8-K: Algorhythm Holdings Changes Auditors

Algorhythm Holdings, Inc. has dismissed its independent registered public accounting firm, Berkowitz Pollack Brant, and engaged M&K CPAs PLLC, effective October 6, 2025.

Summary

• Algorhythm Holdings, Inc. (the Company) dismissed Berkowitz Pollack Brant, Advisors + CPAs (Berkowitz) as its independent registered public accounting firm on October 6, 2025.
• The dismissal was approved by the Audit Committee of the Company's Board of Directors.
• Berkowitz did not issue an audit report on the Company's financial statements during its engagement period from June 2, 2025, to October 6, 2025.
• There were no disagreements between the Company and Berkowitz on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.
• The Company previously reported material weaknesses in its internal control over financial reporting in its Annual Report on Form 10-K for the year ended December 31, 2024.
• M&K CPAs PLLC was engaged as the Company's new independent registered public accounting firm for the fiscal year ending December 31, 2025, effective October 6, 2025.
• Neither the Company nor anyone on its behalf consulted with M&K CPAs regarding accounting principles, audit opinions, disagreements, or reportable events prior to their engagement.

Sentiment

Score: 4

Explanation: While there were no reported disagreements with the dismissed auditor on accounting principles, the underlying material weaknesses in internal control over financial reporting remain a concern. The dismissal of an auditor who did not issue a report, even if without stated disagreements, can raise questions. The prompt engagement of a new firm mitigates some uncertainty.

Positives

• No disagreements on accounting principles or auditing scope were reported between Algorhythm Holdings and the dismissed auditor, Berkowitz Pollack Brant.
• A new independent registered public accounting firm, M&K CPAs PLLC, was promptly engaged on the same day as the dismissal, ensuring continuity for the fiscal year ending December 31, 2025.

Negatives

• Algorhythm Holdings previously reported material weaknesses in its internal control over financial reporting in its Annual Report on Form 10-K for the year ended December 31, 2024.
• The dismissed auditor, Berkowitz Pollack Brant, did not issue an audit report on the Company's financial statements during their engagement period.

Risks

• The Company continues to face material weaknesses in its internal control over financial reporting, as previously disclosed in its Form 10-K for the year ended December 31, 2024.
• A change in independent auditors can introduce a period of transition and potential disruption to financial reporting processes.

Future Outlook

The filing primarily addresses an administrative change in the Company's independent registered public accounting firm and does not provide specific forward-looking statements or guidance on financial performance.

Management Comments

• Alex Andre, Chief Financial Officer and General Counsel, signed the report on behalf of Algorhythm Holdings, Inc.

Industry Context

Changes in independent auditors are a routine part of corporate governance, often occurring due to fee disputes, scope changes, or a desire for fresh perspectives. However, such changes are scrutinized by investors, especially when accompanied by disclosures of internal control weaknesses, as they can signal underlying operational or financial reporting challenges. The prompt engagement of a new firm is standard practice to ensure compliance with SEC reporting requirements.

Corporate Governance

Stakeholder Impact

• Shareholders may experience increased scrutiny regarding the Company's financial reporting and internal controls due to the auditor change and previously disclosed material weaknesses.
• The change aims to ensure continued compliance with regulatory requirements, which is beneficial for all stakeholders.

Next Steps

• M&K CPAs PLLC will serve as the independent registered public accounting firm for Algorhythm Holdings, Inc. for the fiscal year ending December 31, 2025.

Key Dates

Recommendation

The auditor change, while a significant event, does not immediately warrant a strong buy or sell. The existing material weaknesses in internal control over financial reporting are a concern that investors will want to see addressed by the new auditor. A 'hold' allows for observation of how the company and its new auditor will tackle these issues and ensure robust financial reporting, providing time for clarity on the resolution of control weaknesses.

Keywords

Auditor Change, Independent Registered Public Accounting Firm, SEC Filing, Form 8-K, Internal Control Over Financial Reporting, Material Weaknesses, Financial Reporting, Corporate Governance, Algorhythm Holdings