On July 21, 2026, Algorhythm Holdings, Inc. (the "Company") entered into a settlement agreement and stipulation (the "Settlement Agreement") with Continuation Capital, Inc., a Delaware corporation ("CCI"), with respect to certain outstanding liabilities of the Company in the principal amount of $1,928,014 (the "Claim Amount") that CCI has acquired from the former holders thereof.

 

Pursuant to the Agreement, the Company agreed to issue CCI up to 5,000,000 shares of the Company’s common stock, par value $0.01 per share (the "Shares"), in one or more tranches until CCI has generated aggregate proceeds equal to 120% of the Claim Amount. On July 23, 2026, the Circuit Court of the Twelfth Judicial Circuit in and for Desoto County, Florida entered an order approving the Settlement Agreement after a fairness hearing pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended (the "Securities Act"). The number of shares of common stock held by CCI at any given time cannot exceed 19.99% of the issued and outstanding shares of the Company’s common stock.

 

The offer and sale of these securities was and/or will be completed by the Company in private placement transactions that are exempt from the registration requirements of the Securities Act pursuant to Section 3(a)(10) of the Securities Act without payment of underwriting discounts or commissions to any person and without engaging in any advertising or general solicitation of any kind.

 

The foregoing is intended to be a summary of the terms of the Agreement and is subject to and qualified in its entirety by the terms of the Agreement, a copy of which is attached hereto as Exhibit 10.3.