What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-06 compared with 2025-03-05 · 400 added, 323 removed, 519 unchanged (58% of the section changed)

8 unchanged sentences

Notes to Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and

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Accounts payable and accrued liabilities

Notes payable to related party, net of debt issuance costs

Notes payable

Current portion of operating lease liability

6 unchanged sentences

Series B Preferred stock - $ 0.001 par value, 0 and 2,314 shares issued and outstanding as of December 31, 2025 and 2024, respectively

Common stock - $ 0.001

par value, 100,000,000

authorized and 6,761,427

shares issued and outstanding as of December 31, 2024 and 2023, respectively (1)

Series C Preferred stock - $ 0.001 par value, 750 and 0 shares issued and outstanding as of December 31, 2025 and 2024, respectively

Common stock - $ 0.001 par value, 100,000,000 authorized and 3,101,423 and 397,731 shares issued and outstanding as of December 31, 2025 and 2024, respectively (1)

Additional paid-in capital

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Total liabilities and shareholders' equity

Company’s common stock outstanding as of December 31, 2023 has been retroactively restated for the effect of the 25-for-1

reverse stock split effective February 26, 2024.

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.

See Accompanying Notes to Financial Statements.

6 unchanged sentences

General and administrative

Restructuring

Depreciation and amortization

3 unchanged sentences

( 7,917,139 )

Other expense:

Other income/(expense):

Interest expense

( 1,331,128 )

Change in fair value of warrants

Total other expense

( 1,331,128 )

Total other income/(expense)

Loss before income taxes

8 unchanged sentences

Basic and diluted

Company’s weighted average common shares outstanding for the year ended December 31, 2023 have been retroactively restated for

the effect of the 25-for-1 reverse stock split effective February 26, 2024.

The Company’s weighted average common shares outstanding for the year ended December 31, 2024 have been retroactively restated for the effect of the 1-for-17 reverse stock split effective March 28, 2025.

See Accompanying Notes to Financial Statements.

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Series B Preferred Stock

Series C Preferred Stock

Number of Shares

Paid-In Capital

3 unchanged sentences

Offering costs

Preferred stock converted to common stock

Share-based compensation

Issuance of Series B preferred stock and warrants

Conversion of debt to equity

Issuance of restricted stock units

Capitalized dividends converted to common stock

Capitalized dividends

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

Warrant exercises

RSS adjustment

( 7,693,197 )

2 unchanged sentences

$ 101,515,735

$ ( 97,283,343 )

Series B Preferred Stock

Series C Preferred Stock

Paid-In Capital

2 unchanged sentences

Issuance of common shares, net of costs

Adjustments related to reverse stock split

Exercise of restricted stock units

Issuance of warrants

Offering costs

Share-based compensation

Revaluation of share-based compensation liability

Cancelled shares

Issuance of Series B preferred stock and warrants

Conversion of debt to equity

Issuance of restricted stock units

Capitalized dividends

( 8,722,039 )

2 unchanged sentences

$ ( 89,428,436 )

The Company’s

changes in stockholders’ equity for the year ended December 31, 2023 has been retroactively restated for the effect of the

25-for-1 reverse stock split effective February 26, 2024.

The Company’s changes in stockholders’ equity for the year ended December 31, 2024 has been retroactively restated for the effect of the 1-for-17 reverse stock split effective March 28, 2025.

See Accompanying Notes to Financial Statements.

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

Finance charge associated with debt issuance cost

Depreciation and amortization

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Amortization of ROU asset

Loss on disposal of asset

Change in assets and liabilities:

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Software capitalization

( 1,029,157 )

Intangibles capitalization

Net cash used in investing activities

( 1,004,345 )

( 1,031,566 )

Cash flows from financing activities:

Offering costs in connection with the issuance of preferred shares

Offering costs

Proceeds from note payable

Net settlement of share-based compensation liability

Proceeds from related party debt, net of original issue discount

Repayments of related party debt

1 unchanged sentence

Proceeds from issuance of preferred shares, net of issuance costs

Net settlement related to restricted stock units

Proceeds from issuance of common shares, net of issuance costs

Net settlement related to restricted stock units

Warrant exercises

Net cash provided by financing activities

Net decrease in cash

Net increase in cash

Cash, beginning of year

5 unchanged sentences

Reclassification of deferred offering costs

Issuance of warrants in connection with related party debt

Capitalized dividends

Original issue discount and issuance of warrants on related party debt

Issuance of warrants in connection with related party notes

Right of use asset and assumption of operating lease liability

Dividends and preferred stock converted to common stock

See Accompanying Notes to Financial Statements.

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For the Years Ended December 31, 2025 and 2024

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

Reverse Stock Splits

On February 27, 2024, the Company effectuated

a 1-for-25 reverse stock split .

On March 28, 2025, the Company effectuated a 1-for-17

reverse stock split .

The 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 will not change the authorized

The reverse stock splits did not change the authorized

number of shares of the Company’s common stock.

No fractional shares will be issued and any fractional shares resulting from the

reverse stock split will be rounded up to the nearest whole share.

Therefore, stockholders with less than 25 shares will receive one share

The reverse stock split will apply to the Company’s

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 will be adjusted proportionately as a result of the reverse stock split.

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 will also be proportionately adjusted in accordance with the terms of those securities and the Company’s

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

equity incentive plans.

As a result of the reverse stock splits, unless

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

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

In addition, any fractional

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

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

for all periods presented to reflect the reverse stock splits.

Use of Estimates

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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

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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Software development costs of $ 852,171 and $ 992,147 were capitalized for the years ended December 31, 2025 and 2024, respectively.

Amortization of capitalized software development costs were $ 2,031,852 and $ 1,815,447 for the years ended December 31, 2024 and 2023,

respectively, and are included in depreciation and amortization expense.

of capitalized software development costs were $ 1,551,845 and $ 2,031,852 for the years ended December 31, 2025 and 2024, respectively,

and are included in depreciation and amortization expense.

Long-Lived Assets

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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

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

to a customer.

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;

(4) Allocate the transaction price to

performance obligations in the contract;

(4) Allocate the transaction price to performance obligations

in the contract;

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

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

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

Collected taxes, if applicable,

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

The Company will report revenues

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

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

Collected taxes, if applicable, will be recorded within

other current liabilities until remitted to the relevant taxing authority.

Subscriber revenue will consist primarily of subscription

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and can be consumed by customers at any time.

There is no revenue recognized for unpaid trial subscriptions.

Customers may pay for the services in advance

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Net Loss per Share

Basic loss per share common share is calculated

Basic loss per common share is calculated

based on the weighted-average number of common shares outstanding in accordance with FASB ASC Topic 260, Earnings per Share .

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Liquidity, Capital Resources and Going Concern

The Company had cash and cash equivalents of $ 2,706,319

as of December 31, 2024.

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

with a demonstrated market fit.

The Company raised an additional $ 10.9 million during 2024 and paid down $ 2.75 million in Secured Bridge

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

Management has plans to secure such

additional funding.

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

reduce, or eliminate technology development and commercialization efforts.

As of December 31, 2025, the Company had

cash and cash equivalents of $ 3,186,985 .

The Company will require additional funding to complete development of its full product line and to scale products that have

demonstrated market fit.

During 2025, the Company raised $ 7.1

million in additional capital.

Subsequent to year-end, the Company raised an additional $ 0.9

million through March 4, 2026.

These proceeds are expected to fund operations only into the second quarter of 2026.

In February 2026, the Company entered into a merger

agreement with Thramann Holdings, pursuant to which Thramann Holdings will become part of the combined company following the closing of

the transaction.

While the merger is expected to strengthen the Company’s long-term strategic and operational position, the transaction

is not expected to provide sufficient near-term liquidity to fund the Company’s operating requirements for the twelve months following

the issuance of these financial statements.

The Company will continue to require additional capital prior to and following the merger

closing to support ongoing operations and product development.

Management is actively pursuing additional financing

arrangements to address these liquidity needs.

If the Company is unable to raise capital when required or on acceptable terms, it may

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

As a result of the Company’s recurring losses

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

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

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

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

such as the White Lion equity line of credit and additional future financing agreements.

However, management cannot provide any assurances

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

These financial statements do not include any adjustments related

to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the

Company be unable to continue as a going concern.

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

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 second quarter of 2025.

from operations and the need for additional financing to fund its operating and capital requirements, substantial doubt exists regarding

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

plans to mitigate these conditions include the potential use of the White Lion equity line of credit, additional future financing agreements,

and the anticipated strategic benefits of the merger with Thramann Holdings.

However, there can be no assurance that these plans will

be successful.

These financial statements do not include any adjustments

relating to the recoverability or classification of assets or the amounts and classification of liabilities that may be necessary if the

Company is unable to continue as a going concern.

Based on current projections, the Company’s existing cash resources are expected

to be depleted during the second quarter of 2026, and additional capital will be required to execute the business plan.

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 may 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 for complying with certain new or revised accounting

standards that have different effective dates for public and private companies.

We are an “emerging growth company” as

defined in the Jumpstart Our Business Startups Act of 2012.

We will remain an emerging growth company until the earlier of:

day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which we have total annual gross revenue

of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock

that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, and (ii) the date on which we have issued more than $1.0

billion in non-convertible debt during the prior three-year period.

Based on these criteria, the Company’s emerging

growth company status is currently expected to expire on December 31, 2026 , unless it earlier meets one of the disqualifying conditions

described above.

Note 2 – Property & Equipment,

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$ 5,108 and $ 18,016 for the years ended December 31, 2025 and 2024, respectively, related to property and equipment, amortization expense

of $ 531 and $ 0 for the years ended December 31, 2024 and 2023, respectively, related to intangible assets, and amortization expense of

$ 2,031,852 and $ 1,815,447 for the years ended December 31, 2024 and 2023, respectively, related to software development costs.

of $ 963 and $ 531 for the years ended December 31, 2025 and 2024, respectively, related to intangible assets, and amortization expense

of $ 1,551,845 and $ 2,031,852 for the years ended December 31, 2025 and 2024, respectively, related to software development costs.

Note 3 – Accounts Payable and Accrued

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Credit cards payable

Accrued interest

Total accounts payable and accrued liabilities

Note 4 – Notes Payable to Related

Party, net of debt issuance costs

During November 2022,

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

of the Company.

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

The Prior Note

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

The Prior Note is secured by a lien

on substantially all of the Company’s assets.

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

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

The conversion

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

The embedded conversion option

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

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

In the event of an extension, the Company

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

In connection with the

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

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

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

During April 2023, the

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

existing shareholder.

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

The New Note bore

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

The New Note is secured by a lien on substantially

all of the Company’s assets.

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

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

The conversion option was available

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

The embedded conversion option was not accounted for

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

In connection with the

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

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

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

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

During April 2023, the

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

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

of $ 35,981 .

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

at an exercise price of $ 52.50 per share.

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

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

The issued common stock warrants

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

In May of 2023, the Company

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

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

The additional common stock warrants were valued

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

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

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

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

warrants became vested and exercisable.

On July 31, 2023, the

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

In connection with such extension, 13,000 outstanding unvested

common stock warrants became vested and exercisable.

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

As of December 31, 2024 and 2023, the balance

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

Interest expense related to the Prior Note, including

interest incurred, amortization of the debt discount, and the warrant amortization for the years ended December 31, 2024 and 2023 was

$ 121,000 and $ 868,084 , respectively.

As of December 31, 2024 and 2023, the balance of the New Note issued in April 2023, net of debt issuance

costs, was $ 0 and $ 825,000 respectively.

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

discount, and the warrant amortization for the years ended December 31, 2024 and 2023 was $ 45,205 and $ 401,441 .

Note 4 – Notes Payable

The Company originally issued a secured bridge

note in November 2022 with a principal amount of $ 2.2

million , including a $ 200,000

original issue discount, bearing interest at 10% and secured by substantially all of the Company’s assets.

In connection with this

financing, the Company issued 12,000 common stock warrants and provided the lender with a conversion option for the original issue discount

and accrued interest at fixed prices.

In April 2023, the Company entered into an additional secured bridge note with the same investor

for $ 825,000 ,

including a $ 75,000

original issue discount, and issued 26,000 additional warrants.

During April and May 2023, the Company modified the terms of the Prior

Note, cancelled and replaced the original warrants, and extended the maturity date, resulting in the issuance and vesting of additional

warrants and the recognition of incremental debt discount.

In July 2023, the Company extended the maturity date of the New Note, which

resulted in the vesting of previously unvested warrants.

All warrants issued in connection with these financings were classified in equity

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

On April 9, 2024, the

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

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

The Company agreed to

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

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

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On April 26, 2024, the

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

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

Effective April 9, 2024,

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

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

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

Securities”).

Securities consist of (i) 463,337

prefunded common stock warrants with a per share exercise price of $ 0.001 per share (the “Prefunded Warrants”) and (ii)

463,337 non-prefunded warrants (the “Non-Prefunded Warrants”) with an initial per share exercise price equal to $ 1.967 .

The per share 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.

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 current per share exercise price equal to $1.1815.

The number of Non-Prefunded

Warrants was determined by dividing the Rollover Amount by $33.44 (the original exercise price).

The number of Non-Prefunded Warrants

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

100% warrant coverage).

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

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

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

The Non-Prefunded Warrants have a price adjustment provision

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

share price below the then current exercise price.

The original exercise price of $33.44 has been subsequently adjusted to $1.1815.

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

the date of issue.

The Company issued to

the holder 2,942 new common stock warrants with a five-year term as a loan extension fee (“Fee Warrants”).

The Fee Warrants

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

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

The original exercise price of $33.44 has been subsequently

adjusted to $1.1815.

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

following the date of issue.

The Company issued

to the Investor 50,000

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

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 the Company

issues 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 $ 0.4930 .

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

exercisable for six months following the date of issue.

The Non-Prefunded Warrants

and Fee Warrants had a total valuation of $ 811,402 and the Prefunded Warrants had a valuation of $ 732,370 .

and Fee Warrants had a total valuation of $ 811,402

and the Prefunded Warrants had a valuation of $ 732,370 .

As a result, the Company recorded $ 911,384

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

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

All Warrants were classified

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

The Company agreed to

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

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 the Company’s outstanding number of shares at a discount to the applicable Nasdaq

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

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

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.

On June 20, 2025, the Company entered into a promissory

note to finance its directors and officers (“D&O”) insurance premium.

The original principal amount of the note was $ 151,300

and bears interest at a fixed annual rate of 8.250 %.

The note requires monthly payments of principal and interest and matures on May 20,

As of December 31, 2025, the outstanding principal

balance was $ 60,520 .

The note is unsecured and contains no financial covenants.

Note 5 – Commitments and Contingencies

6 unchanged sentences

as part of general and administrative expenses in the statements of operations, was $ 81,344 and $ 85,842 for the years ended December 31,

2024 and 2023, respectively, which consisted of the new operating lease and a temporary month-to-month lease the Company entered into

until a long-term space was identified.

2025 and 2024, respectively.

In the normal course of business, the Company

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

Expected volatilities and based

Expected volatilities are based

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

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Expected life in years

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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Outstanding - December 31, 2025

The following table presents the composition

of options outstanding and exercisable:

The following table presents the composition of

options outstanding and exercisable:

Schedule of options outstanding and exercisable

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

The Company’s options summarized above have been retroactively restated for the effect of the 25-for-1 reverse stock split.

The Company’s options summarized above have been retroactively restated for the effect of the 1-for-25 reverse stock split in 2024 and 1-for 17 reverse stock split in 2025.

Restricted Stock Units

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Outstanding - December 31, 2025

The Company recognized share-based compensation

expense related to stock options and restricted stock units of $ 736,797 and $ 1,025,420

for the years ended December 31, 2024 and 2023, respectively.

recognized share-based compensation expense related to stock options and restricted stock units of $ 207,667

and $ 736,797 for the

years ended December 31, 2025 and 2024, respectively.

The remaining unvested share-based compensation expense of $ 169,580

is expected to be recognized over the next 36 months.

Note 7 – Equity Financings

Equity Line Sales

of Common Stock

7 – Equity Financings

Equity Line Common

Stock Purchase Agreement

On November 25, 2024,

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

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

In April and June 2023,

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

As a result, the Company issued an aggregate

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

Any proceeds that the

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

The White Lion Common Stock Purchase

Agreement prohibits the Company from issuing and selling any shares of common stock to White Lion to the extent such shares, when

aggregated with all other shares of our common stock then beneficially owned by White Lion, would cause White Lion’s

beneficial ownership of common stock to exceed 9.99% (the “Beneficial Ownership Cap”).

The Company recognized all offering costs related

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

Replacement Equity

Line with White Lion

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

Pursuant to the new Common Stock Purchase Agreeme nt, the Company has the right, but not the obligation to require White Lion to

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

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

In connection

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

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 and extended the commitment to December 31, 2027 .

During the year ended

December 31, 2024, the Company closed on several sales of Common Stock under the White Lion Purchase Agreement.

As a result, the Company

issued an aggregate of 4,815,263

common shares and received aggregate proceeds of approximately $ 8.2

Common Stock Purchase

On November 25, 2024,

the Company entered into a common stock purchase agreement (the “Common Stock Purchase Agreement”) and a related registration

rights agreement (the “White Lion RRA”) with White Lion.

Pursuant to the Common Stock Purchase Agreement, the Company has

the right, but not the obligation to require White Lion to purchase, from time to time, up to $10,000,000 in aggregate gross purchase

price of newly issued shares of the Company’s common stock, subject to certain limitations and conditions set forth in the Common

Stock Purchase Agreement.

At-the-Market

Sales Agreement

During the year ended December 31, 2024, the

Company issued 1,317,464

shares for aggregate proceeds of approximately $ 0.7

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

LLC, as sales agent (the “Agent”).

Under the Sales Agreement, the Company may sell

shares of its common stock having an aggregate offering price of up to $10,000,000 from time to time, through an “at the market

offering” (the “ATM Offering”).

The aggregate market value of shares that the Company can sell under the Sales Agreement

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

December 31, 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 year

ended December 31, 2025, the Company issued 1,007,761 shares for aggregate proceeds of approximately $ 2.8 million pursuant to an

At-the-Market Issuance Sales Agreement (the “Sales Agreement”) with Ascendiant Capital Markets, LLC, as sales agent (the

Under the Sales Agreement,

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

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

The aggregate market value of shares that the Company can sell

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

Subsequent to December

31, 2025, and as of the date of this filing, the Company sold 754,925 shares under the Sales Agreement for proceeds of $ 0.9 million and

currently has $0.0 million of unsold availability under the ATM facility.

$2.3 Million Convertible

Preferred Stock and Warrants Financing

Series B Preferred Stock and Warrants Financing

On April 23, 2024, the

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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 $1.851 per share of Common Stock.

The Company also issued warrants (“Warrants”)

exercisable for 1,250,137

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

The current conversion and exercise price has been adjusted to $ 0.4930 .

The proceeds of this financing, together with

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

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 $1.1815.

The proceeds of this financing, together with other available cash resources, were used to repay outstanding debt and for general corporate

Holders of the Series

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

As of December 31, 2024, 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.

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

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

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 December 31, 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

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

The Company received $ 750,000 of

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

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, which has been adjusted to $1.1815.

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 $1.1815.

The proceeds of this financing, together with

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

The following table presents the activity for

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Outstanding - December 31, 2025

During the year ended

December 31, 2024, in connection with the payoff of the New Note and Prior Note, the Company issued 2,226,811 warrants to purchase shares

of common stock at the exercise price of $1.967.

the year ended December 31, 2025, in connection with the Series C Preferred Stock Issuance, the Company issued 314,466 warrants to purchase

shares of common stock at the exercise price of $4.77.

The per share exercise price has been adjusted to $1.1815.

During the year ended

December 31, 2023, in connection with the New Note financing, the Company issued 26,000 warrants to purchase shares of common stock at

the exercise price of $15.25 per share.

During the year ended

December 31, 2023, in connection with the modification of the Prior Note, the Company cancelled the original 12,000 common stock warrants

and issued 24,000 new common stock warrants at an exercise price of $15.25 per share.

Note 8 – Income Taxes

During the year ended December 31, 2024, in connection

with the payoff of the New Note and Prior Note, the Company issued 130,989 warrants to purchase shares of common stock at the exercise

price of $33.44.

The per share exercise price has been adjusted to $1.1815.

8 – Income Taxes

For the years ended December 31, 2025 and 2024,

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Change in valuation allowance

Change in entity status

Change in tax rates

Effective rate

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Stock based compensation

Capitalized software

Total deferred tax assets

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For the year ended December 31, 2025, the Company

has federal and state net operating loss carryforwards of $ 22,457,710 and $ 955,911 ,

has federal and state net operating loss carryforwards of $ 29,496,111

and $ 1,036,222 ,

respectively.

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net operating loss carryforwards will conform to the federal provisions.

After weighing all available positive and negative

evidence for the years ended December 31, 2024 and 2023, the Company has recorded a valuation allowance of $ 6,908,036

After weighing all available positive and

negative evidence for the years ended December 31, 2025 and 2024, the Company has recorded a valuation allowance of $ 9,225,635

and $ 6,908,036 , respectively.

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any positions which require an uncertain tax position liability.

The Company is subject to taxation in the United

States and Colorado.

The statute of limitations on the initial tax return filed for 2021 tax year will expire in 2025 for federal and

in 2026 for state jurisdictions.

Note 9 – Net Loss Per Share

Basic net loss per share is computed by dividing

net loss, which is allocated based upon the proportionate amount of weighted average shares outstanding, to each class of stockholder’s

stock outstanding during the period.

For the calculation of diluted net loss per share, net loss per share attributable to common stockholders

for basic net loss per share is adjusted by the effect of dilutive securities, including awards under our equity compensation plans.

is subject to taxation in the United States and Colorado.

The statute of limitations on the initial tax return filed for 2021 tax year

expired in 2025 for federal and in 2026 for state jurisdictions.

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.

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.

9 – Net Loss Per Share

loss per share is computed by dividing net loss, which is allocated based upon the proportionate amount of weighted average shares outstanding,

to each class of stockholder’s stock outstanding during the period.

For the calculation of diluted net loss per share, net loss

per share attributable to common stockholders for basic net loss per share is adjusted by the effect of dilutive securities, including

awards under our equity compensation plans.

Reverse Stock Splits

On February 27, 2024, the Company effectuated

a 1-for-25 reverse stock split .

On March 28, 2025, the Company effectuated a 1-for-17

reverse stock split .

On February 26, 2024, the Company effected a 1-for-25

reverse stock split of its common 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.

average share amounts have been retroactively adjusted for the 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.

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.

In addition, any fractional

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

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

for all periods presented to reflect the reverse stock splits.

As of December 31, 2025 and 2024,

and 313,269 , respectively of potentially dilutive weighted average shares were excluded from the calculation of diluted net loss per share

because their effect would have been anti-dilutive for the periods presented.

567,872 and 177,536 , respectively of potentially dilutive weighted average shares were excluded from the calculation of diluted

net loss per share because their effect would have been anti-dilutive for the periods presented.

Note 10 - Recently Issued Accounting Pronouncements

ASU 2024 03 — Income Statement—Reporting

Comprehensive Income—Expense Disaggregation (Subtopic 220 40)

In March 2024, the FASB issued ASU 2024 03, which

requires public business entities to provide disaggregated information about certain income statement expense captions.

The amendments

require tabular disclosure of specified natural expense categories underlying relevant functional expense line items.

ASU 2024 03 is

effective for fiscal years beginning after December 15, 2026, with interim disclosure required beginning in 2027.

Early adoption is permitted.

The Company is evaluating the impact of this standard and expects it will result in expanded footnote disclosures but will not materially

impact its consolidated financial position or results of operations.

ASU 2025 01 — Income Statement—Reporting

Comprehensive Income—Expense Disaggregation (Subtopic 220 40):

Clarifying the Effective Date

In January 2025, the FASB issued ASU 2025 01 to clarify the effective

date and transition requirements of ASU 2024 03.

ASU 2025 01 is effective for the same periods as ASU 2024 03 — fiscal years beginning

after December 15, 2026, and interim periods beginning in 2027.

Early adoption is permitted.

The Company does not expect this update to have

a material impact beyond the expanded disclosures required by ASU 2024 03.

ASU 2025 06 — Intangibles—Goodwill

and Other—Internal Use Software (Subtopic 350 40)

In September 2025, the FASB issued ASU 2025 06,

which modernizes the accounting for internal use software by removing the legacy project stage model and clarifying capitalization thresholds.

The ASU also enhances disclosure requirements for significant software development activities.

ASU 2025 06 is effective for fiscal years

beginning after December 15, 2027, including interim periods within those fiscal years.

Early adoption is permitted.

The Company is assessing

the impact of this standard and expects it may affect the timing of expense recognition for internal use software projects and require

incremental disclosures.

ASU 2025 03 — Business Combinations (Topic

805) and Consolidation (Topic 810):

Determining the Accounting Acquirer in a VIE Acquisition

In May 2025, the FASB issued ASU 2025 03, which

amends the guidance for identifying the accounting acquirer in a business combination when the legal acquiree is a variable interest

entity (VIE).

The amendments require entities to apply the general acquirer identification framework in ASC 805 rather than defaulting

to the VIE primary beneficiary model.

ASU 2025 03 is effective for fiscal years beginning after December 15, 2026, including interim

periods within those fiscal years.

Early adoption is permitted.

The Company does not expect this update to have a material impact but

will continue to evaluate its applicability to future acquisition transactions.

ASU 2023 05 — Business Combinations—Joint

Venture Formations (Subtopic 805 60)

In August 2023, the FASB issued ASU 2023 05,

which provides recognition and initial measurement guidance for contributions made to a joint venture upon formation.

The ASU requires

joint ventures to measure contributed net assets at fair value on the formation date.

ASU 2023 05 is effective for joint ventures formed

on or after January 1, 2025.

Early adoption is permitted.

The Company does not expect this standard to have a material impact on its

consolidated financial statements.

Management’s Evaluation

The Company is in the process of assessing the

impact of these recently issued ASUs.

At this time, the Company does not expect that adoption will have a material impact on the consolidated

financial statements;

however, the Company anticipates expanded disclosures, particularly related to expense disaggregation and internal

use software development activities, once the standards become effective.

Note 11 – Subsequent Events

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or disclosure in the financial statements.

On February 19, 2025, the Company issued 1,033,706

shares for aggregate proceeds of approximately $0.5 million under the ATM financing arrangement.

On February 19, 2025, 140 shares of Series B Preferred stock were converted

to 283,116 shares of Common stock.

Additionally, on February 19, 2025, the Series B Preferred stockholders converted their capitalized

dividends into 283,116 shares of Common stock.

On February 17, 2026, Auddia,

acting upon the recommendation of its special committee of independent directors, entered into a definitive merger agreement providing

for a business combination between Auddia and the Company.

Auddia shareholders are

expected to own approximately 20% of the combined company at closing.

Approximately 80% of the combined company is expected to be

owned at closing by Jeff Thramann.

The consideration payable to Mr.

Thramann by the combined company will be a combination of (i)

convertible preferred stock and (ii) non-convertible debt.

The exact percentage

of the combined company that shareholders will own after completion of the merger is subject to adjustment based on Auddia’s net

cash at the time of closing.

The closing of the merger will be conditioned on Auddia having at least $12 million net cash on hand at closing

in order to provide cash runway to fund the combined company to key future business milestones.

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.

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.

Changes and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data