Algorhythm Holdings, Inc.

Good day, everyone, and welcome to the Algorithm Holdings full-year 2025 financial results earnings call. My name is Elvis, and I'll be your operator today. As a reminder, this call is being recorded. We have a brief safe harbor statement, and then we'll begin. This call contains forward-looking statements under U.S. federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of these risks and uncertainties can be found in the reports filed with the Securities and Exchange Commission, including the cautionary statement provided in our current and periodic filings. Now, I'll turn the call over to your host, Gary Atkinson, company CEO. Please go ahead, Gary.

Thank you. Good morning, ladies and gentlemen, and thank you for joining our 2025 year-end earnings call. My name is Gary Atkinson, CEO, of Algorithm Holdings, and I'm joined this morning by our CFO and General Counsel, Alex Andre. We're excited to share the momentum behind Semicab, our AI-powered logistics platform, and the significant traction that we've gained this year. Over the past six weeks, we've seen an extraordinary surge in attention, both from the media and from within the logistics industry. all around our technology and its potential to solve one of freight's most persistent and costly problems today, which is empty miles. This wave of exposure has accelerated our commercial sales pipeline, attracted industry veterans to our company, and expanded our reach to key enterprise decision makers at a scale that we had never anticipated. Before diving into updates, I want to briefly reframe the core problem that we've been setting out to solve and why we believe Semicab is positioned to lead the next wave in freight technology. Firstly, the global truckload market is the backbone of the world's economy. It is estimated to be a $3 trillion a year industry. However, it's still very deeply inefficient. Today, roughly one in every three miles that a truck drives is driven empty. resulting in close to $1 trillion in avoidable waste and inefficiency every year. The Semicat platform is purpose-built to address this problem. Our collaborative AI platform continuously optimizes freight movement across multiple enterprises using our core planning, predicting, and execution engine to build continuous movements, or as we call round trips, to reduce waste. And finally, we've been seeing the results. In real-world production environment, we've shown that we can reduce empty miles by more than 70%, and we have the capability to handle four times the freight volume without adding any additional headcount when compared to traditional freight brokers. Put simply, we're building a platform that can reshape how $3 trillion of freight flows globally, eliminating up to $700 billion in inefficiency. It's very rare to find a solution that simultaneously helps shippers save money, improves fleet utilization for carriers, and can reduce carbon emission for the environment. This is the kind of systemic change that SEMICAP can enable. And I believe we're on the verge of a larger shift that is starting to take place, a movement towards freight as an orchestrated network, as opposed to the current environment of freight as a series of independent transactions. I will talk briefly about some of the growth and some of the full year highlights and then turn the call over to Alex, who will then discuss the financial results. In 2025, we secured four new Fortune 500 clients in India and converted five pilot programs into multimillion dollar contract expansions. That momentum has pushed our annualized revenue run rate to nearly 10 million by year end. and it is already meaningfully higher in the first quarter of 2026. In addition to that, during the first quarter of 2026, we have already achieved two new customers, MTR Foods and Coca-Cola India, plus an additional contract expansion in India. To date, every single one of our pilot customers that has joined our network has come back to us looking for an expansion. Whether it's a geographic expansion through more lanes, or more volume. These expansions are driven by real recurring demand from globally recognized shippers. The shift from pilot to scale is accelerating, and we expect this trend to continue. With that, I'll now turn the call over to over to Alex, who will now walk you through some of the results for the 2025 year. Go ahead, Alex.

Thank you, guys. Hello, everyone. The annual report that we filed with the SEC earlier this morning presented our financial results for the years ended December 31st, 2025 and 24. Our 2025 financial results were heavily impacted by two major transactions that we completed this year. First, on May 2nd, we acquired SMCB Solutions Private Limited, which owns and operates our Semicab Indian business savings. The financial results of SMCVO are reflected in our financial statements for the period of May 2, 2025 through December 31, 2025. Second, on August 1, we sold our legacy consumer electronics business. Under applicable gap provisions, we reflected all financial results attributed to the consumer electronics business as discontinued operations in our financial statements. As a result, Our balance sheet, income statement, and statement of cash flows only reflect the financial results of our continuing operations, including the operations of Semicab. The financial results of the consumer electronics business for all periods reported in our financial statements are reflected in select line items referencing discontinued operations. Moving on to our 2025 financial results, sales for the year ended 2025 increased 1,370% On May 2nd, during the eight months that we owned it during 2025, SMCB, Semicab, delivered $4.4 million of revenue. Semicab's legacy U.S. business was responsible for $300,000 of revenue that we generated during 2024. We've recently announced that Semicab's annualized revenue run rate had increased almost $10 million during December of 2025. During the next 12 months, we expect our revenue to increase substantially, with Semicab's annualized revenue run rate expected to increase to between $15 million and $20 million by the end of 2026. This will be largely attributable to growth in our Semicab Indian managed services business, but will also reflect some revenue that we expect to begin generating from Semicab's new SaaS business that we announced this past fall. Gary will discuss each of these business segments further later during this call. Gross loss for 2025 was $1.3 million compared to $194,000 last year. Gross loss is a function of the revenue that SEMICAB generates from the managed services that it provides in India and the freight, handling, and servicing costs that comprise its cost of sales that it incurs in connection with the provision of those services. Under the managed services model, SEMICAB pays for access to trucks and generates revenue by using these trucks to complete shipments for its customers. It enters into contracts for access to trucks when it enters new territories in India, then begins generating revenue in these territories as it acquires customers there and is awarded more routes. It takes time for Semicab to acquire customers and expand its routes to fully utilize the trucks that it has under contract. During this time, Semicab incurs costs for the trucks that it has under contract, while its revenue scales more gradually as it begins to acquire customers. Consequently, gross margins are negative. As it obtains customers in these territories and is awarded more routes from its customers, Semicab more fully utilizes the trucks it has under contract. As the truck utilization rate increases, a greater amount of revenue is generated by the trucks, spreading a larger revenue base over the relatively same cost of the trucks it is using in these territories. As the network matures in each region and the truck utilization rate improves, the growth in revenue begins to outpace the increases in trucking costs. This drives a sharp improvement in gross margins. We view this initial ramp-up period as a necessary investment in long-term scale and profitability. We expect gross loss as a percentage of revenue to decrease over the next 12 months as the growth in revenue that S&P Cap generates from obtaining new customers and routes exceeds the increase in cost of sales that it incurs as it enters into contracts for access to additional trucks. Operating expenses for 2025 decreased almost 20% to $6.6 million from $8.2 million last year. The decrease was due primarily to a decrease of $3.6 million for impairment of goodwill that we recorded during 2024, partially offset by an increase of $2 million in general administrative expenses. We expect general administrative expenses to increase over the next 12 months as we continue to invest in the growth and development of our SEMICAB business. Net loss from continuing operations for 2025 decreased $3.7 million to $15.2 million from $18.9 million last year. Of these amounts, $6.5 million of our 2025 net loss and $8.9 million of our 2024 net loss consisted of one-time non-cash charges for warrants that we previously issued in capital raising transactions. The decrease in net loss from continuing operations was due primarily to an increase of $5.2 million for cost of sales, partially offset by an increase of $4.1 million for revenue and a decrease in other expenses. We expect our net loss from continuing operations to decrease over the next 12 months due to the previously described increase in revenue that we anticipate generating and our expectation that we will not incur any future losses related to warrant issuances. However, we expect this decrease to be partially offset by increases in the expenses we will incur in connection with the growth and development of our semi-tab business. Finally, we are pleased to report that our balance sheet has strengthened significantly over the past 12 months. We had cash on hand of $6.1 million at December 31st, 2025, and had $10.9 million of cash on hand as of March 25th, 2026, putting us in a strong cash position to support the growth and development of our business for the remainder of 2026. Additionally, we reduced our liabilities by almost 50% between December 31st of 2024 and December 31st of 2025 through our reduction of our outstanding warrant liabilities. This reduction in net liabilities substantially improved our ratio of liabilities to total assets on our balance sheet. That concludes my overview of our 2025 financial results. Gary?