As part of this strategic review, the Company is currently evaluating a potential transaction with an energy company focused on the development of highly scalable, island power generation infrastructure solutions for data centers.

The Company believes the rapidly increasing power requirements associated with artificial intelligence, cloud computing and data center development are creating significant opportunities across the energy infrastructure sector. The Board believes the potential transaction warrants further evaluation as part of its broader review of opportunities to strengthen the Company and create sustained shareholder value.

"We have a responsibility to continually evaluate opportunities that we believe can strengthen the Company and enhance value for our shareholders," said Gary Atkinson, Chief Executive Officer of Algorhythm. "As part of that process, we have identified a unique opportunity in the energy infrastructure sector that we believe merits serious consideration."

"The target company provides a power generation solution that we believe is particularly well suited to the rapidly growing power requirements of hyperscale data centers," said Mr. Atkinson. "Its services are intended to provide scalable, dispatchable power while addressing several of the challenges facing data center developers today, including grid constraints, water consumption and environmental impact. We believe these characteristics make the technology particularly compelling as AI and hyperscale computing continue to drive unprecedented demand for reliable power generation," concluded Mr. Atkinson.

The acquisition, if completed, would result in the energy business becoming the Company’s principal operating business. The structure, valuation, consideration and other material terms of any potential transaction remain subject to ongoing discussions, due diligence, negotiation of definitive agreements, Board approval and other applicable conditions and approvals.

The Company emphasized that it has not entered into a binding definitive agreement with respect to the potential business combination and has not made a final determination regarding any strategic alternative for SemiCab. There can be no assurance that the Company's strategic review or discussions regarding the potential business combination will result in the execution of a definitive agreement or the completion of any transaction.

Any potential transaction would be subject to the negotiation and execution of definitive agreements, completion of due diligence, applicable Board and shareholder approvals, regulatory and Nasdaq requirements, financing conditions, if applicable, and other customary closing conditions.

The Company does not intend to provide additional updates regarding the strategic review or potential transaction unless and until it determines that further disclosure is appropriate or required by applicable securities laws.