Algorhythm, Semicab enter second forbearance on missed payment
Algorhythm Holdings and Semicab signed a second forbearance agreement on June 16, 2026, extending relief for the company's missed $1,500,000 payment due May 2, 2026. Semicab waived the associated defaults and agreed to forbear from legal action until July 16, 2026. The original $1,750,000 promissory note, issued May 2, 2025, requires a final payment of $250,000 by November 2, 2026.
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Algorhythm Holdings and Semicab entered a second forbearance agreement on June 16, 2026, granting the company additional time to address a missed payment on a promissory note. Under the agreement, Semicab waived defaults caused by Algorhythm's failure to pay the $1,500,000 initial payment due on May 2, 2026, and agreed to forbear from taking action on any related defaults through July 16, 2026. This extension provides temporary relief as Algorhythm navigates its obligations under the financing arrangement.
The original promissory note was issued on May 2, 2025, with a principal amount of $1,750,000 to Semicab, a Delaware corporation. The note stipulated that $1,500,000 was due on the first anniversary of issuance, or May 2, 2026, referred to as the Initial Payment. The remaining $250,000 is scheduled for repayment on the 18-month anniversary, or November 2, 2026. The financing was executed pursuant to an equity purchase agreement involving Algorhythm, its subsidiary SemiCab Holdings, and Semicab.
Prior to the June 16 agreement, the parties had signed an initial forbearance agreement on May 9, 2026. That first agreement waived defaults resulting from the missed May 2 payment and established a forbearance period covering defaults occurring on or prior to June 16, 2026. The new agreement supersedes the earlier timeline by extending the forbearance period by one month.
Key Terms of the Forbearance
The second forbearance agreement modifies the enforcement rights of Semicab regarding the unpaid Initial Payment. The key provisions include:
- Default Waiver: Semicab irrevocably waived any default or event of default caused by the failure to pay the $1,500,000 on May 2, 2026.
- Forbearance Period: Semicab will forbear from taking action regarding defaults arising from the missed payment that occur on or prior to July 16, 2026.
Promissory Note Schedule
| Milestone | Date | Amount |
|---|---|---|
| Issuance Date | May 2, 2025 | $1,750,000 (Principal) |
| Initial Payment Due | May 2, 2026 | $1,500,000 |
| Final Payment Due | November 2, 2026 | $250,000 |
The agreement does not alter the ultimate repayment obligations under the promissory note but prevents immediate enforcement action during the specified forbearance window.
What specific funding sources or operational changes does Algorhythm plan to utilize to meet the July 16, 2026 deadline?
How will the company manage the remaining $250,000 final payment due just four months after the current forbearance period ends?
What are the potential penalties or revised terms if Algorhythm fails to satisfy the debt obligations by the new extended deadline?
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