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Notes Payable to Related Parties
 6 Months Ended 12 Months Ended
Jun. 30, 2025
Dec. 31, 2024
Notes Payable to Related Parties

Note 6 – Notes Payable to Related Parties

 

SemiCab Holdings assumed several unsecured loans from Ajesh Kapoor and Vivek Sehgal in the acquisition of SemiCab, Inc.’s business. The Company had accrued interest payable of $5,000 as of June 30, 2025 that was included as a component of accrued expenses on the Company’s condensed consolidated balance sheets. The Company incurred interest expense on these loans of $15,000 and $31,000 for the three and six months ended June 30, 2025, respectively.

 

The terms of each loan are summarized in the table below:

 

   Issue   Maturity       Interest     
Note Holder  Date   Date   Status   Rate   Principal 
Ajesh Kapoor   7/10/2021    7/10/2026    Current    9%  $150,000 
Ajesh Kapoor   8/27/2021    8/26/2026    Current    9%   235,000 
Vivek Sehgal   4/17/2023    2/1/2026    Current    10%   50,000 
Ajesh Kapoor   5/5/2023    2/1/2026    Current    10%   50,000 
Ajesh Kapoor   5/17/2023    2/1/2026    Current    10%   165,000 
                          
Balance as of June 30, 2025                      $650,000 
                          
Less: current portion of notes payable to related parties                       265,000 
                          
Notes payable to related parties, net of current portion                      $385,000 

  

As of December 31, 2024, the loans described above that were issued between April 17, 2023 and May 17, 2023 were in default. Subsequent to December 31, 2024, the Company entered into waivers and amendments with each of the note holders who are parties to those loans to extend the maturity dates of the loans to February 1, 2026.

 

On February 18, 2025, the Company issued a promissory note to each of Stingray Group and Regalia Ventures in the amount of $286,000 and $472,000, respectively. A discussion of these transactions and the terms of the promissory notes is set forth herein in Note 11 – Securities Transactions.

 

On May 2, 2025, the Company and SemiCab Holdings acquired 99.99% of the equity shares of SMCB from SemiCab, Inc. pursuant to which, in part, the Company issued a promissory note to SemiCab, Inc. in the principal amount of $1,750,000. A discussion of this transaction and the terms of the promissory note is set forth herein in Note 17 – Acquisition of SMCB.

 

 

ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023

 

  
Previously Reported [Member]    
Notes Payable to Related Parties  

Note 6 – Notes Payable to Related Parties

 

SemiCab Holdings assumed several unsecured loans from Ajesh Kapoor and Vivek Sehgal in the acquisition of SemiCab, Inc.’s business. The Company had accrued interest payable of $6,000 as of December 31, 2024 that was included as a component of accrued expenses on the Company’s consolidated balance sheets. The Company incurred interest expense on these loans of $36,000 for the year ended December 31, 2024.

 

The terms of each loan are summarized in the table below:

 

   Issue  Maturity     Interest     
Note Holder  Date  Date  Status  Rate   Principal 
Ajesh Kapoor  7/10/2021  7/10/2026  Current   9%  $150,000 
Ajesh Kapoor  8/27/2021  8/26/2026  Current   9%   235,000 
Vivek Sehgal  4/17/2023  10/13/2023  Default   10%   50,000 
Ajesh Kapoor  5/5/2023  5/4/2024  Default   10%   50,000 
Ajesh Kapoor  5/17/2023  5/16/2024  Default   10%   165,000 
                    
Balance as of December 31, 2024                $650,000 
                    
Less: current portion of notes payable to related parties                 265,000 
                    
Notes payable to related parties, net of current portion                $385,000 

 

Subsequent to December 31, 2024, the Company entered into waivers and amendments with each of the note holders who are parties to the loans described above that were in default at December 31, 2024 pursuant to which the maturity dates of the loans were extended to February 1, 2026. As a result of the execution of the waivers and amendments, the Company cured the defaults that had existed at December 31, 2024 due to non-payment on the original maturity dates of the notes.

 

 

ALGORHYTHM HOLDINGS, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024 and 2023