Fort Lauderdale, FL, May  16, 2025  (GLOBE NEWSWIRE) -- Algorhythm Holdings, Inc. (“Algorhythm”) (NASDAQ: RIME) – an AI technology and consumer electronics holding company, announced today its results of operations for the three-month period ended March 31, 2025.

Q1 2025 Financial Highlights

Algorhythm reported revenue of $2.0 million for the three months ended March 31, 2025 compared to $2.4 million for the three months ended March 31, 2024. Gross profit margin increased by 4.4% to 25.1% from 20.7% compared to the same period of the prior year. Gross profit was $0.5 million for the three months ended March 31, 2025. Loss from operations increased $0.5 million to $2.8 million for the three months ended March 31, 2025, compared to $2.3 million for the three months ended March 31, 2024. Net loss increased $6.8 million to $9.2 million for the three months ended March 31, 2025, compared to $2.4 million for the three months ended March 31, 2024. Adjusted net loss, a non-GAAP measure, was $3.2 million for the three months ended March 31, 2025, compared to $2.4 million for the three months ended March 31, 2024. Inventory was reduced by 14% during the three months ended March 31, 2025, from $2.2 million as of December 31, 2024 to $1.9 million as of March 31, 2025. The Company had cash on hand to $3.3 million as of March 31, 2025.

A reconciliation of 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”.

2025 Business Highlights

“2025 is off to an incredible start, highlighted by our recent acquisition of SMCB Solutions Private Ltd. (“SemiCab India”), which operates SemiCab’s AI enabled, cloud-based Collaborative Transportation Platform in the Indian market,” stated Gary Atkinson, Chief Executive Officer of Algorhythm. “SemiCab India is currently operating at an annualized revenue run rate of $4.6 million with projected volume from its national and multinational customers expected to double that run rate by the end of the year. In addition, SemiCab India recently expanded its active fleet to 140 trucks and has access to an additional 450 trucks which, in the event actual growth exceeds projected growth, provides it with the capacity to quadruple its annualized revenue run rate from $4.6 million to over $23 million during the second half of 2025. Algorhythm plans to develop its pipeline of pending contracts with new full truckload (FTL) carriers to grow its fleet to over 1,000 vehicles by the end of 2025 to keep pace with demand.”

“I am highly optimistic at the Company’s outlook for the back half of 2025 and beyond,” continued Mr. Atkinson. “I believe our strategic pivot into AI logistics services with SemiCab will prove to be the correct decision, particularly during this period of extreme economic volatility. We have already seen a seismic move of manufacturing coming into India as a result of tariffs. We foresee this will create opportunities to solve logistics problems and force more optimization throughout the transportation industry. We are committed to continue to invest into the growth of our SemiCab business to take advantage of these opportunities.”

Q1 2025 Financial Summary

Algorhythm generated revenue of $2.0 million for the three months ended March 31, 2025 compared to $2.4 million for the same period last year. “Our decrease in revenue was due primarily to lower sales within our karaoke business,” commented Alex Andre, Chief Financial Officer of Algorhythm. “Sales of our karaoke products will likely continue to decrease due to the negative impact on our business of recently implemented tariffs, however, we expect this to be offset by an increase in revenue that we expect to generate from our SemiCab business. Our recent acquisition of SemiCab India will positively impact our revenue for the remainder of 2025.”

The Company reported a net loss for the three-month period ended March 31, 2025 of $9.2 million, compared to a net loss of $2.4 million in the same period of the prior year. The increase was due primarily to a substantial increase in non-cash expenses of $6.4 million for the change in fair value of warrants that the Company issued in December 2024 as part of a public offering. Excluding non-cash expenses, Algorhythm’s adjusted net loss was $3.2 million for the quarter.

“The warrants that we issued in December 2024 were subject to certain contingencies that resulted in us recording a warrant liability of $16.6 million on our balance sheet at December 31, 2024 and a loss of $6.4 million on our income statement for Q1 2025,” stated Mr. Andre. “All of these contingencies were satisfied or became moot during Q1 2025. As a result, we reclassified the entire warrant liability to equity on our balance sheet at March 31, 2025. We will not incur any future non-cash charges associated with changes in the fair value of these warrants.”

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 and amortization, reduction in SMCB loan in exchange for services, provision for estimated cost of returns, change in fair value of warrant liability, provision for inventory obsolescence, credit losses, reserve for sales returns, and stock-based compensation.

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”.

Conference Call Details:

Date: Friday, May 16, 2025 
Time: 10:00 a.m. EDT 
Dial-in number: 888-999-3182 
Conference ID: RIME

An audio rebroadcast of the call will be available later in the day at:

https://ir.algoholdings.com

About Algorhythm Holdings

Algorhythm Holdings, Inc. is an AI technology and consumer electronics holding company with two primary business units – SemiCab and Singing Machine.

SemiCab is an emerging leader in the global logistics and distribution industry. Since 2020, SemiCab has enabled major retailers, brands and transportation providers to address these common supply-chain problems globally. Its AI-enabled, cloud-based Collaborative Transportation Platform achieves the scalability required to predict and optimize millions of loads and hundreds of thousands of trucks. SemiCab uses real-time data from API-based load tendering and pre-built integrations with TMS and ELD partners to orchestrate collaboration across manufacturers, retailers, distributors, and their carriers. SemiCab uses AI/ML predictions and advanced predictive optimization models to enable fully loaded round trips. With SemiCab’s AI platform, shippers pay less and carriers make more without having to change a thing.

For additional information, please go to: http://www.semicab.com

Singing Machine is the worldwide leader in consumer karaoke products. Based in Fort Lauderdale, Florida, and founded over forty years ago, it designs and distributes the industry's widest assortment of at-home and in-car karaoke entertainment products. Its product 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 Wi-Fi-capable products and is also developing the world’s first globally available, fully integrated in-car karaoke system. Its products are sold in over 25,000 locations worldwide, including Amazon, Costco, Sam’s Club, Target, and Walmart.

For additional information, please go to www.singingmachine.com.

Investor Relations Contact:
[email protected]
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 Algorhythm’s reports to the SEC, including, without limitation Algorhythm’s Annual Report on Form 10-K 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. and SubsidiariesConsolidated Balance Sheets (Unaudited)  March 31, 2025December 31, 2024 Assets   Current Assets  Cash $3,296,000  $7,550,000  Accounts receivable, net of allowances of $396,000 and $275,000, respectively  1,385,000   4,373,000  Accounts receivable, related party  357,000   212,000  Note receivable, related party  1,201,000   701,000  Inventory  1,895,000   2,186,000  Returns asset  751,000   1,621,000  Prepaid expenses and other current assets  126,000   120,000  Total Current Assets  9,011,000   16,763,000   Property and equipment, net  253,000   284,000  Other non-current assets  81,000   124,000  Intangible assets, net  330,000   345,000  Goodwill  786,000   786,000  Total Assets $10,461,000  $18,302,000   Liabilities and Shareholders' Equity   Current Liabilities  Accounts payable $1,301,000  $3,808,000  Accrued expenses  2,414,000   4,224,000  Refund due to customer  630,000   38,000  Reserve for sales returns  1,742,000   3,355,000  Warrant liability  -   16,603,000  Current portion of notes payable to related parties  551,000   265,000  Other current liabilities  97,000   145,000  Total Current Liabilities  6,735,000   28,438,000   Notes payable to related parties, net of current portion  385,000   385,000  Total Liabilities  7,120,000   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 March 31, 2025 and December 31, 2024  -   -  Common stock, $0.01 par value; 800,000,000 and 100,000,000 shares authorized;  2,394,829 and 470,825 shares issued and outstanding at March 31, 2025 and  December 31, 2024  24,000   5,000  Additional paid-in capital  63,577,000   39,682,000  Accumulated deficit  (58,363,000)  (49,172,000) Non-controlling interest  (1,139,000)  (1,036,000) Treasury stock, 10,990 and -0- shares reserved at March 31, 2025 and 2024  (758,000)  -  Total Algorhythm Holdings Shareholders' Equity (Deficit)  3,341,000   (10,521,000)  Total Liabilities and Shareholders' Equity (Deficit) $10,461,000  $18,302,000

Algorhythm Holdings, Inc. and SubsidiariesConsolidated Statements of Operations (Unaudited)  Three Months Ended March 31, 20252024 Net Sales $1,993,000  $2,426,000  Cost of Goods Sold  1,493,000   1,924,000  Gross Profit  500,000   502,000  Operating Expenses Selling expenses  764,000   630,000 General and administrative expenses  2,546,000   2,159,000 Total Operating Expenses  3,310,000   2,789,000  Loss from Operations  (2,810,000)  (2,287,000) Other Expenses Change in fair value of warrant liability  (6,468,000)  - Interest expense  (16,000)  (28,000)Total Other Expenses  (6,484,000)  (28,000) Loss Before Income Tax Benefit  (9,294,000)  (2,315,000) Income Tax Provision  -   (52,000) Net Loss  (9,294,000)  (2,367,000) Net loss attributable to non-controlling interest  103,000   -  Net Loss Available to Common Stockholders $(9,191,000) $(2,367,000) Loss per common share Basic and diluted $(4.66) $(73.76) Weighted Average Common and Common Equivalent Shares: Basic and diluted  1,972,869   32,090

Algorhythm Holdings, Inc.Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) Table 1: Adjusted Net Loss  For the Three Months Ended March 31, 20252024 Net loss (as reported) $(9,294,000) $(2,367,000) Depreciation and amortization  91,000   136,000 Reduction in SMCB loan in exchange for services  172,000   - Provision for estimated cost of returns  870,000   658,000 Change in fair value of warrant liability  6,468,000   - Provision for inventory obsolescence  4,000   - Credit losses  3,000   101,000 Reserve for sales returns  (1,614,000)  (971,000)Stock based compensation  85,000   19,000 Adjusted net loss $(3,215,000) $(2,424,000)