AUDDIA INC.
For the period ended Mar 31, 2026. Filed May 15, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 15, 2026
AUUD$0.48-17.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001683168-25-008031
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001683168-26-004032
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 124 previous paragraphs and 136 current paragraphs.
75 unchanged; 21 reworded; 39 added; 24 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (39)
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
Sales and marketing
Current report
Research and development
Current report
General and administrative
Current report
Sales and marketing
Current report
Sales and marketing expenses 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.
Current report
Research and development
Current report
Research and development 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 Platform.
Current report
General and administrative
Current report
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.
Current report
Depreciation and amortization 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.
Current report
Other income (expense), net
Current report
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.
Current report
Income taxes
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
Going Concern
Current report
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, 2026, 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.
Current report
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.
Current report
During the year ended December 31, 2025, the Company issued 130,879 shares for aggregate proceeds of approximately $2.8 under the ATM facility.
Current report
$2.3 Million Convertible Series B Preferred Stock and Warrants Financing
Current report
At the closing, the Company issued 2,314 shares of Series B convertible preferred stock (“Series B Preferred Stock”) at a purchase price of $1,000 per share of Series B Preferred Stock. The Series B Preferred Stock is convertible into Common Stock at an initial conversion price (“Conversion Price”) of $242.32 per share of Common Stock. The Company also issued warrants (“Warrants”) exercisable for 9,552 shares of Common Stock with a five-year term and an initial exercise price of $242.32 per share, which has been subsequently adjusted to $2.36. The proceeds of this financing, together with other available cash resources, were used to repay outstanding debt and for general corporate purposes.
Current report
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.
Current report
On February 19, 2025, 140 shares of Series B Preferred stock and capitalized dividends were converted to 4,326 shares of Common Stock.
Current report
In April 2025, 447 shares of Series B Preferred stock and capitalized dividends were converted to 11,069 shares of Common stock.
Current report
On June 26, 2025, 192 shares of Series B Preferred stock and capitalized dividends were converted to 4,484 shares of Common Stock.
Current report
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”).
Current report
As of March 31, 2026, no Series B Preferred Stock remains outstanding.
Current report
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.
Current report
As of April 24, 2026, no Series C Preferred Stock remains outstanding.
Removed paragraphs (24)
Previous report
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. Under 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.
Previous report
Direct cost of services
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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 30, 2024. The decrease was due to a decrease in accounting, legal, and stock option expense.
Previous report
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 decreased.
Previous report
Other expense, net
Previous report
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.
Previous report
Comparison of the Nine Months Ended September 30, 2025 and 2024
Previous report
Revenue
Previous report
Direct cost of services
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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 30, 2024. 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 in 2025.
Previous report
Restructuring
Previous report
Restructuring expenses increased by $806,432 or 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.
Previous report
Depreciation and amortization
Previous report
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 decreased.
Previous report
Other expense, net
Previous report
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.
Previous report
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 equipment.
Previous report
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 of $19,686.
Reworded paragraphs (21)
Previous wording
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.
Current wording
The Company initially launched faidr with a B2C subscription model in February of 2022 and is transitioning to a B2B subscription model.
Previous wording
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. The MVP is expected to be supported by a pilot program of participating customers.
Current wording
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.
Previous wording
We have funded our operations with proceeds from the February 2021 IPO, Series A warrants exercised in July 2021 and common share issuance during June of 2023. We 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:
Current wording
We have funded our operations with proceeds from the February 2021 IPO, Series A warrants exercised in July 2021 and common share issuance during June of 2023. We 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 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:
Previous wording
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. 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.
Current wording
As 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. We will need additional funding to complete the development of our full product line and scale products with a demonstrated market fit. Management has plans to secure such additional funding. However, if we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce, or eliminate our technology development and commercialization efforts.
Previous wording
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.
Current wording
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.
Previous wording
On February 27, 2024, the Company effectuated a 1-for-25 reverse stock split.
Current wording
On March 31, 2026, the Company effectuated a 1-for-7.7 reverse stock split.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
Restructuring expenses increased by $472,689 or 100% 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.
Previous wording
We have incurred operating losses since our inception and have an accumulated deficit as a result of ongoing efforts to develop and commercialize our faidr and podcasting Apps. As of September 30, 2025, we had cash and cash equivalents of $2,727,166. 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 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. 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.
Current wording
We have incurred operating losses since our inception and have an accumulated deficit as a result of ongoing efforts to develop and commercialize our faidr and podcasting Apps. As of March 31, 2026, we had cash and cash equivalents of $1,413,387. 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. 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.
Previous wording
On November 25, 2024, we 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, we have the right, but not the obligation to require White Lion to purchase, from time to time, up to $10,000,000 in aggregate gross purchase price of newly issued shares of our common stock, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement. On July 30, 2025, we amended the equity line Common Stock Purchase Agreement from $10,000,000 to $50,000,000 in aggregate gross purchase price of newly issued shares of our common stock.
Current wording
On November 25, 2024, we 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, we have the right, but not the obligation to require White Lion to purchase, from time to time, up to $10,000,000 in aggregate gross purchase price of newly issued shares of our common stock, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement. On July 30, 2025, we amended the equity line Common Stock Purchase Agreement from $10,000,000 to $50,000,000 and extended the commitment to December 31, 2027.
Previous wording
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.
Current wording
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 million.
Previous wording
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”).
Current wording
We have 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 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.
Previous wording
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.
Current wording
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.
Previous wording
Series C Preferred Stock and Warrants Financing
Current wording
$750,000 Series C Preferred Stock and Warrants Financing
Previous wording
On June 30, 2025, we entered into a Securities Purchase Agreement with accredited investors for a convertible preferred stock and warrants financing. We received $750,000 of gross proceeds in connection with the closing of this financing.
Current wording
On June 30, 2025, the Company entered into a Securities Purchase Agreement with accredited investors for a convertible preferred stock and warrants financing. The Company received $750,000 of gross proceeds in connection with the closing of this financing.
Previous wording
At the closing, we issued 750 shares of Series C convertible preferred stock (“Series C Preferred Stock”) at a purchase price of $1,000 per share of Series C Preferred Stock. The Series C Preferred Stock is convertible into Common Stock at an initial conversion price (“Series C Conversion Price”) of $4.77 per share of Common Stock. We also issued warrants exercisable for 314,466 shares of Common Stock with a five year term and an initial exercise price of $4.77 per share, which was subsequently adjusted to $2.2165.
Current wording
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 Stock. 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.
Previous wording
The following table summarizes the statements of cash flows for the nine months ended September 30, 2025 and 2024:
Current wording
The following table summarizes the statements of cash flows for the three months ended March 31, 2026 and 2025:
Previous wording
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.
Current wording
Cash used in operating 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 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.
Previous wording
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.
Current wording
Cash flows used in investing activities for the three months ended March 31, 2026 was $307,517, consisting of capitalization of software development expenses and patent expenses.
Previous wording
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.
Current wording
Cash flows generated 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.
Previous wording
We historically have incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $95,262,663 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. 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.
Current wording
We historically have incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $99,595,219 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 funds. 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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On April 23, 2024, the Company entered into a securities purchase agreement with accredited investors for a convertible preferred stock and warrants financing. The Company received $2,314,000 of gross proceeds in connection with the closing of this financing.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
The following table summarizes our results of operations:
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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.