What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-04-15 compared with 2023-07-14 · 348 added, 342 removed, 15 unchanged (98% of the section changed)

are primarily engaged in the development, marketing, and sale of consumer karaoke audio equipment, accessories and musical recordings.

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

and music enabled consumer products for adults and children.

Our products are among the most widely available karaoke products in the

Our mission is to “create joy through music.” In order to deliver on this mission, we are focused on the following

multi-prong approach:

the short-term, improve profitability by optimizing operations and continue to expand gross margins;

the mid-to-long-term, continue to grow our global distribution and expand into new product categories that take advantage of our

vast distribution relationships and sourcing abilities.

the context requires otherwise, references in this Annual Report to “we,” “us,” “our,” and Algorhythm

refer to Algorhythm Holdings, Inc.

and its consolidated subsidiaries.

otherwise expressly provided in this Annual Report, all historical per share data, number of shares issued and outstanding, stock awards,

and other common stock equivalents set forth herein relating to our common stock have been adjusted to give effect to a reverse stock

split of our common stock in a ratio of 1-for-200 effected on February 10, 2025.

are an AI technology and consumer electronics holding company with two primary business units – SemiCab and Singing Machine.

is an artificial intelligence (“AI”) enabled software logistics business operated through our subsidiary, SemiCab Holdings,

Singing Machine is a home karaoke consumer products business that designs and distributes karaoke products globally to retailers

and ecommerce partners through our subsidiary, The Singing Machine Company, Inc.

operations include our wholly-owned subsidiaries, SMC Logistics, Inc., a California corporation (“SMCL”), SMC-Music, Inc.,

a Florida corporation (“SMCM”), SMC (HK) Limited, a Hong Kong company (“SMH”), The Singing Machine Company, Inc.,

a Delaware corporation (“Singing Machine”), MICS Hospitality Holdings, Inc., a Delaware corporation (“MICS Hospitality”),

MICS Hospitality Management, LLC, a Delaware limited liability company (“MICS Hospitality Management”), and MICS Nomad, LLC,

a Delaware limited liability company (“MICS NY”), and our 80%-owned subsidiary, SemiCab Holdings, LLC, a Nevada limited liability

company (“SemiCab Holdings”).

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

use of trucks.

To orchestrate collaboration across manufacturers, retailers, distributors, and their carriers, SemiCab uses real-time

data from AI-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.

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

Orchestrated Collaboration™ AI model has proven to increase transportation capacity, improve asset utilization, reduce empty miles,

lower logistics costs, and provide visibility into the entire transportation network.

Models show that the technology has the capability

of reducing costs through optimization.

Additionally, SemiCab’s technology has the potential to play a key role in the improved

sustainability model.

Based on its proven ability to improve truck utilization rates, this could result in a dramatic reduction in the

carbon footprint of the industry.

The optimization of existing truck utilization can add trucking capacity without adding more trucks,

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 engage in the development, marketing, and sale of consumer karaoke audio equipment, accessories, and musical recordings.

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

music enabled consumer products for adults and children.

Our products are among the most widely available karaoke products internationally.

mission is to “create joy through music.” To deliver on this mission, we are focused on a multi-prong approach.

In the short-term,

we seek to improve profitability by optimizing operations and continue to expand gross margins.

In the mid-to-long-term, we seek to continue

to expand our business into new verticals including automotive and connected-TV devices and grow our global distribution for our consumer

karaoke products.

Events and Developments

Redemption Agreement

to August 10, 2021, we were partially held by koncepts International Limited (“koncepts”) which was a major stockholder of

our company, that beneficially owned approximately 49% of our shares of common stock outstanding as of March 31, 2021.

We were also partly

held by Treasure Green Holdings Ltd.

(“Treasure Green”), which owned approximately 2% of our common stock.

In total, approximately

51% of our shares of common stock on a fully diluted basis as of March 31, 2021 were previously owned by koncepts and Treasure Green.

koncepts and Treasure Green are owned by Fairy King Prawn Holdings Limited (“Fairy King”), an investment holding company

incorporated in the British Virgin Islands, principally owned by our then Chairman, Philip Lau.

August 5, 2021, we entered into a stock redemption agreement (the “Redemption Agreement”) with koncepts and Treasure Green,

pursuant to which we redeemed 654,105 shares of our common stock (the “Redeemed Shares”).

The closing of the transaction

set forth in the Redemption Agreement took place on August 10, 2021, at which time the Redeemed Shares were assigned and transferred

back to us in consideration of a payment by us of approximately $7.2 million to koncepts and Treasure Green.

The Redeemed Shares were

retired and returned as unissued authorized capital.

to August 10, 2021, we did business with a number of entities that are principally owned by our former Chairman, Philip Lau, including

Starlight R&D Ltd (“SLRD”), Starlight Consumer Electronics USA, Inc., (“SCE”), Cosmo Communications Corporation

of Canada, Inc.

(“Cosmo”), Winglight Pacific, Ltd (“Winglight”) and Starlight Electronics Company Ltd (“SLE”),

among others.

to the Redemption Agreement, neither koncepts nor Treasure Green remained stockholders of our company and SLRD, SCE, Cosmo, Winglight

and SLE are no longer related parties.

Stock Split and Nasdaq Listing

May 23, 2022, we effected a reverse stock split of our shares of common stock in a ratio of 1:30.

The reverse stock split was affected

to meet The Nasdaq Capital Market’s minimum bid price requirement.

All information in this

Annual Report on Form 10-K has been retroactively adjusted to give effect to this 1-for-30 reverse stock split.

common stock was approved for listing on the Nasdaq Capital Market under the symbol “MICS” and began trading on the Nasdaq

Capital Market on May 24, 2022.

Public Offering

May 23, 2022, we entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp., who acted

as the sole underwriter (the “Underwriter”), in a firm commitment underwritten public offering pursuant to which we sold

to the Underwriter 1,000,000 shares of our common stock for gross proceeds of $4.0 million, prior to deducting underwriting discounts

and commissions and other estimated offering expenses of approximately $0.6 million.

The price to the public in the offering was $4.00

per share, before underwriting discounts and commissions.

The offering closed on May 26, 2022.

We received net proceeds of approximately

$3.4 million.

to the terms of the Underwriting Agreement, we issued to the Underwriter warrants to purchase up to 100,000 shares of common stock, representing

10% of the shares sold in the offering, excluding any shares sold through the over-allotment option.

The warrants are exercisable six

months from the commencement of sales under the offering, have an exercise price of $5.00 per share and expire five years from the date

June 13, 2022, Ault Alliance, Inc.

(“Ault Alliance”), formerly BitNile Holdings, Inc., a Delaware corporation, Ault Lending,

LLC (“Ault Lending”), a California limited liability company and subsidiary of Ault Alliance, and Milton C.

Ault, III (“Ault”),

Founder and Executive Chairman of Ault Alliance (collectively the “Reporting Persons”) filed a joint Schedule 13D filing

(the “Schedule 13D”) reporting that the Reporting Persons acquired, in the aggregate, 1,405,000 shares, or 52.8% of the issued

and outstanding shares of our common stock, through open market purchases.

disclosed in the Schedule 13D, as amended and subsequent Section 16 filings, Ault Lending currently owns, and Ault Alliance and Ault

may be deemed to beneficially own, an aggregate of 1,808,000 shares of common stock, or approximately 42.8% of the outstanding shares

of common stock as of the date of this Annual Report.

The reduction in beneficial ownership percentage was a result of us selling stock

in our ATM Offering (as defined and discussed below), and not from any sales of our common stock by Ault Lending.

October 14, 2022, we and our wholly-owned subsidiary, SMC Logistics, Inc.

(“SMC”), entered into a Credit and Security Agreement

(the “Credit Agreement”) with Fifth Third Bank, National Association, as Lender (“Fifth Third”).

The Credit Agreement

provides for a three-year secured revolving credit facility in an aggregate principal amount of up to $15,000,000 decreased to $7,500,000

during the period of January 1 through July 31 of each year (the “Credit Facility”).

The Credit Agreement matures on October

revolving Credit Facility bears interest of (a) the Prime Rate plus 0.50% or (b) the 30 day Term SOFR rate plus 3.00% (subject in each

case to a floor of 0.50%), depending on the type of loan we request.

“Term SOFR” means the forward-looking SOFR rate administered

by CME Group, Inc.

(or other administrator selected by Fifth Third) and published on the applicable Bloomberg LP screen page (or such

other commercially available source providing such quotations as may be selected by Fifth Third), fixed by the administrator thereof

two business days prior to the commencement of the applicable interest period (provided, however, that if Term SOFR is not published

for such business day, then Term SOFR shall be determined by reference to the immediately preceding business day on which such rate is

published), rounded upwards, if necessary, to the next 1/8th of 1% and adjusted for reserves if Fifth Third is required to maintain reserves

with respect to the relevant loans.

are required to pay an unused line fee of 0.35% per annum equal to the difference between (i) the maximum revolving loan limit then in

effect and (ii) the average daily balance of the revolving loans for each month, which fee shall be fully earned by Fifth Third and payable

monthly in arrears on the first business day of each month.

Said fee shall be calculated on the basis of a 360 day year.

The Credit Agreement

provides for an early termination fee of 2% if we prepay or terminate Fifth Third’s commitment to make loans under the Credit Agreement

two or more years prior to the maturity or 0.5% if such prepayment occurs less than two year prior to the maturity or during any renewal

obligations under the Credit Agreement are secured by all of our assets and the assets of SMC, presently owned or later acquired, and

all cash and non-cash proceeds thereof (including, without limitation, insurance proceeds).

of March 31, 2023, we were in default under the Credit Agreement due to non-compliance with the fixed charge coverage ratio covenant

On May 19, 2023, we executed a Waiver and First Amendment agreement which provides for a waiver of previous defaults and

new covenants that are required.

We must comply monthly with minimum liquidity (defined as excess loan availability plus cash on hand)

of $2.5 million between February and July and $4.0 million between September and June.

We must also maintain pre-defined minimum operating

cash flows between February and August 2023, until we achieve a fixed charge ratio of 1.15 :

1.0 beginning in September 2023 and throughout

the remaining term of the Credit Agreement.

February 15, 2023, we entered into an At-The-Market Issuance Sales Agreement (the “Sales Agreement”) with Aegis Capital Corp,

as sales agent (the “Agent”), pursuant to which we could offer and sell, from time to time, through the Agent (the “ATM

Offering”), up to approximately $1.8 million in shares of its common stock.

Shares offered and sold in the ATM Offering were issued

pursuant to the registration statement on Form S-3 (File No.

333-269183) filed with the Securities and Exchange Commission (the “SEC”)

on January 11, 2023 and declared effective by the SEC on January 20, 2023, and the prospectus supplement relating to the ATM Offering

filed with the SEC on February 15, 2023.

During the fiscal year ended March 31, 2023, we received total net proceeds from the ATM Offering

of approximately $36,000 on sales of 14,230 shares of common stock at an average price of $2.56 per share.

Through May 12, 2023, we received

total net proceeds from the ATM Offering of approximately $1.7 million on sales of 1,052,770 shares of common stock at an average price

of $1.64 per share.

The Sales Agreement has been terminated.

in Fiscal Year

2023, our board of directors approved a change in our fiscal year end from March 31 to December 31.

July 3, 2024, we completed the acquisition of substantially all of the assets and the assumption of certain liabilities of SemiCab, Inc.

for a purchase price consisting of 3,210 shares of our common stock and a 20% membership interest in SemiCab Holdings.

August 23, 2023, MICS NY entered into an agreement of lease with OAC 111 Flatiron, LLC and OAC Adelphi, LLC (collectively, the “Landlord”)

pursuant to which MICS NY agreed to lease 10,000 square feet of ground floor retail space and a portion of the basement underneath the

ground floor retail space in the property located at 111 West 24 th Street, New York, New York.

It was our intention to use

this space as a new karaoke venue, offering immersive karaoke technology and audio-visual capabilities, with restaurant and bar offerings.

Due to a lack of funding, however, we initiated termination of the lease in March 2024.

July 26, 2024, the Landlord filed a civil action in the Supreme Court of the State of New York against us and MICS NY for alleged breach

of lease, seeking monetary damages including unpaid rent, future unpaid rent, and other expenses related to the lease.

The complaint

alleged that we and MICS NY breached the lease in various material respects.

September 25, 2024, we and MICS NY entered into a settlement agreement with OAC Flatiron and OAC Adelphi for a full release and dismissal

of the complaint that became effective within five business days of our payment of $250,000 to OAC Flatiron and OAC Adelphi.

full payment of the settlement amount on October 25, 2024, and OAC Flatiron and OAC Adelphi filed a discontinuance with prejudice with

the court on October 29, 2024.

Credit Facility

March 28, 2024, we entered into a loan agreement and related revolving credit note with Oxford Commercial Finance (“Oxford”)

for a $2,000,000 revolving line of credit.

On October 17, 2024, we terminated the loan agreement and note and paid them a termination

fee of $40,000.

As of the date of termination, we had no outstanding amounts owed to Oxford.

and Symbol Change

September 5, 2024, our Certificate of Incorporation was amended to change our name from “The Singing Machine Company, Inc.”

to “Algorhythm Holdings, Inc.” In addition, effective September 8, 2024, our ticker symbol was changed from “MICS”

October 18, 2024, we amended our bylaws to reduce the quorum necessary to hold stockholder meetings from a majority of the voting power

of the shares of our common stock that are issued and outstanding to 33 1/3% of the voting power of the shares of our common stock that

are issued and outstanding.

October 22, 2024, we entered into a securities purchase agreement pursuant to which we agreed to issue and sell to each purchaser:

an original issue discount senior secured note with a principal amount equal to such purchaser’s subscription amount divided by

0.85, and (ii) a number of shares of our common stock equal to (x) 2,300,000, multiplied by (y) such purchaser’s subscription amount,

divided by (z) $2,000,000.

The Offering closed on October 24, 2024.

At the closing, we issued to the purchasers an aggregate of 2,300,000

shares of our common stock and notes in the aggregate principal amount of $2,352,941 for total proceeds of $2,000,000 net of original

issue discount of $352,941.

Univest Securities served as the placement agent in the offering and received seven percent of the gross

proceeds received by us and reimbursement of the legal fees of its counsel.

We repaid all of the notes in December 2024.

Ventures Share Repurchase

November 1, 2024, we entered into a stock repurchase agreement with Regalia Ventures LLC, a Delaware limited liability company (“Regalia

Ventures”), pursuant to which we agreed to pay $472,527 to repurchase 5,495 shares of our common stock that Regalia Ventures had

previously purchased from us on November 20, 2023.

We agreed to issue a promissory note to Regalia Holdings in the principal amount of

the purchase price of the shares at the closing of the transaction.

On February 18, 2025, the date of the closing of the transaction,

we issued a promissory note to Regalia Holdings in the amount of $472,527.

On February 27, 2025, we paid off the note in full.

Ventures is owned and controlled by Jay B.

Foreman, who serves as a member of our board of directors.

Group Share Repurchase

December 3, 2024, we entered into a stock repurchase agreement with Stingray Group, Inc., a Canadian corporation (the “Stingray

Group”), pursuant to which we agreed to pay $285,714 to repurchase 5,495 shares of our common stock that Stingray Group had previously

purchased from us on November 20, 2023.

We agreed to issue a promissory note to Stingray Group in the principal amount of the purchase

price of the shares at the closing of the transaction.

On February 18, 2025, the date of the closing of the transaction, we issued a

promissory note to Stingray Group in the amount of $285,714.

On April 3, 2025, we paid off the note in full.

Mathieu Peloquin is the

Senior Vice-President, Marketing and Communications of Stingray Group and serves as a member of our board of directors.

Offering of Securities

December 4, 2024, we sold 21,000 shares of our common stock and pre-funded warrants to purchase 258,412 shares of our common stock in

lieu of receiving shares of common stock to accredited investors.

Each share of our common stock, or pre-funded warrant in lieu thereof,

was sold together with a Series A warrant to purchase one share of our common stock and a Series B warrant to purchase one share of our

common stock, at an offering price of $34 per share of common stock or pre-funded warrant.

Univest Securities, LLC (“Univest Securities”)

served as our exclusive placement agent in connection with the offering.

We paid Univest Securities a cash fee equal to seven percent

of the aggregate gross proceeds received in the offering and a non-accountable expense allowance equal to one percent of the aggregate

gross proceeds received in the offering.

We also reimbursed Univest Securities for various expenses incurred in connection with the offering.

We received net proceeds of $8,565,000 from the offering, after deducting placement agent fees and other offering expenses.

Direct Offering of Securities

December 18, 2024, we sold 120,337 shares of our common stock to institutional investors in a registered direct offering at a purchase

price of $16.62 per share.

Univest Securities served as our exclusive placement agent in connection with the offering.

We paid Univest

Securities a cash fee equal to eight percent of the aggregate gross proceeds received in the offering.

We reimbursed Univest Securities

for various expenses incurred in connection with the offering.

We received net proceeds of $1,665,000 from the offering, after deducting

placement agent fees and other offering expenses.

Stock Split and Increase in Authorized Shares

January 13, 2025, our stockholders voted to authorize our board of directors to effect a reverse stock split of the outstanding shares

of our common stock at a specific ratio within a range of 1-for-10 to a maximum of 1-for-250 and to amend our certificate of incorporation

to increase the number of authorized common stock from 100,000,000 to 800,000,000 shares.

On January 14, 2025, our board of directors

approved a reverse stock split of 1-for-200 ratio and approved the filing of a certificate of amendment to our certificate of incorporation

to effect the reverse stock split and to increase our authorized shares of common stock from 100,000,000 to 800,000,000.

stock split took effect on February 10, 2025.

of Chief Financial Officer & General Counsel

February 13, 2025, our board of directors appointed Alex Andre to serve as our Chief Financial Officer and General Counsel.

Richard Perez, who was terminated as our Chief Financial Officer on that same date.

Product Portfolio

products are sold directly to distributors and retail customers.

Our portfolio of owned and licensed brands and products are organized

into the following categories:

including our flagship brand Singing Machine, our karaoke line is driven by quality products at affordable price points that we believe

deliver great value to our customers.

All of our karaoke products are Bluetooth® enabled to allow access to digital music content

via our mobile apps available on iOS and Android platforms.

We believe our core karaoke line offers best-in-class advanced features,

including but not limited to, enabling customers to output video to a TV screen, correcting singer’s pitch in real-time with our

proprietary PitchLab™ technology, streaming karaoke content directly to the machine via WiFi, casting karaoke songs from a mobile

device to our karaoke machines through our SingCast™ casting technology, singing duets, and displaying scrolling lyrics in-time

with the song.

Our products are sold directly to consumers via our retail channels, ecommerce, our own website, and distributors worldwide.

This product category accounted for approximately 73% of our net sales in our fiscal year ended March 31, 2023.

Products — including brands such as Carpool Karaoke.

In 2019, we entered into a 3-year license agreement with CBS ®

for its Carpool Karaoke brand, made popular by James Corden on The Late Show with James Corden.

We launched an innovative Carpool

Karaoke Microphone that works specifically in the car.

This license agreement with CBS expired on September 30, 2022.

On February 28,

2023, we renewed this license agreement for an additional three years.

On March 16, 2023, we entered into a three-year license agreement

with Sesame Street Workshop for its Sesame Street brand for karaoke and singalong toy products, effective January 1, 2023.

license agreement, we will be able to develop and offer for sale all the iconic and beloved Sesame Street characters like Elmo, Big Bird,

Cookie Monster, Abby Cadabby, and many more.

This product category accounted for less than 1% of our net sales in our fiscal year ended

March 31, 2023.

and Accessories — we currently offer a line of traditional microphone accessories that are compatible with our karaoke machines.

These microphones feature an assortment of colors, come wired or wireless, and may include new features like party lighting and voice

changing effects.

We are also seeing growth in portable Bluetooth microphones which are marketed under our Party Machine brand.

product category accounted for approximately 20% of our net sales in our fiscal year ended March 31, 2023.

Machine Kids Youth Electronics — including the brand Singing Machine Kids.

Our kids’ line of products offers fun music

entertainment features designed specifically for children.

Our kids’ products provide a high-quality introduction to singing and

music entertainment for young singers and offer advanced features, such as voice changing effects, recording, Bluetooth compatibility,

and portability.

This product category accounted for approximately 5% of our net sales in our fiscal year ended March 31, 2023.

In January 2023, we announced at the Consumer Electronics Show that we will be entering the connected vehicle karaoke device market in

partnership with Stingray Group, Inc.

(“Stingray”).

We have developed microphone hardware utilizing our PitchLab™ technology

to offer integrated wireless microphones for connection with major automotive brand’s vehicles.

We are currently in discussion

with many automotive brands to offer our products.

This product category is new and did not contribute to net sales in our fiscal year

ended March 31, 2023.

Subscriptions — in conjunction with our premium partner, Stingray, we offer karaoke music subscription services for the

iOS and Android platforms as well as a web-based download store and integrated streaming services for our hardware.

We currently offer

almost 20,000 licensed karaoke songs in the catalog.

This product category accounted for approximately 2% of our net sales in our fiscal

year ended March 31, 2023.

product portfolio consists of our Singing Machine karaoke products and our SemiCab AI logistics and distribution services.

Machine Karaoke Product Offerings

karaoke products are sold directly to distributors and retail customers under our flagship Singing Machine brand name and are offered

at affordable price points that we believe deliver great value to our customers.

All of our karaoke products are Bluetooth® enabled

to allow access to digital music content via our mobile apps available on iOS and Android platforms.

Our core karaoke line offers advanced

features, including but not limited to, enabling customers to output video to a TV screen, correcting singer’s pitch in real-time

with our proprietary PitchLab™ technology, streaming karaoke content directly to the machine via WiFi, casting karaoke songs from

a mobile device to our karaoke machines through our SingCast™ casting technology, singing duets, and displaying scrolling lyrics

in-time with the song.

Our products are sold directly to consumers via our retail channels, ecommerce, our own website, and distributors

Arrangements .

offer innovative Carpool Karaoke Microphone that works specifically in the car.

In 2019, we entered into a 3-year license agreement with

CBS ® for its Carpool Karaoke brand, made popular by James Corden on The Late Show with James Corden.

agreement with CBS expired on September 30, 2022.

On February 28, 2023, we renewed this license agreement for an additional three years.

On March 16, 2023, we entered into a three-year license agreement with Sesame Street Workshop for its Sesame Street brand for karaoke

and singalong toy products, effective January 1, 2023.

Through this license agreement, we develop and offer for sale all the iconic and

beloved Sesame Street characters like Elmo, Big Bird, Cookie Monster, Abby Cadabby, and many more.

and Accessories

offer a line of traditional microphone accessories that are compatible with our karaoke machines.

These microphones feature an assortment

of colors, come wired or wireless, and may include new features like party lighting and voice changing effects.

We also offer portable

Bluetooth microphones which are marketed under our Party Machine brand.

Machine Kids Youth Electronics

have a children’s line of products offered under our Singing Machine Kids brand that have fun music entertainment features designed

specifically for children.

Our products for children introduce singing and music entertainment for young singers and offer advanced features,

such as voice changing effects, recording, Bluetooth compatibility, and portability.

intend to enter the connected vehicle karaoke device market through a partnership that we have with Stingray Group.

We have developed

microphone hardware utilizing our PitchLab™ technology to offer integrated wireless microphones for connection with major automotive

brand’s vehicles.

We are currently in discussions with many automotive brands to offer these products.

Subscriptions

conjunction with Stingray Group, we offer karaoke music subscription services for the iOS and Android platforms as well as a web-based

download store and integrated streaming services for our hardware.

We currently offer almost 20,000 licensed karaoke songs in the catalog.

SemiCab AI Logistics and Distribution

Transportation

offers transportation services to shippers and brokers that deliver products for retailers and manufacturers.

SemiCab primarily focuses

on full truck load and over-the-road transportation services.

SemiCab’s services are sold directly to shippers via bids for transportation

These bids are typically awarded for a selected number of routes for a pre-determined period of time, normally up to a year.

Subscription for Shippers

service category consists of a SaaS based platform subscription for shippers that enables them to better manage their freight network

by creating optimal lane bundles for bidding and optimized execution of loads with better control over their data and analytics.

Subscription for Brokers

also offers a software-as-a-service (“SaaS”) based platform subscription for logistics brokers that enables them to better

manage their operations for transportation execution.

The subscription primarily covers shipper management, carrier management, document

management, load operations management, invoicing, integration services, and reporting and analytics.

Development and Design

development is a key element of our strategic growth plan.

We strive to deliver many new, exciting consumer products to market every

single year to retain our presence as the market-leader in consumer karaoke products.

Strategic product development is done in-house

from our corporate headquarters in Fort Lauderdale, FL where we identify new potential categories, features, and price points.

are created in conjunction with contract product designers and inventors in collaboration with our contract manufacturers in China to

deliver products that represent tremendous value to our customers.

In addition to new products, we always look for ways to improve existing

products to hit more affordable price points or improve features based upon market feedback.

operate in one principal industry segment across geographically diverse marketplaces, selling our products globally to large, national

retailers as well as independent retailers, on our retailer’s websites, and our own direct to consumer website.

In North America,

our customers include Amazon, Costco, Sam’s Club, Target and Wal-Mart.

Our largest international territories are the U.K.

and Australia,

where we sell through international distributors.

We also sell to select international retail customers in geographic locations where

we do not have a direct sales presence.

Singing Machine Karaoke Product Offerings

development is a key element of our strategic growth plan for our karaoke products.

We strive to deliver many new, exciting consumer

products to market every single year to retain and strengthen our presence in consumer karaoke products.

Strategic product development

is done in-house from our corporate headquarters in Fort Lauderdale, FL where we identify new potential categories, features, and price

Products are created in conjunction with contract product designers and inventors in collaboration with our contract manufacturers

in China to deliver products that represent tremendous value to our customers.

In addition to new products, we always look for ways to

improve existing products to hit more affordable price points or improve features based upon market feedback.

SemiCab AI Logistics and Distribution

our SemiCab logistics and distribution services, we are focused on expanding and enhancing our SemiCab platform to provide better transportation

services to our customers as well as to automate operational processes.

The objective of these additions and enhancements is to build

additional functionality and improve or automate existing functions.

This will make us more efficient, lower the costs of operation,

provide consistent and reliable services, and reduce potential human error in its processes targeting the transportation execution and

We maintain a small, dedicated software development team in India to build, host, maintain and enhance our SemiCab platform.

and Manufacturing

source our products from a variety of contract manufacturers in southern China.

We are not dependent on any one supplier as we use many

manufacturers (currently five) to make our products.

We maintain a Hong Kong office that provides us with factory management, sourcing,

quality control, engineering, and product development.

We buy finished goods from our suppliers and generally do not source raw materials

for manufacturing, however in limited circumstances where we develop proprietary hardware and software, we will secure the proprietary

circuits and provide them to our contract manufacturers for assembly into the final product.

While we are not responsible for sourcing

raw materials, we rely on our contract manufacturers’ ability to secure injected plastic, wood cabinets, integrated circuits, display

panels, speaker drivers, and other components that are necessary for assembly into our final products.

goods are produced by our contract manufacturers and are either shipped via ocean vessels to our distribution center in Ontario, California

or we utilize a direct import program where our retail customers coordinate to pick up the goods FOB China.

The direct import program

allows our customers to take advantage of better ocean container rates through bigger volume and allows us to bypass our California warehouse.

We maintain a third-party logistics warehouse in Canada where we sell directly to retail customers and independent channels in Canada.

Machine Karaoke Product Offerings

source our karaoke products from a variety of contract manufacturers in southern China.

We are not dependent on any one supplier as we

use multiple manufacturers to make our products.

We maintain a Hong Kong office that provides us with factory management, sourcing, quality

control, engineering, and product development.

We buy finished goods from our suppliers and generally do not source raw materials for

manufacturing, however in limited circumstances where we develop proprietary hardware and software, we will secure the proprietary circuits

and provide them to our contract manufacturers for assembly into the final product.

While we are not responsible for sourcing raw materials,

we rely on our contract manufacturers’ ability to secure injected plastic, wood cabinets, integrated circuits, display panels,

speaker drivers, and other components that are necessary for assembly into our final products.

karaoke products are manufactured by our contract manufacturers and are either shipped via ocean vessels to our two third-party logistics

(“3PL”) warehouses located in California and Canada or we utilize a direct import program where our retail customers coordinate

to pick up the goods FOB China.

The direct import program allows our customers to take advantage of better ocean container rates through

bigger volume and allows us to bypass our 3PL warehouses.

We sell directly to retail customers and independent channels in Canada from

our 3PL warehouse in Canada.

Historically, most of our customers pick up goods from our warehouse (freight collect).

On August 31, 2023, the lease at our Ontario,

California warehouse facility will terminate.

We do not intend to renew the lease agreement and have signed a service agreement with

a third-party logistics company to provide domestic and Canadian warehousing services, effective September 1, 2023.

August 31, 2023, the lease at our Ontario, California warehouse facility expired and was not renewed.

Instead, we outsourced this business

function by entering into a service agreement with a 3PL company to provide domestic and Canadian warehousing services, effective September

SemiCab AI Logistics and Distribution

do not utilize any suppliers or manufacturers in connection with our SemiCab logistics and distribution services.

and Marketing

products are marketed and sold through our direct sales team, working in conjunction with independent sales representatives that provide

sales and customer support for our retail customers in North America.

Sales are recognized upon transfer of title to our customers and

are made utilizing standard credit terms of approximately 60-90 days.

Our sales terms indicate that we only accept returns for defective

merchandise, however we have accepted overstock returns from our retail partners in the past.

Please see risk factor titled “ We

are subject to the risk that some of our large customers may return karaoke products that they have purchased from us and if this happens,

it would reduce our revenues and profitability” under “Risk Factors”.

seek to expand our direct-to-consumer sales, which we believe will increase overall gross margins and also increase brand awareness.

Machine Karaoke Product Offerings

karaoke products are marketed and sold through our direct sales team, working in conjunction with independent sales representatives that

provide sales and customer support for our retail customers in North America.

We seek to expand our direct-to-consumer sales, which we

believe will increase overall gross margins and increase brand awareness.

Sales are recognized upon transfer of title to our customers

and are made utilizing standard credit terms of 60 to 90 days.

Our sales terms indicate that we only accept returns for defective merchandise,

however we have accepted overstock returns from our retail partners in the past.

promotion, and consumer engagement are key elements in the youth electronics, toy, and music categories.

Historically, a significant percentage

of our promotional spending has been structured as co-op promotion incentives with our large retail partners.

We continue to focus our

marketing efforts on growing brand awareness among our target consumer demographic, optimizing marketing investments, and executing an

integrated marketing strategy.

We believe an important component of our future growth is based on speaking to the right customer, with

the right content, in the right channel, at the right time.

We have implemented online marketing, social media, and digital analytics

tools, which allow us to better measure the performance of our marketing activities, learn from our consumers, and receive valuable insights

into industry and competitor activities.

service is a critical component of our marketing strategy.

We maintain a U.S.-based internal customer service department within our corporate

headquarters that responds to customer inquiries, investigates and resolves issues, and is available to assist customers and consumers

during business hours.

youth electronics, toy, and music industries have many participants, none of which have a dominant market share, though certain companies

may have disproportionate strength in specific product categories.

We compete with a number of different companies in a variety of categories,

although there is no single company that competes with us across all of our product categories.

Our largest direct competitors are Singsation ® ,

Singtrix ® , eKids ® , Bonaok, Karaoke USA ™ , and Ion ® Audio.

primary methods of competition in the industry consist of brand positioning, product innovation, quality, price, and timely distribution.

Our competitive strengths include our ability to develop innovative new products and features, speed to market, our relationships with

major retailers, and the quality and pricing of our products.

Historically, a significant

percentage of our promotional spending has been structured as co-op promotion incentives with our large retail partners.

to focus our marketing efforts on growing brand awareness among our target consumer demographic, optimizing marketing investments, and

executing an integrated marketing strategy.

We believe that an important component of our future growth is based on speaking to the right

customer, with the right content, in the right channel, at the right time.

We have implemented online marketing, social media, and digital

analytics tools, which allow us to better measure the performance of our marketing activities, learn from our consumers, and receive

valuable insights into industry and competitor activities.

service is a critical component of our marketing strategy for our karaoke products.

We maintain a U.S.-based internal customer service

department within our corporate headquarters that responds to customer inquiries, investigates, and resolves issues, and is available

to assist customers and consumers during business hours.

SemiCab AI Logistics and Distribution

SemiCab logistics and distribution services are sold through our direct sales team who work with shippers, participate in preparing and

submitting transportation bids, and onboard shippers and customers to start operations.

While the transportation services contracts are

signed for longer durations, generally up to a year, revenue from these services is recognized only after the loads from shippers are

executed and delivered by us.

platform subscriptions are sold through resellers.

Sales are recognized on a rolling monthly basis aligned with SaaS revenue models.

uses limited marketing and promotions at this time as it is primarily focused on creating name recognition and visibility through appropriate

social media channels, blogs, and press releases to share industry awards and customer acquisition news.

Singing Machine Karaoke Product Offerings

respect to our karaoke products, the youth electronics, toy, and music industries have many participants, none of which have a dominant

market share, though certain companies may have disproportionate strength in specific product categories.

We compete with a number of

different companies in a variety of categories, although there is no single company that competes with us across all of our product categories.

Our largest direct competitors are Singsation ® , Singtrix ® , eKids ® , Bonaok, Karaoke USA ™ ,

and Ion ® Audio.

The primary methods of competition in the industry consist of brand positioning, product innovation, quality,

price, and timely distribution.

Our competitive strengths include our ability to develop innovative new products and features, speed

to market, our relationships with major retailers, and the quality and pricing of our products.

SemiCab AI Logistics and Distribution

the AI logistics and distribution space, we compete with traditional and non-traditional logistics companies, including transportation

providers that own equipment, third-party freight brokers, technology matching services, internet freight brokers, carriers offering

logistics services, and on-demand transportation service providers.

We win business by providing reliable services at lower costs and

creating an industry-wide network that can operate more efficiently with less empty miles than the industry norm, thus creating a more

sustainable transportation network for the entire industry.

rely on a combination of word and design mark trademarks and trade secrets to protect our intellectual property.

5 unchanged sentences

are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained.

to our top five customers together comprised approximately 89% and 90% of our net sales for fiscal years ended March 31, 2023 and 2022,

respectively.

In our fiscal year ended March 31, 2023, revenues from two of these customers represented greater than 10% of net sales,

at 48% and 21% of total net sales.

In our fiscal year ended March 31, 2022, revenues from three of these customers represented greater

than 10% of net sales, at 37%, 18%, and 17% of total net sales.

have no long-term contracts with these customers, and as a result, our success depends heavily on our customers’ willingness to

purchase and provide floor or shelf space for our products.

do experience heightened seasonal demand for our products in our second and third quarters of our fiscal year.

In our fiscal years ended

March 31, 2023 and 2022, approximately 62% and 81%, respectively, of our net sales shipped in our second and third quarters.

we continually look for products and new categories to reduce our exposure to seasonality variances.

of our products is designed to comply with all applicable mandatory and voluntary safety standards.

In the United States, these safety

standards are promulgated by federal, state and independent agencies such as the US Consumer Product Safety Commission, ASTM International,

the Federal Communications Commission, and various states Attorney Generals and state regulatory agencies.

All of our products are independently

tested by third party laboratories accepted by the Consumer Product Safety Commission to verify compliance to applicable safety standards.

Singing Machine Karaoke Product Offerings

operate across geographically diverse marketplaces and sell our karaoke products globally to large, national retailers as well as independent

retailers, on our retailer’s websites, and our own direct to consumer website.

In North America, our customers include Amazon,

Costco, Sam’s Club, Target and Wal-Mart.

Our largest international territories are the U.K.

and Australia, where we sell through

international distributors.

We also sell to select international retail customers in geographic locations where we do not have a direct

sales presence.

to our top five customers and top three customers collectively in our karaoke business comprised 79% and 81% of our revenue, respectively, for the

year ended December 31, 2024 and the nine-month transition period ended December 31, 2023, respectively.

We have no long-term

contracts with these customers, and as a result, our success depends heavily on our customers’ willingness to purchase and

provide floor or shelf space for our products.

SemiCab AI Logistics and Distribution

the logistics industry, we provide our contract-based, long-haul, full truckload transportation services in the United States.

our services to any shipper that may need such services on an ongoing basis.

Our customers include Staples and Pepsi.

Singing Machine Karaoke Product Offerings

experience heightened seasonal demand for our karaoke products, typically beginning in late July, and extending into early November of

each calendar year, which is accounted for in our quarters ended September 30 th and December 31 st .

Transportation

demand is also seasonal by nature.

In the US, freight demand typically increases before the holidays and reduces after the holiday season

The agricultural produce seasons may also affect the freight markets.

In India, agricultural and festival seasons drive the

market seasons for freight.

SemiCab AI Logistics

and Distribution Services

the AI logistics and distribution space, the transportation industry not only experiences seasonality, but it is cyclic as well and goes

through regular boom and bust cycles.

Capacity falls when demand and prices are high.

By contrast, smaller operators go out of business

when supplies build up and depress prices.

Singing Machine Karaoke Product Offerings

of our karaoke products are designed to comply with all applicable mandatory and voluntary safety standards.

In the United States, these

safety standards are promulgated by federal, state and independent agencies such as the United States Consumer Product Safety Commission,

ASTM International, the Federal Communications Commission, and various states Attorney Generals and state regulatory agencies.

our products are independently tested by third party laboratories accepted by the Consumer Product Safety Commission to verify compliance

to applicable safety standards.

A similar approach is used to design and test products sold internationally.

carry product liability insurance that provides us with $10,000,000 coverage with a minimal deductible.

We consult with our insurers

to ascertain appropriate liability coverage for our product mix.

We believe our current coverage is adequate for our existing business

and will continue to evaluate our coverage in the future in line with our expanding sales and product breadth.

Capital Resources

are committed to attracting and retaining the brightest and best talent, so investing in human capital is critical to our success.

employee traits we value include industriousness, intellectual curiosity, growth mindset and deeply caring about the quality of work.

The human capital measures and objectives that we focus on in managing our business include employee safety, talent acquisition and retention,

employee engagement, development and training, diversity and inclusion, and compensation and pay equity.

of March 31, 2023, we had 37 employees, with 18 located at our corporate office, 12 at our logistics center in Ontario, California and

7 in our office in Hong Kong.

Of our employees, 1 was engaged in engineering and product development, 7 in sales and marketing, 20 in

customer support or general operations and 9 in general administration and finance.

All of these employees are employed on a full-time

As of March 31, 2023, approximately 51.4% of our current workforce is female, 48.6% male, and our average tenure is 5.48 years.

None of our employees is represented by a collective bargaining unit or is a party to a collective bargaining agreement.

We believe that

our relationship with our employees is good.

core tenet of our talent system is to both develop talent from within and supplement with external hires.

This approach has yielded loyalty

and commitment in our employee base which in turn grows our business, our products, and our customers, while adding new employees and

external ideas supports a continuous improvement mindset and our goals of a diverse and inclusive workforce.

We believe that our average

tenure of 5.48 years as of the end of the fiscal year 2023 reflects the engagement of our employees in this core talent system tenet.

believes that we materially comply with all applicable state, local and international laws governing nondiscrimination in employment

in every location in which we operate.

All applicants and employees are treated with the same high level of respect regardless of their

gender, ethnicity, religion, national origin, age, marital status, political affiliation, sexual orientation, gender identity, disability

or protected veteran status.

Engagement and Development

employee engagement efforts include our frequent and transparent “all-hands” meetings and executive communications, through

which we aim to keep our employees well-informed and to increase transparency.

We believe in continual improvement and use employee feedback

to drive and improve processes that support our customers and ensure a deep understanding of our employees’ needs.

We plan to conduct

annual confidential employee surveys as we believe that ongoing performance feedback encourages greater engagement in our business and

improves individual performance.

Our employees will participate in a 360-degree evaluation process to identify critical capabilities

for development and establish new stretch goals.

employee compensation strategy supports three primary objectives:

attract and retain the best team members;

reflect and reinforce our

most important values;

and align team member interests with stockholder interests in building enduring value.

We believe people should

be paid for what they do and how they do it, regardless of their gender, race or other personal characteristics.

To deliver on that commitment,

we benchmark and set pay ranges based on market data and consider factors such as an employee’s role and experience, the location

of their job, and their performance.

We also regularly review our compensation practices, both in terms of our overall workforce and

individual employees, to ensure our pay is fair and equitable.

part of our compensation philosophy, we believe that we must offer and maintain market competitive total rewards programs for our employees

in order to attract and retain superior talent.

In addition to healthy base wages, additional programs include annual bonus opportunities,

12 paid company holidays a year, healthcare and insurance benefits, including 100% paid health benefits for the employee, generous paid

time off and family leave, family care resources and flexible work hours to work-from-home.

We also have a company matched 401(k) plan,

where we make a matching contribution of 100% of salary deferral contributions up to 3% of pay, plus 50% of salary deferral contributions

from 3% to 5% of pay.

To support the advancement of our employees, we offer training and development programs encouraging advancement

success of our business is fundamentally connected to the well-being of our people.

Accordingly, we are committed to the health, safety

and wellness of our employees.

We provide our employees and their families with access to a variety of flexible and convenient health

and welfare programs, including benefits that support their physical and mental health by providing tools and resources to help them

improve or maintain their health status;

and that offer choice where possible so they can customize their benefits to meet their needs

and the needs of their families.

In response to the COVID-19 pandemic, we implemented significant operating environment changes that

we determined were in the best interest of our employees, as well as the communities in which we operate, and which comply with government

This includes having a significant portion of our employees work from home, while implementing additional safety measures

for employees continuing critical on-site work.

are a Delaware corporation that was formed in 1994.

Our common stock is traded on the NASDAQ Capital Market under the symbol “MICS”.

Our principal executive offices are located at 6301 NW 5 th Way, Suite 2900, Fort Lauderdale, FL, and our telephone number

is (954) 596-1000.

We maintain our corporate website at www.singingmachine.com .

Our website also includes corporate governance

information, including our Code of Ethics and our Board committee charters.

The information contained on our website does not constitute

a part of this Annual Report.

SemiCab AI Logistics and Distribution

respect to our SemiCab AI logistics and distribution services, the transportation industry in the Unites States is regulated by the Department

of Transportation.

This federal agency mandates licensing, insurance and service requirements on the operators in this industry.

of April 14, 2025, we had a total of 25 employees.

None of our employees are represented by a collective bargaining unit or is a party

to a collective bargaining agreement.

file reports and other materials with the Securities and Exchange Commission (“SEC”), including annual reports on Form 10-K,

quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements.

We make available free of charge through our website

at https://ir.algoholdings.com/investor-filings#/ all materials that we file electronically with the SEC as soon as reasonably

practicable after electronically filing or furnishing such material with the SEC.

These materials are also available on the SEC’s

website at www.sec.gov.

information contained on, or accessible through, our website and the SEC’s website does not constitute a part of this report.

inclusion of our website and the SEC’s website in this report is an inactive textual reference only.

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-K

Item 1. Business