Algorhythm Holdings Inc.(RIME) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales decreased by $433,000 to$1,993,000 for the three-month period ended March 31, 2025, compared to $2,426,000 for the same period in 2024, primarily due to the loss of retail shelf space at two major customers[128] - Gross profit decreased to$500,000, or 25.1% of net sales, for the three-month period ended March 31, 2025, compared to $502,000, or 20.7$9,191,000, or $4.66 per share, for the three-month period ended March 31, 2025, compared to$2,367,000, or $73.76 per share, for the same period in 2024[129] - Total assets decreased from$18,302,000 at December 31, 2024, to $10,461,000 at March 31, 2025[129] Operating Expenses - Operating expenses increased by$521,000 to $3,310,000 for the three-month period ended March 31, 2025, primarily due to growth and development expenses for the SemiCab business[128] - Selling expenses increased by$134,000 to $764,000 for the three-month period ended March 31, 2025, compared to$630,000 for the same period in 2024, primarily due to increased online marketing and social media advertising campaigns[137] - General and administrative expenses rose by $387,000 to$2,546,000 for the three-month period ended March 31, 2025, from $2,159,000 in the same period of 2024, mainly due to expenses related to the development and growth of the SemiCab business[138] - Other expenses surged by$6,456,000 to $6,468,000 for the three-month period ended March 31, 2025, compared to$28,000 for the same period in 2024, primarily due to a non-cash loss from the change in fair value of warrants[139] Cash Flow - Net cash used by operating activities was $3,108,000 during the three-month period ended March 31, 2025, an increase of$551,000 from $2,557,000 in the same period of 2024[143] - Net cash used by investing activities was$673,000 for the three-month period ended March 31, 2025, with no cash flows from investing activities in the same period of 2024[144] - Net cash used by financing activities increased to $473,000 for the three-month period ended March 31, 2025, compared to$21,000 for the same period in 2024, primarily due to repayments of promissory notes[145] - As of March 31, 2025, the company's cash balance was $3,296,000[142] Future Outlook - The company expects net sales of Singing Machine products to decrease over the next 12 months due to tariffs on products manufactured in China, while revenue from the SemiCab business is expected to increase[132] - The company plans to invest in the SemiCab business to develop it into a significant revenue producer, focusing on technology research and development, marketing, and hiring qualified employees[125] - The company intends to continue relying on cash generated from operations, equity sales, and debt to fund operations and expansion efforts, including potential acquisitions[146] Acquisitions - The company completed the acquisition of the India component of the SemiCab business on May 2, 2025, following the acquisition of the U.S. component on July 3, 2024[126] Compliance - The company received a letter from Nasdaq on March 25, 2025, confirming compliance with the minimum bid price requirement of$1.00 per share for continued listing[151] Non-controlling Interest - Net loss attributable to non-controlling interest was $103,000 for the three-month period ended March 31, 2025, reflecting losses incurred by SemiCab allocated to SemiCab, Inc. through its 20$6,468,000 for the change in fair value of warrants related to a public offering completed on December 6, 2024[130]