Business Model and Technology - Vocodia Holdings Corp aims to provide scalable enterprise AI sales and customer service solutions, reducing human labor costs and increasing operational efficiency [19]. - The company has developed its first software product, DISA, which can handle each stage of the sales process for both B2B and B2C interactions [29]. - Vocodia's DISAs can manage up to 20,000 simultaneous unique telephone conversations, significantly enhancing customer service capabilities [38]. - The AI sales agents are designed to cost less than one-third of human sales agents, providing a more efficient alternative without the typical human resource issues [46]. - Vocodia's AI technology can be trained in just 3 days, allowing for rapid deployment and continuous learning from interactions [46]. - The company targets corporate clients with call centers of at least 50 seats across various industries, including health, insurance, and hospitality [30]. - Vocodia's proprietary software integrates easily with existing CRM systems, facilitating seamless adoption by enterprises [42]. - The company emphasizes the importance of high-quality voice output in its AI solutions to improve customer rapport and service quality [41]. - The company operates on a scalable AI platform with a recurring revenue model through Software-as-a-Service (SaaS), aiming for high operating margins [50]. - The company charges a monthly fee of $1,495 per DISA, with a contract term of 12 months, contributing to its recurring revenue stream [51]. - The company differentiates itself in the AI sector by providing quicker delivery of services compared to competitors, utilizing proprietary augmented and AI software [56]. Financial Performance - Revenues decreased by 80% to $50,078 for the year ended December 31, 2024, compared to $256,385 in 2023, primarily due to the suspension of DISA product sales [127]. - Cost of revenue decreased to $105,954 in 2024 from $220,777 in 2023, reflecting the reduction in service revenue [128]. - Gross loss increased to $(55,876) in 2024 from a gross profit of $35,608 in 2023, attributed to the suspension of services and ongoing server costs [130]. - Total operating expenses increased by 1% to $5,844,505 in 2024, driven by an 80% rise in general and administrative expenses to $3,344,858 [131][132]. - Net loss for the year ended December 31, 2024, was $10,027,091, compared to a net loss of $8,711,203 in 2023, marking a 16% increase in losses [126]. - Current assets rose by 514% to $78,357 as of December 31, 2024, from $12,770 in 2023, mainly due to an increase in prepaid expenses [136]. - Current liabilities decreased by 72% to $2,241,525 in 2024 from $7,894,129 in 2023, primarily due to the conversion of $3,546,028 in convertible notes [137]. - Cash used in operating activities was $5,369,561 in 2024, compared to $2,696,328 in 2023, indicating increased cash outflow [139]. - The company reported a net loss of $10,027,091, with cash flows used in operating activities amounting to $5,371,973 from financing activities [141]. - The net cash flows used in operating activities for the year ended December 31, 2023 was $2,696,328, with a net loss of $8,711,203 [142]. Legal and Regulatory Matters - ProofPositive LLC initiated arbitration against the Company, claiming breach of the Arizona Securities Act related to unpaid sums under a loan agreement and consulting agreement [72]. - The Company and Mr. Podolak filed a motion to dismiss the arbitration, arguing that ProofPositive did not meet certain conditions for arbitration and that AAA lacks jurisdiction over the dispute [73]. - Carstens, Allen & Gourley, LLP filed a lawsuit against the Company for breach of contract regarding unpaid attorney fees, with settlement negotiations ongoing [74]. - MAI Voice GCO, LLC filed a complaint seeking $32,090 for breach of contract, which the Company denies and intends to defend vigorously [75]. - The company is subject to evolving domestic and foreign regulations impacting its operations, particularly concerning privacy and data security laws [60]. Strategic Plans and Acquisitions - The company plans to pursue acquisitions selectively to enhance its service offerings and improve operational efficiencies [47]. - The company aims to expand its portfolio through strategic acquisitions post-IPO, targeting complementary technology and existing revenue sources [53]. - The company’s operational strategy includes identifying new markets and industries to expand its technology solutions and enhance market recognition [48]. - The company anticipates launching an improved DISA product in the second quarter of 2025 [127]. Stock and Financing - The Company’s common stock is traded on the OTC PINK tier, with a closing price of $0.0012 as of April 14, 2025 [93]. - The Company does not expect to declare or pay cash dividends in the foreseeable future, intending to retain earnings for business expansion [95]. - The Company issued $3,368,236 in convertible notes with a 15% annual interest rate, maturing nine months after issuance [101]. - The Company recognized a loss on settlement of debt totaling $2,662,842 related to the conversion of convertible notes into common stock upon IPO [104]. - The Company recorded interest expense of $432,824 and $2,761,631 for the years ended December 31, 2024 and 2023, respectively, including amortization of debt discount [208]. - The Company amended the certificate of designation to authorize 3,000 shares of Series B Preferred Stock, which has no voting rights and is mandatorily convertible upon IPO completion [209]. - During the year ended December 31, 2023, the Company issued 1,305 shares of Series B Preferred Stock for $1,305,000 [210]. - As of December 31, 2024, the Company had 0 shares of Series B Preferred Stock outstanding, down from 1,305 shares in 2023 [211]. Operational Challenges - The company has substantial doubt about its ability to continue as a going concern, as indicated by management and independent auditors [146]. - As of December 31, 2024, the company did not have any off-balance sheet arrangements that could materially affect its financial condition [145]. - The company did not capitalize any costs associated with software development as technological feasibility was established shortly after general availability [165]. - Contract liabilities for customer deposits for future services were $15,950 for both years ended December 31, 2024 and 2023 [164]. - The company accounts for share-based compensation under ASC 718, with equity instruments recorded based on fair value [151]. - The Company operates as a single operating segment, primarily providing conversational artificial intelligence technology, with substantial revenue derived from the United States [191]. Advertising and Marketing - Advertising expenses for the years ended December 31, 2024 and 2023 were $492,756 and $78,097, respectively, indicating a significant increase in advertising costs [172].
Vocodia Holdings(VHAI) - 2024 Q4 - Annual Report