Algorhythm Holdings, Inc.

Previous wording

We generated net sales of $2,400,000 for the three-month period ended March 31, 2026, compared to $123,000 for the three-month period ended March 31, 2025. The increase in net sales was due primarily to the addition of net sales generated by our SemiCab business resulting from our acquisition of SMCB on May 2, 2025. Cost of sales was $3,077,000 for the three months ended March 31, 2026, compared to $129,000 for the three months ended March 31, 2025. The increase in cost of sales was due primarily to the addition of freight, handling and servicing costs incurred by SMCB resulting from our acquisition of SMCB on May 2, 2025. Our operating expenses were $3,667,000 for the three months ended March 31, 2026, compared to $1,056,000 for the three months ended March 31, 2025. The increase in operating expenses was due primarily to the increase in general and administrative expenses incurred in the growth and development of our SemiCab business during the three months ended March 31, 2026.

Current wording

We generated net sales of $3,005,000 for the three-month period ended June 30, 2026, compared to $1,152,000 for the three months ended June 30, 2025. The increase in net sales was due primarily to the addition of net sales generated by our SemiCab business resulting from our acquisition of SMCB on May 2, 2025. Cost of sales was $3,598,000 for the three months ended June 30, 2026, compared to $1,492,000 for the three months ended June 30, 2025. The increase in cost of sales was due primarily to the addition of freight, handling and servicing costs incurred by SMCB resulting from our acquisition of SMCB on May 2, 2025. Our operating expenses were $2,108,000 for the three months ended June 30, 2026, compared to $868,000 for the three months ended June 30, 2025. The increase in operating expenses was due primarily to the increase in general and administrative expenses incurred in the growth and development of our SemiCab business during the three months ended June 30, 2026.

Previous wording

We generated net loss from continuing operations of $5,380,000, or $0.52 per share of common stock, for the three months ended March 31, 2026, compared to $7,546,000, or $3.77 per share of common stock, for the three months ended March 31, 2025. The most significant contributors to the decrease in the net loss from continuing operations was a decrease of $6,468,000 for a non-cash charge for changes in the fair value of warrants liability partially offset by increases in general and administrative expenses incurred in the growth and development of our SemiCab business. We had total assets of $18,455,000 and $12,724,000 at March 31, 2026 and December 31, 2025, respectively. Net cash used in operating activities attributable to continuing operations was $3,922,000 the three months ended March 31, 2026, compared to $2,374,000 the three months ended March 31, 2025.

Current wording

We generated net loss from continuing operations of $4,149,000 for the three months ended June 30, 2026, compared to a loss of $1,235,000 for the three months ended June 30, 2025. The increase in the net loss from continuing operations was mainly due to administrative expenses incurred in the growth and development of our SemiCab business and the interest expense incurred by us on the pre-paid purchases under the Streeterville Transaction. We had total assets of $18,568,000 and $12,724,000 at June 30, 2026 and December 31, 2025, respectively. Net cash used in operating activities attributable to continuing operations was $6,592,000 for the six months ended June 30, 2026, compared to $3,106,000 for the six months ended June 30, 2025.

Previous wording

Net sales consist of sales generated by our SemiCab business. Net sales increased $2,277,000 to $2,400,000 for the three-month period ended March 31, 2026, compared to $123,000 for the three-month period ended March 31, 2025. The increase in net sales was due primarily to the addition of net sales generated by SMCB, which we acquired on May 2, 2025. We expect net sales to increase over the next 12 months as we generate more business through our growing customer base in India and as we begin to generate business in the United States and Europe.

Current wording

Net sales consist of sales generated by our SemiCab business. Net sales increased $1,853,000 to $3,005,000 for the three-month period ended June 30, 2026, compared to $1,152,000 for the three-month period ended June 30, 2025. The increase in net sales was due primarily to the addition of net sales generated by SMCB, which we acquired on May 2, 2025.

Previous wording

Cost of sales consists primarily of freight, handling and servicing costs that we incur in connection with our SemiCab business. Cost of sales increased $2,948,000 to $3,077,000 for the three-month period ended March 31, 2026, compared to $129,000 for the three-month period ended March 31, 2025. The increase in cost of sales was due primarily to the addition of freight, handling and servicing costs incurred by SMCB, which we acquired on May 2, 2025. We expect costs of sales to increase over the next 12 months in connection with the increase in net sales that we expect to generate from our SemiCab business.

Current wording

Cost of sales consists primarily of freight, handling and servicing costs that we incur in connection with our SemiCab business. Cost of sales increased $2,106,000 to $3,598,000 for the three-month period ended June 30, 2026, compared to $1,492,000 for the three-month period ended June 30, 2025. The increase in cost of sales was due primarily to the addition of freight, handling and servicing costs incurred by SMCB, which we acquired on May 2, 2025.

Previous wording

Selling expenses consist primarily of marketing and advertising activities that we engage in from time to time in connection with our SemiCab business. Selling expenses were $33,000 for the three-month period ended March 31, 2026. We did not incur any selling expenses for the three-month period ended March 31, 2025. We expect selling expenses to increase substantially over the next 12 months as we begin to devote more resources to marketing and advertising activities to support the growth of our SemiCab business in India, the United States and Europe.

Current wording

Selling expenses consist primarily of marketing and advertising activities that we engage in from time to time in connection with our SemiCab business. Selling expenses were $49,000 for the three-month period ended June 30, 2026. We did not incur any selling expenses for the three-month period ended June 30, 2025.

Previous wording

General and administrative expenses consist primarily of compensation expense, legal and accounting expenses, and other corporate expenses. General and administrative expenses increased $2,578,000 to $3,634,000 for the three-month period ended March 31, 2026, compared to $1,056,000 for the three-month period ended March 31, 2025. The increase was due primarily to increases in expenses incurred in connection with the operation of our SemiCab business and stock-based compensation expense. We expect general and administrative expenses to decrease over the next 12 months as we incur less stock-based compensation expense. This decrease will be partially offset by an increase in general and administrative expenses associated with the growth and development of our SemiCab business.

Current wording

General and administrative expenses consist primarily of compensation expense, legal and accounting expenses, and other corporate expenses. General and administrative expenses increased $1,191,000 to $2,059,000 for the three-month period ended June 30, 2026, compared to $868,000 for the three-month period ended June 30, 2025. The increase was due primarily to increases in expenses incurred in connection with the operation of our SemiCab business.

Previous wording

SemiCab Holdings owns our SemiCab business. Net loss attributable to non-controlling interest consists of the loss allocated to SemiCab, Inc., which owned a 20% of the outstanding membership interests of SemiCab Holdings until May 2, 2025, and Ajesh Kapoor and Vivek Sehgal, who collectively owned 20% of the outstanding membership interests of SemiCab Holdings beginning May 2, 2025. The net loss attributable to non-controlling interest of $274,000 for the three-month period ended March 31, 2026 represents the amount of loss incurred by SemiCab Holdings that was allocated to Ajesh Kapoor and Vivek Sehgal through their collective 20% membership interest in SemiCab Holdings. The net loss attributable to non-controlling interest of $103,000 for the three-month period ended March 31, 2025 represents the amount of loss incurred by SemiCab Holdings that was allocated to SemiCab, Inc. between January 1, 2025 and March 31, 2025. We expect net loss attributable to non-controlling interest to increase over the next 12 months as we continue to invest in the development and growth of our SemiCab business.

Current wording

SemiCab Holdings owns our SemiCab business. Net loss attributable to non-controlling interest consists of the loss allocated to SemiCab, Inc., which owned a 20% of the outstanding membership interests of SemiCab Holdings until May 2, 2025, and Ajesh Kapoor and Vivek Sehgal, who collectively owned 20% of the outstanding membership interests of SemiCab Holdings beginning May 2, 2025. The net loss attributable to non-controlling interest of $320,000 for the three-month period ended June 30, 2026 represents the amount of loss incurred by SemiCab Holdings that was allocated to Ajesh Kapoor and Vivek Sehgal through their collective 20% membership interest in SemiCab Holdings. The net loss attributable to non-controlling interest of $224,000 for the three-month period ended June 30, 2025 represents the amount of loss incurred by SemiCab Holdings that was allocated to SemiCab, Inc. between January 1, 2025 and May 2, 2025, and to Ajesh Kapoor and Vivek Sehgal between May 2, 2025 and June 30, 2025.

Previous wording

Other expenses consist primarily of the loss on the change in fair value of warrants that we incurred in connection with the public offering of securities that we completed on December 6, 2024, and interest expense that we incurred in connection with other financing transactions that we have completed. Other expenses decreased $5,448,000 to $1,036,000 for the three-month period ended March 31, 2026, compared to $6,484,000 for the three-month period ended March 31, 2025. The decrease was due primarily to the loss of $6,468,000 on the change in fair value of warrants that we incurred during the three-month period ended March 31, 2025 in connection with the public offering of securities that we completed on December 6, 2024, partially offset by an increase of $1,020,000 related to interest expense, including amortization of deferred debt costs, incurred in connection with financing transactions that we incurred during the three-month period ended March 31, 2026. We expect other expenses to remain at similar levels over the next 12 months as we continue to incur interest expense in connection with the financing transactions that we have completed.

Current wording

Other expenses decreased $4,030,000 to $2,481,000 for the six-month period ended June 30, 2026, compared to $6,511,000 for the six-month period ended June 30, 2025. The decrease was due primarily to the loss of $6,468,000 on the change in fair value of warrants that we incurred during the six-month period ended June 30, 2025 in connection with the public offering of securities that we completed on December 6, 2024, partially offset by the interest expense, including the amortization of deferred debt cost, associated with our recent financing transactions.

Previous wording

Since our inception, we have funded our operations primarily through cash generated by our operations, private sales of equity securities and the use of short- and long-term debt. As of March 31, 2026, our cash and restricted cash balance was $10,939,000.

Current wording

Since our inception, we have funded our operations primarily through cash generated by our operations, private sales of equity securities and the use of short- and long-term debt. As of June 30, 2026, our cash and restricted cash balance was $7,955,000.

Previous wording

Net cash used in operating activities attributable to continuing operations was $3,922,000 during the three-month period ended March 31, 2026, compared to $2,374,000 during the three-month period ended March 31, 2025. The increase of $1,548,000 was due primarily to a decrease of $6,468,000 for loss on change in fair value of warrants that we incurred in connection with the public offering of securities that we completed on December 6, 2024, partially offset by a decrease of $2,166,000 for net loss and an increase of $1,655,000 for accrued expenses.

Current wording

Net cash used in operating activities attributable to continuing operations was $6,592,000 during the six-month period ended June 30, 2026, compared to $3,106,000 during the six-month period ended June 30, 2025. The increase of $3,486,000 was due primarily to decreases of $6,468,000 for loss on the change in fair value of warrants recognized in connection with the public offering of securities that we completed on December 6, 2024, and $2,550,000 for prepaid expenses and other current assets. These decreases were partially offset by increases of $1,482,000 for the amortization of debt discount and issuance costs and $2,754,000 for accounts payable and accrued expenses.

Previous wording

Net cash used in investing activities attributable to continuing operations was $128,000 during the three-month period ended March 31, 2026, compared to $672,000 during the three-month period ended March 31, 2025. The decrease of $544,000 was due primarily to a decrease of $672,000 for advances to SMCB under our loan agreement with them, partially offset by an increase of $114,000 for the capitalization of internal use software costs.

Current wording

Net cash used in investing activities attributable to continuing operations was $267,000 during the six-month period ended June 30, 2026, compared to $1,344,000 during the six-month period ended June 30, 2025. The decrease of $1,077,000 was due primarily to decreases of $1,172,000 for advances to SMCB under our loan agreement with them and $758,000 for repurchases of shares of our common stock, partially offset by a decrease of $593,000 for cash received in connection with our acquisition of SMCB on May 2, 2025 and an increase of $248,000 for the capitalization of internal use software costs

Previous wording

Net cash provided by financing activities attributable to continuing operations was $8,843,000 for the three-month period ended March 31, 2026. We did not have any cash flows from financing activities attributable to continuing operations during the three-month period ended March 31, 2025. The increase of $8,843,000 was due primarily to net proceeds of $9,020,000 that we received from Streeterville under the Fourth Pre-Paid Purchase.

Current wording

Net cash provided by financing activities attributable to continuing operations was $8,668,000 for the six-month period ended June 30, 2026, compared to $379,000 during the six-month period ended June 30, 2025. The increase of $8,289,000 was due primarily to net proceeds of $9,020,000 that we received from Streeterville under the Fourth Pre-Paid Purchase.

Previous wording

On December 30, 2024, we received notice from the Nasdaq indicating that the bid price for our common stock had closed below $0.10 per share for the 13-consecutive trading day period ended December 27, 2024 and, accordingly, we would be subject to the provisions contemplated under Nasdaq Listing Rule 5810(c)(3)(A)(iii) and our securities would be subject to delisting from Nasdaq unless we timely request a hearing before the Nasdaq hearings panel. On February 10, 2025, we implemented a 200-for-1 reverse stock split. On that day, the closing price of our common stock was $2.98 per share and the closing bid of our common stock remained above $1.00 for the next 10 consecutive business days.

Current wording

On December 30, 2024, we received notice from the Nasdaq indicating that the bid price for our common stock had closed below $0.10 per share for the 13-consecutive trading day period ended December 27, 2024 and, accordingly, we would be subject to the provisions contemplated under Nasdaq Listing Rule 5810(c)(3)(A)(iii) and our securities would be subject to delisting from Nasdaq unless we timely request a hearing before the Nasdaq hearings panel. On February 10, 2025, we implemented a 200-for-1 reverse stock split. On that day, the closing price of our common stock was $2.98 per share and the closing bid of our common stock remained above $1.00 for the next 10 consecutive business days. On March 25, 2025, we received a letter from the Nasdaq stating that we had regained compliance with the minimum bid price requirement of $1.00 per share for continued listing on the Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2).

Previous wording

On November 19, 2024, we filed our Quarterly Report on Form 10-Q for our fiscal quarter ended September 30, 2024 with the SEC. Therein, we reported stockholders’ equity of approximately $2,700,000. That same day we filed a Form 8-K with the SEC stating that we believed we had regained compliance with the stockholders’ equity requirement. On November 22, 2024, we received a letter from the Nasdaq indicating that, based on the Form 10-Q that we filed on November 19, 2024, the Nasdaq had determined that we were in compliance with the stockholders’ equity rule. The Nasdaq advised us that it would continue to monitor our ongoing compliance with the stockholders’ equity requirement and, if at the time of our next periodic report, we fail to comply with the requirement, we may be subject to delisting.

Current wording

On May 14, 2026, we filed our Quarterly Report on Form 10-Q for the period ended March 31, 2026 wherein we reported stockholders’ equity of $3,168,000. On May 21, 2026, we filed a Form 8-K where we stated that, as a result of the $3,168,000 of stockholders’ equity that we reported in that quarterly report, we believe that we had regained compliance with Nasdaq Listing Rule 5550(b)(1) for continued listing on the Nasdaq. On May 26, 2026, we received a letter from the Nasdaq notifying us that, based on our Form 8-K, dated May 21, 2026, the Nasdaq had determined that we complied with Nasdaq Listing Rule 5550(b)(1).