What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-08-08 · 322 added, 267 removed, 383 unchanged (61% of the section changed)

1 unchanged sentence

Condensed Balance Sheets

June 30, 2025

September 30, 2025

December 31, 2024

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Series B Preferred stock - $ 0.001 par value, 0 and 2,314 shares issued and

outstanding as of June 30, 2025 and December 31, 2024, respectively

outstanding as of September 30, 2025 and December 31, 2024, respectively

Series C Preferred stock - $ 0.001 par value, 750 and 0 shares issued and

outstanding as of June 30, 2025 and December 31, 2024, respectively

Common stock - $ 0.001

par value, 100,000,000

authorized and 654,959

shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively (1)

outstanding as of September 30, 2025 and December 31, 2024, respectively

Common stock - $ 0.001 par value, 100,000,000 authorized and 2,172,563 and 397,731 shares issued and

outstanding as of September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

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Total liabilities and shareholders’ equity

The accompanying notes are an integral part of these

unaudited condensed financial statements.

(1) The Company’s common stock outstanding as of December 31,

2024 has been retroactively restated for the effect of the 1-for-17 reverse stock split effective March 28, 2025.

The accompanying notes are an integral part of

these unaudited condensed financial statements.

The Company’s common stock outstanding as of December 31, 2024 has been retroactively restated for the effect of the 1-for-17 reverse stock split effective March 28, 2025.

Condensed Statements of Operations

Three Months Ended

Six Months Ended

Nine Months Ended

September 30, September 30,

Operating expenses:

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General and administrative

Restructuring

Depreciation and amortization

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Basic and diluted

The accompanying notes are an integral part of these

unaudited condensed financial statements.

(1) The Company’s common stock outstanding for the three and

six months ended June 30, 2024 has been retroactively restated for the effect of the 1-for-17 reverse stock split effective March 28,

The accompanying notes are an integral part of

these unaudited condensed financial statements.

The Company’s

weighted average common stock outstanding for the three and nine months ended September 30, 2024 has been retroactively restated for

the effect of the 1-for-17 reverse stock split effective March 28, 2025.

Condensed Statements of Changes in Stockholders’

for the Three and Six Months Ended June 30, 2025

for the Three and Nine Months Ended September

30, 2025 and 2024

Preferred Stock

Paid-In-Capital

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Issuance of common shares, net of costs

Issuance of Series C preferred stock and warrants,

net of issuance costs

Issuance of Series C preferred stock and warrants, net of issuance costs

Series B preferred stock converted to common stock

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( 92,852,762 )

Issuance of common shares, net of costs

Preferred stock converted to common stock

Offering costs

Share-based compensation

Warrant exercises

Capitalized dividends

( 2,381,151 )

Balance, September 30, 2025

$ ( 95,262,663 )

Preferred Stock

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( 85,054,083 )

The accompanying notes are an integral part of these

unaudited condensed financial statements.

(1) The Company’s changes in stockholders’ equity for

the three and six months ended June 30, 2024 has been retroactively restated for the effect of the 1-for-17 reverse stock split effective

March 28, 2025.

Issuance of common shares, net of costs

Issuance of restricted stock units

Capitalized dividends

Offering costs

Share-based compensation

( 1,949,428 )

Balance, September 30, 2024 (1)

$ ( 87,106,163 )

The accompanying notes are an integral part of

these unaudited condensed financial statements.

The Company’s

changes in stockholders’ equity for each of the periods prior to the reverse stock split have been retroactively restated for

the effect of the 1-for-17 reverse stock split effective March 28, 2025.

Condensed Statements of Cash Flows

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash flows from operating activities:

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$ ( 6,460,181 )

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

Adjustments to reconcile net loss to net cash provided by (used

in) operating activities:

Depreciation and amortization

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Cash flows from investing activities:

Purchase of property and equipment

(Purchase) disposition of property and equipment

Software capitalization

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Net cash provided by financing activities

Net (decrease) increase in cash

( 1,638,563 )

Net increase in cash

Cash, beginning of year

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Capitalized dividends

Dividends and Series B preferred stock converted to common stock

Right of use asset and assumption of operating lease liability

The accompanying notes are an integral part of these

unaudited condensed financial statements.

The accompanying notes are an integral part of

these unaudited condensed financial statements.

Notes to Condensed Financial Statements (Unaudited)

Note 1 – Description of Business, Basis of Presentation and Summary of Significant Accounting Policies

Note 1 – Description of Business, Basis of Presentation

and Summary of Significant Accounting Policies

Description of Business

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Basis of Presentation

The accompanying financial statements have been prepared

in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

The accompanying financial statements have been

prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

Interim Financial Information

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Reverse Stock Splits

On February 27, 2024, the Company effectuated a 1-for-25

reverse stock split .

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

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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

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 retroactively adjusted to reflect the effect of the reverse stock splits for all periods presented.

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Actual results could differ from those estimates.

The condensed financial statements include some amounts

that are based on management’s best estimates and judgments.

The most significant estimates relate to valuation of capital stock,

warrants and options to purchase shares of the Company’s common stock, and the estimated recoverability and amortization period

for capitalized software development costs.

These estimates may be adjusted as more current information becomes available, and any adjustment

could be significant.

The condensed financial statements include some

amounts that are based on management’s best estimates and judgments.

The most significant estimates relate to valuation of capital

stock, warrants and options to purchase shares of the Company’s common stock, and the estimated recoverability and amortization

period for capitalized software development costs.

These estimates may be adjusted as more current information becomes available, and

any adjustment could be significant.

Risks and Uncertainties

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Such risks and uncertainties include, but are not limited to,

its limited operating history, competition from other companies, limited access to additional funds, dependence on key personnel, and

management of potential rapid growth.

To address these risks, the Company must, among other things, develop its customer base;

and successfully execute its business and marketing strategy;

its limited operating history, competition from other companies, limited access to additional funds, dependence on key personnel, completion

of our proposed business combination and management of potential rapid growth.

To address these risks, the Company must, among other things,

develop its customer base;

implement and successfully execute its business and marketing strategy;

develop follow-on products;

provide superior customer service;

retain, and motivate qualified personnel.

There can be no guarantee that the Company will be successful in addressing these or other such

superior customer service;

and attract, retain, and motivate qualified personnel.

There can be no guarantee that the Company will be successful

in addressing these or other such risks.

Emerging Growth Company Status

The Company is an emerging growth company, as defined

in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Under the JOBS Act, emerging growth companies can delay

adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply

to private companies.

The Company is an emerging growth company, as

defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Under the JOBS Act, emerging growth companies

can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards

apply to private companies.

The Company has elected to use this extended transition period to comply with certain new or revised accounting

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The Company had cash and cash equivalents of $ 2,727,166

as of June 30, 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 $ 1.5

million (net of offering costs) during the six months ended June 30, 2025, and an additional $ 1.9 million subsequent to June 30,

2025, which will only be sufficient into the fourth quarter of 2025.

as of September 30, 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 $ 5.1 million (net of offering costs) during the nine months ended September

30, 2025, and an additional $ 2.1 million subsequent to September 30, 2025, which will only be sufficient to fund operations into the third

quarter of 2026.

Management has plans to secure such additional funding.

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.

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

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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 fourth quarter of 2025.

and working capital funding that will deplete cash on hand during the third quarter of 2026.

Cash and Cash Equivalents

The Company had cash on hand of $ 2,724,371 and

as of June 30, 2025 and December 31, 2024, respectively.

$ 2,703,392 as of September 30, 2025 and December 31, 2024, respectively.

The Company considers all highly liquid instruments

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The Company had cash equivalents of $ 2,795 and $ 2,927

as of June 30, 2025 and December 31, 2024, respectively.

The Company maintains cash deposits at several financial

institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000.

The Company’s cash balance may at times

exceed these limits.

As of June 30, 2025, the Company had approximately $ 0.8 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.

as of September 30, 2025 and December 31, 2024, respectively.

The Company maintains cash deposits at several

financial institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000.

The Company’s cash balance

may at times exceed these limits.

As of September 30, 2025, the Company had approximately $ 2.4 million in excess of federally insured

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.

Software Development Costs

The Company accounts for costs incurred in the development

of computer software as software research and development costs until the preliminary project stage is completed, management has committed

to funding the project, and completion and use of the software for its intended purpose is probable.

The Company ceases capitalization of development costs

once the software has been substantially completed and is available for its intended use.

Software development costs are amortized over

a useful life estimated by the Company’s management of three years.

The Company accounts for costs incurred in the

development of computer software as software research and development costs until the preliminary project stage is completed, management

has committed to funding the project, and completion and use of the software for its intended purpose is probable.

The Company ceases capitalization of development

costs once the software has been substantially completed and is available for its intended use.

Software development costs are amortized

over a useful life estimated by the Company’s management of three years.

Costs associated with significant upgrades and enhancements

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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 six months ended June 30, 2025 and 2024.

Software development

costs of $ 239,502 and $ 255,214 were capitalized for the three months ended June 30, 2025 and 2024, respectively.

Software development

costs of $ 476,475 and $ 528,602 were capitalized for the six months ended June 30, 2025 and 2024, respectively.

Amortization of capitalized

software development costs was $ 356,227 and $ 486,764 for the three months ended June 30, 2025 and 2024, respectively and $ 787,286 and

$ 963,682 for the six months ended June 30, 2025 and 2024, 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 and nine months ended September 30, 2025 and 2024.

development costs of $ 35,802 and $ 258,734 were capitalized for the three months ended September 30, 2025 and 2024, respectively.

development costs of $ 512,277 and $ 787,336 were capitalized for the nine months ended September 30, 2025 and 2024, respectively.

of capitalized software development costs was $ 356,118 and $ 492,872 for the three months ended September 30, 2025 and 2024, respectively

and $ 1,143,272 and $ 1,456,554 for the nine months ended September 30, 2025 and 2024, respectively, and is included in depreciation and

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

Revenue Recognition

Revenue will be measured according to Accounting 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 will exclude any sales incentives and amounts collected on behalf of third parties.

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

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

Revenue will be measured according to Accounting

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 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;

(2) Identify the

performance obligations in the contract;

the performance obligations in the contract;

(3) Determine the transaction price;

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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 will be recorded as deferred revenue.

The deferred revenue will be recognized as

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

Customers may pay for the services in advance

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

The deferred revenue will be recognized

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

Share-Based Compensation

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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 is

based on the estimated grant-date fair value and recognized in earnings over the requisite service period (generally the vesting period).

Compensation expense for all share-based awards

is based on the estimated grant-date fair value and recognized in earnings over the requisite service period (generally the vesting period).

The Company records share-based compensation expense related to non-employees over the related service periods.

Certain share-based compensation awards include a

net-share settlement feature that provides the grantee an option to withhold shares to satisfy tax withholding requirements and are classified

as a share-based compensation liability.

Cash paid to satisfy tax withholdings is classified as financing activities in the condensed

statements of cash flows.

Certain share-based compensation awards include

a net-share settlement feature that provides the grantee an option to withhold shares to satisfy tax withholding requirements and are

classified as a share-based compensation liability.

Cash paid to satisfy tax withholdings is classified as financing activities in the

condensed statements of cash flows.

account for warrants as equity-classified instruments, based on an assessment of the warrant’s specific terms and applicable authoritative

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date while the warrants are outstanding.

Note 2 – Property & Equipment, Intangible Assets, and Software

Development Costs

Property and equipment and software development costs

consisted of the following as of:

Restructuring Costs

During the three months ended September 30,

2025, the Company implemented a restructuring plan to align its cost structure with current business priorities and improve

operational efficiency.

The restructuring included a reduction in workforce, the termination of certain consulting arrangements, and

other cost-saving initiatives.

In addition, the Company incurred approximately $ 0.5 million related to the proposed business

As a result of these actions, the Company recognized restructuring charges of approximately $ 0.8

million during the three and nine months ended September 30, 2025.

Company will continue to evaluate opportunities to further streamline operations and may incur additional restructuring-related

expenses in future periods as these initiatives are finalized.

Note 2 – Property & Equipment, Intangible Assets, and

Software Development Costs

Property and equipment and software development

costs consisted of the following as of:

Schedule of property and equipment and software development costs

September 30,

Computers and equipment

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The Company recognized depreciation expense of

and $ 6,284 for the three months ended June 30, 2025 and 2024, respectively, related to property and equipment, amortization expense of

$ 163 and $ 334 for the three months ended June 30, 2025 and 2024, respectively, related to intangible assets, and amortization expense

of $ 356,227 and $ 486,764 for the three months ended June 30, 2025 and 2024, respectively, related to software development costs.

recognized depreciation expense of $ 2,696 and $ 12,778 for the six months ended June 30, 2025 and 2024, respectively, related to property

and equipment, amortization expense of $ 185 and $ 668 for the six months ended June 30, 2025 and 2024, respectively, related to intangible

assets, and amortization expense of $ 787,286 and $ 963,682 for the six months ended June 30, 2025 and 2024, respectively, related to software

development costs.

$ 1,409 and $ 3,291 for the three months ended September 30, 2025 and 2024, respectively, related to property and equipment, amortization

expense of $ 420 and $ 202 for the three months ended September 30, 2025 and 2024, respectively, related to intangible assets, and amortization

expense of $ 356,118 and $ 492,872 for the three months ended September 30, 2025 and 2024, respectively, related to software development

The Company recognized depreciation expense of $ 4,105 and $ 16,069 for the nine months ended September 30, 2025 and 2024, respectively,

related to property and equipment, amortization expense of $ 605 and $ 465 for the nine months ended September 30, 2025 and 2024, respectively,

related to intangible assets, and amortization expense of $ 1,143,272 and $ 1,456,554 for the nine months ended September 30, 2025 and 2024,

respectively, related to software development costs.

Note 3 – Accounts Payable and Accrued

Accounts payable and accrued liabilities consist of

the following:

Accounts payable and accrued liabilities consist

of the following:

Schedule of accounts payable and accrued liabilities

September 30,

Accounts payable and accrued liabilities

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Total accounts payable and accrued liabilities

Note 4 – Notes Payable to Related Party,

net of debt issuance costs

On April 9, 2024, the Company

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

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

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.

Note 4 – Notes Payable to Related

Party, net of debt issuance costs

On April 9, 2024, the

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

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

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,

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Securities”).

The Rollover Securities consist

of (i) 27,256 prefunded common stock warrants with a per share exercise price of $0.017 per share (the “Prefunded Warrants”)

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

Securities consist of (i) 27,256

prefunded common stock warrants with a per share exercise price of $0.017 per share (the “Prefunded Warrants”) and (ii) 27,256

non-prefunded warrants (the “Non-Prefunded Warrants”) with a current per share exercise price equal to $2.2165.

The number of Non-Prefunded

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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 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 $33.44 has been subsequently

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$ 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 during the three and six months ended June 30, 2024 All warrants were classified as equity

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

warrants of $ 632,388 upon payoff of the debt during the nine months ended September 30, 2024 All warrants were classified as equity as

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

On September 25, 2025,

the prefunded warrants were exercised.

Note 5 – Commitments and Contingencies

Operating Lease

On March 25, 2024, the Company entered into a 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 $ 8,960 for the three months ended June 30, 2025

and 2024, respectively and $ 17,920 and $ 25,385 for the six months ended June 30, 2025 and 2024, respectively.

In the normal course of business, the Company is party

to litigation from time to time.

The Company maintains insurance to cover certain actions and believes that resolution of such litigation

will not have a material adverse effect on the Company.

There are no active litigations as of the date the financial statements were issued.

However, a pre-IPO investor has contacted the Company claiming damages caused by alleged acts and

omissions arising from a private financing by the Company.

On March 25, 2024, the Company entered into a

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 $ 8,960 for the three months ended September

30, 2025 and 2024, respectively and $ 26,881 and $ 22,721 for the nine months ended September 30, 2025 and 2024, respectively.

In the normal course of business, the Company

is party to litigation from time to time.

The Company maintains insurance to cover certain actions and believes that resolution of such

litigation will not have a material adverse effect on the Company.

There are no active litigations as of the date the financial statements

However, a pre-IPO investor has contacted the Company claiming damages caused by alleged

acts and omissions arising from a private financing by the Company.

No complaint has been filed by the investor.

The alleged damages asserted by

the investor are less than approximately $300,000.

The outcome of the complaint was neither probable or estimable as of the date the financial

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

The alleged damages asserted

by the investor are less than approximately $300,000.

The outcome of the complaint was neither probable or estimable as of the date the

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

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 factors.

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 U.S.

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:

The following table presents the activity for

stock options outstanding:

Schedule of stock option activity

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Forfeited/canceled

Outstanding – June 30, 2025

Outstanding – September 30, 2025

Weighted Average Exercise Price

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Forfeited/canceled

Outstanding – June 30, 2024

The following table presents the composition of options outstanding and

Outstanding – September 30, 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 – June 30, 2025

Total – September 30, 2025

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

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Restricted Stock Units

The following table presents the activity for restricted

stock units outstanding:

The following table presents the activity for

restricted stock units outstanding:

Schedule of restricted stock units outstanding

Restricted Stock

Weighted Average Grant Date

Weighted Average

Outstanding - December 31, 2024

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Vested/issued

Outstanding – June 30, 2025

Outstanding – September 30, 2025

Restricted Stock

Weighted Average Grant Date

Weighted Average

Outstanding - December 31, 2023

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Vested/issued

Outstanding – June 30, 2024

The Company recognized share-based compensation expense

related to stock options and restricted stock units of $ 21,158 and $ 132,488 for the three months ended June 30, 2025 and 2024, respectively

and $ 98,064 and $ 305,777 for the six months ended June 30, 2025 and 2024.

The remaining unvested share-based compensation expense of $ 83,918 is

expected to be recognized over the next 30 months.

Outstanding – September 30, 2024

The Company recognized share-based compensation

expense related to stock options and restricted stock units of $ 92,984 and $ 119,416 for the three months ended September 30, 2025

and 2024, respectively and $ 191,048 and $ 425,193 for the nine months ended September 30, 2025 and 2024.

The remaining unvested share-based

compensation expense of $ 186,191 is expected to be recognized over the next 48 months.

Note 7 – Equity Financings

Equity Line Common Stock

Purchase Agreement

On November 25, 2024, the

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

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.

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.

At-the-Market Sales Agreement

During the six months ended

June 30, 2025, the Company issued 78,901 shares for aggregate proceeds of approximately $ 0.7 million pursuant to an At-the-Market

Equity Line Common

Stock Purchase Agreement

On November 25, 2024,

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.

On July 30, 2025, the Company amended the equity

line Common Stock Purchase Agreement from $ 10,000,000 to $ 50,000,000 in aggregate gross purchase price of newly issued shares of the Company’s

common stock.

During the nine months

ended September 30, 2025, the Company issued 995,000 shares of Common stock under the Equity Line Common Stock Purchase Agreement for

total proceeds of $ 3.7 million.

At-the-Market Sales

During the nine months

ended September 30, 2025, the Company issued 78,901 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”).

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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

of June 30, 2025, the Company has utilized all available capacity under our existing shelf registration statement for our ATM program.

Subsequent to September

30, 2025, and as of the date of this filing, the Company sold 928,860

shares under the Sales Agreement for proceeds of $ 2.1

million and currently has approximately $0.9 million of unsold availability under the ATM facility.

$2.3 Million Convertible

Series B Preferred Stock and Warrants Financing

On April 23, 2024, the Company

entered into a securities purchase agreement with accredited investors for a convertible preferred stock and warrants financing.

received $ 2,314,000 of gross proceeds in connection with the closing of this financing.

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 $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 B Preferred

Stock will be entitled to dividends in the amount of 10% per annum, payable quarterly.

The Company has the option to pay dividends on

the Series B Preferred Stock in additional shares of Common Stock.

On April 23, 2024, the

Company entered into a securities purchase agreement with accredited investors for a convertible preferred stock and warrants financing.

The Company received $ 2,314,000 of gross proceeds in connection with the closing of this financing.

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 $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, which has been subsequently adjusted to $2.2165.

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

B Preferred Stock will be entitled to dividends in the amount of 10% per annum, payable quarterly.

The Company has the option to pay dividends

on the Series B Preferred Stock in additional shares of Common Stock.

The Company also has the option to cumulate or “capitalize”

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 June 30, 2025, the Company has elected to capitalize all dividends declared.

As of September 30, 2025, the Company has elected to capitalize all dividends declared.

On February 19, 2025,

140 shares of Series B Preferred stock and capitalized dividends were converted to 33,308 shares of Common Stock.

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, 447 shares of Series B Preferred

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

On June 26, 2025, 192 shares of Series B Preferred

stock and capitalized dividends were converted to 34,523 shares of Common Stock.

Series C Preferred Stock and Warrants Financing

On August 5, 2025, the Company entered into a

series of exchange agreements (the “Exchange Agreements”) with certain accredited investors to exchange 569 outstanding shares

of the Company’s Series B preferred stock (including accrued dividends thereon) for 132,724 shares of common stock at an exchange

price of $ 2.65 per common share.

The issuance of the exchange common shares is intended to be exempt from registration pursuant to the

exemptions under Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”).

As of September 30, 2025, all Series B Preferred

stock had been converted to Common stock.

$750,000 Series C Preferred Stock and Warrants

On June 30, 2025, the Company entered into a Securities

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gross proceeds in connection with the closing of this financing.

At the closing, the Company issued 750 shares of Series

C convertible preferred stock (“Series C Preferred Stock”) at a purchase price of $1,000 per share of Series C Preferred Stock.

At the closing, the Company issued 750 shares

of Series C convertible preferred stock (“Series C Preferred Stock”) at a purchase price of $1,000 per share of Series C Preferred

The Series C Preferred Stock is convertible into Common Stock at an initial conversion price (“Series C Conversion Price”)

of $4.77 per share of Common Stock.

The Company also issued warrants exercisable for 314,466 shares of Common Stock with a five year term

and an initial exercise price of $ 4.77 per share.

The proceeds of this financing, together with other

available cash resources, will be used for general corporate purposes.

of $4.77 per share of Common Stock, which has been adjusted to $2.2165.

The Company also issued warrants exercisable for 314,466 shares

of Common Stock with a five year term and an initial exercise price of $ 4.77 per share, which has been subsequently adjusted to $ 2.2165 .

The proceeds of this financing, together with

other available cash resources, will be used for general corporate purposes.

The following table presents

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Forfeited/cancelled/restored

Outstanding – June 30, 2025

Outstanding – September 30, 2025

Note 8 – Leases under ASC 842

The Company leases certain office space under operating

leases for use in operations.

The Company leases certain office space under

operating leases for use in operations.

The Company recognizes operating lease expense on a straight-line basis over the lease term.

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Rent expense, as part of general and administrative expenses in the statements of operations, was $ 8,960 and $ 8,960 for

the three months ended June 30, 2025 and 2024, respectively and $ 17,920 and $ 25,385 for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, weighted-average remaining lease term and discount rate were as follows:

the three months ended September 30, 2025 and 2024, respectively and $ 26,881 and $ 25,385 for the nine months ended September 30, 2025

and 2024, respectively.

As of September 30, 2025, weighted-average remaining lease term and discount rate were as follows:

Schedule of weighted-average remaining lease term and discount rate

June 30, 2025

September 30, 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 June 30, 2025:

undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of September 30, 2025:

Schedule of annual undiscounted cash flows of leases

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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.

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

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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

On August 5, 2025, the Company issued a press release announcing that it

had entered into a non-binding letter of intent (“LOI”) for a proposed business combination between the Company and Thramann

Holdings, LLC (“Holdings”).

Through the date of issuance of this report, the

Company issued an additional 360,000 shares of Common stock subsequent to June 30, 2025 under the Company’s existing Equity Line

Common Stock Purchase Agreement for total proceeds of $1.9 million.

On August 5, 2025, the Company entered into a

series of exchange agreements (the “Exchange Agreements”) with certain accredited investors to exchange 569 outstanding shares

of the Company’s Series B preferred stock (including accrued dividends thereon) for 132,724 shares of common stock at an exchange

price of $4.486 per common share.

The issuance of the exchange common shares is intended to be exempt from registration pursuant to the

exemptions under Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”).

The foregoing description of the Exchange Agreements

is a summary only, does not purport to be complete and is qualified in its entirety by the full text of the form of Exchange Agreement,

a copy of which is attached as Exhibit 10.35 and incorporated herein by reference.

As previously disclosed, on August 5, 2025, the

Company issued a press release announcing that it had entered into a non-binding letter of intent (“LOI”) for a proposed business

combination between the Company and Thramann Holdings, LLC (“Holdings”).

Holdings is considered a related party, as the Company’s

founder, Chairman, and Chief Executive Officer, Jeff Thramann, is also the founder and principal owner of Holdings.

The LOI contemplates

a business combination between Auddia and Holdings with Auddia becoming a public holding company trading under a new name and ticker symbol.

The transaction would result in the portfolio companies of Holdings and Auddia becoming subsidiaries of the public holding company.

parties initially agreed to a 30-day exclusivity period (expiring September 3, 2025) to negotiate a definitive business combination agreement,

which will include customary closing conditions such as board and stockholder approvals, regulatory approvals, effectiveness of a registration

statement relating to the issuance of Auddia common stock in the business combination and continued listing of the combined company’s

common stock on Nasdaq.

On September 3, 2025, the parties agreed to a 45-day extension of the exclusivity period (expiring on October

18, 2025) under the LOI.

On October 17, 2025, the parties agreed to an additional extension of the exclusivity period until 30 days after

the Securities and Exchange Commission is no longer operating under its Operations Plan Under a Lapse in Appropriations and Government

Shutdown (which operations plan commenced on October 1, 2025).

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