Algorhythm Holdings Announces 2024 Financial Results

/EIN News/ -- Fort Lauderdale, FL, April 16, 2025 (GLOBE NEWSWIRE) -- Algorhythm Holdings, Inc. (the “Company”) (NASDAQ: RIME) – an AI technology and consumer electronics holding company, announced today its results of operations for the twelve months period ended December 31, 2024.

2024 Financial Highlights*

• The Company reported revenue of $23.5 million for the year ended December 31, 2024 compared to $29.2 million for the nine-month period ended December 31, 2023.
  
  
• Gross profit was $4.8 million for the year ended December 31, 2024, compared to $6.2 million for the nine-month period ended December 31, 2023, with gross margins of 20.4% and 21.2% for the two periods, respectively.
  
  
• Loss from operations increased $7.8 million to $13.9 million for the year ended December 31, 2024, compared to $6.1 million for the nine-month period ended December 31, 2023.
  
  
• Net loss increased $18 million to $24.4 million for the year ended December 31, 2024, compared to $6.1 million for the nine-month period ended December 31, 2023.
  
  
• Adjusted net loss, a non-GAAP measure, was $7.6 million for the year ended December 31, 2024, compared to $2.6 million for the nine-month period ended December 31, 2023.
  
  
• Inventory was successfully reduced by 68%, from $6.9 million as of December 31, 2023 to $2.2 million as of December 31, 2024.
  
  
• The Company bolstered its cash on hand to $7.6 million as of December 31, 2024.
  

A reconciliation of adjusted loss from operations and adjusted net loss on a GAAP and non-GAAP basis is included in the table below entitled “Reconciliation of GAAP to non-GAAP Financial Measures”.

*During 2023, the Company changed fiscal year end from March 31 to December 31. In accordance with SEC regulations, the Company’s consolidated financial statements consisted of balance sheets at December 31, 2024 and 2023 and its statements of operations, stockholders’ deficit and cash flows for the year ended December 31, 2024 and the nine-month period ended December 31, 2023. All numbers presented in this press release reflect these periods.

2024 Overview

“This past year marked a pivotal and exciting time for Algorhythm Holdings,” stated Gary Atkinson, Chief Executive Officer of the Company. “During the year, we began the process of transforming the company from a consumer electronics company offering karaoke products to an artificial intelligence (AI) company offering freight technology services to the transportation industry.”

“Let me briefly recap the several noteworthy achievements and organizational changes that we made during the past 12 months to support the long-term profitability of Algorhythm Holdings:

• We entered the AI space by acquiring the United States business of SemiCab, Inc., an emerging artificial intelligence driven logistics company.
  
  
• We completed a number of corporate actions designed to better position the company for future growth, including changing our name to Algorhythm Holdings.
  
  
• We raised more than $10 million of capital to pay off substantially all of our liabilities and debt and provide us with the capital necessary to support the growth and development of our SemiCab business.
  
  
• We hired Alex Andre to serve as our CFO and GC, who brings us 25 years of executive management, financial and legal experience in high-growth public and private companies with particular strength with M&A, capital raises and SEC matters.
  

Additionally, through service agreements, we have been investing in the growth and development of SemiCab, Inc.’s India business (SemiCab India). SemiCab India onboarded a number of notable pilot contracts onto SemiCab, Inc.’s AI logistics platform during the past year, including Apollo Tyres, a top ten global tire manufacturer based in India and two multinational consumer packaged goods manufacturers. These contracts, among others, have resulted in substantial growth in its week-over-week revenue. We plan to complete the acquisition of SemiCab India later this month.”

Financial Summary

“We generated $23.5 million of revenue this past year compared to $29.2 million for the nine-month comparative period in 2023,” commented Alex Andre, CFO and General Counsel of the Company. “The decrease was primarily due to decreases in sales of our karaoke products to one of our retailers that resulted from us not participating in its national Black Friday promotion and a loss of retail shelf space at another retailer. We expect sales of our karaoke products to decrease over the next 12 months due to the negative impact on our business of recently implemented tariffs on our products manufactured in China. However, we expect revenue generated from our SemiCab business to increase over the next 12 months as we generate more business from our customer base in the United States and integrate revenue generated by SemiCab India upon our acquisition of the company later this month.”

“Our net loss was $24.4 million this past year compared to $6.1 million for the nine-month comparative period in 2023. The increase was due primarily to a substantial increase in non-cash expenses that we incurred in connection with our acquisition of SemiCab’s US business in July 2024 and the capital raising activities that we engaged in during Q4 2024. Of our 2024 net loss, $16.7 million was for non-cash expenses. The most significant components of these non-cash expenses were a one-time charge of $3.6 million for goodwill impairment and a one-time, non-cash charge of $8.9 million for warrants that we issued in December 2024 as part of a capital raise. As a result, after deducting all of the non-cash expenses, our adjusted net loss was $7.6 million for 2024.”

The impairment of goodwill charge was associated with the Company’s acquisition of SemiCab, Inc.’s US business. The partial write-off of goodwill was expected as the Company’s SemiCab business is a nascent, emerging business that the Company purchased for its technology, management team and customer contracts, but that had negligible revenue at the time it was acquired. The warrants that the Company issued in December 2024 were subject to certain contingencies that resulted in the Company having to record a warrant liability of $16.6 million on its balance sheet and a loss of $8.9 million on its income statement. All of the contingencies that the warrants were subject to were satisfied or became moot in January 2025. As a result, the Company expects the entire warrant liability to reverse out(?) and be reclassified to equity on its balance sheet for its fiscal quarter ended March 31, 2025.

Outlook

“We are very excited for what 2025 has in store for us, notwithstanding the precarious economic environment that world is maneuvering through,” added Mr. Atkinson. “The foundation of our strategy moving forward will be the continued growth and development of SemiCab, our AI-enabled freight tech logistics and distribution business. The opportunity in this segment of the AI space is very large, and SemiCab, with its cutting-edge technology, is receiving a lot of interest from multinational, Fortune 500 customers as a result. In furtherance of this strategy, we are also evaluating strategic alternatives for our Singing Machine business, including a potential sale of the business. The continued investment in our legacy karaoke and consumer electronics products no longer aligns with our shift to the AI logistics and distribution industry.”

“Our future is brighter than it has ever been. The decisions we’ve made have been bold and decisive to try to turn around the Company. We believe we are making the right investments in the people, assets and companies to allow us to grow quickly and efficiently during 2025. When I reflect upon how far we’ve come during the past year, I could not be more motivated and optimistic about what we will achieve in the future.”

Non-GAAP Financial Measures

The Company prepares it’s consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”). In addition to disclosing financial information prepared in accordance with GAAP, this release also includes non-GAAP operating income, non-GAAP net income and non-GAAP net income per share data for the periods presented. Management uses non-GAAP financial measures internally for financial and operational decision-making and as a means to evaluate period-to-period comparisons. The Company’s management believes that these non-GAAP financial measures provide useful supplemental information to management and investors regarding the performance of the Company's core business operations, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.

These non-GAAP financial measures are not recognized measures for financial statement presentation under U.S. GAAP and do not have standardized meanings. Accordingly, they may be different from similar non-GAAP financial measures presented by other companies. These non-GAAP financial measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP financial measures. Investors should consider these non-GAAP financial measures as a supplement to, and not as a substitute for, corresponding financial measures calculated in accordance with GAAP.

For the purposes of this press release, the following non-GAAP financial measures have the following meanings:

“Adjusted net loss” means net loss plus depreciation, amortization of intangible assets, impairment of goodwill from purchase of SemiCab, Inc., impairment on note receivable – SMCB, reduction in SMCB loan in exchange for services, provision for estimated cost of returns, change in fair value of warrant liability, loss on issuance of warrants, amortization of debt discount and issuance costs, provision for inventory obsolescence, reserve for sales returns, credit losses, non-cash effect on termination of operating lease, net gain from disposal of property and equipment, stock-based compensation and amortization of right of use assets.

For further information, please refer to the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2025 and available online at www.sec.gov.

For a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, please see the table below entitled “Reconciliation of GAAP to Non-GAAP Financial Measures”.

About Algorhythm Holdings

Algorhythm Holdings, Inc. is a holding company with two primary investments. First, the Company owns SemiCab Holdings, an emerging leader in the AI-enabled global logistics industry. Second, the Company owns The Singing Machine Company, the worldwide leader in the consumer karaoke industry.

SemiCab is a cloud-based Collaborative Transportation Platform built to achieve the scalability required to predict and optimize millions of loads and hundreds of thousands 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 predictions and advanced predictive optimization models. On the SemiCab platform, shippers pay less and carriers make more while not having to change a thing.

Since 2020, SemiCab has enabled major retailers, brands and transportation providers to address these common supply-chain problems globally. 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 the technology has the capability of saving shippers tens of billions of dollars annually through optimization. Further, SemiCab’s technology also has the potential to play a key role in the improved sustainability model globally. Based on its proven ability to improve truck utilization rates from 65% to over 90%, this results in a dramatic reduction in the carbon footprint of the industry. The optimization of existing truck utilization can add approximately 30% more 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 eliminate approximately 25% of CO2 emissions attributable to road freight.

For additional information about SemiCab: http://www.semicab.com

The Singing Machine Company, Inc. is the worldwide leader in consumer karaoke products. Based in Fort Lauderdale, Florida, and founded over forty years ago, the Company designs and distributes the industry's widest assortment of at-home and in-car karaoke entertainment products. Their portfolio is marketed under both proprietary brands and popular licenses, including Carpool Karaoke and Sesame Street. Singing Machine products incorporate the latest technology and provide access to over 100,000 songs for streaming through its mobile app and select WiFi-capable products and is also developing the world’s first globally available, fully integrated in-car karaoke system. The Company also has a new philanthropic initiative, CARE-eoke by Singing Machine, to focus on the social impact of karaoke for children and adults of all ages who would benefit from singing. Their products are sold in over 25,000 locations worldwide, including Amazon, Costco, Sam’s Club, Target, and Walmart.

For additional information about Singing Machine: www.singingmachine.com.

Investor Relations Contact

investors@algoholdings.com
www.algoholdings.com

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as "expects," "anticipates," "believes," "will," "will likely result," "will continue," "plans to," "potential," "promising," and similar expressions. These statements are based on management's current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements, including the risk factors described from time to time in the Company's reports to the SEC, including, without limitation the Company’s Annual Report on Form 10- for the year ended December 31, 2024.

You should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this press release. Except as required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this press release to conform our statements to actual results or changed expectations, or as a result of new information, future events or otherwise.

Algorhythm Holdings, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)

Table 1: Adjusted Net Loss

		For the Year Ended December 31, 2024				For the Nine Months Ended December 31, 2023
Net loss (as reported)		$	(24,367,000	)		$	(6,398,000	)
Depreciation			192,000				287,000
Amortization of intangible assets			30,000				-
Impairment of goodwill from purchase of SemiCab Inc			3,592,000				-
Impairment on note receivable - SCMB			439,000				-
Reduction in SMCB loan in exchange for services			637,000				-
Provision for estimated cost of returns			299,000				(1,364,000	)
Change in fair value of warrant liability			(334,000	)			-
Loss on issuance of warrants			8,889,000				-
Amortization of debt discount and issuance costs			1,520,000				-
Provision for inventory obsolescence			918,000				1,798,000
Reserve for sales returns			(35,000	)			2,490,000
Credit losses			14,000				8,000
Non-cash effect on termination of operating lease			(280,000	)			-
Net gain from disposal of property and equipment			-				(44,000	)
Stock based compensation			630,000				110,000
Amortization of right of use assets			236,000				510,000
Adjusted net loss		$	(7,620,000	)		$	(2,603,000	)

Algorhythm Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited)

		December 31, 2024				December 31, 2023
Assets
Current Assets
Cash		$	7,550,000			$	6,703,000
Accounts receivable, net of allowances of $274,000 and $174,000, respectively			4,373,000				7,308,000
Accounts receivable, related party			212,000				269,000
Note receivable - related party			701,000				-
Inventory			2,186,000				6,871,000
Returns asset			1,621,000				1,919,000
Prepaid expenses and other current assets			120,000				136,000
Total Current Assets			16,763,000				23,206,000
Property and equipment, net			284,000				404,000
Operating leases - right of use assets			95,000				3,926,000
Other non-current assets			29,000				179,000
Intangible assets, net			345,000				-
Goodwill			786,000				-
Total Assets		$	18,302,000			$	27,715,000
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable		$	3,808,000			$	7,616,000
Accrued expenses			4,224,000				2,614,000
Refund due to customer			38,000				1,743,000
Customer prepayments			-				687,000
Reserve for sales returns			3,355,000				3,390,000
Warrant liability			16,603,000				-
Current portion of notes payable to related parties			265,000				-
Other current liabilities			145,000				159,000
Total Current Liabilities			28,438,000				16,209,000
Notes payable to related parties, net of current portion			385,000				-
Operating lease liabilities, net of current portion			-				3,925,000
Other liabilities			-				3,000
Total Liabilities			28,823,000				20,137,000
Commitments and Contingencies
Shareholders' (Deficit) Equity
Preferred stock, $1.00 par value; 1,000,000 shares authorized; no
shares issued and outstanding			-				-
Common stock $0.01 par value;  100,000,000 shares authorized;
470,825 and 32,090 shares issued and outstanding at December 31, 2024 and 2023.			5,000				-
Additional paid-in capital			39,682,000				33,493,000
Accumulated deficit			(49,172,000	)			(25,915,000	)
Non-controlling interest			(1,036,000	)			-
Total Algorhythm Holdings Shareholders' (Deficit) Equity			(10,521,000	)			7,578,000
Total Liabilities and Shareholders' (Deficit) Equity		$	18,302,000			$	27,715,000

Algorhythm Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)

		Year Ended				Nine Months Ended
		December 31, 2024				December 31, 2023
Net Sales		$	23,494,000			$	29,198,000
Cost of Goods Sold			18,713,000				23,008,000
Gross Profit			4,781,000				6,190,000
Operating Expenses
Selling expenses			2,874,000				3,717,000
General and administrative expenses			12,240,000				8,616,000
Impairment of goodwill			3,592,000				-
Total Operating Expenses			18,706,000				12,333,000
Loss from Operations			(13,925,000	)			(6,143,000	)
Other (Expense) Income
Change in fair value of warrant liability			334,000				-
Loss on issuance of warrants			(8,889,000	)			-
Interest expense			(1,887,000	)			(299,000	)
Other income			-				44,000
Total Other Expense			(10,442,000	)			(255,000	)
Loss Before Income Tax Benefit			(24,367,000	)			(6,398,000	)
Income Tax Provision			-				-
Net Loss			(24,367,000	)			(6,398,000	)
Net Loss Attributable to Non-controlling Interest			1,110,000				-
Net  Loss Available to Common Stockholders		$	(23,257,000	)		$	(6,398,000	)
Loss per common share
Basic and diluted		$	(353.87	)		$	(263.04	)
Weighted Average Common and Common
Equivalent Shares:
Basic and diluted			65,722				24,323