$RIME

Algorhythm Holdings, Inc.

CIK:0000923601|SEC Filings

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025	Jun. 30, 2026	Jun. 30, 2025
Income Statement [Abstract]
Net Sales	$ 3,005,000	$ 1,152,000	$ 5,405,000	$ 1,275,000
Cost of Sales	3,598,000	1,492,000	6,675,000	1,621,000
Gross Loss	(593,000)	(340,000)	(1,270,000)	(346,000)
Operating Expenses
Selling expenses	49,000		82,000
General and administrative expenses	2,059,000	868,000	5,693,000	1,924,000
Total Operating Expenses	2,108,000	868,000	5,775,000	1,924,000
Loss From Operations	(2,701,000)	(1,208,000)	(7,045,000)	(2,270,000)
Other Expenses
Change in fair value of warrant liability				(6,468,000)
Loss on debt extinguishment	(400,000)		(400,000)
Interest expense, net	(1,045,000)	(27,000)	(2,081,000)	(43,000)
Total Other Expenses	(1,445,000)	(27,000)	(2,481,000)	(6,511,000)
Loss From Continuing Operations Before Income Tax	(4,146,000)	(1,235,000)	(9,526,000)	(8,781,000)
Income tax loss attributable to continuing operations	(3,000)		(3,000)
Net Loss From Continuing Operations	(4,149,000)	(1,235,000)	(9,529,000)	(8,781,000)
Net loss from discontinued operations		426,000		(1,322,000)
Net Loss	(4,149,000)	(809,000)	(9,529,000)	(10,103,000)
Net loss attributable to non-controlling interest	320,000	224,000	594,000	327,000
Net Loss Available to Common Shareholders	$ (3,829,000)	$ (585,000)	$ (8,935,000)	$ (9,776,000)
Loss Per Common Share
Basic from continuing operations	$ (0.25)	$ (0.41)	$ (0.71)	$ (3.80)
Diluted from continuing operations	(0.25)	(0.41)	(0.71)	(3.80)
Basic from discontinued operations		0.17		(0.59)
Diluted from discontinued operations		0.17		(0.59)
Basic	(0.25)	(0.24)	(0.71)	(4.40)
Diluted	$ (0.25)	$ (0.24)	$ (0.71)	$ (4.40)
Weighted Average Common and Common Equivalent Shares:
Basic	15,148,297	2,472,464	12,537,525	2,224,047
Diluted	15,148,297	2,472,464	12,537,525	2,224,047

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025
Cash flows from operating activities
Net loss from continuing operations	$ (9,529,000)	$ (8,781,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Net foreign currency translation adjustment	7,000
Depreciation and amortization of property and equipment and intangible assets	194,000	31,000
Amortization of debt discount and issuance cost	1,482,000
Reduction in SMCB loan in exchange for services		304,000
Gain on allowance for credit loss		(439,000)
Change in fair value of warrant liability		6,468,000
Loss on debt extinguishment	400,000
Stock-based compensation	1,119,000	47,000
Changes in operating assets and liabilities:
Accounts receivable	(383,000)	(584,000)
Prepaid expenses and other current assets	(3,259,000)	(713,000)
Other non-current assets	(16,000)	446,000
Accounts payable	816,000	(224,000)
Accrued expenses	1,854,000	141,000
Other current liabilities	687,000	198,000
Operating lease liabilities	2,000
Provision for employee benefits	34,000
Net cash used in operating activities attributable to continuing operations	(6,592,000)	(3,106,000)
Cash flows from investing activities
Purchase of property and equipment	(19,000)	(7,000)
Capitalization of internal use software costs	(248,000)
Repurchase of shares of common stock		(758,000)
Cash received from acquisition of SMCB		593,000
Advances to SMCB		(1,172,000)
Net cash used in investing activities attributable to continuing operations	(267,000)	(1,344,000)
Cash flows from financing activities
Proceeds from issuance of promissory notes, net of offering costs and discounts	9,020,000	379,000
Payment of promissory notes	(352,000)
Net cash provided by financing activities attributable to continuing operations	8,668,000	379,000
Net cash used in operating activities attributable to discontinued operations		(2,013,000)
Net cash provided by investing activities attributable to discontinued operations		(15,000)
Net cash provided by financing activities attributable to discontinued operations
Total cash used in discontinued operations		(2,028,000)
Net change in cash	1,809,000	(6,099,000)
Cash and restricted cash at beginning of period	6,146,000	7,233,000
Cash and restricted cash at end of period	7,955,000	1,134,000
Supplemental disclosures of cash flow information:
Cash paid for interest	18,000	43,000
Non-cash investing and financing cash flow information:
Common stock issued upon settlement of prepaid purchases	10,043,000
Exchange of partitioned pre-paid purchase for Series A preferred stock	3,500,000
Right of use assets obtained in exchange for new operating lease liabilities	333,000
Reclassification of Series A warrants to equity		7,857,000
Common stock issued for exercise of Series B warrants		15,214,000
Common stock issued for acquisition of SMCB		316,000
Promissory note issued for acquisition of SMCB		$ 1,750,000

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2026	Dec. 31, 2025
Current Assets
Cash	$ 4,972,000	$ 1,632,000
Restricted cash	2,983,000	4,514,000
Accounts receivable, net of allowances of $0 and $113,000, respectively	1,444,000	1,061,000
Prepaid expenses and other current assets	3,988,000	729,000
Total Current Assets	13,387,000	7,936,000
Property and equipment, net	36,000	22,000
Operating lease- right of use assets	304,000
Other non-current assets	95,000	79,000
Intangible assets, net	2,064,000	2,005,000
Goodwill	2,682,000	2,682,000
Total Assets	18,568,000	12,724,000
Current Liabilities
Accounts payable	2,229,000	1,413,000
Accrued expenses	3,106,000	1,556,000
Other current liabilities	756,000	69,000
Current portion of operating lease liabilities	90,000
Promissory notes payable, net	6,413,000	9,102,000
Total Current Liabilities	14,894,000	14,440,000
Operating lease liabities, net of current portion	216,000
Long-term provision for employee benefits	178,000	144,000
Total Liabilities	15,288,000	14,584,000
Commitments and Contingencies
Shareholders’ Equity (Deficit)
Preferred stock, $1.00 par value; 1,000,000 shares authorized; 3,500 and -0- shares issued and outstanding at June 30, 2026 and December 31, 2025	4,000
Common stock, $0.01 par value; 800,000,000 and 100,000,000 shares authorized; 15,670,768 and 3,414,542 shares issued and outstanding at June 30, 2026 and December 31, 2025	157,000	35,000
Additional paid-in capital	80,210,000	65,674,000
Accumulated other comprehensive loss	(19,000)	(25,000)
Accumulated deficit	(73,978,000)	(65,043,000)
Non-controlling interest	(2,336,000)	(1,743,000)
Treasury stock, 10,990 shares reserved at June 30, 2026 and December 31, 2025	(758,000)	(758,000)
Total Shareholders’ Equity (Deficit)	3,280,000	(1,860,000)
Total Liabilities and Shareholders’ Equity (Deficit)	18,568,000	12,724,000
Related Party [Member]
Current Liabilities
Notes payable to related parties	$ 2,300,000	$ 2,300,000