Business Context and Reporting Period
This Form 8-K is filed by Algorhythm Holdings, Inc. (Nasdaq: RIME) on May 7, 2026, reporting an event that occurred on May 2, 2026. The filing addresses a triggering event related to a direct financial obligation under a promissory note.
Key Financial Metrics and Obligations
- Debt Instrument: Promissory Note issued on May 2, 2025, to SemiCab Inc.
- Principal Amount: $1,750,000 total.
- Payment Schedule:
- $1,500,000 due on May 2, 2026 (Initial Payment).
- $250,000 due on November 2, 2026.
- Interest Rate: Increased from 6% per annum to a default rate of 8% per annum on the Initial Payment.
- Liquidity Status: The filing does not provide specific cash flow or liquidity metrics beyond the missed payment.
Material Changes and Events
On May 2, 2026, the Company failed to make the required Initial Payment of $1,500,000. This failure constituted an event of default under the Promissory Note. Consequently, the interest rate on the unpaid amount increased to the default rate of 8% per annum.
Outlook, Risks, and Contingencies
- Acceleration Risk: During the continuance of the default, the Seller (SemiCab Inc.) has the right to declare all outstanding amounts immediately due and payable upon written notice.
- Current Status: As of the filing date, the Seller has not exercised any remedies or sought legal action against the Company.
- Management Commentary: The filing contains no forward-looking guidance or management commentary regarding future financial performance or remediation plans.
Investor Verification Checklist
- Verify if the Company has secured funding to cure the $1,500,000 default.
- Monitor for any written notice from SemiCab Inc. accelerating the remaining $250,000 principal.
- Check for subsequent filings regarding legal proceedings or settlement agreements with the Seller.
- Review the Company's cash position in upcoming quarterly reports to assess liquidity constraints.