[10-Q] VOCODIA HLDGS CORP Quarterly Earnings Report
On 06/25/2025, President & COO (and 10% owner) Nathan Eric Baxter filed a Form 4 reporting the acquisition of 93.7383 common shares of The Scotts Miracle-Gro Company (SMG) at $53.34 per share (transaction code J). After the purchase, his direct holdings total 50,602.6841 shares, while 36,993 shares remain held indirectly through Hagedorn Partnership, L.P. No derivative security activity was disclosed, and the filing does not amend any prior report. The transaction increases Baxter’s direct stake by roughly 0.19%, an immaterial amount relative to his overall ownership and SMG’s share count, indicating a routine adjustment rather than a strategic accumulation. Nevertheless, the buy modestly reinforces executive-shareholder alignment because it adds to an already significant insider position.
Il 25/06/2025, il Presidente e COO (nonché proprietario del 10%) Nathan Eric Baxter ha presentato un modulo Form 4 segnalando l'acquisto di 93,7383 azioni ordinarie della The Scotts Miracle-Gro Company (SMG) al prezzo di $53,34 per azione (codice transazione J). Dopo l'acquisto, la sua partecipazione diretta ammonta a 50.602,6841 azioni, mentre 36.993 azioni rimangono detenute indirettamente tramite Hagedorn Partnership, L.P. Non sono state segnalate attività su strumenti derivati e la comunicazione non modifica alcuna segnalazione precedente. L'operazione aumenta la quota diretta di Baxter di circa il 0,19%, una quantità irrilevante rispetto alla sua proprietà complessiva e al numero totale di azioni SMG, indicando un aggiustamento di routine piuttosto che un accumulo strategico. Tuttavia, l'acquisto rafforza modestamente l'allineamento tra dirigente e azionista, poiché si aggiunge a una posizione interna già significativa.
El 25/06/2025, el Presidente y COO (y propietario del 10%) Nathan Eric Baxter presentó un Formulario 4 informando la adquisición de 93.7383 acciones ordinarias de The Scotts Miracle-Gro Company (SMG) a $53.34 por acción (código de transacción J). Tras la compra, su participación directa totaliza 50,602.6841 acciones, mientras que 36,993 acciones permanecen en posesión indirecta a través de Hagedorn Partnership, L.P. No se reportó actividad con valores derivados y la presentación no modifica ningún informe previo. La transacción incrementa la participación directa de Baxter en aproximadamente un 0.19%, una cantidad insignificante en relación con su propiedad global y el número de acciones de SMG, indicando un ajuste rutinario más que una acumulación estratégica. No obstante, la compra refuerza modestamente la alineación entre ejecutivo y accionista, ya que se suma a una posición interna ya significativa.
2025년 6월 25일, 사장 겸 COO(10% 지분 보유)인 Nathan Eric Baxter가 Form 4를 제출하여 The Scotts Miracle-Gro Company(SMG)의 보통주 93.7383주를 주당 $53.34에 취득했다고 보고했습니다(거래 코드 J). 매수 후 그의 직접 보유 주식 수는 총 50,602.6841주이며, 36,993주는 Hagedorn Partnership, L.P.를 통해 간접적으로 보유 중입니다. 파생상품 관련 활동은 보고되지 않았으며, 이번 제출은 이전 보고서를 수정하지 않습니다. 이번 거래로 Baxter의 직접 지분은 약 0.19% 증가했으며, 이는 전체 소유 지분과 SMG 주식 수에 비해 미미한 수준으로 전략적 축적보다는 일상적인 조정으로 보입니다. 그럼에도 불구하고 이번 매수는 이미 상당한 내부자 지분에 더해 경영진과 주주의 이해관계 일치를 다소 강화합니다.
Le 25/06/2025, le Président et COO (et détenteur de 10%) Nathan Eric Baxter a déposé un formulaire 4 signalant l'acquisition de 93,7383 actions ordinaires de The Scotts Miracle-Gro Company (SMG) au prix de 53,34 $ par action (code transaction J). Après cet achat, ses avoirs directs s'élèvent à 50 602,6841 actions, tandis que 36 993 actions restent détenues indirectement via Hagedorn Partnership, L.P. Aucune activité sur titres dérivés n'a été divulguée, et ce dépôt ne modifie aucun rapport antérieur. Cette transaction augmente la participation directe de Baxter d'environ 0,19 %, un montant négligeable par rapport à sa détention globale et au nombre d'actions de SMG, indiquant un ajustement de routine plutôt qu'une accumulation stratégique. Néanmoins, cet achat renforce modestement l'alignement entre dirigeant et actionnaire, puisqu'il s'ajoute à une position d'initié déjà significative.
Am 25.06.2025 reichte Präsident und COO (sowie 10%-Eigentümer) Nathan Eric Baxter ein Formular 4 ein, in dem der Erwerb von 93,7383 Stammaktien der The Scotts Miracle-Gro Company (SMG) zu je $53,34 (Transaktionscode J) gemeldet wurde. Nach dem Kauf beläuft sich sein direkter Anteil auf insgesamt 50.602,6841 Aktien, während 36.993 Aktien indirekt über Hagedorn Partnership, L.P. gehalten werden. Es wurden keine Derivatgeschäfte gemeldet, und die Einreichung ändert keinen früheren Bericht. Die Transaktion erhöht Baxters direkten Anteil um etwa 0,19%, eine unerhebliche Menge im Verhältnis zu seinem Gesamtbesitz und der Aktienanzahl von SMG, was eher eine routinemäßige Anpassung als eine strategische Aufstockung darstellt. Dennoch stärkt der Kauf die Ausrichtung zwischen Führungskraft und Aktionär leicht, da er eine bereits bedeutende Insiderposition ergänzt.
- Insider alignment: President & COO Nathan Baxter added 93.74 shares, lifting direct ownership to 50,602.68 shares.
- Immaterial size: The purchase amounts to less than 0.2% of Baxter’s existing stake, offering limited insight into future performance.
Insights
TL;DR — Minor insider buy; neutral market impact, slight positive governance signal.
The 93.7-share purchase by President & COO Nathan Baxter is economically negligible (<1% of his stake, de minimis versus float) and coded J, suggesting a non-open-market adjustment. With no derivative activity and no change in indirect holdings, the filing is informational rather than materially market-moving. Investors may view any insider acquisition as a confidence cue, but the tiny size limits signaling power, keeping the overall impact neutral.
Il 25/06/2025, il Presidente e COO (nonché proprietario del 10%) Nathan Eric Baxter ha presentato un modulo Form 4 segnalando l'acquisto di 93,7383 azioni ordinarie della The Scotts Miracle-Gro Company (SMG) al prezzo di $53,34 per azione (codice transazione J). Dopo l'acquisto, la sua partecipazione diretta ammonta a 50.602,6841 azioni, mentre 36.993 azioni rimangono detenute indirettamente tramite Hagedorn Partnership, L.P. Non sono state segnalate attività su strumenti derivati e la comunicazione non modifica alcuna segnalazione precedente. L'operazione aumenta la quota diretta di Baxter di circa il 0,19%, una quantità irrilevante rispetto alla sua proprietà complessiva e al numero totale di azioni SMG, indicando un aggiustamento di routine piuttosto che un accumulo strategico. Tuttavia, l'acquisto rafforza modestamente l'allineamento tra dirigente e azionista, poiché si aggiunge a una posizione interna già significativa.
El 25/06/2025, el Presidente y COO (y propietario del 10%) Nathan Eric Baxter presentó un Formulario 4 informando la adquisición de 93.7383 acciones ordinarias de The Scotts Miracle-Gro Company (SMG) a $53.34 por acción (código de transacción J). Tras la compra, su participación directa totaliza 50,602.6841 acciones, mientras que 36,993 acciones permanecen en posesión indirecta a través de Hagedorn Partnership, L.P. No se reportó actividad con valores derivados y la presentación no modifica ningún informe previo. La transacción incrementa la participación directa de Baxter en aproximadamente un 0.19%, una cantidad insignificante en relación con su propiedad global y el número de acciones de SMG, indicando un ajuste rutinario más que una acumulación estratégica. No obstante, la compra refuerza modestamente la alineación entre ejecutivo y accionista, ya que se suma a una posición interna ya significativa.
2025년 6월 25일, 사장 겸 COO(10% 지분 보유)인 Nathan Eric Baxter가 Form 4를 제출하여 The Scotts Miracle-Gro Company(SMG)의 보통주 93.7383주를 주당 $53.34에 취득했다고 보고했습니다(거래 코드 J). 매수 후 그의 직접 보유 주식 수는 총 50,602.6841주이며, 36,993주는 Hagedorn Partnership, L.P.를 통해 간접적으로 보유 중입니다. 파생상품 관련 활동은 보고되지 않았으며, 이번 제출은 이전 보고서를 수정하지 않습니다. 이번 거래로 Baxter의 직접 지분은 약 0.19% 증가했으며, 이는 전체 소유 지분과 SMG 주식 수에 비해 미미한 수준으로 전략적 축적보다는 일상적인 조정으로 보입니다. 그럼에도 불구하고 이번 매수는 이미 상당한 내부자 지분에 더해 경영진과 주주의 이해관계 일치를 다소 강화합니다.
Le 25/06/2025, le Président et COO (et détenteur de 10%) Nathan Eric Baxter a déposé un formulaire 4 signalant l'acquisition de 93,7383 actions ordinaires de The Scotts Miracle-Gro Company (SMG) au prix de 53,34 $ par action (code transaction J). Après cet achat, ses avoirs directs s'élèvent à 50 602,6841 actions, tandis que 36 993 actions restent détenues indirectement via Hagedorn Partnership, L.P. Aucune activité sur titres dérivés n'a été divulguée, et ce dépôt ne modifie aucun rapport antérieur. Cette transaction augmente la participation directe de Baxter d'environ 0,19 %, un montant négligeable par rapport à sa détention globale et au nombre d'actions de SMG, indiquant un ajustement de routine plutôt qu'une accumulation stratégique. Néanmoins, cet achat renforce modestement l'alignement entre dirigeant et actionnaire, puisqu'il s'ajoute à une position d'initié déjà significative.
Am 25.06.2025 reichte Präsident und COO (sowie 10%-Eigentümer) Nathan Eric Baxter ein Formular 4 ein, in dem der Erwerb von 93,7383 Stammaktien der The Scotts Miracle-Gro Company (SMG) zu je $53,34 (Transaktionscode J) gemeldet wurde. Nach dem Kauf beläuft sich sein direkter Anteil auf insgesamt 50.602,6841 Aktien, während 36.993 Aktien indirekt über Hagedorn Partnership, L.P. gehalten werden. Es wurden keine Derivatgeschäfte gemeldet, und die Einreichung ändert keinen früheren Bericht. Die Transaktion erhöht Baxters direkten Anteil um etwa 0,19%, eine unerhebliche Menge im Verhältnis zu seinem Gesamtbesitz und der Aktienanzahl von SMG, was eher eine routinemäßige Anpassung als eine strategische Aufstockung darstellt. Dennoch stärkt der Kauf die Ausrichtung zwischen Führungskraft und Aktionär leicht, da er eine bereits bedeutende Insiderposition ergänzt.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from ______ to ______
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
| | ||
| (Address of principal executive offices) | (Zip Code) |
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area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| .. |
Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Indicate by check mark whether
the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐
As of July 7, 2025 the registrant
had
Table of Contents
| Page | |||
| PART I. | FINANCIAL INFORMATION | ||
| Item 1. | Condensed Consolidated Financial Statements (Unaudited) | ||
| Condensed Consolidated Balance Sheets | 1 | ||
| Condensed Consolidated Statements of Operations | 2 | ||
| Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) | 3 | ||
| Condensed Consolidated Statements of Cash Flows | 4 | ||
| Notes to Unaudited Condensed Consolidated Financial Statements | 5 | ||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22 | |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 30 | |
| Item 4. | Controls and Procedures | 30 | |
| PART II. | OTHER INFORMATION | 31 | |
| Item 1. | Legal Proceedings | 31 | |
| Item 1A. | Risk Factors | 32 | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 32 | |
| Item 3. | Defaults Upon Senior Securities | 32 | |
| Item 4. | Mine Safety Disclosures | 32 | |
| Item 5. | Other Information | 32 | |
| Item 6. | Exhibits | 33 | |
| Signatures | 34 | ||
i
PART I—FINANCIAL INFORMATION
Vocodia Holdings Corp
Condensed Consolidated Balance Sheets
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Prepaid expenses | ||||||||
| Other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Other assets | ||||||||
| Total Non-Current Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Liquidate damages payable | ||||||||
| Contract liabilities | ||||||||
| Related party payable | ||||||||
| Note payable | ||||||||
| Convertible notes payable, net | ||||||||
| Derivative liability | ||||||||
| Total Current Liabilities and Total Liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Shareholders’ Deficit | ||||||||
| Preferred stock, $ | ||||||||
| Series A Preferred Stock, | ||||||||
| Series B Preferred Stock, | ||||||||
| Series C Convertible Preferred Stock, | ||||||||
| Series D Redeemable Preferred Stock, | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total shareholders’ deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
Vocodia Holdings Corp
Condensed Consolidated Statements of Operations
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Sales, net | $ | $ | ||||||
| Cost of Sales | ||||||||
| Gross Loss | ( | ) | ||||||
| Operating Expenses | ||||||||
| General and administrative expenses | ||||||||
| Salaries and wages | ||||||||
| Research and development and other service providers | ||||||||
| Total Operating Expenses | ||||||||
| Operating Loss | ( | ) | ( | ) | ||||
| Other Income (Expense) | ||||||||
| Liquidated damages | ( | ) | ||||||
| Change in fair value of derivative liability | ||||||||
| Loss on settlement of debts | ( | ) | ( | ) | ||||
| Write-off of accounts receivable | ( | ) | ||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total Other Expense | ( | ) | ( | ) | ||||
| Loss Before Taxes | ( | ) | ( | ) | ||||
| Income Taxes | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted loss per common share | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of common shares outstanding - basic and diluted | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
Vocodia Holdings Corp
Condensed Consolidated Statements of Stockholders’ Deficit
For the Three Ended March 31, 2025
| Series A Preferred Stock | Common Stock | Additional Paid-In | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Common stock issued for exercise of warrants | - | ( | ) | |||||||||||||||||||||||||
| Issuance common stock for settlement of debt | - | |||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
For the Three Ended March 31, 2024
| Series A Preferred Stock | Series B Preferred Stock | Common Stock | Additional Paid-In | Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Issuance of Series B Preferred Stock | - | - | ||||||||||||||||||||||||||||||||||
| Common stock units issued for cash | - | - | ||||||||||||||||||||||||||||||||||
| Deferred offering costs | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Issuance common stock for settlement of debt | - | - | ||||||||||||||||||||||||||||||||||
| Common stock issued for conversion of debt | - | - | ||||||||||||||||||||||||||||||||||
| Common stock issued for conversion of Series B Preferred Stock | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Common stock issued for exercise of warrants | - | - | ( | ) | ||||||||||||||||||||||||||||||||
| Series C warrant issued | - | - | - | |||||||||||||||||||||||||||||||||
| Stock based compensation | - | - | - | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Vocodia Holdings Corp
Condensed Consolidated Statements of Cash Flows
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating activities: | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Amortization of debt issuance costs | ||||||||
| Stock-based compensation | ||||||||
| Liquidated damages -warrants | ||||||||
| Convertible note default penalty | ||||||||
| Change in fair value of derivative liability | ( | ) | ( | ) | ||||
| Loss on settlement of debt | ||||||||
| Write-off of accounts receivable | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Other assets | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Net change in operating right-of-use lease asset and liability | ( | ) | ||||||
| Cash used in operating activities | ( | ) | ( | ) | ||||
| Financing activities: | ||||||||
| Proceeds from issuance of common stock units | ||||||||
| Deferred offering costs | ( | ) | ||||||
| Proceeds from issuance of Series B Preferred stock | ||||||||
| Repayment to related party payable | ( | ) | ||||||
| Proceeds from notes payable | ||||||||
| Repayment of notes payable | ( | ) | ||||||
| Proceeds from convertible notes payable | ||||||||
| Repayment of convertible notes payable | ( | ) | ( | ) | ||||
| Cash provided by financing activities | ||||||||
| Change in cash | ||||||||
| Cash, beginning balances | ||||||||
| Cash, ending balances | $ | $ | ||||||
| Supplemental cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Non-Cash Investing and Financing Activities: | ||||||||
| Initial derivative liabilities recognized as a debt discount | $ | $ | ||||||
| Series C warrants issued | $ | $ | ||||||
| Issuance common stock for settlement of debt | $ | $ | ||||||
| Common stock issued for conversion of debt | $ | $ | ||||||
| Common stock issued for conversion of Series B Preferred Shares | $ | $ | ||||||
| Common stock issued for exercise of warrants | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
VOCODIA HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2025, AND 2024
NOTE 1 – ORGANIZATION AND GOING CONCERN
Organization and Business Overview
The Company and Business: Vocodia Holdings Corp
(“Vocodia”or “the Copmany”) was incorporated in the State of Wyoming on
Click Fish Media, Inc. (“CFM”) was incorporated in the State of Florida on November 29, 2019, and is an IT services provider.
On August 2, 2022, Vocodia purchased all outstanding
shares of CFM held by an owner under common ownership for $
Going Concern
The Company’s consolidated financial statements
are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States including the assumption
of a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.
However, as shown in the accompanying consolidated financial statements, the Company had a net loss of approximately $
Management recognizes that the Company must obtain additional resources to successfully develop its technology and implement its business plans. Through March 31, 2025, the Company has received funding in the form of indebtedness and from the sale stock subscriptions. Management plans to continue to raise funds and/or refinance our indebtedness to support our operations in 2025 and beyond. However, no assurances can be given that we will be successful. If management is not able to timely and successfully raise additional capital and/or refinance indebtedness, the implementation of the Company’s business plan, financial condition and results of operations will be materially affected These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. They do not include all information and notes required by GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K /A of Vocodia Holdings Corp for the year ended December 31, 2024.
5
In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.
Basis of Consolidation
The financial statements have been prepared on a consolidated basis with those of the Company’s wholly owned subsidiaries, Vocodia FL, LLC, Vocodia JV, LLC, and CFM. All intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments Significant estimates are contained in the accompanying financial statements for the valuation of derivatives, the valuation allowance on deferred tax assets, share-based compensation, useful lives for depreciation and amortization of long-lived assets, and the incremental borrowing rate used on right-of-use asset.
Cash and Cash Equivalents
Cash and cash equivalents include cash in bank
accounts and money market funds with maturities of less than three months from inception, which are readily convertible to known amounts
of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. At March 31, 2025, and December
31, 2024, the Company had cash of $
Periodically, the Company may carry cash balances
at financial institutions in excess of the federally insured limit of $
Property and Equipment
Property and equipment are stated at cost less
accumulated depreciation. Expenditures for major betterments and additions are charged to the property and equipment accounts, while replacements,
maintenance, and repairs, which do not improve or extend the lives of the respective assets, are charged to expense. The carrying amounts
of assets that are sold or retired and their related accumulated depreciation are removed from the accounts in the year of disposal, and
any resulting gain or loss is reflected in income.
| Furniture and fixtures | ||||
| Computer equipment |
Accounts Receivable
Accounts receivables are recorded in accordance
with Financial Accounting Standards Board Accounting Standards Codification (ASC) 310, “Receivables.” Accounts
receivables are recorded at the invoiced amount or agreement and do not bear interest. The Company maintains allowances for doubtful accounts
for estimated losses resulting from the inability of its customers to make the required payments for services. Accounts with known financial
issues are first reviewed and specific estimates are recorded. The remaining accounts receivable balances are then grouped in categories
by the number of days the balance is past due, and the estimated loss is calculated as a percentage of the total category based upon past
history. Account balances are charged against the allowance when it is probable that the receivable will not be recovered. During the
three months ended March 31, 2025, the Company recognized an allowance for doubtful accounts of $
6
Revenue Recognition
The Company recognizes revenue in an amount that reflects the consideration to which it expects to be entitled in exchange for the transfer of promised goods or services to customers. The Company follows a five-step process to achieve this core principle: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation.
The Company’s revenues are currently derived from three sources: (1) implementation fees, (2) offering its software as a service on a recurring monthly basis, and (3) generation and verification of leads. Implementation fees are charged for setting up or calibrating its software so that the AI can be used by the customer for its particular use case and are usually a one-time cost. The Company’s contracts with customers are structured with stated prices per service performed, which are not subject to uncertainty or probability of significant reversal; thus, do not represent variable consideration. The recurring monthly fees are charged for the ongoing use of the AI to continue to call/prospect for the Company’s customers and are charged on a monthly recurring basis. The Company awards discounts to its customers on a discretionary basis. The Company will consider additional revenue streams as its technology develops and new opportunities present.
Fair Value of Financial Instruments
The Company follows accounting guidelines on fair value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially recorded at their estimated fair values. Fair Value is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments:
| ● | Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments. | |
| ● | Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace. | |
| ● | Level 3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires a significant judgment or estimation. |
Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires the Company to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed, or initial amounts recorded, may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange.
The carrying amounts of the Company’s financial instruments including cash and cash equivalents, prepaid expenses, accounts payable, accrued liabilities and convertible debt approximate fair value due to the short-term maturities of these instruments.
Set out below are the Company’s financial instruments that are required to be remeasured at fair value on a recurring basis and their fair value hierarchy as of March 31, 2025, and as of December 31, 2024:
| March 31, 2025 | Level 1 | Level 2 | Level 3 | Carrying Value | ||||||||||||
| Liabilities: | ||||||||||||||||
| Derivative Liability – Conversion feature | $ | $ | $ | $ | ||||||||||||
| December 31, 2024 | Level 1 | Level 2 | Level 3 | Carrying Value | ||||||||||||
| Liabilities: | ||||||||||||||||
| Derivative Liability – Conversion feature | $ | $ | $ | $ | ||||||||||||
7
Advertising
The Company expenses advertising costs are incurred.
Advertising expenses for the three months ended March 31, 2025, and 2024, were $
Share-Based Compensation
The Company accounts for employee and non-employee stock awards under ASC 718, Compensation – Stock Compensation, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to nonemployees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. Equity grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Further information regarding share-based compensation can be found in Note 9.
Convertible Notes
The Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial instruments if certain criteria are met. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For our derivative financial instruments, the Company used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within twelve (12) months of the balance sheet date.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants was estimated using a Black-Scholes pricing model.
8
Net Income (Loss) Per Share of Common Stock
Net loss per share of common stock requires presentation of basic earnings per share on the face of the statements of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share computation. In the accompanying financial statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent share arrangements, warrants unless the result would be antidilutive.
The dilutive effect of restricted stock units, options and warrants subject to vesting and other share-based payment awards is calculated using the “treasury stock method,” which assumes that the “proceeds” from the exercise of these instruments are used to purchase common shares at the average market price for the period. The dilutive effect of convertible securities is calculated using the “if-converted method.” Under the if-converted method, securities are assumed to be converted at the beginning of the period, and the resulting shares of common stock are included in the denominator of the diluted calculation for the entire period being presented.
For the three months ended March 31, 2025, and 2024, the following common stock equivalents were excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive.
| March 31, | March 31, | |||||||
| 2025 | 2024 | |||||||
| Shares | Shares | |||||||
| Warrants | ||||||||
| Convertible notes payable | ||||||||
| Liquidated damages payable | ||||||||
Leases
We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets. The Company did not utilize any financing that required recognition of finance leases during the three months ended March 31, 2025, and December 31, 2024.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Leases with a lease term of
9
The Company determines the present value of minimum future lease payments for operating leases by estimating a rate of interest that it would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments and a similar economic environment (the “incremental borrowing rate” or “IBR”).
The Company determines the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. For the reference rate, the Company used the seven-year mortgage interest rate.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The guidance is effective for the Company’s fiscal years beginning after February 1, 2025, with early adoption permitted. The Company does not expect the adoption of this standard to have any material impact on its financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
There have been no other recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during the three months ended March 31, 2025, that are of significance or potential significance to the Company.
NOTE 3 – PROPERTY AND EQUIPMENT
As of March 31, 2025, and December 31, 2024, property and equipment consisted of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Furniture and Fixtures | $ | $ | ||||||
| Computer Equipment | ||||||||
| Total Property and Equipment | ||||||||
| Less: accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Property and Equipment, net | $ | $ | ||||||
During the three months ended March 31, 2025,
and 2024, depreciation and amortization expenses relating to property and equipment were $
NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following at March 31, 2025, and December 31, 2024:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Accrued interest | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
10
NOTE 5 – OPERATING LEASES
We had operating leases for our corporate offices and one short-term lease for executive offices. Our corporate office lease has a remaining lease term of thirty-five (35) months with no options to extend. The Company moved out from the premises on December 15, 2024. As of March 31, 2025, and December 31, 2024, our lease liabilities were .
| Three months ended | ||||
| March 31, | ||||
| 2024 | ||||
| The components of lease expense were as follows: | ||||
| Short-term lease cost | $ | |||
| Operating lease cost | ||||
| Total lease cost | $ | |||
| Supplemental cash flow information related to leases was as follows: Operating cash flows from operating leases | $ | |||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | |||
| Weighted-average remaining lease term - operating leases (year) | ||||
| Weighted-average discount rate — operating leases | ||||
NOTE 6 – NOTE PAYABLE AND CONVERTIBLE NOTES PAYABLE
Note payable
During the year ended December 31, 2023, the Company
issued note payable of $
In February 2024, the Company borrowed $
On December 16, 2024, the Company issued a note
payable of $
Convertible notes payable
The components of Convertible Notes payable as of March 31, 2025, and December 31, 2024, were as follows:
| Principal | Maturity | Interest | March 31, | December 31, | ||||||||||||||||
| Issuance Date | Amount | Date | Rate | 2025 | 2024 | |||||||||||||||
| September 2024 issuances | % | $ | $ | |||||||||||||||||
| November 2024 issuance | % | |||||||||||||||||||
| December 2024 issuance | % | |||||||||||||||||||
| January 2025 issuance | % | |||||||||||||||||||
| March 2025 issuance | % | |||||||||||||||||||
| March 2025 issuance | % | |||||||||||||||||||
| March 2025 issuance | % | |||||||||||||||||||
| March 2025 issuance | % | |||||||||||||||||||
| Total face value | $ | $ | ||||||||||||||||||
| Unamortized debt discount and issuance costs | ( | ) | ( | ) | ||||||||||||||||
| Total convertible notes | ||||||||||||||||||||
| Current portion of convertible notes | ( | ) | ( | ) | ||||||||||||||||
| Long-term convertible notes | $ | $ | ||||||||||||||||||
11
On September 18, 2024, the Company entered into
a Convertible Note with a principal amount of $
On November 13, 2024, the Company entered into
a Convertible Note with a principal amount of $
On December 20, 2024, the Company entered into
a Convertible Note with a principal amount of $
On March 3, 2025, the Company entered into a Convertible
Note with a principal of $
On March 7, 2025, and March 18, 2025, the Company
entered into two Convertible Notes with an investor with a principal of $
On March 10,2025, the Company entered into a Convertible
Note with a principal of $
During the three months ended March 31, 2025,
and 2024, the Company recorded interest expense of $
The Company valued the conversion feature using
the Black-Scholes pricing model. The fair value of the derivative liability for all the notes that became convertible, including the notes
issued in prior years, during the three months ended March 31, 2025, amounted to $
12
NOTE 7 – DERIVATIVE LIABILITITES
Fair Value Assumptions Used in Accounting for Derivative Liabilities
ASC 815 requires us to assess the fair market value of derivative liabilities at the end of each reporting period and recognize any change in the fair market value as other income or expense. The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of issuance date and March 31 2025.
The Black-Scholes model, which requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The current stock price is based on historical issuances. Expected volatility is based on the historical stock price volatility of comparable companies’ common stock, as our stock does not have sufficient historical trading activity. Risk free interest rates were obtained from U.S. Treasury rates for the applicable periods.
The following table summarizes the changes in the derivative liabilities related to convertible note and warrants during the three months ended March 31, 2025:
| Three Months ended | ||||
| March 31 | ||||
| 2025 | ||||
| Expected conversion price | $ | |||
| Expected term | ||||
| Expected average volatility | ||||
| Expected dividend yield | ||||
| Risk-free interest rate |
For the three months ended March 31, 2025, the estimated fair values of the liabilities measured on a recurring basis are as follows:
| Fair Value Measurements Using Significant Observable Inputs (Level 3) | ||||
| Balance - December 31, 2024 | $ | |||
| Addition of new derivatives recognized as debt discounts | ||||
| Addition of new derivatives recognized as loss on derivatives | ||||
| Change in fair value of the derivative | ( | ) | ||
| Balance - March 31, 2025 | $ | |||
The aggregate loss on derivatives during the three months ended March 31, 2025 and 2024 as follows:
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Day one loss due to derivative liabilities on convertible note | $ | $ | ||||||
| (Gain) loss on change in fair value of the derivative liabilities | ( | ) | ||||||
| $ | ( | ) | $ | |||||
13
NOTE 8 – STOCKHOLDERS’ EQUITY
Authorized Capital Stock
Effective
February 28, 2025, the Company amended its articles of incorporation to increase the number of authorized common shares to
The Company has authorized
Series A Preferred Stock
Effective February 24,
2025, the Company amended the Designation of the Series A Preferred Stock to restore voting rights previously eliminated. Pursuant to
the amendment, Holders of the Series A Preferred Stock shall have the right to vote on any matters brought before the stockholders of
the Company for a vote as a single class. Each share of Series A Preferred Stock shall have the equivalent voting power of
The Company has designated
The Series A Preferred Stockholders are not entitled to any dividends, or mandatory conversion right or liquidation preference, however, they do have a voluntary conversion right.
Holders of the Company’s Series A Preferred
Stock shall have the right to convert at a ratio of
As of March 31, 2025, and December 31, 2024,
Series B Preferred Stock
Effective September 27, 2023, the Company has
amended the certificate of designation to authorize
In January 2024, the Company issued an aggregate
of
As of March 31, 2025, and December 31, 2024,
14
Series C Convertible Preferred Stock
On August 2, 2024, the Company issued a Certificate
of Designation of Series C Convertible Preferred Stock designating
The following is a summary of the terms of the Series C Preferred Stock:
| ● | Dividends. The holders of Series C Preferred Stock will be entitled to receive dividends, based on the Stated Value, at a rate of eight percent ( |
| ● | Voting Rights. The Series C COD provides that holders of Series C Preferred Shares shall have the right to vote on all matters presented to the stockholders for approval together with the shares of Common Stock, voting together as a single class, on an “as converted” basis, other than in regards to the Exchange Limitation. |
| ● | Liquidation. In addition, upon any liquidation, dissolution or winding-up of the Company, prior and in preference to the Common Stock, holders of Series C Preferred Stock shall be entitled to receive out of the assets available for distribution to stockholders before any amount shall be paid to the holders of any of shares of Junior Stock, but pari passu with any Parity Stock then outstanding, an amount per Preferred Share equal to the greater of (A) |
| ● | Conversion. The number of shares of Common Stock issuable upon conversion of any share of Series C Preferred Stock shall be determined by dividing (x) the Conversion Amount of such Preferred Share by (y) the Conversion Price (the “Conversion Rate”): |
| (i) | “Conversion Amount” means, with respect to each Share, as of the applicable date of determination, the sum of (1) |
| (ii) | “Conversion Price” means, with respect to each Share, as of any Conversion Date or other date of determination, an initial price of $ |
15
| ● | Redemption. Upon the occurrence of a Triggering Event, each Holder shall (in addition to all other rights it may have hereunder or under applicable law) have the right, exercisable at the sole option of such Holder, to require the Company with respect to each share of Preferred Stock to redeem each share of Preferred Stock then held by such Holder for a redemption price, in cash, equal to |
As of March 31, 2025, and December 31, 2024,
Series D Redeemable Preferred Stock
On August 2, 2024, the Company issued a Certificate
of Designation of Series D Preferred Stock designating
The following is a summary of the terms of the Series D Preferred Stock:
| ● | Dividends. Under the terms of the Series D Preferred Stock, the Company shall not pay any dividends on the Series D Preferred Stock. |
| ● | Voting Rights. Each share of Series D Preferred Stock shall entitle the holder thereof (a) to vote exclusively with respect to the Reverse Stock Split proposal at the Company’s next stockholder meeting following the Original Issue Date (and the Series D Preferred Stock shall not be entitled to vote on any other matter except to the extent required under Title 17 of the Wyoming Statutes or provided herein) and (b) to |
| ● | Liquidation. In addition, upon any liquidation, dissolution or winding-up of the Company, prior and in preference to the Common Stock, the Holders shall be entitled to receive out of the assets available for distribution to stockholders an amount in cash equal to |
| ● | Redemption. On the earlier of the date on which (i) the Company obtains Stockholder Approval and (ii) the SPA is terminated prior to the Second Closing, the Company shall immediately redeem, out of funds legally available therefor, each of the Series D Preferred Stock then outstanding at a redemption price equal to the Redemption Price, without the requirement for any notice or demand or other action by any Holder or any other person or entity, provided that a Holder may, in its sole discretion, waive such right to receive payment on the date of Stockholder Approval or such termination, in whole or in part, and any such waiver shall not affect any other rights of such Holder or any other Holder hereunder. Upon receipt of full payment in cash for a complete redemption, each Holder will promptly submit to the Company such Holder’s Series D Preferred Stock certificates, if any, and such redeemed shares shall no longer be deemed to be outstanding. |
16
As of March 31, 2025, and December 31, 2024,
Common Stock
Each share of Common Stock entitles the holder
to
During the three months ended March 31, 2024, the Company had the following common stock transactions:
| ● |
| ● |
| ● |
| ● |
During the three months ended March 31, 2025, the Company had the following common stock transactions:
| ● |
| ● |
| ● |
As of March 31, 2025, and December 31, 2024,
17
NOTE 9 – STOCK-BASED COMPENSATION
During the three months ended March 31, 2025, and 2024, stock-based compensation was recognized as follows:
| March 31, | March 31, | |||||||
| 2025 | 2024 | |||||||
| Professional fees -restricted stock awards | $ | $ | ||||||
| $ | $ | |||||||
The Company valued compensation expenses to employees based on fair value of common stock using a weighted average price of shares issued to unrelated parties for cash and compensation multiplied by the number of shares issued to the employees.
Warrants
During the three months ended March 31, 2025, the Company did not issue warrants. During the year ended December 31, 2024, the Company issued warrants as follows;
| ● |
| ● |
| ● |
A summary of the activity of the warrants during the three months ended March 31, 2025, as follows:
| Warrants Outstanding | Weighted Average | |||||||||||
| Number of | Weighted Average | Remaining life | ||||||||||
| Warrants | Exercise Price | (years) | ||||||||||
| Outstanding, December 31, 2024 | $ | |||||||||||
| Granted | ||||||||||||
| Expired / cancelled | ||||||||||||
| Exercised | ( | ) | ||||||||||
| Outstanding, March 31, 2025 | $ | |||||||||||
The intrinsic value of the warrants as of March
31, 2025, is $
18
NOTE 10 – RELATED PARTY TRANSACTIONS
Operating expense related party
During the three months ended March 31, 2025,
and 2024, the Company incurred approximately $
Related party payable
On August 1, 2022, the Company entered into a
lending arrangement with a related party, the prior owner of Click Fish Media. The loan is for a two (
Related party management fees
During the three months ended March 31, 2025,
and 2024, 47 Capital Management LLC, an entity wholly owned by the former CFO, billed the Company $
During the three months ended March 31, 2025,
and 2024, Thornhill Advisory Group, Inc., an entity majority owned by the former CFO, billed the Company $
During the three months ended March 31,2025, SGT
Teams, an entity wholly owned by the Company’s CEO, billed the Company management fees of $
Related party debt conversion to common stock
In January 2024,
In January 2024,
In January 2024,
Repaid due to related parties
During the three months ended March 31, 2025,
the Company repaid $
NOTE 11 – LEGAL PROCEEDINGS
From time to time, we may be involved in various disputes and litigation matters that arise in the ordinary course of business.
On December 20, 2023, an individual filed a putative class action lawsuit against a customer of the Company that was using the Company’s DISA’s. Shortly thereafter, the individual filed a first amended complaint (FAC) adding the Company as a party. The FAC states that Plaintiff’s phone number has been on the National Do-Not-Call Registry since 2009. Despite this, Plaintiff alleges he received two prerecorded calls from the Company on behalf of its Customer on October 10 and November 28, 2023. Based on these alleged violations, Plaintiff asserts that the Company violated the Telephone Consumer Protection Act’s (TCPA) prerecorded call provision and the South Carolina Telephone Privacy Protection Act. In response to the FAC, both the Company and its Customer filed a motion to dismiss and motion to strike the class allegations. The motions are fully briefed, but the Court has yet to issue a ruling. The parties each exchanged discovery responses. The parties agreed to attend mediation on October 15, 2024. The Company denies liability and intends to continue to vigorously defend any action, although the probability of a favorable or unfavorable outcome is difficult to estimate as of this date. The result or impact of such allegations are uncertain, including whether or not they could result in damages and/or awards of attorneys’ fees or expenses.
19
ProofPositive LLC (“ProofPositive”) commenced an arbitration (“Arbitration”) before the American Arbitration Association (“AAA”) against the Company, Brian Podolak and his wife (under a pseudonym) (“Respondents”) on or about May 31, 2024. In the Arbitration, ProofPositive asserted a number of claims, including claims under the Arizona Securities Act, arising from Respondents’ alleged failure to pay sums purportedly due under a loan agreement and promissory note, an addendum and consulting agreement. The Company denies liability and intends to continue to vigorously defend any action, although the probability of a favorable or unfavorable outcome is difficult to estimate as of this date. The result or impact of such allegations are uncertain, including whether or not they could result in damages and/or awards of attorneys’ fees or expenses.
Carstens, Allen & Gourley, LLP (“Carstens”)
commenced an action before the Texas Civil Court against the Company on or about August 12, 2024 (“Lawsuit”). In the Lawsuit,
Carstens alleges that the Company was in breach of contract by failure and refusal to pay attorneys’ fees that it owes to Carstens.
The Company has entered into settlement negotiations with Carstens. In December, 2024, Carstens filed for a default judgement for the
unpaid fees. The Company is negotiating with Carstens for a mutually acceptable settlement. In April 2025, the Company reached a settlement
agreement, to pay to Carstens the total sum of $
On December 16, 2024, MAI Voice GCO, LLC filed
a verified complaint alleging breach of contract and seeking $
In March 2025, Berkowitz Pollack & Brant Advisors
filed a lawsuit against the Company for unpaid professional fees in the amount of $
NOTE 12 – COMMITMENTS AND CONTINGENCIES
From time to time, the Company may become subject to threatened and/or asserted claims arising in the ordinary course of business. Management is not aware of any matters, either individually or in the aggregate, that are reasonably likely to have a material adverse effect on the Company’s financial condition, results of operations or liquidity.
On March 6, 2025, the Company entered into a settlement
liquidated damages of $
On March 20, 2025, the Company entered into a
settlement liquidated damages of $
As of March 31, 2025, the Company recorded liquidated
damages payable of $
NOTE 13 – PREPAID EXPENSE
As of March 31, 2025, and December 31, 2024, prepaid expenses consisted of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Prepaid operating expense | $ | $ | ||||||
| Prepaid insurance | ||||||||
| Prepaid expense | $ | $ | ||||||
20
NOTE 14 – SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date these consolidated financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure, except as follows:
Financial Matters
On May 13,2025, the Company entered into a Senior
Secured Convertible Note with a principal amount of $
During April and May 2025, the
Company issued
In June 2025, the Company issued
During April and May 2025, the
Company issued
In May 2025, the Company issued
Legal Matters
In April 2025, the Company settled a lawsuit previously
filed against the Company by Carstens Allen and Gourley. The Company agreed to pay to Carstens the total sum of $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. Our consolidated financial statements have been prepared in accordance with U.S. GAAP. In addition, our consolidated financial statements and the financial data included in this Quarterly Report on Form 10-Q K reflect our reorganization and have been prepared as if our current corporate structure had been in place throughout the relevant periods. Actual results could differ materially from those projected in the forward-looking statements. For additional information regarding these and other risks and uncertainties, please see the items listed above under the section captioned “Risk Factors”, as well as any other cautionary language contained in this Quarterly Report on Form 10-Q. Except as may be required by law, we undertake no obligation to update any forward-looking statements to reflect events after the date of this Quarterly Report on Form 10-Q.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements represent our expectations, beliefs, intentions, or strategies concerning future events, including, but not limited to, any statements regarding our assumptions about financial performance; the continuation of historical trends; growth strategies; the sufficiency of our cash balances for future liquidity and capital resource needs; the expected impact of changes in accounting policies on our results of operations, financial condition or cash flows; anticipated problems and our plans for future operations; our future financing plans and anticipated needs for working capital; and the economy in general or the future of the food production industry, all of which were subject to various risks and uncertainties. Such statements, when used in this Annual Report on Form 10-K and other reports, statements, and information we have filed with the Securities and Exchange Commission (“SEC”), in our press releases, presentations to securities analysts or investors, in oral statements made by or with the approval of an executive officer, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “continue,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. However, any statements contained in this Annual Report on Form 10-K that are not statements of historical fact may be deemed to be forward-looking statements. These statements are expressed in good faith and based upon a reasonable basis when made, but there can be no assurance that these expectations will be achieved or accomplished.
This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found under Part I Item 1 “Business” and Part II Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in other parts of this Quarterly Report on Form 10-Q. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors as described in this Quarterly Report on Form 10-Q generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Quarterly Report on Form 10-Q will in fact occur. In addition to the information expressly required to be included in this filing, we will provide such further material information, if any, as may be necessary to ensure that the required statements, in light of the circumstances under which they are made, are not misleading.
Although forward-looking statements in this Quarterly Report on Form 10-Q reflect the good faith judgment of our management, forward-looking statements are inherently subject to known and unknown risks, business, economic and other risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report on Form 10-Q, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by us in our reports filed with the Securities and Exchange Commission (“SEC”) which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected.
This Quarterly Report on Form 10-Q also contains estimates, projections, and other information concerning our industry, our business, and particular markets, including data regarding the estimated size of those markets. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, general publications, government data, and similar sources.
Overview
Vocodia Holdings Corp (“VHC”) was incorporated in the State of Wyoming on April 27, 2021 and is a conversational AI technology provider. Vocodia’s technology is designed to drive better sales and services for its customers. Clients turn to Vocodia for their product and service needs.
Business Summary
We are an AI software company that builds practical AI functions and makes them easily obtainable for businesses on cloud-based platform solutions at low costs and scalable to multiagent vast enterprise solutions.
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Our operations include our wholly owned subsidiary, Click Fish Media, Inc. (“CFM”), which was incorporated in the State of Florida on November 26, 2019 and is an IT services provider. CFM was formerly owned by James Sposato, who is an officer and director of the Company. CFM was wholly acquired by the Company from Mr. Sposato per the Contribution Agreement. CFM was formerly owned by James Sposato, who is an officer and director of the Company. CFM was acquired by us from Mr. Sposato per the Contribution Agreement, dated August 1, 2022. In the Contribution Agreement, Mr. Sposato (“Contributor”), has contributed, assigned, transferred and delivered to us, the outstanding capital stock of CFM and we have accepted the contributed shares from the Contributor. As full consideration for the contribution, we have paid the Contributor consideration in the amount of $10.
An illustration of our organizational structure is provided below:
We aim to offer corporate clients scalable enterprise AI sales and customer service solutions intended to rapidly increase sales and service, while lowering employment costs.
We seek to enhance rapport and relationship building for customers, which is as necessary component to sales. We believe that there is a positive correlation between AI which sounds similar to a human voice over the phone and better customer rapport and customer service benefits. With our advanced AI, we believe that it will be difficult for customers to distinguish between speaking to a human sales representative and to an AI bot. We believe we can increase customer satisfaction and maximize potential service efficiency for our clients. Our goal is to provide quick training and deployment, potentially unlimited scalability, easy integration with existing corporate platforms and other benefits to our customers from AI’s efficiency. We strive to help our customers manage budgets and perform better than the high costs of existing sales and service personnel.
On February 26, 2024, we completed our initial public offering (the “IPO”) of 1,400,000 units, each consisting of one share of common stock, par value $0.0001 (“Common Stock”), one Series A Warrant to purchase one share of Common Stock at $4.25 (the “Series A Warrant”), and one Series B Warrant to purchase one share of Common Stock at $8.50 (the “Series B Warrant”), at a price to the public of $4.25 per Unit.
The gross proceeds from the IPO, before underwriting discounts and commissions and estimated offering expenses payable by us, were approximately $5,950,000. On February 22, 2024, our Common Stock, Series A Warrants and Series B Warrants began trading on the BZX Exchange, a division of Cboe Global Markets, under the ticker symbols “VHAI,” “VHAI+A” and “VHAI+B”, respectively.
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On June 14, 2024, Vocodia Holdings Corp. (the “Company”) received a letter (the “Letter”) from the Listing Qualifications Department of The Cboe BZX Exchange, Inc. (“Cboe”) notifying the Company that Cboe had decided to exercise its discretionary authority pursuant to Exchange Rule 14.2 to delist the Company and suspend trading of the Company’s Common Stock (VHAI), Series A Warrants (VHAI+A) and Series B Warrants (VHAI+B) on June 24, 2024. The Letter cited that the basis for this decision is that the Company is currently not in compliance with (i) Exchange Rule 14.9(e)(1)(B) because its Common Stock did not maintain a minimum bid price of $1.00 over 30 consecutive business days and (ii) Exchange Rule 14.9(e)(2) because the Company has failed to me at least one of the following requirements: (A) stockholders’ equity of at least $2.5 million; (B) market value of listed securities of at least $35 million; or (C) net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the three most recently complete fiscal years.
Pursuant to Exchange Rule 14.12(h) the Company appealed the staff’s decision, and an appeal hearing was held on August 8, 2024 before a two-member Panel (the “Panel”). On September 6, 2024, the Company received notice that the Panel rejected the Company’s appeal and determined to delist the Company’s securities. The receipt of the Panel’s decision will result in the immediate delisting of the Company’s Common Stock and Warrants on the Cboe, under the symbols “VHAI,” “VHAI+A,” and “VHAI+B”, and a Form 25-NSE will be filed with the Commission, which will remove the Company’s securities from listing and registration on Cboe. The Company did not appeal the Panel’s decision. Therefore, the trading of the Company’s Common Stock and Warrants was suspended at the close of business on September 10, 2024, and delisted from Cboe, as indicated in the Panel’s letter.
The Company’s common stock began trading under the trading symbols “VHAI,” “VHAI+A,” and VHAI+B” on the OTC Pink Market operated on the OTC Markets system effective with the open of the markets on September 11, 2024. The Company intends to apply to have its common stock quoted on the OTCQB Venture Market on the OTC Markets; however, there can be no assurances that its common stock and warrants will be approved, or will continue, to be traded on such market.
Results of Operations
Comparison of the three months ended March 31, 2025 to the three months ended March 31, 2024
The following tables set forth selected consolidated statements of operations data and such data as a percentage of total revenues for each of the periods indicated:
| Three Months Ended | ||||||||||||||||
| March 31, | ||||||||||||||||
| 2025 | 2024 | Change | % | |||||||||||||
| Revenues | $ | - | $ | - | - | 0 | % | |||||||||
| Cost of revenue | 47,130 | - | 47,130 | 100 | % | |||||||||||
| Gross profit (loss) | (47,130 | ) | - | (47,130 | ) | 100 | % | |||||||||
| Operating costs and expenses: | ||||||||||||||||
| Operating expense | 263,793 | 2,822,460 | (2,558,667 | ) | -91 | % | ||||||||||
| Other income (expenses) | (861,891 | ) | (4,122,910 | ) | 3,261,019 | -79 | % | |||||||||
| Net loss | $ | (1,172,814 | ) | $ | (6,945,370 | ) | 5,772,556 | -83 | % | |||||||
We did not earn revenue for the three months ended March 31, 2025 or for the three months ended March 31, 2024. Beginning in January 2024, we suspended sales of our DISA product in order to update its functionality so it could scale to the needs of our customers. We anticipate launching our improved DISA product, as well as initiating our crypto treasury business in the third quarter of 2025.
Cost of Revenue
Cost of revenue increased by $ 47,130, or 100%, to $ 47,130 for the three months ended March 31, 2025 from $0 for the three months ended March 31, 2024, primarily due to increased cost of our cloud hosting platform.
Gross Loss
The increase in our gross loss of $ 47,130 to a gross loss of $ 47,130 for the three months ended March 31, 2025 from a gross loss of $0 for the three months ended March 31, 2024 is primarily attributable to the increased costs of our cloud server expenses.
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Operating Expenses
| Three Months Ended | ||||||||||||||||
| March 31, | ||||||||||||||||
| 2025 | 2024 | Change | % | |||||||||||||
| Operating Expenses | ||||||||||||||||
| General and administrative expenses | $ | 202,890 | $ | 1,646,902 | (1,444,012 | ) | -88 | % | ||||||||
| Salaries and wages | 33,277 | 382,383 | (349,106 | ) | -91 | % | ||||||||||
| Software development and other service providers | 27,626 | 793,175 | (765,549 | ) | -97 | % | ||||||||||
| Total Operating Expenses | $ | 263,793 | $ | 2,822,460 | (2,558,667 | ) | -91 | % | ||||||||
Operating expense decreased by $2,558,667 or 91% to $263,793 for the three months ended March 31, 2025 from $2,822,460 for the three months ended March 31, 2024 primarily due to the reduction in general and administrative expenses related to going public in the first quarter of 2024, a reduction in software development costs related to our DISA products and a reduction in salaries and wages and stock based compensation expenses paid to employees and service providers.
General and Administrative Expenses decreased by $1,444,012 or 88% to $202,890 during the three months ended March 31, 2025 from $1,646,902 during the three months ended March 31, 2024. The decrease is primarily a result of a reduction of the Company’s costs related to going public during the first quarter of 2024 such as insurance, professional fees, and investor relations.
Salaries and wages decreased by $349,106, or 91%, to $33,277 for the three months ended March 31, 2025 from $382,383 for the three months ended March 31, 2024, due to a reduction in staff in 2024 and a reduction in stock based compensation paid.
Research and development and other service providers expense decreased by $765,549, or 97%, to $27,626 for the three months ended March 31, 2025 from $793,175 for the three months ended March 31, 2024, primarily related to an decrease in software development costs related to our DISA products.
Total other income (expense)
During the three months ended March 31, 2025, we had other expenses of $861,891, which consisted of liquidated damages paid to certain warrant holders of $710,375, loss on settlement of debts of $33,510, write off of accounts receivable of $50,000 and interest expense of $116,882, offset by a change in fair value of derivative liability of $48,816.
Liquidity and Capital Resources
The following table provides selected financial data about us as of March 31, 2025 and December 31, 2024
| March 31, | December 31, | |||||||||||||||
| 2024 | 2024 | Change | % | |||||||||||||
| Current assets | $ | 43,991 | $ | 128,357 | $ | (84,366 | ) | -66 | % | |||||||
| Current liabilities | $ | 3,281,696 | $ | 2,363,345 | $ | 918,351 | 39 | % | ||||||||
| Working capital (deficiency) | $ | (3,237,705 | ) | $ | (2,234,988 | ) | $ | (1,002,717 | ) | 45 | % | |||||
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Current assets decreased by $84,366, or 66%, to $43,991 as of March 31, 2025 from $128,357 as of December 31, 2024. The decrease was primarily attributable to a reduction in accounts receivable of $50,000 and prepaid expenses of approximately $76,000.
Current liabilities increased by $918,351, or 39%, to $3,281,696 as of March 31, 2025 from $2,363,345 as of December 31, 2024. The increase was primarily attributable to an increase in accounts payable and accrued liabilities, an increase in liquidated damages payable and an increase in convertible notes payable offset by a reduction in related party payables.
We believe we will not have sufficient cash on hand to support our operations for at least 12 months. As of March 31, 2025, we had a working capital deficiency of $3,237,705 and total cash of $1,339. As discussed below, this condition and other factors raise substantial doubt regarding our ability to continue as a going concern.
We intend to generally rely on cash from operations and equity and debt offerings to the extent necessary and available, to satisfy our liquidity needs. There are several factors that could result in the need to raise additional funds, including a failure to generate revenue in the short term, a lack of anticipated sales growth and increased costs. Our efforts are directed toward generating positive cash flow and, ultimately, profitability. As our efforts during our fiscal 2024 and the three months ended ,March 31, 2025 have not generated positive cash flows, we will need to raise additional capital. Should capital not be available to us at reasonable terms, other actions will become necessary, including implementing cost control measures and additional efforts to increase sales. We may also be required to take more strategic actions such as exploring strategic options for the sale of our company, the creation of joint ventures or strategic alliances under which we will pursue business opportunities, or other alternatives.
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Cash Flow
| Three months ended March 31, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Cash provided by / (used in) operating activities | $ | (188,550 | ) | $ | (2,428,570 | ) | $ | 2,240,020 | ||||
| Cash provided by / (used in) investing activities | $ | - | $ | - | $ | - | ||||||
| Cash provided by / (used in) financing activities | $ | 189,608 | $ | 5,125,428 | $ | (4,935,820 | ) | |||||
| Cash on hand | $ | 1,339 | $ | 2,696,858 | $ | (2,695,519 | ) | |||||
Cash Flow from Operating Activities
Three months ended March 31, 2025 and 2023
For the three months ended March 31, 2025 and 2024, we did not generate positive cash flows from operating activities. For the three months ended March 31, 2025, net cash flows used in operating activities was $188,550 compared to $2,428,570 during the three months ended March 31, 2024.
Cash flows used in operating activities for the three months ended March 31, 2025 was comprised of a net loss of $1,172,814, which was reduced by non-cash expenses of $792,607 for depreciation, amortization of debt issuance costs. liquidated damage for warrants, loss on settlement of debt and write off of accounts receivable and net change in working capital of $ 191,657, offset by change in fair value of derivative liabilities.
For the three months ended March 31, 2024, net cash flows used in operating activities was $2,428,570. During the three months ended March 31, 2024, we had a net loss of $6,945,370, which was reduced by non-cash expenses of $4,175,256 for depreciation, amortization of debt issuance costs. liquidated damage for warrants, loss on settlement of debt and net change in working capital of $341,544, offset by change in fair value of derivative liabilities.
Cash Flows from Financing Activities
During the three months ended March 31, 2025, cash provided by financing activities of $189,608 included $260,000 from the issuance of convertible notes payable, and was offset by related party payable of $21,729 and the repayment of convertible notes payable of $48,663 and convertible notes payable of $802,984. During the three months ended March 31, 2024, cash provided by financing activities of $5,125,428 included $5,372,787 from the sales of common stock units, $605,000 from the sale of 605 Preferred B shares, and $30,000 from the issuance of note payable, and was offset by deferred offering costs of $24,375 and the repayment of notes payable of $55,000 and convertible notes payable of $802,984.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities.
Going Concern
The accompanying financial statements of the Company are prepared in accordance with U.S. GAAP applicable to a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued.
In accordance with Financial Accounting Standards Board (“FASB”), Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), the Company’s management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the accompanying financial statements are issued.
Critical Accounting Policies
Our accounting policies are more fully described in our unaudited financial statements. The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on our best knowledge of current and anticipated events, actual results could differ from the estimates.
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We have identified the following accounting policies as those that require significant judgments, assumptions and estimates and that have a significant impact on our financial condition and results of operations. These policies are considered critical because they may result in fluctuations in our reported results from period to period, due to the significant judgments, estimates and assumptions about complex and inherently uncertain matters and because the use of different judgments, assumptions or estimates could have a material impact on our financial condition or results of operations. We evaluate our critical accounting estimates and judgments required by our policies on an ongoing basis and update them as appropriate based on changing conditions.
Fair Value of Financial Instruments. The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements. ASC 820 provides a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in absence of a principal, most advantageous market for the specific asset or liability.
The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value.
The three tiers are defined as follows:
| ● | Level 1 – Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; |
| ● | Level 2 – Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and |
| ● | Level 3 – Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. |
The determination of fair value and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to unobservable management estimates and assumptions. Management’s assumptions could vary depending on the asset or liability valued and the valuation method used. Such assumptions could include estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors to assist us in determining fair value, as appropriate.
Derivative Liabilities. The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic No. 480, (“ASC 480”), “Distinguishing Liabilities from Equity” and FASB ASC Topic No. 815, (“ASC 815”) “Derivatives and Hedging”. Derivative liabilities are adjusted to reflect fair value at each reporting period, with any increase or decrease in the fair value recorded in the results of operations (other income/expense) as change in fair value of derivative liabilities. The Company uses a binomial pricing model to determine fair value of these instruments.
Beneficial Conversion Features. For instruments that are not considered liabilities under ASC 480 or ASC 815, the Company applies ASC 470-20 to convertible securities with beneficial conversion features that must be settled in stock. ASC 470-20 requires that the beneficial conversion feature be valued at the commitment date as the difference between the effective conversion price and the fair market value of the common stock (whereby the conversion price is lower than the fair market value) into which the security is convertible, multiplied by the number of shares into which the security is convertible limited to the amount of the loan. This amount is recorded as a debt discount and amortized to interest expense in the Consolidated Statements of Operations.
Debt Discount. For certain notes issued, the Company may provide the debt holder with an original issue discount. The original issue discount is recorded as a debt discount, reducing the face amount of the note, and is amortized to interest expense over the life of the debt, in the Consolidated Statements of Operations.
Research and Development. The Company accounts for research and development costs in accordance with ASC subtopic 730-10, Research and Development (“ASC 730-10”).
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Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred.
Stock-based Compensation. The Company accounts for our stock-based compensation under ASC 718 “Compensation – Stock Compensation” using the fair value-based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.
The Company uses the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options.
The fair value of stock-based compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods.
When determining fair value, the Company considers the following assumptions in the Black-Scholes model:
| ● | Exercise price, | |
| ● | Expected dividends, | |
| ● | Expected volatility, | |
| ● | Risk-free interest rate; and | |
| ● | Expected life of option |
Recent Accounting Standards. Changes to accounting principles are established by the FASB in the form of Accounting Standards Updates (“ASU’s”) to the FASB’s Codification. We consider the applicability and impact of all ASU’s on our financial position, results of operations, stockholders’ deficit, cash flows, or presentation thereof. Management has evaluated all recent accounting pronouncements as issued by the FASB in the form of Accounting Standards Updates (“ASU”) through the date these financial statements were available to be issued and found the following recent accounting pronouncements issued, but not yet effective accounting pronouncements, are not expected to have a material impact on the financial statements of the Company.
In August 2020, FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity; Own Equity (“ASU 2020-06”), as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year.
We do not expect the adoption of this pronouncement will have a material effect on our financial statements.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
As a public company, we will be subject to the reporting requirements of the Exchange Act, and the Sarbanes-Oxley Act. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time consuming and costly, and place significant strain on our personnel, systems and resources.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures, and internal control over financial reporting.
We do not yet have effective disclosure controls and procedures, or internal controls over all aspects of our financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Our management has deemed certain conditions to be material weaknesses and significant deficiencies in our internal controls. For example, we failed to employ a sufficient number of staff to maintain optimal segregation of duties and to provide optimal levels of oversight and we rely upon a third-party accounting firm to assist us with generally accepted in the United States of America (“GAAP”) compliance. Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. We will be required to expend time and resources to further improve our internal controls over financial reporting, including by expanding our staff. However, we cannot assure you that our internal control over financial reporting, as modified, will enable us to identify or avoid material weaknesses in the future.
Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business, including increased complexity resulting from our international expansion. Further, weaknesses in our disclosure controls or our internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of management reports and independent registered public accounting firm audits of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures, and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the market price of our common stock.
We are not currently required to comply with the SEC rules that implement Section 404 of the Sarbanes-Oxley Act, and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. As a public company, we will be required to provide an annual management report on the effectiveness of our internal control over financial reporting commencing with our second annual report on Form 10-K. Our independent registered public accounting firm is not required to audit the effectiveness of our internal control over financial reporting until after we are no longer an “emerging growth company” as defined in the JOBS Act. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may be involved in various disputes and litigation matters that arise in the ordinary course of business.
The Company received correspondence in February, 2023 from an attorney representing a former customer of the Company. The correspondence contains allegations that the customer provided certain leads to the Company that were not processed by the Company according to the agreement between the Company and the customer. Further, the customer alleges that it paid for the processing of those leads and that it was entitled to a refund of a portion of its payment. The Company has requested details of which leads were not processed, however the customer has not provided those details. The Company denies liability and intends to continue to vigorously defend any action, although the probability of a favorable or unfavorable outcome is difficult to estimate as of this date. The result or impact of such allegations are uncertain, including whether or not they could result in damages and/or awards of attorneys’ fees or expenses. While the outcome is uncertain, the Company has accrued $15,950 and accounted for it as Unearned Revenue until the matter is resolved.
The Company received a letter dated August 28, 2023, from an attorney hired on behalf of a former employee of the Company. This former employee offered her resignation, which was accepted on July 12, 2023. This letter contains allegations that the former employee was sexually harassed and terminated wrongfully by the Company. The Company is of the opinion that allegations in this letter lack merit. The Company has reported this matter to its insurance carrier and outside counsel has been engaged. The Company denies liability and intends to continue to vigorously defend any action, although the probability of a favorable or unfavorable outcome is difficult to estimate as of this date. The result or impact of such allegations are uncertain, including whether or not they could result in damages and/or awards of attorneys’ fees or expenses. In December 2023 the former employee’s attorney requested that the parties attend mediation, however a date for said mediation has not been determined. In December 2024, the EEOC dismissed the case.
On December 20, 2023, an individual filed a putative class action lawsuit against a customer of the Company that was using the Company’s DISA’s. Shortly thereafter, the individual filed a first amended complaint (FAC) adding the Company as a party. The FAC states that Plaintiff’s phone number has been on the National Do-Not-Call Registry since 2009. Despite this, Plaintiff alleges he received two prerecorded calls from the Company on behalf of its Customer on October 10 and November 28, 2023. Based on these alleged violations, Plaintiff asserts that the Company violated the Telephone Consumer Protection Act’s (TCPA) prerecorded call provision and the South Carolina Telephone Privacy Protection Act. In response to the FAC, both the Company and its Customer filed a motion to dismiss and motion to strike the class allegations. The motions are fully briefed, but the Court has yet to issue a ruling. The parties each exchanged discovery responses. The parties agreed to attend mediation on October 15, 2024. The Company denies liability and intends to continue to vigorously defend any action, although the probability of a favorable or unfavorable outcome is difficult to estimate as of this date. The result or impact of such allegations are uncertain, including whether or not they could result in damages and/or awards of attorneys’ fees or expenses.
ProofPositive LLC (“ProofPositive”) commenced an arbitration (“Arbitration”) before the American Arbitration Association (“AAA”) against the Company, Brian Podolak and his wife (under a pseudonym) (“Respondents”) on or about May 31, 2024. In the Arbitration, ProofPositive asserted a number of claims, including claims under the Arizona Securities Act, arising from Respondents’ alleged failure to pay sums purportedly due under a loan agreement and promissory note, an addendum and consulting agreement. The Company denies liability and intends to continue to vigorously defend any action, although the probability of a favorable or unfavorable outcome is difficult to estimate as of this date. The result or impact of such allegations are uncertain, including whether or not they could result in damages and/or awards of attorneys’ fees or expenses.
Carstens, Allen & Gourley, LLP (“Carstens”) commenced an action before the Texas Civil Court against the Company on or about August 12, 2024 (“Lawsuit”). In the Lawsuit, Carstens alleges that the Company was in breach of contract by failure and refusal to pay attorneys’ fees that it owes to Carstens. The Company has entered into settlement negotiations with Carstens. In December, 2024, Carstens filed for a default judgement for the unpaid fees. The Company is negotiating with Carstens for a mutually acceptable settlement.
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On December 16, 2024, MAI Voice GCO, LLC filed a verified complaint alleging breach of contract and seeking $32,090. The Company denies liability and intends vigorously defend the action that was brought, although the probability of a favorable or unfavorable outcome is difficult to estimate as of this date. The result or impact of such allegations are uncertain, including whether or not they could result in damages and/or awards of attorneys’ fees or expenses.
In March, 2025, Berkowitz Pollack & Brant Advisors filed a lawsuit against the Company for unpaid professional fees in the amount of $48,057.
In April 2025, the Company settled a lawsuit previously filed against the Company by Carstens Allen and Gourley. The Company agreed to pay Carstens the total sum of $160,000 in 13 payments. Upon signing the settlement, Carstens filed with the courts to dismiss the lawsuit.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
You should carefully consider the risk factors discussed in our Annual Report on Form 10-K under the heading “Part I, Item 1A. Risk Factors,” which risks could materially affect our business, financial condition or future results. Such risks are not the only risks facing the Company. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may have a material adverse effect on our business, financial condition and future results or enhance the adverse impact of the risks known to us.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5.
Subsequent Events
[*]
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Item 6. Exhibits.
Furnish the exhibits required by Item 601 of Regulation S-K (§ 229.601 of this chapter).
| Exhibit Number | Description | |
| 31.1* | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1* | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2* | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Filed herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| VOCODIA HOLDINGS CORP | ||
| Date: July 8, 2025 | By: | /s/ Brian Podolak |
| Brian Podolak | ||
| Chief Executive Officer | ||
| (Principal Executive Officer, Principal Financial and Accounting Officer) | ||
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FAQ
What did SMG insider Nathan Baxter report on his Form 4?
How many Scotts Miracle-Gro shares does Baxter own after the transaction?
Were any derivative securities involved in this Form 4 filing for SMG?
What transaction code was used and what does it indicate?
Does this insider purchase significantly change SMG’s ownership structure?
