Algorhythm Holdings, Inc., a Delaware-based company specializing in phonograph records and prerecorded audio tapes and disks, with a market capitalization of just $4.27 million, is facing potential delisting from the Nasdaq Stock Market. According to InvestingPro analysis, the company's overall financial health score is rated as WEAK, with concerning metrics across multiple dimensions.
The company, formerly known as Singing Machine Co Inc., received a notification from Nasdaq on Monday, December 30, 2024, that its common stock had closed below the minimum bid price requirement.
According to Nasdaq Listing Rule 5550(a)(2), a company's stock must maintain a closing bid price of at least $1.00 for 30 consecutive business days. Algorhythm Holdings was initially alerted to this non-compliance on August 26, 2024, and was given until February 24, 2025, to regain compliance with the Bid Price Rule.
The situation escalated when the company's stock price closed below $0.10 per share for 13 consecutive trading days ending on December 27, 2024. This triggered Nasdaq's Low Priced Stock Rule, putting Algorhythm Holdings at risk of being delisted from the exchange. While the stock has recently shown some recovery, trading at $0.14 and posting a 29.65% gain over the past week, it remains down nearly 89% over the past year. InvestingPro subscribers have access to 15+ additional insights about RIME's financial health and market performance.
In response, Algorhythm Holdings plans to request a hearing before the Nasdaq Hearings Panel, which will delay any further delisting actions until the hearing takes place and any granted extension period expires. The company's stock, traded under the symbol NASDAQ:RIME, will continue to be listed on Nasdaq pending the outcome of the hearing process.
In other recent news, Algorhythm Holdings has made several significant financial moves. The company recently announced a registered direct offering of its common stock, expected to result in $2 million in gross proceeds. Additionally, Algorhythm Holdings priced a public offering projected to generate approximately $9.5 million in gross proceeds. Univest Securities served as the exclusive placement agent for both offerings.
The company also secured approximately $2 million in funding through a Securities Purchase Agreement, issuing 2,300,000 shares of common stock. This funding is planned for working capital and other general corporate purposes.
In terms of compliance, Algorhythm Holdings successfully regained compliance with Nasdaq's minimum stockholders' equity requirement after a period of non-compliance. This was achieved through a compliance plan that included an At-The-Market Issuance Sales Agreement with Ascendiant Capital Markets and the acquisition of SemiCab, Inc.
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