What changed in this filing

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Item 1A. Risk Factors

2022-02-17 compared with 2021-03-31 · 832 added, 827 removed, 107 unchanged (94% of the section changed)

Report on Form 10-K contains forward-looking information based on our current expectations.

Because our business is subject to

many risks and our actual results may differ materially from any forward-looking statements made by or on behalf of us, this section

includes a discussion of important factors that could affect our business, operating results, financial condition and the trading

price of our securities.

This discussion should be read in conjunction with the other information in this Annual Report on Form

10-K, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial

Condition and Results of Operations.

The occurrence of any of the events or developments described below could have a material

adverse effect on our business, results of operations, financial condition, prospects and securities trading prices.

risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.

Risks related

to the Corona Virus and COVID-19 Pandemic

Public health

officials have recommended and mandated precautions to mitigate the spread of COVID-19, including prohibitions on congregating

in heavily populated areas and shelter-in-place orders or similar measures.

Our research and development and our entire business

may be adversely impacted by actions taken to contain or treat the impact of COVID-19, and the extent of such impact will

depend on future developments, which are highly uncertain and cannot be predicted.

Risks related

to our financial position and need for additional capital

have previously expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to

obtain further financing.

Our past working

capital deficiency, stockholders’

deficit and recurring losses from operations raise substantial doubt about our ability

to continue as a going concern.

As a result, our independent registered public accounting firm included an explanatory paragraph

in its report on our financial statements for the year ended December 31, 2019 with respect to this uncertainty.

that the net proceeds from our recent February 2021 IPO, and our existing cash will be sufficient to fund our current operating

plans through at least the next 12 months.

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

and we could spend our available financial resources much faster than we currently expect and need to raise additional funds sooner

than we anticipate.

This Annual Report

on Form 10-K contains forward-looking information based on our current expectations.

Because our business is subject to many risks and

our actual results may differ materially from any forward-looking statements made by or on behalf of us, this section includes a discussion

of important factors that could affect our business, operating results, financial condition and the trading price of our securities.

discussion should be read in conjunction with the other information in this Annual Report on Form 10-K, including our financial statements

and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The occurrence

of any of the events or developments described below could have a material adverse effect on our business, results of operations, financial

condition, prospects and securities trading prices.

Additional risks and uncertainties not presently known to us or that we currently

deem immaterial may also impair our business operations.

Risks related to the

COVID-19 pandemic

Public health officials

have recommended and mandated precautions to mitigate the spread of COVID-19.

Our research and development and our entire business may

be adversely impacted by actions taken to contain or treat the impact of COVID-19, and the extent of such impact will depend on future

developments, which are highly uncertain and cannot be predicted.

The COVID-19 pandemic has adversely impacted economic activity and conditions

Although our business has not been adversely impacted by the COVID-19 pandemic to date, the Company cannot predict with certainty

the full extent the COVID-19 pandemic will have on our business including macroeconomic conditions and customer demand for our products

in the future.

Risks related to our

financial position and need for additional capital

Our auditors have

previously expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain further

Our past working capital

deficiency, stockholders’ deficit and recurring losses from operations raised substantial doubt about our ability to continue as

a going concern.

As a result, our independent registered public accounting firm included an explanatory paragraph in its report on our

financial statements for the year ended December 31, 2019 with respect to this uncertainty.

We believe that the net proceeds from

our recent February 2021 IPO, the July 2021 exercise of our publicly traded Series A Warrants, and our existing cash will be sufficient

to fund our current operating plans through at least the next 12 months.

We have based these estimates, however, on assumptions that

may prove to be wrong, and we could spend our available financial resources much faster than we currently expect and need to raise additional

funds sooner than we anticipate.

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

or eliminate our technology development and commercialization efforts.

incurred significant net losses since inception and anticipate that we will continue to incur net losses for the foreseeable future

and may never achieve or maintain profitability.

We have incurred

significant net losses since inception and anticipate that we will continue to incur net losses for the foreseeable future and may never

achieve or maintain profitability.

Since inception, we have incurred significant

Our net losses were $4,051,221 and $5,230,245 for the years ended December 31, 2020 and 2019, respectively.

of December 31, 2020, we had a shareholders’

deficit of $13,103,250.

To date, we have devoted our efforts towards securing

financing, building, and evolving our technology platform, marketing our mobile app product for radio stations as well as initiating

our marketing efforts for our music player.

We expect to continue to incur significant expenses and operating losses for the foreseeable

We anticipate that our expenses will increase substantially if, and as, we:

hire and retain additional sales, accounting and finance marketing and engineering personnel;

build out our product pipeline;

add operational, financial and management information systems and personnel;

maintain, expand, protect and enforce our intellectual property portfolio.

We expect to continue to incur net losses in the near term.

Our net losses were $13,478,069 and $4,051,221 for the years ended

December 31, 2021 and 2020, respectively.

For the year ended December 31, 2021 our cash used in operations was $5,428,094.

31, 2021, we had cash and equivalents on hand of $6,345,291.

To date, we have devoted our efforts towards securing financing, building,

and evolving our technology platform, marketing our mobile app product for radio stations as well as initiating our marketing efforts

for our music player.

We expect to continue to incur significant expenses and operating losses for the foreseeable future.

We anticipate

that our expenses will increase substantially if, and as, we:

incur costs related to the national launch of our Faidr App and as we continue obtaining market acceptance;

recruit and retain podcasters to our Vodacast App and retaining listeners on the platform;

continue to develop and improve our technology;

effectively addressing any competing technological and market developments;

add operational, business development & marketing personnel;

incur legal expenses related to avoiding and defending against intellectual property infringement, misappropriation and other claims

To become profitable, we must develop and

eventually commercialize one or more product candidates, including Auddia and Vodacast, with significant market potential.

will require us to be successful in a range of challenging activities, and our expenses will increase substantially as we seek

to bring these products to market.

We may never succeed in any or all of these activities and, even if we do, we may never generate

revenue that is significant or large enough to achieve profitability.

If we do achieve profitability, we may not be able to sustain

or increase profitability on a quarterly or annual basis.

Our failure to become and remain profitable would decrease the value

of our company and could impair our ability to raise capital, develop new products, expand our business or continue our operations.

A decline in the value of our Company also could cause stockholders to lose all or part of their investment.

additional funding, which may not be available on acceptable terms, or at all.

Failure to obtain this capital when needed may force

us to delay, limit or terminate our product development efforts or other operations.

We expect our

expenses to increase in connection with our ongoing activities, particularly as we continue to invest in sales, marketing and engineering

resources and bring our products to market.

Furthermore, following the closing of our IPO, we expect to incur additional costs

associated with operating as a public company.

While we believe that the net proceeds from our recent IPO and our existing cash,

cash equivalents and available-for-sale securities will be sufficient to fund our current operating plans through at least the

next 12 months, we anticipate that we may need additional funding to complete the development of our full product line and

scale products with a demonstrated market fit.

eventually commercialize one or more product candidates, including Faidr and Vodacast, with significant market potential.

This will require

us to be successful in a range of challenging activities, and our expenses will increase substantially as we seek to bring these products

We may never succeed in any or all of these activities and, even if we do, we may never generate revenue that is significant

or large enough to achieve profitability.

If we do achieve profitability, we may not be able to sustain or increase profitability on a

quarterly or annual basis.

Our failure to become and remain profitable would decrease the value of our company and could impair our ability

to raise capital, develop new products, expand our business or continue our operations.

A decline in the value of our Company also could

cause stockholders to lose all or part of their investment.

We may need additional

funding, which may not be available on acceptable terms, or at all.

Failure to obtain this capital when needed may force us to delay,

limit or terminate our product development efforts or other operations.

We expect our expenses

to increase in connection with our ongoing activities, particularly as we continue to invest in sales, marketing and engineering resources

and bring our products to market.

Furthermore, we expect to incur additional costs associated with operating as a public company.

we believe that the net proceeds from our recent IPO, Series A warrant exercises and our existing cash will be sufficient to fund our

current operating plans through at least the next 12 months, we anticipate that we may need additional funding to complete the development

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

Building and scaling

technology products is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate

the necessary user experience required to obtain market acceptance and achieve meaningful product sales.

In addition, our product

candidates, once developed, may not achieve commercial success.

The majority of revenue will be derived from or based on sales

of software products that may not be commercially available for many years, if at all.

Accordingly, we will need to continue to

rely on revenues from existing products and/or additional financing to achieve our business objectives.

Adequate additional financing

may not be available to us on acceptable terms, or at all.

additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights

to our technologies and product candidates.

technology products is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary

user experience required to obtain market acceptance and achieve meaningful product sales.

In addition, our product candidates, once developed,

may not achieve commercial success.

The majority of revenue will be derived from or based on sales of software products that may not be

commercially available for many years, if at all.

Accordingly, we will need to continue to rely on revenues from existing products and/or

additional financing to achieve our business objectives.

Adequate additional financing may not be available to us on acceptable terms,

Raising additional

capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies

and product candidates.

We may seek additional

capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and

licensing arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities,

the ownership interest of stockholders will be diluted, and the terms may include liquidation or other preferences that adversely

affect the rights of existing stockholders.

The incurrence of indebtedness would result in increased fixed payment obligations

and could involve restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability

to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to

conduct our business.

If we raise additional funds through strategic partnerships and alliances and licensing arrangements with

third parties, we may have to relinquish valuable rights to our technologies, or our other product candidates, or grant licenses

on terms unfavorable to us.

generated historical revenue from our mobile app platform for radio stations, but future revenue growth is dependent on new software

Our ability to

generate revenue from product sales and achieve profitability depends on our ability to successfully complete the development and

commercialization of future software products.

Our ability to generate meaningful revenue from product sales depends heavily on

our success in:

capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing

arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership

interest of stockholders will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights

of existing stockholders.

The incurrence of indebtedness would result in increased fixed payment obligations and could involve restrictive

covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual

property rights and other operating restrictions that could adversely impact our ability to conduct our business.

If we raise additional

funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights

to our technologies, or our other product candidates, or grant licenses on terms unfavorable to us.

We have generated

historical revenue from our mobile app platform for radio stations, but future revenue growth is dependent on new software services.

Our ability to generate

revenue from product sales and achieve profitability depends on our ability to successfully complete the development and commercialization

of future software products.

Our ability to generate meaningful revenue from product sales depends heavily on our success in:

obtaining market acceptance;

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attracting, hiring and retaining qualified personnel.

Our limited operating history of

our current business plan may make it difficult for investors to evaluate the success of our business to date and to assess our

future viability.

Our limited operating history of our current

business plan may make it difficult for investors to evaluate the success of our business to date and to assess our future viability.

We are an early-stage

company founded in 2012, with a limited operating history that has recently changed its business plan to develop and sell our new

and potential products.

There can be no assurance that any of our future products and services will be successfully developed,

protected from competition by others, or marketed successfully.

Accordingly, there can be no assurance that we will ever have positive

net earnings.

have identified material weaknesses in our internal control over financial reporting.

Failure to achieve and maintain effective

internal control over financial reporting could result in our failure to accurately or timely report our financial condition or

results of operations, which could have a material adverse effect on our business and securities prices.

A material weakness is a deficiency, or

a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a

material misstatement of our financial statements will not be prevented or detected on a timely basis.

Management is working to

remediate our current material weaknesses and prevent potential future material weaknesses by hiring additional qualified accounting

and financial reporting personnel, and further reviewing and enhancing our accounting processes.

We may not be able to fully remediate

any future material weaknesses until these steps have been completed and have been operating effectively for a sufficient period

If we are not able to maintain effective internal control over financial reporting, our financial statements and related

disclosures may be inaccurate, which could have a material adverse effect on our business and our securities prices.

We are required to comply with the SEC’s

company founded in 2012, with a limited operating history that has recently changed its business plan to develop and sell our new and

potential products.

There can be no assurance that any of our future products and services will be successfully developed, protected from

competition by others, or marketed successfully.

Accordingly, there can be no assurance that we will ever have positive net earnings.

We have identified

material weaknesses in our internal control over financial reporting.

Failure to achieve and maintain effective internal control over

financial reporting could result in our failure to accurately or timely report our financial condition or results of operations, which

could have a material adverse effect on our business and securities prices.

A material weakness is a deficiency, or a combination

of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement

of our financial statements will not be prevented or detected on a timely basis.

Management is working to remediate our current material

weaknesses and prevent potential future material weaknesses by hiring additional qualified accounting and financial reporting personnel,

and further reviewing and enhancing our accounting processes.

We may not be able to fully remediate any future material weaknesses until

these steps have been completed and have been operating effectively for a sufficient period of time.

If we are not able to maintain effective

internal control over financial reporting, our financial statements and related disclosures may be inaccurate, which could have a material

adverse effect on our business and our securities prices.

We are required to comply with the SEC’s

rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which requires management to certify financial and other information

in our quarterly and annual reports and provide an annual management report on the effectiveness of our controls over financial

Although we will be required to disclose changes made in our internal controls and procedures on a quarterly basis,

we will not be required to make our first annual assessment of our internal controls over financial reporting pursuant to Section

404 until this annual report on Form 10-K for the fiscal year ending December 31, 2021.

This assessment includes disclosure of

any material weaknesses identified by our management in our internal control over financial reporting, as well as a statement that

our independent registered public accounting firm has issued an opinion on the effectiveness of our internal control over financial

reporting, provided that our independent registered public accounting firm will not be required to attest to the effectiveness

of our internal control over financial reporting until our first annual report required to be filed with the SEC following the

later of the date we are deemed to be an “accelerated filer”

or a “large accelerated filer,”

each as defined

in the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or the date we are no longer an emerging

in our quarterly and annual reports and provide an annual management report on the effectiveness of our controls over financial reporting.

This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting,

as well as a statement that our independent registered public accounting firm has issued an opinion on the effectiveness of our internal

control over financial reporting, provided that our independent registered public accounting firm will not be required to attest

to the effectiveness of our internal control over financial reporting until our first annual report required to be filed with the SEC

following the later of the date we are deemed to be an “accelerated filer” or a “large accelerated filer,” each

as defined in the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or the date we are no longer an emerging

growth company, as defined in the JOBS Act.

We could be an emerging growth company for up to five years.

to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could

be impaired, which would adversely affect our business.

If we fail to maintain

proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired, which

would adversely affect our business.

Ensuring that we have

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of finance personnel in response to these increasing demands and expectations.

Our management

is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance

regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance

with generally accepted accounting principles.

Our management does not expect that our internal control over financial reporting

will prevent or detect all errors and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable,

not absolute, assurance that the control system’s objectives will be met.

Because of the inherent limitations in all control

systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that

all control issues and instances of fraud, if any, within our company will have been detected.

We expect to expend significant resources

in developing the necessary documentation and testing procedures required by Section 404 of the Sarbanes-Oxley Act.

be certain that the actions we will be taking to improve our internal controls over financial reporting will be sufficient, or

that we will be able to implement our planned processes and procedures in a timely manner.

In addition, if we are unable to produce

accurate financial statements on a timely basis, investors could lose confidence in the reliability of our financial statements,

which could cause the market price of our common stock to decline and make it more difficult for us to finance our operations

Risks related

to the development of our products

Our management is responsible

for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability

of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting

Our management does not expect that our internal control over financial reporting will prevent or detect all errors and all

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control

system’s objectives will be met.

Because of the inherent limitations in all control systems, no evaluation of controls can provide

absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any,

within our company will have been detected.

We expect to expend significant

resources in developing the necessary documentation and testing procedures required by Section 404 of the Sarbanes-Oxley Act.

be certain that the actions we will be taking to improve our internal controls over financial reporting will be sufficient, or that we

will be able to implement our planned processes and procedures in a timely manner.

In addition, if we are unable to produce accurate financial

statements on a timely basis, investors could lose confidence in the reliability of our financial statements, which could cause the market

price of our common stock to decline and make it more difficult for us to finance our operations and growth.

Risks related to the

development of our products

Our subscription

revenue margins and our freedom to operate our Auddia commercial-free radio platform rely on continuity of the established music

licensing framework.

Present music

licensing costs and general rights to play music are determined by an established statutory rate framework which could change in

Changes in licensing costs and general rights to play music content could impact our direct costs for content or even

prohibit access to content that is fundamental to the platform.

Changes could adversely impact our cost to operate the platform

and/or our rights to deliver content to end users.

platform will rely on the established “personal use exemption”

which allows individuals to record content for personal

use, without prohibition.

The Auddia platform

will allow consumers to access broadcast audio content “live,”

in real-time, and also enables end users to personally

record audio content for later consumption.

We believe that Auddia will rely on an established precedent which permits individuals

to record and replay content (audio and/or video) so long as it is for personal use, only (the “Personal Use Exemption”).

While the Personal Use Exemption has been well established, there is a risk that the Personal Use Exemption may not apply to the

Auddia platform.

If it is found that Auddia is not able to rely upon the Personal Use Exemption, the costs to the Company for music

content would increase significantly and result in an increase in the consumer price for Auddia, thus making Auddia less desirable

in the marketplace.

If we are unable

to obtain and maintain patent protection for our products and product candidates, or if the scope of the patent protection obtained

is not sufficiently broad, our competitors could develop and commercialize products and product candidates similar or identical

to ours, and our ability to successfully commercialize our products and product candidates may be adversely affected.

Our commercial

success will depend, in part, on our ability to obtain and maintain patent protection in the United States and other countries

with respect to our products and product candidates.

We seek to protect our proprietary position by filing patent applications

in the United States and abroad related to our products and product candidates that are important to our business.

revenue margins and our freedom to operate our Faidr radio platform rely on continuity of the established music licensing framework.

Present music licensing

costs and general rights to play music are determined by an established statutory rate framework which could change in the future.

in licensing costs and general rights to play music content could impact our direct costs for content or even prohibit access to content

that is fundamental to the platform.

Changes could adversely impact our cost to operate the platform and/or our rights to deliver content

to end users.

Our Faidr platform

will rely on the established “personal use exemption” which allows individuals to record content for time-shifting purposes.

The Faidr platform will

allow consumers to access broadcast audio content “live,” in real-time with a slight delay, and also enables consumers to

buffer audio content on the user’s device for delayed playback, that can take advantage of the App’s intelligent listening

capabilities.

We believe that the limited buffering provided for within the Faidr App is lawful and falls within the United States Supreme

Court’s ruling allowing consumers the right to time shift programming for later consumption.

The Faidr App only permits buffering

on the user’s mobile device in a manner that does not permit librarying of content by the consumer and no right to offload content

from the Faidr App to another device, other than through the exploitation of the “analog hole” (e.g., allowing another device

to record audio while it is playing through the Faidr App).

While we believe that the functionality of the Faidr App is protected under

current law, there is a risk that one or more aspects of the Faidr App may be found to violate the rights of third parties.

If it is determined

that we are not permitted to give consumers the right to buffer content locally and also control their listener experience by receiving

alternative programming to what is included in an AM/FM station’s transmission, certain features of the Faidr App may have to be

disabled or discontinued, the costs to the Company for access to content could increase significantly, and result in an increase in the

consumer price of the App, thus making the Faidr App less desirable in the marketplace.

If we are unable to

obtain and maintain patent protection for our products and product candidates, or if the scope of the patent protection obtained is not

sufficiently broad, our competitors could develop and commercialize products and product candidates similar or identical to ours, and

our ability to successfully commercialize our products and product candidates may be adversely affected.

Our commercial success

will depend, in part, on our ability to obtain and maintain patent protection in the United States and other countries with respect to

our products and product candidates.

We seek to protect our proprietary position by filing patent applications in the United States and

abroad related to our products and product candidates that are important to our business.

We cannot be certain

that additional patents will be issued or granted with respect to applications that are currently pending or that we may apply

for in the future with respect to one or more of our products and product candidates, or that issued or granted patents will not

later be found to be invalid and/or unenforceable.

that additional patents will be issued or granted with respect to applications that are currently pending or that we may apply for in

the future with respect to one or more of our products and product candidates, or that issued or granted patents will not later be found

to be invalid and/or unenforceable.

The patent prosecution

process is expensive and time-consuming.

We may not be able to file and prosecute all necessary or desirable patent applications

at a reasonable cost or in a timely manner.

It is also possible that we will fail to identify patentable aspects of our research

and development output before it is too late to obtain patent protection.

Although we enter into non-disclosure and confidentiality

agreements with parties who have access to patentable aspects of our research and development output, such as our employees, collaboration

partners, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output

before a patent application is filed, thereby jeopardizing our ability to seek patent protection.

perceived errors, failures or bugs in our platform or products could materially and adversely affect our operating results and

growth prospects.

We may not be able to file and prosecute all necessary or desirable patent applications at a

reasonable cost or in a timely manner.

It is also possible that we will fail to identify patentable aspects of our research and development

output before it is too late to obtain patent protection.

Although we enter into non-disclosure and confidentiality agreements with parties

who have access to patentable aspects of our research and development output, such as our employees, collaboration partners, consultants,

advisors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application

is filed, thereby jeopardizing our ability to seek patent protection.

Real or perceived

errors, failures or bugs in our platform or products could materially and adversely affect our operating results and growth prospects.

The software underlying

our platform and products is highly technical and complex.

Our software has previously contained, and may now or in the future

contain, undetected errors, bugs or vulnerabilities.

In addition, errors, failures and bugs may be contained in open source software

utilized in building and operating our products or may result from errors in the deployment or configuration of open source software.

Some errors in our software may only be discovered after the software has been deployed or may never be generally known.

bugs or vulnerabilities discovered in our software after it has been deployed, or never generally discovered, could result in interruptions

in platform availability, product malfunctioning or data breaches, and thereby result in damage to our reputation, adverse effects

upon customers and users, loss of customers and relationships with third parties, including social media networks, loss of revenue

or liability for damages.

In some instances, we may not be able to identify the cause or causes of these problems or risks within

an acceptable period of time.

Risks related

to our business operations

success depends on our ability to retain key employees, consultants and advisors and to attract, retain and motivate qualified

We are highly

dependent on members of our executive team;

Our software has previously contained, and may now or in the future contain,

undetected errors, bugs or vulnerabilities.

In addition, errors, failures and bugs may be contained in open source software utilized in

building and operating our products or may result from errors in the deployment or configuration of open source software.

in our software may only be discovered after the software has been deployed or may never be generally known.

Any errors, bugs or vulnerabilities

discovered in our software after it has been deployed, or never generally discovered, could result in interruptions in platform availability,

product malfunctioning or data breaches, and thereby result in damage to our reputation, adverse effects upon customers and users, loss

of customers and relationships with third parties, including social media networks, loss of revenue or liability for damages.

instances, we may not be able to identify the cause or causes of these problems or risks within an acceptable period of time.

Risks related to our

business operations

Our future success

depends on our ability to retain key employees, consultants and advisors and to attract, retain and motivate qualified personnel.

We are highly dependent

on members of our executive team;

the loss of whose services may adversely impact the achievement of our objectives.

While we have entered into employment agreements with certain of our executive officers, any of them could leave our employment

We currently do not have “key person”

insurance on any of our employees.

The loss of the services of one

or more of our current employees might impede the achievement of our research, development and commercialization objectives.

Recruiting and

retaining other qualified employees, consultants and advisors for our business, including scientific and technical personnel, will

also be critical to our success.

While we have entered

into employment agreements with certain of our executive officers, any of them could leave our employment at any time.

We currently do

not have “key person” insurance on any of our employees.

The loss of the services of one or more of our current employees

might impede the achievement of our research, development and commercialization objectives.

Recruiting and retaining

other qualified employees, consultants and advisors for our business, including scientific and technical personnel, will also be critical

to our success.

Competition for skilled personnel is intense and the turnover rate can be high.

We may not be

able to attract and retain personnel on acceptable terms given the competition among numerous technology companies for individuals

with similar skill sets.

The inability to recruit, or loss of services of certain executives, key employees, consultants or advisors,

may impede the progress of our product development and commercialization objectives.

unable to manage expected growth in the scale and complexity of our operations, our performance may suffer.

We may not be able to attract and retain

personnel on acceptable terms given the competition among numerous technology companies for individuals with similar skill sets.

The inability

to recruit, or loss of services of certain executives, key employees, consultants or advisors, may impede the progress of our product

development and commercialization objectives.

If we are unable

to manage expected growth in the scale and complexity of our operations, our performance may suffer.

If we are successful

in executing our business strategy, we will need to expand our managerial, operational, financial and other systems and resources

to manage our operations, continue our technology development activities and, in the longer term, scale a commercial infrastructure

to support our product roll out and end user projections.

Future growth would impose significant added responsibilities on members

of management.

It is likely that our management, finance, sales, marketing and engineering systems and facilities currently in

place may not be adequate to support this future growth.

Our need to effectively manage our operations, growth and future product

commercialization requires that we continue to develop more robust business processes and improve our systems and procedures in

each of these areas and to attract and retain sufficient numbers of talented employees.

We may be unable to successfully implement

these tasks on a larger scale and, accordingly, may not achieve our product development and growth goals.

in executing our business strategy, we will need to expand our managerial, operational, financial and other systems and resources to manage

our operations, continue our technology development activities and, in the longer term, scale a commercial infrastructure to support our

product roll out and end user projections.

Future growth would impose significant added responsibilities on members of management.

is likely that our management, finance, sales, marketing and engineering systems and facilities currently in place may not be adequate

to support this future growth.

Our need to effectively manage our operations, growth and future product commercialization requires that

we continue to develop more robust business processes and improve our systems and procedures in each of these areas and to attract and

retain sufficient numbers of talented employees.

We may be unable to successfully implement these tasks on a larger scale and, accordingly,

may not achieve our product development and growth goals.

Any cybersecurity-related

attack, significant data breach or disruption of the information technology systems or networks on which we rely could negatively

affect our business.

Our operations

rely on information technology systems for the use, storage and transmission of sensitive and confidential information with respect

to our customers, our customers’

consumers or other social media audiences, the third-party technology platforms of other

parties and our employees.

A malicious cybersecurity-related attack, intrusion or disruption by either an internal or external

source or other breach of the systems on which our platform and products operate, and on which our employees conduct business,

could lead to unauthorized access to, use of, loss of or unauthorized disclosure of sensitive and confidential information, disruption

of our services, and resulting regulatory enforcement actions, litigation, indemnity obligations and other possible liabilities,

as well as negative publicity, which could damage our reputation, impair sales and harm our business.

Cyberattacks and other malicious

internet-based activity continue to increase, and cloud-based platform providers of products and services have been and are expected

to continue to be targeted.

In addition to traditional computer “hackers,”

malicious code (such as viruses and worms),

phishing, employee theft or misuse and denial-of-service attacks, sophisticated nation-state and nation-state supported actors

now engage in attacks (including advanced persistent threat intrusions).

Despite efforts to create security barriers to such threats,

it is not feasible, as a practical matter, for us to entirely mitigate these risks.

If our security measures are compromised as

a result of third-party action, employee, customer, or user error, malfeasance, stolen or fraudulently obtained log-in credentials

or otherwise, our reputation would be damaged, our data, information or intellectual property, or those of our customers, may be

destroyed, stolen or otherwise compromised, our business may be harmed and we could incur significant liability.

attack, significant data breach or disruption of the information technology systems or networks on which we rely could negatively affect

our business.

Our operations rely on

information technology systems for the use, storage and transmission of sensitive and confidential information with respect to our customers,

our customers’ consumers or other social media audiences, the third-party technology platforms of other parties and our employees.

A malicious cybersecurity-related attack, intrusion or disruption by either an internal or external source or other breach of the systems

on which our platform and products operate, and on which our employees conduct business, could lead to unauthorized access to, use of,

loss of or unauthorized disclosure of sensitive and confidential information, disruption of our services, and resulting regulatory enforcement

actions, litigation, indemnity obligations and other possible liabilities, as well as negative publicity, which could damage our reputation,

impair sales and harm our business.

Cyberattacks and other malicious internet-based activity continue to increase, and cloud-based platform

providers of products and services have been and are expected to continue to be targeted.

In addition to traditional computer “hackers,”

malicious code (such as viruses and worms), phishing, employee theft or misuse and denial-of-service attacks, sophisticated nation-state

and nation-state supported actors now engage in attacks (including advanced persistent threat intrusions).

Despite efforts to create security

barriers to such threats, it is not feasible, as a practical matter, for us to entirely mitigate these risks.

If our security measures

are compromised as a result of third-party action, employee, customer, or user error, malfeasance, stolen or fraudulently obtained log-in

credentials or otherwise, our reputation would be damaged, our data, information or intellectual property, or those of our customers,

may be destroyed, stolen or otherwise compromised, our business may be harmed and we could incur significant liability.

We have not always

been able in the past and may be unable in the future to anticipate or prevent techniques used to obtain unauthorized access to

or compromise of our systems because they change frequently and are generally not detected until after an incident has occurred.

We also cannot be certain that we will be able to prevent vulnerabilities in our software or address vulnerabilities that we may

become aware of in the future.

Further, as we rely on third-party cloud infrastructure, we depend in part on third party security

measures to protect against unauthorized access, cyberattacks and the mishandling of data and information.

Any cybersecurity event,

including any vulnerability in our software, cyberattack, intrusion or disruption, could result in significant increases in costs,

including costs for remediating the effects of such an event, lost revenue due to network downtime, and a decrease in customer

and user trust, increases in insurance premiums due to cybersecurity incidents, increased costs to address cybersecurity issues

and attempts to prevent future incidents, and harm to our business and our reputation because of any such incident.

There can be no

assurance that any limitation of liability provisions in our technical and/or subscription agreements would be enforceable or adequate

or would otherwise protect us from any such liabilities or damages with respect to any claim related to a cybersecurity incident.

We also cannot be sure that our existing general liability insurance coverage and coverage for cyber liability or errors or omissions

will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims

or that the insurer will not deny coverage as to any future claim.

The successful assertion of one or more large claims against

us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases

or the imposition of large deductible or co-insurance requirements, would harm our business.

Many governments

have enacted laws requiring companies to provide notice of data security incidents involving certain types of personal data.

addition, some of our customers require us to notify them of data security breaches.

Security compromises experienced by our competitors,

by our customers or by us may lead to public disclosures, which may lead to widespread negative publicity.

Any security compromise

in our industry, whether actual or perceived, could harm our reputation, erode confidence in the effectiveness of our security

measures, negatively affect our ability to attract new customers, encourage consumers to restrict the sharing of their personal

data with our customers or the social media networks, cause existing customers to elect not to renew their subscriptions or subject

us to third-party lawsuits, regulatory fines or other action or liability, which could harm our business.

regulations and increased awareness relating to privacy, information security and data protection could increase our costs, affect

or limit how we collect and use personal information and harm our brand.

We receive, store

and otherwise process personal information and other data from and about our customers and our employees.

We also receive personal

information and other data about our customers’

consumers or other social media audiences.

There are numerous federal, state,

local and international laws and regulations regarding privacy, data protection, information security and the storing, sharing,

use, processing, transfer, disclosure, retention and protection of personal information and other content, the scope of which is

rapidly changing, subject to differing interpretations and may be inconsistent among countries and states, or conflict with other

We are also subject to the terms of our privacy policies and contractual obligations to third parties related to privacy,

data protection and information security.

We strive to comply with applicable laws, regulations, policies and other legal obligations

relating to privacy, data protection and information security.

However, the regulatory framework for privacy, data protection and

information security worldwide is, and is likely to remain, uncertain for the foreseeable future, and it is possible that these

or other actual or alleged obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to

another and may conflict with other rules or our practices.

We also expect

that there will continue to be new laws, regulations and industry standards concerning privacy, data protection and information

security proposed and enacted in various jurisdictions.

The United States, the European Union (“EU”), and other countries

in which we currently or may operate are increasingly adopting or revising privacy, information security and data protection laws

and regulations that could have a significant impact on our current and planned privacy, data protection and information security-related

practices, our collection, use, sharing, retention and safeguarding of customer, consumer and/or employee information, as well

as any other third-party information we receive, and some of our current or planned business activities.

New and changing laws,

regulations, and industry standards concerning privacy, data protection and information security may also impact the social media

platforms and data providers we utilize, and thereby indirectly impact our business.

In the United States, this includes increased

privacy-related regulations and enforcement activity at both the federal level and state levels that impose requirements on the

personal information we collect in the course of our business activities.

In the EU, this includes the General Data Protection

Regulation (“GDPR”), which came into effect in May 2018.

While we have taken measures to comply with applicable requirements

contained in the GDPR, we may need to continue to make adjustments as more clarification and guidance on the requirements of the

GDPR and how to comply with such requirements becomes available.

Further, following a referendum in June 2016 in which voters in

the United Kingdom approved an exit from the EU, the United Kingdom government has initiated a process to leave the EU, known as

Brexit has created uncertainty with regard to the regulation of data protection in the United Kingdom.

In particular, although

the United Kingdom enacted a Data Protection Act in May 2018 that is designed to be consistent with the GDPR, uncertainty remains

regarding how data transfers to and from the United Kingdom will be regulated.

Additionally, although we have self-certified under

the U.S.-EU and U.S.-Swiss Privacy Shield Frameworks with regard to our transfer of certain personal data from the EU and Switzerland

to the United States, some regulatory uncertainty remains surrounding the future of data transfers from the EU and Switzerland

to the United States, and we are monitoring regulatory developments in this area.

California also recently enacted legislation,

the California Consumer Privacy Act of 2018, (the “CCPA”), that will afford consumers expanded privacy protections

been able in the past and may be unable in the future to anticipate or prevent techniques used to obtain unauthorized access to or compromise

of our systems because they change frequently and are generally not detected until after an incident has occurred.

We also cannot be certain

that we will be able to prevent vulnerabilities in our software or address vulnerabilities that we may become aware of in the future.

Further, as we rely on third-party cloud infrastructure, we depend in part on third party security measures to protect against unauthorized

access, cyberattacks and the mishandling of data and information.

Any cybersecurity event, including any vulnerability in our software,

cyberattack, intrusion or disruption, could result in significant increases in costs, including costs for remediating the effects of such

an event, lost revenue due to network downtime, and a decrease in customer and user trust, increases in insurance premiums due to cybersecurity

incidents, increased costs to address cybersecurity issues and attempts to prevent future incidents, and harm to our business and our

reputation because of any such incident.

There can be no assurance

that any limitation of liability provisions in our technical and/or subscription agreements would be enforceable or adequate or would

otherwise protect us from any such liabilities or damages with respect to any claim related to a cybersecurity incident.

We also cannot

be sure that our existing general liability insurance coverage and coverage for cyber liability or errors or omissions will continue to

be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims or that the insurer will

not deny coverage as to any future claim.

The successful assertion of one or more large claims against us that exceed available insurance

coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or

co-insurance requirements, would harm our business.

Many governments have

enacted laws requiring companies to provide notice of data security incidents involving certain types of personal data.

In addition, some

of our customers require us to notify them of data security breaches.

Security compromises experienced by our competitors, by our customers

or by us may lead to public disclosures, which may lead to widespread negative publicity.

Any security compromise in our industry, whether

actual or perceived, could harm our reputation, erode confidence in the effectiveness of our security measures, negatively affect our

ability to attract new customers, encourage consumers to restrict the sharing of their personal data with our customers or the social

media networks, cause existing customers to elect not to renew their subscriptions or subject us to third-party lawsuits, regulatory fines

or other action or liability, which could harm our business.

Changing regulations

and increased awareness relating to privacy, information security and data protection could increase our costs, affect or limit how we

collect and use personal information and harm our brand.

We receive, store and

otherwise process personal information and other data from and about our customers and our employees.

We also receive personal information

and other data about our customers’ consumers or other social media audiences.

There are numerous federal, state, local and international

laws and regulations regarding privacy, data protection, information security and the storing, sharing, use, processing, transfer, disclosure,

retention and protection of personal information and other content, the scope of which is rapidly changing, subject to differing interpretations

and may be inconsistent among countries and states, or conflict with other rules.

We are also subject to the terms of our privacy policies

and contractual obligations to third parties related to privacy, data protection and information security.

We strive to comply with applicable

laws, regulations, policies and other legal obligations relating to privacy, data protection and information security.

However, the regulatory

framework for privacy, data protection and information security worldwide is, and is likely to remain, uncertain for the foreseeable future,

and it is possible that these or other actual or alleged obligations may be interpreted and applied in a manner that is inconsistent from

one jurisdiction to another and may conflict with other rules or our practices.

We also expect that there

will continue to be new laws, regulations and industry standards concerning privacy, data protection and information security proposed

and enacted in various jurisdictions.

The United States, the European Union (“EU”), and other countries in which we currently

or may operate are increasingly adopting or revising privacy, copyright, information security and data protection laws and regulations

that could have a significant impact on our current and planned privacy, data protection and information security-related practices, our

collection, use, sharing, retention and safeguarding of customer, consumer and/or employee information, as well as any other third-party

information we receive, and some of our current or planned business activities.

New and changing laws, regulations, and industry standards

concerning privacy, data protection and information security may also impact the social media platforms and data providers we utilize,

and thereby indirectly impact our business.

In the United States, this includes increased privacy-related regulations and enforcement

activity at both the federal level and state levels that impose requirements on the personal information we collect in the course of our

business activities.

In the EU, this includes the General Data Protection Regulation (“GDPR”), which came into effect in May

While we have taken measures to comply with applicable requirements contained in the GDPR, we may need to continue to make adjustments

as more clarification and guidance on the requirements of the GDPR and how to comply with such requirements becomes available.

following a referendum in June 2016 in which voters in the United Kingdom approved an exit from the EU, the United Kingdom government

has initiated a process to leave the EU, known as Brexit.

Brexit has created uncertainty with regard to the regulation of data protection

in the United Kingdom.

In particular, although the United Kingdom enacted a Data Protection Act in May 2018 that is designed to be consistent

with the GDPR, uncertainty remains regarding how data transfers to and from the United Kingdom will be regulated.

Additionally, although

we have self-certified under the U.S.-EU and U.S.-Swiss Privacy Shield Frameworks with regard to our transfer of certain personal data

from the EU and Switzerland to the United States, some regulatory uncertainty remains surrounding the future of data transfers from the

EU and Switzerland to the United States, and we are monitoring regulatory developments in this area.

California also recently enacted

legislation, the California Consumer Privacy Act of 2018, (the “CCPA”), that will afford consumers expanded privacy protections

and control over the collection, use and sharing of their personal information when it goes into effect on January 1, 2020.

CCPA was recently amended, and it is possible that it will be amended again before it goes into effect.

The potential effects of

this legislation are far-reaching and may require us to modify our data processing practices and policies and to incur substantial

costs and expenses in an effort to comply.

For example, the CCPA gives California residents expanded rights to access and require

deletion of their personal information, opt out of certain personal information sharing and receive detailed information about

how their personal information is used.

The CCPA also provides for civil penalties for violations, as well as a private right of

action for data breaches that may increase data breach litigation.

With laws and

regulations such as the GDPR in the EU and the CCPA in the United States imposing new and relatively burdensome obligations, and

with substantial uncertainty over the interpretation and application of these and other laws and regulations, we may face challenges

in addressing their requirements and making necessary changes to our policies and practices, and may incur significant costs and

expenses in an effort to do so.

For example, the increased consumer control over the sharing of their personal information afforded

by CCPA may affect our customers’

ability to share such personal information with us or may require us to delete or remove

consumer information from our records or data sets, which may create considerable costs for our organization.

In addition, any

failure or perceived failure by us to comply with our privacy policies, our privacy-, data protection- or information security-related

obligations to customers, users or other third parties or any of our other legal obligations relating to privacy, data protection

or information security may result in governmental investigations or enforcement actions, litigation, claims or public statements

against us by consumer advocacy groups or others, and could result in significant liability, loss of relationships with key third

parties including social media networks and other data providers, or cause our users to lose trust in us, which could have an adverse

effect on our reputation and business.

Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations

and policies that are applicable to the businesses of our users may limit the adoption and use of, and reduce the overall demand

for, our platform.

Additionally,

if the third parties we work with, such as vendors or developers, violate applicable laws or regulations or our policies, such

violations may also put our customers’

and their users’

and consumers’

or other social media audiences’

content at risk and could in turn have an adverse effect on our business.

Any significant change to applicable laws, regulations

or industry practices regarding the collection, use, retention, security or disclosure of such content, or regarding the manner

in which the express or implied consent of such persons for the collection, use, retention or disclosure of such content is obtained,

could increase our costs and require us to modify our services and features, possibly in a material manner, which we may be unable

to complete and may limit our ability to store and process user data or develop new services and features.

All of these implications

could adversely affect our revenue, results of operations, business and financial condition.

depends on a strong brand, and if we are not able to develop, maintain and enhance our brand, our business and operating results

may be harmed.

recently amended, and it is possible that it will be amended again before it goes into effect.

The potential effects of this legislation

are far-reaching and may require us to modify our data processing practices and policies and to incur substantial costs and expenses in

an effort to comply.

For example, the CCPA gives California residents expanded rights to access and require deletion of their personal

information, opt out of certain personal information sharing and receive detailed information about how their personal information is

The CCPA also provides for civil penalties for violations, as well as a private right of action for data breaches that may increase

data breach litigation.

With laws and regulations

such as the GDPR in the EU and the CCPA in the United States imposing new and relatively burdensome obligations, and with substantial

uncertainty over the interpretation and application of these and other laws and regulations, we may face challenges in addressing their

requirements and making necessary changes to our policies and practices, and may incur significant costs and expenses in an effort to

For example, the increased consumer control over the sharing of their personal information afforded by CCPA may affect our customers’

ability to share such personal information with us or may require us to delete or remove consumer information from our records or data

sets, which may create considerable costs for our organization.

In addition, any failure or perceived failure by us to comply with our

privacy policies, our privacy-, data protection- or information security-related obligations to customers, users or other third parties

or any of our other legal obligations relating to privacy, data protection or information security may result in governmental investigations

or enforcement actions, litigation, claims or public statements against us by consumer advocacy groups or others, and could result in

significant liability, loss of relationships with key third parties including social media networks and other data providers, or cause

our users to lose trust in us, which could have an adverse effect on our reputation and business.

Furthermore, the costs of compliance

with, and other burdens imposed by, the laws, regulations and policies that are applicable to the businesses of our users may limit the

adoption and use of, and reduce the overall demand for, our platform.

Additionally, if the

third parties we work with, such as vendors or developers, violate applicable laws or regulations or our policies, such violations may

also put our customers’ and their users’ and consumers’ or other social media audiences’ content at risk and could

in turn have an adverse effect on our business.

Any significant change to applicable laws, regulations or industry practices regarding

the collection, use, retention, security or disclosure of such content, or regarding the manner in which the express or implied consent

of such persons for the collection, use, retention or disclosure of such content is obtained, could increase our costs and require us

to modify our services and features, possibly in a material manner, which we may be unable to complete and may limit our ability to store

and process user data or develop new services and features.

All of these implications could adversely affect our revenue, results of operations,

business and financial condition.

We may also face different

obligations in foreign jurisdictions when providing access to AM/FM radio station simulcasts through the Faidr App.

In the United States,

we will generally not be liable for monetary damages for copyright infringement arising from a radio station’s transmissions made

accessible through the Faidr App even if the owner of the station has failed to obtain all necessary licenses to simulcast music over

the Internet.

In the UK and the EU, the laws differ from those in the United States for companies that operate directory services and

we may either have to disable access to stations that have failed to obtain the necessary licenses for accessibility through the Faidr

App in different jurisdictions or obtain licenses to cover the communications to the public made by such stations and accessed through

the Faidr App.

The costs for such licenses could be excessive and negatively impact our business, operations and financial condition.

Our business depends

on a strong brand, and if we are not able to develop, maintain and enhance our brand, our business and operating results may be harmed.

Moreover, our brand and reputation could be harmed if we were to experience significant negative publicity.

We believe that

developing, maintaining and enhancing our brand is critical to achieving widespread acceptance of our platform and products, attracting

new customers, retaining existing customers, persuading existing customers to adopt additional products and use-cases, and hiring

and retaining our employees.

We believe that developing,

maintaining and enhancing our brand is critical to achieving widespread acceptance of our platform and products, attracting new customers,

retaining existing customers, persuading existing customers to adopt additional products and use-cases, and hiring and retaining our employees.

We believe that the importance of our brand will increase as competition in our market further intensifies.

Successful promotion of our brand will depend on a number of factors, including the effectiveness of our marketing efforts, including

thought leadership, our ability to provide a high-quality, reliable and cost-effective platform, the perceived value of our platform

and products and our ability to provide quality customer success and support experience.

Brand promotion activities require us

to make substantial expenditures.

To date, we have made significant investments in the promotion of our brand.

The promotion of

our brand, however, may not generate customer awareness or increase revenue, and any increase in revenue may not offset the expenses

we incur in building and maintaining our brand.

We operate in

a public-facing industry in which every aspect of our business is impacted by social media.

Negative publicity, whether or not

justified, can spread rapidly through social media.

To the extent that we are unable to respond timely and appropriately to negative

publicity, our reputation and brand could be harmed.

Moreover, even if we are able to respond in a timely and appropriate manner,

we cannot predict how negative publicity may affect our reputation and business.

We and our employees also use social media to

communicate externally.

There is risk that the use of social media by us or our employees to communicate about our business may

give rise to liability or result in public exposure of personal information of our employees or customers, each of which could

affect our revenue, business, results of operations and financial condition.

and future legislation may increase the difficulty and cost for us to commercialize our product candidates and may affect the prices

Our business and

financial prospects could be affected by changes in regulations and policy in the United States and abroad.

We operate in a highly

regulated industry and new laws or judicial decisions, or new interpretations of existing laws or decisions, related to copyright

or the personal use exemption for recording content and the amount of payment for content rights could negatively impact our business,

operations and financial condition.

subject to litigation, disputes or regulatory inquiries for a variety of claims, which could adversely affect our results of operations,

harm our reputation or otherwise negatively affect our business.

From time to time,

we may be involved in litigation, disputes or regulatory inquiries that arise in the ordinary course of business.

These may include

claims, lawsuits and proceedings involving labor, and employment, wage and hour, commercial, alleged securities law violations

or other investor claims, and other matters.

We expect that the number and significance of these potential disputes may increase

as our business expands and our company grows larger.

While our agreements with customers limit our liability for damages arising

from our platform, we cannot assure you that these contractual provisions will protect us from liability for damages in the event

Although we carry general liability insurance coverage, our insurance may not cover all potential claims to which

we are exposed or may not be adequate to indemnify us for all liability that may be imposed.

Any claims against us, whether meritorious

or not, could be time consuming, result in costly litigation, require significant amounts of management time, adversely affect

Successful promotion of our

brand will depend on a number of factors, including the effectiveness of our marketing efforts, including thought leadership, our ability

to provide a high-quality, reliable and cost-effective platform, the perceived value of our platform and products and our ability to provide

quality customer success and support experience.

Brand promotion activities require us to make substantial expenditures.

To date, we have

made significant investments in the promotion of our brand.

The promotion of our brand, however, may not generate customer awareness or

increase revenue, and any increase in revenue may not offset the expenses we incur in building and maintaining our brand.

We operate in a public-facing

industry in which every aspect of our business is impacted by social media.

Negative publicity, whether or not justified, can spread rapidly

through social media.

To the extent that we are unable to respond timely and appropriately to negative publicity, our reputation and brand

could be harmed.

Moreover, even if we are able to respond in a timely and appropriate manner, we cannot predict how negative publicity

may affect our reputation and business.

We and our employees also use social media to communicate externally.

There is risk that the use

of social media by us or our employees to communicate about our business may give rise to liability or result in public exposure of personal

information of our employees or customers, each of which could affect our revenue, business, results of operations and financial condition.

Enacted and future

legislation may increase the difficulty and cost for us to commercialize our product candidates and may affect the prices we may set.

Our business and financial

prospects could be affected by changes in laws, regulations, and policies in the United States and abroad.

We operate in a highly regulated

industry and new laws or judicial decisions, or new interpretations of existing laws or decisions, including those related to copyright,

and the amount of payment for content rights could negatively impact our business, operations and financial condition.

We may be subject to litigation, disputes

or regulatory inquiries for a variety of claims, which could adversely affect our results of operations, harm our reputation or otherwise

negatively affect our business.

From time to time, we

may be involved in litigation, disputes or regulatory inquiries that arise in the ordinary course of business.

These may include claims,

lawsuits and proceedings involving labor, and employment, wage and hour, commercial, alleged securities law violations or other investor

claims, claims for trademark or copyright infringement and other matters.

We expect that the number and significance of these potential

disputes may increase as our business expands, our company grows larger and more users listen to streaming audio through our Faidr App.

While our agreements with customers limit our liability for damages arising from our platform, we cannot assure you that these contractual

provisions will protect us from liability for damages in the event we are sued or protect us from claims against third parties with whom

we do not have agreements.

Radio station owners may object to our providing access to their simulcast streams through the Faidr App in

a manner that gives the consumer the ability to control whether the consumer listens to audio advertisements included in the station’s

transmissions.

The copyright owners of musical works and sound recordings may object to our providing users with the ability to buffer

audio content for time shifting purposes.

Although we carry general liability insurance coverage, our insurance may not cover all potential

claims to which we are exposed or may not be adequate to indemnify us for all liability that may be imposed.

Any claims against us, whether

meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time, adversely affect

our reputation and result in the diversion of significant operational resources.

Because litigation is inherently unpredictable,

we cannot assure you that the results of any of these actions will not have a material adverse effect on our revenue, business,

brand, results of operations and financial condition.

Risks related to our intellectual

is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, and to interruption by man-made problems

such as power disruptions, computer viruses, cyberattack, data security breaches or terrorism.

A significant

natural disaster, such as an earthquake, fire or a flood, occurring where a business partner is located could adversely affect

Because litigation is inherently unpredictable, we cannot

assure you that the results of any of these actions will not have a material adverse effect on our revenue, business, brand, results of

operations and financial condition.

Risks related to our intellectual property

Our business is

subject to the risks of earthquakes, fire, floods and other natural catastrophic events, and to interruption by man-made problems such

as power disruptions, computer viruses, cyberattack, data security breaches or terrorism.

A significant natural

disaster, such as an earthquake, fire or a flood, occurring where a business partner is located could adversely affect our business, results

of operations and financial condition.

Further, if a natural disaster or man-made problem were to affect our network service providers

or Internet service providers, this could adversely affect the ability of our customers to use our products and platform.

natural disasters and acts of terrorism could cause disruptions in our or our customers’ businesses, national economies, or the

world economy.

We also rely on our network and third-party infrastructure and enterprise applications and internal technology systems

for our engineering, sales and marketing and operations activities.

If a major disruption is caused by a natural disaster or man-made

problem, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in our development

activities, lengthy interruptions in service, breaches of data security and loss of critical data, any of which could adversely affect

our business, results of operations and financial condition.

Further, if a natural disaster or man-made problem were to affect

our network service providers or Internet service providers, this could adversely affect the ability of our customers to use our

products and platform.

In addition, natural disasters and acts of terrorism could cause disruptions in our or our customers’

businesses, national economies, or the world economy.

We also rely on our network and third-party infrastructure and enterprise

applications and internal technology systems for our engineering, sales and marketing and operations activities.

If a major disruption

is caused by a natural disaster or man-made problem, we may be unable to continue our operations and may endure system interruptions,

reputational harm, delays in our development activities, lengthy interruptions in service, breaches of data security and loss of

critical data, any of which could adversely affect our business, results of operations and financial condition.

Any failure to protect our intellectual

property rights could impair our business.

Our success and

ability to compete depend in part upon our intellectual property.

We attempt to protect our intellectual property rights, both

in the United States and in foreign countries, through a combination of patent, trademark, copyright and trade secret laws, as

well as licensing agreements and third-party nondisclosure and assignment agreements.

However, the steps we take to protect our

intellectual property rights may be inadequate.

Because of the differences in foreign trademark, patent and other laws concerning

proprietary rights, our intellectual property rights may not receive the same degree of protection in foreign countries as they

would in the United States.

Our failure to obtain or maintain adequate protection of our intellectual property rights for any reason

could have a material adverse effect on our business, results of operations and financial condition.

We have applied

for patent protection in the United States relating to certain existing and proposed systems, methods and processes.

assure that any of our patent applications will result in an issued patent.

Any patent(s) we own could be challenged, invalidated

or circumvented by others and may not be of sufficient scope or strength to provide us with any meaningful protection or commercial

Further, we cannot assure you that competitors will not infringe our patent(s), or that we will have adequate resources

to enforce our patent(s).

We also rely on

unpatented proprietary technology.

It is possible that others will independently develop the same or similar technology or otherwise

obtain access to our unpatented technology.

To protect our trade secrets and other proprietary information, we have entered into

confidentiality agreements with most of our employees and consultants.

We cannot assure you that these agreements will provide

meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation

or disclosure of such trade secrets, know-how or other proprietary information.

If we are unable to maintain the proprietary nature

of our technologies, our business, financial condition and results of operations could be harmed.

We rely on our

trademarks, service marks, trade names, and brand names to distinguish our products and services from the products and services

of our competitors, and have registered or applied to register many of these trademarks in the United States and other jurisdictions.

We cannot assure you that our trademark applications will be approved.

Third parties may also oppose our trademark applications,

or otherwise challenge our use of the trademarks, or use and register confusingly similar trademarks in these or other jurisdictions.

In the event that our trademarks are successfully challenged, we could be forced to rebrand our products and services, which could

result in loss of brand recognition, and could require us to devote resources advertising and marketing new brands.

cannot assure you that third parties will not infringe our trademarks, or that we will have adequate resources to enforce our trademarks.

Although we rely

on copyright laws to protect the works of authorship (including software) created by us, we do not register the copyrights in any

of our copyrightable works.

Our success and ability

to compete depend in part upon our intellectual property.

We attempt to protect our intellectual property rights, both in the United States

and in foreign countries, through a combination of patent, trademark, copyright and trade secret laws, as well as licensing agreements

and third-party nondisclosure and assignment agreements.

However, the steps we take to protect our intellectual property rights may be

Because of the differences in foreign trademark, patent and other laws concerning proprietary rights, our intellectual property

rights may not receive the same degree of protection in foreign countries as they would in the United States.

Our failure to obtain or

maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our business,

results of operations and financial condition.

We have applied for patent

protection in the United States relating to certain existing and proposed systems, methods and processes.

We cannot assure that any of

our patent applications will result in an issued patent.

Any patent(s) we own could be challenged, invalidated or circumvented by others

and may not be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage.

Further, we cannot

assure you that competitors will not infringe our patent(s), or that we will have adequate resources to enforce our patent(s).

We also rely on unpatented

proprietary technology.

It is possible that others will independently develop the same or similar technology or otherwise obtain access

to our unpatented technology.

To protect our trade secrets and other proprietary information, we have entered into confidentiality agreements

with most of our employees and consultants.

We cannot assure you that these agreements will provide meaningful protection for our trade

secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure of such trade

secrets, know-how or other proprietary information.

If we are unable to maintain the proprietary nature of our technologies, our business,

financial condition and results of operations could be harmed.

We rely on our trademarks,

service marks, trade names, and brand names to distinguish our products and services from the products and services of our competitors,

and have registered or applied to register many of these trademarks in the United States and other jurisdictions.

We cannot assure you

that our trademark applications will be approved.

Third parties may also oppose our trademark applications, or otherwise challenge our

use of the trademarks, or use and register confusingly similar trademarks in these or other jurisdictions.

In the event that our trademarks

are successfully challenged, we could be forced to rebrand our products and services, which could result in loss of brand recognition,

and could require us to devote resources advertising and marketing new brands.

Further, we cannot assure you that third parties will not

infringe our trademarks, or that we will have adequate resources to enforce our trademarks.

Although we rely on copyright

laws to protect the works of authorship (including software) created by us, we do not register the copyrights in any of our copyrightable

Copyrights of U.S.

origin must be registered before the copyright owner may bring an infringement suit

in the United States.

Furthermore, if a copyright of U.S.

origin is not registered within three months of publication of the underlying

work, the copyright owner is precluded from seeking statutory damages or attorney’s fees in any United States enforcement

action, and is limited to seeking actual damages and lost profits.

origin must be registered before the copyright owner may bring an infringement suit in the United States.

if a copyright of U.S.

origin is not registered within three months of publication of the underlying work, the copyright owner is precluded

from seeking statutory damages or attorney’s fees in any United States enforcement action and is limited to seeking actual damages

and lost profits.

Accordingly, if one of our unregistered copyrights of U.S.

is infringed by a third party, we will need to register the copyright before we can file an infringement suit in the United States,

and our remedies in any such infringement suit may be limited.

In order to protect

our intellectual property, we may be required to spend significant resources to monitor and protect our rights.

Litigation brought

to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management, and could

result in the impairment or loss of portions of our intellectual property.

Furthermore, our efforts to enforce our intellectual

property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual

property rights.

Our failure to secure, protect and enforce our intellectual property rights could adversely affect our brand and

adversely affect our business.

parties claim that we infringe upon or otherwise violate their intellectual property rights, our business could be adversely affected.

We face the risk

of claims that we have infringed or otherwise violated third parties’

intellectual property rights.

There is considerable

patent and other intellectual property development activity in our industry.

Our future success depends in part on not infringing

upon or otherwise violating the intellectual property rights of others.

From time to time, our competitors or other third parties

may claim that we are infringing upon or otherwise violating their intellectual property rights, and we may be found to be infringing

upon or otherwise violating such rights.

We may be unaware of the intellectual property rights of others that may cover some or

all of our technology or conflict with our trademark rights.

Any claims of intellectual property infringement or other intellectual

property violations, even those without merit, could:

origin is infringed by a third party, we will need to register

the copyright before we can file an infringement suit in the United States, and our remedies in any such infringement suit may be limited.

In order to protect our

intellectual property, we may be required to spend significant resources to monitor and protect our rights.

Litigation brought to protect

and enforce our intellectual property rights could be costly, time-consuming and distracting to management, and could result in the impairment

or loss of portions of our intellectual property.

Furthermore, our efforts to enforce our intellectual property rights may be met with

defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights.

Our failure to

secure, protect and enforce our intellectual property rights could adversely affect our brand and adversely affect our business.

If third parties

claim that we infringe upon or otherwise violate their intellectual property rights, our business could be adversely affected.

We face the risk of

claims that we have infringed or otherwise violated third parties’ intellectual property rights.

There is considerable patent and

other intellectual property development activity in our industry.

Our future success depends in part on not infringing upon or otherwise

violating the intellectual property rights of others.

From time to time, our competitors or other third parties may claim that we are

infringing upon or otherwise violating their intellectual property rights, and we may be found to be infringing upon or otherwise violating

We may be unaware of the intellectual property rights of others that may cover some or all of our technology or conflict

with our trademark rights.

Any claims of intellectual property infringement or other intellectual property violations, even those without

merit, could:

be expensive and time consuming to defend;

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require us to modify, redesign, reengineer or rebrand our platform or products, if feasible;

divert management’s attention and resources;

require us to enter into royalty or licensing agreements in order to obtain the right to use a third party’s intellectual property.

Any royalty or

licensing agreements, if required, may not be available to us on acceptable terms or at all.

A successful claim of infringement

against us could result in our being required to pay significant damages, enter into costly settlement agreements, or prevent us

from offering our platform or products, any of which could have a negative impact on our operating profits and harm our future

We may also be obligated to indemnify our customers or business partners in connection with any such litigation and

to obtain licenses, modify our platform or products, or refund subscription fees, which could further exhaust our resources.

disputes could also disrupt our platform or products, adversely affecting our customer satisfaction and ability to attract customers.

Our use of “open

source”

software could negatively affect our ability to offer and sell access to our platform and products and subject us

to possible litigation.

We use open source

software in our platform and products and expect to continue to use open source software in the future.

There are uncertainties

regarding the proper interpretation of and compliance with open source licenses, and there is a risk that such licenses could be

construed in a manner that imposes unanticipated conditions or restrictions on our ability to use such open source software, and

consequently to provide or distribute our platform and products.

Although use of open source software has historically been free,

recently several open source providers have begun to charge license fees for use of their software.

If our current open source

providers were to begin to charge for these licenses or increase their license fees significantly, this would increase our research

and development costs and have a negative impact on our results of operations and financial condition.

Additionally,

we may from time to time face claims from third parties claiming ownership of, or seeking to enforce the terms of, an open source

license, including by demanding release of source code for the open source software, derivative works or our proprietary source

code that was developed using or that is distributed with such open source software.

These claims could also result in litigation

and could require us to make our proprietary software source code freely available, require us to devote additional research and

development resources to change our platform or incur additional costs and expenses, any of which could result in reputational

harm and would have a negative effect on our business and operating results.

In addition, if the license terms for the open source

software we utilize change, we may be forced to reengineer our platform or incur additional costs to comply with the changed license

terms or to replace the affected open source software.

Further, use of certain open source software can lead to greater risks than

use of third-party commercial software, as open source licensors generally do not provide warranties or controls on the origin

of software or indemnification for third party infringement claims.

Although we have implemented policies to regulate the use and

incorporation of open source software into our platform and products, we cannot be certain that we have not incorporated open source

software in our platform and products in a manner that is inconsistent with such policies.

A third party has alleged Trademark

On September 24, 2020, we received Cease

and Desist Letter alleging that the ticker symbol AUDD infringes upon the claimant’s trademark “audD”.

is no claim concerning our proprietary technology.

The claimant was seeking a permanent injunction against infringement, damages,

and attorneys’

divert management’s attention and resources;

require us to enter into royalty or licensing agreements in order to obtain the right to use a third party’s intellectual property.

Any royalty or licensing

agreements, if required, may not be available to us on acceptable terms or at all.

A successful claim of infringement against us could

result in our being required to pay significant damages, enter into costly settlement agreements, or prevent us from offering our platform

or products, any of which could have a negative impact on our operating profits and harm our future prospects.

We may also be obligated

to indemnify our customers or business partners in connection with any such litigation and to obtain licenses, modify our platform or

products, or refund subscription fees, which could further exhaust our resources.

Such disputes could also disrupt our platform or products,

adversely affecting our customer satisfaction and ability to attract customers.

Our use of “open

source” software could negatively affect our ability to offer and sell access to our platform and products and subject us to possible

We use open source software

in our platform and products and expect to continue to use open source software in the future.

There are uncertainties regarding the proper

interpretation of and compliance with open source licenses, and there is a risk that such licenses could be construed in a manner that

imposes unanticipated conditions or restrictions on our ability to use such open source software, and consequently to provide or distribute

our platform and products.

Although use of open source software has historically been free, recently several open source providers have

begun to charge license fees for use of their software.

If our current open source providers were to begin to charge for these licenses

or increase their license fees significantly, this would increase our research and development costs and have a negative impact on our

results of operations and financial condition.

Additionally, we may

from time to time face claims from third parties claiming ownership of, or seeking to enforce the terms of, an open source license, including

by demanding release of source code for the open source software, derivative works or our proprietary source code that was developed using

or that is distributed with such open source software.

These claims could also result in litigation and could require us to make our proprietary

software source code freely available, or require us to devote additional research and development resources to change our platform or

incur additional costs and expenses, any of which could result in reputational harm and would have a negative effect on our business and

operating results.

In addition, if the license terms for the open source software we utilize change, we may be forced to reengineer our

platform or incur additional costs to comply with the changed license terms or to replace the affected open source software.

use of certain open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally

do not provide warranties or controls on the origin of software or indemnification for third party infringement claims.

Although we have

implemented policies to regulate the use and incorporation of open source software into our platform and products, we cannot be certain

that we have not incorporated open source software in our platform and products in a manner that is inconsistent with such policies.

On September 24, 2020, we received Cease and Desist

Letter alleging that the ticker symbol AUDD infringes upon the claimant’s trademark “audD”.

There is no claim concerning

our proprietary technology.

The claimant was seeking a permanent injunction against infringement, damages, and attorneys’ fees.

The Company abandoned AUDD as a ticker symbol and is now using AUUD.

While we intend to defend this

lawsuit vigorously and believe that we have valid defenses to these claims, there can be no assurance that a favorable outcome

will be obtained.

In addition, any

intellectual property litigation to which we become a party may require us to do one or more of the following:

While we intend to defend this lawsuit vigorously and believe that

we have valid defenses to these claims, there can be no assurance that a favorable outcome will be obtained.

In addition, any intellectual

property litigation to which we become a party may require us to do one or more of the following:

cease selling, licensing, or using products or features that incorporate the intellectual property rights that we allegedly infringe, misappropriate, or violate;

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Intellectual property

litigation is typically complex, time consuming, and expensive to resolve and would divert the time and attention of our management

and technical personnel.

It may also result in adverse publicity, which could harm our reputation and ability to attract or retain

litigation is typically complex, time consuming, and expensive to resolve and would divert the time and attention of our management and

technical personnel.

It may also result in adverse publicity, which could harm our reputation and ability to attract or retain customers.

As we grow, we may experience a heightened risk of allegations of intellectual property infringement.

An adverse result

in any litigation claims against us could have a material adverse effect on our business, financial condition, and results of operations.

provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other

Our agreements

with customers and other third parties may include indemnification or other provisions under which we agree to indemnify or otherwise

be liable to them for losses suffered or incurred as a result of claims of intellectual property infringement, damages caused by

us to property or persons, or other liabilities relating to or arising from our platform, products or other acts or omissions.

The term of these contractual provisions often survives termination or expiration of the applicable agreement.

Large indemnity

payments or damage claims from contractual breach could harm our business, operating results and financial condition.

From time to time, customers may require

us to indemnify or otherwise be liable to them for breach of confidentiality or failure to implement adequate security measures

with respect to their data stored, transmitted or processed by our employees, platform or products.

Although we normally contractually

limit our liability with respect to such obligations, we may still incur substantial liability related to them.

Any dispute with

a customer with respect to such obligations could have adverse effects on our relationship with that customer and other current

and prospective customers, reduce demand for our platform or products, and harm our revenue, business and operating results.

Risks related to ownership of our

An adverse result in any litigation

claims against us could have a material adverse effect on our business, financial condition, and results of operations.

Indemnity provisions

in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses.

Our agreements with

customers and other third parties may include indemnification or other provisions under which we agree to indemnify or otherwise be liable

to them for losses suffered or incurred as a result of claims of intellectual property infringement, damages caused by us to property

or persons, or other liabilities relating to or arising from our platform, products or other acts or omissions.

The term of these contractual

provisions often survives termination or expiration of the applicable agreement.

Large indemnity payments or damage claims from contractual

breach could harm our business, operating results and financial condition.

From time to time, customers may require us to

indemnify or otherwise be liable to them for breach of confidentiality or failure to implement adequate security measures with respect

to their data stored, transmitted or processed by our employees, platform or products.

Although we normally contractually limit our liability

with respect to such obligations, we may still incur substantial liability related to them.

Any dispute with a customer with respect

to such obligations could have adverse effects on our relationship with that customer and other current and prospective customers, reduce

demand for our platform or products, and harm our revenue, business and operating results.

Risks related to ownership of our common

Our executive

officers, directors, and principal stockholders will maintain the ability to control all matters submitted to our stockholders

for approval.

Following the sale by us of 3,991,818 common shares

in the IPO, our executive officers, directors and stockholders who owned more than 5% of our outstanding common stock before the IPO will,

in the aggregate, beneficially own common shares representing approximately 30.56% of our outstanding common stock following completion

As a result, if these stockholders were to act together, they would be most likely be able to control most or all matters

submitted to our stockholders for approval, as well as our management and affairs.

For example, these persons, if they act together, they

would likely control the election of directors and approval of any merger, consolidation, or sale of all or substantially all of our assets.

This concentration of voting power could delay or prevent an acquisition of our company on terms that other stockholders may desire or

result in management of our company with which our public stockholders disagree.

A significant

portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future,

which could cause the market price of our common stock to drop significantly, even if our business is performing well.

substantial number of shares of our common stock in the public market could occur at any time, subject to certain

restrictions described below.

These sales, or the perception in the market that holders of a large number of shares intend to

sell shares, could reduce the market price of our common stock.

After the recent IPO, we have 11,291,829 shares of common

stock issued and outstanding.

This includes the 3,991,818 shares, as part of the Units, that we sold in the IPO, the

1,568,182 shares that were registered for resale by certain selling shareholders, which may be resold in the public market

immediately without restriction, unless purchased by our affiliates, but does not include 4,590,590 shares issuable upon

the exercise of the Series A Warrants, 341,655 common shares reserved for issuance upon the exercise of common share purchase

options and 358,334 common shares reserved for issuance upon the exercise of common share purchase warrants.

Following the

IPO, 5,731,829 shares are restricted as a result of securities laws or lock-up agreements but may be able to be sold

commencing 180 days after the IPO.

of warrants in the IPO will cause existing stockholders to experience additional dilution if those warrants are exercised.

officers, directors, and principal stockholders will maintain the ability to control all matters submitted to our stockholders for approval.

Our executive officers, directors and stockholders

who owned more than 5% of our outstanding common stock will, in the aggregate, beneficially own common shares representing approximately

27.8% of our outstanding common stock as of February 17, 2022.

As a result, if these stockholders were to act together, they would most

likely be able to control most or all matters submitted to our stockholders for approval, as well as our management and affairs.

these persons, if they act together, they would likely control the election of directors and approval of any merger, consolidation, or

sale of all or substantially all of our assets.

This concentration of voting power could delay or prevent an acquisition of our company

on terms that other stockholders may desire or result in management of our company with which our public stockholders disagree.

A significant portion

of our total outstanding shares are eligible for sale into the public market.

Substantial sales of our shares into the public market could

cause the market price of our common stock to drop significantly, even if our business is performing well.

Sales of a substantial

number of shares of our common stock in the public market could occur at any time, subject to certain restrictions described below.

sales, or the perception in the market that holders of a large number of shares intend to sell shares, could reduce the market price of

our common stock.

We have 12,416,520 shares of common stock issued and outstanding as of February 17, 2022.

Substantially all of these

shares, unless held by our affiliates, may be resold in the public market immediately without restriction.

Shares held by our affiliates

may be resold into the public market subject to compliance with the requirements of the SEC’s Rule 144.

The issuance of

warrants in the IPO will cause existing stockholders to experience additional dilution if those warrants are exercised.

In addition to the shares

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will experience dilution at the time they exercise their warrants.

In July 2021, certain

holders of our publicly traded Series A Warrants exercises 1,091,692 warrants.

As of February 17, 2022, we currently have 3,498,898 Series

A Warrants that remain outstanding.

We also offered a warrant

to the representative of the IPO underwriters that is exercisable for 319,345 shares (the “Representative’s Warrant”).

If the representative of the underwriters exercises these warrants in the future, existing stockholders will experience additional dilution.

of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for investors in our securities.

The price of our

common stock may be volatile and fluctuate substantially, which could result in substantial losses for investors in our securities.

Our common stock price

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general economic, industry and market conditions;

the other factors described in this “Risk Factors”

If our quarterly

operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline

substantially.

Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our stock to fluctuate

substantially.

We believe that quarterly comparisons of our financial results are not necessarily meaningful and should not be

relied upon as an indication of our future performance.

the other factors described in this “Risk Factors” section.

If our quarterly operating

results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.

any quarterly fluctuations in our operating results may, in turn, cause the price of our stock to fluctuate substantially.

that quarterly comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our

future performance.

In the past, following

periods of volatility in the market price of a company’s securities, securities class-action litigation often has been instituted

against that company.

Such litigation, if instituted against us, could cause us to incur substantial costs to defend such claims

and divert management’s attention and resources.

If securities

analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price

of our stock could decline.

The trading market

for our common stock will rely, in part, on the research and reports that industry or financial analysts publish about us or our

Such litigation, if instituted against us, could cause us to incur substantial costs to defend such claims and divert

management’s attention and resources.

If securities analysts

do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could

The trading market for

our common stock will rely, in part, on the research and reports that industry or financial analysts publish about us or our business.

We do not currently have, and may never obtain, research coverage by industry or financial analysts.

If no, or few, analysts

commence coverage of us, the trading price of our stock would likely decrease.

Even if we do obtain analyst coverage, if one or

more of the analysts covering our business downgrade their evaluations of our stock, the price of our stock could decline.

or more of these analysts cease to cover our stock, we could lose visibility in the market for our stock, which in turn could cause

our stock price to decline.

trading market for our common stock may not develop.

If no, or few, analysts commence

coverage of us, the trading price of our stock would likely decrease.

Even if we do obtain analyst coverage, if one or more of the analysts

covering our business downgrade their evaluations of our stock, the price of our stock could decline.

If one or more of these analysts

cease to cover our stock, we could lose visibility in the market for our stock, which in turn could cause our stock price to decline.

An active trading

market for our common stock may not develop.

Prior to the IPO, there

was no public market for our common stock.

The IPO price for our common stock was determined through negotiations with the underwriters.

Although we have received approval for the trading of our common stock and Series A Warrants on the Nasdaq Capital Market, an active trading

market for our shares may never develop or be sustained following this IPO.

If an active market for our common stock does not develop,

Although our common stock and Series A Warrants trade on the Nasdaq Capital Market, an active

trading market for our shares and warrants may not be sustained.

If an active market for our common stock and warrants is not sustained,

it may be difficult to sell our securities without depressing the market price for the shares, or at all.

not keep a registration statement updated for the term of the warrants, the holders will not be able to exercise the warrants.

While we intend

to keep a registration statement/prospectus updated until February 16, 2026 (five years from the effective date of the Registration

Statement), we may not be able to do so, nor will we necessarily be providing adequate public financial information to allow the

holders to sell the common stock underlying the Series A Warrants.

Accordingly, investors might not be able to exercise their Series

A Warrants and sell the underlying common stock at a time when it is beneficial to do so.

In order to keep

a prospectus effective, we will be required to, among other actions, file post-effective amendments to the registration statement

containing current financial and other information.

Each such registration statement will have to be filed with, and declared effective

There can be no assurance that such post-effective amendments will be declared effective.

“emerging growth company,”

and the reduced disclosure requirements applicable to emerging growth companies may make

our common stock less attractive to investors.

We are an “emerging

growth company”

(“EGC”), as defined in the JOBS Act.

If we do not keep

a registration statement updated for the term of the warrants, the holders will not be able to exercise the warrants.

While we intend to keep

a registration statement/prospectus updated until February 16, 2026 (five years from the effective date of the Registration Statement),

we may not be able to do so, nor will we necessarily be providing adequate public financial information to allow the holders to sell the

common stock underlying the Series A Warrants.

Accordingly, investors might not be able to exercise their Series A Warrants and sell the

underlying common stock at a time when it is beneficial to do so.

In order to keep a prospectus

effective, we will be required to, among other actions, file post-effective amendments to the registration statement containing current

financial and other information.

Each such registration statement will have to be filed with, and declared effective by the SEC.

can be no assurance that such post-effective amendments will be declared effective.

We are an “emerging

growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less

attractive to investors.

We are an “emerging

growth company” (“EGC”), as defined in the JOBS Act.

We will remain an EGC until the earliest of:

last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more;

(ii) the last day

of the fiscal year following the fifth anniversary of the date of the completion of our IPO;

(iii) the date on which we have

issued more than $1 billion in nonconvertible debt during the previous three years;

and (iv) the date on which we are deemed

to be a large accelerated filer under the rules of the SEC.

For so long as we remain an EGC, we are permitted and intend to rely

on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies.

day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more;

(ii) the last day of the fiscal

year following the fifth anniversary of the date of the completion of our IPO;

(iii) the date on which we have issued more than $1

billion in nonconvertible debt during the previous three years;

and (iv) the date on which we are deemed to be a large accelerated

filer under the rules of the SEC.

For so long as we remain an EGC, we are permitted and intend to rely on exemptions from certain disclosure

requirements that are applicable to other public companies that are not emerging growth companies.

These exemptions include:

not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, or Section 404;

not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;

being permitted to present only two years of audited financial statements, in addition to any required unaudited interim financial statements, and only two years of related “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

in this prospectus;

reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements;

an exemption from the requirement to seek nonbinding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We may choose to take advantage of some, but not all, of the available exemptions.

We have taken advantage of reduced reporting

burdens in this Annual Report.

In particular, we have not included all of the executive compensation information that would be

required if we were not an EGC.

We cannot predict whether investors will find our common stock less attractive if we rely on certain

or all of these exemptions.

If some investors find our common stock less attractive as a result, there may be a less active trading

market for our common stock and our stock price may be more volatile.

incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time

to new compliance initiatives.

We may choose to take

advantage of some, but not all, of the available exemptions.

We have taken advantage of reduced reporting burdens in this Annual Report.

In particular, we have not included all of the executive compensation information that would be required if we were not an EGC.

predict whether investors will find our common stock less attractive if we rely on certain or all of these exemptions.

If some investors

find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price

may be more volatile.

We will incur increased

costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

As a public company,

and particularly after we are no longer an EGC, we will incur significant legal, accounting and other expenses that we did not

incur as a private company.

In addition, the

Sarbanes-Oxley Act and rules subsequently implemented by the SEC and Nasdaq have imposed various requirements on public companies,

including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.

management and other personnel will need to devote a substantial amount of time to these compliance initiatives.

Moreover, these

rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming

For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain

director and officer liability insurance.

to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material

adverse effect on our business and stock price.

and particularly after we are no longer an EGC, we will incur significant legal, accounting and other expenses that we did not incur as

a private company.

In addition, the Sarbanes-Oxley

Act and rules subsequently implemented by the SEC and Nasdaq have imposed various requirements on public companies, including establishment

and maintenance of effective disclosure and financial controls and corporate governance practices.

Our management and other personnel

will need to devote a substantial amount of time to these compliance initiatives.

Moreover, these rules and regulations will increase

our legal and financial compliance costs and will make some activities more time-consuming and costly.

For example, we expect that these

rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance.

Failure to establish

and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect

on our business and stock price.

We are not currently

required to comply with the rules of the SEC implementing Section 404 of the Sarbanes-Oxley Act and therefore are not required

to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose.

Upon becoming

a publicly traded company, we will be required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley

Act, which will require management to certify financial and other information in our quarterly and annual reports and provide an

annual management report on the effectiveness of controls over financial reporting.

Though we will be required to disclose changes

made in our internal controls and procedures on a quarterly basis, we will not be required to make our first annual assessment

of our internal control over financial reporting pursuant to Section 404 until the year following our first annual report required

to be filed with the SEC.

Our independent registered public accounting firm will not be required to attest to the effectiveness

of our internal control over financial reporting until the later of the year following our first annual report required to be filed

with the SEC or the date we are no longer an emerging growth company and are an accelerated or large accelerated filer.

To comply with

the requirements of being a public company, we may need to undertake various actions, such as implementing new internal controls

and procedures and hiring additional accounting or internal audit staff.

In this regard, we will need to continue to dedicate internal

resources, engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over

financial reporting, continue steps to improve control processes, validate through testing that controls are functioning as documented

and implement a continuous reporting and improvement process for internal control over financial reporting.

In addition, we have

identified material weaknesses in our internal control over financial reporting and may identify further such material weaknesses,

either of which we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the

requirements of Section 404.

If unable to comply

with the requirements of Section 404 to address and remediate in a timely manner material weaknesses identified in our internal

control over financial reporting, or to assert that our internal control over financial reporting is effective, or if our independent

registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial

reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our

common stock could be negatively affected, and we could become subject to investigations by the Nasdaq Capital Market on which

our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

required to comply with the rules of the SEC implementing Section 404 of the Sarbanes-Oxley Act and therefore are not required to make

a formal assessment of the effectiveness of our internal control over financial reporting for that purpose.

Upon becoming a publicly traded

company, we will be required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which will

require management to certify financial and other information in our quarterly and annual reports and provide an annual management report

on the effectiveness of controls over financial reporting.

Though we will be required to disclose changes made in our internal controls

and procedures on a quarterly basis, we will not be required to make our first annual assessment of our internal control over financial

reporting pursuant to Section 404 until the year following our first annual report required to be filed with the SEC.

Our independent

registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting

until the later of the year following our first annual report required to be filed with the SEC or the date we are no longer an emerging

growth company and are an accelerated or large accelerated filer.

To comply with the requirements

of being a public company, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring

additional accounting or internal audit staff.

In this regard, we will need to continue to dedicate internal resources, engage outside

consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue

steps to improve control processes, validate through testing that controls are functioning as documented and implement a continuous reporting

and improvement process for internal control over financial reporting.

In addition, we have identified material weaknesses in our internal

control over financial reporting and may identify further such material weaknesses, either of which we may not be able to remediate in

time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404.

If unable to comply with

the requirements of Section 404 to address and remediate in a timely manner material weaknesses identified in our internal control over

financial reporting, or to assert that our internal control over financial reporting is effective, or if our independent registered public

accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may

lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively

affected, and we could become subject to investigations by the Nasdaq Capital Market on which our securities are listed, the SEC or other

regulatory authorities, which could require additional financial and management resources.

Pursuant to Section 404,

we will be required to furnish a report by our management on our internal control over financial reporting, including, once we

are no longer an EGC, an attestation report on internal control over financial reporting issued by our independent registered public

accounting firm.

To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document

and evaluate our internal control over financial reporting, which is both costly and challenging.

Despite our efforts, there is

a risk that neither we nor our independent registered public accounting firm will be able to conclude within the prescribed timeframe

that our internal control over financial reporting is effective as required by Section 404.

This could result in an adverse reaction

in the financial markets due to a loss of confidence in the reliability of our financial statements.

in our corporate charter and our bylaws and under Delaware law could make an acquisition of us, which may be beneficial to our

stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

We are a Delaware

The anti-takeover provisions of the Delaware General Corporation Law (the “DGCL”) may discourage, delay

or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period

of three years after the person becomes an interested stockholder, even if a change in control would be beneficial to our existing

stockholders.

Provisions in

our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that

stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares.

provisions also could limit the price that investors might be willing to pay in the future for shares of our common stock, thereby

depressing the market price of our common stock.

In addition, because our board of directors is responsible for appointing the

members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove

our current management by making it more difficult for stockholders to replace members of our board of directors.

Among other things,

these provisions:

we will be required to furnish a report by our management on our internal control over financial reporting, including, once we are no

longer an EGC, an attestation report on internal control over financial reporting issued by our independent registered public accounting

To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate

our internal control over financial reporting, which is both costly and challenging.

Despite our efforts, there is a risk that neither

we nor our independent registered public accounting firm will be able to conclude within the prescribed timeframe that our internal control

over financial reporting is effective as required by Section 404.

This could result in an adverse reaction in the financial markets due

to a loss of confidence in the reliability of our financial statements.

Provisions in our

corporate charter and our bylaws and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders,

more difficult and may prevent attempts by our stockholders to replace or remove our current management.

We are a Delaware corporation.

The anti-takeover provisions of the Delaware General Corporation Law (the “DGCL”) may discourage, delay or prevent a change

in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after

the person becomes an interested stockholder, even if a change in control would be beneficial to our existing stockholders.

Provisions in our corporate

charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider

favorable, including transactions in which you might otherwise receive a premium for your shares.

These provisions also could limit the

price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our

common stock.

In addition, because our board of directors is responsible for appointing the members of our management team, these provisions

may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for

stockholders to replace members of our board of directors.

Among other things, these provisions:

allow the authorized number of our directors to be changed only by resolution of our board of directors;

3 unchanged sentences

limit who may call stockholder meetings;

authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a stockholder rights plan, or so-called “poison pill,”

that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors.

Moreover, because

we are incorporated in Delaware, we are governed by the provisions of Section 203 of the DGCL, which prohibits a person who

owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date

of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination

is approved in a prescribed manner.

we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will

be your sole source of gain.

We have never

declared or paid cash dividends on our capital stock.

We currently intend to retain all of our future earnings, if any, to finance

the growth and development of our business.

authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a stockholder rights plan, or so-called “poison pill,” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors.

Moreover, because we

are incorporated in Delaware, we are governed by the provisions of Section 203 of the DGCL, which prohibits a person who owns in

excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction

in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed

Because we do not

anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source

We have never declared

or paid cash dividends on our capital stock.

We currently intend to retain all of our future earnings, if any, to finance the growth and

development of our business.

In addition, the terms of any future debt agreements may preclude us from paying dividends.

As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

Our charter provides that the Court of Chancery of the State of Delaware is the exclusive forum for certain litigation that may be initiated

by our stockholders, which could limit our stockholders’

ability to obtain a favorable judicial forum for such disputes with

us or our directors, officers or employees.

capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

Our charter provides

that the Court of Chancery of the State of Delaware is the exclusive forum for certain litigation that may be initiated by our stockholders,

which could limit our stockholders’ ability to obtain a favorable judicial forum for such disputes with us or our directors, officers

or employees.

Our certificate of incorporation

1 unchanged sentence

any derivative action or proceeding brought on behalf of the Company, any action asserting a claim of breach of a fiduciary duty owed

by any director, officer or other employee of the Company to the Company or the Company’s stockholders, any action asserting a

claim against the Company arising pursuant to any provision of the DGCL or the Company’s certificate of incorporation or bylaws,

or any action asserting a claim against the Company governed by the internal affairs doctrine.

Our certificate of incorporation also

provides that unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United

States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities

Act of 1933, as amended (the “Securities Act”), as amended.

Despite the fact that the certificate of incorporation provides

for these exclusive forum provisions to be applicable to the fullest extent permitted by applicable law, Section 27 of the Exchange Act,

creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules

and regulations thereunder and Section 22 of the Securities Act , creates concurrent jurisdiction for federal and state courts over all

suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

As a result, this

provision of the Company’s certificate of incorporation would not apply to claims brought to enforce a duty or liability created

by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.

However, there is uncertainty as to

whether a Delaware court would enforce the exclusive Federal forum provisions for Securities Act claims and that investors cannot waive

compliance with the federal securities laws and rules and regulations thereunder.

The choice of

forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes

with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers

and other employees.

Alternatively, if a court were to find the choice of forum provisions contained in our charter to be inapplicable

or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.

by any director, officer or other employee of the Company to the Company or the Company’s stockholders, any action asserting a claim

against the Company arising pursuant to any provision of the DGCL or the Company’s certificate of incorporation or bylaws, or any

action asserting a claim against the Company governed by the internal affairs doctrine.

Our certificate of incorporation also provides

that unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States

of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act

of 1933, as amended (the “Securities Act”), as amended.

Despite the fact that the certificate of incorporation provides for

these exclusive forum provisions to be applicable to the fullest extent permitted by applicable law, Section 27 of the Exchange Act, creates

exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations

thereunder and Section 22 of the Securities Act , creates concurrent jurisdiction for federal and state courts over all suits brought

to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

As a result, this provision of

the Company’s certificate of incorporation would not apply to claims brought to enforce a duty or liability created by the Exchange

Act, or any other claim for which the federal courts have exclusive jurisdiction.

However, there is uncertainty as to whether a Delaware

court would enforce the exclusive Federal forum provisions for Securities Act claims and that investors cannot waive compliance with the

federal securities laws and rules and regulations thereunder.

The choice of forum provisions

may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors,

officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees.

Alternatively,

if a court were to find the choice of forum provisions contained in our charter to be inapplicable or unenforceable in an action, we may

incur additional costs associated with resolving such action in other jurisdictions.

Unresolved Staff Comments

We own no properties.

Our current corporate headquarters is based in a leased office in Boulder,

Our current lease expires on April 30, 2021;

however, we believe that we will find suitable space elsewhere in the area

on acceptable terms.

own no properties.

Our current corporate headquarters is based in a leased office in Boulder, Colorado.

Our current lease term expires

on April 30, 2022;

but included, three (3) separate six month renewal options.

We believe that we will find suitable space elsewhere in

the area on acceptable terms.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors