# EDGAR Filing Document

**Accession Number:** 0000923601
**File Stem:** 0001493152-25-016908
**Filing Date:** 2025-10
**Character Count:** 84151
**Document Hash:** 83b8d9556bb9b28bebd2999833150a1e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-25-016908.hdr.sgml**: 20251003

**ACCESSION NUMBER**: 0001493152-25-016908

**CONFORMED SUBMISSION TYPE**: 8-K/A

**PUBLIC DOCUMENT COUNT**: 17

**CONFORMED PERIOD OF REPORT**: 20250502

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20251003

**DATE AS OF CHANGE**: 20251003

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Algorhythm Holdings, Inc.
- **CENTRAL INDEX KEY:** 0000923601
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHONOGRAPH RECORDS & PRERECORDED AUDIO TAPES & DISKS [3652]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 953795478
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41405
- **FILM NUMBER:** 251374971

**BUSINESS ADDRESS:**
- **STREET 1:** 6301 NW 5TH WAY, STE 2900
- **CITY:** FORT LAUDERDALE
- **STATE:** FL
- **ZIP:** 33309
- **BUSINESS PHONE:** (954) 596-1000

**MAIL ADDRESS:**
- **STREET 1:** 6301 NW 5TH WAY, STE 2900
- **CITY:** FORT LAUDERDALE
- **STATE:** FL
- **ZIP:** 33309

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SINGING MACHINE CO INC
- **DATE OF NAME CHANGE:** 19940523

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K/A**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

---

| | |
|:---|:---|
| Date of Report (Date of earliest event reported): | **May 2, 2025** |

---

---

| |
|:---|
| **ALGORHYTHM HOLDINGS, INC.** |
| (Exact Name of Registrant as Specified in Charter) |

---

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-41405** | **95-3795478** |
| (State or Other Jurisdiction | (Commission | (IRS Employer |
| of Incorporation) | File Number) | Identification No.) |

---

---

| | |
|:---|:---|
| **6301 NW 5th Way, Suite 2900**<br>**Fort Lauderdale, FL** | **33309** |
| (Address of Principal Executive Offices) | (Zip Code) |

---

---

| | |
|:---|:---|
| Registrant's Telephone Number, Including Area Code: | **(954) 596-1000** |

---

**Not Applicable**

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (*see* General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| <br> **Title of each class** | <br> **Trading Symbol(s)** | <br> **Name of each exchange on which registered** |
| Common Stock, par value $0.01 per share | RIME | The Nasdaq Stock Market LLC<br> (The Nasdaq Capital Market) |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**EXPLANATORY NOTE**

On May 8, 2025, Algorhythm Holdings, Inc., a Delaware corporation (the "Company"), filed a Current Report on Form 8-K (the "Original Form 8-K") with the Securities and Exchange Commission to report that it and its subsidiary, SemiCab Holdings, LLC, a Nevada limited liability, entered into that certain Equity Purchase Agreement, dated May 2, 2025 (the "Closing Date") with SemiCab Inc., a Delaware corporation, pursuant to which SemiCab Holdings purchased 9,999 shares of the issued and outstanding equity shares, Rs. 10 par value, of SMCB Solutions Private Limited, an Indian company ("SMCB"), representing 99.99% of the issued and outstanding equity shares of SMCB. The transactions contemplated therein were consummated on the Closing Date. This Current Report on Form 8-K/A (this "Form 8-K/A") amends the Original Form 8-K to include the required financial statements and pro forma financial information with respect to SMCB.

**Section 9 – Financial Statements and Exhibits**

---

| | |
|:---|:---|
| **Item 9.01** | **Financial Statements and Exhibits.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)* *Financial Statements of Businesses or Funds Acquired.* 

The audited balance sheets of SMCB as of March 31, 2025 and 2024 and the audited statements of operations, shareholders' equity and cash flows of SMCB for the years ended March 31, 2025 and 2024, and the notes related thereto, are filed as Exhibit 99.2 to this Form 8-K/A and incorporated by reference herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b)* *Pro Forma Financial Information.* 

The unaudited pro forma condensed combined balance sheet of SMCB as of March 31, 2025, the unaudited pro forma condensed combined statement of operations of SMCB for the three-month period ended March 31, 2025, and the unaudited pro forma condensed combined statement of operations of SMCB for the year ended December 31, 2024, and the notes related thereto, are filed as Exhibit 99.3 to this Form 8-K/A and incorporated by reference herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(d)* *Exhibits.* 

---

| | |
|:---|:---|
| Exhibit No. | Description |
| 10.1\* | [Equity Purchase Agreement, dated May 2, 2025, by and among Algorhythm Holdings, Inc., SemiCab Holdings, LLC and SemiCab, Inc.](https://www.sec.gov/Archives/edgar/data/923601/000164117225009278/ex10-1.htm) |
| 10.2\* | [Promissory Note, dated May 2, 2025, issued by Algorhythm Holdings, Inc. in favor of SemiCab, Inc.](https://www.sec.gov/Archives/edgar/data/923601/000164117225009278/ex10-2.htm) |
| 10.3\* | [Amended and Restated Limited Liability Company Agreement of SemiCab Holdings, LLC, dated May 2, 2025, by and among Algorhythm Holdings, Inc., SemiCab Holdings, LLC, Ajesh Kapoor and Vivek Sehgal.](https://www.sec.gov/Archives/edgar/data/923601/000164117225009278/ex10-3.htm) |
| 23.1 | [Consent of Berkowitz Pollack Brant, Advisors + CPAs](ex23-1.htm) |
| 99.1\* | [Press Release issued May 5, 2025](https://www.sec.gov/Archives/edgar/data/923601/000164117225009278/ex99-1.htm) |
| 99.2 | [Audited balance sheets of SMCB as of March 31, 2025 and 2024 and audited statements of operations, shareholders' equity and cash flows of SMCB for the years ended March 31, 2025 and 2024, and the notes related thereto](ex99-2.htm) |
| 99.3 | [Unaudited pro forma condensed combined balance sheet as of March 31, 2025, unaudited pro forma condensed combined statement of operations for the three-month period ended March 31, 2025, and unaudited pro forma condensed combined statement of operations for the year ended December 31, 2024, and the notes related thereto](ex99-3.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

\* Previously filed

**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
| Date: October 3, 2025 | **ALGORHYTHM HOLDINGS, INC.** | **ALGORHYTHM HOLDINGS, INC.** |
|  | By: | */s/ Alex Andre* |
|  | Name: | Alex Andre |
|  | Title: | Chief Financial Officer and General Counsel |

---

## Exhibit 23.1

**Exhibit 23.1**

CONSENT OF REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM

We consent to the use of our report dated October 3, 2025, which included an explanatory paragraph as to the Company's ability to continue as a going concern, relating to the financial statements of SMCB Solutions Private Limited, which comprise the balance sheets as of March 31, 2025 and 2024, and the related statements of operations and comprehensive income (loss), shareholders' equity (deficit), and cash flows for each of the two years then ended, and the related notes to the financial statements, which is included in this Form 8-K/A of Algorhythm Holdings, Inc.

We also consent to the incorporation by reference of such report in the Registration Statements on Form S-8 (No. 333-268106).

---

| |
|:---|
| /s/ Berkowitz Pollack Brant, Advisors + CPAs |
| New York, New York |
| October 3, 2025 |

---

![](ex23-1_001.jpg)

## Exhibit 99.2

**Exhibit 99.2**

**SMCB Solutions Private Limited**

**Table of Contents**

---

| | |
|:---|:---|
|  | Page |
| [Report of Independent Registered Public Accounting Firm](#a_001) (PCAOB ID: 52) | 2 |
| [Balance Sheets as of March 31, 2025 and 2024](#a_002) | 3 |
| [Statements of Operations and Comprehensive Income (Loss) for the Years Ended March 31, 2025 and 2024](#a_003) | 4 |
| [Statements of Shareholders' Equity (Deficit) for the Years Ended March 31, 2025 and 2024](#a_004) | 5 |
| [Statements of Cash Flows for the Years Ended March 31, 2025 and 2024](#a_005) | 6 |
| [Notes to Financial Statements](#a_006) | 7 |

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Shareholders of SMCB Solutions Private Limited

**Opinion on the Financial Statements**

We have audited the accompanying balance sheets of SMCB Solutions Private Limited (the "Company") as of March 31, 2025 and 2024, and the related statements of operations and comprehensive income (loss), shareholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

**Substantial Doubt about the Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations, has a working capital deficiency, and accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters also are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company's auditor since 2025.

/s/ Berkowitz Pollack Brant, Advisors + CPAs

New York, New York

October 3, 2025

**SMCB Solutions Private Limited**

**BALANCE SHEETS**

**(Amounts rounded to the nearest thousands)**

---

| | | |
|:---|:---|:---|
|  | **As of March 31,** | **As of March 31,** |
|  | **2025** | **2024** |
| **ASSETS** |  |  |
| **Current Assets** |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $336000 | $49000 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance for expected credit losses of $8,000 and $7,000, respectively | 597000 | 289000 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 253000 | 157000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Current Assets** | **1186000** | **495000** |
| Property and equipment, net | 9000 | 11000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Assets** | $**1195000** | $**506000** |
| **<u>Liabilities and Shareholders' Equity / (Deficit)</u>** |  |  |
| **Current Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $284000 | $687000 |
| &nbsp;&nbsp;&nbsp;Interest payable to related party | 27000 |  |
| &nbsp;&nbsp;&nbsp;Accrued compensation and related benefits | 6000 | 19000 |
| &nbsp;&nbsp;&nbsp;Note payable to related party | 1640000 |  |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 580000 | 292000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Current Liabilities** | **2537000** | **998000** |
| **Other Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Long-term provision for employee benefits, net of current portion | 89000 | 61000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities** | **2626000** | **1059000** |
| **Commitments and Contengencies** |  |  |
| **Shareholders' Equity / (Deficit)** |  |  |
| &nbsp;&nbsp;&nbsp;Equity shares $0.10 par value; 10,000 shares authorized; 10,000 shares issued and outstanding at March 31, 2025 and 2024 | 1000 | 1000 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital |  |  |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income | 13000 | 1000 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (1445000) | (555000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Shareholders' Equity / (Deficit)** | **(1431000)** | **(553000)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities and Shareholders' Equity / (Deficit)** | $**1195000** | $**506000** |

---

***See notes to financial statements.***

**SMCB Solutions Private Limited**

**STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME / (LOSS)** 

**(Amounts rounded to the nearest thousands)**

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended March 31,** | **For the Years Ended March 31,** |
|  | **2025** | **2024** |
| **Net Sales** | $**2653000** | $1669000 |
| **Cost of Sales** | **2681000** | 1597000 |
| **Gross (Loss) Profit** | **(28000)** | 72000 |
| **Operating Expenses** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salary and benefits | 665000 | 623000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative | 117000 | 116000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 9000 | 8000 |
| **Total Operating Expenses** | **791000** | 747000 |
| **Loss from Operations** | **(819000)** | (675000) |
| **Other Expense, net** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other income | 1000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other expense | (38000) | (2000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (34000) | - |
| **Total Other Expense, net** | **(71000)** | (2000) |
| **Net Loss Before Income Taxes** | **(890000)** | (677000) |
| Income tax (benefit) expense | - | 13000 |
| **Net Loss** | **(890000)** | (690000) |
| **Other Comprehensive Income / (Loss)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | 12000 | (3000) |
| &nbsp;&nbsp;&nbsp;**Total Comprehensive Loss** | $**(878000)** | $(693000) |

---

***See notes to financial statements.***

**SMCB Solutions Private Limited**

 **STATEMENTS OF SHAREHOLDERS' EQUITY / (DEFICIT)** 

**For the Years Ended March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Equity** | **Equity** | | | |
|  | **Shares** | **Amount** | **Accumulated Earnings /**<br>**(Deficit)** | **Accumulated Other Comprehensive**<br> **Income / (Loss)** | **Total Shareholders' Equity /**<br> **(Deficit)** |
| **Balance at April 1, 2023** | **10000** | $**1000** | $**135000** | $**4000** | $**140000** |
| Foreign currency translation adjustment | **-** | **-** | **-** | (3000) | (3000) |
| Net loss | **-** | - | **(690000)** | - | **(690000)** |
| **Balance at March 31, 2024** | **10000** | $**1000** | $**(555000)** | $**1000** | $**(553000)** |
| Foreign currency translation adjustment |  |  |  | 12000 | 12000 |
| Net loss | - | - | (890000) | - | (890000) |
| **Balance at March 31, 2025** | **10000** | $**1000** | $**(1445000)** | $**13000** | $**(1431000)** |

---

***See notes to financial statements.***

**SMCB Solutions Private Limited**

**STATEMENTS OF CASH FLOWS**

**(Amounts rounded to the nearest thousands)**

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended March 31,** | **For the Years Ended March 31,** |
|  | **2025** | **2024** |
| **Cash flows from operating activities** |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(890000) | $(690000) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for expected credit losses | 1000 | 7000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 9000 | 8000 |
| &nbsp;&nbsp;&nbsp;Changes in Operating Assets and Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (309000) | (178000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (85000) | (105000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (403000) | 686000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest payable | 27000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation and related benefits | 15000 | 18000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 288000 | 195000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (1347000) | (59000) |
| **Cash flows from investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment | (6000) | (5000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (6000) | (5000) |
| **Cash flows from financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from related party debt | 1640000 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 1640000 | - |
| Effect of exchange rate changes on cash | 11000 | 21000 |
| **Net Change in Cash** | **298000** | **(43000)** |
| **Cash at Beginning of Year** | **49000** | **92000** |
| **Cash at End of Year** | $**347000** | $**49000** |

---

***See notes to financial statements.***

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)**

**NOTE 1 – NATURE OF BUSINESS**

SMCB Solutions Private Limited (the "Company") is a private limited company based in Bangalore, India, that operates an artificial intelligence ("AI") enabled software logistics and distribution unit - SemiCab (the "SemiCab business").

On May 2, 2025, through an equity purchase agreement, the Company became a 99.99%-owned subsidiary of SemiCab Holdings, LLC, a Nevada limited liability company ("SemiCab Holdings"), which in turn is an 80%-owned subsidiary of Algorhythm Holdings, Inc., a Delaware corporation ("Algorhythm Holdings"). The Company generates revenue from the performance of freight services for customers in India and the performance of software development and information technology (IT) services for Algorhythm Holdings in the United States of America.

**NOTE 2 – LIQUIDITY, GOING CONCERN AND MANAGEMENT PLANS**

As of March 31, 2025, the Company's cash balance was $336,000, which will not be sufficient to fund planned operations for at least one year after the date the financial statements are issued. The Company has recurring losses from operations, an accumulated deficit of $1,445,000, and negative operating cash flow. These factors raise substantial doubt about the Company's ability to continue as a going concern for at least one year after the date that the Company's audited financial statements are issued.

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the financial statements have been prepared under the assumption that the Company will continue as a going concern and that the realization of assets and satisfaction of liabilities and commitments will continue in the ordinary course of business.

During the past 12 months, the Company has funded its business by obtaining loans from Algorhythm Holdings. The Company plans to continue to finance its business operations by obtaining additional loans from Algorhythm Holdings under a loan agreement that it has with Algorhythm Holdings. The Company has not made any arrangements to obtain additional capital from sources other than Algorhythm Holdings. As of the date of the acquisition, May 2, 2025, a total of $2,140,000 of loans were outstanding under the loan agreement and a total of $360,000 remained available for future borrowings under the loan agreement. The Company can provide no assurance that Algorhythm Holdings will continue to fund its business operations or that alternative forms of financing will be available in an amount or on terms acceptable to the Company, if at all.

In making this assessment, management performed a comprehensive analysis of the Company's current circumstances, including its financial position, cash flow forecasts, and obligations and debts. Although management has a recent history of obtaining loans from Algorhythm Holdings, the analysis used to determine the Company's ability to continue as a going concern does not include cash resources outside the Company's direct control that management expects to be available within the next 12 months.

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)**

**NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Basis of Presentation**

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") and the rules and regulations of the United States Securities and Exchange Commission (the "SEC"). All amounts have been rounded to the nearest thousands, unless otherwise indicated.

**Use of Estimates**

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Significant items subject to such estimates and assumptions include, but are not limited to, revenue recognition, allowance for expected credit losses, accounting for income taxes, and obligations related to employee benefits. Management believes that the estimates and judgments upon which it relies, are reasonable based upon information available to the Company at the time that these estimates and judgments were made. Actual results could differ from those estimates.

**Cash and Restricted Cash**

The Company considers cash to include cash in banks and deposits with financial institutions in India that can be liquidated without prior notice or penalty. Cash is maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits by Deposit Insurance and Credit Guarantee Corporation for India. Generally, these deposits may be withdrawn upon demand.

In addition, restricted cash held by the Company was $11,000 and $-0- as of March 31, 2025 and 2024, respectively. Restricted cash held by the Company related to fixed deposits that also serve as guarantees. These amounts are segregated and recorded in prepaid expenses and other current assets of the balance sheets.

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)**

**Supplemental Cash Flow Information**

The following table shows supplemental cash flow information:

---

| | | |
|:---|:---|:---|
|  | Year Ended March 31, | Year Ended March 31, |
|  | 2025 | 2024 |
| **<u>Reconciliation of cash and restricted cash</u>** |  |  |
| Cash | $336000 | $49000 |
| Restricted cash included in prepaid expenses and other current assets | 11000 | - |
|  | $347000 | $49000 |
| **<u>Supplemental disclosure of cash flow information</u>** |  |  |
| Cash paid for income tax | $- | $- |
| Cash paid for interest | $- | $- |
| **<u>Supplemental disclosure of non-cash financing activities</u>** |  |  |
| Settlement of accounts receivable in exchange for debt with related party | $809000 | $- |

---

**Accounts Receivable and Allowance for Expected Credit Losses**

The Company's accounts receivable balance is derived from transportation services and digital support provided to customers. As part of this balance, the Company also recognizes revenue earned but not yet invoiced to customers, recorded as unbilled or accrued revenue.

---

| | | |
|:---|:---|:---|
|  | **As of March 31,** | **As of March 31,** |
|  | **2025** | **2024** |
| Accounts receivable | $273000 | $32000 |
| Accounts receivable – related party |  | 212000 |
| Accrued Revenue -- related party | 36000 | 52000 |
| Accrued revenue | 296000 |  |
| Allowance for expected credit losses | (8000) | (7000) |
|  | $**597000** | $**289000** |

---

The Company recognizes an allowance for expected credit losses at the time the receivable balance is recorded, based on its estimate of expected credit losses. This estimate is adjusted over the life of the receivable as circumstances evolve. The Company evaluates both specific credit risks and broader portfolio-level trends by considering historical collection experience, current and forecasted economic conditions, and other relevant factors. At each reporting period, the Company records a provision by applying a calculated percentage to the outstanding accounts receivable balance and revises this estimate as necessary. Accounts receivable balances are written-off against the allowance for expected credit losses after all means of collection have been exhausted and the potential for recovery is considered remote.

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)** 

On July 13, 2023, the Company entered into a factoring arrangement with Hinduja Leyland Finance Ltd. (HLF), a Non-Banking Financial Company (NBFC) in India, for the purpose of accelerating collections on accounts receivable. Under the agreement, specific receivables are sold to HLF in exchange for upfront payment, subject to fees and terms. The Company terminated this factoring arrangement in March 2024. As of March 31, 2025 and 2024, the net liability relating for factoring activity, included in other current liabilities, was $-0- and $8,000, respectively.

**Concentration of Credit Risk** 

Financial instruments that potentially subject the Company to credit risk consist primarily of cash, accounts receivable and advance payments to vendors. The Company holds cash at financial institutions that the Company believes are high credit quality financial institutions and limits the amount of credit exposure with any one bank and conducts ongoing evaluations of the creditworthiness of the banks with which it does business. These deposits are typically in excess of insured limits.

As of March 31, 2025, and March 31, 2024, there were three and one customers that represented 10% or greater of the Company's accounts receivable balance, respectively. With respect to the Company's revenue, there were three customers that each accounted for more than 10% of total revenue for the years ended March 31, 2025, and 2024, respectively.

The following table shows the percentage of revenue and accounts receivable derived from each customer exceeding 10% of the Company's revenue and accounts receivable, respectively:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Revenue** | **Revenue** | **Accounts Receivable** | **Accounts Receivable** |
| <br>**Major Customers** | **Year Ended March 31,** | **Year Ended March 31,** | **As of March 31,** | **As of March 31,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Customer 1 | 38% | 31%<sup>(1)</sup> |  |  |
| Customer 2 - Related party | 24% | 41%<sup>(1)</sup> |  | 89% |
| Customer 3 | 14% | 12% | 29%<sup>(1)</sup> |  |
| Customer 4<sup>(1)</sup> |  |  | 36%<sup>(1)</sup> |  |
| Customer 5<sup>(1)</sup> |  |  | 11%<sup>(1)</sup> |  |

---

<sup>(1)</sup> Less than 10%

**Prepaid Expenses and Other Current Assets**

In accordance with U.S. GAAP, prepaid expenses, such as prepaid rent, insurance, or licenses, are reported as assets when payments are made in advance for goods or services to be consumed in future periods. These amounts are amortized over the expected benefit period, typically on a straight-line basis, and adjusted for any impairment or non-refundable portions. Material prepaid balances are classified as current assets based on their expected realization period, with significant judgments or changes in amortization disclosed when relevant.

Advance payments to vendors, including prepay or cash on delivery (COD) arrangements, are recognized as prepaid assets until such goods or services are received. Upon delivery, the amounts are reclassified to the appropriate expense account based on the nature of the transaction. The Company periodically reviews the carrying value of the prepaid expenses and other current assets to determine if any amounts are no longer recoverable and records an expense in the period such determination is made.

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)** 

**Related Party Transactions**

In compliance with U.S. GAAP, the Company discloses material related party transactions, including the nature of such relationships, where they may impact the Company's understanding of the financial position, results of operations, or cash flows. These include dealings with affiliates, principal owners, management, and their immediate families. The Company identifies and discloses the nature of the relationship, terms of the transactions, and any outstanding balances. Transactions are not presumed to be at arm's length and must be substantiated if claimed as such. Disclosure is made when the relationship or transaction could impact the understanding of the Company's financial position or results of operations.

The Company provides monthly technical support and development services to its related party, SemiCab, Inc., a U.S. based freight services provider. The revenue generated is accrued and recognized when earned. As of March 31, 2025 and 2024, the Company's related party revenue was $666,000 and $674,000, respectively.

**Foreign Currency**

The functional currency of the Company is the Indian Rupee. The financial statements of the Company were translated into United States dollars in accordance with Accounting Standards Codification ("ASC 830"), *Foreign Currency Matters*. Assets and liabilities are translated at the exchange rate on the balance sheet date, while revenues, expenses, and cash flows use average rates over each reporting periods. Equity components are translated at historical rates. Transaction gains and losses arising from exchange rate differences are recognized in the statements of operations and comprehensive income / (loss). Translation adjustments are included in accumulated other comprehensive income / (loss) within shareholders' deficit in the Company's balance sheets. As cash flow translations use average rates, related balances may differ from changes reported on the balance sheets.

**Property and Equipment, Net**

Property and equipment is stated at cost, less accumulated depreciation. Expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to their estimated useful lives using straight-line method.

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)** 

**Leases**

The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use ("ROU") assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date. The liability is equal to the present value of the remaining minimum lease payments. The asset is based on the liability, subject to certain adjustments. Operating leases result in straight-line expense (similar to operating leases under the prior accounting standard) while finance leases result in a front-loaded expense pattern (similar to capital leases under the prior accounting standard). As the interest rate implicit in the Company's operating leases is not readily determinable, the Company utilizes its incremental borrowing rate to discount the lease payments. The Company utilizes the implicit rate for its finance leases. When lease terms are 12 months or less and meet the criteria for short-term lease classification, no ROU asset or lease liability are recognized.

**Long Lived Assets**

The Company reviews long-lived assets for impairment in accordance with ASC Topic 360, *Property, Plant and Equipment* ("ASC 360"). The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the asset to its carrying value. An impairment loss is recognized when the estimated undiscounted future cash flows expected to result from the use of the asset is less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. The Company had no impairment loss related to long-lived assets for the years ended March 31, 2025 and 2024.

**Fair Value Measurements**

In accordance with ASC 820, *Fair Value Measurements and Disclosures*, fair value is defined as the exit price, or the amount that would be received for the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date.

The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs include those that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:

● Level 1: Quoted market prices in active markets for identical assets or liabilities.

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)** 

● Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or model-derived valuations. All significant inputs used in the Company's valuations are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include quoted prices that are adjusted for security-specific restrictions which are compared to output from internally-developed models such as a discounted cash flow model.

● Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts of financial instruments carried at cost, including cash, accounts receivable, accounts payable and notes payable – related party approximate their fair value as recorded on the balance sheets.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

**Revenue Recognition** 

The Company recognizes revenue in accordance with ASC 606, *Revenue from Contracts with Customers*. All revenue is generated from contracts with customers. The Company recognizes revenue when services are performed for the customer in an amount, referred to as the transaction price, that reflects the consideration to which the Company is expected to be entitled in exchange for those services. The Company determines revenue recognition utilizing the following five steps: (i) identification of the contract with a customer; (ii) identification of the performance obligations in the contract (promised services that are distinct); (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as, the Company transfers control of the service for each performance obligation.

The Company's performance obligations are established when a customer submits a purchase order notification and the Company accepts the order. The Company identifies performance obligations as the delivery of the requested service at the location specified in the customer's contract and/or purchase order. Revenue from sales of services is recognized at the point in time when the Company transfers control to the customer, typically at the time when the services are performed in full, at which time there are no further performance obligations remaining.

The Company's contracts with customers consist of one performance obligation, which is the performance of services. The Company's contracts have no financing elements. Payment terms are generally less than 90 days and have no further contract asset or liability obligations once control of the service is transferred to the customer. Revenue is recorded in the amount of consideration the Company expects to receive for the sale of the service.

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)** 

All revenues earned from contracts are presented net of discounts, allowances, and applicable taxes.

The Company utilizes independent contractors and third-party carriers to perform transportation services. In accordance with ASC Topic 606, Revenue Recognition: Principal Agent Considerations, the Company evaluates the terms in the agreements with its customers and vendors to determine whether or not the Company acts as the principal or as an agent in the arrangement with each party respectively. The determination of whether to record the revenue on a gross or net basis depends upon whether the Company has control over the goods prior to transferring it. Based on the Company's evaluation of the control model, it is determined that for majority of the arrangements, the Company is considered the principal where revenue is recognized on a gross basis. In certain arrangements, where the Company acts as an agent, such revenues are recognized net of the cost of the purchased transportation.

**Cost of Revenue**

Costs of revenue include all directly related costs to deliver services, which includes independent contractor and third-party drivers, insurance, truck maintenance costs, equipment rental and other directly related costs. Such costs are expensed as incurred.

**Sales Taxes**

Goods and Services Tax ("GST") and other similar indirect taxes are levied by various jurisdictions on the purchase of goods and services. The Company accounts for such taxes on a net basis, meaning revenue and expenses are recorded exclusive of recoverable sales taxes. Sales taxes collected from customers are excluded from revenue, and taxes paid to suppliers are excluded from expenses where they are recoverable from tax authorities.

For non-recoverable sales taxes incurred:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● If related to the acquisition or construction of an asset, the non-recoverable amount is capitalized as part of the asset's cost.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● If related to other expenditures, the non-recoverable amount is expensed as incurred.

Sales tax amounts payable to or recoverable from tax authorities are presented within prepaid expenses and other current assets and/or other current liabilities on the balance sheets.

**Income Taxes**

The Company follows the provisions of ASC 740, *Accounting for Income Taxes* ("ASC 740"). Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If it is more likely than not that some portion of a deferred tax asset will not be realized, a valuation allowance is recognized.

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)** 

The Company recognizes a liability for uncertain tax positions. An uncertain tax position is defined as a position in a previously filed tax return or a position expected to be taken in a future tax return that is not based on clear and unambiguous tax law and that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company measures the tax benefits recognized based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution.

As of March 31, 2025, and 2024, there were no uncertain tax positions that resulted in any adjustment to the Company's provision for income taxes. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. The Company currently has no liabilities recorded for accrued interest or penalties related to uncertain tax provisions.

**Recent Accounting Pronouncements**

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures*. ASU 2023-09 is intended to enhance the usefulness of income tax disclosures by requiring entities to disclose specific rate reconciliations, amount of income taxes separate by federal, state and foreign tax jurisdictions, and the amount of income (loss) from continuing operations before income tax expense (benefit) disaggregated between federal, state and foreign. ASU 2023-09 is effective for the Company for its fiscal year beginning April 1, 2025, with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, *Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40)*. This ASU requires disclosure on an annual and interim basis, in the notes to the financial statements, of disaggregated information about specific categories underlying certain income statement expense line items. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods with annual reporting periods beginning after December 15, 2027, on a retrospective basis. The Company is currently evaluating the impact of this ASU on its financial statements and related disclosures.

The Company reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to the Company's operations or that no material effect is expected on its financial statements as a result of future adoption.

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)** 

**NOTE 4 – CONTRACT ASSETS AND LIABILITIES**

Contract assets include unbilled amounts resulting from in-transit shipments, as the Company has an unconditional right to payment only when services have been completed (i.e., shipments have been delivered). Amounts do not exceed their net realizable value. Contract assets are generally classified as current, and the full balance is converted each quarter based on the short-term nature of the transactions.

Contract liabilities consist of advance payments as well as deferred revenue. Advance payments represent payments received from customers that will be earned over the contract term. Deferred revenue represents the amount due from customers related to in-transit shipments that has not yet been recognized as revenue based on progress. The Company classifies advance payments and billings in excess of revenue as either current or long-term, depending on the period over which the amount will be earned, and deferred revenue as current based on the short-term nature of the transactions.

As of March 31, 2025 and 2024, contract assets were $332,000 (including $36,000 to a related party) and $52,000 (none to a related party), respectively, and were recorded within "account receivables, net of allowance", on the balance sheets.

As of March 31, 2025 and 2024, contract liabilities were $196,000 (including $170,000 to a related party) and $42,000 (all to a related party), respectively, and were recorded within "other current liabilities", on the balance sheets.

**NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS**

Prepaid expenses and other current assets consists of the following:

---

| | | |
|:---|:---|:---|
|  | **As of March 31,** | **As of March 31,** |
|  | **2025** | **2024** |
| Goods and services tax | $150000 | $118000 |
| Vendor advance | 59000 |  |
| Security deposits | 20000 | 15000 |
| Fixed deposit – bank guarantee | 11000 |  |
| Prepaid expenses | 13000 | 12000 |
| Other | - | 12000 |
|  | $253000 | $157000 |

---

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)** 

**NOTE 6 – PROPERTY AND EQUIPMENT, NET**

A summary of the Company's property and equipment, net is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | | **As of March 31,** | **As of March 31,** |
|  | Useful<br>Life | **2025** | **2024** |
| Computer and office equipment | 3-5 years | $39000 | $32000 |
| Less: accumulated depreciation |  | (30000) | (21000) |
|  |  | $9000 | $11000 |

---

The Company recorded depreciation expense of $9,000 and $8,000 in relation to the depreciation of property and equipment for the years ended March 31, 2025 and 2024 respectively.

**NOTE 7 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES**

Accrued expenses and other current liabilities consists of the following:

---

| | | |
|:---|:---|:---|
|  | **As of March 31,** | **As of March 31,** |
|  | **2025** | **2024** |
| Goods and services tax | $66000 | $38000 |
| Provision for freight expenses | 285000 | 80000 |
| Customer advance | 26000 |  |
| Customer advance to related party | 170000 |  |
| Deferred revenue |  | 42000 |
| Salary payable |  | 97000 |
| Other payable | 33000 | 35000 |
|  | $**580000** | $**292000** |

---

**NOTE 8 – NOTE PAYABLE TO RELATED PARTIES**

The Company is a party to a loan agreement with Algorhythm Holdings dated March 22, 2024. Under the loan agreement, Algorhythm Holdings agreed to loan up to $2,500,000 to the Company. The loans are anticipated to be made in tranches. Disbursements of any tranches are fully at the discretion of Algorhythm Holdings. Each tranche has a repayment period of five years. The loans can be repaid at any time prior to the five-year maturity date without penalty. Interest on the loans accrues at a rate of six percent per year and is payable quarterly.

The Company is also a party to an intercompany master services agreement ("MSA") whereby the Company agrees to provide IT software development services to Algorhythm Holdings. In exchange, under the MSA, Algorhythm Holdings grants intellectual property rights to the Company to use the Company's software platform in India. Compensation for services is invoiced and paid on a monthly or quarterly basis as agreed by both parties, with rates subject to periodic review and revision. Further, MSA requires a royalty rate of 0.5% of gross annal revenue recognized associated with the licensed technology. The agreement is for a term of two years ending on April 1, 2025 and automatically renews for additional 12-month periods unless prior notice is given by the terminating party. The agreement automatically renewed for an additional 12-month period on April 1, 2025.

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)** 

During the year ended March 31, 2025, Algorhythm Holdings made loans to the Company in the amount of $2,449,000 and the Company charged $809,000 to Algorhythm Holdings for services that were performed under the MSA, which charges offset amounts due under the loan with Algorhythm Holdings. As a result, as of March 31, 2025, a total of $1,640,000 of loans were outstanding under the loan agreement and a total of $860,000 remained available for future borrowings under the loan agreement. As of March 31, 2025, the Company had not made any interest payments due under the loan agreement. As a result, the loans were in default as of March 31, 2025.

Ajesh Kapoor serves as the Director of the Company and serves as the Chief Executive Officer, the Chief Technology Officer and a member of the Board of Managers of SemiCab Holdings. He also serves as a member of the Board of Directors of Algorhythm Holdings.

**NOTE 9 – EMPLOYEE BENEFIT PLANS**

**Defined Benefit Plan**

The Company maintains certain defined benefit plans covering eligible employees in accordance with local statutory requirements and business practices. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation, or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Company. The Leave Encashment Plan provides a lump-sum payment to employees when they leave the Company based on a multiple of their final monthly salary. Both the Gratuity and Leave Encashment Plans are unfunded with obligation amounts determined by actuarial valuations. These obligation amounts are recorded on the balance sheets within "Accrued compensation and related benefits" and "Long-term provision for employee benefits, net of the current portion". All expenses associated with these plans are recorded within "Salary and benefits" on the statements of operations and comprehensive income / (loss).

Employer benefit obligations and related changes for the years as follows:

---

| | | |
|:---|:---|:---|
|  | **As of March 31,** | **As of March 31,** |
|  | **2025** | **2024** |
| Employee benefit obligations as of April 1 | $80000 | $60000 |
| Employee benefits paid |  |  |
| Employer expenses | 15000 | 20000 |
| Employee benefit obligations as of March 31 | $95000 | $80000 |

---

**Provident Fund Benefits**

Certain categories of employees of the Company receive benefits from a Provident Fund, a defined contribution plan. Both the employee and employer each make monthly contributions to a government administered fund equal to 12% of the covered employee's qualifying salary. The Company has no further obligations under the plan beyond its monthly contributions. The Company contributed $6,000 to the Provident Fund plan for each of the years ended March 31, 2025 and 2024, respectively.

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)** 

**NOTE 10 – COMMITMENTS AND CONTINGENCIES**

**Lease Commitments**

The Company entered into an operating lease agreement for its corporate headquarters located in Bangalore, India. The lease is for a term of less than 12 months. Base rent under the lease is approximately $4,000 per month. Lease expense for the Company's operating lease is recognized on a straight-line basis over the lease term and was included in general and administrative expenses in the Company's statement of operations. Lease expense was $51,000 and $48,000 for the years ended March 31, 2025, and 2024, respectively.

**Contingencies**

The Company is subject to claims, suits and other proceedings from time to time in the ordinary course of business that could result in fines, civil penalties, or other adverse consequences. In accordance with the provisions of ASC Topic 450, *Contingencies,* the Company records a liability when it believes that it is probable that a loss has been incurred and the amount can be reasonably estimated. If the Company determines that it is probable that a loss has been incurred and the loss or range of loss can be estimated, the Company accrues the estimated amount of the loss. The Company evaluates developments in its legal matters that could affect the amount of liability that has been previously accrued and makes adjustments as appropriate. Significant judgment is required to determine both the likelihood of there being and the estimated amount of a loss related to such matters.

**NOTE 11 – INCOME TAXES**

Income tax (benefit) expense is comprised of the following:

---

| | | |
|:---|:---|:---|
|  | **Year Ended March 31,** | **Year Ended March 31,** |
|  | **2025** | **2024** |
| Current tax expense | $- | $- |
| Deferred tax (benefit) expense | - | 13000 |
| Income tax (benefit) expense | $- | $13000 |

---

**SMCB Solutions Private Limited**

**NOTES TO FINANCIAL STATEMENTS**

**March 31, 2025 and 2024**

**(Amounts rounded to the nearest thousands, except share amounts)** 

The components of deferred income taxes as follows:

---

| | | |
|:---|:---|:---|
|  | **As of March 31,** | **As of March 31,** |
|  | **2025** | **2024** |
| Accrued liabilities | $24000 | $21000 |
| Net operating losses | 286000 | 142000 |
| Total deferred tax assets | 310000 | 163000 |
| Less: valuation allowance | (310000) | (163000) |
| Total deferred tax assets, net | $- | $- |

---

The Company's operations are primarily based out of the Indian jurisdiction. There are unused tax losses amounting to $1,126,000 and $56,000 at March 31, 2025 and March 31, 2024, respectively. The tax benefit for these losses, if not utilized, will expire on various dates starting from financial year 2024 to 2031. Under the Indian jurisdiction, a period of 3 financial years remains open to assessment by tax authorities or a period of 10 financial years if the assessing officer has evidence that undeclared income exceeds a certain limit.

The Company has recorded a valuation allowance on the deferred tax asset resulting from such losses due to Company's history of past losses and lack of conclusive evidence to support the view that sufficient taxable profit will be generated in the future by the Company to offset such losses.

**NOTE 12 – SUBSEQUENT EVENTS**

**Acquisition of the Company**

On May 2, 2025, Algorhythm Holdings and SemiCab Holdings entered into an equity purchase agreement with SemiCab, Inc. pursuant to which: (i) SemiCab Holdings purchased 9,999 shares of the issued and outstanding equity shares of the Company, representing 99.99% of the issued and outstanding equity shares of the Company, from SemiCab, Inc. for $1,750,000, the payment of which amount was evidenced by the issuance of a promissory note by Algorhythm Holdings to SemiCab, Inc., and (ii) Algorhythm Holdings purchased the 20% membership interest in SemiCab Holdings then held by SemiCab, Inc. for aggregate consideration consisting of 119,742 shares of Algorhythm Holdings' common stock that were issued to SemiCab, Inc. The acquisition was completed on May 2, 2025.

**Additional Loans Under Loan Agreement**

During the period commenced April 1, 2025 and ended May 2, 2025, Algorhythm Holdings made loans to the Company in the amount of $632,000 and the Company charged $132,000 for services to Algorhythm Holdings that were performed under the MSA, which charges offset amounts due under the loan agreement with the Company. As of May 2, 2025, a total of $2,140,000 of loans were outstanding under the loan agreement and a total of $360,000 remained available for future borrowings under the loan agreement. As of May 2, 2025, the Company had not made any interest payments due under the loan agreement. As a result, the loans were in default as of May 2, 2025.

**Amendment to the Loan Agreement**

On May 26, 2025, the Company entered into an amendment to the loan agreement with Algorhythm Holdings pursuant to which the parties agreed to increase the maximum loan amount available to the Company under loan agreement from $2,500,000 to $5,000,000.

## Exhibit 99.3

**Exhibit 99.3**

**Unaudited Pro Forma Condensed Combined Financial Statements**

On May 2, 2025 (the "Closing Date"), Algorhythm Holdings, Inc. (the "Company") and its subsidiary, SemiCab Holdings, LLC, a Nevada limited liability company ("SemiCab Holdings"), entered into an equity purchase agreement with SemiCab Inc., a Delaware corporation, pursuant to which: (i) SemiCab Holdings purchased 9,999 shares of the issued and outstanding equity shares, Rs. 10 par value, of SMCB Solutions Private Limited, an Indian company ("SMCB"), representing 99.99% of the issued and outstanding equity shares of SMCB, for $1,750,000, the payment of which amount was evidenced by the issuance of a promissory note by the Company to SemiCab, Inc., and (ii) the Company purchased the 20% membership interest in SemiCab Holdings then held by SemiCab, Inc. for aggregate consideration consisting of 119,742 shares of the Company's common stock, par value $0.01 per share.

On the Closing Date, the Company and SemiCab Holdings entered into an amended and restated employment agreement with each of Ajesh Kapoor and Vivek Sehgal pursuant to which Mr. Kapoor agreed to serve as the Chief Executive Officer and Chief Technology Officer of SemiCab Holdings and Mr. Sehgal agreed to serve as the Chief Product Officer of SemiCab Holdings. Pursuant to the terms of the employment agreements, SemiCab Holdings granted Messrs. Kapoor and Sehgal a membership interest in SemiCab Holdings of 15% and five percent, respectively, with three quarters of each such grant subject to certain forfeiture rights. Additionally, Mr. Kapoor was granted the right to serve as a member of the board of directors of the Company and the right to appoint an additional member to the board of directors upon the occurrence of certain specified events.

Also on the Closing Date, the Company, SemiCab Holdings, Ajesh Kapoor and Vivek Sehgal entered into an Amended and Restated Limited Liability Company Agreement for SemiCab Holdings which sets forth the terms and conditions governing the operation and management of SemiCab Holdings.

The promissory note provides that $1,500,000 is due and payable by the Company on the first anniversary of the Closing Date and the remaining $250,000 is due and payable by the Company on the 18-month anniversary of the Closing Date. The promissory note bears interest at six percent per annum. The promissory note includes customary events of default, such as the failure to pay principal or interest when due and the occurrence of certain bankruptcy events. If an event of default occurs, SemiCab, Inc. has the right to declare all outstanding amounts immediately due and payable. In the event any payment is not made when due, regardless of whether it constitutes an event of default, the amount of such payment will accrue interest at a default rate of eight percent per annum.

The accompanying unaudited pro forma condensed combined financial information of the Company is presented to illustrate the estimated effects of the acquisition of SMCB by the Company on May 2, 2025 and should be read in conjunction with:

● the Company's audited financial statements and accompanying notes as of and for the year ended December 31, 2024 included in the Company's Annual Report on Form 10-K, filed with the Securities Exchange Commission ("SEC") on April 15, 2025;

● the Company's unaudited financial statements and accompanying notes as of and for the three-month period ended March 31, 2025 included in the Company's Quarterly Report on Form 10-Q, filed with the SEC on May 15, 2025;

● SMCB's unaudited Statements of Operations and the accompanying notes for the three months ended March 31, 2025 and the year ended December 31, 2024; and

● SMCB's audited Balance Sheet and the accompanying notes at March 31, 2025, included elsewhere in this Current Report on Form 8-K/A.

**Algorhythm Holdings, Inc. and Subsidiaries**

 **Unaudited Pro Forma Condensed Combined Balance Sheet**

**As of March 31, 2025**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |<br>**Algorhythm**<br>**Holdings**<br>**Historical** |<br>**SMCB**<br>**Solutions**<br>**Historical** |<br> **Pro Forma**<br> **Adjustments** |  | **Algorhythm**<br>**Holdings**<br>**Pro Forma,**<br>**As Adjusted** |
| **Assets** |  |  |  |  |  |
| Current assets |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $3296000 | $336000 |  |  | $3632000 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 1385000 | 597000 | (170000) |)(h) | 1776000 |
|  |  |  | (36000) |)(h) |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable, related party | 357000 |  |  |  | 357000 |
| &nbsp;&nbsp;&nbsp;Note receivable, related party | 1201000 |  | (1640000) |)(d) |  |
|  |  |  | 439000 | (j) |  |
| &nbsp;&nbsp;&nbsp;Inventory | 1895000 |  |  |  | 1895000 |
| &nbsp;&nbsp;&nbsp;Returns asset | 751000 |  |  |  | 751000 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 126000 | 253000 |  |  | 379000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 9011000 | 1186000 |  |  | 8790000 |
| Property and equipment, net | 253000 | 9000 |  |  | 262000 |
| Other non-current assets | 81000 |  |  |  | 81000 |
| Intangible assets, net | 330000 |  |  |  | 330000 |
| Goodwill | 786000 | - | 3764000 | (b) | 4550000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $10461000 | $1195000 |  |  | $14013000 |
| **Liabilities and shareholders' equity (deficit)** |  |  |  |  |  |
| Current liabilities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | $3715000 | $284000 | 150000 | (a) | $4113000 |
|  |  |  | (36000) |)(i) |  |
| &nbsp;&nbsp;&nbsp;Interest payable to related party |  | 27000 |  |  | 27000 |
| &nbsp;&nbsp;&nbsp;Refund due to customer | 630000 |  |  |  | 630000 |
| &nbsp;&nbsp;&nbsp;Reserve for sales returns | 1742000 |  |  |  | 1742000 |
| &nbsp;&nbsp;&nbsp; Accrued compensation and accrued benefits |  | 6000 |  |  | 6000 |
| &nbsp;&nbsp;&nbsp;Current portion of notes payable to related parties | 551000 | 1640000 | (1640000) |)(d) | 2051000 |
|  |  |  | 1500000 | (c) |  |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 97000 | 580000 | (170000) |)(h) | 507000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 6735000 | 2537000 |  |  | 9076000 |
| Notes payable to related parties, net of current portion | 385000 |  | 250000 | (c) | 635000 |
| Long-term provision for employee benefits, net of current | - | 89000 |  |  | 89000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 7120000 | 2626000 |  |  | 9800000 |
| Commitments and contingencies |  |  |  |  |  |
| Shareholders' equity (deficit) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Common stock | 24000 |  |  |  | 24000 |
| &nbsp;&nbsp;&nbsp;Equity shares |  | 1000 | (1000) |)(f) |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 63577000 |  | 316000 | (e) | 67342000 |
|  |  |  | 3449000 | (b), (f), (e) |  |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss |  | 13000 |  |  | 13000 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (58363000) | (1445000) | (1461000) |)(a), (c), (j) | (61269000) |
| &nbsp;&nbsp;&nbsp;Non-controlling interest | (1139000) |  |  |  | (1139000) |
| &nbsp;&nbsp;&nbsp;Treasury stock | (758000) | - |  |  | (758000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity (deficit) | 3341000 | (1431000) |  |  | 4213000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity (deficit) | $10461000 | $1195000 |  |  | $14013000 |

---

The accompanying notes are an integral part of these financial statements

**Algorhythm Holdings, Inc. and Subsidiaries**

 **Unaudited Pro Forma Condensed Combined Statement of Operations**

**For the Three Months Ended March 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |<br>**Algorhythm**<br>**Holdings**<br>**Historical** |<br>**SMCB**<br>**Solutions**<br>**Historical** |<br>**Pro Forma**<br>**Adjustments** | **Algorhythm**<br>**Holdings**<br>**Pro Forma,**<br>**As Adjusted** |
| Net sales | $1993000 | $997000 | $(183000)(k) | $2807000 |
| Cost of goods sold | 1493000 | 937000 |  | 2430000 |
| Gross profit | 500000 | 60000 |  | 377000 |
| Operating expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling expenses | 764000 |  |  | 764000 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 2546000 | 226000 | (159000)(k) | 2613000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 3310000 | 226000 |  | 3377000 |
| Loss from operations | (2810000) | (166000) |  | (3000000) |
| Other expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant liability | (6468000) |  |  | (6468000) |
| &nbsp;&nbsp;&nbsp;Interest expense | (16000) |  |  | (16000) |
| &nbsp;&nbsp;&nbsp;Other expense | - | (2000) |  | (2000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expenses | (6484000) | (2000) |  | (6486000) |
| Net loss | (9294000) | (168000) |  | (9486000) |
| Net loss attributable to non-controlling interest | 103000 | - |  | 103000 |
| Net loss available to common stockholders | $(9191000) | $(168000) |  | $(9383000) |
| Net loss per common share |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | $(4.66) |  |  | $(4.48) |
| Weighted average common and common equivalent shares |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 1972869 |  | 119742 (e) | 2092611 |

---

*The accompanying notes are an integral part of these financial statements*

 

**Algorhythm Holdings, Inc. and Subsidiaries**

 **Unaudited Pro Forma Condensed Combined Statement of Operations**

**For the Year Ended December 31, 2024**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |<br>**Algorhythm**<br>**Holdings**<br>**Historical** |<br>**SMCB**<br>**Solutions**<br>**Historical** |<br>**Pro Forma**<br>**Adjustments** |  | **Algorhythm**<br>**Holdings**<br>**Pro Forma,**<br>**As Adjusted** |
| Net sales | $23494000 | 2582000 | (655000) |)(k) | $25421000 |
| Cost of goods sold | 18713000 | 2792000 |  |  | 21505000 |
| Gross profit | 4781000 | (210000) |  |  | 3916000 |
| Operating expenses |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling expenses | 2874000 |  |  |  | 2874000 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 12240000 | 578000 | 170000 | (l), (m) | 11979000 |
|  |  |  | (570000) |)(k) |  |
|  |  |  | (439000) |)(j) |  |
| &nbsp;&nbsp;&nbsp;Impairment of goodwill | 3592000 | - |  |  | 3592000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 18706000 | 578000 |  |  | 18445000 |
| Loss from operations | (13925000) | (788000) |  |  | (14529000) |
| Other expenses |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant liability | 334000 |  |  |  | 334000 |
| &nbsp;&nbsp;&nbsp;Loss on issuance of warrants | (8889000) |  |  |  | (8889000) |
| &nbsp;&nbsp;&nbsp; Extinguishment of debt |  |  | 1640000 | (d) |  |
|  |  |  | (1640000) |)(d) |  |
| &nbsp;&nbsp;&nbsp;Interest expense | $(1887000) |  |  |  | (1887000) |
| &nbsp;&nbsp;&nbsp;Other expense | - | 5000 |  |  | 5000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expenses | (10442000) | 5000 |  |  | (10437000) |
| Net loss | (24367000) | (783000) |  |  | (24966000) |
| Net loss attributable to non-controlling interest | 1110000 | - |  |  | 1110000 |
| Net loss available to common stockholders | $(23257000) | $(783000) |  |  | $(23856000) |
| Net loss per common share |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | $(353.87) |  |  |  | $(128.63) |
| Weighted average common and common equivalent shares |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 65722 |  | 119742 | (e) | 185464 |

---

*The accompanying notes are an integral part of these financial statements*

**Notes to Unaudited Pro Forma Condensed Combined Financial Statements**

**Note 1. Basis of Presentation**

The unaudited pro forma condensed combined financial statements (the "Pro Forma Financial Statements") have been in accordance with generally accepted accounting principles in the United States and Article 8 of Regulation S-X. The Pro Forma Financial Statements present the pro forma balance sheet and statements of operations of the Company based upon historical information of the Company and SMCB after giving effect to the acquisition of SMCB and the adjustments described in these footnotes. The unaudited pro forma condensed combined balance sheet at March 31, 2025, assumes that the acquisition was completed on March 31, 2025. The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2025 and the year ended December 31, 2024 assume that the acquisition was completed on January 1, 2024.

The unaudited pro forma condensed combined financial statements are based upon and derived from the historical unaudited financial statements of the Company as of and for the three-month period ended March 31, 2025, the historical unaudited Statement of Operations of SMCB for the three-month period ended March 31, 2025, the historical audited Balance Sheet of the SMCB as of March 31, 2025, the historical audited financial statements of the Company as of and for the year ended December 31, 2024, and the historical unaudited financial statements of SMCB as of and for the year ended December 31, 2024. Certain financial statement line items in SMCB's historical financial statements have been reclassified and condensed to conform to corresponding financial statement line items included in the Company's historical financial statement presentation. These reclassifications did not result in any change to the previously reported total assets, net loss or stockholders' deficit.

The Pro Forma Financial Statements have been prepared by management for illustrative purposes only. The unaudited pro forma condensed combined financial information is not necessarily indicative of the condensed combined financial position or results of operations that would have been realized had the acquisition occurred as of the dates indicated, nor is it meant to be indicative of any anticipated condensed combined financial position or future results of operations that the Company will experience after the acquisition. In addition, the accompanying unaudited pro forma condensed combined statements of operations do not include any pro forma adjustments to reflect operational efficiencies, expected cost savings or economies of scale that may be achievable or the impact of any non-recurring charges and one-time transaction related costs that result directly from the transaction. The historical consolidated financial information has been adjusted to give effect to pro forma events that are: (a) directly attributable to the acquisition, (b) factually supportable, and (c) with respect to the unaudited pro forma condensed combined statements of operations, expected to have a continuing impact on the condensed combined results of operations.

Furthermore, while the Company will be subject to tax at the corporate level subsequent to the Closing Date, the Company will be in a net loss position that will result in a de minimus deferred tax asset that has been determined to not be more likely than not to be realized. As a result, the Company will not realize an income tax benefit from the acquisition and no adjustments for the income tax impact of any transaction accounting adjustments have been reflected herein.

**Note 2. Consideration Transferred and Purchase Price Allocation**

The accompanying Pro Forma Financial Statements and related notes were prepared using the acquisition method of accounting, in accordance with Accounting Standard Codification ("ASC") 805, *Business Combinations* ("ASC 805"), with the Company considered the acquirer of SMCB. In accordance with ASC 805, the assets acquired and the liabilities assumed have been measured at fair value based on various estimates, with the remaining purchase price recorded as goodwill. Under ASC 805, acquisition-related transaction costs and acquisition-related restructuring charges are not included as components of consideration transferred but are accounted for as expenses in the period in which the costs are incurred.

Fair values of assets and liabilities acquired were determined based on the requirements of ASC 820, *Fair Value Measurements and Disclosures*. In accordance with ASC 820, fair value is an exit price and is defined as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." The fair values of assets and liabilities acquired represent the Company's estimates of fair values as of the acquisition date. Accordingly, management believes the fair values recognized for the assets acquired are based on reasonable estimates and assumptions.

The purchase price for the acquisition was $4,206,000, comprised of: (a) the issuance of a promissory note in the principal amount of $1,750,000, (b) 119,742 shares of the Company's common stock, par value $0.01 per share, valued at $316,000 based on the closing price of the Company's common stock of $2.64 per share on May 2, 2025, and (c) the acquisition of debt owed to the Company in the amount of $2,140,000.

---

| | |
|:---|:---|
| Promissory note | $1750000 |
| 119,742 shares of common stock | 316000 |
| Acquisition of debt | 2140000 |
| Estimated fair value of consideration transferred | $4206000 |

---

The Company has performed a preliminary valuation analysis of the fair market value of SMCB assets acquired and liabilities assumed. Using the total consideration for the acquisition, the Company has estimated the allocations to such assets and liabilities. The following table summarizes the allocation of the preliminary purchase price as May 2, 2025, the date the acquisition was completed:

---

| | |
|:---|:---|
| Cash and cash equivalents | $593000 |
| Accounts receivable, net | 319000 |
| Prepaid expenses and other current assets | 377000 |
| Property & equipment, net | 11000 |
| Other non-current assets | 489000 |
| Goodwill | 3764000 |
| &nbsp;&nbsp;&nbsp;Total assets acquired | $5553000 |
| Accounts payable and accrued expenses | $(372000) |
| Other current liabilities | (975000) |
| &nbsp;&nbsp;&nbsp;Total liabilities assumed | (1347000) |
| Fair value of consideration transferred | $4206000 |

---

This preliminary purchase price allocation has been used to prepare the transaction accounting adjustments in the pro forma balance sheet and income statement. The fair values of assets and liabilities acquired represent the Company's estimates of fair values as of the acquisition date. Management believes that the fair values recognized for the assets and liabilities acquired are based on reasonable estimates and assumptions. The final purchase price allocation will be determined when the Company has completed the detailed valuations and necessary calculations. The final allocation is expected to be completed when the Company files its report on Form 10-Q for the quarter ended September 30, 2025 and could differ materially from the preliminary allocation used in the transaction accounting adjustments. The final allocation may include: (i) changes in fair values of property and equipment, (ii) changes in allocations to goodwill, and (iii) other changes to assets and liabilities.

**Note 3. Adjustments to Pro Forma Financial Statements**

The unaudited pro forma adjustments included in the Pro Forma Financial Statements are as follows:

*Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet*

(a) The
 adjustments to accounts payable and accumulated deficit reflects the estimated transaction
 expenses of $150,000 that were cash settled, or are expected to be cash settled, subsequent
 to March 31, 2025. These costs included fees for legal, accounting, due diligence, tax, valuation
 and other various services necessary to complete the transaction. These estimated costs have
 been excluded from the pro forma statements of operations because they reflect changes directly
 attributable to the acquisition that will not have an ongoing impact on the Company.

(b) The
 adjustment to goodwill reflects the excess of the fair value of the consideration transferred
 over the fair value of SMCB's identifiable assets acquired and liabilities assumed
 in the acquisition. The fair value of the consideration transferred over the fair value of
 the identifiable net assets acquired is calculated as follows:

---

| | |
|:---|:---|
| Fair value of consideration transferred | $4206000 |
| Fair value of net assets acquired | 442000 |
| Total goodwill adjustment | $3764000 |

---

(c) The
 adjustment to current portion of notes payable to related parties and notes payable to related
 parties, net of current portion represents the issuance of a promissory note to SemiCab,
 Inc. in the principal amount of $1,750,000, of which $1,500,000 is due in 12 months and the
 remaining $250,000 is due in 18 months.

(d) The
 adjustment to notes receivable, related party, notes payable to related parties, net of current portion and extinguishment of debt reflects the elimination of $1,640,000 of notes
 receivable and notes payable between SMCB and the Company.

(e) The
 adjustment to par value and additional paid-in capital reflects the issuance of 119,742 shares
 of the Company's common stock, par value $0.01 per share, to SemiCab, Inc. valued at
 $316,000 based on the closing price of the Company's common stock of $2.64 per
 share on May 2, 2025.

(f) The
 adjustment to equity shares reflects the elimination of SMCB's historical equity
 balances.

(g) The adjustment to accumulated deficit
 reflects the assumption of $2,140,000 of debt owed by SMCB to the Company.

(h) The adjustments to accounts receivable reflect the elimination
 of related party customer advances between SMCB and the Company.

(i) The adjustment to accounts payable and accrued expenses reflects the elimination of related
 party accrued sales between SMCB and the Company.

(j) The adjustment to note receivable, related party reflects the reversal of prior credit
 losses

*Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations*

(k) The
 adjustment to revenue and general and administrative expenses reflects the elimination of
 royalties in the amount of $183,000 and $655,000, which is a 15% markup of the expenses
 recorded in general and administrative expenses during the three months ended March 31,
 2025 and the year ended December 31, 2024, respectively, paid by SMCB to the Company under
 its intercompany services agreement with the Company.

(l) The
 adjustment to general and administrative expenses reflects the estimated transaction expenses
 of $150,000 that were cash settled, or are expected to be cash settled, subsequent to March
 31, 2025. These costs included fees for legal, accounting, due diligence, tax, valuation
 and other various services necessary to complete the transaction. These estimated costs have
 been excluded from the pro forma statements of operations because they reflect changes directly
 attributable to the acquisition that will not have an ongoing impact on the Company.

(m) The
 adjustment to general and administrative expenses reflects equity compensation expense of
 $20,000 associated with the membership interest granted to Ajesh Kapoor and Vivek Sehgal
 under their respective amended and restated employment agreements.