10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 001-41405

 

ALGORHYTHM HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	95-3795478
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

6301 NW 5th Way, Suite 2900, Fort Lauderdale, FL	33309	(954) 596-1000
(Address of principal executive offices)	(Zip Code)	(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value per share	RIME	NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer ☐
Non-accelerated filer	☒	Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 15, 2025, there were 2,514,571 shares of the issuer’s common stock, $0.01 par value per share, outstanding.

ALGORHYTHM HOLDINGS, INC.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Condensed Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024	2
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 (Unaudited)	3
	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2025 and 2024 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
PART II – OTHER INFORMATION		37
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Algorhythm Holdings, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2025			December 31, 2024
	(unaudited)
Assets
Current Assets
Cash	$	1,134,000		$	7,550,000
Accounts receivable, net of allowances of $101,000 and $274,000, respectively		2,317,000			4,373,000
Accounts receivable, related party		124,000			212,000
Note receivable - related party		-			701,000
Inventory		2,733,000			2,186,000
Returns asset		93,000			1,621,000
Prepaid expenses and other current assets		1,219,000			120,000
Total Current Assets		7,620,000			16,763,000
Property and equipment, net		252,000			284,000
Other non-current assets		90,000			124,000
Intangible assets, net		315,000			345,000
Goodwill		4,418,000			786,000
Total Assets	$	12,695,000		$	18,302,000
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	1,996,000		$	3,808,000
Accrued expenses		3,295,000			4,224,000
Refund due to customer		1,232,000			38,000
Reserve for sales returns		521,000			3,355,000
Warrant liability		-			16,603,000
Promissory notes payable,net		379,000			-
Current portion of promissory note payable - SemiCab, Inc.		1,500,000			-
Current portion of notes payable to related parties		265,000			265,000
Other current liabilities		62,000			145,000
Total Current Liabilities		9,250,000			28,438,000
Notes payable to related parties, net of current portion		385,000			385,000
Promoissory note payable - SemiCab, Inc., net of current portion		250,000			-
Total Liabilities		9,885,000			28,823,000
Commitments and Contingencies
Shareholders’ Equity (Deficit)
Preferred stock, $1.00 par value; 1,000,000 shares authorized; no shares issued and outstanding at June 30, 2025 and December 31, 2024		-			-
Common stock, $0.01 par value; 800,000,000 and 100,000,000 shares authorized; 2,514,571 and 470,825 shares issued and outstanding at June 30, 2025 and December 31, 2024		25,000			5,000
Additional paid-in capital		63,854,000			39,682,000
Accumulated deficit		(58,948,000	)		(49,172,000	)
Non-controlling interest		(1,363,000	)		(1,036,000	)
Treasury stock, 10,990 and 0 shares reserved at June 30, 2025 and December 31, 2024		(758,000	)		-
Total Algorhythm Holdings Shareholders’ Equity (Deficit)		2,810,000			(10,521,000	)
Total Liabilities and Shareholders’ Equity (Deficit)	$	12,695,000		$	18,302,000

See notes to the condensed consolidated financial statements

2

Algorhythm Holdings, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	June 30, 2025			June 30, 2024			June 30, 2025			June 30, 2024
Net Sales	$	2,716,000		$	2,440,000		$	4,709,000		$	4,866,000
Cost of Goods Sold		1,762,000			2,116,000			3,255,000			4,040,000
Gross Profit		954,000			324,000			1,454,000			826,000
Operating Expenses
Selling expenses		234,000			547,000			998,000			1,177,000
General and administrative expenses		1,502,000			2,053,000			4,048,000			4,212,000
Operating lease impairment expense		-			3,878,000			-			3,878,000
Total Operating Expenses		1,736,000			6,478,000			5,046,000			9,267,000
Loss from Operations		(782,000	)		(6,154,000	)		(3,592,000	)		(8,441,000	)
Other Expenses
Change in fair value of warrant liability		-			-			(6,468,000	)		-
Interest expense		(27,000	)		(17,000	)		(43,000	)		(45,000	)
Total Other Expenses		(27,000	)		(17,000	)		(6,511,000	)		(45,000	)
Loss Before Income Tax Benefit		(809,000	)		(6,171,000	)		(10,103,000	)		(8,486,000	)
Income Tax Benefit		-			52,000			-			-
Net Loss		(809,000	)		(6,119,000	)		(10,103,000	)		(8,486,000	)
Net loss attributable to non-controlling interest		224,000			-			327,000			-
Net Loss Available to Common Shareholders	$	(585,000	)	$	(6,119,000	)	$	(9,776,000	)	$	(8,486,000	)
Income (Loss) Per Common Share
Basic and diluted	$	(0.24	)	$	(190.68	)	$	(4.40	)	$	(264.44	)
Weighted Average Common and Common
Equivalent Shares:
Basic and diluted		2,472,464			32,090			2,224,047			32,090

See notes to the condensed consolidated financial statements

3

Algorhythm Holdings, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

For the Three Months Ended June 30, 2025 and 2024 (Unaudited)

	Common Stock				Additional Paid-in			Non- Controlling			Treasury			Accumulated
	Shares		Amount		Capital			Interest			Stock			Deficit			Total
Balance at March 31, 2025		2,394,829	$	24,000	$	63,577,000		$	(1,139,000	)	$	(758,000	)	$	(58,363,000	)	$	3,341,000
Net loss		-		-		-			(224,000	)		-			(585,000	)		(809,000	)
Stock-based compensation		-		-		(38,000	)		-			-			-			(38,000	)
Common stock issued for acquisition of SMCB		119,742		1,000		315,000			-			-			-			316,000
Balance at June 30, 2025		2,514,571	$	25,000	$	63,854,000		$	(1,363,000	)	$	(758,000	)	$	(58,948,000	)	$	2,810,000
Balance at March 31, 2024		6,418,061	$	64,000	$	33,448,000		$	-		$	-		$	(28,282,000	)	$	5,230,000
Net loss		-		-		-			-			-			(6,119,000	)		(6,119,000	)
Stock-based compensation		-		-		17,000			-			-			-			17,000
Balance at June 30, 2024		6,418,061	$	64,000	$	33,465,000		$	-		$	-		$	(34,401,000	)	$	(872,000	)

For the Six Months Ended June 30, 2025 and 2024 (Unaudited)

	Common Stock					Additional Paid-in		Non- Controlling			Treasury			Accumulated
	Shares			Amount		Capital		Interest			Stock			Deficit			Total
Balance at December 31, 2024		470,825		$	5,000	$	39,682,000	$	(1,036,000	)	$	-		$	(49,172,000	)	$	(10,521,000	)
Net loss		-			-		-		(327,000	)		-			(9,776,000	)		(10,103,000	)
Exercise of Series B warrants		1,910,975			19,000		15,195,000		-			-			-			15,214,000
Stock-based compensation		23,818			-		47,000		-			-			-			47,000
Reclassification of Series A warrants to equity		-			-		7,857,000		-			-			-			7,857,000
Common stock issued for acquisition of SMCB		119,742			1,000		315,000		-			-			-			316,000
Repurchase of common stock from related parties		(10,990	)		-		758,000		-			(758,000	)		-			-
Other		201			-		-		-			-			-			-
Balance at June 30, 2025		2,514,571		$	25,000	$	63,854,000	$	(1,363,000	)	$	(758,000	)	$	(58,948,000	)	$	2,810,000
Balance at December 31, 2023		6,418,061		$	64,000	$	33,429,000	$	-		$	-		$	(25,915,000	)	$	7,578,000
Net income		-			-		-		-			-			(8,486,000	)		(8,486,000	)
Stock-based compensation		-			-		36,000		-			-			-			36,000
Balance at June 30, 2024		6,418,061		$	64,000	$	33,465,000	$	-		$	-		$	(34,401,000	)	$	(872,000	)

See notes to the condensed consolidated financial statements

4

Algorhythm Holdings, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Six Months Ended
	June 30, 2025			June 30, 2024
Cash flows from operating activities
Net loss	$	(10,103,000	)	$	(8,486,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		96,000			125,000
Reduction in SMCB loan in exchange for services		304,000			-
Gain on allowance for credit loss		(439,000	)		-
Change in fair value of warrant liability		6,468,000			-
Provision for estimated cost of returns		1,528,000			1,301,000
Provision for inventory obsolescence		4,000			-
Credit losses		3,000			14,000
Impairment expense		-			3,878,000
Reserve for sales returns		(2,834,000	)		(1,217,000	)
Stock-based compensation		47,000			36,000
Changes in operating assets and liabilities:
Accounts receivable		2,372,000			4,945,000
Due from banks		-			(187,000	)
Accounts receivable - related parties		88,000			(145,000	)
Inventories		(551,000	)		(38,000	)
Prepaid expenses and other current assets		(722,000	)		69,000
Other non-current assets		523,000			(64,000	)
Accounts payable		(2,184,000	)		(3,940,000	)
Accrued expenses		(1,147,000	)		(771,000	)
Refunds due to customers		1,194,000			(649,000	)
Other liabilities		(83,000	)		(281,000	)
Net cash used in operating activities		(5,436,000	)		(5,410,000	)
Cash flows from investing activities
Purchase of property and equipment		(22,000	)		(6,000	)
Repurchase of shares of common stock		(758,000	)		-
Cash received from acquisition of SMCB		593,000			-
Advances to SMCB		(1,172,000	)		-
Net cash used in investing activities		(1,359,000	)		(6,000	)
Cash flows from financing activities
Proceeds from issuance of promissory notes, net		379,000			-
Other		-			(42,000	)
Net cash provided by (used in) financing activities		379,000			(42,000	)
Net change in cash		(6,416,000	)		(5,458,000	)
Cash at beginning of year		7,550,000			6,703,000
Cash at end of period	$	1,134,000		$	1,245,000
Supplemental disclosures of cash flow information:
Cash paid for interest	$	43,000		$	40,000
Non-Cash investing and financing cash flow information:
Reclassification of Series A warrants to equity	$	7,857,000		$	-
Common stock issued for exercise of Series B warrants	$	15,214,000		$	-
Common stock issued for acquisition of SMCB	$	316,000		$	-
Promissory note issued for acquisition of SMCB	$	1,750,000		$	-

See notes to the condensed consolidated financial statements

5

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 9,999 shares of the issued and outstanding equity shares, Rs. 10 par value, of SMCB, representing 99.99% of the issued and outstanding equity shares of SMCB, for $1,750,000, the payment of which was evidenced by the issuance of a promissory note by the Company to the SemiCab, Inc., and (ii) the Company purchased the 20% membership interest in SemiCab Holdings then held by SemiCab, Inc. for aggregate consideration consisting of 119,742 shares of the Company’s common stock. The acquisition was completed on May 2, 2025.

6

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.

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.

7

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.

8

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 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

9

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:

	Useful		June 30,		December 31,
	Life		2025		2024
Computer and office equipment		5-7 years	$	462,000	$	412,000
Furniture and fixtures		7 years		107,000		107,000
Molds and tooling		3-5 years		2,312,000		2,297,000
				2,881,000		2,816,000
Less: accumulated depreciation				2,629,000		2,532,000
			$	252,000	$	284,000

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.

A summary of the Company’s intangible assets at June 30, 2025 and December 31, 2024 is as follows:

	Useful		June 30,		December 31,
	Life		2025		2024
Customer relationships		5-7 years	$	25,000	$	25,000
Trade names		7 years		25,000		25,000
Developed technology		3-5 years		325,000		325,000
				375,000		375,000
Less: accumulated amortization				60,000		30,000
			$	315,000	$	345,000

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.

10

On May 2, 2025, the Company and SemiCab Holdings acquired 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.

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:

	Issue		Maturity				Interest
Note Holder	Date		Date		Status		Rate			Principal
Ajesh Kapoor		7/10/2021		7/10/2026		Current		9	%	$	150,000
Ajesh Kapoor		8/27/2021		8/26/2026		Current		9	%		235,000
Vivek Sehgal		4/17/2023		2/1/2026		Current		10	%		50,000
Ajesh Kapoor		5/5/2023		2/1/2026		Current		10	%		50,000
Ajesh Kapoor		5/17/2023		2/1/2026		Current		10	%		165,000
Balance as of June 30, 2025										$	650,000
Less: current portion of notes payable to related parties											265,000
Notes payable to related parties, net of current portion										$	385,000

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 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 $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.

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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 $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 $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 $300,000. Repayment terms consisted of weekly payments in the amount of $16,200 for 28 weeks for a total repayment of $453,600. The effective interest rate for the borrowings was 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 18% per year. As of December 31, 2024, the merchant cash advance had been repaid in full.

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.

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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 24^th Street, New York, New York (the “Premises”).

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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.

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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 1,667 shares of common stock authorized for issuance under the plan. Of this amount, awards representing 1,183 shares of common stock had been granted under the plan and 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.

Note 10 – Net Loss Per Share

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:

	Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	June 30, 2025			June 30, 2024			June 30, 2025			June 30, 2024
Net loss available to common shareholders	$	(585,000	)	$	(6,119,000	)	$	(9,776,000	)	$	(8,486,000	)
Basic and diluted weighted average of common stock outstanding		2,472,464			32,090			2,224,047			32,090
Loss per common share	$	(0.24	)	$	(190.68	)	$	(4.40	)	$	(264.44	)

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:

	Three Months		Three Months		Six Months		Six Months
	Ended		Ended		Ended		Ended
	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
Basic weighted average common shares outstanding		2,472,464		32,090		2,224,047		32,090
Effect of dilutive stock options and warrants		-		-		-		-
Diluted weighted average of common shares outstanding		2,472,464		32,090		2,224,047		32,090

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.

15

For the three and six months ended June 30, 2025, 484 shares of common stock underlying stock options, respectively, and 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, 543 shares of common stock underlying stock options and 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.

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 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 $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 $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 10% per year. The Company incurred $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 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 $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.

16

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 $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 $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 21,000 shares of its common stock, pre-funded warrants to purchase up to 258,412 shares of common stock, Series A warrants to purchase up to 279,412 shares of common stock, and Series B warrants to purchase up to 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 $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 $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 $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 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.

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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 $120,000. The note is subject to a one-time interest charge of 12%, or approximately $14,000, and is payable in 12 monthly installments of $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 $84,000 after deductions of $15,000 for original issue discount, $16,000 for placement agent fees and $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 $240,000. The note is subject to a one-time interest charge of 12%, or approximately $29,000. An initial payment of $134,000 is due on December 15, 2025. Thereafter, the remainder is payable in six monthly installments of $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 $189,000 after deductions of $30,000 for original issue discount, $16,000 for placement agent fees and $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 $120,000. The note is subject to a one-time interest charge of 12%, or approximately $14,000, and is payable in 12 monthly installments of $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 $105,000 after deductions of $15,000 for original issue discount.

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.

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The key inputs for the Series A warrant liabilities were as follows:

Warrant Liability – Series A Warrants	January 17, 2025			December 31, 2024
Stock price on valuation date	$	8.38		$	18.00
Exercise price	$	8.38		$	34.00
Number of warrants		1,133,652			279,412
Remaining term (years)		4.88			4.93
Annual equity volatility		126.0	%		113.0	%
Annual volume volatility		377.0	%		379.0	%
Risk-free interest rate		4.32	%		4.29	%
Expected stockholder approval date		January 13, 2025			January 14, 2025
Expected stockholder approval probability		100	%		50	%

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.

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:

	Series A Warrants			Series B Warrants			Total Warrant Liabilities
Balance at December 31, 2024	$	5,456,000		$	11,147,000		$	16,603,000
Exercises		—			(15,214,000	)		(15,214,000	)
Loss on change in fair value		2,401,000			4,067,000			6,468,000
Reclassification to equity		(7,857,000	)		—			(7,857,000	)
Balance at June 30, 2025	$	—		$	—		$	—

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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:

	Series A Warrants		Series B Warrants			Other Warrants		Total
Balance at December 31, 2024		279,412		279,412			4,511		563,335
Exercises		—		(279,412	)		—		(279,412	)
Balance at June 30, 2025		279,412		—			4,511		283,923

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.

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.

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.

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

	Three Months Ended June 30, 2025									Three Months Ended June 30, 2024								Six Months Ended June 30, 2025									Six Months Ended June 30, 2024
	Singing									Singing								Singing									Singing
	Machine			SemiCab			Total			Machine			SemiCab		Total			Machine			SemiCab			Total			Machine			SemiCab		Total
Revenues	$	1,564,000		$	1,152,000		$	2,716,000		$	2,440,000		$	-	$	2,440,000		$	3,434,000		$	1,275,000		$	4,709,000		$	4,866,000		$	-	$	4,866,000
Less:
Adjusted cost of revenues		270,000			1,492,000			1,762,000			2,116,000			-		2,116,000			1,634,000			1,621,000			3,255,000			4,040,000			-		4,040,000
Adjusted sales and marketing		234,000			-			234,000			547,000			-		547,000			998,000			-			998,000			1,177,000			-		1,177,000
Adjusted general and administrative (1)		751,000			744,000			1,495,000			1,982,000			-		1,982,000			2,684,000			1,224,000			3,908,000			4,070,000			-		4,070,000
Adjusted depreciation and amortization		28,000			17,000			45,000			54,000			-		54,000			61,000			32,000			93,000			106,000			-		106,000
Adjusted impairement of ROU lease		-			-			-			3,878,000			-		3,878,000			-			-			-			3,878,000			-		3,878,000
Share based compensation		(38,000	)		-			(38,000	)		17,000			-		17,000			47,000			-			47,000			36,000			-		36,000
Change in fair value of warrant liability		-			-			-			-			-		-			6,468,000			-			6,468,000			-			-		-
Gain on disposal of fixed assets		-			-			-			-			-		-			-			-			-			-			-		-
Loss on issuance of warrants		-			-			-			-			-		-			-			-			-			-			-		-
Interest expense		9,000			18,000			27,000			17,000			-		17,000			9,000			34,000			43,000			45,000			-		45,000
Other income (expense), net		-			-			-			-			-		-			-			-			-			-			-		-
Income tax provision		-			-			-			(52,000	)		-		(52,000	)		-			-			-			-			-		-
Segment net loss	$	310,000		$	(1,119,000	)	$	(809,000	)	$	(6,119,000	)	$	-	$	(6,119,000	)	$	(8,467,000	)	$	(1,636,000	)	$	(10,103,000	)	$	(8,486,000	)	$	-	$	(8,486,000	)
Total segment assets	$	5,244,000		$	3,033,000		$	8,277,000		$	12,367,000		$	-	$	12,367,000		$	5,244,000		$	3,033,000		$	8,277,000		$	12,367,000		$	-	$	12,367,000

⁽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 June 30, 2025:

	June 30,		December 31,
	2025		2024
Total segment assets	$	8,277,000	$	17,516,000
Goodwill		4,418,000		786,000
Total assets	$	12,695,000	$	18,302,000

The total segment assets of $17,516,000 at December 31, 2024 were comprised of $16,301,000 for the Singing Machine segment and $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:

	Three Months Ended					Six Months Ended
Product Line	June 30, 2025			June 30, 2024		June 30, 2025		June 30, 2024
Karaoke machines	$	1,533,000		$	1,257,000	$	2,275,000	$	2,308,000
Licensed products		1,000			107,000		15,000		198,000
Kids youth electronics		103,000			102,000		170,000		171,000
Microphones and accessories		(260,000	)		865,000		523,000		1,818,000
Music subscriptions		187,000			109,000		451,000		371,000
Logistics services		1,152,000			-		1,275,000		-
Total revenue	$	2,716,000		$	2,440,000	$	4,709,000	$	4,866,000

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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:

	Three Months Ended				Six Months Ended
Geographic Area	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
North America	$	1,410,000	$	2,316,000	$	3,403,000	$	4,742,000
Australia		46,000		124,000		46,000		124,000
India		1,137,000		-		1,137,000		-
All Others		123,000		-		123,000		-
	$	2,716,000	$	2,440,000	$	4,709,000	$	4,866,000

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.

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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, 17% of accounts receivable were due from one customer in North America and 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, 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 11% and 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 37% and 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 39%, 14%, and 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 10%, 11% and 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 50%, 11%, and 10%. The loss of any of these customers could have an adverse impact on the Company.

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 $187,000 and $451,000, respectively, from Stingray Group. For the three and six months ended June 30, 2024, the Company received music subscription revenue of $109,000 and $349,000, respectively, from Stingray Group. As of June 30, 2025 and December 31, 2024, the Company had $124,000 and $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 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.

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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 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 $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 99.99% of the equity shares of SMCB, the Company made advances to SMCB in the amount of $1,172,000. During the same period, SMCB charged $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 $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.

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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 9,999 shares of the issued and outstanding equity shares, Rs. 10 par value, of SMCB, representing 99.99% of the issued and outstanding equity shares of SMCB, for $1,750,000, the payment of which amount was evidenced by the issuance of a promissory note by the Company to the SemiCab, Inc., and (ii) the Company purchased the 20% membership interest in SemiCab Holdings then held by SemiCab, Inc. for aggregate consideration consisting of 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 $1,500,000 is due and payable by the Company on the first anniversary of the Closing Date and the remaining $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 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:

Consideration:
Promissory note	$	1,750,000
119,742 shares of common stock		316,000
Assumption of debt		2,008,000
Total	$	4,074,000
Identifiable net assets acquired:
Cash and cash equivalents	$	593,000
Accounts receivable, net		319,000
Prepaid expenses and other current assets		377,000
Property and equipment, net		11,000
Other non-current assets		489,000
Accounts payable and accrued expenses		(372,000	)
Other current liabilities		(975,000	)
Net assets acquired		442,000
Goodwill	$	3,632,000

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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.

	Six Months Ended
	June 30, 2025			June 30, 2024
Net revenue	$	7,438,000		$	6,135,000
Operating loss from continuing operations		(4,539,000	)		(8,689,000	)
Net loss	$	(11,313,000	)	$	(8,735,000	)

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 $368,000. The note is subject to a one-time interest charge of $162,000 and is payable in 28 weekly installments of $19,000 commencing on July 14, 2025. The Company received net proceeds of $350,000 after deductions of $18,000 for administrative agent fees.

Sale of Singing Machine Business

On August 1, 2025, the 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.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other parts of this report contain forward-looking statements that involve risks and uncertainties. All forward-looking statements included in this report are based on information available to us on the date hereof, and, except as required by law, we assume no obligation to update any such forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth herein under Item 1A. Risk Factors and elsewhere in this report. The following should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this report and the audited consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2024.

Overview

We are an artificial intelligence (“AI”) technology that currently has one business unit, which is SemiCab. SemiCab is an AI-enabled software logistics business operated through our subsidiary, SemiCab Holdings, LLC. Prior to August 1, 2025, we had a second business unit, which was Singing Machine. Singing Machine was a home karaoke consumer products business that designed and distributed karaoke products globally to retailers and ecommerce partners through our subsidiary, The Singing Machine Company, Inc. We sold our Singing Machine business on August 1, 2025. Accordingly, we no longer own or operate the Singing Machine business line.

SemiCab

SemiCab is a cloud-based Collaborative Transportation Platform built to achieve the scalability required to predict and optimize loads and the use of trucks. To orchestrate collaboration across manufacturers, retailers, distributors, and their carriers, SemiCab uses real-time data from API-based load tendering and pre-built integrations with TMS and ELD partners. To build fully loaded round trips, SemiCab uses AI/ML techniques and advanced predictive optimization models.

Since 2020, SemiCab has enabled major retailers, brands and transportation providers to address their transportation needs. SemiCab’s Orchestrated Collaboration™ AI model has proven to increase transportation capacity, improve asset utilization, reduce empty miles, lower logistics costs, and provide visibility into the entire transportation network. Models show that our SemiCab technology has the capability of reducing costs through optimization. Additionally, our SemiCab technology has the potential to play a key role in the improved sustainability model. Based on its proven ability to improve truck utilization rates, this could result in a dramatic reduction in the carbon footprint of the industry. The optimization of existing truck utilization can add trucking capacity without adding more trucks, drivers or driven miles which addresses common problems plaguing the industry like severe driver shortage and road congestion. Trucking optimization could also reduce carbon emissions attributable to road freight.

Singing Machine

Through Singing Machine, we engaged in the development, marketing, and sale of consumer karaoke audio equipment, accessories, and musical recordings. We were a leading global karaoke and music entertainment company that specializes in the design and production of quality karaoke and music enabled consumer products for adults and children. Our products were among the most widely available karaoke products internationally. We sold our Singing Machine business on August 1, 2025. Accordingly, we no longer own or operate the Singing Machine business line.

Recent Corporate Events

Name and Symbol Change

Effective September 5, 2024, our Certificate of Incorporation was amended to change our name from “The Singing Machine Company, Inc.” to “Algorhythm Holdings, Inc.” In addition, effective September 8, 2024, our ticker symbol was changed from “MICS” to “RIME.”

Reverse Stock Split and Increase in Authorized Shares

On January 13, 2025, our stockholders voted to authorize our board of directors to effect a reverse stock split of the outstanding shares of our common stock at a specific ratio within a range of 1-for-10 to a maximum of 1-for-250 and to amend our certificate of incorporation to increase the number of authorized common stock from 100,000,000 to 800,000,000 shares. On January 14, 2025, our board of directors approved a reverse stock split of 1-for-200 ratio and approved the filing of a certificate of amendment to our certificate of incorporation to effect the reverse stock split and to increase our authorized shares of common stock from 100,000,000 to 800,000,000. The reverse stock split took effect on February 10, 2025. In accordance with SEC rules and regulations, all share numbers and prices throughout this report and our condensed consolidated financial statements reflect post-reverse stock split numbers.

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Acquisition of SMCB

On May 2, 2025 (the “Closing Date”), we and SemiCab Holdings entered into an equity purchase agreement with SemiCab Inc. pursuant to which: (i) SemiCab Holdings purchased 9,999 shares of the issued and outstanding equity shares, Rs. 10 par value, of SMCB, representing 99.99% of the issued and outstanding equity shares of SMCB, for $1,750,000, the payment of which amount was evidenced by the issuance of a promissory note by us to SemiCab, Inc., and (ii) we purchased the 20% membership interest in SemiCab Holdings then held by SemiCab, Inc. for aggregate consideration consisting of 119,742 shares of our common stock. The promissory note provides that $1,500,000 is due and payable by us on the first anniversary of the Closing Date and the remaining $250,000 is due and payable by us on the 18-month anniversary of the Closing Date. The promissory note bears interest at six percent per annum.

On the Closing Date, we and SemiCab Holdings entered into an amended and restated employment agreement with each of Ajesh Kapoor and Vivek Sehgal pursuant to which Mr. Kapoor agreed to serve as the Chief Executive Officer and Chief Technology Officer of SemiCab Holdings and Mr. Sehgal agreed to serve as the Chief Product Officer of SemiCab Holdings. Pursuant to the terms of the employment agreements, SemiCab Holdings granted Messrs. Kapoor and Sehgal a membership interest in SemiCab Holdings with three quarters of each such grant subject to certain forfeiture rights tied to continued employment with SemiCab Holdings. Additionally, Mr. Kapoor was granted the right to serve as a member of our board of directors and the right to appoint an additional member of our board of directors upon the occurrence of certain specified events.

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

Sale of Singing Machine Business

On August 1, 2025, we 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 our Singing Machine business for $500,000. The transaction closed on August 1, 2025.

Strategy

We intend to invest in our SemiCab business to develop and grow it into a significant revenue producer for us. This will involve investments in the continued research and development of its technology, the hiring of additional qualified employees, marketing and advertising initiatives, and back-office support. While SemiCab is a nascent business, it has already acquired several multinational consumer products companies as customers. We believe that as existing customers experience the benefits of our SemiCab logistics and distribution solutions, they will begin to increase their use of SemiCab. We also believe that SemiCab’s proven ability to improve truck utilization rates and improve trucking capacity without adding more trucks, drivers or driven miles will be of substantial interest to additional companies that can benefit from SemiCab.

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We acquired the United States component of our SemiCab business on July 3, 2024 and acquired the India component of our SemiCab business on May 2, 2025. We may make additional investments in companies operating in the AI distribution and logistics space that we believe are complementary to our SemiCab business. Our investments could involve an acquisition of the assets or equity of complementary companies or businesses or could involve a strategic partnership or joint venture with complementary companies or businesses or digital asset treasury strategies. We believe that additional investments could provide us with new AI logistics and distribution technologies, services and resources that we can implement across our entire SemiCab business or could help us to more quickly expand our SemiCab footprint into other parts of the world. We are actively evaluating additional opportunities to expand our SemiCab business through investments in complementary AI logistics and distribution businesses and companies.

Financial Results

We generated revenue of $2,716,000 for the three-month period ended June 30, 2025, compared to $2,440,000 for the three-month period ended June 30, 2024. The increase in revenue was due primarily to net sales generated by our SemiCab business. This was partially offset by a decrease in net sales of our Singing Machine karaoke products due to the negative impact on our business from recently implemented tariffs on our products manufactured in China. Gross profit was $954,000, or 35.1% of net sales, for the three-month period ended June 30, 2025, compared to $324,000, or 13.3% of net sales, for the three-month period ended June 30, 2024. The increase was due primarily to an increase of $276,000 for net sales and a decrease of $354,000 for cost of goods sold.

Our operating expenses were $1,736,000 for the three-month period ended June 30, 2025, compared to $6,478,000 for the three-month period ended June 30, 2024. The decrease in operating expenses was due primarily to a decrease of $3,878,000 for operating lease impairment expenses. We incurred a loss from operations of $782,000 for the three-month period ended June 30, 2025 compared to $6,154,000 for the three-month period ended June 30, 2024.

We generated net loss available to common shareholders of $585,000, or $0.24 per share of common stock, for the three-month period ended June 30, 2025, compared to $6,119,000, or $190.68 per share of common stock, for the three-month period ended June 30, 2024. We had total assets of $12,695,000 and $18,302,000 at June 30, 2025 and December 31, 2024, respectively. Net cash used by operating activities was $5,436,000 for the six-month period ended June 30, 2025 compared to $5,410,000 for the six-month period ended June 30, 2024.

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Outlook

We expect net sales generated from our SemiCab business to increase substantially over the next 12 months as we generate more business from our growing customer base in the United States and India. We sold our Singing Machine business on August 1, 2025. As a result, we will no longer be generating any net sales from that business line. Overall, total net sales are anticipated to increase over the next 12 months as growth in net sales generated by our SemiCab business is expected to exceed the loss in net sales of our Singing Machine karaoke products. We expect gross profit to decrease over the next 12 months due to an increase in cost of goods sold that we will incur in connection with the increase in net sales that we expect to generate from our SemiCab business. The decrease in gross profit will be partially offset by the reduction in cost of goods sold that we will realize as a result of the sale of our Singing Machine business. We expect operating expenses to decrease over the next 12 months as a result of our sale of the Singing Machine business. The reductions achieved may be partially offset by increases in legal and accounting expenses that we incur as we engage in additional capital-raising activities as needed to fund our business and expenses that we incur to fund the growth and development of our SemiCab business. Net loss available to common stockholders is expected to decrease during the next 12 months primarily due to the sale of our Singing Machine business.

Notwithstanding the foregoing, in the event we complete additional acquisitions of controlling or non-controlling financial interests in other complementary businesses or companies through mergers, acquisitions, joint ventures or other strategic initiatives, such as the acquisition of the United States component of our SemiCab business on July 3, 2024 and the acquisition of the India component of our SemiCab business on May 2, 2025, our financial results will include and reflect the financial results of the target entities. Accordingly, the completion of any such transactions in the future may have a substantial beneficial or negative impact on our business, financial condition and results of operations.

Comparison of the Three-Month Periods Ended June 30, 2025 and 2024

Net Sales

Net sales consist primarily of sales generated by our SemiCab managed services logistics platform and sales of our Singing Machine karaoke products. Net sales increased $276,000 to $2,716,000 for the three-month period ended June 30, 2025, compared to $2,440,000 for the three-month period ended June 30, 2024. The increase in net sales was due primarily to net sales generated by our SemiCab business. This was partially offset by a decrease in net sales of our Singing Machine karaoke products due to the negative impact on our business from recently implemented tariffs on our products manufactured in China. We sold our Singing Machine business on August 1, 2025. As a result, we will no longer be generating any revenue from that business line. However, we anticipate total revenue to increase over the next 12 months as growth in revenue generated by our SemiCab business exceeds the loss in net sales of our Singing Machine karaoke products.

Cost of Goods Sold

Cost of goods sold consists primarily of costs for raw materials and the manufacturing of our Singing Machine karaoke products, and freight, handling and servicing costs that we incur in connection with our SemiCab business. Cost of goods sold decreased $354,000 to $1,762,000 for the three-month period ended June 30, 2025, compared to $2,116,000 for the three-month period ended June 30, 2024. The decrease in cost of goods sold was due primarily to a decrease in cost of goods sold for our Singing Machine karaoke products associated with lower net sales of these products. This was partially offset by freight, handling and servicing costs that we incurred in connection with our SemiCab business. We expect costs of goods sold to increase over the next 12 months in connection with the increase in net sales that we expect to generate from our SemiCab business. We expect this increase to be partially offset by the reduction in cost of goods sold that we will realize as a result of the sale of our Singing Machine business.

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Operating Expenses

Operating expenses consist of selling expenses and general and administrative expenses.

Selling Expenses

Selling expenses consist primarily of marketing and advertising expenses that we incur in connection with advertising campaigns and online advertising initiatives that we engage in to generate sales of our Singing Machine karaoke products. We did not incur any selling expenses in connection with our SemiCab business. Selling expenses decreased $313,000 to $234,000 for the three-month period ended June 30, 2025, from $547,000 for the three-month period ended June 30, 2024. The decrease was due primarily to a decrease in marketing and advertising expenses commensurate with the decrease in sales of our Singing Mahine karaoke products. We expect selling expenses to decrease substantially over the next 12 months due to the sale of our Singing Machine business.

General and Administrative Expenses

General and administrative expenses consist primarily of payroll expenses, legal and accounting expenses, warehouse expenses and rent expense associated with our Singing Machine business, and general and administrative expenses incurred in the development and growth of our SemiCab business. General and administrative expenses decreased $551,000 to $1,502,000 for the three-month period ended June 30, 2025, compared to $2,053,000 for the three-month period ended June 30, 2024. The decrease was due primarily to decreases in general and administrative expenses incurred by our Singing Machine business, partially offset by increases in general and administrative expenses incurred in the growth and development of our SemiCab business. We expect general and administrative expenses to decrease over the next 12 months due to the sale of our Singing Machine business. We expect the reductions achieved to be partially offset by an increase in expenses that we expect to incur as we continue to invest in the growth and development of our SemiCab business.

Operating Lease Impairment Expense

Operating lease impairment expense consists of the write off of assets including security deposits, rent deposits and right of use assets that we incurred due to our abandonment of our agreement of lease, dated August 23, 2023, with OAC 111 Flatiron, LLC and OAC Adelphi, LLC, during the three months ended June 30, 2024. Operating lease impairment expense was $3,878,000 for the three months ended June 30, 2024. We did not incur any operating lease impairment expense for the three months ended June 30, 2025. We do not expect to incur any additional operating lease impairment expenses during the next 12 months.

31

Other Expenses

Other expenses consist of financing costs that we incurred under our loan and security agreement, dated March 28, 2024, with Oxford Business Credit and other non-operating expenses that we incurred in connection with our SemiCab business. Other expenses increased $10,000 to $27,000 for the three months ended June 30, 2025, compared to $17,000 for the three-month period ended June 30, 2024. We terminated the loan agreement and security agreement on October 17, 2024. We may incur additional financing costs during the next 12 months, and expect to continue to incur additional non-operating expenses in connection with our SemiCab business.

Net Loss Attributable to Non-Controlling Interests

Net loss attributable to non-controlling interests consists of the loss allocated to SemiCab, Inc., which owned a 20% of the outstanding membership interests of SemiCab Holdings until May 2, 2025, and Ajesh Kapoor and Vivek Sehgal, who collectively owned 20% of the outstanding membership interests of SemiCab Holdings beginning May 2, 2025. SemiCab Holdings owns our SemiCab business. We acquired our SemiCab business from SemiCab, Inc. on July 3, 2024, and, as part of the transaction, granted SemiCab, Inc. a 20% membership interest in SemiCab Holdings. The net loss attributable to non-controlling interest of $224,000 represents the amount of loss incurred by SemiCab that was allocated to SemiCab, Inc. through its 20% membership interest in SemiCab Holdings for period beginning April 1, 2025 and ending May 2, 2025, and the amount of loss incurred by SemiCab that was allocated to Ajesh Kapoor and Vivek Sehgal through their collective 20% membership interest in SemiCab Holdings for the period beginning May 2, 2025 and ending June 30, 2025. We expect net loss attributable to non-controlling interest to increase over the next 12 months as we continue to invest in the development and growth of SemiCab’s business.

Comparison of the Six-Month Periods Ended June 30, 2025 and 2024

Net Sales

Net sales decreased $157,000 to $4,709,000 for the six-month period ended June 30, 2025, compared to $4,866,000 for the six-month period ended June 30, 2024. The decrease in net sales was due primarily to a decrease in net sales of our Singing Machine karaoke products due to the negative impact on our business from recently implemented tariffs on our products manufactured in China. This was partially offset by the increase in net sales that we generated from our SemiCab business.

Cost of Goods Sold

Cost of goods sold decreased $785,000 to $3,255,000 for the six-month period ended June 30, 2025, compared to $4,040,000 for the six-month period ended June 30, 2024. The decrease in cost of goods sold was due primarily to our decrease in net sales of our karaoke products and the corresponding decrease in karaoke products manufactured, resulting in lower manufacturing costs. We incurred only a minimal amount of costs in connection with our SemiCab business. This was partially offset by an increase in cost of goods sold associated with the increase in net sales that we generated from our SemiCab business.

32

Operating Expenses

Selling Expenses

Selling expenses decreased $179,000 to $998,000 for the six-month period ended June 30, 2025, from $1,177,000 for the six-month period ended June 30, 2024. The decrease was due primarily to a decrease in marketing and advertising expenses commensurate with the decrease in sales of our Singing Machine karaoke products. We did not incur any selling expenses in connection with our SemiCab business.

General and Administrative Expenses

General and administrative expenses decreased $164,000 to $4,048,000 for the six-month period ended June 30, 2025, compared to $4,212,000 for the six-month period ended June 30, 2024. The decrease was due primarily to decreases in general and administrative expenses incurred by our Singing Machine business, partially offset by increases in general and administrative expenses incurred in the growth and development of our SemiCab business.

Operating Lease Impairment Expense

Operating lease impairment expense was $3,878,000 for the six months ended June 30, 2024. We did not incur any operating lease impairment expense for the three months ended June 30, 2025.

Other Expenses

Other expenses consists primarily of a non-cash loss that we incurred for the change in fair value of the warrants in connection with the public offering of securities that we completed on December 6, 2024. Other expenses increased $6,466,000 to $6,511,000 for the six-month period ended June 30, 2025, compared to $45,000 for the six-month period ended June 30, 2024. The increase was due primarily to an increase of $6,468,000 for the change in fair value of warrants. We incurred only a minimal amount of other expenses in connection with our SemiCab business.

Net Loss Attributable to Non-Controlling Interests

The net loss attributable to non-controlling interest of $327,000 represents the amount of loss incurred by SemiCab that was allocated to SemiCab, Inc. through its 20% membership interest in SemiCab Holdings for period beginning January 1, 2025 and ending May 2, 2025, and the amount of loss incurred by SemiCab that was allocated to Ajesh Kapoor and Vivek Sehgal through their collective 20% membership interest in SemiCab Holdings for the period beginning May 2, 2025 and ending June 30, 2025.

Liquidity And Capital Resources

Since our inception, we have funded our operations primarily through cash generated by our operations, private sales of equity securities and the use of short- and long-term debt. As of June 30, 2025, our cash balance was $1,134,000.

33

Net cash used by operating activities was $5,436,000 during the six-month period ended June 30, 2025, compared to $5,410,000 during the six-month period ended June 30, 2024. The increase of $26,000 was due primarily to an increase of $6,468,000 for change in fair value of warrants that we incurred in connection with the public offering of securities that we completed on December 6, 2024. This was partially offset by a decrease of $3,878,000 for impairment expense and an increase of $1,617,000 for net loss.

Net cash used by investing activities was $1,359,000 during the six-month period ended June 30, 2025, compared to $6,000 during the six-month period ended June 30, 2024. The increase of $1,353,000 was due primarily to increases of $758,000 for repurchases of shares of our common stock and $1,172,000 for advances to SMCB under out loan agreement with them, partially offset by an increase of $593,000 for cash received in connection with our acquisition of SMCB on May 2, 2025.

Net cash provided by financing activities was $379,000 for the six-month period ended June 30, 2025, compared to net cash used in financing activities of $42,000 for the six-month period ended June 30, 2024. The difference of $421,000 was due primarily to an increase of $379,000 for proceeds from the issuance of promissory notes payable.

Our limited cash resources along with our recent history of recurring operating losses and decreases in working capital create substantial doubt about our ability to continue as a going concern. To date, our capital needs have been met through cash generated by our operations, sales of our equity securities and the use of short- and long-term debt to fund our operations. We have used these sources of capital to pay virtually all of the costs and expenses that we have incurred to date. These costs and expenses have been comprised primarily of the professional fees, employee compensation expenses, and general and administrative expenses discussed above. We intend to continue to rely upon each of these sources to fund our operations and expansion efforts, including additional acquisitions of controlling or non-controlling financial interests in other complementary businesses and companies during the next 12 months.

We can provide no assurance that these sources of capital will be adequate to fund our operations and expansion efforts during the next 12 months. If these sources of capital are not adequate, we will need to obtain additional capital through alternative sources of financing. We may attempt to obtain additional capital through the sale of equity securities or the issuance of short- and long-term debt. If we raise additional funds by issuing shares of our common stock, our stockholders will experience dilution. If we raise additional funds by issuing securities exercisable or convertible into shares of our common stock, our stockholders will experience dilution in the event the securities are exercised or converted, as the case may be, into shares of our common stock. Debt financing may involve agreements containing covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, issuing equity securities, making capital expenditures for certain purposes or above a certain amount, or declaring dividends. In addition, any equity securities or debt that we issue may have rights, preferences and privileges senior to those of the shares of common stock held by our stockholders.

34

We have 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 us, if at all. Our ability to obtain additional capital will be subject to a number of factors, including market conditions and our operating performance. These factors may make the timing, amount, terms and conditions of any proposed future financing transactions unattractive to us. If we cannot raise additional capital when needed, or if such capital cannot be obtained on acceptable terms, we may not be able to pay our costs and expenses as they are incurred, take advantage of future acquisition opportunities, respond to competitive pressures or unanticipated events, or otherwise execute upon our business plan. This may adversely affect our business, financial condition and results of operations and, in the extreme case, cause us to discontinue our operations.

Off-Balance Sheet Arrangements

As of June 30, 2025, we did not have any relationships with unconsolidated entities or financial partners, such as entities often referred to as structured finance or special purpose entities, that had been established for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

Critical Accounting Estimates

Our interim financial statements were prepared in accordance with United States generally accepted accounting principles, which require management to make subjective decisions, assessments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions increases, such judgements become even more subjective. While management believes that its assumptions are reasonable and appropriate, actual results may be materially different than estimated. Our critical accounting estimates and assumptions have not materially changed from those identified in our Annual Report on Form 10-K for the year ended December 31, 2024.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for small reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Our principal executive officer and principal financial officer, with the assistance of other members of our management, have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Based upon this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and is accumulated and communicated to our management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

35

Our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was not effective at December 31, 2024 due to the material weaknesses described below.

1. We lacked sufficient resources in our accounting department, restricting our ability to review and approve certain material journal entries which increases the likelihood that a material misstatement of interim or annual financial statements might not be prevented.

2. We lacked sufficient resources in our accounting department, which resulted in our inability to have proper segregation of duties for the preparation, review and approval of certain material reconciliations related to financial reporting in a timely manner.

3. Due to our lack of sufficient resource restrictions in our accounting department, we have not established a three-way match of documents or other controls precise enough to detect a material misstatement in revenue.

To remediate these material weaknesses, we intend to conduct a thorough review of the accounting department to ensure that the staff has the appropriate training and experience. We may hire one or more accounting persons to assist us with our accounting and financial reporting function. We also intend to implement more comprehensive written policies and procedures that address separation of duties and proper accounting and financial reporting.

Despite the material weaknesses identified above, we believe that the condensed consolidated financial statements included in the period covered by this report fairly present, in all material aspects, our financial condition, results of operations and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles.

Changes in Internal Controls over Financial Reporting

During our fiscal quarter ended June 30, 2025, there were no additional changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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.

There were no other material changes to the disclosures made in Part I – Item 3. Legal Proceedings of our Annual Report on Form 10-K for our fiscal year ended December 31, 2024 and Part II – Other Information – Item 1. Leal Proceedings of our Quarterly Report on Form 10-Q for our fiscal quarter ended March 31, 2025 regarding these matters.

Item 1A. Risk Factors

Not required for small reporting companies.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On May 2, 2025, we and SemiCab Holdings entered into an equity purchase agreement with SemiCab Inc. pursuant to which: (i) SemiCab Holdings purchased 9,999 shares of the issued and outstanding equity shares, Rs. 10 par value, of SMCB, representing 99.99% of the issued and outstanding equity shares of SMCB, for $1,750,000, the payment of which amount was evidenced by the issuance of a promissory note by us to SemiCab, Inc., and (ii) we purchased the 20% membership interest in SemiCab Holdings then held by SemiCab, Inc. for aggregate consideration consisting of 119,742 shares of our common stock. The acquisition was completed on May 2, 2025. The shares of common stock were issued to SemiCab, Inc. in a private placement transaction that was exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act directly by us without engaging in any advertising or general solicitation of any kind and without payment of underwriting discounts or commissions to any person.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Rule 10b5-1 Trading Arrangements

During the three-month period ended June 30, 2025, none of our officers or directors adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408(a) of Regulation S-K.

37

Item 6. Exhibits

The documents set forth below are filed as exhibits to this report. Where so indicated, exhibits that were previously filed with the SEC are incorporated by reference herein.

Exhibit No.	Description
10.1	Equity Purchase Agreement, dated May 2, 2025, by and among Algorhythm Holdings, Inc., SemiCab Holdings, LLC and SemiCab, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 8, 2025)
10.2	Promissory Note, dated May 2, 2025, issued by Algorhythm Holdings, Inc. in favor of SemiCab, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 8, 2025)
10.3	Amended and Restated Limited Liability Company Agreement of SemiCab Holdings, LLC, dated May 2, 2025, by and among Algorhythm Holdings, Inc., SemiCab Holdings, LLC, Ajesh Kapoor and Vivek Sehgal (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 8, 2025)
10.4	Asset Purchase Agreement, dated August 1, 2025, by and among Algorhythm Holdings, Inc., The Singing Machine Company, Inc. and Stingray Music USA, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 7, 2025)
31.1*	Certification of Chief Executive Officer required by Rule 13a-14(a) or 15d-14(a)
31.2*	Certification of Chief Financial Officer required by Rule 13a-14(a) or 15d-14(a)
32.1**	Certification of Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

*	Filed herewith
**	Furnished herewith.

38

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ALGORHYTHM HOLDINGS, INC.
Date: August 19, 2025	By:	/s/ Gary Atkinson
		Gary Atkinson
		Chief Executive Officer
		(Principal Executive Officer)
Date: August 19, 2025	By:	/s/ Alex Andre
		Alex Andre
		Chief Financial Officer & General Counsel
		(Principal Financial and Accounting Officer)

39

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Gary Atkinson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Algorhythm Holdings, Inc. for the period ended June 30, 2025;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 19, 2025	/s/ Gary Atkinson
	Gary Atkinson
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Alex Andre, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Algorhythm Holdings, Inc. for the period ended June 30, 2025;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 19, 2025	/s/ Alex Andre
	Alex Andre
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Algorhythm Holdings, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: August 19, 2025	By:	/s/ Gary Atkinson
	Name:	Gary Atkinson
	Title:	Chief Executive Officer
		(Principal Executive Officer)
Date: August 19, 2025	By:	/s/ Alex Andre
	Name:	Alex Andre
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

XML

Cover - $ / shares	6 Months Ended
	Jun. 30, 2025	Aug. 15, 2025
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2025
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2025
Current Fiscal Year End Date	--12-31
Entity File Number	001-41405
Entity Registrant Name	ALGORHYTHM HOLDINGS, INC.
Entity Central Index Key	0000923601
Entity Tax Identification Number	95-3795478
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	6301 NW 5th Way
Entity Address, Address Line Two	Suite 2900
Entity Address, City or Town	Fort Lauderdale
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33309
City Area Code	(954)
Local Phone Number	596-1000
Title of 12(b) Security	Common Stock,
Trading Symbol	RIME
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,514,571
Entity Listing, Par Value Per Share	$ 0.01

XML

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2025	Dec. 31, 2024
Current Assets
Cash	$ 1,134,000	$ 7,550,000
Inventory	2,733,000	2,186,000
Returns asset	93,000	1,621,000
Prepaid expenses and other current assets	1,219,000	120,000
Total Current Assets	7,620,000	16,763,000
Property and equipment, net	252,000	284,000
Other non-current assets	90,000	124,000
Intangible assets, net	315,000	345,000
Goodwill	4,418,000	786,000
Total Assets	12,695,000	18,302,000
Current Liabilities
Accounts payable	1,996,000	3,808,000
Accrued expenses	3,295,000	4,224,000
Refund due to customer	1,232,000	38,000
Reserve for sales returns	521,000	3,355,000
Warrant liability		16,603,000
Other current liabilities	62,000	145,000
Total Current Liabilities	9,250,000	28,438,000
Total Liabilities	9,885,000	28,823,000
Commitments and Contingencies
Shareholders’ Equity (Deficit)
Preferred stock, $1.00 par value; 1,000,000 shares authorized; no shares issued and outstanding at June 30, 2025 and December 31, 2024
Common stock, $0.01 par value; 800,000,000 and 100,000,000 shares authorized; 2,514,571 and 470,825 shares issued and outstanding at June 30, 2025 and December 31, 2024	25,000	5,000
Additional paid-in capital	63,854,000	39,682,000
Accumulated deficit	(58,948,000)	(49,172,000)
Non-controlling interest	(1,363,000)	(1,036,000)
Treasury stock, 10,990 and 0 shares reserved at June 30, 2025 and December 31, 2024	(758,000)
Total Algorhythm Holdings Shareholders’ Equity (Deficit)	2,810,000	(10,521,000)
Total Liabilities and Shareholders’ Equity (Deficit)	12,695,000	18,302,000
Nonrelated Party [Member]
Current Assets
Accounts receivable	2,317,000	4,373,000
Current Liabilities
Promissory note payable	379,000
Related Party [Member]
Current Assets
Accounts receivable	124,000	212,000
Note receivable - related party		701,000
Current Liabilities
Promissory note payable	1,500,000
Current portion of notes payable to related parties	265,000	265,000
Notes payable to related parties, net of current portion	385,000	385,000
Promoissory note payable - SemiCab, Inc., net of current portion	$ 250,000

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2025	Dec. 31, 2024
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable, net	$ 101,000	$ 274,000
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	800,000,000	100,000,000
Common stock, shares issued	2,514,571	470,825
Common stock, shares outstanding	2,514,571	470,825
Treasury stock, shares reserved	10,990	0

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2025	Jun. 30, 2024	Jun. 30, 2025	Jun. 30, 2024
Income Statement [Abstract]
Net Sales	$ 2,716,000	$ 2,440,000	$ 4,709,000	$ 4,866,000
Cost of Goods Sold	1,762,000	2,116,000	3,255,000	4,040,000
Gross Profit	954,000	324,000	1,454,000	826,000
Operating Expenses
Selling expenses	234,000	547,000	998,000	1,177,000
General and administrative expenses	1,502,000	2,053,000	4,048,000	4,212,000
Operating lease impairment expense		3,878,000		3,878,000
Total Operating Expenses	1,736,000	6,478,000	5,046,000	9,267,000
Loss from Operations	(782,000)	(6,154,000)	(3,592,000)	(8,441,000)
Other Expenses
Change in fair value of warrant liability			(6,468,000)
Interest expense	(27,000)	(17,000)	(43,000)	(45,000)
Total Other Expenses	(27,000)	(17,000)	(6,511,000)	(45,000)
Loss Before Income Tax Benefit	(809,000)	(6,171,000)	(10,103,000)	(8,486,000)
Income Tax Benefit		52,000
Net Loss	(809,000)	(6,119,000)	(10,103,000)	(8,486,000)
Net loss attributable to non-controlling interest	224,000		327,000
Net Loss Available to Common Shareholders	$ (585,000)	$ (6,119,000)	$ (9,776,000)	$ (8,486,000)
Income (Loss) Per Common Share, Basic	$ (0.24)	$ (190.68)	$ (4.40)	$ (264.44)
Income (Loss) Per Common Share, Diluted	$ (0.24)	$ (190.68)	$ (4.40)	$ (264.44)
Weighted Average Common and Common Equivalent Shares: Basic	2,472,464	32,090	2,224,047	32,090
Weighted Average Common and Common Equivalent Shares: Diluted	2,472,464	32,090	2,224,047	32,090

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Condensed Consolidated Statements of Shareholders' Equity (Deficit) (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Noncontrolling Interest [Member]	Treasury Stock, Common [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2023	$ 64,000	$ 33,429,000			$ (25,915,000)	$ 7,578,000
Balance, shares at Dec. 31, 2023	6,418,061
Net income (loss)					(8,486,000)	(8,486,000)
Stock-based compensation		36,000				36,000
Balance at Jun. 30, 2024	$ 64,000	33,465,000			(34,401,000)	(872,000)
Balance, shares at Jun. 30, 2024	6,418,061
Balance at Dec. 31, 2023	$ 64,000	33,429,000			(25,915,000)	7,578,000
Balance, shares at Dec. 31, 2023	6,418,061
Balance at Dec. 31, 2024	$ 5,000	39,682,000	(1,036,000)		(49,172,000)	(10,521,000)
Balance, shares at Dec. 31, 2024	470,825
Balance at Mar. 31, 2024	$ 64,000	33,448,000			(28,282,000)	5,230,000
Balance, shares at Mar. 31, 2024	6,418,061
Net income (loss)					(6,119,000)	(6,119,000)
Stock-based compensation		17,000				17,000
Balance at Jun. 30, 2024	$ 64,000	33,465,000			(34,401,000)	(872,000)
Balance, shares at Jun. 30, 2024	6,418,061
Balance at Dec. 31, 2024	$ 5,000	39,682,000	(1,036,000)		(49,172,000)	(10,521,000)
Balance, shares at Dec. 31, 2024	470,825
Net income (loss)			(327,000)		(9,776,000)	(10,103,000)
Stock-based compensation		47,000				47,000
Stock based compensation, shares	23,818
Common stock issued for acquisition of SMCB	$ 1,000	315,000				316,000
Common stock issued for acquisition of SMCB, shares	119,742
Exercise of Series B warrants	$ 19,000	15,195,000				15,214,000
Exercise of Series B warrants, shares	1,910,975
Reclassification of Series A warrants to equity		7,857,000				7,857,000
Repurchase of common stock from related parties		(758,000)		758,000
Repurchase of common stock from related parties, shares	(10,990)
Other
Other, shares	201
Balance at Jun. 30, 2025	$ 25,000	63,854,000	(1,363,000)	(758,000)	(58,948,000)	2,810,000
Balance, shares at Jun. 30, 2025	2,514,571
Balance at Mar. 31, 2025	$ 24,000	63,577,000	(1,139,000)	(758,000)	(58,363,000)	3,341,000
Balance, shares at Mar. 31, 2025	2,394,829
Net income (loss)			(224,000)		(585,000)	(809,000)
Stock-based compensation		(38,000)				(38,000)
Stock based compensation, shares
Common stock issued for acquisition of SMCB	$ 1,000	315,000				316,000
Common stock issued for acquisition of SMCB, shares	119,742
Balance at Jun. 30, 2025	$ 25,000	$ 63,854,000	$ (1,363,000)	$ (758,000)	$ (58,948,000)	$ 2,810,000
Balance, shares at Jun. 30, 2025	2,514,571

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2025	Jun. 30, 2024
Cash flows from operating activities
Net loss	$ (10,103,000)	$ (8,486,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	96,000	125,000
Reduction in SMCB loan in exchange for services	304,000
Gain on allowance for credit loss	(439,000)
Change in fair value of warrant liability	6,468,000
Provision for estimated cost of returns	1,528,000	1,301,000
Provision for inventory obsolescence	4,000
Credit losses	3,000	14,000
Impairment expense		3,878,000
Reserve for sales returns	(2,834,000)	(1,217,000)
Stock-based compensation	47,000	36,000
Changes in operating assets and liabilities:
Due from banks		(187,000)
Inventories	(551,000)	(38,000)
Prepaid expenses and other current assets	(722,000)	69,000
Other non-current assets	523,000	(64,000)
Accounts payable	(2,184,000)	(3,940,000)
Accrued expenses	(1,147,000)	(771,000)
Refunds due to customers	1,194,000	(649,000)
Other liabilities	(83,000)	(281,000)
Net cash used in operating activities	(5,436,000)	(5,410,000)
Cash flows from investing activities
Purchase of property and equipment	(22,000)	(6,000)
Repurchase of shares of common stock	(758,000)
Cash received from acquisition of SMCB	593,000
Advances to SMCB	(1,172,000)
Net cash used in investing activities	(1,359,000)	(6,000)
Cash flows from financing activities
Proceeds from issuance of promissory notes, net	379,000
Other		(42,000)
Net cash provided by (used in) financing activities	379,000	(42,000)
Net change in cash	(6,416,000)	(5,458,000)
Cash at beginning of year	7,550,000	6,703,000
Cash at end of period	1,134,000	1,245,000
Supplemental disclosures of cash flow information:
Cash paid for interest	43,000	40,000
Non-Cash investing and financing cash flow information:
Reclassification of Series A warrants to equity	7,857,000
Common stock issued for exercise of Series B warrants	15,214,000
Common stock issued for acquisition of SMCB	316,000
Promissory note issued for acquisition of SMCB	1,750,000
Nonrelated Party [Member]
Changes in operating assets and liabilities:
Accounts receivable	2,372,000	4,945,000
Related Party [Member]
Changes in operating assets and liabilities:
Accounts receivable	$ 88,000	$ (145,000)

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Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2025
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Nature of Business

6 Months Ended

Jun. 30, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business

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 9,999 shares of the issued and outstanding equity shares, Rs. 10 par value, of SMCB, representing 99.99% of the issued and outstanding equity shares of SMCB, for $1,750,000, the payment of which was evidenced by the issuance of a promissory note by the Company to the SemiCab, Inc., and (ii) the Company purchased the 20% membership interest in SemiCab Holdings then held by SemiCab, Inc. for aggregate consideration consisting of 119,742 shares of the Company’s common stock. The acquisition was completed on May 2, 2025.

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Liquidity, Going Concern and Management Plans

6 Months Ended

Jun. 30, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Liquidity, Going Concern and Management Plans

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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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2025

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

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.

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.

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.

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Variable Interest Entities

6 Months Ended

Jun. 30, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

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 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

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Property and Equipment, Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2025

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 June 30, 2025 and December 31, 2024 is as follows:

	Useful		June 30,		December 31,
	Life		2025		2024
Computer and office equipment		5-7 years	$	462,000	$	412,000
Furniture and fixtures		7 years		107,000		107,000
Molds and tooling		3-5 years		2,312,000		2,297,000
				2,881,000		2,816,000
Less: accumulated depreciation				2,629,000		2,532,000
			$	252,000	$	284,000

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.

A summary of the Company’s intangible assets at June 30, 2025 and December 31, 2024 is as follows:

	Useful		June 30,		December 31,
	Life		2025		2024
Customer relationships		5-7 years	$	25,000	$	25,000
Trade names		7 years		25,000		25,000
Developed technology		3-5 years		325,000		325,000
				375,000		375,000
Less: accumulated amortization				60,000		30,000
			$	315,000	$	345,000

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.

On May 2, 2025, the Company and SemiCab Holdings acquired 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.

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Notes Payable to Related Parties

6 Months Ended

Jun. 30, 2025

Debt Disclosure [Abstract]

Notes Payable to Related Parties

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:

	Issue		Maturity				Interest
Note Holder	Date		Date		Status		Rate			Principal
Ajesh Kapoor		7/10/2021		7/10/2026		Current		9	%	$	150,000
Ajesh Kapoor		8/27/2021		8/26/2026		Current		9	%		235,000
Vivek Sehgal		4/17/2023		2/1/2026		Current		10	%		50,000
Ajesh Kapoor		5/5/2023		2/1/2026		Current		10	%		50,000
Ajesh Kapoor		5/17/2023		2/1/2026		Current		10	%		165,000
Balance as of June 30, 2025										$	650,000
Less: current portion of notes payable to related parties											265,000
Notes payable to related parties, net of current portion										$	385,000

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 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 $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.

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Credit Facilities and Other Financing Arrangements

6 Months Ended

Jun. 30, 2025

Credit Facilities And Other Financing Arrangements

Credit Facilities and Other Financing Arrangements

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 $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 $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 $300,000. Repayment terms consisted of weekly payments in the amount of $16,200 for 28 weeks for a total repayment of $453,600. The effective interest rate for the borrowings was 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 18% per year. As of December 31, 2024, the merchant cash advance had been repaid in full.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2025

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

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.

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 24^th 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.

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.

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Stock Compensation Expense

6 Months Ended

Jun. 30, 2025

Equity [Abstract]

Stock Compensation Expense

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 1,667 shares of common stock authorized for issuance under the plan. Of this amount, awards representing 1,183 shares of common stock had been granted under the plan and 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.

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Net Loss Per Share

6 Months Ended

Jun. 30, 2025

Earnings Per Share [Abstract]

Net Loss Per Share

Note 10 – Net Loss Per Share

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:

	Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	June 30, 2025			June 30, 2024			June 30, 2025			June 30, 2024
Net loss available to common shareholders	$	(585,000	)	$	(6,119,000	)	$	(9,776,000	)	$	(8,486,000	)
Basic and diluted weighted average of common stock outstanding		2,472,464			32,090			2,224,047			32,090
Loss per common share	$	(0.24	)	$	(190.68	)	$	(4.40	)	$	(264.44	)

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:

	Three Months		Three Months		Six Months		Six Months
	Ended		Ended		Ended		Ended
	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
Basic weighted average common shares outstanding		2,472,464		32,090		2,224,047		32,090
Effect of dilutive stock options and warrants		-		-		-		-
Diluted weighted average of common shares outstanding		2,472,464		32,090		2,224,047		32,090

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.

For the three and six months ended June 30, 2025, 484 shares of common stock underlying stock options, respectively, and 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, 543 shares of common stock underlying stock options and 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.

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Securities Transactions

6 Months Ended

Jun. 30, 2025

Securities Transactions

Securities Transactions

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 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 $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 $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 10% per year. The Company incurred $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 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 $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.

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 $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 $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 21,000 shares of its common stock, pre-funded warrants to purchase up to 258,412 shares of common stock, Series A warrants to purchase up to 279,412 shares of common stock, and Series B warrants to purchase up to 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 $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 $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 $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 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.

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 $120,000. The note is subject to a one-time interest charge of 12%, or approximately $14,000, and is payable in 12 monthly installments of $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 $84,000 after deductions of $15,000 for original issue discount, $16,000 for placement agent fees and $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 $240,000. The note is subject to a one-time interest charge of 12%, or approximately $29,000. An initial payment of $134,000 is due on December 15, 2025. Thereafter, the remainder is payable in six monthly installments of $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 $189,000 after deductions of $30,000 for original issue discount, $16,000 for placement agent fees and $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 $120,000. The note is subject to a one-time interest charge of 12%, or approximately $14,000, and is payable in 12 monthly installments of $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 $105,000 after deductions of $15,000 for original issue discount.

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Derivative Liability

6 Months Ended

Jun. 30, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Liability

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.

The key inputs for the Series A warrant liabilities were as follows:

Warrant Liability – Series A Warrants	January 17, 2025			December 31, 2024
Stock price on valuation date	$	8.38		$	18.00
Exercise price	$	8.38		$	34.00
Number of warrants		1,133,652			279,412
Remaining term (years)		4.88			4.93
Annual equity volatility		126.0	%		113.0	%
Annual volume volatility		377.0	%		379.0	%
Risk-free interest rate		4.32	%		4.29	%
Expected stockholder approval date		January 13, 2025			January 14, 2025
Expected stockholder approval probability		100	%		50	%

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.

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:

	Series A Warrants			Series B Warrants			Total Warrant Liabilities
Balance at December 31, 2024	$	5,456,000		$	11,147,000		$	16,603,000
Exercises		—			(15,214,000	)		(15,214,000	)
Loss on change in fair value		2,401,000			4,067,000			6,468,000
Reclassification to equity		(7,857,000	)		—			(7,857,000	)
Balance at June 30, 2025	$	—		$	—		$	—

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:

	Series A Warrants		Series B Warrants			Other Warrants		Total
Balance at December 31, 2024		279,412		279,412			4,511		563,335
Exercises		—		(279,412	)		—		(279,412	)
Balance at June 30, 2025		279,412		—			4,511		283,923

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.

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Income Taxes

6 Months Ended

Jun. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

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.

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Segment Information and Revenue Disaggregation

6 Months Ended

Jun. 30, 2025

Segment Reporting [Abstract]

Segment Information and Revenue Disaggregation

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.

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

	Three Months Ended June 30, 2025									Three Months Ended June 30, 2024								Six Months Ended June 30, 2025									Six Months Ended June 30, 2024
	Singing									Singing								Singing									Singing
	Machine			SemiCab			Total			Machine			SemiCab		Total			Machine			SemiCab			Total			Machine			SemiCab		Total
Revenues	$	1,564,000		$	1,152,000		$	2,716,000		$	2,440,000		$	-	$	2,440,000		$	3,434,000		$	1,275,000		$	4,709,000		$	4,866,000		$	-	$	4,866,000
Less:
Adjusted cost of revenues		270,000			1,492,000			1,762,000			2,116,000			-		2,116,000			1,634,000			1,621,000			3,255,000			4,040,000			-		4,040,000
Adjusted sales and marketing		234,000			-			234,000			547,000			-		547,000			998,000			-			998,000			1,177,000			-		1,177,000
Adjusted general and administrative (1)		751,000			744,000			1,495,000			1,982,000			-		1,982,000			2,684,000			1,224,000			3,908,000			4,070,000			-		4,070,000
Adjusted depreciation and amortization		28,000			17,000			45,000			54,000			-		54,000			61,000			32,000			93,000			106,000			-		106,000
Adjusted impairement of ROU lease		-			-			-			3,878,000			-		3,878,000			-			-			-			3,878,000			-		3,878,000
Share based compensation		(38,000	)		-			(38,000	)		17,000			-		17,000			47,000			-			47,000			36,000			-		36,000
Change in fair value of warrant liability		-			-			-			-			-		-			6,468,000			-			6,468,000			-			-		-
Gain on disposal of fixed assets		-			-			-			-			-		-			-			-			-			-			-		-
Loss on issuance of warrants		-			-			-			-			-		-			-			-			-			-			-		-
Interest expense		9,000			18,000			27,000			17,000			-		17,000			9,000			34,000			43,000			45,000			-		45,000
Other income (expense), net		-			-			-			-			-		-			-			-			-			-			-		-
Income tax provision		-			-			-			(52,000	)		-		(52,000	)		-			-			-			-			-		-
Segment net loss	$	310,000		$	(1,119,000	)	$	(809,000	)	$	(6,119,000	)	$	-	$	(6,119,000	)	$	(8,467,000	)	$	(1,636,000	)	$	(10,103,000	)	$	(8,486,000	)	$	-	$	(8,486,000	)
Total segment assets	$	5,244,000		$	3,033,000		$	8,277,000		$	12,367,000		$	-	$	12,367,000		$	5,244,000		$	3,033,000		$	8,277,000		$	12,367,000		$	-	$	12,367,000

⁽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 June 30, 2025:

	June 30,		December 31,
	2025		2024
Total segment assets	$	8,277,000	$	17,516,000
Goodwill		4,418,000		786,000
Total assets	$	12,695,000	$	18,302,000

The total segment assets of $17,516,000 at December 31, 2024 were comprised of $16,301,000 for the Singing Machine segment and $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:

	Three Months Ended					Six Months Ended
Product Line	June 30, 2025			June 30, 2024		June 30, 2025		June 30, 2024
Karaoke machines	$	1,533,000		$	1,257,000	$	2,275,000	$	2,308,000
Licensed products		1,000			107,000		15,000		198,000
Kids youth electronics		103,000			102,000		170,000		171,000
Microphones and accessories		(260,000	)		865,000		523,000		1,818,000
Music subscriptions		187,000			109,000		451,000		371,000
Logistics services		1,152,000			-		1,275,000		-
Total revenue	$	2,716,000		$	2,440,000	$	4,709,000	$	4,866,000

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:

	Three Months Ended				Six Months Ended
Geographic Area	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
North America	$	1,410,000	$	2,316,000	$	3,403,000	$	4,742,000
Australia		46,000		124,000		46,000		124,000
India		1,137,000		-		1,137,000		-
All Others		123,000		-		123,000		-
	$	2,716,000	$	2,440,000	$	4,709,000	$	4,866,000

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Concentrations, Risks and Uncertainties

6 Months Ended

Jun. 30, 2025

Risks and Uncertainties [Abstract]

Concentrations, Risks and Uncertainties

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.

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, 17% of accounts receivable were due from one customer in North America and 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, 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 11% and 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 37% and 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 39%, 14%, and 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 10%, 11% and 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 50%, 11%, and 10%. The loss of any of these customers could have an adverse impact on the Company.

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Related Party Transactions

6 Months Ended

Jun. 30, 2025

Related Party Transactions [Abstract]

Related Party Transactions

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 $187,000 and $451,000, respectively, from Stingray Group. For the three and six months ended June 30, 2024, the Company received music subscription revenue of $109,000 and $349,000, respectively, from Stingray Group. As of June 30, 2025 and December 31, 2024, the Company had $124,000 and $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 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.

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 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 $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 99.99% of the equity shares of SMCB, the Company made advances to SMCB in the amount of $1,172,000. During the same period, SMCB charged $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 $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.

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Acquisition of SMCB

6 Months Ended

Jun. 30, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisition of SMCB

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 9,999 shares of the issued and outstanding equity shares, Rs. 10 par value, of SMCB, representing 99.99% of the issued and outstanding equity shares of SMCB, for $1,750,000, the payment of which amount was evidenced by the issuance of a promissory note by the Company to the SemiCab, Inc., and (ii) the Company purchased the 20% membership interest in SemiCab Holdings then held by SemiCab, Inc. for aggregate consideration consisting of 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 $1,500,000 is due and payable by the Company on the first anniversary of the Closing Date and the remaining $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 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:

Consideration:
Promissory note	$	1,750,000
119,742 shares of common stock		316,000
Assumption of debt		2,008,000
Total	$	4,074,000
Identifiable net assets acquired:
Cash and cash equivalents	$	593,000
Accounts receivable, net		319,000
Prepaid expenses and other current assets		377,000
Property and equipment, net		11,000
Other non-current assets		489,000
Accounts payable and accrued expenses		(372,000	)
Other current liabilities		(975,000	)
Net assets acquired		442,000
Goodwill	$	3,632,000

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.

	Six Months Ended
	June 30, 2025			June 30, 2024
Net revenue	$	7,438,000		$	6,135,000
Operating loss from continuing operations		(4,539,000	)		(8,689,000	)
Net loss	$	(11,313,000	)	$	(8,735,000	)

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Subsequent Events

6 Months Ended

Jun. 30, 2025

Subsequent Events [Abstract]

Subsequent Events

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 $368,000. The note is subject to a one-time interest charge of $162,000 and is payable in 28 weekly installments of $19,000 commencing on July 14, 2025. The Company received net proceeds of $350,000 after deductions of $18,000 for administrative agent fees.

Sale of Singing Machine Business

On August 1, 2025, the 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.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2025

Accounting Policies [Abstract]

Basis of Presentation

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.

Segment Reporting

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

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.

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.

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Property and Equipment, Intangible Assets and Goodwill (Tables)

6 Months Ended

Jun. 30, 2025

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

A summary of the Company’s property and equipment at June 30, 2025 and December 31, 2024 is as follows:

	Useful		June 30,		December 31,
	Life		2025		2024
Computer and office equipment		5-7 years	$	462,000	$	412,000
Furniture and fixtures		7 years		107,000		107,000
Molds and tooling		3-5 years		2,312,000		2,297,000
				2,881,000		2,816,000
Less: accumulated depreciation				2,629,000		2,532,000
			$	252,000	$	284,000

Schedule of Intangible Assets

A summary of the Company’s intangible assets at June 30, 2025 and December 31, 2024 is as follows:

	Useful		June 30,		December 31,
	Life		2025		2024
Customer relationships		5-7 years	$	25,000	$	25,000
Trade names		7 years		25,000		25,000
Developed technology		3-5 years		325,000		325,000
				375,000		375,000
Less: accumulated amortization				60,000		30,000
			$	315,000	$	345,000

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Notes Payable to Related Parties (Tables)

6 Months Ended

Jun. 30, 2025

Debt Disclosure [Abstract]

Schedule of Notes Payable to Related Parties Loan

The terms of each loan are summarized in the table below:

	Issue		Maturity				Interest
Note Holder	Date		Date		Status		Rate			Principal
Ajesh Kapoor		7/10/2021		7/10/2026		Current		9	%	$	150,000
Ajesh Kapoor		8/27/2021		8/26/2026		Current		9	%		235,000
Vivek Sehgal		4/17/2023		2/1/2026		Current		10	%		50,000
Ajesh Kapoor		5/5/2023		2/1/2026		Current		10	%		50,000
Ajesh Kapoor		5/17/2023		2/1/2026		Current		10	%		165,000
Balance as of June 30, 2025										$	650,000
Less: current portion of notes payable to related parties											265,000
Notes payable to related parties, net of current portion										$	385,000

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Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2025

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Loss Per Share

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:

	Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	June 30, 2025			June 30, 2024			June 30, 2025			June 30, 2024
Net loss available to common shareholders	$	(585,000	)	$	(6,119,000	)	$	(9,776,000	)	$	(8,486,000	)
Basic and diluted weighted average of common stock outstanding		2,472,464			32,090			2,224,047			32,090
Loss per common share	$	(0.24	)	$	(190.68	)	$	(4.40	)	$	(264.44	)

Schedule of Diluted Weighted Average Number of Shares

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:

	Three Months		Three Months		Six Months		Six Months
	Ended		Ended		Ended		Ended
	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
Basic weighted average common shares outstanding		2,472,464		32,090		2,224,047		32,090
Effect of dilutive stock options and warrants		-		-		-		-
Diluted weighted average of common shares outstanding		2,472,464		32,090		2,224,047		32,090

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Derivative Liability (Tables)

6 Months Ended

Jun. 30, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Warrant Liabilities

The key inputs for the Series A warrant liabilities were as follows:

Warrant Liability – Series A Warrants	January 17, 2025			December 31, 2024
Stock price on valuation date	$	8.38		$	18.00
Exercise price	$	8.38		$	34.00
Number of warrants		1,133,652			279,412
Remaining term (years)		4.88			4.93
Annual equity volatility		126.0	%		113.0	%
Annual volume volatility		377.0	%		379.0	%
Risk-free interest rate		4.32	%		4.29	%
Expected stockholder approval date		January 13, 2025			January 14, 2025
Expected stockholder approval probability		100	%		50	%

Schedule of Fair Value of the Derivative Liabilities

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:

	Series A Warrants			Series B Warrants			Total Warrant Liabilities
Balance at December 31, 2024	$	5,456,000		$	11,147,000		$	16,603,000
Exercises		—			(15,214,000	)		(15,214,000	)
Loss on change in fair value		2,401,000			4,067,000			6,468,000
Reclassification to equity		(7,857,000	)		—			(7,857,000	)
Balance at June 30, 2025	$	—		$	—		$	—

Schedule of Shares of Common Stock Underlying Warrants

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:

	Series A Warrants		Series B Warrants			Other Warrants		Total
Balance at December 31, 2024		279,412		279,412			4,511		563,335
Exercises		—		(279,412	)		—		(279,412	)
Balance at June 30, 2025		279,412		—			4,511		283,923

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Segment Information and Revenue Disaggregation (Tables)

6 Months Ended

Jun. 30, 2025

Segment Reporting [Abstract]

Schedule of Details the Revenue, Significant expenses and Other Segment

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

	Three Months Ended June 30, 2025									Three Months Ended June 30, 2024								Six Months Ended June 30, 2025									Six Months Ended June 30, 2024
	Singing									Singing								Singing									Singing
	Machine			SemiCab			Total			Machine			SemiCab		Total			Machine			SemiCab			Total			Machine			SemiCab		Total
Revenues	$	1,564,000		$	1,152,000		$	2,716,000		$	2,440,000		$	-	$	2,440,000		$	3,434,000		$	1,275,000		$	4,709,000		$	4,866,000		$	-	$	4,866,000
Less:
Adjusted cost of revenues		270,000			1,492,000			1,762,000			2,116,000			-		2,116,000			1,634,000			1,621,000			3,255,000			4,040,000			-		4,040,000
Adjusted sales and marketing		234,000			-			234,000			547,000			-		547,000			998,000			-			998,000			1,177,000			-		1,177,000
Adjusted general and administrative (1)		751,000			744,000			1,495,000			1,982,000			-		1,982,000			2,684,000			1,224,000			3,908,000			4,070,000			-		4,070,000
Adjusted depreciation and amortization		28,000			17,000			45,000			54,000			-		54,000			61,000			32,000			93,000			106,000			-		106,000
Adjusted impairement of ROU lease		-			-			-			3,878,000			-		3,878,000			-			-			-			3,878,000			-		3,878,000
Share based compensation		(38,000	)		-			(38,000	)		17,000			-		17,000			47,000			-			47,000			36,000			-		36,000
Change in fair value of warrant liability		-			-			-			-			-		-			6,468,000			-			6,468,000			-			-		-
Gain on disposal of fixed assets		-			-			-			-			-		-			-			-			-			-			-		-
Loss on issuance of warrants		-			-			-			-			-		-			-			-			-			-			-		-
Interest expense		9,000			18,000			27,000			17,000			-		17,000			9,000			34,000			43,000			45,000			-		45,000
Other income (expense), net		-			-			-			-			-		-			-			-			-			-			-		-
Income tax provision		-			-			-			(52,000	)		-		(52,000	)		-			-			-			-			-		-
Segment net loss	$	310,000		$	(1,119,000	)	$	(809,000	)	$	(6,119,000	)	$	-	$	(6,119,000	)	$	(8,467,000	)	$	(1,636,000	)	$	(10,103,000	)	$	(8,486,000	)	$	-	$	(8,486,000	)
Total segment assets	$	5,244,000		$	3,033,000		$	8,277,000		$	12,367,000		$	-	$	12,367,000		$	5,244,000		$	3,033,000		$	8,277,000		$	12,367,000		$	-	$	12,367,000

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

Schedule of Reconcilation of Segment Assets to Consolidated

The following reconciles total segment assets to consolidated total assets as of June 30, 2025:

	June 30,		December 31,
	2025		2024
Total segment assets	$	8,277,000	$	17,516,000
Goodwill		4,418,000		786,000
Total assets	$	12,695,000	$	18,302,000

Schedule of Revenue by Product Line

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:

	Three Months Ended					Six Months Ended
Product Line	June 30, 2025			June 30, 2024		June 30, 2025		June 30, 2024
Karaoke machines	$	1,533,000		$	1,257,000	$	2,275,000	$	2,308,000
Licensed products		1,000			107,000		15,000		198,000
Kids youth electronics		103,000			102,000		170,000		171,000
Microphones and accessories		(260,000	)		865,000		523,000		1,818,000
Music subscriptions		187,000			109,000		451,000		371,000
Logistics services		1,152,000			-		1,275,000		-
Total revenue	$	2,716,000		$	2,440,000	$	4,709,000	$	4,866,000

Schedule of Revenue by Revenue by Geographic Region

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:

	Three Months Ended				Six Months Ended
Geographic Area	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
North America	$	1,410,000	$	2,316,000	$	3,403,000	$	4,742,000
Australia		46,000		124,000		46,000		124,000
India		1,137,000		-		1,137,000		-
All Others		123,000		-		123,000		-
	$	2,716,000	$	2,440,000	$	4,709,000	$	4,866,000

XML

Acquisition of SMCB (Tables)

6 Months Ended

Jun. 30, 2025

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Schedule of Business Acquisition

Consideration:
Promissory note	$	1,750,000
119,742 shares of common stock		316,000
Assumption of debt		2,008,000
Total	$	4,074,000
Identifiable net assets acquired:
Cash and cash equivalents	$	593,000
Accounts receivable, net		319,000
Prepaid expenses and other current assets		377,000
Property and equipment, net		11,000
Other non-current assets		489,000
Accounts payable and accrued expenses		(372,000	)
Other current liabilities		(975,000	)
Net assets acquired		442,000
Goodwill	$	3,632,000

Schedule of Pro Forma Financial Information

	Six Months Ended
	June 30, 2025			June 30, 2024
Net revenue	$	7,438,000		$	6,135,000
Operating loss from continuing operations		(4,539,000	)		(8,689,000	)
Net loss	$	(11,313,000	)	$	(8,735,000	)

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Nature of Business (Details Narrative) - USD ($)	May 02, 2025	Jan. 13, 2025	Jun. 30, 2025	Dec. 31, 2024
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
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 February 10, 2025. All current and prior year balances have been adjusted to reflect the reverse stock split.
Common stock, par value			$ 0.01	$ 0.01
Equity Purchase Agreement [Member] | Semi Cab Inc [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Membership interest percentage	20.00%
Semi Cab Holdings [Member] | Equity Purchase Agreement [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Stock issued during period shares acquisitions	9,999
Common stock, par value	$ 10
Semi Cab Inc [Member] | Equity Purchase Agreement [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Debt Instrument, Face Amount	$ 1,750,000
Aggregate consideration consisting shares	119,742
Semi Cab Holdings LLC [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Ownership percentage			80.00%

XML

Liquidity, Going Concern and Management Plans (Details Narrative) - USD ($)	Jun. 30, 2025	Dec. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash	$ 1,134,000	$ 7,550,000

XML

Summary of Significant Accounting Policies (Details Narrative)	6 Months Ended
	Jun. 30, 2025 Segment
Accounting Policies [Abstract]
Number of operating segments	1

XML

Variable Interest Entities (Details Narrative)	May 02, 2025
Semi Cab Inc [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Common stock issued for purchase ownership percentage	99.99%

XML

Schedule of Property and Equipment (Details) - USD ($)	Jun. 30, 2025	Dec. 31, 2024
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 2,881,000	$ 2,816,000
Less: accumulated depreciation	2,629,000	2,532,000
Property and equipment net	252,000	284,000
Computer and Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 462,000	412,000
Computer and Office Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life	5 years
Computer and Office Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life	7 years
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 107,000	107,000
Useful life	7 years
Molds and Tooling [Member]
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 2,312,000	$ 2,297,000
Molds and Tooling [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life	3 years
Molds and Tooling [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life	5 years

XML

Schedule of Intangible Assets (Details) - USD ($)	Jun. 30, 2025	Dec. 31, 2024
Property, Plant and Equipment [Line Items]
Customer relationships	$ 25,000	$ 25,000
Trade names	25,000	25,000
Developed technology	325,000	325,000
Intangible assets gross	375,000	375,000
Less: accumulated amortization	60,000	30,000
Intangible assets net	$ 315,000	$ 345,000
Customer Relationships [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life	5 years
Customer Relationships [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life	7 years
Trade Names [Member]
Property, Plant and Equipment [Line Items]
Useful life	7 years
Developed Technology Rights [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life	3 years
Developed Technology Rights [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life	5 years

XML

Property and Equipment, Intangible Assets and Goodwill (Details Narrative) - USD ($)		3 Months Ended		6 Months Ended
	May 02, 2025	Jun. 30, 2025	Jun. 30, 2024	Jun. 30, 2025	Jun. 30, 2024	Dec. 31, 2024
Depreciation expense		$ 31,000	$ 53,000	$ 64,000	$ 105,000
Amortization expense		17,000		32,000
Impairment of goodwill				0
Goodwill		4,418,000		4,418,000		$ 786,000
Additional godwill	$ 3,632,000
Semi Cab Inc [Member]
Goodwill		$ 786,000		$ 786,000
Common stock issued for purchase ownership percentage	99.99%

XML

Schedule of Notes Payable to Related Parties Loan (Details) - USD ($)	May 17, 2023	May 05, 2023	Apr. 17, 2023	Aug. 27, 2021	Jul. 10, 2021	Jun. 30, 2025	Dec. 31, 2024	May 18, 2023
Defined Benefit Plan Disclosure [Line Items]
Interest rate								17.97%
Ajesh Kapoor [Member]
Defined Benefit Plan Disclosure [Line Items]
Maturity date	Feb. 01, 2026	Feb. 01, 2026		Aug. 26, 2026	Jul. 10, 2026
Interest rate	10.00%	10.00%		9.00%	9.00%
Balance	$ 165,000	$ 50,000		$ 235,000	$ 150,000
Vivek Seghal [Member]
Defined Benefit Plan Disclosure [Line Items]
Maturity date			Feb. 01, 2026
Interest rate			10.00%
Balance			$ 50,000
Related Party [Member]
Defined Benefit Plan Disclosure [Line Items]
Balance						$ 650,000
Less: current portion of notes payable to related parties						265,000
Notes payable to related parties, net of current portion						$ 385,000	$ 385,000

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Notes Payable to Related Parties (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2025	Jun. 30, 2025	May 02, 2025	Feb. 18, 2025
Semi Cab Inc [Member] | Equity Purchase Agreement [Member]
Defined Benefit Plan Disclosure [Line Items]
Debt Instrument, Face Amount			$ 1,750,000
Semi Cab Inc [Member]
Defined Benefit Plan Disclosure [Line Items]
Common stock issued for purchase ownership percentage			99.99%
Stingray Group [Member]
Defined Benefit Plan Disclosure [Line Items]
Promissory note				$ 286,000
Regalia Ventures [Member]
Defined Benefit Plan Disclosure [Line Items]
Promissory note				$ 472,000
Related Party [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest payable	$ 5,000	$ 5,000
Interest expense	$ 15,000	$ 31,000

XML

Credit Facilities and Other Financing Arrangements (Details Narrative) - USD ($)	Oct. 17, 2024	May 08, 2024	Mar. 22, 2024	Mar. 28, 2024
Agile Capilal Merchant Cash Advance [Member]
Line of Credit Facility [Line Items]
Amount borrowed			$ 315,000
Debt amount			300,000
Periodic payment			16,200
Repayments of debt			$ 453,600
Effective interest rate			15.00%
Cedar Advance Merchant Cash Advance [Member]
Line of Credit Facility [Line Items]
Amount borrowed		$ 215,000
Debt amount		204,300
Periodic payment		11,100
Repayments of debt		$ 312,000
Effective interest rate		18.00%
Revolving Credit Facility [Member] | Loan Agreement [Member]
Line of Credit Facility [Line Items]
Revolving credit facility maximum amount				$ 2,000,000
Credit facility termination fee	$ 40,000

XML

Commitments and Contingencies (Details Narrative)												10 Months Ended	12 Months Ended	13 Months Ended
	Feb. 11, 2025 USD ($)	Jan. 01, 2025 USD ($)	Oct. 25, 2024 USD ($)	Oct. 01, 2024 USD ($)	Sep. 25, 2024 USD ($)	Jul. 01, 2024 USD ($)	Jun. 03, 2024 USD ($)	May 20, 2024 USD ($)	May 18, 2024 USD ($)	Jun. 21, 2023 USD ($)	Mar. 28, 2020 USD ($)	Apr. 30, 2025 USD ($)	Dec. 31, 2024 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2025 USD ($)	Aug. 23, 2023 ft²	May 18, 2023 USD ($)
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Working capital																	$ 1,000,000
Repayments of debt														$ 91,667
Interest rate																	17.97%
Component of accrued expenses													$ 325,000
Written off													$ 3,878,000
Loss on termination of lease					$ 4,000
Blue Yonder Inc [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Component of accrued expenses															$ 509,119
Lawsuit claiming damages in the amount										$ 275,000
Milestone payments	$ 509,119	$ 509,119		$ 225,000						$ 509,119
First milestone payment						$ 175,000
Lease Agreement [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Lease space | ft²																10,000
Settlement Agreement [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Lease payments					250,000
periodic lease payments			$ 100,000		$ 150,000
Asset Purchase Agreement [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Original debt											$ 100,000
Original debt											$ 300,000
Settlement Sum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Payments of litigation									$ 946,666
Initial Payment [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Payments of litigation								$ 25,000
Second Payment [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Payments of litigation							$ 75,000
Additional Payment [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Payments of litigation												$ 84,666

XML

Stock Compensation Expense (Details Narrative)	6 Months Ended
	Jun. 30, 2025 USD ($) shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unrecognized expense | $	$ 60,000
2022 Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares common stock authorized	1,667
Share base compensation issued shares	1,183
Number of shares available to issued	484

XML

Schedule of Basic and Diluted Loss Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2025	Jun. 30, 2024	Jun. 30, 2025	Jun. 30, 2024
Earnings Per Share [Abstract]
Net loss available to common shareholders	$ (585,000)	$ (6,119,000)	$ (9,776,000)	$ (8,486,000)
Basic weighted average of common stock outstanding	2,472,464	32,090	2,224,047	32,090
Diluted weighted average of common stock outstanding	2,472,464	32,090	2,224,047	32,090
Basic loss per common share	$ (0.24)	$ (190.68)	$ (4.40)	$ (264.44)
Diluted loss per common share	$ (0.24)	$ (190.68)	$ (4.40)	$ (264.44)

XML

Schedule of Diluted Weighted Average Number of Shares (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2025	Jun. 30, 2024	Jun. 30, 2025	Jun. 30, 2024
Earnings Per Share [Abstract]
Basic weighted average common shares outstanding	2,472,464	32,090	2,224,047	32,090
Effect of dilutive stock options and warrants
Diluted weighted average of common shares outstanding	2,472,464	32,090	2,224,047	32,090

XML

Net Loss Per Share (Details Narrative) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2025	Jun. 30, 2024	Jun. 30, 2025	Jun. 30, 2024
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	484	543	484	543
Common Stock Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	1,138,163	4,511	1,138,163	4,511

XML

Securities Transactions (Details Narrative) - USD ($)						3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 17, 2025	Jan. 13, 2025	Dec. 04, 2024	Dec. 03, 2024	Nov. 01, 2024	Jun. 30, 2025	Jun. 30, 2024	Jun. 30, 2025	Jun. 30, 2024	Dec. 31, 2024	Feb. 18, 2025	May 18, 2023
Stock repurchased, value
Accrued interest rate												17.97%
Fair value adjustment of warrants								6,468,000
Series A Warrants [Member]
Warrant exercise price		$ 8.38
Series A Warrant [Member]
Fair value adjustment of warrants								$ 2,401,000
Common Stock [Member]
Stock repurchased								10,990
Stock repurchased, value
Issuance of shares		1,910,975
Warrant [Member]
Fair value adjustment of warrants								6,468,000
December 2024 Private Placement [Member] | Common Stock [Member]
Issuance of shares		1,910,975
Stock Repurchase Agreement [Member] | Regalia Ventures [Member]
Stock repurchased					5,495
Stock repurchased, value										$ 472,000
Promissory note											$ 472,000
Accrued interest rate											10.00%
Interest expense								1,000
Stock Repurchase Agreement [Member] | Stingray Group [Member]
Stock repurchased				5,495
Stock repurchased, value										$ 286,000
Promissory note											$ 286,000
Interest expense								$ 3,000
Securities Purchase Agreement [Member] | Thousand Eight Hundred Diagonal Lending LLC [Member]
Face value	$ 120,000
One time interest charge, percent	12.00%
Debt instrument, periodic payment, interest	$ 14,000
Monthly payments	12 monthly installments
Interest expense	$ 11,000
Net proceeds amount	84,000
Original interest discount	15,000
Placement agent fees	16,000
Legal fees	5,000
Securities Purchase Agreement [Member] | Boot Capital L L C [Member]
Face value	$ 120,000
One time interest charge, percent	12.00%
Debt instrument, periodic payment, interest	$ 14,000
Monthly payments	12 monthly installments
Interest expense	$ 11,000
Net proceeds amount	105,000
Original interest discount	15,000
Securities Purchase Agreement [Member] | December 2024 Private Placement [Member]
Gross proceeds			$ 9,000,000
Securities Purchase Agreement [Member] | December 2024 Private Placement [Member] | Series A Warrants [Member]
Series B warrant purchased			279,412
Securities Purchase Agreement [Member] | December 2024 Private Placement [Member] | Series B Warrants [Member]
Series B warrant purchased			279,412
Securities Purchase Agreement [Member] | December 2024 Private Placement [Member] | Series A and B Warrant [Member]
Warrant exercise price			$ 6.84
Securities Purchase Agreement [Member] | December 2024 Private Placement [Member] | Series A Warrant [Member]
Warrant exercise price		$ 8.38
Securities Purchase Agreement [Member] | December 2024 Private Placement [Member] | Common Stock [Member]
Issuance of shares			21,000
Common stock prefunded warrants			258,412
Second Securities Purchase Agreement [Member] | Thousand Eight Hundred Diagonal Lending LLC [Member]
Face value	$ 240,000
One time interest charge, percent	12.00%
Debt instrument, periodic payment, interest	$ 29,000
Interest expense	22,000
Net proceeds amount	189,000
Original interest discount	30,000
Placement agent fees	16,000
Legal fees	5,000
Principal and interest amount	$ 134,000

XML

Schedule of Derivative Warrant Liabilities (Details) - Series A Warrants [Member]	Jan. 17, 2025 shares	Dec. 31, 2024 shares
Measurement Input, Share Price [Member]
Business Combination [Line Items]
Warrants and rights outstanding, measurement Input	8.38	18.00
Measurement Input, Exercise Price [Member]
Business Combination [Line Items]
Warrants and rights outstanding, measurement Input	8.38	34.00
Measurement Input Number Of Warrants [Member]
Business Combination [Line Items]
Number of warrants	1,133,652	279,412
Measurement Input, Expected Term [Member]
Business Combination [Line Items]
Remaining term (years)	4 years 10 months 17 days	4 years 11 months 4 days
Measurement Input Price Annual Equity Volatility [Member]
Business Combination [Line Items]
Warrants and rights outstanding, measurement Input	126.0	113.0
Measurement Input Price Annual Volume Volatility [Member]
Business Combination [Line Items]
Warrants and rights outstanding, measurement Input	377.0	379.0
Measurement Input, Risk Free Interest Rate [Member]
Business Combination [Line Items]
Warrants and rights outstanding, measurement Input	4.32	4.29
Measurement Input, Maturity [Member]
Business Combination [Line Items]
Expected stockholder approval date	Jan. 13, 2025	Jan. 14, 2025
Measurement Input Approval Probability [Member]
Business Combination [Line Items]
Warrants and rights outstanding, measurement Input	100	50

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Schedule of Fair Value of the Derivative Liabilities (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2025	Jun. 30, 2024	Jun. 30, 2025	Jun. 30, 2024
Balance			$ 16,603,000
Exercises			(15,214,000)
Loss on change in fair value			6,468,000
Reclassification to equity			(7,857,000)
Balance
Series A Warrant [Member]
Balance			5,456,000
Exercises
Loss on change in fair value			2,401,000
Reclassification to equity			(7,857,000)
Balance
Series B Warrant [Member]
Balance			11,147,000
Exercises			(15,214,000)
Loss on change in fair value			4,067,000
Reclassification to equity
Balance

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Schedule of Shares of Common Stock Underlying Warrants (Details)	6 Months Ended
	Jun. 30, 2025 USD ($) shares
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Exercises | $	$ 15,214,000
Series A Warrants [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Balance	279,412
Exercises | $
Balance	279,412
Series B Warrants [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Balance	279,412
Exercises | $	$ (279,412)
Balance
Other Warrants [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Balance	4,511
Exercises | $
Balance	4,511
Warrant [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Balance	563,335
Exercises | $	$ (279,412)
Balance	283,923

XML

Derivative Liability (Details Narrative)	Jan. 13, 2025 $ / shares shares
Series A Warrants [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Shares issuable for each outstanding warrants exercised	1,133,652
Warrants exercisable price | $ / shares	$ 8.38
Common Stock [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Stock Issued During Period, Shares, New Issues	1,910,975

XML

Income Taxes (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2025	Jun. 30, 2024	Jun. 30, 2025	Jun. 30, 2024
Effective Income Tax Rate Reconciliation [Line Items]
Income tax		$ (52,000)
Domestic Tax Jurisdiction [Member]
Effective Income Tax Rate Reconciliation [Line Items]
Income tax	$ 52,000		$ 52,000

XML

Schedule of Details the Revenue, Significant expenses and Other Segment (Details) - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2025	Jun. 30, 2024	Jun. 30, 2025	Jun. 30, 2024	Dec. 31, 2024
Segment Reporting Information [Line Items]
Revenues		$ 2,716,000	$ 2,440,000	$ 4,709,000	$ 4,866,000
Adjusted general and administrative		1,502,000	2,053,000	4,048,000	4,212,000
Adjusted depreciation and amortization				96,000	125,000
Adjusted impairement of ROU lease					3,878,000
Share based compensation				47,000	36,000
Change in fair value of warrant liability				6,468,000
Income tax provision			(52,000)
Total segment assets		12,695,000		12,695,000		$ 18,302,000
Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenues		2,716,000	2,440,000	4,709,000	4,866,000
Adjusted cost of revenues		1,762,000	2,116,000	3,255,000	4,040,000
Adjusted sales and marketing		234,000	547,000	998,000	1,177,000
Adjusted general and administrative	[1]	1,495,000	1,982,000	3,908,000	4,070,000
Adjusted depreciation and amortization		45,000	54,000	93,000	106,000
Adjusted impairement of ROU lease			3,878,000		3,878,000
Share based compensation		(38,000)	17,000	47,000	36,000
Change in fair value of warrant liability				6,468,000
Gain on disposal of fixed assets
Loss on issuance of warrants
Interest expense		27,000	17,000	43,000	45,000
Other income (expense), net
Income tax provision			(52,000)
Segment net loss		(809,000)	(6,119,000)	(10,103,000)	(8,486,000)
Total segment assets		8,277,000	12,367,000	8,277,000	12,367,000	17,516,000
Operating Segments [Member] | Singing Machine [Member]
Segment Reporting Information [Line Items]
Revenues		1,564,000	2,440,000	3,434,000	4,866,000
Adjusted cost of revenues		270,000	2,116,000	1,634,000	4,040,000
Adjusted sales and marketing		234,000	547,000	998,000	1,177,000
Adjusted general and administrative	[1]	751,000	1,982,000	2,684,000	4,070,000
Adjusted depreciation and amortization		28,000	54,000	61,000	106,000
Adjusted impairement of ROU lease			3,878,000		3,878,000
Share based compensation		(38,000)	17,000	47,000	36,000
Change in fair value of warrant liability				6,468,000
Gain on disposal of fixed assets
Loss on issuance of warrants
Interest expense		9,000	17,000	9,000	45,000
Other income (expense), net
Income tax provision			(52,000)
Segment net loss		310,000	(6,119,000)	(8,467,000)	(8,486,000)
Total segment assets		5,244,000	12,367,000	5,244,000	12,367,000	16,301,000
Operating Segments [Member] | Semi Cab [Member]
Segment Reporting Information [Line Items]
Revenues		1,152,000		1,275,000
Adjusted cost of revenues		1,492,000		1,621,000
Adjusted sales and marketing
Adjusted general and administrative	[1]	744,000		1,224,000
Adjusted depreciation and amortization		17,000		32,000
Adjusted impairement of ROU lease
Share based compensation
Change in fair value of warrant liability
Gain on disposal of fixed assets
Loss on issuance of warrants
Interest expense		18,000		34,000
Other income (expense), net
Income tax provision
Segment net loss		(1,119,000)		(1,636,000)
Total segment assets		$ 3,033,000		$ 3,033,000		$ 1,215,000

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

XML

Schedule of Reconcilation of Segment Assets to Consolidated (Details) - USD ($)	Jun. 30, 2025	Dec. 31, 2024	Jun. 30, 2024
Segment Reporting Information [Line Items]
Total segment assets	$ 12,695,000	$ 18,302,000
Goodwill	4,418,000	786,000
Total Assets	12,695,000	18,302,000
Net Assets, Segment [Member]
Segment Reporting Information [Line Items]
Total segment assets	12,695,000	18,302,000
Goodwill	4,418,000	786,000
Total Assets	12,695,000	18,302,000
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total segment assets	8,277,000	17,516,000	$ 12,367,000
Total Assets	8,277,000	17,516,000	$ 12,367,000
Operating Segments [Member] | Net Assets, Segment [Member]
Segment Reporting Information [Line Items]
Total segment assets	8,277,000	17,516,000
Total Assets	$ 8,277,000	$ 17,516,000

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Schedule of Revenue by Product Line (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2025	Jun. 30, 2024	Jun. 30, 2025	Jun. 30, 2024
Revenue from External Customer [Line Items]
Total revenue	$ 2,716,000	$ 2,440,000	$ 4,709,000	$ 4,866,000
Karaoke Machines [Member]
Revenue from External Customer [Line Items]
Total revenue	1,533,000	1,257,000	2,275,000	2,308,000
Licensed Products [Member]
Revenue from External Customer [Line Items]
Total revenue	1,000	107,000	15,000	198,000
Kids Youth Electronics [Member]
Revenue from External Customer [Line Items]
Total revenue	103,000	102,000	170,000	171,000
Microphones And Accessories [Member]
Revenue from External Customer [Line Items]
Total revenue	(260,000)	865,000	523,000	1,818,000
Music Subscriptions [Member]
Revenue from External Customer [Line Items]
Total revenue	187,000	109,000	451,000	371,000
Logistics Services [Member]
Revenue from External Customer [Line Items]
Total revenue	$ 1,152,000		$ 1,275,000

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Schedule of Revenue by Revenue by Geographic Region (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2025	Jun. 30, 2024	Jun. 30, 2025	Jun. 30, 2024
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 2,716,000	$ 2,440,000	$ 4,709,000	$ 4,866,000
North America [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	1,410,000	2,316,000	3,403,000	4,742,000
AUSTRALIA
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	46,000	124,000	46,000	124,000
INDIA
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	1,137,000		1,137,000
All Other [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 123,000		$ 123,000

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Segment Information and Revenue Disaggregation (Details Narrative) - USD ($)	Jun. 30, 2025	Dec. 31, 2024	Jun. 30, 2024
Segment Reporting Information [Line Items]
Total segment assets	$ 12,695,000	$ 18,302,000
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total segment assets	8,277,000	17,516,000	$ 12,367,000
Operating Segments [Member] | Singing Machine [Member]
Segment Reporting Information [Line Items]
Total segment assets	5,244,000	16,301,000	12,367,000
Operating Segments [Member] | Semi Cab [Member]
Segment Reporting Information [Line Items]
Total segment assets	$ 3,033,000	$ 1,215,000

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Concentrations, Risks and Uncertainties (Details Narrative) - Customer Concentration Risk [Member]		3 Months Ended		6 Months Ended
	Dec. 31, 2024	Jun. 30, 2025	Jun. 30, 2024	Jun. 30, 2025	Jun. 30, 2024
Accounts Receivable [Member] | Three Customers [Member] | North America [Member]
Concentration Risk [Line Items]
Concentration of risk, percentage				17.00%
Accounts Receivable [Member] | Three Customers [Member] | INDIA
Concentration Risk [Line Items]
Concentration of risk, percentage				16.00%
Accounts Receivable [Member] | Four Customers [Member] | North America [Member]
Concentration Risk [Line Items]
Concentration of risk, percentage	68.00%
Sales Revenue [Member] | Top Three Customers [Member]
Concentration Risk [Line Items]
Concentration of risk, percentage		11.00%	66.00%	37.00%	71.00%
Sales Revenue [Member] | Customer One [Member]
Concentration Risk [Line Items]
Concentration of risk, percentage			39.00%	10.00%	50.00%
Sales Revenue [Member] | Customer Two [Member]
Concentration Risk [Line Items]
Concentration of risk, percentage			14.00%	11.00%	11.00%
Sales Revenue [Member] | Customer Three [Member]
Concentration Risk [Line Items]
Concentration of risk, percentage			13.00%	16.00%	10.00%

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Related Party Transactions (Details Narrative) - USD ($)			3 Months Ended		4 Months Ended	6 Months Ended
	Jun. 11, 2024	Mar. 22, 2024	Jun. 30, 2025	Jun. 30, 2024	May 02, 2025	Jun. 30, 2025	Jun. 30, 2024	Dec. 31, 2024
Related Party Transaction [Line Items]
Revenue from related parties			$ 2,716,000	$ 2,440,000		$ 4,709,000	$ 4,866,000
Advances to Smcb						1,172,000
Reduction in loan in exchange for services						304,000
Expenses under service perform by SMCB					$ 304,000
Semi Cab Holdings [Member]
Related Party Transaction [Line Items]
Number of shares issued for service	1,605
Semi Cab Inc [Member]
Related Party Transaction [Line Items]
Common stock issued for purchase ownership percentage					99.99%
Loan Agreement [Member]
Related Party Transaction [Line Items]
Loan payable					$ 2,008,000			$ 1,140,000
Loan receivable					$ 2,008,000
Stingray Group [Member] | Subscription Sharing Agreement [Member]
Related Party Transaction [Line Items]
Revenue from related parties			187,000	$ 109,000		451,000	$ 349,000
Due from related parties			124,000			124,000		$ 212,000
SMCB [Member] | Loan Agreement [Member]
Related Party Transaction [Line Items]
Proceeds from loan		$ 2,500,000
Loan remaining			$ 492,000			492,000
SMBC [Member] | Loan Agreement [Member]
Related Party Transaction [Line Items]
Advances to Smcb						1,172,000
Software and infrastructure development and maintenance services						$ 304,000

XML

Schedule of Business Acquisition (Details) - USD ($)		6 Months Ended
	May 02, 2025	Jun. 30, 2025	Jun. 30, 2024
Business Combination [Line Items]
Promissory note		$ 1,750,000
Shares of common stock		$ 316,000
SMCB Acquisition [Member]
Business Combination [Line Items]
Promissory note	$ 1,750,000
Shares of common stock	316,000
Assumption of debt	2,008,000
Consideration	4,074,000
Cash and cash equivalents	593,000
Accounts receivable, net	319,000
Prepaid expenses and other current assets	377,000
Property and equipment, net	11,000
Other non-current assets	489,000
Accounts payable and accrued expenses	(372,000)
Other current liabilities	(975,000)
Net assets acquired	442,000
Goodwill	$ 3,632,000

XML

Schedule of Business Acquisition (Details) (Parenthetical) - Common Stock [Member] - shares		3 Months Ended	6 Months Ended
	May 02, 2025	Jun. 30, 2025	Jun. 30, 2025
Business Combination [Line Items]
Share of common stock issue		119,742	119,742
SMCB Acquisition [Member]
Business Combination [Line Items]
Share of common stock issue	119,742

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Schedule of Pro Forma Financial Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2025	Jun. 30, 2024
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]
Net revenue	$ 7,438,000	$ 6,135,000
Operating loss from continuing operations	(4,539,000)	(8,689,000)
Net loss	$ (11,313,000)	$ (8,735,000)

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Acquisition of SMCB (Details Narrative) - USD ($)	May 02, 2025	Jun. 30, 2025	Dec. 31, 2024
Business Combination [Line Items]
Common stock, par value		$ 0.01	$ 0.01
Equity Purchase Agreement [Member] | Semi Cab Inc [Member]
Business Combination [Line Items]
Membership interest percentage	20.00%
Amended And Restated Employment Agreement [Member] | Messrs Kapoor And Sehgal [Member]
Business Combination [Line Items]
Membership interest percentage	15.00%
Semi Cab Holdings [Member] | Equity Purchase Agreement [Member]
Business Combination [Line Items]
Stock issued during period shares acquisitions	9,999
Common stock, par value	$ 10
Semi Cab Inc [Member] | Equity Purchase Agreement [Member]
Business Combination [Line Items]
Debt Instrument, Face Amount	$ 1,750,000
Aggregate consideration consisting shares	119,742
Notes payable	$ 1,500,000
Remaining debt amount	$ 250,000

XML

Subsequent Events (Details Narrative) - USD ($)		1 Months Ended	6 Months Ended
	Aug. 01, 2025	Jul. 30, 2025	Jun. 30, 2025	Jun. 30, 2024
Subsequent Event [Line Items]
Promissory note			$ 379,000
Business Loan And Security Agreement [Member] | Agile Capital Fundind LLC [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Promissory note		$ 368,000
One-time interest charge		162,000
Weekly installment amount		19,000
Proceeds from issue of promissory note		350,000
Administrative agent fees		$ 18,000
Asset Purchase Agreement [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
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.