Algorhythm Holdings Reports Significant Revenue Decline and Increased Net Loss for 2024

Algorhythm Holdings, Inc., formerly known as The Singing Machine Company, Inc., reported a significant decline in financial performance for the year ended December 31, 2024, with net sales of $23.5 million, down from $29.2 million during the nine-month transition period ending December 31, 2023. The decrease in revenue was primarily attributed to reduced sales to major retailers, including Walmart and Target, due to the company's absence from Walmart's Black Friday promotions and loss of retail shelf space at Target. Gross profit also fell to $4.8 million, representing 20.4% of net sales, compared to 21.2% in the previous period.

The company incurred a net loss available to common stockholders of $23.3 million, or $353.87 per share, a substantial increase from the $6.4 million loss, or $263.04 per share, reported in the prior period. This loss was exacerbated by a one-time, non-cash impairment charge of $3.6 million related to goodwill from the acquisition of SemiCab, Inc., and a loss of $8.9 million on the issuance of warrants during a public offering. Operating expenses rose to $18.7 million, driven by increased general and administrative costs associated with the growth of the SemiCab business.

Strategically, Algorhythm completed the acquisition of SemiCab, Inc. on July 3, 2024, which is expected to enhance its logistics capabilities. The company also underwent a name change and a reverse stock split to improve its market position. Despite the challenges faced, Algorhythm plans to focus on expanding its SemiCab business and optimizing operations within its Singing Machine segment. The company anticipates that revenue from SemiCab will grow as it develops its customer base, while it expects a decline in sales from its karaoke products due to recent tariffs on imports from China.

As of December 31, 2024, Algorhythm reported total assets of $18.3 million, down from $27.7 million a year earlier, and total liabilities of $28.8 million, up from $20.1 million. The company had a cash balance of $7.6 million but indicated that this would not be sufficient to fund operations for the next 12 months without raising additional capital. The company is exploring various financing options, including equity and debt securities, to support its operations and growth initiatives.