Algorhythm Holdings, Inc PRE 14A, filed Oct 6, 2025

Algorhythm Holdings, Inc. (RIME)

PRE 14A 2025-10-06 For: 2025-10-06

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☒	Preliminary Proxy Statement
☐	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☐	Definitive Proxy Statement
☐	Definitive Additional Materials
☐	Soliciting Material under § 240.14a-12

☒	No fee required

☐	Fees paid previously with preliminary materials.

☐	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

1.	To elect seven directors to serve on our board of directors until their respective successors are duly elected and qualified, or until their respective earlier death, resignation or removal;

2.	To grant discretionary authority to our board of directors to: (i) amend our certificate of incorporation to combine outstanding shares of our common stock into a lesser number of outstanding shares, or complete a “reverse stock split,” at a specific ratio within a range of one-for-two (1-for-2) to a maximum of a one-for-ten (1-for-10), with the exact ratio to be determined by our board of directors in its sole discretion; and (ii) effect the reverse stock split, if at all, within one year of the date the proposal is approved by stockholders (the “Reverse Stock Split Proposal”);

3.	To approve the reincorporation of us from the State of Delaware to the State of Nevada by conversion (the “Nevada Reincorporation Proposal”);

4.	To approve an amendment to our 2022 Equity Incentive Plan (the “2022 Plan”) to increase the number of shares of common stock authorized for issuance thereunder to 5,000,000 (the “2022 Plan Amendment Proposal”);

5.	To approve the issuance of shares of common stock to Streeterville Capital, LLC in pre-paid financing transactions that may collectively equal or exceed 20% of our issued and outstanding shares of common stock (the “Pre-Paid Financing Proposal”);

6.	To ratify the selection of M&K CPAs as our independent registered public accounting firm to audit our consolidated financial statements for our fiscal year ending December 31, 2025 (the “Auditor Ratification Proposal”);

7.	To approve one or more adjournments of the Annual Meeting, if necessary or appropriate, to solicit additional proxies in favor of the Reverse Stock Split Proposal, the Nevada Reincorporation Proposal, the 2022 Plan Amendment Proposal or the Pre-Paid Financing Proposal if there are not sufficient votes at the Annual Meeting to approve and adopt the Reverse Stock Split Proposal, the Nevada Reincorporation Proposal, the 2022 Plan Amendment Proposal or the Pre-Paid Financing Proposal (the “Adjournment Proposal”); and

8.	To transact such other business as may properly come before the Annual Meeting virtually, or any postponement or adjournment thereof.

	Page

NOTE REGARDING FORWARD-LOOKING STATEMENTS	ii
PROXY STATEMENT	1
ABOUT THE PROXY MATERIALS	1
PROPOSAL 1 – ELECTION OF DIRECTORS	8
INFORMATION ABOUT OUR BOARD OF DIRECTORS AND COMMITTEES	11
PROPOSAL 2 –REVERSE STOCK SPLIT	15
PROPOSAL 3 –REINCORPORATION INTO THE STATE OF NEVADA	21
PROPOSAL 4 – AMENDMENT TO THE 2022 EQUITY INCENTIVE PLAN	40
PROPOSAL 5 – ISSUANCE OF SHARES IN PRE-PAID FINANCING	45
PROPOSAL 6 –RATIFICATION OF THE COMPANY’S ACCOUNTING FIRM	48
AUDIT COMMITTEE REPORT	49
PROPOSAL 7 –ADJOURNMENT OF THE ANNUAL MEETING	49
MANAGEMENT	50
EXECUTIVE COMPENSATION	51
PAY VERSUS PERFORMANCE	55
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	58
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	59
ANNUAL REPORT ON FORM 10-K	61
OTHER BUSINESS	61
APPENDIX A: Certificate of Amendment	A-1
APPENDIX B: Reincorporation Resolutions	B-1
APPENDIX C: Plan of Conversion	C-1
APPENDIX D: Nevada Charter	D-1
APPENDIX E: Nevada Bylaws	E-1
APPENDIX F: Amendment to 2022 Equity Incentive Plan	F-1

1.	To elect seven directors to serve on our board of directors until their respective successors are duly elected and qualified, or until their respective earlier death, resignation or removal;

2.	To grant discretionary authority to our board of directors to: (i) amend our certificate of incorporation to combine outstanding shares of our common stock into a lesser number of outstanding shares, or complete a “reverse stock split,” at a specific ratio within a range of one-for-two (1-for-2) to a maximum of a one-for-ten (1-for-10), with the exact ratio to be determined by our board of directors in its sole discretion; and (ii) effect the reverse stock split, if at all, within one year of the date the proposal is approved by stockholders (the “Reverse Stock Split Proposal”);

Sincerely,


Gary Atkinson
Chief Executive Officer and Chairman of the Board of Directors

2 – Reverse Stock Split	“FOR”	● Vote “For” this proposal ● Vote “Against” this proposal ● Abstain from voting on this proposal	Approved if a majority of the number of votes cast vote “For” this proposal exceeds the number of votes cast “Against” this proposal by holders present virtually or represented by proxy and entitled to vote at the Annual Meeting	No effect	No broker non-votes; brokers have discretion to vote

3 – Reincorporation of us to the State of Nevada by Conversion	“FOR”	● Vote “For” this proposal ● Vote “Against” this proposal ● Abstain from voting on this proposal	Approved if holders of a majority of the outstanding shares of common stock present virtually or represented by proxy and entitled to vote at the Annual Meeting votes “For” this proposal	Against	Against

4 – Amendment to our 2022 Equity Incentive Plan	“FOR”	● Vote “For” this proposal ● Vote “Against” this proposal ● Abstain from voting on this proposal	Approved if holders of a majority of the outstanding shares of common stock present virtually or represented by proxy and entitled to vote at the Annual Meeting votes “For” this proposal	Against	No effect

5 – The Pre-Paid Financing	“FOR”	● Vote “For” this proposal ● Vote “Against” this proposal ● Abstain from voting on this proposal	Approved if holders of a majority of the outstanding shares of common stock present virtually or represented by proxy and entitled to vote at the Annual Meeting votes “For” this proposal	Against	No effect

6 – Ratification of the Selection of M&K CPAs as our Independent Registered Public Accounting Firm	“FOR”	● Vote “For” this proposal ● Vote “Against” this proposal ● Abstain from voting on this proposal	Approved if holders of a majority of the outstanding shares of common stock present virtually or represented by proxy and entitled to vote at the Annual Meeting votes “For” this proposal	No effect	No broker non-votes; brokers have discretion to vote

7 –Adjournment of the Annual Meeting	“FOR”	If a quorum is represented at the Annual Meeting, this proposal will be approved if the number of the votes cast “For” this proposal exceeds the number of votes cast “Against” this proposal by holders present virtually or represented by proxy and entitled to vote at the Annual Meeting		No effect	No broker non-votes; brokers have discretion to vote

		If a quorum is not represented at the Annual Meeting, this proposal will be approved if holders of a majority of the outstanding shares of common stock present virtually or represented by proxy and entitled to vote at the Annual Meeting votes “For” this proposal		Against	Against

●	At the Annual Meeting. To vote at the Annual Meeting, attend the Annual Meeting via the Internet and follow the instructions.

●	By Internet. To vote by proxy via the Internet, follow the instructions described on the proxy card.

●	By Telephone. To vote by proxy via telephone within the United States and Canada, use the toll-free number on the proxy card.

●	By Mail. To vote by mail, complete, sign, and date the proxy card and return it in the envelope provided.

●	At the Annual Meeting. To vote at the Annual Meeting, you must obtain a valid proxy from your broker or other nominee. Follow the instructions from your broker or other nominee, or contact them to request a proxy form.

●	By Internet. You may vote through the Internet if your broker or other nominee makes this method available, in which case the instructions will be included in the proxy materials provided to you.

●	By Telephone. You may vote by telephone if your broker or other nominee makes this method available, in which case the instructions will be included in the proxy materials provided to you.

●	By Mail. If you received a proxy card and voting instructions from the broker or other nominee holding your shares rather than from us, follow the instructions on the proxy card.

●	“FOR” the seven director nominees under Proposal 1;

●	“FOR” the reverse stock split under Proposal 2;

●	“FOR” the reincorporation of us to the State of Nevada by Conversion under Proposal 3;

●	“FOR” the amendment to our 2022 Equity Incentive Plan to increase the number of shares authorized for issuance thereunder under Proposal 4;

●	“FOR” the issuance shares of common stock to Streeterville Capital, LLC in pre-paid financing transactions that may exceed 20% of our issued and outstanding under Proposal 5;

●	“FOR” the ratification of the selection of M&K CPAs as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2025 under Proposal 6;

●	“FOR” the approval of one or more adjournments of the Annual Meeting, if necessary or appropriate, to solicit additional proxies in favor of the Reverse Stock Split Proposal, the Nevada Reincorporation Proposal, the 2022 Plan Amendment Proposal or the Pre-Paid Financing Proposal if there are not sufficient votes at the Annual Meeting to approve and adopt the Reverse Stock Split Proposal, the Nevada Reincorporation Proposal, the 2022 Plan Amendment Proposal or the Pre-Paid Financing Proposal.

●	sending written notice of revocation to Algorhythm Holdings, Inc., 6301 NW 5^th Way, Suite 2900, Fort Lauderdale, FL 33309, Attention: Secretary, in time for it to be received before the Annual Meeting;

●	submitting a new proxy with a later date using any of the voting methods described above (subject to the deadlines for voting with respect to each method); or

●	voting at the Annual Meeting (provided that attending the meeting will not, by itself, revoke your proxy).

Name of Nominee	Age	Principal Position	Director Since
Gary Atkinson	43	Chief Executive Officer, Secretary & Chairman of the Board	2021
Bernardo Melo	49	Director	2022
Harvey Judkowitz	81	Director	2004
Jay B. Foreman	63	Director	2022
Ajesh Kapoor	59	Director	2025
Scott Thorn	46	Director	2025
Kapil Gupta	58	Director	2025

1.	any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

2.	any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

3.	being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities;

4.	being found by a court of competent jurisdiction in a civil action, the SEC or the CFTC to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

5.	being subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

6.	being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Name	Audit Committee	Compensation Committee	Nominating and Corporate Governance Committee	Executive Committee
Harvey Judkowitz	Chairman	Chairman	X	X
Jay B. Foreman	X	X	Chairman	X
Gary Atkinson	-	-	-	Chairman
Bernardo Melo	-	-	-	-
Ajesh Kapoor	-	-	-	-
Scott Thorn	X	X	-	-
Kapil Gupta	X	-	X	-

	●	The historical trading price and trading volume of our common stock;

	●	The then-prevailing trading price and trading volume of our common stock and the expected impact of the Reverse Stock Split on the trading market for our common stock in the short and long-term;

	●	Our ability to maintain our listing on The Nasdaq Capital Market;

	●	The Reverse Stock Split ratio would result in the least administrative cost to us;

	●	Prevailing general market and economic conditions; and

	●	Whether and when the additional authorized but unissued shares of common stock that will result from the implementation of a Reverse Stock Split are needed to provide the flexibility to use our common stock for business and/or financial purposes or for future equity awards.

Provision	Delaware	Nevada
Charter Regarding Limitation of Liability of Directors and Officers	The Delaware Charter provides that, to the fullest extent permitted by the DGCL, our directors shall not be liable to us or our stockholders for monetary damages for breach of fiduciary duty.	The Nevada Charter provides that directors and officers are not individually liable to us, our stockholders or creditors, unless the presumption of Nevada’s codified “business judgment rule” has been rebutted and it is proven that such person has breached such person’s fiduciary duties as a director or officer and such breach involved intentional misconduct, fraud or a knowing violation of law. Note that Nevada law, which covers both directors and officers, does not categorically exempt breaches of duty of loyalty from exculpation.
Provision	Delaware	Nevada
Bylaws Regarding Proxies	Under the DGCL and the Delaware Bylaws, no proxy authorized by a stockholder shall be valid after three years from the date of its execution unless the proxy provides for a longer period.	The Nevada Bylaws provide that no proxy shall be voted or acted upon after six months from its date, unless the proxy provides for a longer period, which may not exceed seven years unless the proxy is deemed irrevocable pursuant to the applicable provisions of the NRS.
	Delaware	Nevada
Charter and Bylaws Regarding Removal of Directors	The Delaware Charter and the Delaware Bylaws provide that any director may be removed at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares then entitled to vote for the election of directors.	The Nevada Bylaws provide that any director may be removed from office at any time, with or without cause, in accordance with the NRS. Under the NRS, a director may only be removed by the vote of stockholders representing not less than two-thirds of the voting power of the issued and outstanding stock entitled to vote.

Plan Category	Number of Securities to be issued upon exercise of outstanding options, warrants and rights		Weighted -average exercise price of outstanding option, warrants and rights		Number of securities remaining available for future issuance under equity compensation Plans
Equity compensation plans approved by security holders		352	$	1,228		318
Equity compensation plans not approved by security holders		N/A		N/A		N/A
Total		352	$	1,228		318

	(i)	reviewed and discussed the audited consolidated financial statements with management;

	(ii)	discussed with Marcum LLP, our former independent registered public accounting firm, the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 1301, Communications with Audit Committees; and

	(iii)	received from Marcum LLP the written disclosures and letter required by applicable requirements of the Public Company Accounting Oversight Board and discussed with Marcum LLP their independence.

		Officer/Director
Name	Age	Since	Position or Office
Gary Atkinson	43	2012/2021	Chief Executive Officer, Secretary and Chairman of the Board
Alex Andre	51	2025	Chief Financial Officer and General Counsel

Name and Principal Position	Year / Period		Salary ($)		Bonus ($)		All Other Compensation ⁽¹⁾		Total ($)
Gary Atkison		2024		215,000		32,250		6,285		253,535
Chief Executive Officer		2023		165,385		-0-		4,142		169,527
Richard Perez ⁽²⁾		2024		174,596		-0-		-0-		174,596
Chief Financial Officer
Lionel Marquis ⁽³⁾		2024		134,100		10,000		8,755		152,855
Former Chief Financial Officer		2023		161,538		100,000		6,462		268,000
Bernardo Melo		2024		215,000		57,552		10,902		283,454
Chief Revenue Officer ⁽⁴⁾		2023		165,385		47,988		8,535		221,908

⁽¹⁾	Consists of 401(k) matching contributions that we made during the respective years.

⁽²⁾	Mr. Perez was appointed as our Chief Financial Officer on January 3, 2024 and was terminated as our Chief Financial Officer on February 13, 2025.

⁽³⁾	Mr. Marquis resigned as our Chief Financial Officer on December 31, 2023.

⁽⁴⁾	Mr. Melo was terminated as our Chief Revenue Officer effective August 1, 2025.

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($) ⁽¹⁾		Total ($)
Harvey Judkowitz		27,000		10,000		37,000
Joseph Kling ⁽²⁾		21,000		10,000		31,000
Jay Foreman		27,500		10,000		37,500
Mathieu Peloquin ⁽³⁾		25,000		10,000		35,000
Gary Atkinson		-0-		10,000		10,000
Bernardo Melo		-0-		10,000		10,000
James Turner ⁽⁴⁾		3,000		10,000		13,000
Kenneth Cragun ⁽⁴⁾		3,000		10,000		13,000
Henry Nisser ⁽⁴⁾		3,000		-0-		3,000

⁽¹⁾	Represents the grant date fair value of the awards calculated in accordance with ASC Topic 718, Compensation - Stock Compensation. A summary of the assumptions made in the valuation of these awards is provided in our Form 10-K for the year ended December 31, 2024 under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and in our consolidated financial statements beginning on page F-1 of our Form 10-K for the year ended December 31, 2024.

⁽²⁾	On August 21, 2025, Mr. Kling resigned from our board of directors.

⁽³⁾	On October 3, 2025, Mr. Peloquin resigned from our board of directors.

⁽⁴⁾	On September 5, 2024, Messrs. Turner, Cragun and Nisser resigned from our board of directors.

	●	An annual cash retainer of $25,000, payable in quarterly installments on the first day of each quarter in advance of service for such quarter.

	●	An annual grant of a restricted stock award with a value at the time of issuance of $25,000.
	●	An annual grant of a stock option with a value at the time of issuance of $25,000.

	●	An annual cash retainer of $5,000 for each committee of the board of directors upon which the board member serves, payable in quarterly installments on the first day of each quarter in advance of service for such quarter.

	●	An initial grant of a stock option with a value at the time of issuance of $25,000 for each individual who becomes a non-employee director due to either: (i) the initial appointment or election to the board of directors, or (ii) a change in status that the board of directors determines results in a previously ineligible director qualifying as a non-employee director.

	●	All expenses are reimbursed for attending board, committee and annual meetings or when their presence at a location away from home is requested.

Year	Summary Compensation Table Total for CEO⁽¹⁾		Compensation Actually Paid to CEO⁽²⁾		Average Summary Compensation Table Total for Non-CEO NEOs⁽³⁾		Average Compensation Actually Paid to Non-CEO NEOs⁽⁴⁾		Value of Initial Fixed $100 Investment Based On Total Stockholder Return⁽⁵⁾		Net Income (Loss)
Fiscal Year 2024	$	253,535	$	263,535	$	203,635	$	226,302	$	8.74	$	(23,257,000	)
Nine-Month Transition Period Ended December 31, 2023	$	169,527	$	250,069	$	244,954	$	256,856	$	63.52	$	(6,398,000	)
Fiscal Year 2023	$	307,451	$	263,866	$	415,138	$	388,476	$	12.68	$	(4,638,462	)
Fiscal Year 2022	$	161,414		161,414	$	245,935	$	243,829	$	34.15	$	230,471

⁽¹⁾	The dollar amounts reported are the amounts of total compensation reported for our CEO, Gary Atkinson, in the Summary Compensation Table for fiscal years 2024, 2023 and 2022.
⁽²⁾	The dollar amounts reported represent the amount of “compensation actually paid”, as computed in accordance with SEC rules. The dollar amounts reported are the amounts of total compensation reported for Mr. Atkinson during the applicable year, but also include (i) the year-end value of equity awards granted during the reported year, (ii) the change in the value of equity awards that were unvested at the end of the prior year, measured through the date the awards vested, or through the end of the reported fiscal year, and (iii) value of equity awards issued and vested during the reported fiscal year. See table below for further information.
⁽³⁾	The dollar amounts reported are the average of the total compensation reported for our NEOs, other than our CEO, in the Summary Compensation Table for fiscal years 2024, 2023 and 2022.
⁽⁴⁾	The dollar amounts reported represent the average amount of “compensation actually paid”, as computed in accordance with SEC rules, for our NEOs, other than our CEO. The dollar amounts reported are the average of the total compensation reported for our NEOs, other than our CEO in the Summary Compensation Table for fiscal years 2024, 2023 and 2022, but also include: (i) the year-end value of equity awards granted during the reported year, (ii) the change in the value of equity awards that were unvested at the end of the prior year, measured through the date the awards vested, or through the end of the reported fiscal year, and (iii) value of equity awards issued and vested during the reported fiscal year.

Name and Principal Position	Year	Summary Compensation Table Total for CEO		Reported Value of Equity Awards for CEO ⁽¹⁾		Fair Value as of Year End for Unvested Awards Granted During the Year		Fair Value Year over Year Increase or Decrease in Unvested Awards Granted in Prior Years		Fair Value of Awards Granted and Vested During the Year		Fair Value Increase or Decrease from Prior Year end for Awards that Vested during the Year			Compensation Actually Paid to CEO
Gary Atkinson,	Fiscal Year 2024	$	253,535	$	10,000	$	-	$	-	$	10,000	$	-		$	263,535
Chief Executive Officer	Nine-Month Transition Period Ended December 31, 2023	$	169,527	$	-	$	-	$	-	$	112,042	$	(31,500	)	$	250,069
	Fiscal Year 2023	$	307,451	$	58,586	$	15,001	$	-	$	-	$	-		$	263,866
	Fiscal Year 2022	$	161,414	$	-	$	-	$	-	$	-	$	-		$	161,414

Name and Principal Position	Year	Summary Compensation Table Total for Non-CEO NEOs		Reported Value of Equity Awards for Non-CEO NEOs ⁽¹⁾		Fair Value as of Year End for Unvested Awards Granted During the Year		Fair Value Year over Year Increase or Decrease in Unvested Awards Granted in Prior Years		Fair Value of Awards Granted and Vested During the Year		Fair Value Increase or Decrease from Prior Year end for Awards that Vested during the Year			Compensation Actually Paid to Non-CEO NEOs ⁽²⁾
Richard Perez, Former Chief Financial Officer	Fiscal Year 2024	$	174,596	$	-	$	-	$	-		-	$	-		$	174,596

Lionel Marquis, Former Chief Financial Officer	Nine-Month Transition Period Ended December 31, 2023	$	268,000	$	-	$	-	$	-	$	48,650	$	(20,998	)	$	295,652
	Fiscal Year 2023	$	468,224	$	38,419	$	20,400	$	-	$	-	$	-		$	450,205
	Fiscal Year 2022	$	160,638	$	-	$	-	$	-	$	-	$	-		$	160,638

Bernardo Melo, Former Chief Revenue Officer	Fiscal Year 2024	$	283,454	$	10,000	$	-	$	-	$	10,000	$	-		$	293,454
	Nine Months Ended December 31, 2023	$	221,908	$	-	$	-	$	-	$	48,650	$	(52,498	)	$	218,060
	Fiscal Year 2023	$	362,051	$	38,419	$	1,680	$	-	$	-	$	1,434		$	326,746	⁽²⁾
	Fiscal Year 2022	$	331,232	$	9,114	$	4,901	$	-	$	-	$	-		$	327,019	⁽²⁾

Name of Beneficial Owner	Amount and Nature of Beneficial Ownership ⁽¹⁾		Percentage of Beneficial Ownership
Gary Atkinson, Chief Executive Officer and Chairman of the Board ⁽²⁾		160		*
Alex Andre, Chief Financial Officer and General Counsel ⁽³⁾		23,818		*
Bernardo Melo, Director ⁽²⁾		219		*
Harvey Judkowitz, Director ⁽²⁾		103		*
Jay Foreman, Director ⁽²⁾		337		*
Ajesh Kapoor, Director		-0-		*
Scott Thorn, Director		-0-		*
Kapil Gupta, Director		-0-		*

All executive officers and directors as a group (7 persons)		24,732		*

	⁽¹⁾	This table has been prepared based on 2,641,778 shares of our common stock outstanding on the Record Date.

	⁽²⁾	Includes as to the person indicated, the following outstanding stock options to purchase shares of our common stock issued under 2022 Plan and other stock option awards, which will be vested and exercisable within 60 days of the Record Date: (i) 101 shares of common stock underlying stock options held by Gary Atkinson, (ii) 118 shares of common stock underlying stock options held by Bernardo Melo, (iii) 29 shares of common stock underlying stock options held by Harvey Judkowitz, and (iv) 83 shares of common stock underlying stock options held by Jay Foreman.

	⁽³⁾	Includes a restricted stock award for 23,818 shares of common stock for which Mr. Andre holds the voting rights.

By Order of the Board of Directors,

__________________________________
Gary Atkinson Chief Executive Officer and Chairman of the Board of Directors

Fort Lauderdale, Florida
October [ ], 2025

	ALGORHYTHM HOLDINGS, INC.,
	a Delaware corporation

	By:
		Gary Atkinson
		Chief Executive Officer

	(a)	5,000,000 shares, plus

	(b)	Commencing January 1, 2025, an annual increase to be added as of the first day of our fiscal year equal to the least of: (i) 15% of the outstanding Common Stock on a fully diluted basis as of the end of our immediately preceding fiscal year, or (ii) a lesser amount determined by the Board; provided, however, that any shares from any such increases in previous years that are not actually issued shall continue to be available for issuance under the Plan subject to adjustment from time to time as provided in Section 15.1.