Algorhythm Holdings, Inc. 10-Q

Item 1. Legal Proceedings On February 11, 2025, Blue Yonder, Inc. (“Blue Yonder”) filed a civil action in the Superior Court of the State of Arizona against us for breach of contract and to enforce a stipulated judgment entered against SemiCab, Inc. in connection with the liabilities related to Blue Yonder that we assumed when we acquired SemiCab, Inc.’s business. Blue Yonder alleged that, because we assumed these liabilities, Blue Yonder could enforce the judgment against us. The judgment was in the amount of $509,119. On August 1, 2025, we filed an answer to the complaint and counterclaims against Blue Yonder for breach of contract. On January 30, 2026, the court granted Blue Yonder’s motion for judgment on the pleadings. On June 12, 2026, we entered into a confidential settlement agreement and mutual release with Blue Yonder to resolve all claims related to the litigation and the underlying stipulated judgment. Under the terms of the settlement agreement, we agreed to pay Blue Yonder $500,000 in full settlement of all claims. We paid the settlement amount on July 2, 2026. Upon receipt of the payment, Blue Yonder released the Company and its subsidiaries from all claims related to the litigation and filed a satisfaction of judgment. Except as described above, there were no other material changes to the disclosures made in Part I – Item 3. Legal Proceedings of our Annual Report on Form 10-K for our fiscal year ended December 31, 2025 regarding these matters. Item 1A. Risk Factors Not required for smaller reporting companies. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds None. Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures Not applicable.