Singing Machine receives waiver for loan default but credit line cut from $5M to $2M

Algorhythm Holdings, Inc.

Lender waived Event of Default from failing to deliver June 2023 financial statements on time.
Borrowing base and maximum revolving loan limit reduced from $5M to $2M.
New liquidity covenant: cash + availability must be at least $2.5M at each month-end starting July 31, 2023.
Termination fee (Section 4.05(e)) and Section 12.04 deleted from Credit Agreement.

Key facts

Extracted from this filing and checked against the source text.

Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.9

Algorhythm Holdings, Inc. amended Revolving Loan Amendment with Fifth Third Bank, National Association (effective 2023-08-30).

Action: amendment
Agreement: credit facility
Counterparty: Fifth Third Bank, National Association
Effective: 2023-08-30

Exact text from the filing

On August 30, 2023, The Singing Machine Company, Inc. and its wholly owned subsidiary, SMC Logistics, Inc., entered into a Waiver and Second Amendment (the “Revolving Loan Amendment”) to that certain Credit and Security Agreement (the “Credit Agreement”) with Fifth Third Bank, National Association, dated as of October 14, 2022.

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Algorhythm Holdings, Inc. filing history →

Source: SEC EDGAR

accession 0001493152-23-031486

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