Fort Lauderdale, FL, Nov. 20, 2024 (GLOBE NEWSWIRE) -- Algorhythm Holdings, Inc. ("Algorhythm") (NASDAQ: RIME) – an AI-driven technology and consumer electronics holding company, announced today its results of operations for the three- and nine- month periods ended September 30, 2024.

CEO Commentary

"We are pleased to share our third-quarter results," said Gary Atkinson, CEO of Algorhythm. "This was a highly active and transformational period for our business. We focused on integrating our recent acquisition of SemiCab, secured notable new pilot contracts for SemiCab's logistics technology platform, and finalized a landmark OEM partnership for our automotive karaoke technology with BYD, a leading global EV manufacturer. Additionally, we supported our legacy retail karaoke partners as they prepared for the holiday season. I am proud of our team for successfully managing critical initiatives across multiple fronts, driving our business forward."

Business Highlights and Key Events

Algorhythm achieved several milestones during the third quarter, marked by strategic realignment and growth initiatives across its two key operating subsidiaries:

July 3^rd: The Company closed the acquisition of SemiCab, an emerging AI-driven logistics transportation company.
September 5^th: The Company rebranded as Algorhythm Holdings, Inc. to fully reflect the shift to a holding company model. SemiCab and Singing Machine will continue to operate under their own distinct brands.
October 7^th: SemiCab secured a multimillion-dollar pilot contract with a $200 billion consumer packaged goods client for multiple US metropolitan markets.
October 9^th: SemiCab won a multimillion-dollar pilot contract with a $10 billion Indian multinational consumer packaged goods manufacturer.
October 17^th: SemiCab was awarded a multimillion-dollar pilot contract with Apollo Tyres, a top ten global tire manufacturer based in India.
November 13^th: The Company filed an 8-K announcing it believes to be back in compliance with Nasdaq's Minimum Equity Rule. As of the date of this report, the Company reported shareholders' equity of $2.9 million.
November 14^th: Singing Machine announced a formal partnership with BYD to integrate Singing Machine microphone technology into BYD's vehicles globally. The agreement also includes technology partnerships between Stingray Group, Inc., a global leader in digital music content, and manufacturing collaboration with BYD for mass production of the Company's karaoke automotive microphone.

Additionally, the Company anticipates completing the acquisition of SMCB Solutions Private Limited ("SemiCab India") during Q4 2024. SemiCab India continues to serve Fortune 500 clients under both pilot and scalable long-term contracts. In the karaoke division, Singing Machine is actively focusing on OEM partnerships across automotive, television, and set-top-box markets, aligning with its broader strategy to prioritize technology-driven solutions while reducing reliance on traditional retail relationships.

Third Quarter Operational Results

Third quarter operational highlights were as follows:

Revenues: Sales for Q3 2024 totaled $10.6 million, compared to $15.9 million in Q3 2023, a decline of $5.3 million (33%). The decrease reflects a strategic focus on higher-margin products, reducing promotional pricing strategies with two top-five customers. Sales were also impacted by general inflationary pressures and softened demand for audio and in-home entertainment.

Operating Expenses: Operating expenses for Q3 2024 were $1.1 million, down from $3.6 million in Q3 2023. This includes a $3.9 million non-cash gain from early termination of an operating lease. Excluding non-cash items, the Company incurred $1.3 million in additional operating expenses related to SemiCab's acquisition and increased legal and professional fees.

Balance Sheet: Shareholders' equity improved significantly, increasing from a deficit of $(0.9) million as of June 30, 2024, to $2.7 million as of September 30, 2024.

Net Income: The Company reported net income of $1.2 million for Q3 2024, compared to $0.1 million for the same period in 2023.

Conference Call Details:

Management will host a conference call at 10:00 am Eastern time to discuss the financial results and provide a business update.

Date: Wednesday, November 20, 2024

Time: 10:00 a.m. ET

Dial-in number: (888)-800-3146

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 a diversified holding company with two primary investments. The first is SemiCab, an emerging leader in the AI-driven global logistics industry. The second is The Singing Machine Company, the world's leading brand in the consumer karaoke market.

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 regarding 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. To learn more, go to 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 Transition Report on Form 10-KT for the transition period from April 1, 2023 to December 31, 2023, the Company's Quarterly Report on Form 10-Q for the quarter ended March 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 SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2024			December 31, 2023
	(Unaudited)

Assets
Current Assets
Cash	$	621,000		$	6,703,000
Accounts receivable, net of allowances of $266,000 and $174,000, respectively		4,330,000			7,308,000
Due from Banks		22,000			-
Accounts receivable, related party		157,000			269,000

Inventory		7,328,000			6,871,000
Returns asset		1,081,000			1,919,000
Prepaid expenses and other current assets		867,000			136,000
Total Current Assets		14,406,000			23,206,000

Property and equipment, net		318,000			404,000
Operating leases - right of use assets		137,000			3,926,000
Other non-current assets		41,000			179,000
Intangible assets, net		1,356,000			-
Goodwill		3,354,000			-
Total Assets		19,612,000		$	27,715,000

Liabilities and Shareholders' Equity

Current Liabilities
Accounts payable	$	8,743,000		$	7,616,000
Accrued expenses		4,303,000			2,614,000
Refund due to customer		462,000			1,743,000
Customer prepayments		-			687,000
Reserve for sales returns		2,212,000			3,390,000
Merchant cash advances payable		303,000			-
Notes payable		50,000			-
Current portion of notes payable to related parties		265,000			-

Current portion of operating lease liabilities		135,000			84,000
Other current liabilities		15,000			75,000
Total Current Liabilities		16,488,000			16,209,000

Other liabilities		-			3,000
Notes payable to related parties, net of current portion		385,000			-
Operating lease liabilities, net of current portion		-			3,925,000
Total Liabilities		16,873,000			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; 11,079,678 issued and 9,752,755 shares outstanding at September 30, 2024 and 6,418,061 issued and outstanding at December 31, 2023.		98,000			64,000
Additional paid-in capital		35,995,000			33,429,000
Accumulated deficit		(33,206,000	)		(25,915,000	)
Non-controlling interest		(148,000	)		-
Total Algorhythm Holdings Shareholders' Equity		2,739,000			7,578,000

Total Liabilities and Shareholders' Equity	$	19,612,000		$	27,715,000

See notes to the condensed consolidated financial statements

ALGORHYTHM HOLDINGS, INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	For the Three Months Ended						For the Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023

Net Sales	$	10,622,000		$	15,931,000		$	15,488,000		$	21,939,000

Cost of Goods Sold		8,247,000			12,197,000			12,287,000			16,582,000

Gross Profit		2,375,000			3,734,000			3,201,000			5,357,000

Operating Expenses
Selling expenses		653,000			1,169,000			1,830,000			2,426,000
General and administrative expenses		4,339,000			2,459,000			8,552,000			7,403,000
Net (gain) loss on early termination of operating lease		(3,874,000	)		-			4,000			-
Total Operating Expenses		1,118,000			3,628,000			10,386,000			9,829,000

Income (Loss) from Operations		1,257,000			106,000			(7,185,000	)		(4,472,000	)

Other (Expenses) Income
Gain on disposal of fixed assets		-			44,000			-			44,000
Gain from Employee Retention Credit Program refund		-			-			-			704,000
Interest expense		(283,000	)		(53,000	)		(328,000	)		(122,000	)
Total Other (Expenses) Income, net		(283,000	)		(9,000	)		(328,000	)		626,000

Income (Loss) Before Income Tax Benefit		974,000			97,000			(7,513,000	)		(3,846,000	)

Income Tax Benefit (Provision)		-			-			-			(1,502,000	)

Consolidated Net Income (Loss)		974,000			97,000			(7,513,000	)		(5,348,000	)

Net (income) loss attributable to non-controlling interest		221,000			-			221,000			-

Net Income (Loss) Available to Common Stockholders	$	1,195,000		$	97,000		$	(7,292,000	)	$	(5,348,000	)

Income (Loss) per common share
Basic and diluted	$	0.13		$	0.03		$	(0.99	)	$	(1.44	)

Weighted Average Common and Common
Equivalent Shares:
Basic and diluted		9,095,504			4,220,259			7,341,204			3,726,259

See notes to the condensed consolidated financial statements

ALGORHYTHM HOLDINGS, INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Nine Months Ended
	September 30, 2024			September 30, 2023

Cash flows from operating activities
Net loss	$	(7,513,000	)	$	(5,348,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		159,000			289,000
Amortization of intangible assets		44,000			-
Provision for estimated cost of returns		839,000			1,095,000
Provision for inventory obsolescence		-			271,000
Credit losses		92,000			104,000
Gain on termination of operating lease		(246,000	)		-
Net gain from disposal of property and equipment		-			(42,000	)
Stock based compensation		616,000			174,000
Amortization of right of use assets		194,000			520,000
Change in net deferred tax assets		-			1,399,000
Changes in operating assets and liabilities:
Accounts receivable		3,079,000			(3,982,000	)
Due from banks		(22,000	)		(152,000	)
Accounts receivable - related parties		(303,000	)		117,000
Inventories		(456,000	)		(3,424,000	)
Prepaid expenses and other current assets		(718,000	)		87,000
Other non-current assets		151,000			(248,000	)
Accounts payable		394,000			10,442,000
Accrued expenses		(198,000	)		(486,000	)
Refunds due to customers		(1,967,000	)		1,212,000
Reserve for sales returns		(1,180,000	)		(646,000	)
Operating lease liabilities		116,000			(622,000	)
Payment of early termination fee on operating lease termination settlement		(150,000	)		-
Net cash (used in) provided by operating activities		(7,069,000	)		760,000
Cash flows from investing activities
Purchase of property and equipment		(70,000	)		(163,000	)
Cash received from purchase of SemiCab Inc		17,000			-
Disposal of property and equipment		-			55,000
Net cash used in investing activities		(53,000	)		(108,000	)

Cash flows from financing activities
Proceeds from sale of stock, net of offering costs		1,489,000			1,640,000
Payments on merchant cash advances payable		(327,000	)		-
Net payment from revolving lines of credit		-			(1,761,000	)
Other		(122,000	)		(113,000	)
Net cash provided by (used in) financing activities		1,040,000			(234,000	)
Net change in cash		(6,082,000	)		418,000

Cash at beginning of year		6,703,000			2,795,000
Cash at end of period	$	621,000		$	3,213,000

Supplemental disclosures of cash flow information:
Cash paid for interest	$	320,000			80,000
Non-Cash investing and financing cash flow information:
Common stock issued for purchase of SemiCab Inc	$	569,000		$	-
Equipment purchased under capital lease	$	-		$	55,000
Right of use assets exchanged for lease liabilities	$	136,000		$	3,874,000

See notes to the condensed consolidated financial statements

Algorhythm Holdings Reports Third Quarter 2024 Results