What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-15 compared with 2025-11-06 · 395 added, 365 removed, 217 unchanged (78% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should

be read in conjunction with the unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report

and our audited financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December

The following discussion and analysis should be

read in conjunction with the unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report and

our audited financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31,

2025, which was filed with the SEC on March 5, 2025.

This discussion and analysis and other parts of this Quarterly Report contain

forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such

as statements regarding our plans, objectives, expectations, intentions and projections.

Our actual results and the timing of selected

events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those

set forth under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report.

You should carefully read the “Risk

Factors” section of this Quarterly Report and of our Annual Report on Form 10-K for the year ended December 31, 2024, to gain an

understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

also see the section entitled “Special Note Regarding Forward-Looking Statements.”

This discussion and analysis and other parts of this Quarterly Report contain forward-looking

statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding

our plans, objectives, expectations, intentions and projections.

Our actual results and the timing of selected events could differ materially

from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Part II, Item

1A, “Risk Factors” and elsewhere in this Quarterly Report.

You should carefully read the “Risk Factors” section

of this Quarterly Report and of our Annual Report on Form 10-K for the year ended December 31, 2025, to gain an understanding of the important

factors that could cause actual results to differ materially from our forward-looking statements.

Please also see the section entitled

“Special Note Regarding Forward-Looking Statements.”

Auddia (the “Company”)

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podcast listening experiences.

On August 20, 2025, the

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

free faidr app for an anticipated launch in early 2026., The Discovr Radio platform, a web-based portal will allow artists and record

labels to promote songs on radio streams, through an integration with faidr.

On August 20, 2025, the Company

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

faidr app for an anticipated launch in early 2026., The Discovr Radio platform, a web-based portal will allow artists and record labels

to promote songs on radio streams, through an integration with faidr.

faidr historically allowed

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

We have developed our

AI platform on top of Google’s TensorFlow open-source library that is being “taught” to know the difference between

all types of audio content on the radio.

We have developed our AI

platform on top of Google’s TensorFlow open-source library that is being “taught” to know the difference between all

types of audio content on the radio.

For instance, the platform recognizes the difference between a commercial and a song and DJ conversation.

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end of each piece of content.

The faidr app with its

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

The faidr app with its advanced

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

We believe the faidr App represents

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

The Company initially

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

year or Q1 of 2026.

In August 2025, the

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

Auddia is targeting artists and labels

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

ad-free AM/FM streams on all music stations.

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

personalization listening experience.

The Company initially launched

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

In August 2025, the Company

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

Auddia is targeting artists and labels for SaaS

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

AM/FM streams on all music stations.

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

listening experience.

New music platforms like

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instead of radio ads.

Unlike other new music

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

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

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

This gives artists opportunities to be heard by the many

millions of streaming radio listeners worldwide.

The new Discovr Radio

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

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

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

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

facilitate the connection of artists to their new fans.

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

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

Auddia is evolving its

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

and labels as subscribers.

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

a new channel for music promotion.

The faidr mobile App

is available today through the iOS and Android App stores and the MVP version of the Discovr Radio platform is expected to be released

before the end of Q1 of 2026.

Unlike other new music discovery

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

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

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

This gives artists opportunities to be heard by the many millions of

streaming radio listeners worldwide.

The new Discovr Radio platform

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

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

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

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

the connection of artists to their new fans.

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

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

Auddia is evolving its business

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

as subscribers.

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

for music promotion.

The faidr mobile App is available

today through the iOS and Android App stores and the MVP version of the Discovr Radio platform that was released on January 20, 2026.

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

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with proceeds from the February 2021 IPO, Series A warrants exercised in July 2021 and common share issuance during June of 2023.

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

we sold common shares during 2025 and 2024 pursuant to our equity line facility and issued preferred stock in our Series B and Series

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

In addition, we sold common shares during 2025 and 2024 pursuant to our equity line facility and issued preferred stock in our Series

B and Series C issuances.

Since our inception, we have incurred significant operating losses.

As of September 30, 2025, we had an accumulated deficit

of $95,262,663.

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

and commercialization of one or more of our Apps.

We expect that our expenses and capital requirements will increase substantially in

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

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

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

As of March 31, 2026, we had an accumulated

deficit of $99,595,218.

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

development and commercialization of one or more of our Apps.

We expect that our expenses and capital requirements will increase substantially

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

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

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

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

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

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

continue to pursue and complete potential acquisitions of other companies;

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

As a result, we will need substantial additional

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

Until such time as we can generate significant revenue from

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

may include collaborations with other companies or other strategic transactions.

We may be unable to raise additional funds or enter into

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

If we fail to raise capital or enter into such agreements

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

of our product candidates.

Because of the numerous risks and uncertainties

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

to achieve or maintain profitability.

As a result, we will need substantial additional funding

to support our continuing operations and pursue our growth strategy.

Until such time as we can generate significant revenue from product

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

collaborations with other companies or other strategic transactions.

We may be unable to raise additional funds or enter into such other

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

If we fail to raise capital or enter into such agreements as and

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

product candidates.

Because of the numerous risks and uncertainties associated

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

or maintain profitability.

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

If we fail to become

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

and be forced to reduce or terminate our operations.

As of September 30, 2025, we had cash and cash

equivalents of $2,727,165.

Through the date of this report, we have secured approximately $7.2 million in additional financing in 2025.

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

If we fail to become profitable

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

forced to reduce or terminate our operations.

of March 31, 2026, we had cash and cash equivalents of $1,413,387.

Through the date of this

report, we have secured approximately $12.9 million in additional financing in 2026.

need additional funding to complete the development of our full product line and scale products

with a demonstrated market fit.

Management has plans to secure such additional funding.

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

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

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

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

Recent Developments

Proposed Business Combination

On August 5, 2025, the Company issued a press

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

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

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 a privately held holding company that controls LT350, Influence

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

The Company has established a special committee

of the board of directors to evaluate the related party transaction.

The Company has established a special committee of

the board of directors to evaluate the related party transaction.

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

The LOI contemplates a business combination between

Auddia and Holdings with Auddia becoming a public holding company trading under the new name, McCarthy Finney and ticker symbol MCFN.

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

the proposed terms, Holdings’ equity holders are expected to receive an 80% ownership interest in the combined company, with Auddia

equity holders owning a 20% interest.

The proposed business combination is subject to

a number of known and unknown risk and uncertainties.

There can be no assurances that the parties will enter into a definitive business

combination on the terms contemplated hereby or at all.

Further, there can be no assurances that such business combination will be approved

by stockholders or will ultimately be consummated.

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

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

and Thramann Holdings.

Upon closing of the proposed transaction, the Company

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

Auddia would become a wholly owned subsidiary of McCarthy

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

Jeff Thramann would remain as

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

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

of the board of the combined company.

Auddia shareholders at the time of closing are expected

to own a 20% economic interest of McCarthy Finney, with an 80% economic interest of the combined company expected to be owned at closing

by Jeff Thramann.

Under certain circumstances, these ownership percentages may be adjusted upward or downward based on the level of Auddia’s

cash at closing.

The consideration to be paid to Thramann Holdings

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

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

The closing of the merger will be conditioned on Auddia

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

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

The transaction has been unanimously approved by the

board of directors of both companies.

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

to Auddia’s special committee and board of directors.

The proposed transaction is expected to close in the

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

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

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

The proposed business combination is subject to a

number of known and unknown risk and uncertainties.

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

stockholders or will ultimately be consummated.

For more information about the business combination

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

Mergers and Acquisitions

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During 2022, 2023 and 2024,

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

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

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

bid price for continued listing.

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

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

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

price for continued listing.

On May 24, 2024, we received

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to a Mandatory Panel Monitor for a period of one year from the date of the letter in accordance with application of Listing Rule 5815(d)(4)(B).

On October 16, 2024,

we received a written notice from Nasdaq indicating that we were not in compliance with the $1.00 minimum bid price requirement set forth

in Nasdaq Listing Rule 5550(a)(2) for continued listing.

The bid price notice does not result in the immediate delisting of our common

stock from the Nasdaq Capital Market.

The bid price notice indicated that we have 180 calendar days (or until April 14, 2025) in which

to regain compliance.

If at any time during this 180 calendar day period the bid price of our common stock closes at or above $1.00 per

share for a minimum of ten consecutive business days, the Nasdaq staff will provide us with a written confirmation of compliance and the

matter will be closed.

On October 16, 2024, we received

a written notice from Nasdaq indicating that we were not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq

Listing Rule 5550(a)(2) for continued listing.

The bid price notice does not result in the immediate delisting of our common stock from

the Nasdaq Capital Market.

The bid price notice indicated that we have 180 calendar days (or until April 14, 2025) in which to regain

If at any time during this 180 calendar day period the bid price of our common stock closes at or above $1.00 per share for

a minimum of ten consecutive business days, the Nasdaq staff will provide us with a written confirmation of compliance and the matter

will be closed.

On April 14, 2025, Nasdaq

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

On February 27, 2024,

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

On March 28, 2025, the

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

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

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Impact of Inflation

We have recently experienced higher costs across

our business as a result of inflation, including higher costs related to employee compensation and outside services.

We expect inflation

to continue to have a negative impact throughout 2025, and it is uncertain whether we will be able to offset the impact of inflationary

pressures in the near term.

We have recently experienced higher costs across our

business as a result of inflation, including higher costs related to employee compensation and outside services.

We expect inflation to

continue to have a negative impact throughout 2025, and it is uncertain whether we will be able to offset the impact of inflationary pressures

in the near term.

Components of our results of operations

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Direct costs of services

Direct cost of services

consists primarily of costs incurred related to our technology and development of our Apps, including hosting and other technology related

We expect our direct costs of services to increase in the future as we continue to develop and enhance our technology related

to the faidr and podcasting Apps.

Direct cost of services consists

primarily of costs incurred related to our technology and development of our Apps, including hosting and other technology related expenses.

We expect our direct costs of services to increase in the future as we continue to develop and enhance our technology related to the faidr

and podcasting Apps.

Sales and marketing

Our sales and marketing

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

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

We expect our sales and marketing expenses to fluctuate

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

retention, and subscription conversion.

Our sales and marketing expenses

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

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

We expect our sales and marketing expenses to fluctuate period

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

and subscriptions.

Research and development

Since our inception,

we have focused significant resources on our research and development activities related to the software development of our technology.

We account 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

We cease capitalization of development costs once the software has been substantially completed and is available for its

intended use.

Since our inception, we have

focused significant resources on our research and development activities related to the software development of our technology.

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.

We cease 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 our management of three years.

Costs associated

with significant upgrades and enhancements that result in additional functionality are capitalized.

Capitalized costs are subject to an

ongoing assessment of recoverability based on anticipated future revenues and changes in software technologies.

Unamortized capitalized

software development costs determined to be in excess of anticipated future net revenues are impaired and expensed during the period of

such determination.

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

develop and enhance faidr and develop the Discovr Radio platform.

Costs associated with significant

upgrades and enhancements that result in additional functionality are capitalized.

Capitalized costs are subject to an ongoing assessment

of recoverability based on anticipated future revenues and changes in software technologies.

Unamortized capitalized software development

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

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

faidr and develop the Discovr Radio platform.

General and administrative

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Restructuring Costs

Our restructuring costs

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

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

During the three months ended September

Our restructuring costs consist

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

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

During the three months ended March 31, 2026,

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

Additionally, we incurred legal and financial related costs in connection with the proposed business combination during the three months

ended September 30, 2025.

Additionally,

we incurred legal and financial related costs in connection with the proposed business combination during the three months ended March

Other income and expense

The other income and

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

The other income and expense

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

Results of operations

Comparison of the Three Months Ended

September 30, 2025 and 2024

The following table summarizes our results of

Comparison of the Three Months Ended March

31, 2026 and 2025

The following table summarizes our results of operations:

Three Months Ended

September 30, 2025

September 30, 2024

Operating expenses:

Direct cost of services

Sales and marketing

Research and development

General and administrative

Restructuring

Depreciation and amortization

Total operating expenses

Loss from operations

Other expense:

Interest expense

Total other expense

Loss before income taxes

Provision for income taxes

Total revenues for the

three months ended September 30, 2025 and 2024 were $0 as we continue to develop and enhance our faidr App and build out our Discovr artist

portal to establish new revenue streams.

Direct cost of services

Direct Cost of Services

increased by $336 or 0.6% to $55,252 for the three months ended September 30, 2025 compared to $54,916 for the three months ended September

30, 2024 due to increased music licensing costs.

Sales and marketing

Sales and marketing expenses

decreased by $138,688 or (49.1%) to $143,762 for the three months ended September 30, 2025 compared to $282,450 for the three months ended

September 30, 2024.

The decrease in sales and marketing expenses was primarily attributed to a decrease in marketing promotion costs as

we are focus on building out our new Discovr artist portal.

Research and development

expenses increased by $84,541 or 36.3% to $317,626 for the three months ended September 30, 2025 from $233,085 for the three months ended

September 30, 2024 primarily due to an increase in research and development consulting fees incurred and lower amount capitalized

as a result IT staff restructuring.

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

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

General and administrative

General and administrative expenses decreased

by $182,499 or (20.7%) to $698,940 for the three months ended September 30, 2025 compared to $881,439 for the three months ended September

The decrease was due to a decrease in accounting, legal, and stock option expense.

Restructuring

Restructuring expenses increased by $806,432 or

100% for the three months ended September 30, 2025 compared to $0 for the three months ended September 30, 2024.

We implemented changes

to our IT department.

These one-time restructuring expenses relate to payroll and benefits, severance, and onboarding of new outsourced

IT team and expenses related to the proposed business combination.

Depreciation and amortization

expenses decreased by $138,014 or (27.8%) to $357,946 for the three months ended September 30, 2025 compared to $495,960 for the three

months ended September 30, 2024.

Capitalized software costs have decreased, in which the ongoing amortization of our faidr App has also

Other expense, net

Total other expenses

remained relatively flat and incrementally decreased by $385 or (24.4%) to $1,193 for the three months ended September 30, 2025 compared

to $1,578 for the three months ended September 30, 2024.

Comparison of the Nine Months Ended

September 30, 2025 and 2024

The following table summarizes our results of

Nine Months Ended

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Operating expenses:

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Loss from operations

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

Provision for income taxes

Total revenues for the

nine months ended September 30, 2025 and 2024 were $0 as we continue to develop and enhance our faidr App and build out our new Discovr

artist portal to establish new revenue streams.

Direct cost of services

Direct Cost of Services

increased by $16,072 or 10.5% to $169,388 for the nine months ended September 30, 2025 compared to $153,316 for the nine months ended

September 30, 2024 due to increased music licensing costs.

$ (2,281,553 )

$ (1,752,565 )

Total revenues for the three

months ended March 31, 2026 and 2025 were $0 as we continue to develop and enhance our faidr App and build out our Discovr artist portal

to establish new revenue streams.

Sales and marketing

Sales and marketing expenses

decreased by $81,353 or 12.6% to $564,360 for the nine months ended September 30, 2025 compared to $645,713 for the nine months ended

September 30, 2024.

The decrease in sales and marketing expenses was primarily attributed to a decrease in marketing promotion costs.

We are focused on the proposed business combination and business restructuring efforts.

increased by $215,005 or 91.3% to $450,446 for the three months ended March 31, 2026 compared to $235,441 for the three months ended

March 31, 2025.

The increase in sales and marketing expenses was primarily attributed to increase in marketing and promotional activities

and trade show expenses.

Research and development

expenses increased by $392,564 or 70.3% to $950,744 for the nine months ended September 30, 2025 from $558,180 for the nine months ended

September 30, 2024 primarily due to an increase in research and development consulting fees incurred and lower amount capitalized

as a result IT staff restructuring.

We continue to develop enhancements to our faidr App and will continue capitalize software costs to

the extent that such development qualifies for capitalization.

expenses decreased by $111,719 or 28.2% to $284,984 for the three months ended March 31, 2026 from $396,703 for the three months ended

March 31, 2025 primarily due to an decrease in research and development consulting fees incurred related to the launch of Discovr Radio

General and administrative

General and administrative expenses decreased

by $767,290 or (27.1%) to $2,059,273 for the nine months ended September 30, 2025 compared to $2,826,563 for the nine months ended September

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

legal expenses due to potential acquisition efforts that occurred during the nine months ended September 30, 2024 and were not present

General and administrative expenses increased

by $158,183 or 25.1% to $789,075 for the three months ended March 31, 2026 compared to $630,891 for the three months ended March 31, 2025.

The increase was due to an increase related to public relations professional fees.

Restructuring

Restructuring expenses increased by $472,689 or 100%

100% for the nine months ended September 30, 2025 compared to $0 for the nine months ended September 30, 2024.

We implemented changes

to our IT department.

These one-time restructuring expenses relate to payroll and benefits, severance, and onboarding of new outsourced

IT team and expenses related to the proposed business combination.

for the three months ended March 31, 2026 compared to $0 for the three months ended March 31, 2025.

The increase is due to audit and

legal expenses related to reverse merger.

Depreciation and amortization

expenses decreased by $325,107 or (22.1%) to $1,147,981 for the nine months ended September 30, 2025 compared to $1,473,088 for the nine

months ended September 30, 2024.

Capitalized software costs have decreased, in which the ongoing amortization of our faidr App has also

Other expense, net

Total other expenses decreased by $799,130 or (99.5%) to $4,191 for

the nine months ended September 30, 2025 compared to $803,321 for the nine months ended September 30, 2024, which was due to the change

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

expenses decreased by $196,311 or (45.4%) to $236,096 for the three months ended March 31, 2026 compared to $432,407 for the three months

ended March 31, 2025.

The decrease is due to fully amortized capitalized cost and lower capitalized software costs.

Other income (expense),

Total other income (expenses)

increased by $8,453 or 545% to $6,901 for the three months ended March 31, 2026 compared to ($1,552) for the three months ended March

31, 2025 primarily due to increase in interest income on return on funds in money market account.

Since our inception in 2012,

until the corporate conversion in February 2021, we were organized as a Colorado limited liability company for federal and state income

tax purposes and treated as a partnership for U.S.

income tax purposes.

As such, we were not viewed as a taxpaying entity in any jurisdiction

and do not require a provision for income taxes.

Each member of our company was responsible for the tax liability, if any, related to

its proportionate share of our taxable income.

Effective on February 16,

2021, we became treated as a corporation for U.S.

income tax purposes and thus became subject to U.S.

federal, state and local income

taxes and are be taxed at the prevailing corporate tax rates.

Among other things, we may begin to generate net operating losses at the

corporate level.

We will account 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 events that have been recognized in the financial statements but

have not been reflected in taxable income.

A valuation allowance is established to reduce deferred tax assets to its estimated realizable

value, which is zero based on our operating history.

The Company has significant

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

The proposed merger with Thramann Holdings is expected to result

in an ownership change under Internal Revenue Code Section 382.

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

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

tax-exempt rate.

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

Because the Company maintains

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

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

Going Concern

Our existing cash was

$1,413,387 at March 31, 2026.

We secured approximately $12.9 million in additional funding in 2026 through May 12,

20 26, which will only be sufficient to fund our current operating plans into the first quarter of 2027.

We will need additional

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

Management has plans to

secure such additional funding.

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

or eliminate our technology development and commercialization efforts.

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.

Liquidity and capital

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and have an accumulated deficit as a result of ongoing efforts to develop and commercialize our faidr and podcasting Apps.

As of September

31, 2026, we had cash and cash equivalents of $1,413,387.

We have working capital of approximately $2.2 million as of September 30, 2025.

We anticipate that operating losses and net cash used in operating activities will increase over the next 12 months as we continue to

develop and market our products.

We secured $5.1 million of financing 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 our current operating plans into the third quarter

We have based these estimates, however, on assumptions that may prove to be wrong.

We will need additional funding to complete

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

Management has plans to secure such additional

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

development and commercialization efforts.

Equity Line Common

Stock Purchase Agreement

On November 25, 2024,

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

We have working capital of approximately $858,095 as of March 31, 2026.

We anticipate

that operating losses and net cash used in operating activities will increase over the next 12 months as we continue to develop and market

our products.

We secured $0.9 million of financing during the three months ended March 31, 2026, and an additional $12.0 million subsequent

to March 31, 2026, which will only be sufficient to fund our current operating plans into the first quarter of 2027.

We have based

these estimates, however, on assumptions that may prove to be wrong.

We will need additional funding to complete the development of our

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

Management has plans to secure such additional funding.

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

and commercialization efforts.

Equity Line Common Stock

Purchase Agreement

On November 25, 2024, we

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

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

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On July 30, 2025, we 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 our common stock.

In April 2025, we issued

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

In July and August 2025,

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

At-the-Market Sales

During the nine months

ended September 30, 2025, we 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,

we may sell shares of our common stock having an aggregate offering price of up to $10,000,000 from time to time, through an “at

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

Subsequent to September 30, 2025, and as of the date of this filing, we have

sold 928,860 shares under the Sales Agreement for proceeds of $2.1 million and currently have approximately $0.9 million of unsold availability

under the ATM facility.

Series C Preferred

Stock and Warrants Financing

On June 30, 2025, we entered into a Securities

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

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 million.

At-the-Market Sales Agreement

We have entered into 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”).

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

$0.0 million of unsold availability under the ATM facility.

During the year ended December

31, 2025, the Company issued 130,879 shares for aggregate proceeds of approximately $2.8 under the ATM facility.

$2.3 Million Convertible

Series B Preferred Stock and Warrants Financing

On April 23, 2024, the Company

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

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

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

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 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 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.

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 Series B Preferred Stock remains outstanding.

$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.

We received $750,000 of gross proceeds

in connection with the closing of this financing.

At the closing, we issued 750 shares of Series

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

The 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 $36.73 per share of Common Stock.

We also issued warrants exercisable for 314,466 shares of Common Stock with a five year term and an

initial exercise price of $4.77 per share, which was subsequently adjusted to $2.2165.

The proceeds of this financing, together with

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

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 Series C Preferred Stock

remains outstanding.

The proceeds of this financing, together with other

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

Cash Flow Analysis

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The following table summarizes

the statements of cash flows for the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30,

the statements of cash flows for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

Net cash provided by (used in):

Operating activities

$ (2,275,114 )

$ (1,443,166 )

Investing activities

1 unchanged sentence

Change in cash

$ (1,773,598 )

$ (1,016,406 )

Operating activities

Cash used in operating

activities for the nine months ended September 30, 2025 was ($4,335,812), primarily resulting from our net loss of ($5,702,369), change

in working capital of $5,368 primarily related to an increase in accounts payable and accrued liabilities, and non-cash charges of $1,361,189

related to depreciation and amortization and share based compensation expense.

Cash used in operating activities for both periods consisted

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

professional support services.

activities for the three months ended March 31, 2026 was $2,275,114, primarily resulting from our net loss of ($2,281,553), change in

working capital of $252,435 primarily related to an increase in accounts payable and lease liability, and non-cash charges of $236,096

related to depreciation and amortization, $7,878 amortization of ROU and $14,897 in share based compensation expense.

Cash used in operating

activities for the nine months ended September 30, 2024 was ($3,803,324), primarily resulting from our net loss of ($6,460,181) and change

in working capital of $112,262, offset by non-cash charges of $2,544,594 related to depreciation and amortization, share based compensation

expense, and the change in fair value of warrants.

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

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

activities for both periods consisted of personnel-related expenditures, marketing and promotion costs, and public company administrative

support costs such as legal and other professional support services.

Investing activities

Cash flows used in investing activities for the

nine months ended September 30, 2025 was $(534,012), consisting of capitalization of software development expenses and patent expenses.

Cash used in investing activities for the nine

months ended September 30, 2024 was ($799,535), consisting of the capitalization of software development expenses and purchase of computer

three months ended March 31, 2026 was $307,517, consisting of capitalization of software development expenses and patent expenses.

Financing activities

Cash flows generated

in financing activities for the nine months ended September 30, 2025 was $4,890,671 and primarily related to cash proceeds from the issuance

of common shares of $4,368,296 and cash proceeds (net of issuance costs) from the issuance of Series C preferred stock of $700,000, partially

offset by offering costs of $178,192.

Cash provided by financing

activities for the nine months ended September 30, 2024 was $7,572,130, which consisted of cash proceeds from the issuance of common shares

of $8,176,048 and cash proceeds from the issuance of preferred shares of $2,238,575.

This was partially offset by the repayment of the

note payable to related party of $2,750,000, payment of offering costs of $72,807 and net settlement of share-based compensation liability

in financing activities for the three months ended March 31, 2026 was $809,033 primarily related to cash proceeds from the issuance of

common shares partially offset by repayments to related party notes payable of $45,390 and offering costs of $37,500.

Funding Requirements

1 unchanged sentence

incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $99,595,219

and $89,428,436 as of September 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025 and December 31, 2024, we had cash

and cash equivalents of $2,727,166 and $2,706,319, respectively.

Our cash is comprised primarily of demand deposit accounts and money

market funds.

We secured $ 5.1 million of financing

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 our current operating plans into the third quarter of 2026.

We have based these estimates, however, on assumptions that

may prove to be wrong.

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

demonstrated market fit.

and $97,283,343 as of March 31, 2026 and December 31, 2025, respectively.

As of March 31, 2026 and December 31, 2025, we had cash and

cash equivalents of $1,413,387 and $3,186,985, respectively.

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

We secured $0.9 million of financing during the three months ended March 31, 2026, and an additional $12 million of financing subsequent

to March 31, 2026, which will only be sufficient to fund our current operating plans into the first quarter of 2027.

We have based

these estimates, however, on assumptions that may prove to be wrong.

We will need additional funding to complete the development of our

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

Management has plans to secure such additional funding.

If we are unable to raise capital when needed or on acceptable

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

We expect our expenses

to increase in connection with our ongoing activities, particularly as we continue the development, and marketing and promotion of faidr.

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

and commercialization efforts.

We expect our expenses to

increase in connection with our ongoing activities, particularly as we continue the development, and marketing and promotion of faidr.

In addition, we expect to continue to incur additional costs associated with operating as a public company, including legal, accounting,

6 unchanged sentences

avoiding and defending against intellectual property infringement, misappropriation and other claims.

Off-balance sheet

We did not have during

the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the

Critical Accounting

Off-balance sheet arrangements

We did not have during the

periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Critical Accounting Estimates

Our financial statements

10 unchanged sentences

condition and results of operations.

Software Development

The Company accounts

for costs incurred in the development of computer software as software research and development costs until the preliminary project stage

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.

9 unchanged sentences

Equity-based compensation

Certain of our employees and consultants have

received grants of common shares in our company.

These awards are accounted for in accordance with guidance prescribed for accounting

for equity-based compensation.

Certain of our employees and consultants have received

grants of common shares in our company.

These awards are accounted for in accordance with guidance prescribed for accounting for equity-based

compensation.

Based on this guidance and the terms of the awards, the awards are equity classified.

The common shares

receive distributions if any in an order of priority in accordance with our limited liability company agreement.

The fair value of each award is determined using

the Black-Scholes option-pricing model which values options based on the stock price at the grant date, the expected life of the option,

the estimated volatility of the stock, and the risk-free interest rate over the expected life of the option.

The expected volatility was

determined considering comparable companies historical stock prices as a peer group for the fiscal year the grant occurred and prior fiscal

years for a period equal to the expected life of the option.

The risk-free interest rate was the rate available with a term equal to the

expected life of the option.

The common shares receive distributions

if any in an order of priority in accordance with our limited liability company agreement.

The fair value of each award is determined using the

Black-Scholes option-pricing model which values options based on the stock price at the grant date, the expected life of the option, the

estimated volatility of the stock, and the risk-free interest rate over the expected life of the option.

The expected volatility was determined

considering comparable companies historical stock prices as a peer group for the fiscal year the grant occurred and prior fiscal years

for a period equal to the expected life of the option.

The risk-free interest rate was the rate available with a term equal to the expected

life of the option.

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

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Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as

defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

We are a smaller reporting company as defined

by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

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 2. Management’s Discussion and Analysis