Algorhythm Holdings, Inc. (the "Company") (NASDAQ:RIME) – a diversified holding company that owns and operates Azure Energy, a renewable power plant developer, and SemiCab, a leading AI enabled logistics provider, today announced the voluntary termination of a previously disclosed settlement transaction completed under Section 3(a)(10) of the Securities Act with Continuation Capital, Inc. The Company would have been required to issue more than 8 million additional shares of common stock to pay off the remaining balance of approximately $1.4 million.
"One of our highest priorities in the near term is to proactively strengthen our balance sheet, eliminate existing dilutive financings, and lower our cost of capital," commented Andrew Thompson, CEO of Algorhythm Holdings. "In furtherance of this, we recently announced the retirement of all of our outstanding shares of Series A Preferred Stock. Terminating this $1.4 million financing was the next step in this process."
"We made a conscientious decision to partner with Algorhythm and leverage our value contribution for the benefit of all Algorhythm shareholders. We have compelling business opportunities in place and in the pipeline. We believe it is paramount to dramatically improve the financing solutions available to the Company in order to execute upon our long-term business plan," concluded Mr. Thompson.
The Company recently acquired Azure Energy in an all-stock transaction valued at $23 million, acquiring contracts expected to generate revenue of more than $10 million through the end of 2027. The Company intends to use this revenue to lower its cost of capital, strengthen its balance sheet, and fund its future growth.