Property and Equipment, Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment, Intangible Assets and Goodwill

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:

	Useful	December 31,		December 31,
	Life	2024		2023
Computer and office equipment	5-7 years	$	412,000	$	404,000
Furniture and fixtures	7 years		107,000		107,000
Molds and tooling	3-5 years		2,297,000		2,228,000
			2,816,000		2,739,000
Less: Accumulated depreciation			2,532,000		2,335,000
		$	284,000	$	404,000

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

A summary of the Company’s intangible assets at December 31, 2024 and 2023 is as follows:

	Useful	December 31,
	Life	2024
Customer relationships	9 years	$	25,000
Trade name	9 years		25,000
Developed technology	6 years		325,000
			375,000
Less: Accumulated amortization			30,000
		$	345,000

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:

Balance at January 1, 2024	$	-0-
Goodwill from acquisition of SemiCab, Inc. on July 3, 2024		4,378,000
Impairment of goodwill		(3,592,000	)
Balance at December 31, 2024	$	786,000