adjusted cost of revenues</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">18,222,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">491,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">18,713,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">23,008,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">23,008,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--SellingAndMarketingExpense_msILFCOzyiF_zKHxEbV9CUml" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Adjusted sales and marketing</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">2,874,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">2,874,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,717,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,717,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--GeneralAndAdministrativeExpense_msILFCOzyiF_zsxvyajBOuT8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Adjusted general and administrative (1)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">9,935,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1,014,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">10,949,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">8,219,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">8,219,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--DepreciationAndAmortization_msILFCOzyiF_z9pvIIdOYC5k" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Adjusted depreciation and amortization</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">191,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">31,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">222,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">287,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">287,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--ShareBasedCompensation_msILFCOzyiF_zK9f6LXwcY0g" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Share based compensation</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">578,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">52,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">630,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">110,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">110,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--GoodwillImpairmentLoss_msILFCOzyiF_zO45NCBSLcHh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif">Impairment of goodwill</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,592,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,592,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--OtherAssetImpairmentCharges_msILFCOzyiF_zA8RgU8J6Jrk" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif">Impairment of note receivable</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">439,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">439,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--FairValueAdjustmentOfWarrants_msILFCOzyiF_z9ak276LgI09" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Change in fair value of warrant liability</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(334,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(334,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--GainLossOnSaleOfOtherAssets_iN_di_maILFCOzyiF_zvs2vqLIk1i2" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Gain on disposal of fixed assets</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(44,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(44,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr id="xdx_404_ecustom--GainLossOnIssuanceOfWarrants_msILFCOzyiF_zJ9PJHV39mef" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Loss on issuance of warrants</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">8,889,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">8,889,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--InterestExpense_msILFCOzyiF_zYzwIAY5uy4a" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Interest expense</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,660,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">227,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,887,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">299,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">299,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--NetIncomeLoss_iT_mtILFCOzyiF_zsqZi7p0mIvh" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Segment net loss</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(18,818,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(5,549,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(24,367,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(6,398,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">-</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(6,398,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Total segment assets</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_989_ecustom--TotalSegmentAssets_iI_c20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SingingMachineMember_zpcFauWruXx5" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total segment assets">16,301,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_983_ecustom--TotalSegmentAssets_iI_c20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember__us-gaap--StatementBusinessSegmentsAxis__custom--SemiCabMember_zWJAo43F2Anc" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total segment assets">1,215,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td id="xdx_980_ecustom--TotalSegmentAssets_iI_c20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zq1e4pVmOPg1" style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right" title="Total segment assets">17,516,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 0.25in; vertical-align: top">(1)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Excludes depreciation and amortization, share-based compensation, impairment of goodwill and impairment of a note receivable.</td></tr> </table>

23197000

297000

23494000

29198000

18222000

491000

18713000

23008000

2874000

3717000

9935000

1014000

10949000

8219000

191000

31000

222000

287000

578000

52000

630000

110000

3592000

439000

-334000

44000

8889000 8889000

1660000

227000

1887000

299000

18818000

5549000

24367000

-6398000

16301000 1215000 17516000

<p id="xdx_895_eus-gaap--ReconciliationOfAssetsFromSegmentToConsolidatedTextBlock_zELD0gDcRyYg" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">The following reconciles total segment assets to consolidated total assets as of December 31, 2024: Schedule of Reconcilation of Segment Assets to Consolidated <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: center"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: center"> </td> <td colspan="2" id="xdx_493_20241231__srt--ConsolidationItemsAxis__us-gaap--OperatingSegmentsMember_zhXbHY1DIVH" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2024</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: center"> </td></tr> <tr id="xdx_401_ecustom--TotalSegmentAssets_iI_zdqihVPmKyDf" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 78%">Total segment assets</td><td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 1%">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right; width: 18%">17,516,000</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left; width: 1%"> </td></tr> <tr id="xdx_40A_eus-gaap--Goodwill_iI_zMDK8tvJRo1a" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">Goodwill</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">786,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--Assets_iTI_zOyJMWVVs6ii" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left">Total assets</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">18,302,000</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

17516000

786000

18302000

Revenue by product line is as follows: Schedule of Revenue by Product Line <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid">Product Line</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_497_20240101__20241231_zb5jHeKCUpTh" style="border-bottom: Black 1pt solid; text-align: center">Year Ended December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49B_20230401__20231231_zfQWy1N2jyl1" style="border-bottom: Black 1pt solid; text-align: center">Nine Months Ended December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_408_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--ClassicKaraokeMachinesMember_zTpHp4vKXrR" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">Classic Karaoke Machines</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">16,516,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">24,189,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--LicensedProductsMember_zFqQYdwzd4T" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Licensed Products</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">486,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">549,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--KidsYouthElectronicsMember_zAKNMrh4oqRe" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Kids Youth Electronics</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">959,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">565,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--MicrophonesAndAccessoriesMember_zEiSqzGMKTq1" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Microphones and Accessories</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,411,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,283,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--MusicSubscriptionsMember_z08duvHiga46" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Music Subscriptions</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">825,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">612,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--Revenues_hsrt--ProductOrServiceAxis__custom--LogisticsServicesMember_zJ7HX6vayNP9" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Logistics Services</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">297,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--Revenues_zFqc9Ih7aH4e" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 2.5pt">Total Net Sales</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">23,494,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">29,198,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

16516000

24189000

486000

549000

959000

565000

4411000

3283000

825000

612000

297000

23494000

29198000

<p id="xdx_89B_ecustom--GeographicRegionDisaggregationOfRevenueinTableTextBlock_zbb5R5tulLF" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.5in">Revenue by geographic region is as follows: Schedule of Revenue by Revenue by Geographic Region <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_497_20240101__20241231_z75QlcMQnOf" style="border-bottom: Black 1pt solid; text-align: center">Year Ended December 31, 2024</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49B_20230401__20231231_zXoG1KaFGUEi" style="border-bottom: Black 1pt solid; text-align: center">Nine Months Ended December 31, 2023</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_40E_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__srt--NorthAmericaMember_zrdKGCeLxumf" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">North America</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">22,191,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 18%; text-align: right">28,763,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__country--AU_zCBGxorWj1Oc" style="vertical-align: bottom; background-color: White"> <td>Australia</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,075,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">205,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__custom--EuropeAndUnitedKingdomMember_zq4ulZQExFf7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Europe and United Kingdom</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">184,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">226,000</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--Revenues_hsrt--StatementGeographicalAxis__custom--OthersMember_zunWafxnEdL" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">All Others</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">44,000</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">4,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--Revenues_zCrv9wyOm9Hd" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 2.5pt">Total Net Sales</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">23,494,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">29,198,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

22191000

28763000

1075000

205000

184000

226000

44000

4000

23494000

29198000

139182

7305920

Notes 16 – Concentrations, Risks and Uncertainties Bank Liquidity and Financial Stability Concentrations, Risks and Uncertainties At times, the Company maintains cash in United States bank accounts that are more than the Federal Deposit Insurance Corporation insured amounts. The Company maintains cash balances in foreign financial institutions. The Company regularly monitors the financial stability of this financial institution and believes that it is not exposed to any significant credit risk in cash and cash equivalents. However, in March and April 2023, certain U.S. government banking regulators took steps to intervene in the operations of certain financial institutions due to liquidity concerns, which caused general heightened uncertainties in financial markets. While these events have not had a material direct impact on the Company’s operations, if further liquidity and financial stability concerns arise with respect to banks and financial institutions, either nationally or in specific regions, the Company’s ability to access cash or enter into new financing arrangements may be threatened, which could have a material adverse effect on its business, financial condition and results of operations. U.S. Trade Policies U.S. government administration and members of the U.S. Congress have recently implemented significant changes in U.S. trade policy and taken certain actions that are impacting the Company’s business, including imposing tariffs on certain goods imported into the United States. Some of these changes have triggered retaliatory actions by affected countries and may result in “trade wars” and increased costs for goods imported into the United States. All of the Company’s products are manufactured and imported from China and the Company sells its products in Canada and other countries. The implementation of tariffs has resulted in an increase in the cost of the Company’s products. If the Company is unable to mitigate these increased costs through price increases, it may experience lower sales which would negatively impact its revenue, gross profit margin and results of operations. Revenue Concentration The Company derives a majority of its revenues from sales of its products in North America by retailers. The Company’s allowance for credit losses is based upon management’s estimates and historical experience and reflects the fact that accounts receivable is concentrated with several large customers. At December 31, 2024, <span id="xdx_90E_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20240101__20241231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--ThreeCustomersMember_zz5o5aIu0c73">68% of accounts receivable were due from three customers in North America that each individually owed more than 10% of the Company’s total accounts receivable. On December 31, 2023, <span id="xdx_900_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20231231__20231231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--FourCustomersMember_zEhwDpWZ5hN3">82% of accounts receivable were due from four customers in North America that each individually owed more than 10% of the Company’s total accounts receivable. Revenue derived from the Company’s top five customers and top three customers collectively as a percentage of total net sales was <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20240101__20241231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--FiveCustomersMember_zU0bLx7EO7Vf" title="Concentration of sales risk, percentage">79% and <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230401__20231231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--FiveCustomersMember_zqi74MsyqRji" title="Concentration of sales risk, percentage">81% of our revenue, respectively, for the year ended December 31, 2024 and the nine months ended December 31, 2023, respectively. Revenues from customers representing greater than 10% of total net sales were derived from top four customers for the year ended December 31, 2024 as percentage of the net sales were <span id="xdx_905_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20240101__20241231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_zU7JQepmQiq3" title="Concentration of risk, percentage">26%, <span id="xdx_907_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20240101__20241231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerTwoMember_ziyaiybm0tl2" title="Concentration of risk, percentage">22%, <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20240101__20241231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerThreeMember_zLBRQgrR28qh" title="Concentration of risk, percentage">16% and 12%, respectively. Revenues from customers representing greater than 10% of total net sales were derived from top three customers for the nine months ended December 31, 2023 as percentage of the net sales were <span id="xdx_90F_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230401__20231231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerOneMember_zoCotZEUIFlf" title="Concentration of risk, percentage">48%, <span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230401__20231231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerTwoMember_ztgWLXNAlx2b" title="Concentration of risk, percentage">21% and <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20230401__20231231__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--SalesRevenueMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--CustomerThreeMember_zog5OrUtpCMh" title="Concentration of risk, percentage">12%. The loss of any of these customers could have an adverse impact on the Company. ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2024 and 2023

0.68

0.82

0.79

0.81

0.26

0.22

0.16

0.48

0.21

0.12

Note 17 – Related Party Transactions Stingray Group Subscription Payments The Company has a music subscription sharing agreement with Stingray Group. For the year ended December 31, 2024 and the nine months ended 2023, the Company received music subscription revenue of $<span id="xdx_900_eus-gaap--Revenues_c20240101__20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--StingrayGroupMember__us-gaap--TypeOfArrangementAxis__custom--SubscriptionSharingAgreementMember_z1VnyU0S5N1c" title="Revenue from related parties">780,000 and $<span id="xdx_90D_eus-gaap--Revenues_c20230401__20231231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--StingrayGroupMember__us-gaap--TypeOfArrangementAxis__custom--SubscriptionSharingAgreementMember_zzKv0VVSF691" title="Revenue from related parties">612,000, respectively, from Stingray Group. As of December 31, 2024 and 2023, the Company had $<span id="xdx_90D_eus-gaap--OtherReceivables_iI_c20241231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--StingrayGroupMember__us-gaap--TypeOfArrangementAxis__custom--SubscriptionSharingAgreementMember_zstTOkbNxk49" title="Due from related parties">212,000 and $<span id="xdx_902_eus-gaap--OtherReceivables_iI_c20231231__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--StingrayGroupMember__us-gaap--TypeOfArrangementAxis__custom--SubscriptionSharingAgreementMember_zYRInjLFwEH3" title="Due from related parties">269,000, respectively, due from Stingray Group for music subscription reimbursement. SMCB VIE Analysis The Company determined that SMCB, which is a subsidiary of SemiCab, Inc., is a VIE as the Company provides financial support to SMCB. While not contractually obligated, SMCB currently relies on the Company’s reimbursement of certain costs under an intercompany services agreement (“MSA”) whereby SMCB agrees to provide IT software development services to SemiCab, Inc. In exchange, under the MSA, the Company grants intellectual property rights to SMCB to use the software platform in India. Compensation for services is invoiced and paid on a monthly or quarterly basis as agreed by both parties, with rates subject to periodic review and revision. The agreement is for a term of two years ending on April 1, 2025 and automatically renews for additional 12-month periods unless prior notice is given by the terminating party. The agreement automatically renewed for an additional 12-month period on April 1, 2025. As a result of this relationship and the financial support provided by the Company to SMCB under the loan agreement described below to fund SMCB’s operations, SMCB has been determined to be a VIE. The Company further determined that it is not the primary beneficiary of SMCB because the Company does not have the power to direct or control SMCB’s significant activities related to its business. Accordingly, the Company has not consolidated SMCB’s results of operations and financial position in its consolidated financial statements. Pursuant to the terms of the asset purchase agreement that the Company entered into on June 11, 2024, the Company entered into an option agreement that granted SemiCab Holdings the right to acquire all of the issued and outstanding equity securities of SMCB for <span id="xdx_906_eus-gaap--StockIssuedDuringPeriodSharesIssuedForServices_c20240611__20240611__us-gaap--RelatedPartyTransactionAxis__custom--SemiCabHoldingsMember_zT3nRlKXRdNf" title="Stock issued during period shares issued for services">1,605 shares of the Company’s common stock. The Company did not exercise this right and the option agreement expired on August 31, 2024. Loan Agreement The Company is a party to a loan agreement with SMCB dated March 22, 2024. Under the loan agreement, the Company agreed to loan up to $<span id="xdx_905_eus-gaap--ProceedsFromLoans_c20240322__20240322__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--SMCBMember_zSP1y4ZBuhHf" title="Proceeds from loan">2,500,000 to SMCB. The loans are anticipated to be made in tranches. Disbursements of any tranches are fully at the discretion of the Company. Each tranche has a repayment period of five years. The loans can be repaid at any time prior to the five-year maturity date without penalty. Interest on the loans accrues at a rate of six percent per year and is payable quarterly. As of December 31, 2024, the Company had made aggregate advances to SMCB in the amount of $1,777,000. During the year ended December 31, 2024, SMCB charged $<span id="xdx_90D_ecustom--SoftwareInfrastructureDevelopmentAndMaintenanceServices_c20240101__20241231__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--SMBCMember_zFIfCfUr9Deg" title="software and infrastructure development and maintenance services">637,000 for services to the Company that were performed under the MSA, which charges offset amounts due under the loan with SMCB. As a result, as of December 31, 2024, a total of $1,140,000 of loans were outstanding under the loan agreement, and a total of $<span id="xdx_908_eus-gaap--DebtInstrumentCarryingAmount_iI_c20241231__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--SMCBMember_zZu8oa1YkGig" title="Loan remaining">1,360,000 remained available for future borrowings under the loan agreement as of December 31, 2024. As of December 31, 2024, SMCB had not made any interest payments due under the loan agreement. As a result, the loans were in default as of December 31, 2024. The Company performed the credit risk assessment of the collectability of the notes receivable from SMCB at December 31, 2024 pursuant to ASC 326-20. Due to uncertainties associated with the loans, the Company accrued a reserve in the amount of $<span id="xdx_905_eus-gaap--ProvisionForDoubtfulAccounts_c20240101__20241231__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--SMCBMember_zUvOsnTmhN" title="Reserve">439,000 as of December 31, 2024. The reserve was included within general and administrative expenses in the Company’s statement of operations. Subsequent to December 31, 2024, the Company made additional advances to SMCB in the aggregate amount of $<span id="xdx_906_eus-gaap--AccountsPayableCurrentAndNoncurrent_iI_c20250101__us-gaap--TypeOfArrangementAxis__custom--LoanAgreementMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--SMCBMember__us-gaap--SubsequentEventTypeAxis__us-gaap--SubsequentEventMember_zO9zMJcwjct8" title="Advance payable">500,000 under the loan agreement.

780000

612000

212000

269000

1605

2500000

1777000 637000

1140000

1360000

439000

500000

Excludes depreciation and amortization, share-based compensation, impairment of goodwill and impairment of a note receivable. Excludes depreciation and amortization, share-based compensation, impairment of goodwill and impairment of a note receivable.