What changed in this filing

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Item 1. Financial Statements

2026-05-15 compared with 2025-11-06 · 375 added, 424 removed, 281 unchanged (74% of the section changed)

1 unchanged sentence

Condensed Balance Sheets

September 30, 2025

March 31, 2026

December 31, 2025

15 unchanged sentences

Accounts payable and accrued liabilities

Notes payable

Current portion of operating lease liability

Stock awards liability

Total current liabilities

4 unchanged sentences

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

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

outstanding as of March 31, 2026 and December 31, 2025, respectively

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

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

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

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

outstanding as of March 31, 2026 and December 31, 2025, respectively

Common stock - $ 0.001

par value, 100,000,000 authorized

and 500,914 and

402,833 shares

issued and outstanding as of March 31, 2026 and December 31, 2025, respectively (1)

Additional paid-in capital

4 unchanged sentences

Total liabilities and shareholders' equity

The accompanying notes are an integral part of

these unaudited condensed financial statements.

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

The accompanying notes are an integral part of these

unaudited condensed financial statements.

Company’s common stock outstanding as of March 31, 2026 and December 31, 2025 has been retroactively restated for the effect

of the 1-for 7.7 reverse stock split effective March 31, 2026.

Condensed Statements of Operations

Three Months Ended

Nine Months Ended

September 30, September 30,

Operating expenses:

9 unchanged sentences

( 1,751,013 )

( 5,698,178 )

( 5,656,860 )

Other expense:

Interest expense

Change in fair value of warrants

Total other expense

Other income (expense):

Interest income (expense)

Total other income (expense)

Loss before income taxes

1 unchanged sentence

( 1,752,565 )

( 5,702,369 )

( 6,460,181 )

Provision for income taxes

1 unchanged sentence

$ ( 1,752,565 )

$ ( 5,702,369 )

$ ( 6,460,181 )

Net loss per share attributable to common stockholders

2 unchanged sentences

Basic and diluted

The accompanying notes are an integral part of

these unaudited condensed financial statements.

The Company’s

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

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

The accompanying notes are an integral part of these

unaudited condensed financial statements.

Company’s weighted average common stock outstanding for the three months ended March 31 2026 and 2025 has been retroactively

restated for the effect of the 1-for 7.7 reverse stock split effective March 31, 2026.

Condensed Statements of Changes in Stockholders’

for the Three and Nine Months Ended September

30, 2025 and 2024

Preferred Stock

for the Three Months Ended March 31, 2026 and 2025

B Preferred Stock

C Preferred Stock

Paid-In-Capital

1 unchanged sentence

$ 101,518,433

Issuance of common shares, net of costs

Series B preferred stock converted to common stock

Offering costs

Share-based compensation

Issuance of restricted stock units

Capitalized dividends converted to common stock

Capitalized dividends

$ ( 97,283,343 )

( 1,752,565 )

Balance, March 31, 2025

( 91,239,759 )

Issuance of common shares, net of costs

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

Issuance of common shares, net of costs of $27,592

Series B preferred stock converted to common stock

Offering costs

Share-based compensation

3 unchanged sentences

( 2,281,553 )

Balance, June 30, 2025

( 92,852,762 )

Issuance of common shares, net of costs

Preferred stock converted to common stock

Offering costs

Share-based compensation

Warrant exercises

Capitalized dividends

( 2,381,151 )

Balance, March 31, 2026

$ 102,432,091

Balance, September 30, 2025

$ ( 99,595,219 )

Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Paid-In-Capital

1 unchanged sentence

$ ( 89,428,436 )

Issuance of common shares, net of costs

Offering costs

Share-based compensation

( 2,207,328 )

Balance, March 31, 2024 (1)

( 82,750,658 )

Issuance of common shares, net of costs

Issuance of Series B preferred stock and warrants

Conversion of debt to equity

Issuance of common shares, net of costs of $20,882

Series B preferred stock converted to common stock

Offering costs

Share-based compensation

( 2,303,425 )

Balance, June 30, 2024 (1)

( 85,054,083 )

Issuance of common shares, net of costs

Issuance of restricted stock units

Capitalized dividends converted to common stock

Capitalized dividends

Offering costs

Share-based compensation

( 1,752,565 )

Balance, September 30, 2024 (1)

Balance, March 31, 2025

$ ( 91,239,759 )

The accompanying notes are an integral part of

these unaudited condensed financial statements.

The Company’s

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

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

The accompanying notes are an integral part of these

unaudited condensed financial statements.

The Company’s common

stock outstanding as of March 31, 2026 and 2025 and December 31, 2025 and 2024 has been retroactively restated for the effect of the

1-for 7.7 reverse stock split effective March 31, 2026.

Condensed Statements of Cash Flows

For the Nine Months Ended September 30,

For the Three Months Ended March

Cash flows from operating activities:

1 unchanged sentence

$ ( 1,752,565 )

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

in) operating activities:

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

Depreciation and amortization

Share-based compensation expense

Change in fair value of warrants

Amortization of ROU asset

2 unchanged sentences

Prepaid assets

Other current assets

Accounts payable and accrued liabilities

4 unchanged sentences

Cash flows from investing activities:

(Purchase) disposition of property and equipment

Software capitalization

2 unchanged sentences

Cash flows from financing activities:

Offering costs

Net settlement of share-based compensation liability

Repayments of related party debt

( 2,750,000 )

Deferred Offering costs

Repayments of debt

Proceeds from issuance of preferred shares, net of issuance costs

2 unchanged sentences

Net cash provided by financing activities

Net increase in cash

Net decrease in cash

( 1,773,598 )

( 1,016,406 )

Cash, beginning of year

5 unchanged sentences

Reclassification of deferred offering costs

Issuance of warrants in connection with related party debt

Capitalized dividends

Dividends and Series B preferred stock converted to common stock

Right of use asset and assumption of operating lease liability

The accompanying notes are an integral part of

these unaudited condensed financial statements.

The accompanying notes are an integral part of these

unaudited condensed financial statements.

Notes to Condensed Financial Statements (Unaudited)

Note 1 – Description of Business, Basis of Presentation

and Summary of Significant Accounting Policies

Note 1 – Description of Business, Basis of Presentation and

Summary of Significant Accounting Policies

Description of Business

4 unchanged sentences

Basis of Presentation

The accompanying financial statements have been

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

The accompanying financial statements have been prepared

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

Interim Financial Information

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Reverse Stock Splits

On February 27, 2024, the Company effectuated

a 1-for-25 reverse stock split .

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

reverse stock split .

On March 31, 2026, the Company effectuated a 1-for-7.7

reverse stock split .

The reverse stock splits did not change the authorized

9 unchanged sentences

equity incentive plans.

As a result of the reverse stock splits, unless

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

As a result of the reverse stock splits, unless described

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

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

9 unchanged sentences

Actual results could differ from those estimates.

The condensed financial statements include some

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

The most significant estimates relate to valuation of capital

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

period for capitalized software development costs.

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

any adjustment could be significant.

The condensed financial statements include some amounts

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

The most significant estimates relate to valuation of capital stock,

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

for capitalized software development costs.

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

could be significant.

Risks and Uncertainties

2 unchanged sentences

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

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

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

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

develop its customer base;

implement and successfully execute its business and marketing strategy;

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

management of potential rapid growth.

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

and successfully execute its business and marketing strategy;

develop follow-on products;

superior customer service;

and attract, retain, and motivate qualified personnel.

There can be no guarantee that the Company will be successful

in addressing these or other such risks.

Emerging Growth Company Status

The Company is an emerging growth company, as

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

Under the JOBS Act, emerging growth companies

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

apply to private companies.

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

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

provide superior customer service;

retain, and motivate qualified personnel.

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

Going Concern

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

as of September 30, 2025.

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

with a demonstrated market fit.

The Company raised an additional $ 5.1 million (net of offering costs) during the nine months ended September

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

quarter of 2026.

Management has plans to secure such additional funding.

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.

Our existing cash and cash equivalents was

at March 31, 2026.

The Company secured approximately $ 12.9

million in additional financing through April 30, 2026, which will only be sufficient to fund our current operating plans into the

first quarter of 2027.

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 has plans to secure such additional funding.

If the Company is unable to raise

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

and commercialization efforts.

As a result of the Company’s recurring losses

1 unchanged sentence

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

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

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

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

However, management cannot

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

These financial statements do not include

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

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

The Company’s current level of cash is not sufficient

to execute the business plan.

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

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

the Company’s ability to continue as a going concern.

Cash and Cash Equivalents

The Company had cash on hand of $ 455,757 and $ 1,052,990

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

as of March 31, 2026 and December 31, 2025, respectively.

The Company considers all highly liquid instruments

1 unchanged sentence

The Company had cash equivalents of $ 957,630 and

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

The Company maintains cash deposits at several

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

The Company’s cash balance

may at times exceed these limits.

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

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

The Company continually

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

$ 2,133,995 as of March 31, 2026 and December 31, 2025, respectively.

The Company maintains cash deposits at several financial

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

The Company’s cash balance may at

times exceed these limits.

As of March 31, 2026, the Company had approximately $ 1.2 million in excess of federally insured limits.

of December 31, 2025, the Company had approximately $ 2.9 million in excess of federally insured limits.

The Company continually monitors

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

Property and Equipment

Property and equipment are stated at cost, net of

accumulated depreciation.

Depreciation is provided utilizing the straight-line method over the estimated useful lives for owned assets,

ranging from two to five years .

Software Development Costs

The Company accounts for costs incurred in the

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

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

The Company ceases capitalization of development

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

Software development costs are amortized

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

The Company accounts for costs incurred in the development

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

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

The Company ceases capitalization of development costs

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

Software development costs are amortized over

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

Costs associated with significant upgrades and enhancements

4 unchanged sentences

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

The Company determined that no such impairments were required during the three and nine months ended September 30, 2025 and 2024.

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

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

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

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

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

Software development costs of $ 299,637 and $ 236,973 were capitalized for the three months ended March 31, 2026 and March 31, 2025, respectively.

Amortization of capitalized software development costs was $ 234,603 and $ 431,037 for the three months ended March 31, 2026 and March

31, 2025, respectively and are included in depreciation and amortization expense in the Company’s condensed statement of operations.

Long-Lived Assets

The Company reviews its tangible and limited

lived intangible long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of

the asset may not be recovered.

If a potential impairment is indicated, the Company compares the carrying amount of the asset to the

undiscounted future cash flows associated with the asset.

In the event the future cash flows are less than their carrying value, a

loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset.

determined long-lived assets were no t

impaired for the three months ended March 31, 2026 and 2025 and year ended December 31, 2025.

The Company accounts for income taxes using an asset

and liability approach, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of

A valuation allowance is established to reduce deferred tax assets to their estimated realizable value when, in the opinion of

management, it is more likely than not that some portion or all of the deferred income tax assets will not be realized in the future.

The Company recognizes benefits of uncertain tax positions

if it is more likely than not that such positions will be sustained upon examination based solely on their technical merits, as the largest

amount of benefit that is more likely than not to be realized upon the ultimate settlement.

The Company’s policy is to recognize

interest and penalties related to unrecognized tax benefits as a part of income tax expense.

Prior to the Company’s conversion to a Delaware

corporation in February 2021, the Company was a limited liability company and had elected to be treated as a pass-through entity for income

tax purposes.

Accordingly, taxable income and losses of the Company were reported on the income tax returns of its members, and no provision

for federal income taxes have been recorded in the accompanying financial statements.

Had the Company been a taxable entity, no provision

for income taxes would have been recorded as the Company has sustained losses since inception.

Right of Use Assets and Lease Liabilities

In February 2016, the FASB issued Accounting Standards

Update (“ASU”) No.

2016-02, Leases (Topic 842).

The standard requires lessees to recognize almost all leases on the balance

sheet as a Right-of-use (“ROU”) asset and a lease liability and requires leases to be classified as either an operating or

a finance type lease.

The standard became effective for the Company beginning January 1, 2019.

The Company adopted ASC 842 using the modified

retrospective approach, by applying the new standard to all leases existing at the date of initial application.

Results and disclosure

requirements for reporting periods beginning after January 1, 2019 are presented under ASC 842.

Under ASC 842, the Company determines if an arrangement

is a lease at inception.

ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease

payments over the lease term.

For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement.

As the Company’s lease does not provide an implicit rate, the Company estimated the incremental borrowing rate in determining the

present value of lease payments.

Operating leases are included in operating lease right

of use asset and operating lease liabilities, current and non-current, on the Company’s accompanying balance sheets.

Revenue Recognition

Revenue will be measured according to Accounting

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

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

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:

Revenue will be measured according to Accounting Standards

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

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

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

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

( 1) Identify the contract with a client;

the performance obligations in the contract;

(2) Identify the

performance obligations in the contract;

(3) Determine the transaction price;

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There is no revenue recognized for unpaid trial subscriptions.

Customers may pay for the services in advance

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

Customers may pay for the services in advance of

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

The deferred revenue will be recognized

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

Advertising Costs

The Company expenses advertising costs as

Advertising expense for the three months ended March 31, 2026 and 2025 was $ 184,902

and $ 90,096 ,

respectively.

Share-Based Compensation

1 unchanged sentence

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

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

Compensation expense for all share-based awards

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

fair value of the awards on the date of grant.

Compensation expense for all share-based awards is

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

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

Certain share-based compensation awards include

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

classified as a share-based compensation liability.

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

condensed statements of cash flows.

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

guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability

pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether

the warrants are indexed to the Company’s own Common Stock, among other conditions for equity classification.

This assessment, which

requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end

date while the warrants are outstanding.

Restructuring Costs

During the three months ended September 30,

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

operational efficiency.

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

other cost-saving initiatives.

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

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

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

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

expenses in future periods as these initiatives are finalized.

Note 2 – Property & Equipment, Intangible Assets, and

Software Development Costs

Property and equipment and software development

costs consisted of the following as of:

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 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, Intangible Assets, and Software

Development Costs

Property and equipment and software development costs

consisted of the following as of:

Schedule of property and equipment and software development costs

September 30,

Computers and equipment

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The Company recognized depreciation expense of $ 903

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

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

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

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

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

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

respectively, related to software development costs.

and $ 1,348 for the three months ended March 31, 2026 and 2025, respectively, related to property and equipment, amortization expense

of $ 590 and $ 22 for the three months ended March 31, 2026 and 2025, respectively, related to intangible assets, and amortization expense

of $ 234,603 and $ 431,037 for the three months ended March 31, 2026 and 2025, respectively, related to software development costs.

Note 3 – Accounts Payable and Accrued

Accounts payable and accrued liabilities consist

of the following:

Accounts payable and accrued liabilities consist of

the following:

Schedule of accounts payable and accrued liabilities

September 30,

Accounts payable and accrued liabilities

Credit cards payable

Accounts payable

Accrued liabilities

Total accounts payable and accrued liabilities

Note 4 – Notes Payable to Related

Party, net of debt issuance costs

On April 9, 2024, the

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

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

The Company agreed to

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

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

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

On April 26, 2024, the

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

Effective April 9, 2024,

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) 27,256

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

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

The number of Non-Prefunded

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 price.

The original exercise price of $33.44 has been subsequently adjusted to $2.2165.

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 $2.2165.

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 .

As a result, the Company recorded

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

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

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

On September 25, 2025,

the prefunded warrants were exercised.

Note 4 – Notes Payable

On June 20, 2025, the

Company entered into a promissory note to finance its directors and officers (“D&O”) insurance premium.

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

As of March 31, 2026 and

December 31, 2025, the outstanding principal balance was $ 15,130 and $ 60,520 , respectively.

The note is unsecured and contains no financial

Note 5 – Commitments and Contingencies

Operating Lease

On March 25, 2024, the Company entered into a

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

The monthly base rent for months two

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

Rent expense, as part

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

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

In the normal course of business, the Company

is party to litigation from time to time.

On March 25, 2024, the Company entered into a 37-month

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

The monthly base rent for months two through

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

Rent expense, as part of

general and administrative expenses in the statements of operations, was $ 20,984 and $ 8,960 for the three months ended March 31,

2026 and 2025, respectively.

In the normal course of business, the Company is

party to litigation from time to time.

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

1 unchanged sentence

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

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

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

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

No complaint has been filed by the investor.

The alleged damages asserted

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

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

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

The alleged damages

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

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

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

Note 6 – Share-based Issuances

Stock Options

The fair value of each option award is estimated

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

Because Black

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

Expected volatilities and based

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

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

options granted are expected to be outstanding.

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

The fair value of each option award is estimated on

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

Because Black Scholes

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

Expected volatilities and based on implied

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

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

granted are expected to be outstanding.

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

Treasury yield curve in effect at the time of grant.

The following table presents the activity for

stock options outstanding:

The following table presents the activity for stock

options outstanding:

Schedule of stock option activity

2 unchanged sentences

Forfeited/canceled

Outstanding – September 30, 2025

Outstanding – March 31, 2026

Weighted Average Exercise Price

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Forfeited/canceled

Outstanding – September 30, 2024

The following table presents the composition of options outstanding

and exercisable:

Outstanding – March 31, 2025

The following table presents the composition of options outstanding and

Schedule of options outstanding and exercisable

2 unchanged sentences

Exercise Prices

Total – September 30, 2025

Total – March 31, 2026

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 1-for-17 reverse stock split.

Company’s common stock outstanding as of March 31, 2026 and December 31, 2025 has been retroactively restated for the effect

of the 1-for 7.7 reverse stock split effective March 31, 2026.

Restricted Stock Units

The following table presents the activity for

restricted stock units outstanding:

The following table presents the activity for restricted

stock units outstanding:

Schedule of restricted stock units outstanding

4 unchanged sentences

Vested/issued

Outstanding – September 30, 2025

Restricted Stock

Weighted Average

Outstanding - December 31, 2023

Forfeited/canceled

Vested/issued

Outstanding – September 30, 2024

The Company recognized share-based compensation

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

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

The remaining unvested share-based

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

Outstanding – March 31, 2025

The Company recognized share-based compensation expense

related to stock options and restricted stock units of $ 14,897

and $ 76,906 for the three months ended

March 31, 2026 and 2025, respectively.

The remaining unvested share-based compensation expense of

is expected to be recognized over the next 42 months.

Note 7 – Equity Financings

Equity Line Common

Stock Purchase Agreement

On November 25, 2024,

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

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

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

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

On July 30, 2025, the Company amended the equity

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

common stock.

During the nine months

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

total proceeds of $ 3.7 million.

At-the-Market Sales

During the nine months

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

Issuance Sales Agreement (the “Sales Agreement”) with Ascendiant Capital Markets, LLC, as sales agent (the “Agent”).

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 September

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

Equity Line Common Stock

Purchase Agreement

On November 25, 2024, the

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

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

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

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

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, 2025, the Company issued 129,221

shares of Common stock under the Equity Line Common Stock Purchase Agreement for total proceeds of $ 3.7

At-the-Market Sales Agreement

The Company has entered

into 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

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.

During the three months

ended March 31, 2026, the Company sold 98,043

shares under the Sales Agreement for proceeds of $0 .9

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

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

During the year ended December

31, 2025, the Company issued 130,879

shares under the Sales Agreement for aggregate proceeds of approximately $ 2.8

$2.3 Million Convertible

1 unchanged sentence

On April 23, 2024, the

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

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

At the closing, the

Company issued 2,314

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

Series B Preferred Stock.

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

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

The Company also issued warrants (“Warrants”)

exercisable for 73,538

shares of Common Stock with a five-year term and an initial exercise price of $ 31.47

per share, which has been subsequently adjusted to $2.2165.

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

for general corporate purposes.

Holders of the Series

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

The Company has the option to pay dividends

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

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

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

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

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

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 $242.32 per share of Common Stock.

The Company also issued warrants (“Warrants”) exercisable for 9,552 shares

of Common Stock with a five-year term and an initial exercise price of $242.32 per share, which has been subsequently adjusted to $2.36.

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

Company has the option to pay dividends on the Series B Preferred Stock in additional shares of Common Stock.

The Company also has the

option to cumulate or “capitalize” the dividends, in which case the accrued dividend amount shall be added to the stated

value of each share of Series B Preferred Stock.

As of March 31, 2026, 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 4,326 shares of Common Stock.

In April 2025, 447 shares of Series B Preferred

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

In April 2025, 447 shares of Series B Preferred stock

and capitalized dividends were converted to 11,069 shares of Common stock.

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

stock and capitalized dividends were converted to 4,484 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 September 30, 2025, all Series B Preferred

stock had been converted to 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 17,237 shares of common stock at an exchange price

of $20.41 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 March 31, 2026, no shares of Series B

Preferred stock remain outstanding.

$750,000 Series C Preferred Stock and Warrants

1 unchanged sentence

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 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 $2.2165.

The Company also issued warrants exercisable for 314,466 shares

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

The proceeds of this financing, together with

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

of $36.73 per share of Common Stock.

The Company also issued warrants exercisable for 40,841 shares of Common Stock with a five year

term and an initial exercise price of $36.73 per share, which has been subsequently adjusted to $2.36.

Subsequent to March 31, 2026, on April 23, 2026,

the Company entered into an exchange agreement (the “Exchange Agreement”) with the accredited investors to exchange 750 outstanding

shares of the Company’s Series C preferred stock (including accrued dividends thereon) for 216,525 shares of common stock at an

exchange price of $3.91 per common share.

No shares of Series C preferred stock remain outstanding.

As of April 24, 2026, no shares of Series C

Preferred stock remain outstanding.

The proceeds of this financing, together with other

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

The following table presents

4 unchanged sentences

Forfeited/cancelled/restored

Outstanding – September 30, 2025

Outstanding – March 31, 2026

Weighted Average Exercise Price

Outstanding - December 31, 2024

Forfeited/cancelled/restored

Outstanding – March 31, 2025

During the three months ended March 31, 2026 and

year ended December 31, 2025, in connection with the Series C Preferred Stock Issuance, the Company issued 0 and 40,841 , respectively

warrants to purchase shares of common stock at the exercise price of $36.73.

The per share exercise price has been adjusted to $2.36.

Note 8 – Leases under ASC 842

2 unchanged sentences

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

determines if an arrangement is a lease at contract inception.

Lease and non-lease components are accounted for as a single component

for all leases.

Operating lease right to use (“ROU”) assets and liabilities are recognized at the lease commencement date

based on the present value of the future lease payments over the expected lease term, which includes optional renewal periods if the Company

determines it is reasonably certain that the option will be exercised.

As the operating lease does not provide an implicit rate, the discount

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

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

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

and 2024, respectively.

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

Management determines if an arrangement is a lease at contract inception.

Lease and non-lease components are accounted for as a

single component for all leases.

Operating lease right to use (“ROU”) assets and liabilities are recognized at the lease

commencement date based on the present value of the future lease payments over the expected lease term, which includes optional

renewal periods if the Company determines it is reasonably certain that the option will be exercised.

As the operating lease does

not provide an implicit rate, the discount rate used in the present value calculation represents the incremental borrowing rate

determined using information available at the commencement date.

Rent expense, as part of general and administrative expenses in the

statements of operations, was $ 20,984 and

for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, weighted-average remaining lease term and

discount rate were as follows:

Schedule of weighted-average remaining lease term and discount rate

September 30, 2025

March 31, 2026

Weighted-average remaining lease term

1 unchanged sentence

The following is a maturity analysis of the annual

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

undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of March 31, 2026:

Schedule of annual undiscounted cash flows of leases

2 unchanged sentences

Note 9 – Segment Reporting

Operating segments are identified as components

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

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

The Company views its operations and manages its

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

AI platform for audio and innovative technologies for podcasts.

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

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

No financial information is disaggregated

into separate lines of businesses.

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

available and how to best deploy these resources.

The single segment’s principal measure of

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

Operating segments are identified as components of

an enterprise about which separate discrete financial information is available for evaluation by the Chief Operating Decision Maker (“CODM”)

in making decisions regarding resource allocation and assessing performance.

The Company views its operations and manages its business

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

for audio and innovative technologies for podcasts.

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

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

No financial information is disaggregated into separate

lines of businesses.

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

and how to best deploy these resources.

The single segment’s principal measure of segment

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

The CFO considers actual and forecasted

expenses when evaluating performance.

Note 10 – 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.

As of March 31, 2026 and March 31, 2025, 72,339 and

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 11 – Subsequent Events

3 unchanged sentences

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

As previously disclosed, on August 5, 2025, the

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

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

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

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

The LOI contemplates

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

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

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

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

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

common stock on Nasdaq.

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

18, 2025) under the LOI.

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

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

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

On April 23, 2026, the Company entered into an

exchange agreement (the “Exchange Agreement”) with the accredited investors to exchange 750 outstanding shares of the Company’s

Series C preferred stock (including accrued dividends thereon) for 216,525 shares of common stock at an exchange price of $3.91 per common

No shares of Series C preferred stock remain outstanding.

On April 24, 2026, the Company sold 1,405,006

common shares, 3,679,737 pre-funded warrants, and 5,084,783 common warrants in a registered public offering pursuant to (i) a Form S-1

Registration Statement (as amended, the “Registration Statement”) (File No.

333 294887) filed with the Securities and Exchange

Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), and (ii) the related prospectus

dated April 24, 2026 as filed with the Commission on April 27, 2026.

The gross proceeds of this public offering were $12 million.

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

What changed 10-Q

Item 1. Financial Statements