Algorhythm Holdings, Inc. 8-K

What Happened
Algorhythm Holdings, Inc. (RIME) announced on Feb 17, 2026 that it entered into Secured Pre‑Paid Purchase #4 with Streeterville Capital, LLC under its August 21, 2025 Securities Purchase Agreement. The fourth Pre‑Paid Purchase has a principal amount of $10,355,000 before an original issue discount of $855,000 (net proceeds $9,500,000), accrues interest at 9% per annum, and matures in three years. The transaction is secured (including by cash held in a Deposit Account Control Agreement) and is guaranteed by the company’s subsidiary RIME Holdings, LLC. The sale was completed as a private placement exempt from registration under Section 4(a)(2) of the Securities Act.

Key Details

• Fourth Pre‑Paid Purchase principal: $10,355,000; original issue discount: $855,000; net proceeds received: $9,500,000.
• $3,500,000 of the proceeds were placed in a DACA deposit account controlled under a Deposit Account Control Agreement (minimum cash collateral).
• Interest rate: 9% per annum; maturity: 3 years. The obligation is secured by the Security Agreement and IP Security Agreement; RIME Holdings, LLC provided a guaranty.
• Placement agent Univest Securities was paid an 8% cash fee on proceeds not held in the DACA account (paid on $6.0M = $480,000) and will receive 8% of the DACA funds when released (8% of $3.5M = $280,000 when released).

Why It Matters
This 8‑K documents a material financing that provides Algorhythm with $9.5M in net cash while creating a secured financing obligation that accrues 9% interest and matures in three years. The arrangement involves collateral and a subsidiary guaranty, and the securities were issued in a private placement. For investors, the item increases the company’s funded obligations and may affect liquidity, capital structure and potential future stock issuance tied to the Pre‑Paid Purchase terms (the filing also reports the related creation of a direct financial obligation and an unregistered sale).