What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-19 compared with 2025-08-19 · 205 added, 190 removed, 162 unchanged (71% of the section changed)

11 unchanged sentences

December 31, 2024.

are an artificial intelligence (“AI”) technology that currently has one business unit, which is SemiCab.

SemiCab is an AI-enabled

software logistics business operated through our subsidiary, SemiCab Holdings, LLC.

Prior to August 1, 2025, we had a second business

unit, which was Singing Machine.

Singing Machine was a home karaoke consumer products business that designed and distributed karaoke

products globally to retailers and ecommerce partners through our subsidiary, The Singing Machine Company, Inc.

We sold our Singing Machine

business on August 1, 2025.

Accordingly, we no longer own or operate the Singing Machine business line.

are an artificial intelligence (“AI”) technology company that currently has one business unit, which is SemiCab.

is an AI-enabled software logistics business operated through our subsidiary, SemiCab Holdings, LLC.

Prior to August 1, 2025, we had

a second business unit, which was Singing Machine.

Singing Machine was a home karaoke consumer products business that designed and

distributed karaoke products globally to retailers and ecommerce partners through our subsidiary, The Singing Machine Company, Inc.

We sold our Singing Machine business on August 1, 2025.

Accordingly, we no longer own or operate the Singing Machine business

is a cloud-based Collaborative Transportation Platform built to achieve the scalability required to predict and optimize loads and the

1 unchanged sentence

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 techniques and advanced predictive optimization models.

data from API-based load tendering and pre-built integrations with Transportation Management System (“TMS”) and Electronic

Logging Device (“ELD”) partners.

To build fully loaded round trips, SemiCab uses AI/ML techniques and advanced predictive

optimization models.

2020, SemiCab has enabled major retailers, brands and transportation providers to address their transportation needs.

9 unchanged sentences

drivers or driven miles which addresses common problems plaguing the industry like severe driver shortage and road congestion.

optimization could also reduce carbon emissions attributable to road freight.

Singing Machine, we engaged in the development, marketing, and sale of consumer karaoke audio equipment, accessories, and musical recordings.

We were a leading global karaoke and music entertainment company that specializes in the design and production of quality karaoke and

We were a leading global karaoke and music entertainment company that specialized in the design and production of quality karaoke and

music enabled consumer products for adults and children.

40 unchanged sentences

agreement for SemiCab Holdings which sets forth the terms and conditions governing the operation and management of SemiCab Holdings.

of Singing Machine Business

of Singing Machine

August 1, 2025, we entered into an asset purchase agreement with SMC and Stingray Music USA, Inc.

3 unchanged sentences

The transaction closed on August 1, 2025.

We determined that the sale

of the Singing Machine business met the criteria under Accounting Standards Codification (“ASC”) 205-20, Presentation

of Financial Statements – Discontinued Operations (“ASC 205-20”), to be classified as a discontinued operation

as the sale represents a strategic shift that will have a significant effect on our operations and financial results.

Accordingly, we

have accounted for the Singing Machine business as a discontinued operation in this Quarterly Report on Form 10-Q.

Unless otherwise noted,

the information contained in this Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

consists exclusively of our continuing operations and does not include the operations of the Singing Machine business.

Additional information

concerning the Singing Machine business is presented in Note 19 -- Discontinued Operations of our condensed consolidated financial

Streeterville Capital Financing

On November 13, 2025, we entered

into Secured Pre-Paid Purchase #2 with Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”), under

that certain securities purchase agreement (the “Securities Purchase Agreement”), dated August 21, 2025, between us and Streeterville.

Under the Securities Purchase Agreement, we agreed to issue and sell shares of our common stock to Streeterville in one or more pre-paid

purchases (each, a “Pre-Paid Purchase” and collectively, the “Pre-Paid Purchases”) for an aggregate purchase price

of up to $20,000,000.

Secured Pre-Paid Purchase #2 provides for a second Pre-Paid Purchase in the principal amount of $5,450,000, before

deducting an original issue discount of $450,000 (the “Second Pre-Paid Purchase”).

The Second Pre-Paid Purchase accrues interest

at the rate of nine percent (9%) per annum and has a maturity date of three years.

The Second Pre-Paid Purchase is

similar to the first Pre-Paid Purchase that we completed on August 21, 2025, however the Second Pre-Paid Purchase is secured by cash in

an amount not less than the lesser of:

(i) $4,500,000, and (ii) 90% of the then-current outstanding balance of the Second Pre-Paid Purchase

(the “Minimum Balance Amount”).

The Minimum Balance Amount is being held in a deposit account (the “DACA Account”)

held by RIME Holdings, LLC, a Utah limited liability company and wholly-owned subsidiary of ours that we formed in connection with this

transaction (“RIME Holdings”), pursuant to a Deposit Account Control Agreement, dated November 13, 2025, by and among RIME

Holdings, Lakeside Bank, an Illinois banking company, and Streeterville (the “DACA Agreement”).

Accordingly, of the $5,000,000

proceeds that we received from the Second Pre-Paid Purchase, $4,500,000 were placed in the DACA Account.

We have the right to use funds

in the DACA Account to repay any portion of the outstanding balance of the Second Pre-Paid Purchase, but only so long as the payment does

not cause the outstanding balance to drop below the Minimum Balance Amount.

As long as no event of default has occurred, we may withdraw

from the Deposit Account any funds in excess of the Minimum Balance Amount.

The Second Pre-Paid Purchase is secured by the Guaranty, the

Security Agreement, and the IP Security Agreement (each as defined in the Securities Purchase Agreement).

In addition, RIME Holdings executed

a guaranty of the obligations outstanding under the Second Pre-Paid Purchase for the benefit of Streeterville.

We entered into a new placement

agency agreement with Univest Securities, LLC to serve as the placement agent in the offering (the “Placement Agent”) that

supersedes the placement agency agreement that we previously entered into with them on August 21, 2025 in connection with the offering.

We agreed to pay the Placement Agent a cash fee equal to eight percent (8%) of the aggregate gross proceeds received by us from any Pre-Paid

Purchases that we complete and reimburse the Placement Agent for legal fees in the amount of $50,000.

The cash fee for the Second Pre-Paid

Purchase must be paid on February 28, 2026;

provided, however , that we may request that the payment date be extended by 90 days.

We completed the offer and sale

of these securities in a private placement transaction that was exempt from the registration requirements of the Securities Act pursuant

to Section 4(a)(2) of the Securities Act without engaging in any advertising or general solicitation of any kind.

intend to invest in our SemiCab business to develop and grow it into a significant revenue producer for us.

20 unchanged sentences

AI logistics and distribution businesses and companies.

generated revenue of $2,716,000 for the three-month period ended June 30, 2025, compared to $2,440,000 for the three-month period ended

June 30, 2024.

The increase in revenue was due primarily to net sales generated by our SemiCab business.

This was partially offset by

a decrease in net sales of our Singing Machine karaoke products due to the negative impact on our business from recently implemented

tariffs on our products manufactured in China.

Gross profit was $954,000, or 35.1% of net sales, for the three-month period ended June

30, 2025, compared to $324,000, or 13.3% of net sales, for the three-month period ended June 30, 2024.

The increase was due primarily

to an increase of $276,000 for net sales and a decrease of $354,000 for cost of goods sold.

operating expenses were $1,736,000 for the three-month period ended June 30, 2025, compared to $6,478,000 for the three-month period

ended June 30, 2024.

The decrease in operating expenses was due primarily to a decrease of $3,878,000 for operating lease impairment

We incurred a loss from operations of $782,000 for the three-month period ended June 30, 2025 compared to $6,154,000 for the

three-month period ended June 30, 2024.

generated revenue of $1,744,000 for the three-month period ended September 30, 2025, compared to $127,000 for the three-month period

ended September 30, 2024.

The increase in revenue was due primarily to the addition of net sales generated by our SemiCab business

resulting from our acquisition of SMCB on May 2, 2025.

Gross loss was $351,000, or 20% of net sales, for the three-month period

ended September 30, 2025, compared to $32,000, or 25% of net sales, for the three-month period ended September 30, 2024.

increase was due primarily to an increase of $1,617,000 for net sales and an increase of $1,936,000 for cost of sales.

operating expenses were $1,214,000 for the three-month period ended September 30, 2025, compared to $1,791,000 for the three-month

period ended September 30, 2024.

The decrease in operating expenses was due primarily to a decrease of $816,000 for operating

expenses incurred during the three-month period ended September 30, 2024 related to acquisition of the SemiCab business on July 3,

We incurred net loss from continuing operations of $1,882,000 for the three-month period ended September 30, 2025 compared to

$2,106,000 for the three-month period ended September 30, 2024.

generated net loss available to common shareholders of $2,962,000, or $1.15 per share of common stock, for the three-month period ended

June 30, 2025, compared to $6,119,000, or $190.68 per share of common stock, for the three-month period ended June 30, 2024.

assets of $12,695,000 and $18,302,000 at June 30, 2025 and December 31, 2024, respectively.

Net cash used by operating activities was

$5,436,000 for the six-month period ended June 30, 2025 compared to $5,410,000 for the six-month period ended June 30, 2024.

expect net sales generated from our SemiCab business to increase substantially over the next 12 months as we generate more business from

our growing customer base in the United States and India.

We sold our Singing Machine business on August 1, 2025.

As a result, we will

no longer be generating any net sales from that business line.

Overall, total net sales are anticipated to increase over the next 12

months as growth in net sales generated by our SemiCab business is expected to exceed the loss in net sales of our Singing Machine karaoke

We expect gross profit to decrease over the next 12 months due to an increase in cost of goods sold that we will incur in connection

with the increase in net sales that we expect to generate from our SemiCab business.

The decrease in gross profit will be partially offset

by the reduction in cost of goods sold that we will realize as a result of the sale of our Singing Machine business.

We expect operating

expenses to decrease over the next 12 months as a result of our sale of the Singing Machine business.

The reductions achieved may be

partially offset by increases in legal and accounting expenses that we incur as we engage in additional capital-raising activities as

needed to fund our business and expenses that we incur to fund the growth and development of our SemiCab business.

Net loss available

to common stockholders is expected to decrease during the next 12 months primarily due to the sale of our Singing Machine business.

September 30, 2025, compared to a net gain available to common shareholders of $1,195,000, or $0.13 per share of common stock, for the

three-month period ended September 30, 2024.

The net gain available to common shareholders for 2024 was due primarily to a one-time gain of $3,874,000 that we

recognized on the early termination of an operating lease that we included in discontinued operations as a result of the sale of our Singing

Machine business.

We had total assets of $10,845,000 and $18,302,000 at September 30, 2025 and December 31,

2024, respectively.

Net cash used by operating activities attributable to continuing operations was $4,343,000 for the nine-month period

ended September 30, 2025 compared to $3,770,000 for the nine-month period ended September 30, 2024.

expect net sales generated from our SemiCab business to increase substantially over the next 12 months as we generate more business

from our growing customer base in India.

We expect gross loss to decrease over the next 12 months as the increase in net sales that

we expect to generate from our SemiCab business exceeds the increase in cost of sales that we expect to incur in connection with the growth in sales.

We expect operating expenses to increase over the next 12 months due to increases

in legal and accounting expenses that we incur as we engage in additional capital-raising activities as needed to fund our business

and increases in expenses that we expect to incur to fund the growth and development of our SemiCab business.

Net loss available to

common stockholders is expected to remain at similar levels.

We expect cost reduction activities that we are engaging in to

beneficially impact our net loss, but expect this to be offset by increases in the investment we will continue to make in the growth

and development of our SemiCab business.

Notwithstanding

6 unchanged sentences

results of operations.

of the Three-Month Periods Ended June 30, 2025 and 2024

sales consist primarily of sales generated by our SemiCab managed services logistics platform and sales of our Singing Machine karaoke

Net sales increased $276,000 to $2,716,000 for the three-month period ended June 30, 2025, compared to $2,440,000 for the three-month

period ended June 30, 2024.

The increase in net sales was due primarily to net sales generated by our SemiCab business.

This was partially

offset by a decrease in net sales of our Singing Machine karaoke products due to the negative impact on our business from recently implemented

tariffs on our products manufactured in China.

We sold our Singing Machine business on August 1, 2025.

As a result, we will no longer

be generating any revenue from that business line.

However, we anticipate total revenue to increase over the next 12 months as growth

in revenue generated by our SemiCab business exceeds the loss in net sales of our Singing Machine karaoke products.

of Goods Sold

of goods sold consists primarily of costs for raw materials and the manufacturing of our Singing Machine karaoke products, and freight,

handling and servicing costs that we incur in connection with our SemiCab business.

Cost of goods sold decreased $354,000 to $1,762,000

for the three-month period ended June 30, 2025, compared to $2,116,000 for the three-month period ended June 30, 2024.

The decrease in

cost of goods sold was due primarily to a decrease in cost of goods sold for our Singing Machine karaoke products associated with lower

net sales of these products.

This was partially offset by freight, handling and servicing costs that we incurred in connection with our

SemiCab business.

We expect costs of goods sold to increase over the next 12 months in connection with the increase in net sales that

we expect to generate from our SemiCab business.

We expect this increase to be partially offset by the reduction in cost of goods sold

that we will realize as a result of the sale of our Singing Machine business.

of the Three-Month Periods Ended September 30, 2025 and 2024

Net sales consist of sales

generated by our SemiCab business.

Net sales increased $1,617,000 to $1,744,000 for the three-month period ended September 30, 2025, compared

to $127,000 for the three-month period ended September 30, 2024.

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

from our growing customer base in India

Cost of Sales

Cost of sales consists primarily

of freight, handling and servicing costs that we incur in connection with our SemiCab business.

Cost of sales increased $1,936,000 to

$2,095,000 for the three-month period ended September 30, 2025, compared to $159,000 for the three-month period ended September 30, 2024.

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.

expenses consist of selling expenses and general and administrative expenses.

expenses consist primarily of marketing and advertising expenses that we incur in connection with advertising campaigns and online advertising

initiatives that we engage in to generate sales of our Singing Machine karaoke products.

We did not incur any selling expenses in connection

with our SemiCab business.

Selling expenses decreased $313,000 to $234,000 for the three-month period ended June 30, 2025, from $547,000

for the three-month period ended June 30, 2024.

The decrease was due primarily to a decrease in marketing and advertising expenses commensurate

with the decrease in sales of our Singing Mahine karaoke products.

We expect selling expenses to decrease substantially over the next

12 months due to the sale of our Singing Machine business.

Selling expenses consist

primarily of marketing and advertising activities that we engage in from time to time.

Selling expenses were $3,000 for the three-month

period ended September 30, 2025.

We did not incur any selling expenses for the three-month period ended September 30, 2024.

selling expenses to increase over the next 12 months as we being to devote more resources to marketing and advertising activities to

support the growth of our SemiCab business.

and Administrative Expenses

and administrative expenses consist primarily of payroll expenses, legal and accounting expenses, warehouse expenses and rent expense

associated with our Singing Machine business, and general and administrative expenses incurred in the development and growth of our SemiCab

General and administrative expenses decreased $551,000 to $1,502,000 for the three-month period ended June 30, 2025, compared

to $2,053,000 for the three-month period ended June 30, 2024.

The decrease was due primarily to decreases in general and administrative

expenses incurred by our Singing Machine business, partially offset by increases in general and administrative expenses incurred in the

growth and development of our SemiCab business.

We expect general and administrative expenses to decrease over the next 12 months due

to the sale of our Singing Machine business.

We expect the reductions achieved to be partially offset by an increase in expenses that

we expect to incur as we continue to invest in the growth and development of our SemiCab business.

Lease Impairment Expense

lease impairment expense consists of the write off of assets including security deposits, rent deposits and right of use assets that

we incurred due to our abandonment of our agreement of lease, dated August 23, 2023, with OAC 111 Flatiron, LLC and OAC Adelphi, LLC,

during the three months ended June 30, 2024.

Operating lease impairment expense was $3,878,000 for the three months ended June 30, 2024.

We did not incur any operating lease impairment expense for the three months ended June 30, 2025.

We do not expect to incur any additional

operating lease impairment expenses during the next 12 months.

expenses consist of financing costs that we incurred under our loan and security agreement, dated March 28, 2024, with Oxford Business

Credit and other non-operating expenses that we incurred in connection with our SemiCab business.

Other expenses increased $10,000 to

$27,000 for the three months ended June 30, 2025, compared to $17,000 for the three-month period ended June 30, 2024.

We terminated the

loan agreement and security agreement on October 17, 2024.

We may incur additional financing costs during the next 12 months, and expect

to continue to incur additional non-operating expenses in connection with our SemiCab business.

Loss Attributable to Non-Controlling Interests

loss attributable to non-controlling interests 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.

and administrative expenses consist primarily of payroll expenses, legal and accounting expenses, and rent expense associated with our

SemiCab business and corporate expenses.

General and administrative

expenses decreased $580,000 to $1,211,000 for the three-month period ended September 30, 2025, compared to $1,791,000 for the three-month

period ended September 30, 2024.

The decrease was due primarily to a decrease of $816,000 for operating expenses incurred during the

three-month period ended September 30, 2024 in connection with our acquisition of SemiCab’s business on July 3, 2024.

general and administrative expenses to increase over the next 12 months as we continue to invest in the growth and development of our

SemiCab business.

expenses consist of financing costs that we incurred under our loans and other financing activities.

Other expenses increased $10,000

to $293,000 for the three-months ended September 30, 2025, compared to $283,000 for the three-month period ended September 30, 2024.

We may incur additional financing costs during the next 12 months and expect to continue to incur additional non-operating expenses

in connection with the operation and growth of our SemiCab business.

Net Loss Attributable to Non-Controlling

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.

SemiCab Holdings owns our SemiCab business.

We acquired our SemiCab business

from SemiCab, Inc.

We acquired our SemiCab business from SemiCab,

on July 3, 2024, and, as part of the transaction, granted SemiCab, Inc.

a 20% membership interest in SemiCab Holdings.

The net loss attributable to non-controlling interest of $224,000 represents the amount of loss incurred by SemiCab that was allocated

to SemiCab, Inc.

through its 20% membership interest in SemiCab Holdings for period beginning April 1, 2025 and ending May 2, 2025, and

the amount of loss incurred by SemiCab that was allocated to Ajesh Kapoor and Vivek Sehgal through their collective 20% membership interest

in SemiCab Holdings for the period beginning May 2, 2025 and ending June 30, 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 SemiCab’s business.

of the Six-Month Periods Ended June 30, 2025 and 2024

sales decreased $157,000 to $4,709,000 for the six-month period ended June 30, 2025, compared to $4,866,000 for the six-month period

ended June 30, 2024.

The decrease in net sales was due primarily to a decrease in net sales of our Singing Machine karaoke products due

to the negative impact on our business from recently implemented tariffs on our products manufactured in China.

This was partially offset

by the increase in net sales that we generated from our SemiCab business.

of Goods Sold

of goods sold decreased $785,000 to $3,255,000 for the six-month period ended June 30, 2025, compared to $4,040,000 for the six-month

period ended June 30, 2024.

The decrease in cost of goods sold was due primarily to our decrease in net sales of our karaoke products

and the corresponding decrease in karaoke products manufactured, resulting in lower manufacturing costs.

We incurred only a minimal amount

of costs in connection with our SemiCab business.

This was partially offset by an increase in cost of goods sold associated with the

increase in net sales that we generated from our SemiCab business.

expenses decreased $179,000 to $998,000 for the six-month period ended June 30, 2025, from $1,177,000 for the six-month period ended

June 30, 2024.

The decrease was due primarily to a decrease in marketing and advertising expenses commensurate with the decrease in sales

of our Singing Machine karaoke products.

We did not incur any selling expenses in connection with our SemiCab business.

attributable to non-controlling interest of $20,000 for the three-month period ended September 30, 2025 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 for the three-month period ended September 30, 2025.

The net loss attributable to non-controlling interest of $221,000 for the

three-month period ended September 30, 2024 represents the amount of loss incurred by SemiCab Holdings that was allocated to SemiCab,

through its 20% membership interest in SemiCab Holdings for the three-month period ended September 30, 2024.

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 SemiCab’s

of the Nine-Month Periods Ended September 30, 2025 and 2024

Net sales increased $2,891,000

to $3,018,000 for the nine-month period ended September 30, 2025, compared to $127,000 for the nine-month period ended September 30, 2024.

The increase in net sales was due primarily to the addition of net sales generated by SMCB, which we acquired on May 2, 2025.

Cost of sales increased $3,557,000 to $3,716,000 for the nine-month

period ended September 30, 2025, compared to $159,000 for the nine-month period ended September 30, 2024.

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.

Selling expenses were $3,000

for the nine-month period ended September 30, 2025.

We did not incur any selling expenses for the nine-month period ended September 30,

and Administrative Expenses

and administrative expenses decreased $164,000 to $4,048,000 for the six-month period ended June 30, 2025, compared to $4,212,000 for

the six-month period ended June 30, 2024.

The decrease was due primarily to decreases in general and administrative expenses incurred

by our Singing Machine business, partially offset by increases in general and administrative expenses incurred in the growth and development

of our SemiCab business.

Lease Impairment Expense

lease impairment expense was $3,878,000 for the six months ended June 30, 2024.

We did not incur any operating lease impairment expense

for the three months ended June 30, 2025.

expenses consists primarily of a non-cash loss that we incurred for the change in fair value of the warrants in connection with the public

offering of securities that we completed on December 6, 2024.

Other expenses increased $6,466,000 to $6,511,000 for the six-month period

ended June 30, 2025, compared to $45,000 for the six-month period ended June 30, 2024.

The increase was due primarily to an increase

of $6,468,000 for the change in fair value of warrants.

We incurred only a minimal amount of other expenses in connection with our SemiCab

Loss Attributable to Non-Controlling Interests

net loss attributable to non-controlling interest of $327,000 represents the amount of loss incurred by SemiCab that was allocated to

SemiCab, Inc.

through its 20% membership interest in SemiCab Holdings for period beginning January 1, 2025 and ending May 2, 2025, and

the amount of loss incurred by SemiCab that was allocated to Ajesh Kapoor and Vivek Sehgal through their collective 20% membership interest

in SemiCab Holdings for the period beginning May 2, 2025 and ending June 30, 2025.

and administrative expenses increased $354,000 to $3,184,000 for the nine-month period ended September 30, 2025, compared to $2,830,000

for the nine-month period ended September 30, 2024.

The increase was due primarily to increases in general and administrative expenses

incurred in the growth and development of our SemiCab business.

expenses increased $6,476,000 to $6,804,000 for the nine-month period ended September 30, 2025, compared to $328,000 for the

nine-month period ended September 30, 2024.

The increase was due primarily to an increase of $6,468,000 for a one-time, non-cash

loss that we incurred in connection with the change in fair value of warrants sold in the public offering of

securities that we completed on December 6, 2024.

Net Loss Attributable to Non-Controlling

The net loss attributable

to non-controlling interest of $347,000 represents the amount of loss incurred by SemiCab that was allocated to SemiCab, Inc.

its 20% membership interest in SemiCab Holdings for period beginning January 1, 2025 and ending May 2, 2025, and the amount of loss incurred

by SemiCab that was allocated to Ajesh Kapoor and Vivek Sehgal through their collective 20% membership interest in SemiCab Holdings for

the period beginning May 2, 2025 and ending September 30, 2025.

The net loss attributable to non-controlling interest of $221,000 for

the nine-month period ended September 30, 2024 represents the loss incurred by SemiCab Holdings that was allocated to SemiCab, Inc.

its 20% membership interest in SemiCab Holdings for the nine-month period ended September 30, 2024.

And Capital Resources

1 unchanged sentence

the use of short- and long-term debt.

As of June 30, 2025, our cash balance was $1,134,000.

cash used by operating activities was $5,436,000 during the six-month period ended June 30, 2025, compared to $5,410,000 during the six-month

period ended June 30, 2024.

The increase of $26,000 was due primarily to an increase of $6,468,000 for change in fair value of warrants

that we incurred in connection with the public offering of securities that we completed on December 6, 2024.

This was partially offset

by a decrease of $3,878,000 for impairment expense and an increase of $1,617,000 for net loss.

cash used by investing activities was $1,359,000 during the six-month period ended June 30, 2025, compared to $6,000 during the six-month

period ended June 30, 2024.

The increase of $1,353,000 was due primarily to increases of $758,000 for repurchases of shares of our common

stock and $1,172,000 for advances to SMCB under out loan agreement with them, partially offset by an increase of $593,000 for cash received

in connection with our acquisition of SMCB on May 2, 2025.

cash provided by financing activities was $379,000 for the six-month period ended June 30, 2025, compared to net cash used in financing

activities of $42,000 for the six-month period ended June 30, 2024.

The difference of $421,000 was due primarily to an increase of $379,000

for proceeds from the issuance of promissory notes payable.

As of September 30, 2025, our cash balance was $2,839,000.

Net cash used by operating

activities attributable to continuing operations was $4,343,000 during the nine-month period ended September 30, 2025, compared to $3,770,000

during the nine-month period ended September 30, 2024.

The increase of $573,000 was due primarily to an increase of $7,523,000 for loss

from continuing operations, partially offset by an increase of $6,468,000 for the loss that we incurred in connection with the change

in fair value of warrants sold in the public offering of securities that we completed on December 6, 2024.

Net cash used by investing

activities attributable to continuing operations was $1,888,000 during the nine-month period ended September 30, 2025, compared cash provided

by investing activities attributable to continuing operations of $17,000 during the nine-month period ended September 30, 2024.

The difference

of $1,905,000 was due primarily to increases of $1,172,000 for advances to SMCB under our loan agreement with them, $758,000 for repurchases

of shares of our common stock, and $541,000 for the capitalization of internal use software costs.

These increases were partially offset

by an increase of $593,000 for cash received in connection with our acquisition of SMCB on May 2, 2025.

Net cash provided by financing

activities attributable to continuing operations was $4,115,000 during the nine-month period ended September 30, 2025, compared to $1,103,000

during the nine-month period ended September 30, 2024.

The difference of $3,012,000 was due primarily to an increase of $4,293,000 for

proceeds from the issuance of promissory notes, partially offset by a decrease of $1,489,000 for proceeds from the sale of stock.

limited cash resources along with our recent history of recurring operating losses and decreases in working capital create substantial

31 unchanged sentences

Sheet Arrangements

of June 30, 2025, we did not have any relationships with unconsolidated entities or financial partners, such as entities often referred

of September 30, 2025, we did not have any relationships with unconsolidated entities or financial partners, such as entities often referred

to as structured finance or special purpose entities, that had been established for the purpose of facilitating off-balance sheet arrangements

14 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis