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Item 1. Financial Statements

2026-08-14 compared with 2026-05-15 · 480 added, 317 removed, 339 unchanged (70% of the section changed)

1 unchanged sentence

Condensed Balance Sheets

March 31, 2026

June 30, 2026

December 31, 2025

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Shareholders’ equity:

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

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 March 31, 2026 and December 31, 2025, respectively

Series C Preferred stock - $ 0.001

shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

Common stock - $ 0.001

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and 5,803,182 and 402,833

402,833 shares

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

issued and outstanding

as of June 30, 2026 and December 31, 2025, respectively (1)

Additional paid-in capital

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Total liabilities and shareholders’ equity

The accompanying notes are an integral part of these

unaudited condensed financial statements.

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

The accompanying notes are an integral part of

these unaudited condensed financial statements.

Company’s common stock outstanding as of June 30, 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.

1 unchanged sentence

Three Months Ended

Six Months Ended

Operating expenses:

9 unchanged sentences

( 1,567,208 )

Other income (expense):

( 5,312,432 )

( 3,318,220 )

Other expense:

Interest income (expense)

3 unchanged sentences

( 1,568,653 )

( 5,256,819 )

( 3,321,218 )

Provision for income taxes

1 unchanged sentence

$ ( 1,568,653 )

$ ( 5,256,819 )

$ ( 3,321,218 )

Net loss per share attributable to common stockholders

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Basic and diluted

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.

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 six months ended June 30 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 Months Ended March 31, 2026 and 2025

B Preferred Stock

C Preferred Stock

Paid-In-Capital

for the Six Months Ended June 30, 2026 and 2025

Series C Preferred Stock

Common Stock (1)

Balance, December 31, 2025

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

Series B preferred stock converted to common stock

Offering costs

6 unchanged sentences

( 99,595,219 )

Issuance of common shares

Issuance of Pre-Funded Warrants

Common Warrant

Offering costs

( 1,190,179 )

Series B Preferred Stock

( 1,190,179 )

Exercise of Pre-Funded Warrants into Common Stock

Share-based compensation

Series C Preferred Conversion

Exercise of Common Warrants

Conversion of Capitalized dividends into Common Shares

( 2,975,266 )

Balance, June 30, 2026

$ 113,254,051

$ ( 102,570,485 )

Series C Preferred Stock

Paid-In-Capital

Common Stock (1)

Balance, December 31, 2024

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( 91,239,759 )

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.

Issuance of common shares, net of costs

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

Series B preferred stock converted to common stock

Share-based compensation

Capitalized dividends

RSS adjustment

( 1,568,653 )

Balance, June 30, 2025

$ ( 92,852,762 )

The accompanying notes are an integral part of

these unaudited condensed financial statements.

The Company’s common stock outstanding as of June 30, 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,

Condensed Statements of Cash Flows

For the Three Months Ended March

For the Six Months Ended June 30,

Cash flows from operating activities:

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Prepaid assets

Other current assets

Accounts payable and accrued liabilities

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Cash flows from financing activities:

Deferred Offering costs

Repayments of debt

Offering costs

( 1,117,723 )

Repayments of note payable

Proceeds from issuance of preferred shares, net of issuance costs

Proceeds from issuance of common shares, net of issuance costs

Dividends and Series B preferred stock converted to common stock

Proceeds from issuance of common shares

Proceeds from issuance of prefunded warrants

Proceeds from issuance of common warrants

Proceeds from exercise of common warrants

Net cash provided by financing activities

Net decrease in cash

( 1,773,598 )

Net increase (decrease) in cash

( 1,638,563 )

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Capitalized dividends

The accompanying notes are an integral part of these

unaudited condensed financial statements.

The accompanying notes are an integral part of

these unaudited condensed financial statements.

Notes to Condensed Financial Statements (Unaudited)

Note 1 – Description of Business, Basis of Presentation and

Summary of Significant Accounting Policies

Note 1 – Description of Business, Basis of Presentation

and Summary of Significant Accounting Policies

Description of Business

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Basis of Presentation

The accompanying financial statements have been prepared

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

The accompanying financial statements have been

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

Interim Financial Information

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equity incentive plans.

As a result of the reverse stock splits, unless described

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

As a result of the reverse stock splits, unless

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

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

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Actual results could differ from those estimates.

The condensed financial statements include some amounts

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

The most significant estimates relate to valuation of capital stock,

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

for capitalized software development costs.

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

could be significant.

The condensed financial statements include some

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

The most significant estimates relate to valuation of capital

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

period for capitalized software development costs.

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

any adjustment could be significant.

Risks and Uncertainties

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retain, and motivate qualified personnel.

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

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

Going Concern

Our existing cash and cash equivalents was $ 9,558,190

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.

at June 30, 2026 which will only be sufficient to fund our current operating plans into the second 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.

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

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Cash and Cash Equivalents

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

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

The Company had cash on hand of $ 411,270

and $ 1,052,990 as of June 30, 2026 and December 31, 2025, respectively.

The Company considers all highly liquid instruments

purchased with an original maturity of three months or less to be cash equivalents.

The Company had cash equivalents of $ 957,630 and

$ 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.

The Company had cash equivalents of $ 9,146,920

and $ 2,133,995 as of June 30, 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 June 30, 2026, the Company had approximately $ 9.3

million in excess of federally insured limits.

As 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

Property and Equipment

Property and equipment are stated at cost, net of

accumulated depreciation.

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,

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Software Development Costs

The Company accounts for costs incurred in the development

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

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

The Company ceases capitalization of development costs

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

Software development costs are amortized over

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

The Company accounts for costs incurred in the

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

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

The Company ceases capitalization of development

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

Software development costs are amortized

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

Costs associated with significant upgrades and enhancements

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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 considered impaired and expensed during the period of such determination.

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.

Unamortized capitalized software development

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

determination.

Software development costs of $ 252,088

and $ 239,502

were capitalized for the three months ended June 30, 2026 and 2025, respectively.

Software development costs of $ 551,857

and $ 476,475

were capitalized for the six months ended June 30, 2026 and 2025, respectively.

Amortization of capitalized software development

costs was $ 259,568

and $ 356,227

for the three months ended June 30, 2026 and 2025, respectively and $ 494,171

and $ 787,286

for the six months ended June 30, 2026 and 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.

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.

The Company determined long-lived assets

were no t impaired for the six months ended June 30, 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

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

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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.

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.

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

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

Revenue is measured according to Accounting Standards

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

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

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

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

( 1) Identify the contract with a client;

(2) Identify the

performance obligations in the contract;

(2) Identify the performance

obligations in the contract;

(3) Determine the transaction price;

(4) Allocate the transaction price to performance obligations

in the contract;

(4) Allocate the transaction price to performance obligations in the

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

The Company will report

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

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

Collected taxes, if applicable, will be recorded

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

Subscriber revenue will consist primarily of subscription

The Company reports revenues

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

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

Collected taxes, if applicable, are recorded within other

current liabilities until remitted to the relevant taxing authority.

Subscriber revenue consists primarily of subscription

fees and other ancillary subscription-based revenues.

Revenue will be recognized on a straight-line basis when the performance obligations

Revenue is recognized on a straight-line basis when the performance obligations

to provide each service for the period have been satisfied, which is over time as our subscription services are continuously available

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There is no revenue recognized for unpaid trial subscriptions.

Customers may pay for the services in advance of

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

The deferred revenue will be recognized

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

Customers may pay for the services in advance

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

The deferred revenue is 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 ,

The Company expenses advertising costs as incurred.

Advertising expense for the three months ended June 30, 2026 and 2025 was $ 232,106 and $ 53,143 ,

respectively.

Advertising expense for the six months ended June 30, 2026 and 2025 was $ 417,009

and $ 143,238 , respectively.

Share-Based Compensation

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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).

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.

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 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 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.

last 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 $1.235 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

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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:

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

June 30, 2026

December 31, 2025

Computers and equipment

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The Company recognized depreciation expense of

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.

$ 903 and $ 1,348 for the three months ended June

30, 2026 and 2025, respectively, related to property and equipment, amortization expense of $ 930

and $ 163 for the three months ended June 30, 2026 and 2025, respectively, related to intangible

assets, and amortization expense of $ 259,568 and $ 356,227

for the three months ended June 30, 2026 and 2025, respectively, related to software development costs.

The Company recognized depreciation expense

of $ 1,806 and $ 2,696 for the six months ended

June 30, 2026 and 2025, respectively, related to property and equipment, amortization expense of $ 1,520

and $ 185 for the six months ended June 30, 2026 and 2025, respectively, related to intangible

assets, and amortization expense of $ 494,171 and $ 787,286

for the six months ended June 30, 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

June 30, 2026

December 31, 2025

Accounts payable

Accrued liabilities

Total accounts payable and accrued liabilities

Credit cards payable

Note 4 – Notes Payable

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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

The original principal

amount of the note was $ 151,300 and bore interest at a fixed annual rate of 8.250 %.

The note required monthly payments of principal and

interest and matured on May 20, 2026 .

The note has been fully paid down.

As of June 30, 2026 and

December 31, 2025, the outstanding principal balance was $ 0 and $ 60,520 , respectively.

The note is unsecured and contains no financial

The note was unsecured and contained 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 $ 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

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

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

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.

expense, as part of general and administrative expenses in the statements of operations, was $ 21,199 and $ 8,960

for the three months ended June 30, 2026 and 2025, respectively and $ 42,183 and $ 17,920 for

the six months ended June 30, 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 litigation will not have a material adverse effect on the Company.

There are no active litigations as of the date

the financial statements were issued.

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

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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 outcome of the complaint was neither probable nor reasonably

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

In addition, one investor in our April 2026 common

stock and warrant public offering has contacted the Company claiming that it would be owed a cash payment for warrants it holds if the

Company's proposed merger with Thramann Holdings LLC is consummated.

We believe this investor's claim is without merit because all warrants

expire in accordance with their terms prior to the consummation of the Company's pending merger.

No complaint has been filed by this investor.

If a complaint is filed, the Company believes it would have meritorious defenses to this claim and would intend to defend such case vigorously.

The outcome of the claim was neither probable or estimable as of the date that these financial statements were issued.

Therefore, no accrual

has been made.

Note 6 – Share-based Issuances

Stock Options

The fair value of each option award is estimated on

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

Because Black Scholes

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

Expected volatilities and based on implied

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

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

granted are expected to be outstanding.

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

The fair value of each option award is estimated

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

Because Black

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

Expected volatilities and based

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

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

options granted are expected to be outstanding.

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

Treasury yield curve in effect at the time of grant.

The following table presents the activity for stock

options outstanding:

The following table presents the activity

for stock options outstanding:

Schedule of stock option activity

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Forfeited/canceled

Outstanding – March 31, 2026

Outstanding – June 30, 2026

Weighted Average Exercise Price

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Forfeited/canceled

Outstanding – March 31, 2025

The following table presents the composition of options outstanding and

Outstanding – June 30, 2025

The following table presents the composition of options outstanding

and exercisable:

Schedule of options outstanding and exercisable

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Exercise Prices

Total – March 31, 2026

Total - June 30, 2026

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

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.

The Company’s common stock outstanding as of June 30, 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

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Forfeited/canceled

Vested/issued

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.

Outstanding – June 30, 2025

The Company recognized share-based

compensation expense related to stock options and restricted stock units of $ 15,087

for the three months ended June 30, 2026 and 2025, respectively and $ 29,984

for the six months ended June 30, 2026 and 2025.

The remaining unvested share-based compensation expense of $ 140,678

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.

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 .

is expected to be recognized over the next 39

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 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

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

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 $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

Series B Preferred Stock and Warrants Financing

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 Offering”).

The aggregate

market value of shares that the Company can sell under the Sales Agreement will be subject to the limitations of General Instruction I.B.6

of Form S-3, to the extent required under such instruction.

During the three and

six months ended June 30, 2026, the Company sold 0 and 98,043 shares, respectively 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 under the Sales Agreement for aggregate proceeds of approximately $ 2.8 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

The Company received $ 2,314,000

of gross proceeds in connection with the closing of this financing.

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

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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.

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.

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.

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 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.

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 June 30, 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 $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.

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.

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 plus capitalized dividends to date 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.

As of June 30, 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.

April 2026 Registered Direct Offering

On April 27, 2026, the Company closed a

best-efforts registered direct offering (the “Offering”) of 1,405,006 shares

of common stock, together with, in lieu of common stock for certain investors, 3,679,737

pre-funded warrants to purchase common stock (the “Pre-Funded Warrants”), and accompanying common stock purchase

warrants to purchase up to 5,084,743

shares of common stock (the “Common Warrants”).

The combined public offering price was $ 2.36

per share (or per Pre-Funded Warrant) and accompanying Common Warrant.

Gross proceeds were $ 11,999,993

(approximately $12.0 million), before deduction of a 7.0 %

cash fee payable to the placement agent and other offering expenses, together totaling approximately $ 1.2

Gross proceeds were allocated among the common stock, pre-funded warrants and common warrants on a relative fair

The Pre-Funded Warrants have an exercise

price of $ 0.001

per share, which was pre-funded at closing, and no stated expiration date;

they remain exercisable until exercised in full.

Common Warrants have an exercise price of $ 2.36

per share and expire earlier of (i) five years from the initial exercise date and (ii) the consummation of the Company’s

pending merger with Thramann Holdings, LLC (the "Merger").

All 3,679,737

Pre-Funded Warrants were exercised by April 30, 2026 for an aggregate exercise price of $3,680.

As of June 30, 2026, 1,000

common warrants were exercised at $ 2.36

with the proceeds of $ 2,360 ,

leaving 5,083,743

Common Warrants outstanding.

The Company evaluated the Common Warrants and Pre-Funded Warrants under ASC 815-40, Derivatives and

Hedging—Contracts in Entity’s Own Equity , and determined that both instruments are indexed to the Company’s

own stock and meet the criteria for equity classification.

Accordingly, the warrants have been classified within stockholders’

equity and are not subject to fair value remeasurement in future periods.

All 3,679,737 Pre-Funded

Warrants were exercised in full as of June 30, 2026.

Upon exercise, $ 5,711,457

was reclassified from the Pre-Funded Warrants equity account to common stock and additional paid-in capital.

No Pre-Funded Warrants

remain outstanding.

Warrant Valuation

The Company estimated the fair value of the Common

Warrants issued in the Offering on the issuance date using the Black-Scholes option-pricing model.

The fair value of the Pre-Funded Warrants

approximated their intrinsic value due to the nominal exercise price of $0.001 per share and was recorded within stockholders' equity.

The assumptions used in estimating the fair value of the Common Warrants were based on information available at the issuance date.

the Common Warrants and Pre-Funded Warrants met the criteria for equity classification under ASC 815-40, the warrants were recorded in

stockholders' equity and are not subsequently remeasured.

Schedule of assumptions

Common Warrants

Valuation methodology

Black-Scholes option-pricing model

Exercise price

Risk-free rate

Expected term (in years)

Dividend yield

The expected term reflects management's estimate of the period until exercise or termination, including consideration

of the pending merger transaction and the contractual provision causing the warrants to expire upon consummation of the merger.

The following table presents

3 unchanged sentences

Outstanding - December 31, 2025

Forfeited/cancelled/restored

Outstanding – March 31, 2026

Forfeited/canceled

( 3,680,737 )

Outstanding – June 30, 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.

Forfeited/canceled

Outstanding – June 30, 2025

During the six months ended June 30, 2026 and

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

and 40,840 , 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.

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:

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 $ 21,199 and

$ 8,960 for the three months ended June 30, 2026 and 2025, respectively and $ 42,183 and

$ 17,920 for the six months ended June 30, 2026 and 2025, respectively.

As of June 30,

2026, weighted-average remaining lease term and discount rate were as follows:

Schedule of weighted-average remaining lease term and discount rate

March 31, 2026

June 30, 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 March 31, 2026:

undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of June 30, 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 CFO 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

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.

1 unchanged sentence

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.

For the three months ended of June 30, 2026 and

June 30, 2025, 9,262,392 and 109,946 , 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.

For the six months ended of June 30, 2026 and

June 30, 2025 , 7,479 and 127,944 , 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.

The shares underlying the Pre-Funded Warrants

are included in basic weighted-average shares outstanding from the April 27, 2026 issuance date because the Pre-Funded Warrants are exercisable

for nominal consideration and are not subject to any contingency other than the passage of time.

The Common Warrants are excluded from

basic earnings per share and are evaluated each period for their dilutive effect using the treasury stock method (or a method that reflects

the Common Warrant’s cash-settlement feature);

given the Company’s net losses, the Common Warrants were antidilutive and excluded from

diluted earnings per share for the periods presented.

Note 11 – Subsequent Events

Management evaluated subsequent events and transactions

that occurred after the balance sheet date, up to the date that the financial statements were issued.

Based upon this review, other than

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

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.

Interim Bridge Funding for Target Companies

On July 17, 2026, Auddia entered into a senior unsecured bridge note

(each a “Bridge Note”) with each of Thramann Holdings, LT350, Influence, and Voyex.

The purpose of the Bridge Notes is to

provide a limited amount of interim funding and working capital to the Target Companies while the Merger Agreement is still pending.

The Bridge Notes were reviewed and approved by a Auddia’s special

committee of independent and disinterested directors (the “Special Committee”) and Audit Committee.

Terms of the Bridge Notes

Amount and Funding

The maximum amount to be funded by Auddia under each of the Bridge

Notes is up to (i) $360,000 for Thramann Holdings, (ii) $400,000 for LT350;

(iii) $590,000 for Influence Healthcare;

and (iv) $50,000

Amounts will be funded in tranches as mutually agreed to by the parties.

Any advance in excess of $50,000 will require approval

of the Auddia’s Audit Committee.

No further amounts will be funded if the pending Merger Agreement is terminated.

As of the date of this filing, the aggregate funded amount was $920,728.

Interest Rate;

Maturity Date

Interest shall accrue at the rate of 8.0% per annum, compounded annually.

Unless earlier repaid or converted, outstanding principal and unpaid

accrued interest on each Bridge Note shall be due and payable upon the earlier of (i) the second anniversary of the termination of the

Merger Agreement or (ii) a change of control (as defined in the Bridge Notes) involving a particular Target Company.

In the event of a

change of control involving LT350, Influence or Voyex, the particular Target Company would owe a repayment premium equal to 50% of the

outstanding principal amount of its Bridge Note.

Seniority and Security

The Bridge Notes are unsecured senior obligations of each Target Company.

Each Target Company has agreed not to incur any debt that would be secured or senior to its Bridge Note.

Conversion Terms

The Thramann Holdings Bridge Note is not convertible.

If any of the other Target Companies consummates, on or prior to its

Bridge Note maturity date, an equity financing pursuant to which it sells shares of its equity securities (the “Next Round Securities”),

with an aggregate sales price of not less than the amount set forth below, excluding any and all indebtedness under the Bridge Note that

is converted into Next Round Securities, and with the principal purpose of raising capital (a “Qualified Financing”), then

all principal, together with all unpaid accrued interest under the particular Bridge Note, shall automatically convert into shares of

the Next Round Securities at 80% of the cash price per share paid by the other purchasers of Next Round Securities in the Qualified Financing.

The Qualified Financing threshold shall be (i) $3,000,000 for LT350;

(ii) $2,000,000 for Influence;

and $1,000,000 for Voyex.

Credit of Funds for Cash Merger Closing Condition

The Merger Agreement contains a closing condition that Auddia’s

net cash at closing be at least equal to $12,000,000.

The parties have agreed that any funds advanced by Auddia to the Target Companies

under the Bridge Notes shall be credited to Auddia’s net cash at closing for purposes of this closing condition under the Merger

The above summary of the Bridge Notes does not purport to be a complete

summary of the Bridge Notes and is qualified in its entirety by reference to the full text of each of the Bridge Notes, copies of which

are filed herewith as an exhibit and are incorporated by reference.

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