What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-11-07 · 224 added, 375 removed, 346 unchanged (63% of the section changed)

Financial Statements

Condensed Balance Sheets

September 30, 2024

Balance Sheets

March 31, 2025

December 31, 2024

15 unchanged sentences

Accounts payable and accrued liabilities

Notes payable to related party, net of debt issuance costs

Current portion of operating lease liability

6 unchanged sentences

Series B Preferred stock - $ 0.001 par value, 2,174 and 2,314 shares issued and

outstanding as of September 30, 2024 and December 31, 2023, respectively

Common stock - $ 0.001 par value, 100,000,000 authorized and 5,673,675 and 854,162 shares issued and

outstanding as of September 30, 2024 and December 31, 2023, respectively

outstanding as of March 31, 2025 and December 31, 2024, respectively

Common stock - $ 0.001 par value, 100,000,000 authorized and 510,176 and 397,731 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

6 unchanged sentences

these unaudited condensed financial statements.

Condensed Statements of Operations

Statements of Operations

Three Months Ended

Nine Months Ended

September 30,

Operating expenses:

8 unchanged sentences

( 2,054,620 )

( 5,656,860 )

( 5,461,258 )

Other expense:

Interest expense

( 1,133,398 )

Change in fair value of warrants

Total other expense

( 1,133,398 )

Loss before income taxes

1 unchanged sentence

( 2,207,328 )

( 6,460,181 )

( 6,594,656 )

Provision for income taxes

1 unchanged sentence

$ ( 2,207,328 )

$ ( 6,460,181 )

$ ( 6,594,656 )

Net loss per share attributable to common stockholders

4 unchanged sentences

these unaudited condensed financial statements.

Condensed Statements of Changes in Stockholders’

for the Three and Nine Months Ended September

30, 2024 and 2023

Series B Preferred Stock

Statements of Changes in Stockholders’ Equity

for the Three Months Ended March 31, 2025 and

B Preferred Stock

Paid-In-Capital

2 unchanged sentences

Issuance of common shares, net of costs

Offering costs

Share-based compensation

( 2,207,328 )

Balance, March 31, 2024

( 82,750,658 )

Issuance of common shares, net of costs

Issuance of Series B preferred stock and warrants

Conversion of debt to equity

Series B preferred stock converted to common stock

Offering costs

Share-based compensation

( 2,303,425 )

Balance, June 30, 2024

( 85,054,083 )

Issuance of common shares, net of costs

Issuance of restricted stock units

Capitalized dividends converted to common stock

Capitalized dividends

Offering costs

Share-based compensation

( 1,752,565 )

Balance, September 30, 2024

Balance, March 31, 2025

( 91,239,759 )

Series B Preferred Stock

B Preferred Stock

Paid-In-Capital

1 unchanged sentence

$ ( 80,543,330 )

Exercise of restricted stock units and warrants

Share-based compensation

( 2,155,312 )

Balance, March 31, 2023

( 73,891,146 )

Issuance of common shares, net of costs

Issuance of warrants

Share-based compensation

Revaluation of share-based compensation liability

( 2,322,862 )

Balance, June 30, 2023

( 76,214,008 )

Offering costs

Share-based compensation

Revaluation of share-based compensation

( 2,207,328 )

Balance, September 30, 2023

Balance, March 31, 2024

$ ( 82,750,658 )

1 unchanged sentence

these unaudited condensed financial statements.

Condensed Statements of Cash Flows

Nine Months Ended September 30,

Statements of Cash Flows

For the Three Months Ended March 31,

Cash flows from operating activities:

1 unchanged sentence

$ ( 2,207,328 )

Adjustments to reconcile net loss to net cash provided by (used in) operating

Finance charge associated with debt issuance cost

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

Share-based compensation expense

Change in fair value of warrants

Amortization of ROU asset

9 unchanged sentences

Cash flows from investing activities:

Purchase of property and equipment

Software capitalization

Intangibles capitalization

Net cash used in investing activities

Cash flows from financing activities:

Offering costs in connection with the issuance of preferred shares

Net settlement of share-based compensation liability

Proceeds from related party debt, net of original issue discount

Repayments of related party debt

( 2,750,000 )

Proceeds from issuance of preferred shares, net of issuance costs

Proceeds from issuance of common shares, net of issuance costs

Dividends and Series B preferred stock converted to common stock

Net cash provided by financing activities

Net decrease in cash

Net increase (decrease) in cash

( 1,016,406 )

Cash, beginning of year

6 unchanged sentences

Capitalized dividends

Original issue discount and issuance of warrants on related party debt

Issuance of warrants in connection with related party notes

Right of use asset and assumption of operating lease liability

24 unchanged sentences

recurring nature.

Reverse Stock Split

The Company filed an amendment to its Certificate

of Incorporation with the Secretary of State in Delaware which became effective as of 5:00 P.M.

Eastern Time on February 26, 2024.

a result, every twenty-five (25) issued shares of common stock were automatically combined into one share of common stock.

Shares of the Company’s common stock were

assigned a new CUSIP number (05072K 206) and began trading on a split-adjusted basis on February 27, 2024.

The reverse stock split did not change the authorized

Reverse Stock Splits

On February 27, 2024,

the Company effectuated a 1-for-25 reverse stock split .

On March 28, 2025, the

Company effectuated a 1-for-17 reverse stock split .

The reverse stock splits did not change the authorized

number of shares of the Company’s common stock.

No fractional shares were issued and any fractional shares resulting from the reverse

stock split were rounded up to the nearest whole share.

Therefore, stockholders with less than 25 shares received one share of stock.

All stock amounts have been retrospectively adjusted

to account for the reverse stock split.

The reverse stock split applies to the Company’s outstanding warrants, stock options and

restricted stock units.

The number of shares of common stock into which these outstanding securities are convertible or exercisable were

adjusted proportionately as a result of the reverse stock split.

The exercise prices of any outstanding warrants or stock options were

also proportionately adjusted in accordance with the terms of those securities and the Company’s equity incentive plans.

stock splits were rounded up to the nearest whole share.

The reverse stock splits applied to the Company’s

outstanding warrants, stock options and restricted stock units.

The number of shares of common stock into which these outstanding securities

are convertible or exercisable were adjusted proportionately as a result of the reverse stock splits.

The exercise prices of any outstanding

warrants or stock options were also proportionately adjusted in accordance with the terms of those securities and the Company’s

equity incentive plans.

As a result of the reverse stock splits, unless

described otherwise, all references to common stock, share data, per share data and related information contained in these financial statements

have been retrospectively adjusted to reflect the effect of the reverse stock splits for all periods presented.

In addition, any fractional

shares that would otherwise be issued as a result of the reverse stock splits were rounded up to the nearest whole share.

number of shares issuable and exercise prices of stock options and warrants have been retrospectively adjusted in these financial statements

for all periods presented to reflect the reverse stock splits.

Use of Estimates

33 unchanged sentences

The Company had cash and cash equivalents of

as of September 30, 2024.

The Company will need additional funding to complete the development of the full product line and scale products

with a demonstrated market fit.

The Company raised an additional $ 10.4 million during 2024 and paid down $ 2.75 million in Secured Bridge

Notes and will only be sufficient to fund our current operating plans into the first quarter of 2025.

Management has plans to secure such

additional funding.

If the Company is unable to raise capital when needed or on acceptable terms, the Company will be forced to delay,

reduce, or eliminate technology development and commercialization efforts.

As a result of the Company’s recurring losses

from operations, and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding

the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to

the Company’s ability to continue as a going concern within one year after the date the financial statements are issued.

has plans to mitigate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern,

such as the White Lion equity line of credit (refer to Note 7) and additional future financing agreements.

However, management cannot

provide any assurances that the Company will be successful in accomplishing any of its plans.

These financial statements do not include

any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might

be necessary should the Company be unable to continue as a going concern.

The Company’s current level of cash is not sufficient

to execute the business plan.

For the foreseeable future, the Company will incur significant operating expenses, capital expenditures

and working capital funding that will deplete cash on hand during the first quarter of 2025.

as of March 31, 2025.

The Company will need additional funding to complete the development of the full product line and scale

products with a demonstrated market fit.

The Company raised an additional $ 0.7

million during the first quarter of 2025, which will only be sufficient into the third quarter of 2025.

Management has plans to

secure such additional funding.

If the Company is unable to raise capital when needed or on acceptable terms, the Company will be

forced to delay, reduce, or eliminate technology development and commercialization efforts.

As a result of the Company’s recurring

losses from operations, and the need for additional financing to fund its operating and capital requirements, there is uncertainty

regarding the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial

doubt as to the Company’s ability to continue as a going concern within one year after the date the financial statements are

Management has plans to mitigate the conditions or events that raise substantial doubt about the entity’s ability to

continue as a going concern, such as the White Lion equity line of credit (refer to Note 7) and additional future financing

However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

These financial statements do not include any adjustments related to the recoverability and classification of assets or the

amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Company’s current level of cash is not sufficient to execute the business plan.

For the foreseeable future, the Company will

incur significant operating expenses, capital expenditures and working capital funding that will deplete cash on hand during

the third quarter of 2025.

Cash and Cash Equivalents

The Company had cash on hand of $ 1,687,030 and

$ 801,448 as of September 30, 2024 and December 31, 2023, respectively.

$ 2,703,392 as of March 31, 2025 and December 31, 2024, respectively.

The Company considers all highly liquid instruments

1 unchanged sentence

The Company had cash equivalents of $ 2,883 and $ 2,927

as of September 30, 2024 and December 31, 2023, respectively.

as of March 31, 2025 and December 31, 2024, respectively.

The Company maintains cash deposits at several

2 unchanged sentences

may at times exceed these limits.

As of September 30, 2024, the Company had approximately $ 3.5 million in excess of federally insured

As of March 31, 2025, the Company had approximately $ 1.2 million in excess of federally insured limits.

As of December 31, 2024, the Company had approximately $ 2.2 million in excess of federally insured limits.

The Company continually

monitors its positions with, and the credit quality of, the financial institutions with which it invests.

The Company continually monitors

its positions with, and the credit quality of, the financial institutions with which it invests.

Software Development Costs

12 unchanged sentences

determined to be in excess of anticipated future net revenues are considered impaired and expensed during the period of such determination.

The Company determined that no such impairments were required during the three and nine months ended September 30, 2024 and 2023.

development costs of $ 258,734 and $ 213,705 were capitalized for the three months ended September 30, 2024 and 2023, respectively.

development costs of $ 787,336 and $ 743,208 were capitalized for the nine months ended September 30, 2024 and 2023, respectively.

of capitalized software development costs was $ 492,872 and $ 458,973 for the three months ended September 30, 2024, and 2023, respectively

and $ 1,456,554 and $ 1,331,823 for the nine months ended September 30, 2024 and 2023, respectively, and is included in depreciation and

amortization expense in the Company’s condensed statement of operations.

The Company determined that no such impairments were required during the three months ended March 31, 2025 and 2024.

Software development

costs of $ 236,973 and $ 273,388 were capitalized for the three months ended March 31, 2025 and 2024, respectively.

Amortization of capitalized

software development costs was $ 431,037 and $ 476,918 for the three months ended March 31, 2025 and 2024, respectively, and is included

in depreciation and amortization expense in the Company’s condensed statement of operations.

Revenue Recognition

1 unchanged sentence

Standards Codification (“ASC”) 606, Revenue – Revenue from Contracts with Customers, and will be recognized based on

consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties.

The Company will recognize revenue when a performance obligation is satisfied by transferring control over a service or product to a customer.

The Company will report revenues net of any tax assessed by a governmental authority that is both imposed on, and concurrent with, a specific

revenue-producing transaction between a seller and a customer in the condensed statements of operations.

Collected taxes will be recorded

consideration specified in a contract with a customer and will exclude any sales incentives and amounts collected on behalf of third parties.

The Company will recognize revenue when it satisfies a performance obligation by transferring control over a service or product to a customer.

To achieve this core principle, the Company applies the following five steps:

( 1) Identify the contract with a client;

the performance obligations in the contract;

(3) Determine the transaction price;

(4) Allocate the transaction price to performance obligations

in the contract;

and (5) Recognize revenues when or as the company satisfies a performance obligation.

The Company will report

revenues net of any tax assessed by a governmental authority that is both imposed on, and concurrent with, a specific revenue-producing

transaction between a seller and a customer in the accompanying statements of operations.

Collected taxes, if applicable, will be recorded

within other current liabilities until remitted to the relevant taxing authority.

2 unchanged sentences

Revenue will be recognized on a straight-line basis when the performance obligations

to provide each service for the period are satisfied, which is over time as our subscription services are continuously available and can

be consumed by customers at any time.

to provide each service for the period have been satisfied, which is over time as our subscription services are continuously available

and can be consumed by customers at any time.

There is no revenue recognized for unpaid trial subscriptions.

Customers may pay for the services in advance

of the performance obligation and therefore these prepayments would be recorded as deferred revenue.

of the performance obligation and therefore these prepayments will be recorded as deferred revenue.

The deferred revenue will be recognized

as revenue in the statement of operations as the services are provided.

as revenue in the accompanying statements of operations as the services are provided.

Share-Based Compensation

1 unchanged sentence

arrangements with employees, directors, and consultants and recognizes the compensation expense for share-based awards based on the estimated

fair value of the awards on the date of grant in accordance with ASC 718.

fair value of the awards on the date of grant in accordance with ASC 718, Compensation – Stock Compensation (“ASC 718”).

Compensation expense for all share-based awards

14 unchanged sentences

date while the warrants are outstanding.

connection with the amendment to the Secured Bridge Notes (see Note 4), the Company converted $ 911,384 ,

consisting of accrued interest and the original issue discount on the Bridge Notes, into equity securities.

As a result of the

conversion, the Company recognized a change in the fair value of warrants in the amount of $ 0 and $ 632,388

during the three and nine months ended September 30, 2024.

Reclassifications

Certain prior period amounts have been reclassified

to conform to the current period presentation.

The reclassifications did not have an impact on net loss as previously reported.

Note 2 – Property & Equipment,

Intangible Assets, and Software Development Costs

Note 2 – Property & Equipment, Intangible Assets, and

Software Development Costs

Property and equipment and software development

1 unchanged sentence

Schedule of property and equipment and software development costs

September 30,

Computers and equipment

8 unchanged sentences

Total software development costs, net

The Company recognized depreciation expense of

$ 3,291 and $ 6,193 for the three months ended September 30, 2024 and 2023, respectively related to property and equipment, amortization

expense of $ 202 and $ 0 for the three months ended September 30, 2024 and 2023, respectively related to intangible assets, and amortization

expense of $ 492,872 and $ 458,973 for the three months ended September 30, 2024 and 2023, respectively related to software development

The Company recognized depreciation expense of $ 16,069 and $ 18,997 for the nine months ended September 30, 2024 and 2023, respectively

related to property and equipment, amortization expense of $ 465 and $ 0 for the nine months ended September 30, 2024 and 2023, respectively

related to intangible assets, and amortization expense of $ 1,456,554 and $ 1,331,823 for the nine months ended September 30, 2024 and 2023,

The Company recognized depreciation expense

of $ 1,348 and $ 6,494 for the three months ended March 31, 2025 and 2024, respectively, related to property and equipment,

amortization expense of $ 22 and $ 334 for the three months ended March 31, 2025 and 2024, respectively, related to

intangible assets, and amortization expense of $ 431,037 and $ 476,918 for the three months ended March 31, 2025 and 2024,

respectively, related to software development costs.

3 unchanged sentences

Schedule of accounts payable and accrued liabilities

September 30,

Accounts payable and accrued liabilities

Credit cards payable

Accrued interest

Total accounts payable and accrued liabilities

1 unchanged sentence

Party, net of debt issuance costs

During November 2022,

the Company entered into a Secured Bridge Note (the “Prior Note”) financing with an accredited investor and existing shareholder

of the Company.

The Prior Note had a principal amount of $ 2,200,000 , including an original issue discount of $ 200,000 .

The Prior Note

bore interest at an annual stated interest rate of 10% with an original maturity date of May of 2023.

The Prior Note is secured by a lien

on substantially all of the Company’s assets.

At maturity, the lender had the option to convert the original issue discount and

accrued but unpaid interest into shares of the Company’s common stock at a fixed conversion price of $ 30.75 per share.

The conversion

option was available to the lender at the earlier of (i) maturity, or (ii) payback of all the principal.

The embedded conversion option

was not accounted for separately, in accordance with the guidance outlined in ASC 815-40, as it was considered indexed to the Company’s

The Company had the option to extend the maturity date by six months to November 2023.

In the event of an extension, the Company

will issue additional warrants, and the interest rate on the Note will increase to 20%.

In connection with the

Prior Note financing, the Company issued 12,000 common stock warrants with a five-year term at an exercise price of $ 52.50 per share.

At the time of issuance, the common stock warrants were valued at $ 361,878 and recorded as a debt discount to the Prior Note.

common stock warrants were classified as equity as they were indexed to the Company’s shares in accordance with ASC 815-40.

During April 2023, the

Company entered into an additional Secured Bridge Note (the “New Note”) financing with the same accredited investor and significant

existing shareholder.

The New Note had a principal amount of $ 825,000 , including an original issue discount of $ 75,000 .

The New Note bore

interest at an annual stated interest rate of 10% with an original maturity date of July 2023.

The New Note is secured by a lien on substantially

all of the Company’s assets.

At maturity, the lender had the option to convert the original issue discount and accrued but unpaid

interest into shares of the Company’s common stock at a fixed conversion price of $ 52.50 per share.

The conversion option was available

to the lender at the earlier of (i) maturity, or (ii) payback of all the principal.

The embedded conversion option was not accounted for

separately, in accordance with the guidance outlined in ASC 815-40, as it was considered indexed to the Company’s shares.

In connection with the

New Note financing, the Company issued 26,000 common stock warrants with a five-year term at an exercise price of $ 52.50 per share, from

which 13,000 common stock warrants were exercisable immediately and were exercisable in the event that the loan term is extended.

time of issuance, the common stock warrants were valued at $ 252,940 , which was recorded as an additional debt discount to the New Note.

The issued common stock warrants were classified as equity as they were indexed to the Company’s shares in accordance with ASC 815-40.

During April 2023, the

Company also modified the terms of the Prior Note and cancelled the original 12,000 common stock warrants issued with the Prior Note.

The Company recognized the modification in accordance with ASC 815-40-35, which resulted in the recognition of debt discount in the amount

of $ 35,981 .

In lieu of the cancelled common stock warrants, the Company issued 24,000 new common stock warrants with a five-year term

at an exercise price of $ 52.50 per share.

From the newly issued 24,000 new common stock warrants, 12,000 common stock warrants were fully

vested and immediately exercisable, while the remaining 12,000 common stock warrants remained unvested.

The issued common stock warrants

were classified as equity as they were indexed to the Company’s shares in accordance with ASC 815-40.

In May of 2023, the Company

renegotiated with the lender an extension of the maturity date of the Prior Note for six months to November 2023 with an increased annual

interest rate of 20% and issued an additional 12,000 common stock warrants to the lender.

The additional common stock warrants were valued

at $ 94,083 and recorded as an additional debt discount.

The issued common stock warrants were classified in equity as they were considered

indexed to the Company’s shares in accordance with ASC 815-40.

In connection with this extension, the 12,000 outstanding unvested

warrants became vested and exercisable.

On July 31, 2023, the

Company extended the maturity date of the New Note to November 30, 2023.

In connection with such extension, 13,000 outstanding unvested

common stock warrants became vested and exercisable.

There was no change in the application of the accounting under ASC 815-40.

As of September 30, 2024 and December 31, 2023,

the balance of the Prior Note, net of debt issuance costs, was $ 0 and $ 2,200,000 , respectively.

Interest expense related to the Prior

Note, including interest incurred, amortization of the debt discount, and the warrant amortization for the three months ended September

30, 2024 and 2023 was $ 0 and $ 157,298 , respectively.

Interest expense related to the Prior Note, including interest incurred, amortization

of the debt discount, and the warrant amortization for the nine months ended September 30, 2024 and 2023 was $ 121,000 and $ 762,112 , respectively.

As of September 30, 2024 and December 31, 2023, the balance of the New Note issued in April 2023, net of debt issuance costs, was $ 0 and

$ 825,000 respectively.

Interest expense related to the New Note, including interest incurred, amortization of the debt discount, and the

warrant amortization for the three months ended September 30, 2024 and 2023 was $ 0 and $ 401,441 .

Interest expense related to the New Note,

including interest incurred, amortization of the debt discount, and the warrant amortization for the nine months ended September 30, 2024

and 2023 was $ 45,205 and 401,441 .

On April 9, 2024, the

Company and the investor entered into an Amendment and Waiver Agreement relating to the Bridge Notes.

The Company agreed to

pay $ 2.75 million in cash to the Investor in repayment of the principal of the Bridge Notes (exclusive of the $ 275,000 of original issue

discount on the Bridge Notes) shortly after the closing by the Company of one or more equity financings with total gross proceeds to the

Company of not less than $ 6,000,000 .

On April 26, 2024, the

Company repaid $ 2.75 million of principal on its Secured Bridge Notes.

On April 9, 2024,

the Company and the investor entered into an Amendment and Waiver Agreement relating to the Company’s outstanding Bridge

Refer to the Company’s Form 10-K for the year ended December 31, 2024 for additional information regarding the Bridge

The Company agreed

to pay $2.75 million in cash to the holder in repayment of the principal of the Bridge Notes (exclusive of the $275,000 of

original issue discount on the Bridge Notes) shortly after the closing by the Company of one or more equity financings with total

gross proceeds to the Company of not less than $6,000,000.

On April 26, 2024,

the Company repaid $ 2.75

million of principal on its outstanding Secured Bridge Notes.

Effective April 9, 2024,

the Investor converted $ 911,384 (the “Rollover Amount”) which is equal to the (i) unpaid accrued interest on the Bridge Notes

the holder converted $ 911,384 (the “Rollover Amount”) which is equal to the (i) unpaid accrued interest on the Bridge Notes

plus (ii) the original issue discount (“OID”) on the Bridge Notes, into equity securities of the Company (the “Rollover

3 unchanged sentences

and (ii) 27,256 non-prefunded warrants (the “Non-Prefunded Warrants”) with a per share exercise price equal to $6.2934.

of the date and time of the Amendment and Waiver Agreement, the Nasdaq Minimum Price (as defined in the applicable Nasdaq listing rules)

for the Company’s common stock was $ 1.966 .

The number of Prefunded

Warrants was determined by dividing the Rollover Amount by $1.967.

The number of Non-Prefunded Warrants is equal to the number of Prefunded

Warrants (i.e.

The number of Non-Prefunded

Warrants was determined by dividing the Rollover Amount by $33.49 (the original exercise price).

The number of Non-Prefunded Warrants

is equal to the number of Prefunded Warrants (i.e.

100% warrant coverage).

The Non-Prefunded Warrants have a price adjustment provision which will adjust the exercise price

downward in the event that the Company issues equity securities in the future at an effective per share price below the then current exercise

In order to assure compliance with applicable Nasdaq rules, the Non-Prefunded Warrants shall not be exercisable for six months

following the date of issue.

The Company issued to

the Investor 50,000 new common stock warrants with a five-year term as a loan extension fee (“Fee Warrants”).

price of these additional Fee Warrants is $ 1.967 .

The Fee Warrants have a price adjustment provision which will adjust the exercise price

downward in the event that the Company issues equity securities in the future at an effective per share price below the then current exercise

In order to assure compliance with applicable Nasdaq rules, the Fee Warrants shall not be exercisable for six months following

The Non-Prefunded Warrants have a price adjustment provision

which will adjust the exercise price downward in the event that the Company issues equity securities in the future at an effective per

share price below the then current exercise price.

The original exercise price of $33.49 has been subsequently adjusted to $6.2934.

order to assure compliance with applicable Nasdaq rules, the Non-Prefunded Warrants shall not be exercisable for six months following

the date of issue.

The Company issued

to the holder 2,942

new common stock warrants with a five-year term as a loan extension fee (“Fee Warrants”).

The Fee Warrants have a price

adjustment provision which will adjust the exercise price downward in the event that the Company issues equity securities in the

future at an effective per share price below the then current exercise price.

The original exercise price of $33.49 has been

subsequently adjusted to $6.2934.

In order to assure compliance with applicable Nasdaq rules, the Fee Warrants shall not be

exercisable for six months following the date of issue.

The Non-Prefunded Warrants

1 unchanged sentence

As a result, the Company recorded

$ 911,384 as a non-cash charge in connection with the issuance of warrants related to the Secured Bridge Notes and a change in the fair

value of warrants of $ 632,388 , which is included in other expense in the accompanying statements of operations.

All Warrants were classified

as equity as they were indexed to the Company’s shares in accordance with ASC 815-40.

The Company agreed to

adjust the exercise price of the Investor’s Existing Warrants from $ 15.25 (after adjustment for the recent reverse stock) to $ 1.967

The Investor will not

be able to receive shares upon exercise of any of the foregoing securities, unless prior stockholder approval is obtained, if (i) the

number of shares to be issued would exceed 20% of the Company’s outstanding number of shares at a discount to the applicable Nasdaq

Minimum Price or (ii) the number of shares to be issued would result in in a Change of Control within the meaning of Nasdaq Rule 5635(b).

$ 911,384 as a non-cash charge in connection with the issuance of warrants related to the Bridge Notes and a change in the fair

value of warrants of $ 632,388 upon payoff of the debt.

All warrants were classified as equity as they were indexed to the Company’s

shares in accordance with ASC 815-40.

Note 5 – Commitments and Contingencies

1 unchanged sentence

On March 25, 2024, the Company entered into a

new 37-month operating lease commencing on April 1, 2024 with two separate two year renewal options.

The monthly base rent for months

two through 14 is $2,456, increasing to $3,070 for months 15 through 26, and ending at $3,684 for months 27 through 37.

Rent expense,

as part of general and administrative expenses in the condensed statement of operations, was $ 8,960 and $ 22,721 for the three and nine

months ended September 30, 2024, respectively, which consisted of the new lease and a temporary month-to-month lease the Company entered

into until a long-term space was identified.

Rent expense was $ 12,053 and $ 49,491 for the three and nine months ended September 30, 2023,

respectively, under the former lease that terminated in December 2023.

37-month operating lease commencing on April 1, 2024 with two separate two year renewal options.

The monthly base rent for months two

through 14 is $2,456, increasing to $3,070 for months 15 through 26, and ending at $3,684 for months 27 through 37.

Rent expense, as part

of general and administrative expenses in the statements of operations, was $ 8,960 and $ 22,480 for the three months ended March

31, 2025 and 2024, respectively, which consisted of the new operating lease and a temporary month-to-month lease the Company entered into

until a long-term space was identified.

In the normal course of business, the Company

10 unchanged sentences

financial statements were issued, therefore, no accrual has been made.

NASDAQ Deficiencies

On November 21, 2023,

the Company received a written notice from Nasdaq indicating that it was not in compliance with Nasdaq Listing Rule 5550(b)(1), which

requires companies listed on The Nasdaq Capital Market to maintain a minimum of $2,500,000 in stockholders’ equity for continued

listing (the “Stockholders’ Equity Requirement”).

In the Company’s quarterly report on Form 10-Q for the period

ended September 30, 2023, the Company reported stockholders’ equity of $ 2,415,012 , and, as a result, did not satisfy Listing Rule

Nasdaq’s November written notice had no immediate impact on the listing of our common stock.

The hearing with the Panel

occurred on January 18, 2024, and addressed all outstanding listing compliance matters, including compliance with the Stockholders’

Equity Notice as well as compliance with the Bid Price Requirement.

On January 30, 2024,

the Panel granted the Company’s request for an exception to Nasdaq’s listing rules until April 22, 2024, to demonstrate compliance

with all applicable continued listing requirements for the Nasdaq Capital Market.

On April 16, 2024, the

Company received a letter from Nasdaq granting an exception to the Exchange’s listing rules until May 20, 2024, to demonstrate compliance

with Listing Rule 5550(b)(1) (the “Equity Rule”).

On May 24, 2024, the Company received a letter

from Nasdaq indicating that the Company has regained compliance with the equity requirement in Listing rule 5550(b) (1) (the Equity Rule”.)

The Company will be subject to a Mandatory Panel Monitor for a period of one year from the date of the letter in accordance with application

of Listing Rule 5815(d)(4)(B).

The Nasdaq listing rules

require listed securities to maintain a minimum bid price of $1.00 per share.

On October 16, 2024, the Company received a written notice

from Nasdaq indicating that it was not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2)

for continued listing.

The Bid Price Notice does not result in the immediate delisting of the Company’s common stock from the Nasdaq

Capital Market.

The Bid Price Notice indicated that the Company has 180 calendar days (or until April 14, 2025) in which to regain compliance.

The Company’s receipt

of these Nasdaq letters does not affect the Company’s business, operations or reporting requirements with the Securities and Exchange

Note 6 – Share-based Issuances

Stock Options

The fair value of each option award is estimated

on the date of grant using a Black Scholes option valuation model that uses the assumptions noted in the following table.

Because Black

Scholes option valuation models incorporate ranges of assumptions for inputs, these ranges are disclosed.

Expected volatilities and based

on implied volatilities from traded options on the Company’s stock, historical volatility of the Company’s stock, and other

The expected term of options granted is derived from the output of the valuation model and represents the period of time that

options granted are expected to be outstanding.

The risk-free rate for periods within the contractual life of the option is based on the

Treasury yield curve in effect at the time of grant.

The following table presents the activity for

stock options outstanding:

Schedule of activity for stock

options outstanding

Schedule of stock option activity

Weighted Average Exercise Price

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Forfeited/canceled

Outstanding – September 30, 2024

Outstanding – March 31, 2025

Weighted Average Exercise Price

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Forfeited/canceled

Outstanding – September 30, 2023

The following table presents the composition of

options outstanding and exercisable:

Outstanding – March 31, 2024

The following table presents the composition of options outstanding

and exercisable:

Schedule of options outstanding and exercisable

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Exercise Prices

Total – September 30, 2024

Total – March 31, 2025

Price and Life reflect the weighted average exercise price and weighted average remaining contractual life, respectively.

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restricted stock units outstanding:

Schedule of activity for restricted

stock units outstanding

Average Grant Date

Schedule of restricted stock units outstanding

Restricted Stock

Weighted Average Grant Date

Outstanding - December 31, 2024

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Vested/issued

Outstanding – September 30, 2024

Average Grant Date

Outstanding – March 31, 2025

Restricted Stock

Weighted Average Grant Date

Outstanding - December 31, 2023

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Vested/issued

Outstanding – September 30, 2023

Outstanding – March 31, 2024

The Company recognized share-based compensation

expense related to stock options and restricted stock units of $ 119,416 and $ 217,141 for the three months ended September 30, 2024

and 2023, respectively, and $ 425,193 and $ 799,677 for the nine months ended September 30, 2024 and 2023, respectively.

The remaining unvested

share-based compensation expense of $ 295,304 is expected to be recognized over the next 39 months.

expense related to stock options and restricted stock units of $ 76,906 and $ 173,289 for the three months ended March 31, 2025 and

2024, respectively.

The remaining unvested share-based compensation expense of $ 105,130 is expected to be recognized over the next

Note 7 – Equity Financings

Equity Line Sales

of Common Stock

Line Common Stock Purchase Agreement

On November 25, 2024,

the Company entered into a Common Stock Purchase Agreement (the “White Lion Purchase Agreement”) with White Lion Capital,

LLC, a Nevada limited liability company (“White Lion”) for an equity line facility.

In April and June 2023,

the Company closed on three sales of Common Stock under the White Lion Purchase Agreement.

As a result, the Company issued an aggregate

of 2,361,514 common shares and received aggregate proceeds of approximately $ 1.3 million.

Any proceeds that the

Company receives under the White Lion Purchase Agreement are expected to be used for working capital and general corporate purposes.

The White Lion Purchase Agreement prohibits the

Company from issuing and selling any shares of common stock to White Lion to the extent such shares, when aggregated with all other shares

of our common stock then beneficially owned by White Lion, would cause White Lion’s beneficial ownership of common stock to exceed

9.99% (the “Beneficial Ownership Cap”).

The Company recognized all offering costs related

to the equity line of credit as deferred offering costs in accordance with the guidance in ASC 835-30-S45.

Replacement Equity

Line with White Lion

6, 2023, the Company entered into a new Common Stock Purchase Agreement and a related registration rights agreement with White Lion.

to the new Common Stock Purchase Agreement, the Company has the right, but not the obligation to require White Lion to purchase, from

time to time until December 31, 2024, up to $10,000,000 in aggregate gross purchase price of newly issued shares of the Company’s

common stock, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement.

In connection with the new

Common Stock Purchase Agreement, the parties agreed to terminate the previous Common Stock Purchase Agreement with White Lion.

During the nine months

ended September 30, 2024, the Company closed on several sales of Common Stock under the White Lion Purchase Agreement.

As a result, the

Company issued an aggregate of 4,815,263 common shares and received aggregate proceeds of approximately $ 8.2 million.

the Company entered into a new equity line Common Stock Purchase Agreement and a related registration rights agreement with White Lion.

Pursuant to the Common Stock Purchase Agreement, the Company has the right, but not the obligation to require White Lion to purchase,

from time to time, up to $10,000,000 in aggregate gross purchase price of newly issued shares of the Company’s common stock, subject

to certain limitations and conditions set forth in the Common Stock Purchase Agreement.

At-the-Market Sales

During the three

months ended March 31, 2025, the Company issued 78,947

shares for aggregate proceeds of approximately $ 0.7 million

pursuant to an At-the-Market Issuance Sales Agreement (the “Sales Agreement”) with Ascendiant Capital Markets, LLC, as

sales agent (the “Agent”).

Under the Sales Agreement,

the Company may sell shares of its common stock having an aggregate offering price of up to $10,000,000 from time to time, through an

“at the market offering” (the “ATM Offering”).

The aggregate market value of shares that the Company can sell

under the Sales Agreement will be subject to the limitations of General Instruction I.B.6 of Form S-3, to the extent required under such

$2.3 Million Convertible

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At the closing, the Company

issued 2,314 shares of Series B convertible preferred stock (“Series B Preferred Stock”) at a purchase price of $ 1,000 per

share of Series B Preferred Stock.

The Series B Preferred Stock is convertible into Common Stock at an initial conversion price (“Conversion

Price”) of $ 1.851 per share of Common Stock.

The Company also issued warrants (“Warrants”) exercisable for 1,250,137

shares of Common Stock with a five-year term and an initial exercise price of $ 1.851 per share.

The proceeds of this

financing, together with other available cash resources, were used to repay outstanding debt and for general corporate purposes.

issued 2,314 shares of Series B convertible preferred stock (“Series B Preferred Stock”) at a purchase price of

$1,000 per share of Series B Preferred Stock.

The Series B Preferred Stock is convertible into Common Stock at an initial conversion price

(“Conversion Price”) of $31.47 per share of Common Stock.

The Company also issued

warrants (“Warrants”) exercisable for 73,538 shares of Common Stock with a five-year term and an initial exercise

price of $ 31.47 per share.

The current conversion and exercise price has been adjusted

to $ 6.2934 .

The proceeds of this financing, together with other available cash resources,

were used to repay outstanding debt and for general corporate purposes.

Holders of the Series

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the dividends, in which case the accrued dividend amount shall be added to the stated value of each share of Series B Preferred Stock.

As of September 30, 2024, the Company has elected to capitalize all dividends declared.

As of March 31, 2025, the Company has elected to capitalize all dividends declared.

On February 19, 2025,

140 shares of Series B Preferred stock were converted to 16,654 shares of Common Stock.

Additionally, on February 19, 2025, the Series

B Preferred stockholders converted their capitalized dividends into 16,654 shares of Common Stock.

The following table presents

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Forfeited/cancelled/restored

Outstanding – September 30, 2024

Outstanding – March 31, 2025

Note 8 – Leases under ASC 842

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rate used in the present value calculation represents the incremental borrowing rate determined using information available at the commencement

For the three and nine months ended September 30, 2024, the Company recorded operating lease expense of $ 8,960 and $ 17,921 , respectively,

For the three months ended March 31, 2025 and 2024, the Company recorded operating lease expense of $ 8,960 and $ 0 , respectively,

which is included in general and administrative expenses in the Company’s accompanying condensed statements of operations.

September 30, 2024, weighted-average remaining lease term and discount rate were as follows:

March 31, 2025, weighted-average remaining lease term and discount rate were as follows:

Schedule of weighted-average remaining lease term and discount rate

September 30, 2024

March 31, 2025

Weighted-average remaining lease term

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The following is a maturity analysis of the annual

undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of September 30, 2024:

undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of March 31, 2025:

Schedule of annual undiscounted cash flows of leases

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Less imputed interest

Note 9 – Segment Reporting

Operating segments are identified as components

of an enterprise about which separate discrete financial information is available for evaluation by the Chief Operating Decision Maker

(“CODM”) in making decisions regarding resource allocation and assessing performance.

The Company views its operations and manages its

business in one operating segment engaged in the technology of how customers engage with audio through the development of a proprietary

AI platform for audio and innovative technologies for podcasts.

The Company’s Chief Financial Officer (“CFO”), as the

CODM, regularly reviews the entity-wide financial and operational performance as a single unit.

No financial information is disaggregated

into separate lines of businesses.

The CEO makes resource allocation and business process decisions regarding the overall level of resources

available and how to best deploy these resources.

The single segment’s principal measure of

segment profit and loss is consolidated research and development expenses and administrative expenses.

The CFO considers actual and forecasted

expenses when evaluating performance.

Note 10 – Subsequent

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as set forth below, management did not identify any subsequent events that would have required adjustment or disclosure in the financial

The Nasdaq listing rules

require listed securities to maintain a minimum bid price of $1.00 per share.

On October 16, 2024, the Company received a written notice

from Nasdaq indicating that it was not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2)

for continued listing.

The Bid Price Notice does not result in the immediate delisting of the Company’s common stock from the Nasdaq

Capital Market.

The Bid Price Notice indicated that the Company has 180 calendar days (or until April 14, 2025) in which to regain compliance.

In April 2025, 447 shares of Series B Preferred

stock and capitalized dividends were converted to 85,225 shares of Common stock.

In April 2025, the Company

issued 25,000 shares of Common stock under the Equity Line Common Stock Purchase Agreement for total proceeds of $0.1 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements