What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-06 compared with 2025-03-05 · 321 added, 292 removed, 254 unchanged (71% of the section changed)

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statements that are subject to risks and uncertainties.

See “ Special Note Regarding Forward-Looking Statements ” for a discussion

of the uncertainties, risks, and assumptions associated with those statements.

Actual results could differ materially from those discussed

in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Form

10-K, particularly in the section entitled “ Risk Factors.

” Unless we state otherwise or the context otherwise requires, the

terms “we,” “us,” “our” and the “Company” refer Auddia Inc.

See “ Special Note Regarding Forward-Looking Statements ” for

a discussion of the uncertainties, risks, and assumptions associated with those statements.

Actual results could differ materially from

those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere

in this Form 10-K, particularly in the section entitled “ Risk Factors.

” Unless we state otherwise or the context otherwise

requires, the terms “we,” “us,” “our” and the “Company” refer Auddia Inc.

and its subsidiaries.

Auddia (the “Company”) is an AI technology

company headquartered in Boulder, CO that is reinventing how consumers engage with audio through the development of its faidr app, an

industry-first audio platform, which utilizes proprietary AI technology to personalize and customize both radio and podcast listening

faidr allows users to

listen to AM/FM radio stations without unwanted commercial breaks.

The app replaces these ad breaks in real time with streaming music

similar in format and genre to the radio station being played.

Auddia (the “Company”)

is an AI technology company headquartered in Boulder, CO that is reinventing how consumers engage with audio through the development of

its faidr app, an industry-first audio platform, which utilizes proprietary AI technology to personalize and customize both radio and

podcast listening experiences.

On August 20, 2025,

the Company announced that it is in the process of building its proprietary Discovr Radio platform and integrating it into the newly

configured free faidr app.

The Discovr Radio platform, a web-based portal will allow artists and record labels to promote songs on radio

streams, through an integration with faidr.

faidr historically allowed

users to listen to AM/FM radio stations without unwanted commercial breaks.

The app replaces these ad breaks in real time with songs supplied

by Discovr Radio, giving artists exposure on mainstream airwaves.

The faidr app represents the first-time consumers can combine the local

content uniquely provided by AM/FM radio with commercial-free and personalized listening many consumers demand from digital-media consumption

In addition to commercial-free AM/FM, faidr includes podcasts – also with ads removed or easily skipped by listeners – as

well as exclusive content, which includes new artist discovery, curated music stations, and exclusive music podcasts that allow hosts

to play full tracks within the episode.

and preference-based new music discovery.

In addition to commercial-free AM/FM, faidr includes podcasts with its Forward+ ad skipping

technology on iOS.

The combination of AM/FM

streaming and podcasting, with Auddia’s unique, AI technology-driven differentiators, addresses large (radio streamers) and rapidly

growing (podcast listeners) audiences.

streaming and new-music distribution, with Auddia’s unique, AI technology-driven differentiators, addresses large (radio streamers)

and rapidly growing (independent and emerging artists) audiences and customer bases.

We have developed our

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end of each piece of content.

The faidr app is intended

to be downloaded by consumers who are willing to pay for a customizable, commercial-free listening experience.

Our advanced features allow

subscribers to skip any content heard on the station and request audio content on-demand.

We believe the faidr App represents a significant

differentiated audio streaming product, the first to give audio streamers a more personalized middle ground between passive content like

broadcast radio and fully on-demand content like Spotify.

No other audio streaming app available today, including category leaders like

TuneIn, iHeart, and Audacy, can compete with faidr’s full product offerings.

We launched an MVP version of faidr through several

consumer trials in 2021 to measure consumer interest and engagement with the App.

The full app launched on February 15, 2022, and included

all major U.S.

The faidr app with its

advanced features allow users to skip any content heard on the station and request audio content on-demand.

We believe the faidr App represents

a significant differentiated audio streaming product, the first to give audio streamers a more personalized middle ground between passive

content like broadcast radio and fully on-demand content like Spotify.

No other audio streaming app available today, including category

leaders like TuneIn, iHeart, and Audacy, can compete with faidr’s full product offerings.

We launched an MVP version

of faidr through several consumer trials in 2021 to measure consumer interest and engagement with the App.

The full app launched on February

15, 2022, and included all major U.S.

radio stations in the US.

In February 2023, we added faidrRadio, our exclusive content offerings, to the app.

were added to the app for the iOS version before the end of Q1 2023 as planned and added to the Android app in May of 2023.

addition of podcasts, exclusive content, and continued enhancement of its ad-free accuracy and functionality, the faidr app now boast

a strong 30-day retention rate of above 20% and is in the beginning phases of rolling out subscription products to users.

In February 2023, we added faidrRadio, our exclusive content offerings,

Podcasts were added to the app for the iOS version before the end of Q1 2023 and added to the Android app in May of 2023.

The Company initially

launched faidr with a B2C subscription model in February of 2022 and is transitioning to a B2B subscription model.

In August 2025, the Company

announced a new B2B business model with a strategic shift to AI driven music discovery.

Auddia is targeting artists and labels for SaaS

subscription access to ad-free AM/FM streaming listeners on the faidr app, while faidr users will enjoy free access to AI driven ad-free

AM/FM streams on all music stations.

Consumer subscriptions will no longer be required to enjoy faidr’s ad-free and content personalization

listening experience.

New music platforms like

Bandcamp and SoundCloud are integral tools for artists to connect with new fans and even monetize their content, but those platforms only

cater to a subset of the total addressable market for an artist.

The Company believes the largest group of potential fans for most artists

remains on commercial radio, listening to music passively and not searching for new artists even though Company surveys and research indicate

radio listeners are interested in hearing new music when listening to their favorite radio stations.

Auddia’s new Discovr Radio

platform will deliver the experience of passively listening to commercial AM/FM radio streams while passively being exposed to new music

instead of radio ads.

Unlike other new music

discovery platforms, which allow artists to upload songs in the hopes that new listeners will find them among the other songs available,

Discovr Radio delivers guaranteed plays to artists, leveraging AI to place their songs into radio feeds as part of a custom programming

experience and as unique content during what would typically be an ad break.

This gives artists opportunities to be heard by the many

millions of streaming radio listeners worldwide.

The new Discovr Radio

platform will consist of a new AI Placement Engine and Artist Portal.

The AI Placement Engine will aim to put the right new song in front

of the right listener, on the right station, adjacent to the right artist, to optimize music discovery and the connection between artists

The Artist Portal will give artists performance analytics on number of total plays, likes and dislikes, demographic data, and

facilitate the connection of artists to their new fans.

In addition to streaming songs on live radio streams, the Discovr Radio offering

will eventually allow artists and labels to launch campaigns on streaming apps to promote new songs, albums, and tours.

Auddia is evolving its

business model from direct-to-consumer to business-to-business, shifting its focus from individual radio-streaming subscribers to artists

and labels as subscribers.

Through a modest monthly subscription, artist and label customers gain guaranteed radio plays—offering

a new channel for music promotion.

The faidr mobile App

is available today through the iOS and Android App stores.

is available today through the iOS and Android App stores and the MVP version of the Discovr Radio platform was released on January 20,

The MVP is expected to be supported by a pilot program of participating customers.

We have funded our operations

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obtained debt financing through a related party during November 2022 and April 2023, which was subsequently repaid in April 2024.

we sold common shares during 2023 and 2024 pursuant to our equity line facility.

Since our inception, we have incurred significant operating

As of December 31, 2024, we had an accumulated deficit of $89,428,436.

Our ability to generate product revenue sufficient to achieve

profitability will depend heavily on the successful development and commercialization of one or more of our Apps.

We expect that our expenses

and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we:

nationally launch our faidr App and as we continue training our proprietary AI technology and make product enhancements;

continue to develop and expand our technology and functionality to advance the faidr app;

we sold common shares during 2025 and 2024 pursuant to our equity line and at-the-market facilities and issued preferred stock in our

Series B and Series C issuances.

Since our inception, we have incurred significant operating losses.

As of December 31, 2025, we had an

accumulated deficit of $97,283,343.

Our ability to generate product revenue sufficient to achieve profitability will depend heavily on

the successful development and commercialization of one or more of our Apps.

We expect that our expenses and capital requirements will

increase substantially in connection with our ongoing activities, particularly if and as we:

Launch Discovr Radio to artists and labels and market our faidr App to consumers;

continue to develop and expand our technology and functionality to advance the faidr app and Discovr Radio platform;

rollout our product on a national basis, which will include increasing our sales and marketing costs related to the promotion of our products.

faidr promotion will include a combination of a) purchasing ads directly from broadcasters or b) participating broadcasters to promote without purchasing ads, but sharing a portion of subscription proceeds based on listening activity on those stations;

faidr and Discovr Radio promotion will include a combination of a) purchasing ads directly from broadcasters or b) participating broadcasters to promote without purchasing ads, but sharing a portion of subscription proceeds based on listening activity on those stations or c) leveraging all social media outlets;

continue to pursue and complete potential acquisitions of other companies;

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add operational and general administrative personnel which will support our product development programs, commercialization efforts and our transition to operating as a public company.

As a result, we will

need substantial additional funding to support our continuing operations and pursue our growth strategy.

Until such time as we can generate

significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other

capital sources, which may include collaborations with other companies or other strategic transactions.

We may be unable to raise additional

funds or enter into such other agreements or arrangements when needed on favorable terms, or at all.

If we fail to raise capital or enter

into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization

of one or more of our product candidates.

Because of the numerous

risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when

or if we will be able to achieve or maintain profitability.

As a result, we will need substantial additional

funding to support our continuing operations and pursue our growth strategy.

Until such time as we can generate significant revenue from

product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, which

may include collaborations with other companies or other strategic transactions.

We may be unable to raise additional funds or enter into

such other agreements or arrangements when needed on favorable terms, or at all.

If we fail to raise capital or enter into such agreements

as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more

of our product candidates.

Because of the numerous risks and uncertainties

associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able

to achieve or maintain profitability.

Even if we are able to generate product sales, we may not become profitable.

If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations

at planned levels and be forced to reduce or terminate our operations.

As of December 31, 2024,

we had cash of $2,706,319.

We secured approximately $10.9 million in additional financing in 2024 and paid off $2.75 million of Secured

Bridge Notes.

We will need additional funding to complete the development of our full product line and scale products with a demonstrated

If we fail to become

profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels

and be forced to reduce or terminate our operations.

As of December 31, 2025, we had cash and cash

equivalents of $3,186,985.

Through the date of this report, we have secured approximately $0.9 million in additional financing in 2026.

We will need additional funding to complete the development of our full product line and scale products with a demonstrated market fit.

Management has plans to secure such additional funding.

However, if we are unable to raise capital when needed or on acceptable

terms, we would be forced to delay, reduce, or eliminate our technology development and commercialization efforts.

However, if we are unable to raise capital when needed or on acceptable terms,

we would be forced to delay, reduce, or eliminate our technology development and commercialization efforts.

Recent Developments

Mergers and Acquisitions Strategy

We are exploring various merger and acquisition

options as part of a broader strategy which aims to scale the business more rapidly;

accelerate user adoption and subscriber growth;

new markets (international);

Proposed Business Combination

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 (“Thramann Holdings”).

Thramann Holdings is a privately held holding company that controls

LT350, Influence Healthcare, and Voyex, three early stage AI-native companies founded by Jeff Thramann, Auddia’s founder, CEO and

Executive Chairman.

The Company has established a special committee of

independent directors to evaluate the related party transaction.

The special committee has engaged its own counsel and financial advisor.

On February 17, 2026, Auddia, acting upon the recommendation

of its special committee of independent directors, entered into a definitive merger agreement for a business combination between Auddia

and Thramann Holdings.

Upon closing of the proposed transaction, the Company

would be renamed McCarthy Finney and would trade under its new MCFN ticker symbol.

Auddia would become a wholly owned subsidiary of McCarthy

Finney, and each of the three Thramann Holdings entities would also be wholly owned by McCarthy Finney.

Jeff Thramann would remain as

CEO of McCarthy Finney and John Mahoney would remain as CFO.

Auddia’s current board members are expected to continue as members

of the board of the combined company.

Auddia shareholders at the time of closing are expected to own a 20% economic interest of McCarthy

Finney, with an 80% economic interest of the combined company expected to be owned at closing by Jeff Thramann.

Under certain circumstances,

these ownership percentages may be adjusted upward or downward based on the level of Auddia’s cash at closing.

The consideration to be paid to Thramann Holdings

in the proposed transaction will consist of (i) shares of McCarthy Finney convertible preferred stock and (ii) $3.5 million aggregate

principal amount of McCarthy Finney notes with a two year maturity date.

The closing of the merger will be conditioned on Auddia

having at least $12 million cash on hand at closing in order to provide cash runway to fund McCarthy Finney to key future business milestones.

There can be no assurances as to Auddia’s level of cash at closing.

The transaction has been unanimously approved by the

board of directors of both companies.

In connection with the approval of the merger agreement, Houlihan Capital provided a fairness opinion

to Auddia’s special committee and board of directors.

The proposed transaction is expected to close in the

second quarter of 2026, subject to customary closing conditions, including approvals by the Auddia stockholders, the effectiveness of

the S-4 registration statement to be filed with the SEC to register the shares of McCarthy Finney stock to be issued in connection with

the merger, and the continued listing of the combined company’s common stock on Nasdaq.

The proposed business combination is subject to a

number of known and unknown risk and uncertainties.

There can be no assurances that that such business combination will be approved by

stockholders or will ultimately be consummated.

For more information about

the business combination transaction, please see Auddia's Current Report on Form 8-K filed with the SEC on February 17, 2026.

Mergers and Acquisitions

We are exploring various

merger and acquisition options as part of a broader strategy which aims to scale the business more rapidly;

accelerate user adoption and

subscriber growth;

enter new markets (international);

and open new pathways toward raising capital.

The overall strategy focuses on three areas:

(1) acquiring

retained users of a radio-streaming app, (2) bringing our proprietary ad-free products to that userbase to generate significant subscription

revenue, and (3) bringing together other differentiated features into the larger audio Superapp platform.

RFM Acquisition

On January 26, 2024, we entered into a Purchase

Agreement (the “RFM Purchase Agreement”), pursuant to which we agreed to acquire RadioFM (the “RFM Acquisition”),

which is currently a component of both AppSmartz and RadioFM (partnerships under common control).

The aggregate consideration for the

RFM Acquisition is $13,000,000 (plus $2,000,000 in contingent consideration if certain post-close milestones are reached), in addition

to the assumption of certain liabilities, as may be adjusted pursuant to the terms of the RFM Purchase Agreement.

In March 2024, the parties mutually agreed to

terminate the RFM Purchase Agreement.

The overall strategy focuses on three

(1) acquiring retained customers of the Discovr Radio platform to generate significant subscription revenue, (2) acquiring retained

users of faidr to supply the audience to Discovr Radio customers (3) scaling the faidr userbase and the Discovr Radio customer base once

we’ve achieved product-market fit.

Nasdaq Deficiency Notices

During 2022, 2023 and 2024, the Company received

notices from Nasdaq indicating that the Company was not in compliance with (i) Nasdaq Listing Rule 5550(b)(1), which requires companies

listed on The Nasdaq Stock Market to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing or (ii) Nasdaq

Listing Rule 5550(a)(2) which requires companies listed on The Nasdaq Stock Market to maintain a minimum of a $1.00 bid price for continued

During 2022, 2023 and

2024, the Company received notices from Nasdaq indicating that the Company was not in compliance with (i) Nasdaq Listing Rule 5550(b)(1),

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

listing or (ii) Nasdaq Listing Rule 5550(a)(2) which requires companies listed on The Nasdaq Stock Market to maintain a minimum of a $1.00

bid price for continued listing.

On May 24, 2024, we received

a letter from Nasdaq indicating that we had regained compliance with the equity requirement in Listing rule 5550(b) (1) (the Equity Rule”.)

We 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).

a letter from Nasdaq indicating that we had regained compliance with the equity requirement in Listing Rule 5550(b) (1).

We 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).

On October 16, 2024,

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matter will be closed.

Reverse Share 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

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.

The reverse stock split 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 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.

On April 14, 2025, Nasdaq

notified us that we were in compliance with the $1.00 minimum bid price requirement.

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 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.

Impact of Inflation

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Our sales and marketing

expenses consist primarily of salaries, direct to consumer promotional spend and consulting services, all of which are related to the

sales and promotion performed during the period.

We expect our sales and marketing expenses to fluctuate period by period as we release

new upgrades and enhancements within our Apps and look to generate revenue through customer acquisition, retention, and subscription conversion.

expenses consist primarily of salaries, direct to consumer (users for faidr and Discovr Radio) promotional spend and consulting services,

all of which are related to the sales and promotion performed during the period.

We expect our sales and marketing expenses to fluctuate

period by period as we release new upgrades and enhancements within our Apps and look to generate revenue through customer acquisition,

retention, and subscriptions.

Research and development

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We expect to continue to incur research and development expenses and capitalization in the future as we continue to

develop and enhance our faidr and podcasting Apps.

develop and enhance faidr and develop the Discovr Radio platform.

General and administrative

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liability insurance premiums and investor relations activities.

Restructuring Costs

Our restructuring costs

consist primarily of employee severance and related benefits, contract termination fees, and other costs incurred in connection with actions

taken to streamline operations and align our cost structure with current business priorities.

During the year ended December 31, 2025,

we implemented a restructuring plan that included workforce reductions and the termination of certain consulting arrangements.

Additionally,

we incurred legal and financial related costs in connection with the proposed business combination during the year ended December 31,

Other income and expense

The other income and

expense category primarily consists of interest expense attributed to the debt and conversion features of the Notes payable to related

expense category primarily consists of interest income on our money market account and interest expense attributed to the debt and conversion

features of the Notes payable to related party.

Results of operations

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of operations:

Year Ended December 31,

For the Year Ended December 31,

Operating expenses:

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General and administrative

Restructuring

Depreciation and amortization

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Total revenues for the

years ended December 31, 2024 and 2023 were $0 as we continue to develop and enhance our faidr and podcasting Apps to establish new revenue

years ended December 31, 2025 and 2024 were $0 as we continue to develop and enhance our faidr App and build out our Discovr Radio artist

portal to establish new revenue streams.

Direct Cost of

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increased by $18,722 or 9.2% to $221,672 for the year ended December 31, 2025, compared to $202,950 for the year ended December 31, 2024

This remained relatively flat due to ongoing cost of services to maintain the faidr app.

due to increased music licensing costs.

Sales and marketing

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decreased by $31,262 or 3.6% to $829,415 for the year ended December 31, 2025 compared to $860,677 for the year ended December 31, 2024.

The decrease in sales and marketing expenses as of December 31, 2024 compared to December 31, 2023 was primarily attributed to reduced

marketing promotion costs.

We expect our sales and marketing expenses to fluctuate period by period as we release new upgrades and enhancements

within our apps and look to generate revenue through customer acquisition, retention, and subscription conversion.

The decrease in sales and marketing expenses was primarily attributed to a decrease in marketing promotion costs as we are focus on building

out our new Discovr Radio artist portal.

Research and development

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expenses increased by $124,969 or 12.2% to $1,145,578 for the year ended December 31, 2025 from $1,020,609 for the year ended December

31, 2023 primarily due to a reduction in the level of capitalized software expenses.

We are continually

developing enhancements to both our faidr and podcasting Apps and will continue capitalize software costs to the extent that such development

qualifies for capitalization.

31, 2024 primarily due to an increase in research and development consulting fees incurred and lower amount capitalized as a result of

IT staff restructuring.

We continue to develop enhancements to our faidr App and build out our Discovr Radio artist portal and will continue

capitalize software costs to the extent that such development qualifies for capitalization.

General and administrative

expenses increased by $268,572 or 7.5% to $3,845,302 for the year ended December 31, 2024 compared to $3,576,729 for the year ended December

The increase resulted primarily from an increase in professional fees, such as, accounting and legal expenses.

expenses decreased by $1,052,416 or 27.4% to $2,792,886 for the year ended December 31, 2025 compared to $3,845,302 for the year ended

December 31, 2024.

The decrease resulted primarily from a decrease in stock based compensation and professional fees, such as, accounting,

audit and legal expenses associated with acquisition target evaluations in 2024.

Restructuring

Restructuring expenses increased by $1,150,139

or 100% for the year ended December 31, 2025 compared to $0 for the year ended December 31, 2024.

The increase reflects one-time costs

of $334,360 associated with changes to our IT organization, including payroll and benefits, severance, and the transition to an outsourced

Restructuring expenses also include $815,779 in certain costs incurred in connection with the proposed business combination.

Depreciation and amortization

expenses increased by $146,764 or 8.0% to $1,987,601 for the year ended December 31, 2024 compared to $1,840,837 for the year ended December

The increase is entirely related to the increased amortization of our faidr and podcasting Apps.

Other expense,

Total other expenses

decreased by $526,228 or (39.5%) from $1,331,128 for the year ended December 31, 2023 to $804,900 for the year ended December 31, 2024.

Interest expense decreased by $172,512 due to the repayment of notes payable to related party in April 2024.

expenses decreased by $429,685 or 21.6% to $1,557,916 for the year ended December 31, 2025 compared to $1,987,601 for the year ended December

Capitalized software costs have decreased as a result of previously capitalized software development costs that have been fully

Other income/(expense),

Total other income/(expenses) decreased by $809,309 or 100.5% to $4,409

for the year ended December 31, 2025 compared to $804,900 for the year ended December 31, 2024, which was due to the change in fair value

of warrants issued in connection with the repayment of notes payable to related party in April 2024.

Since our inception in

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value, which is zero based on our operating history.

The Company has significant

federal and state net operating loss carryforwards (“NOLs”).

The proposed merger with Thramann Holdings is expected to result

in an ownership change under Internal Revenue Code Section 382.

An ownership change would subject the Company’s NOLs to an annual

limitation based on the fair market value of the Company immediately prior to the ownership change multiplied by the applicable long-term

tax-exempt rate.

As a result, a substantial portion of the Company’s NOLs may not be available to offset future taxable income.

Because the Company maintains

a full valuation allowance against its deferred tax assets, any such limitation would not impact the Company’s financial statements.

The Company will continue to evaluate the potential impact of Section 382 limitations in future periods.

Going Concern

Our existing cash was $3,186,985 at December 31,

We secured approximately $10.9 million in additional financing in 2024 and $0.6 million year-to-date through March 5,

2025, which enabled us to pay down $2.75 million in connection with the Secured Bridge Notes in 2024 and will only be sufficient

to fund our current operating plans into the second quarter of 2025.

We will need additional funding to complete the development of our

full product line and scale products with a demonstrated market fit.

Management has plans to secure such additional funding.

unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce, or eliminate our technology development

and commercialization efforts.

We secured approximately $7.1 million in additional financing in 2025 and $0.9 million year-to-date through March 4, 2026, which

will only be sufficient to fund our current operating plans into the second quarter of 2026.

We will need additional funding to complete

the development of our full product line and scale products with a demonstrated market fit.

Management has plans to secure such additional

If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce, or eliminate our technology

development and commercialization efforts.

As a result of the Company’s

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Sources of liquidity

We have incurred

operating losses since our inception and have an accumulated deficit as a result of ongoing efforts to develop and commercialize our

faidr and podcasting Apps.

We have incurred operating

losses since our inception and have an accumulated deficit as a result of ongoing efforts to develop and commercialize our faidr and podcasting

As of December 31, 2025, we had cash and cash equivalents of $3,186,985.

We have working capital in the

amount of approximately $2.2 million as of December 31, 2024.

We anticipate that operating losses and net cash used in operating

activities will increase over the next 12 months as we continue to develop and market our products.

We secured $10.9 million of

additional financing in 2024, which enabled us to pay down $2.75 million in connection with the Secured Bridge Notes and will only

be sufficient to fund our current operating plans into the second quarter of 2025.

The Company has based these estimates, however,

on assumptions that may prove to be wrong.

We will need additional funding to complete the development of our full product line and

scale products with a demonstrated market fit.

Management has plans to secure such additional funding.

If we are unable to raise

capital when needed or on acceptable terms, we would be forced to delay, reduce, or eliminate our technology development and

commercialization efforts.

Interim Bridge Financings

As previously disclosed,

on November 14, 2022, we entered into a Secured Bridge Note (“Prior Note”) financing with one of our accredited investors,

a significant existing shareholder of the Company.

We received $2,000,000 of gross proceeds from the Prior Note financing.

On April 17, 2023, we

entered into an additional Secured Bridge Note (“New Note”) financing with the same accredited investor from the Prior Note

We received $750,000 of gross proceeds from the New Note financing.

The New Note was issued with a principal amount of $825,000,

10% interest rate and a maturity date on July 31, 2023.

The New Note is secured by a lien on substantially all of our assets.

of the New Note, the accredited investor, or our lender, has the option to convert any original issue discount and accrued but unpaid

interest into shares of our common stock at a fixed conversion price of $15.25 per share.

In connection with the

New Note financing, we issued 26,000 common stock warrants to the accredited investor with a five-year term and a fixed $15.25 per share

exercise price, from which 13,000 of these common stock warrants are exercisable immediately.

The remaining 13,000 common stock warrants

would only become exercisable if the maturity date of the New Note is extended in accordance with the terms of the New Note.

31, 2023, we extended the maturity date of the New Note to November 30, 2023.

Upon the July 31, 2023 extension, the interest rate on the

New Note increased to 20% from 10%, and the remaining portion of the 13,000 common stock warrants became exercisable.

As of November 30,

2023, we extended the maturity date of the Prior Note and New Note to March 31, 2024.

All terms of the Prior Note and New Note, such as

interest rate and exercisable common stock warrants remained the same.

Further, in connection

with the New Note financing, the parties agreed to make certain amendments to the Prior Note financing.

Specifically, the parties agreed

to cancel the 12,000 common stock warrants issued as part of the prior financing and, in lieu of the cancelled warrants, issued the investor

common stock warrants for 24,000 common shares with an exercise price of $15.25 per common share and a five-year term.

From the newly

issued 24,000 common stock warrants, 12,000 common stock warrants were exercisable immediately, while the other 12,000 common stock warrants

became exercisable at the time of extension of the maturity date of the Prior Note during May of 2023.

In order for the accredited

investor to receive common shares from a conversion or exercise of the common stock warrants, an approval is required from the shareholders,

if the number of common shares to be issued to the accredited investor, when aggregated with all other shares of common stock beneficially

or deemed beneficially owned by the accredited investor would (i) result in the investor owning more than the Beneficial Ownership Limitation

(as defined below), as determined in accordance with Section 13 of the Securities Exchange Act of 1934 or (ii) otherwise constitute a

Change of Control within the meaning of Nasdaq Rule 5635(b).

The “Beneficial Ownership Limitation” shall be 19.99% of the

number of shares of the common stock outstanding immediately prior to the proposed issuance of shares of common stock.

On April 9, 2024, we

entered into an Amendment and Waiver Agreement with the Investor relating to the Bridge Notes.

We 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 of one or more equity financings with total gross proceeds to us of not less than $6,000,000.

On April 26, 2024, we

repaid $2.75 million of principal on our Secured Bridge Notes.

Effective April 9, 2024,

the Investor converted $911,384, which is equal to the (i) unpaid accrued interest on the Bridge Notes plus (ii) the OID on the Bridge

Notes, into equity securities.

The Rollover Securities

consist of (i) 463,337 Prefunded Warrants with a per share exercise price of $0.001 per share and (ii) 463,337 Non-Prefunded Warrants

with an initial per share exercise price equal to $1.967.

The per share exercise price has been adjusted to $0.4930.

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.

100% warrant coverage).

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

downward in the event that we issue equity securities in the future at an effective per share price below the then current exercise price.

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.

We issued to the Investor

50,000 Fee Warrants with a five-year term as a loan extension fee.

The exercise price of these additional Fee Warrants was initially $1.967.

The Fee Warrants have a price adjustment provision which will adjust the exercise price downward in the event that we issue equity securities

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

The per share exercise price has been adjusted to

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

the date of issue.

We 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 per share,

and further to $0.4930.

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 our 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).

Equity Line Sales

of Common Stock

We have working capital in the amount of approximately

$2.4 million as of December 31, 2025.

We anticipate that operating losses and net cash used in operating activities will increase over

the next 12 months as we continue to develop and market our products.

We secured approximately $7.1 million in additional financing in

2025 and $0.9 million year-to-date through March 4, 2026, which will only be sufficient to fund our current operating plans into the

second quarter of 2026.

The Company has based these estimates, however, on assumptions that may prove to be wrong.

We will need additional

funding to complete the development of our full product line and scale products with a demonstrated market fit.

Management has plans to

secure such additional funding.

If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce,

or eliminate our technology development and commercialization efforts.

Equity Line Common

Stock Purchase Agreement

On November 25, 2024,

we 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.

On April 17, 2023 and

April 20, 2023, we closed on two sales of Common Stock under the White Lion Purchase Agreement.

We issued an aggregate of 78,489 common

shares and received aggregate proceeds of approximately $1.12 million.

Replacement Equity

Line with White Lion

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

the new Common Stock Purchase Agreement, we have 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 our 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.

Through December 31, 2024, we have sold

4,815,263 shares to White Lion for total proceeds of $8,176,048.

This Common Stock Purchase Agreement expired on December 31, 2024.

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

Pursuant to the new Common Stock Purchase Agreement, we have the right, but not the obligation to require White Lion to purchase, from

time to time until December 31, 2025, up to $10,000,000 in aggregate gross purchase price of newly issued shares of our common stock,

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

have effective registration statements that registers for resale by White Lion up to 20,000,000 shares of common stock that we may issue

to White Lion under the New Equity Line Purchase Agreement.

As of March 5, no

shares have been issued under this agreement.

After White Lion has acquired shares under the Equity Line Purchase Agreement, it may sell

all, some or none of those shares.

Sales to White Lion by us pursuant to the Equity Line Purchase Agreement may result in substantial

dilution to the interests of other holders of our common stock.

to the Common Stock Purchase Agreement, we have 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 our common stock, subject to certain limitations and conditions

set forth in the Common Stock Purchase Agreement.

On July 30, 2025, we amended the equity line Common Stock Purchase Agreement from $10,000,000

to $50,000,000 and extended the commitment to December 31, 2027.

In April 2025, we issued

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

In July and August 2025,

we issued 970,000 shares of Common stock under the Equity Line Common Stock Purchase Agreement for total proceeds of $3.6 million.

At-the-Market Sales

During the year ended December 31, 2025, we issued

1,007,761 shares for aggregate proceeds of approximately $2.7 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, we may sell shares

of our 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”).

Subsequent to December 31, 2025, and as of the date of this filing, we have sold 754,925 shares under

the Sales Agreement for proceeds of $0.9 million and currently have $0.0 million of unsold availability under the ATM facility.

Series C Preferred

Stock and Warrants Financing

On June 30, 2025, we entered into a Securities

Purchase Agreement with accredited investors for a convertible preferred stock and warrants financing.

We received $750,000 of gross proceeds

in connection with the closing of this financing.

At the closing, we 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.

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.

We 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 was subsequently adjusted to $1.1815.

Cash Flow Analysis

12 unchanged sentences

Operating activities

$ (5,633,393 )

$ (5,093,143 )

Investing activities

2 unchanged sentences

Operating Activities

Cash used in operating activities

for the year ended December 31, 2025 was $5,633,393, primarily resulting from our net loss of $7,693,197, offset by $1,796,648 of non-cash

charges related to depreciation and amortization, share-based compensation expense, amortization of ROU asset and lost on disposal of

The net loss was further impacted by a change in working capital of $263,156.

Cash used in operating activities for both periods

consisted of personnel-related expenditures, marketing and promotion costs, and public company administrative support costs such as legal

and other professional support services.

Cash used in operating

6 unchanged sentences

costs such as legal and other professional support services.

Cash used in operating

activities for the year ended December 31, 2023, was $4,504,207, primarily resulting from our net loss of $8,807,496 and change in working

capital of $554,983 related to an increase in accounts payable and accrued liabilities, offset by non-cash charges of $3,748,306 related

to depreciation and amortization, share based compensation expense, and finance charges associated with the debt issuance costs of the

Secured Bridge Notes.

Cash used in operating activities for both periods consisted of personnel-related expenditures, marketing and promotion

costs, and public company administrative support costs such as legal and other professional support services.

Investing Activities

3 unchanged sentences

Financing Activities

Cash flows generated in financing

activities for the year ended December 31, 2025 was $6,991,777 and related primarily to cash proceeds from the issuance of preferred and

common shares of $7,127,014.

Cash flows generated

1 unchanged sentence

preferred and common shares of $10,959,602 and repayment of notes payable of $2,750,000.

Cash flows generated

in financing activities for the year ended December 31, 2023 was $4,678,895 and related primarily to cash proceeds from the issuance of

common shares of $4,016,523 and proceeds from related party debt of $750,000.

Funding Requirements

5 unchanged sentences

Our cash is comprised primarily of demand deposit accounts and money market funds.

$10.9 million of additional financing in 2024, which enabled us to pay down $2.75 million in connection with the Secured Bridge Notes

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

We will need additional funding to complete

the development of our full product line and scale products with a demonstrated market fit.

Management has plans to secure such additional

If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce, or eliminate our technology

development and commercialization efforts.

$7.1 million of additional financing in 2025 and $0.9 million year-to-date through March 4, 2026, which will only be sufficient to fund

our current operating plans into the second quarter of 2026.

We will need additional funding to complete the development of our full product

line and scale products with a demonstrated market fit.

Management has plans to secure such additional funding.

If we are unable to raise

capital when needed or on acceptable terms, we would be forced to delay, reduce, or eliminate our technology development and commercialization

We expect our expenses to increase in connection

59 unchanged sentences

grant occurred and prior fiscal years for a period equal to the expected life of the option.

risk-free interest rate was the rate available with a term equal to the expected life of the option.

The expected life of

the option was estimated based on a mid-point method calculation.

The risk-free interest rate was the rate

available with a term equal to the expected life of the option.

The expected life of the option was estimated based on a mid-point method

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-K

Item 7. Management’s Discussion and Analysis