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Subsequent Events
9 Months Ended
Sep. 30, 2025
Subsequent Events [Abstract]  
Subsequent Events

Note 20 – Subsequent Events

 

Repayment of Notes Payable to Related Parties

 

On October 8, 2025, the Company repaid two unsecured loans that it had assumed in connection with the acquisition of SemiCab, Inc.’s business on July 3, 2024. The repaid loans consisted of: (i) a loan made to SemiCab, Inc. by Vivek Sehgal on April 17, 2023, and (ii) a loan made to SemiCab, Inc. by Ajesh Kapoor on May 5, 2023, each in the original principal amount of $50,000. Mr. Kapoor serves as the Chief Executive Officer and Chief Technology Officer of SemiCab Holdings and as a member of the Board of Directors of the Company, and Mr. Sehgal serves as the Chief Product Officer of SemiCab Holdings.

 

Streeterville Capital Financing

 

On November 13, 2025, the Company entered into Secured Pre-Paid Purchase #2 with Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”), under that certain securities purchase agreement (the “Securities Purchase Agreement”), dated August 21, 2025, between us and Streeterville. Under the Securities Purchase Agreement, the Company agreed to issue and sell shares of its common stock to Streeterville in one or more pre-paid purchases (each, a “Pre-Paid Purchase” and collectively, the “Pre-Paid Purchases”) for an aggregate purchase price of up to $20,000,000. Secured Pre-Paid Purchase #2 provides for a second Pre-Paid Purchase in the principal amount of $5,450,000, before deducting an original issue discount of $450,000 (the “Second Pre-Paid Purchase”). The Second Pre-Paid Purchase accrues interest at the rate of nine percent (9%) per annum and has a maturity date of three years.

 

The Second Pre-Paid Purchase is similar to the first Pre-Paid Purchase that the Company completed on August 21, 2025, however the Second Pre-Paid Purchase is secured by cash in an amount not less than the lesser of: (i) $4,500,000, and (ii) 90% of the then-current outstanding balance of the Second Pre-Paid Purchase (the “Minimum Balance Amount”). The Minimum Balance Amount is being held in a deposit account (the “DACA Account”) held by RIME Holdings, LLC, a Utah limited liability company and wholly-owned subsidiary of the Company that the Company formed in connection with this transaction (“RIME Holdings”), pursuant to a Deposit Account Control Agreement, dated November 13, 2025, by and among RIME Holdings, Lakeside Bank, an Illinois banking company, and Streeterville (the “DACA Agreement”). Accordingly, of the $5,000,000 proceeds that the Company received from the Second Pre-Paid Purchase, $4,500,000 were placed in the DACA Account.

 

The Company has the right to use funds in the DACA Account to repay any portion of the outstanding balance of the Second Pre-Paid Purchase, but only so long as the payment does not cause the outstanding balance to drop below the Minimum Balance Amount. As long as no event of default has occurred, the Company may withdraw from the Deposit Account any funds in excess of the Minimum Balance Amount. The Second Pre-Paid Purchase is secured by the Guaranty, the Security Agreement, and the IP Security Agreement (each as defined in the Securities Purchase Agreement). In addition, RIME Holdings executed a guaranty of the obligations outstanding under the Second Pre-Paid Purchase for the benefit of Streeterville.

 

The Company entered into a new placement agency agreement with Univest Securities, LLC to serve as the placement agent in the offering (the “Placement Agent”) that supersedes the placement agency agreement that the Company previously entered into with them on August 21, 2025 in connection with the offering. The Company agreed to pay the Placement Agent a cash fee equal to eight percent (8%) of the aggregate gross proceeds received by the Company from any Pre-Paid Purchases that it completes and reimburse the Placement Agent for legal fees in the amount of $50,000. The cash fee for the Second Pre-Paid Purchase must be paid on February 28, 2026; provided, however, that the Company may request that the payment date be extended by 90 days.