FORT LAUDERDALE - Algorhythm Holdings, Inc. (NASDAQ: RIME), a technology and consumer electronics holding company with current market capitalization of $2.43 million and annual revenue of $32.48 million, has announced the pricing of its public offering, which is expected to generate approximately $9.5 million in gross proceeds before deductions. According to InvestingPro data, the company's shares are currently trading near their 52-week low amid challenging market conditions. The offering includes 55,882,353 shares of common stock or pre-funded warrants, plus accompanying Series A and Series B Warrants.
Each share or warrant sold comes with a Series A Warrant to buy additional stock at $0.17 per share and a Series B Warrant at $0.34 per share. The Series A Warrants are valid for five years from the initial exercise date, while the Series B Warrants will expire two and a half years after their initial exercise date. The purchase price for each share and accompanying warrants is set at $0.17, with the pre-funded warrants being offered at a price reduced by $0.01.
The company has indicated that the net proceeds from the offering will be utilized for working capital, general corporate purposes, and to repay certain outstanding senior secured notes. This capital raise comes at a crucial time, as InvestingPro analysis shows the company has been experiencing significant cash burn and currently maintains a weak financial health score. Subscribers to InvestingPro can access 15 additional key insights about RIME's financial position and market performance. The offering is expected to close around December 6, 2024, subject to customary closing conditions. Univest Securities, LLC is the sole placement agent for the transaction.
Algorhythm's portfolio includes SemiCab Holdings, which focuses on AI-enabled global logistics, and The Singing Machine Company, a leader in the consumer karaoke industry. SemiCab's technology aims to increase transportation capacity and reduce the carbon footprint of the trucking industry. The Singing Machine Company offers a range of karaoke products and is developing an in-car karaoke system.
This offering is being made under a registration statement filed with the Securities and Exchange Commission (SEC), which has been declared effective. The final prospectus relating to the offering will be available on the SEC's website. While the company is currently unprofitable with a loss per share of $1.38 over the last twelve months, analysts tracked by InvestingPro predict a return to profitability this year. Discover comprehensive analysis and Fair Value estimates for RIME and 1,400+ other stocks through InvestingPro's detailed research reports.
The information provided in this article is based on a press release statement.
In other recent news, Algorhythm Holdings has regained compliance with Nasdaq's minimum stockholders' equity requirement following a period of non-compliance. This milestone was achieved through a successful compliance plan that included an At-The-Market Issuance Sales Agreement with Ascendiant Capital Markets, LLC, and the acquisition of SemiCab, Inc., resulting in the issuance of over 4 million shares of common stock. Additionally, Algorhythm Holdings secured approximately $2 million in funding through a Securities Purchase Agreement, issuing 2,300,000 shares of common stock with the net proceeds planned for working capital and other general corporate purposes.
The company has also formed a partnership with Apollo Tyres (NS:APLO), India's largest tire manufacturer, through its subsidiary SemiCab India. This partnership aims to optimize freight logistics with an AI-powered platform. Despite a decrease in net sales and gross profit, Algorhythm Holdings has announced a strategic shift towards the automotive and connected TV sectors. These are the recent developments for Algorhythm Holdings. Nasdaq has cautioned that if Algorhythm Holdings does not demonstrate continued compliance in its next SEC periodic report, it may face delisting. However, the company would receive written notice and have the opportunity to appeal the decision to a Nasdaq listing panel.
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