Algorhythm Holdings (RIME) Completes Asset Acquisition; CEO Departs

What Happened
Algorhythm Holdings, Inc. (RIME) filed an 8‑K reporting that on September 15, 2026 it closed an Asset Purchase Agreement to acquire substantially all assets of Azure Energy, LLC, a waste‑to‑power and biomass‑to‑power developer. The purchase price was paid entirely with Parent securities valued at $23,000,000 (4,076,312 shares of common stock — ~19.99% of outstanding as of Sept 14 — and 22,038 shares of Series B preferred). Concurrently the company received a 36‑month option to buy 79.0286% of Azure S.R.L. for $30,000,000 (up to 50% payable in cash, remainder in Series B preferred). The Board obtained a fairness opinion and approved the transaction. The 8‑K also discloses a new direct financial obligation of $4,025,000 (via an Exchange Agreement and PPP #5). In connection with the closing the company terminated CEO Gary Atkinson and CFO/General Counsel Alex Andre (not for cause); Andrew Thompson was appointed CEO and two seller‑nominated directors joined the Board.

Key Details

• Closing date: September 15, 2026; purchase price: $23,000,000 in securities (4,076,312 common; 22,038 Series B preferred).
• Option: exclusive 36‑month option to buy 79.0286% of Azure S.R.L. for $30,000,000 (≤50% cash; rest in Series B preferred).
• Leadership: CEO Gary Atkinson dismissed and resigned from the Board; Andrew Thompson named CEO; CFO Alex Andre terminated.
• Indemnities and caps: seller indemnification subject to $25,000 de minimis, $230,000 aggregate threshold, and $2,300,000 cap (10% of Purchase Price).
• New direct financial obligation: $4,025,000 created (Exchange Agreement / PPP #5).

Why It Matters
This transaction adds firm‑capacity renewable generation assets (waste/biomass‑to‑power) to Algorhythm’s business and gives the company an option to acquire a controlling stake in a related Costa Rica entity, potentially expanding its project portfolio. The acquisition was paid entirely with equity, which issued nearly 4.1M new common shares (about 19.99% of the company as of Sept 14), so investors should note dilution and transfer‑restrictions (6‑month lockup/short‑sale ban until registration). The leadership changes — removal of the prior CEO/CFO and appointment of a new CEO — and the newly created $4.025M obligation are material governance and financial developments investors may want to monitor.