SCHEDULE 13D/A: Stingray Group Significantly Reduces Stake in Algorhythm Holdings Following Share Repurchase
Amendment to Beneficial Ownership Statement
Stingray Group Inc. and its CEO Eric Boyko have significantly reduced their beneficial ownership in Algorhythm Holdings, Inc. to 0.1% after selling 5,494 shares back to the issuer.
Summary
- Stingray Group Inc. and Eric Boyko, collectively the Reporting Persons, filed an Amendment No. 3 to their Schedule 13D regarding their beneficial ownership in Algorhythm Holdings, Inc.
- On February 18, 2025, Stingray sold 5,494 shares of Algorhythm Holdings' Common Stock back to the Issuer.
- The sale was executed at a price of $0.26 per share, payable via a promissory note issued by Algorhythm Holdings to Stingray.
- This transaction was conducted pursuant to a Stock Repurchase Agreement dated December 3, 2024.
- Following the repurchase, the Reporting Persons beneficially own 2,722 shares of Common Stock, representing approximately 0.1% of Algorhythm Holdings' issued and outstanding shares.
- The percentage is based on 2,381,799 shares outstanding, adjusted for a 1-for-200 reverse stock split reported on February 6, 2025.
Sentiment
Score: 5
Explanation: The document reports a pre-arranged transaction (stock repurchase) which is a factual disclosure of a change in beneficial ownership. While a significant shareholder reducing their stake could be seen as slightly negative for the issuer, the event itself was expected and agreed upon in advance, leading to a neutral overall sentiment for the disclosure.
Positives
- Stingray Group Inc. has reduced its exposure to Algorhythm Holdings, receiving a promissory note as payment.
- For Algorhythm Holdings, the repurchase reduces the number of outstanding shares, which can be accretive to earnings per share for remaining shareholders, assuming the shares are retired.
Negatives
- A significant former beneficial owner, Stingray Group, has substantially reduced its stake, which could be interpreted by the market as a lack of confidence in Algorhythm Holdings' future prospects.
Risks
- The Reporting Persons (Stingray Group Inc. and Eric Boyko) intend to continuously review their investment in Algorhythm Holdings and may change their current intentions regarding their investment in the future.
Future Outlook
The Reporting Persons (Stingray Group Inc. and Eric Boyko) intend to continuously review their investments in Algorhythm Holdings, Inc. and reserve the right to change their current intentions regarding their investment at any time.
Management Comments
- "The Reporting Persons intend to review their investments in the Issuer on a continuing basis and may in the future take actions with respect to their investment in the Issuer as they deem appropriate, including changing their current intentions."
Industry Context
This filing details a specific corporate transaction between Stingray Group Inc. and Algorhythm Holdings, Inc., rather than reflecting broader industry trends. It primarily concerns a change in beneficial ownership due to a stock repurchase.
Related Party Transactions
- The stock repurchase agreement between Stingray Group Inc. (a former 10% beneficial owner) and Algorhythm Holdings, Inc. can be considered a related party transaction.
- Eric Boyko, as President and CEO of Stingray and a former 10% beneficial owner, is also involved in this transaction.
Stakeholder Impact
- Shareholders of Algorhythm Holdings, Inc.: Experience a reduction in the beneficial ownership by a significant former shareholder, which could influence market perception. The repurchase itself reduces outstanding shares, potentially increasing earnings per share for remaining shareholders.
- Stingray Group Inc.: Reduces its investment exposure to Algorhythm Holdings, Inc. and receives a promissory note as consideration.
- Eric Boyko: His indirect beneficial ownership in Algorhythm Holdings, Inc. through Stingray Group Inc. has decreased.
Next Steps
- Reporting Persons will continue to review their investment in Algorhythm Holdings, Inc.
- Reporting Persons may take future actions or change their intentions regarding their investment in Algorhythm Holdings, Inc.
Key Dates
| Date | Description |
|---|---|
| August 18, 2021 | Initial Statement on Schedule 13D filed. |
| May 26, 2022 | Amendment No. 1 to Schedule 13D filed. |
| November 24, 2023 | Amendment No. 2 to Schedule 13D filed. |
| May 31, 2024 | Date as of which Eric Boyko controlled approximately 70.78% of Stingray's combined voting power. |
| December 3, 2024 | Stock Repurchase Agreement entered into between Stingray and Algorhythm Holdings. |
| February 6, 2025 | Algorhythm Holdings' Current Report on Form 8-K filed, reporting 2,381,799 shares outstanding and a 1-for-200 reverse stock split. |
| February 18, 2025 | Date of event requiring statement; Stingray sold 5,494 shares to Algorhythm Holdings. |
| February 19, 2025 | Filing date of this Amendment No. 3; Joint Filing Agreement entered into by Reporting Persons. |
Keywords
SEC filing, Schedule 13D/A, beneficial ownership, stock repurchase, share sale, Stingray Group Inc., Algorhythm Holdings Inc., RIME, Eric Boyko, corporate governance, investment review
Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.