Algorhythm Holdings Inc.(RIME) - 2024 Q4 - Annual Report

Acquisition and Corporate Changes - Algorhythm Holdings, Inc. completed the acquisition of SemiCab, Inc. for a purchase price consisting of 3,210 shares of common stock and a 20% membership interest in SemiCab Holdings[28]. - Algorhythm Holdings, Inc. changed its fiscal year end from March 31 to December 31 during 2023[27]. - The company appointed Alex Andre as Chief Financial Officer and General Counsel on February 13, 2025, replacing Richard Perez[40]. - A reverse stock split of 1-for-200 was approved and took effect on February 10, 2025, along with an increase in authorized shares from 100,000,000 to 800,000,000[39]. Financial Activities - The company entered into a loan agreement for a $2,000,000 revolving line of credit with Oxford Commercial Finance, which was terminated on October 17, 2024, with no outstanding amounts owed[32]. - A public offering on December 4, 2024, resulted in net proceeds of$8,565,000 from the sale of 21,000 shares of common stock and pre-funded warrants[37]. - A registered direct offering on December 18, 2024, generated net proceeds of $1,665,000 from the sale of 120,337 shares of common stock at a purchase price of$16.62 per share[38]. Product Development and Offerings - The company plans to expand its business into new verticals, including automotive and connected-TV devices, to grow global distribution for its karaoke products[26]. - Singing Machine's karaoke products are Bluetooth® enabled and feature advanced capabilities such as real-time pitch correction and streaming karaoke content via WiFi[42]. - The karaoke product offerings include almost 20,000 licensed karaoke songs in the catalog[47]. - The company does not rely on a single supplier for karaoke products, using multiple manufacturers in southern China[53]. Sales and Marketing - Sales to the top five customers accounted for 79% of karaoke revenue for the year ended December 31, 2024[67]. - Marketing efforts are aimed at increasing brand awareness and optimizing investments through digital analytics tools[58]. - The karaoke products are marketed through a direct sales team and independent representatives, with sales recognized upon transfer of title[57]. Logistics and Operations - The company has outsourced its warehousing services to a 3PL company effective September 1, 2023, after the lease at the Ontario warehouse expired[55]. - The SemiCab logistics services focus on full truckload transportation, with contracts generally lasting up to a year[60]. - The company maintains a dedicated software development team in India to enhance the SemiCab platform[52]. - The logistics industry experiences cyclic demand, with smaller operators facing challenges during periods of oversupply[70]. Seasonal Trends - Seasonal demand for karaoke products typically peaks from late July to early November, impacting quarterly performance[69].