Segment Information and Revenue Disaggregation

12 Months Ended

Dec. 31, 2024

Segment Reporting [Abstract]

Segment Information and Revenue Disaggregation

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

The following table details the revenues, significant expenses and other segment items regularly provided to the CODM:

	Year Ended December 31, 2024									Nine Months Ended  December 31, 2023
	Singing Machine			SemiCab			Total			Singing Machine			SemiCab		Total
Revenues	$	23,197,000		$	297,000		$	23,494,000		$	29,198,000		$	-	$	29,198,000
Less:
Adjusted cost of revenues		18,222,000			491,000			18,713,000			23,008,000			-		23,008,000
Adjusted sales and marketing		2,874,000			-			2,874,000			3,717,000			-		3,717,000
Adjusted general and administrative (1)		9,935,000			1,014,000			10,949,000			8,219,000			-		8,219,000
Adjusted depreciation and amortization		191,000			31,000			222,000			287,000			-		287,000
Share based compensation		578,000			52,000			630,000			110,000			-		110,000
Impairment of goodwill		-			3,592,000			3,592,000			-			-		-
Impairment of note receivable		-			439,000			439,000			-			-		-
Change in fair value of warrant liability		(334,000	)		-			(334,000	)		-			-		-
Gain on disposal of fixed assets		-			-			-			(44,000	)		-		(44,000	)
Loss on issuance of warrants		8,889,000			-			8,889,000			-			-		-
Interest expense		1,660,000			227,000			1,887,000			299,000			-		299,000
Segment net loss	$	(18,818,000	)	$	(5,549,000	)	$	(24,367,000	)	$	(6,398,000	)	$	-	$	(6,398,000	)
Total segment assets	$	16,301,000		$	1,215,000		$	17,516,000

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

The following reconciles total segment assets to consolidated total assets as of December 31, 2024:

	December 31, 2024
Total segment assets	$	17,516,000
Goodwill		786,000
Total assets	$	18,302,000

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:

Product Line	Year Ended December 31, 2024		Nine Months Ended December 31, 2023
Classic Karaoke Machines	$	16,516,000	$	24,189,000
Licensed Products		486,000		549,000
Kids Youth Electronics		959,000		565,000
Microphones and Accessories		4,411,000		3,283,000
Music Subscriptions		825,000		612,000
Logistics Services		297,000		-
Total Net Sales	$	23,494,000	$	29,198,000

ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

Revenue by geographic region is as follows:

	Year Ended December 31, 2024		Nine Months Ended December 31, 2023
North America	$	22,191,000		28,763,000
Australia		1,075,000		205,000
Europe and United Kingdom		184,000		226,000
All Others		44,000		4,000
Total Net Sales	$	23,494,000		29,198,000

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.