FORT LAUDERDALE - Algorhythm Holdings, Inc. (NASDAQ:RIME), a technology and consumer electronics company with a current market capitalization of $1.15 million, has disclosed a registered direct offering of its common stock, which is expected to result in $2 million in gross proceeds for the company. According to InvestingPro data, the company's stock has experienced significant volatility, declining over 93% in the past year. The firm has agreed to sell approximately 24.07 million shares at a price of $0.0831 each. The transaction is scheduled to close on December 18, 2024, given all customary conditions are met. InvestingPro analysis indicates the company is currently trading below its Fair Value, with concerning financial health metrics including a weak overall financial health score and rapidly diminishing cash reserves.
Univest Securities, LLC is serving as the exclusive placement agent for this offering. This sale of shares is being conducted in accordance with a shelf registration statement previously filed and declared effective by the U.S. Securities and Exchange Commission (SEC) on January 20, 2023.
Algorhythm Holdings is known for its two primary investments: SemiCab Holdings, a company in the AI-enabled global logistics industry, and The Singing Machine Company, a leader in the consumer karaoke market. SemiCab's platform utilizes AI and machine learning to enhance transportation efficiency, while The Singing Machine Company offers a variety of karaoke products and is developing an in-car karaoke system.
The company's recent announcement follows the SEC guidelines, and the final prospectus supplement and accompanying prospectus will be available on the SEC's website. This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in any jurisdiction where such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Algorhythm's AI-driven logistics platform, SemiCab, has shown potential in reducing costs and carbon emissions in the transportation sector by optimizing truck utilization rates. The Singing Machine Company, on the other hand, has a global presence in the karaoke industry and is involved in philanthropic initiatives through its CARE-eoke program. Financial metrics from InvestingPro reveal the company's challenges, with a negative EBITDA of $10.6 million and revenue decline of 16.2% in the last twelve months. Subscribers to InvestingPro can access 17 additional ProTips and a comprehensive Pro Research Report for deeper insights into RIME's financial position and growth prospects.
The company cautions that this announcement contains forward-looking statements subject to risks and uncertainties and that actual results may differ materially from those projected. Investors are encouraged to review factors that may affect the company's future results as detailed in the company's SEC filings. This article is based on a press release statement.
In other recent news, Algorhythm Holdings, Inc. has announced a series of significant developments. The technology and consumer electronics holding company priced a public offering expected to generate approximately $9.5 million in gross proceeds. The funds raised are slated for working capital, general corporate purposes, and to repay certain outstanding senior secured notes, according to Univest Securities, the sole placement agent for the transaction.
Additionally, Algorhythm Holdings has regained compliance with Nasdaq's minimum stockholders' equity requirement following a period of non-compliance. This was achieved through a successful compliance plan that included an At-The-Market Issuance Sales Agreement with Ascendiant Capital Markets, LLC, and the acquisition of SemiCab, Inc., resulting in the issuance of over 4 million shares of common stock.
Moreover, the company secured approximately $2 million in funding through a Securities Purchase Agreement, issuing 2,300,000 shares of common stock. The net proceeds are planned for working capital and other general corporate purposes.
Furthermore, Algorhythm Holdings has formed a partnership with Apollo Tyres (NS:APLO), India's largest tire manufacturer, through its subsidiary SemiCab India. This partnership aims to optimize freight logistics with an AI-powered platform.
Despite a decrease in net sales and gross profit, Algorhythm Holdings has announced a strategic shift towards the automotive and connected TV sectors. These are the recent developments for Algorhythm Holdings. However, Nasdaq has cautioned that if Algorhythm Holdings does not demonstrate continued compliance in its next SEC periodic report, it may face delisting.
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