{"url_path":"/sec/rime/8-k/2026-07-02/item-1-01","section_key":"item-1-01","section_title":"Item 1.01 Entry Into a Material Definitive Agreement.**","topic":"sec","document":{"doc_type":"8-K","doc_date":"2026-07-02","source_url":"https://www.sec.gov/Archives/edgar/data/923601/0001493152-26-031919-index.html","accession_number":"0001493152-26-031919","cik":"0000923601","ticker":"RIME","issuer_name":"Algorhythm Holdings, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/923601/0001493152-26-031919-index.html","primary_entity_key":"0000923601","primary_entity_name":"Algorhythm Holdings, Inc."},"word_count":582,"has_tables":true,"body_markdown":"**Item\n1.01 Entry Into a Material Definitive Agreement.**\n\n \n\nAs\npreviously disclosed, on February 17, 2026, Algorhythm Holdings, Inc. (the “Company”) entered into Secured Pre-Paid Purchase\n#4 in the principal amount of $10,355,000 (“Secured Pre-Paid Purchase #4”) with Streeterville Capital, LLC, a Utah limited\nliability company (“Streeterville”), under that certain securities purchase agreement (the “Securities Purchase Agreement”),\ndated August 21, 2025, between the Company and Streeterville. Under the Securities Purchase Agreement, the Company agreed to issue and\nsell shares of its common stock to Streeterville in one or more pre-paid purchases (each, a “Pre-Paid Purchase” and collectively,\nthe “Pre-Paid Purchases”) for an aggregate purchase price of up to $20,000,000.\n\n \n\nOn\nJune 29, 2026, the Company entered into an exchange agreement (the “Exchange Agreement”) with Streeterville. Pursuant to\nthe Exchange Agreement, the Company and Streeterville agreed to partition a new Pre-Paid Purchase (the “Partitioned\nPre-Paid Purchase”) in the original principal amount of $3,500,000 (the “Partitioned Amount”) from Secured Pre-Paid\nPurchase #4 and reduce the outstanding balance of Secured Pre-Paid Purchase #4 by an amount equal to the Partitioned Amount. The parties\nthen exchanged the resulting Partitioned Pre-Paid Purchase for 3,500 shares (the “Exchange Shares”) of the Company’s\nnewly created Series A Preferred Stock, par value $1.00 per share (the “Series A Preferred Stock”). The parties agreed that,\nimmediately following cancellation of the Partitioned Amount, the outstanding balance of Secured Pre-Paid Purchase #4 was $7,202,371.69.\n\n \n\nOn\nJune 29, 2026, in connection with the issuance of the Exchange Shares, the Company filed the Certificate of Designation of Preferences\nand Rights of Series A Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware.\nThe Certificate of Designation designates 15,000 shares of the Company’s preferred stock, par value $1.00 per share, as Series\nA Preferred Stock and provides that each share of Series A Preferred Stock has a stated value of $1,150 (the “Stated Value”).\nEach share of Series A Preferred Stock accrues a preferred return on the Stated Value at a rate of 9% per annum (the “Preferred\nReturn”) which compounds daily and is payable quarterly in cash or additional shares of Series A Preferred Stock at the Company’s\nelection. Upon the occurrence of an event of default under the Certificate of Designation, the Stated Value will automatically increase\nto 15%, which increase may be applied up to three times for three separate events of default.\n\n \n\nThe\nSeries A Preferred Stock is non-convertible and has no voting rights except in certain limited circumstances. It is not entitled to participate\nin dividends, distributions or payments to holders of the Company’s common stock and may be redeemed by the Company, at the sole\ndiscretion of its board of directors, for a cash redemption price equal to 110% of the applicable liquidation amount. The Series A Preferred\nStock ranks senior to all shares of the Company’s capital stock, including the Company’s common stock, with respect to dividends,\ndistributions and payments upon liquidation, dissolution and winding up. The Certificate of Designation also contains covenants restricting\ncertain issuances of securities, changes to authorized shares, asset pledges, asset dispositions, reverse stock splits and fundamental\ntransactions.\n\n \n\nThe\nforegoing descriptions of the Exchange Agreement and Certificate of Designation do not purport to be complete and are qualified in their\nentirety by reference to the full text of the Exchange Agreement and Certificate of Designation, copies of which are filed as Exhibits\n10.1 and 3.1, respectively, to this Current Report on Form 8-K and are incorporated by reference herein."}