What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-17 compared with 2021-03-31 · 647 added, 557 removed, 169 unchanged (88% of the section changed)

Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS

INDEX TO FINANCIAL

Annual Financial Statements

Report of Independent Registered Public Accounting Firm

Balance Sheets at of December 31, 2020 and 2019

Balance Sheets as of December 31, 2021 and 2020

Statements of Operations, Years Ended December 31, 2021 and 2020

Statements of Changes in D eficiency in Shareholders’

Equity, Years Ended December 31, 2020, and 2019

Statements of Changes in Stockholders’ Equity (Deficit), Years Ended December 31, 2021, and 2020

Statements of Cash Flows, Years Ended December 31, 2021, and 2020

Notes to Financial Statements

Report of Independent

Registered Public Accounting Firm

Report of Independent Registered Public Accounting

To the Board of Directors and Stockholders

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying

balance sheets of Auddia Inc.

(f/k/a Clip Interactive, LLC.)(the “Company”) at December 31, 2020 and 2019, and the

related statements of operations, deficiency in stockholders’

equity and cash flows for each of the years in the two-year

period ended December 31, 2020, and the related notes (collectively referred to as the financial statements).

In our opinion, the

financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019,

and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2020, in conformity

with accounting principles generally accepted in the United States of America.

We have audited the accompanying balance sheets

of Auddia Inc.

(f/k/a Clip Interactive, LLC.)(the “Company”) at December 31, 2021 and 2020, and the related statements of

operations, changes in stockholders’ equity (deficit) and cash flows for each of the years in the two-year period ended December

31, 2021, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations

and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally

accepted in the United States of America.

Basis for Opinion

These financial statements

are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial

statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws

and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits

in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of

expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express

no such opinion.

Our audits included performing

procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing

procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and

disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

that our audits provide a reasonable basis for our opinion.

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to

assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that

respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well

as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were

communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material

to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of

critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by

communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or

disclosures to which they relate.

Assets Impairment Assessments

described in Notes 1 to the financial statements, the Company has software development costs of approximately $1.8 million at

December 31, 2020.

No directly observable market inputs are available to measure the fair value to determine if the asset is recoverable.

Therefore, an estimate is derived indirectly and is based on net present value techniques utilizing post-tax cash flows and discount

The estimates that management used in calculating the net present values depend on assumptions specific to the nature of

the markets in which its product operates with regard to the amount and timing of projected future cash flows;

long-term subscriber

demand forecasts;

actions of competitors (competing content), future tax and discount rates.

The principal considerations

for our determination that performing procedures relating to the intangible assets impairment assessment is a critical audit matter

are the significant judgment by management when developing the net present value of the intangible assets.

This in turn led to

a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant

assumptions related to the amount and timing of projected future cash flows and the discount rate.

the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial

These procedures included testing management’s process for developing the fair value estimate;

evaluating the

appropriateness of the net present value techniques;

The critical audit matters communicated below

are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to

the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our

especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion

on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate

opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Intangible Assets Impairment Assessments

As described in Notes 1 to the financial statements,

the Company has software development costs of approximately $3.2 million at December 31, 2021.

No directly observable market inputs are

available to measure the fair value to determine if the asset is recoverable.

Therefore, an estimate is derived indirectly and is based

on net present value techniques utilizing post-tax cash flows and discount rates.

The estimates that management used in calculating the

net present values depend on assumptions specific to the nature of the markets in which its product operates with regard to the amount

and timing of projected future cash flows;

long-term subscriber demand forecasts;

actions of competitors (competing content), future tax

and discount rates.

The principal considerations for our determination that performing

procedures relating to the intangible assets impairment assessment is a critical audit matter are the significant judgment by management

when developing the net present value of the intangible assets.

This in turn led to a high degree of auditor judgment, subjectivity,

and effort in performing procedures and evaluating management’s significant assumptions related to the amount and timing of projected

future cash flows and the discount rate.

Addressing the matter involved performing procedures

and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

These procedures included testing

management’s process for developing the fair value estimate;

evaluating the appropriateness of the net present value techniques;

testing the completeness and accuracy of underlying data used in the model;

and evaluating the significant assumptions used by management, including the amount and timing of projected future cash flows and

the discount rate.

Evaluating management’s assumptions related to the amount and timing of projected future cash flows and

the discount rate involved evaluating whether the assumptions used by management were reasonable considering the current and past

performance of the intangible assets, the consistency with external market and industry data, and whether these assumptions were

consistent with evidence obtained in other areas of the audit.

and evaluating the significant assumptions used by management,

including the amount and timing of projected future cash flows and the discount rate.

Evaluating management’s assumptions related

to the amount and timing of projected future cash flows and the discount rate involved evaluating whether the assumptions used by management

were reasonable considering the current and past performance of the intangible assets, the consistency with external market and industry

data, and whether these assumptions were consistent with evidence obtained in other areas of the audit.

/s/ Daszkal Bolton LLP

Daszkal Bolton LLP

We have served as the Company’s auditor since

Boca Raton, Florida March 31, 2021

We have served as the Company’s auditor since 2020

Boca Raton, Florida February 17, 2022

Balance Sheets

December 31, 2021 and 2020

3 unchanged sentences

Non-current assets:

Property and equipment, net of accumulated depreciation of $687,123 and $683,090

Software development costs, net of accumulated amortization of $1,388,943 and $1,020,611

Property and equipment, net

Software development costs, net

Deferred offering costs

Security deposits

Prepaids and other non-current assets

Total non-current assets

LIABILITIES AND DEFICIENCY IN

SHAREHOLDERS' EQUITY

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:

7 unchanged sentences

Commitments and contingencies

Deficiency in shareholders' equity:

Stockholders’ equity (deficit):

Preferred stock - $ 0.001 par value, 10,000,000 authorized and 0 shares issued and outstanding

1 unchanged sentence

Additional paid-in capital

Subscription receivable

Accumulated deficit

1 unchanged sentence

( 51,360,320 )

Total deficiency in shareholders’

Total stockholders’ equity (deficit)

( 13,103,250 )

Total liabilities and deficiency in shareholders’

See Accompanying Notes to Financial

of Operations

For the Years Ended December 31, 2020

Total liabilities and stockholders’ equity (deficit)

See Accompanying Notes to Financial Statements.

Statement of Operations

For the Years Ended December 31, 2021 and 2020

Year Ended December 31,

4 unchanged sentences

General and administrative

Depreciation and amortization

Total operating expenses

Loss from operations

( 5,569,435 )

( 2,382,850 )

Other (expense) income:

Finance charge – convertible debt

( 8,141,424 )

PPP loan extinguishment

Interest expense

( 1,668,413 )

Interest income

Total other expense

Net loss per share attributable to common shareholders

( 7,908,634 )

( 1,668,371 )

$ ( 13,478,069 )

$ ( 4,051,221 )

Net loss per share attributable to common stockholders

Basic and diluted

2 unchanged sentences

See Accompanying Notes to Financial Statements.

of Changes in Deficiency in Shareholders' Equity

For the Years Ended December 31, 2020

Statement of Changes in Stockholders’

Equity (Deficit)

For the Years Ended December 31, 2021 and 2020

Additional Paid-In

Balance, December 31, 2019

Issuance of common shares for cash

$ ( 47,309,099 )

$ ( 9,228,877 )

Issuance of common shares

Collection of subscription receivable

Issuance of common shares for consulting services

Share-based compensation

( 4,051,221 )

Balance, December 31, 2020

$ ( 51,360,320 )

$ ( 13,103,250 )

Issuance of common shares

Collection of subscription receivable

Exercise of warrants

Conversion of debt obligations

Share-based compensation

( 13,478,069 )

Balance, December 31, 2021

$ ( 64,838,389 )

See Accompanying Notes to Financial Statements.

of Cash Flows

For the Years Ended December 31, 2020

Statement of Cash Flows

For the Years Ended December 31, 2021 and 2020

Year Ended December 31,

3 unchanged sentences

Adjustments to reconcile net loss to net cash used in operating activities:

Finance charge associated with debt-to-equity conversion

Depreciation and amortization

Share-based compensation

Issuance of common stock for consulting services

Issuance of related party debt for consulting services

Gain on PPP loan extinguishment

Change in assets and liabilities:

Accounts receivable

Prepaids and other non-current assets

Accrued fees to a related party

1 unchanged sentence

Net cash used in operating activities

( 5,471,545 )

( 1,992,381 )

Cash flows from investing activities:

Software capitalization

( 1,472,290 )

Purchase of property and equipment

Net cash used in investing activities

( 1,552,686 )

Cash flows from financing activities:

Repayment of line of credit

( 6,000,000 )

Repayment of deferred salary

Proceeds from related party debt

Repayments of related party debt

Proceeds from issuance of promissory notes payable

Proceeds from issuance of common stock

3 unchanged sentences

Net cash provided by financing activities

Net (decrease) increase in cash

Net increase (decrease) in cash

Cash, beginning of year

2 unchanged sentences

Cash paid for interest

$ ( 1,337,140 )

Supplemental disclosures of non-cash activity:

Conversion of notes to convertible notes

Conversion of accounts payable to convertible notes

Shares issued for conversion of indebtedness

PPP loan extinguishment

See Accompanying Notes to Financial Statements.

1 unchanged sentence

For the Year Ended December 31, 2021

Note 1 - Description of Business, Basis of Presentation

and Summary of Significant Accounting Policies

Note 1 - Description of Business, Basis of Presentation and Summary

of Significant Accounting Policies

Description of Business

Auddia Inc., formerly Clip

Interactive, LLC, (the “Company”, “Auddia”, “we”, “our”) is a technology

company that makes radio broadcasts and streaming audio content digitally actionable and measurable.

On January 14, 2012,

Clip Interactive, LLC was formed as a Colorado limited liability company and on November 25, 2019 changed its trade name to

Effective February 16, 2021, the Company converted from Clip Interactive,

LLC, a Colorado limited liability company to Auddia Inc., a Delaware corporation.

This accounting change has been given retrospective

treatment in the financial statements.

Auddia Inc., formerly Clip Interactive, LLC, (the

“Company”, “Auddia”, “we”, “our”) is a technology company that is reinventing how consumers

engage with audio through the development of a proprietary AI platform for audio and innovative technologies for podcasts.

Clip Interactive,

LLC was initially formed as a Colorado limited liability company on January 14, 2012 and on November 25, 2019 changed its trade name to

On February 16, 2021, the Company completed an

initial public offering (the “IPO”) of 3,991,818 units, at $4.125 per unit, consisting of one share of common stock and one

warrant to purchase one share of common stock at an exercise price of $4.54 per share.

In addition, the underwriters exercised their option

to purchase 598,772 Series A warrants to cover over-allotments and were issued 319,346 in representative warrants at an exercise price

of $5.15625 per share.

After deducting underwriters commissions and expenses, the Company received net proceeds of approximately $15.1

million and its common stock commenced trading on Nasdaq under the ticker symbol “AUUD”.

Concurrently with the IPO, holders

of the Company’s promissory notes, convertible notes, and related party notes, along with accrued interest, were converted into

6,814,570 shares of the Company’s common stock.

Concurrently with the IPO the Company converted

from a Colorado limited liability company to a Delaware corporation.

This accounting change has been given retrospective treatment in

the condensed financial statements.

Basis of Presentation

The accompanying financial

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

The accompanying financial statements have been

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

Use of Estimates

The preparation of financial statements

in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues

and expenses during the reporting period.

The preparation of financial statements in conformity

with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures

of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during

the reporting periods.

Actual results could differ from those estimates.

The financial statements include

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

The most significant estimates relate to valuation of

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

period for capitalized software development costs.

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

and any adjustment could be significant.

The financial statements include some amounts

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

The most significant estimates relate to valuation of capital stock, warrants

and options to purchase shares of the Company's common stock, and the estimated recoverability and amortization period for capitalized

software development costs.

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

Reclassification of Presentation

Certain prior year amounts have been reclassified

for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations.

Risks and Uncertainties

The Company is subject to various risks

and uncertainties frequently encountered by companies in the early stages of development.

Such risks and uncertainties include,

but are not limited to, its limited operating history, competition from other companies, limited access to additional funds, dependence

on key personnel, and management of potential rapid growth.

To address these risks, the Company must, among other things, develop

its customer base;

implement and successfully execute its business and marketing strategy;

The Company is subject to various risks and uncertainties

frequently encountered by companies in the early stages of development.

Such risks and uncertainties include, but are not limited to,

its limited operating history, competition from other companies, limited access to additional funds, dependence on key personnel, and

management of potential rapid growth.

To address these risks, the Company must, among other things, develop its customer base;

and successfully execute its business and marketing strategy;

develop follow-on products;

superior customer service;

and attract, retain, and motivate qualified personnel.

There can be no guarantee that the Company will

be successful in addressing these or other such risks.

The Company considers all highly liquid

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

The Company had no cash equivalents

at December 31, 2020 or December 31, 2019.

The Company maintains cash deposits at several financial institutions, which are insured

by the Federal Deposit Insurance Corporation up to $250,000.

The Company’s cash balance may at times exceed these limits.

At December 31, 2020 and December 31, 2019, the Company had approximately $0 and $47,000, respectively, in excess of federally

insured limits.

The Company continually monitors its positions with, and the credit quality of, the financial institutions with

which it invests.

Accounts Receivable

The Company provides an allowance for doubtful

accounts equal to the estimated uncollectible amounts.

The Company's estimate is based on historical collection experience and

a review of the current status of trade accounts receivable.

It is reasonably possible that the Company's estimate of the allowance

for doubtful accounts will change and that losses ultimately incurred could differ materially from the amounts estimated in determining

the allowance.

The allowance for doubtful accounts was $0 at December 31, 2020 and $2,500 at December 31, 2019.

Credit Risk, Major Customers, and Suppliers

Revenues are predominately in the radio

industry located primarily in the United States.

The Company extends trade credit to its customers on terms that are generally

practiced in the industry.

Two customers accounted for approximately 72% and 82% of revenues for the year ended December 31, 2020

and 2019, respectively.

provide superior customer service;

retain, and motivate qualified personnel.

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

The Company considers all highly liquid instruments

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

The Company had no cash equivalents at December 31,

2021 or December 31, 2020.

The Company maintains cash deposits at several

financial institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000.

The Company’s cash balance

may at times exceed these limits.

At December 31, 2021 and December 31, 2020, the Company had approximately $ 5.9

million and $ 0 , respectively, in excess

of federally insured limits.

The Company continually monitors its positions with, and the credit quality of, the financial institutions

with which it invests.

Property and Equipment

Property and equipment are stated at cost,

net of accumulated depreciation.

Depreciation is provided utilizing the straight line method over the estimated useful lives for

owned assets, ranging from two to five years.

Property and equipment are stated at cost, net

of accumulated depreciation.

Depreciation is provided utilizing the straight-line method over the estimated useful lives for owned assets,

ranging from two to five years.

Software Development Costs

The Company accounts for costs incurred

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

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

The Company accounts for costs incurred in the

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

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

The Company ceases capitalization of development

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

Software development costs are

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

Costs associated with significant upgrades

and enhancements that result in additional functionality are capitalized.

Capitalized costs are subject to an ongoing assessment

of recoverability based on anticipated future revenues and changes in software technologies.

Unamortized capitalized software development

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

Software development costs of approximately $867,600 and $704,200 were capitalized for the years ended December 31, 2020 and 2019,

respectively.

Amortization of capitalized software development costs were approximately $368,300 and $684,000 for the years ended

December 31, 2020 and 2019, respectively and are included in depreciation and amortization expense.

Offering Costs

Software development costs are amortized

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

Costs associated with significant upgrades and enhancements

that result in additional functionality are capitalized.

Capitalized costs are subject to an ongoing assessment of recoverability based

on anticipated future revenues and changes in software technologies.

Unamortized capitalized software development costs

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

Software development costs of $ 1,515,741 and $ 867,578 were capitalized for the years ended December 31, 2021 and 2020, respectively.

of capitalized software development costs were $ 146,737 and $ 368,332 for the years ended December 31, 2021 and 2020, respectively and

are included in depreciation and amortization expense.

Deferred Offering Costs

The Company deferred direct and incremental

costs associated with its IPO that occurred in February 2021.

During the years ended December 31, 2020 and December 31, 2019 offering

costs in the amounts of $50,284 and $196,511 were capitalized, consisting principally of legal, advisory, and consulting fees incurred

in connection with the formation and preparation for the IPO.

The Company capitalized deferred offering costs of $ 142,049

and $ 141,908

during the years ended December 31, 2021 and 2020, respectively which were netted against IPO proceeds in February 2021.

Deferred offering costs consisted principally of legal, advisory,

and consulting fees incurred in connection with the formation and preparation for the IPO.

Long-Lived Assets

The Company reviews its tangible and limited

lived intangible long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount

of the asset may not be recovered.

If a potential impairment is indicated, the Company compares the carrying amount of the asset

to the undiscounted future cash flows associated with the asset.

In the event the future cash flows are less than their carrying

value, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset.

Company determined long-lived assets were not impaired at December 31, 2020 and December 31, 2019.

Prior to the Company’s conversion

to a Delaware corporation in February 2021, the Company was a limited liability company and had

elected to be treated as a pass-through entity for income tax purposes.

Accordingly, taxable income and losses of the Company were

reported on the income tax returns of its members, and no provision for federal income taxes have been recorded in the accompanying financial statements.

Had the Company been a taxable entity, no provision for income taxes would have been recorded

as the Company has sustained losses since inception

Company may only recognize tax benefits from an uncertain tax position if it is more likely than not that the tax position will

be sustained on examination by the taxing authorities, based on the technical merits of the position.

The Company is required to

make many subjective assumptions and judgments regarding income tax exposures.

Interpretations of and guidance surrounding income

tax law and regulations change over time and may result in changes to its subjective assumptions and judgments.

ASC Topic 606, "Revenue from Contracts with Customers"

On January 1, 2019, the Company adopted

ASC 606 using the modified retrospective method.

This method required retrospective application of the new accounting standard

to all unfulfilled contracts that were outstanding as of January 1, 2019.

The Company reviews its tangible and limited lived

intangible long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset

may not be recovered.

If a potential impairment is indicated, the Company compares the carrying amount of the asset to the undiscounted

future cash flows associated with the asset.

In the event the future cash flows are less than their carrying value, a loss is recognized

based on the amount by which the carrying value exceeds the fair value of the long-lived asset.

The Company determined long-lived assets

were no t impaired at December 31, 2021 and December 31, 2020.

The Company accounts for income taxes using an

asset and liability approach, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences

A valuation allowance is established to reduce deferred tax assets to their estimated realizable value when, in the opinion

of management, it is more likely than not that some portion or all of the deferred income tax assets will not be realized in the future.

The Company recognizes benefits of uncertain tax

positions if it is more likely than not that such positions will be sustained upon examination based solely on their technical merits,

as the largest amount of benefit that is more likely than not to be realized upon the ultimate settlement.

The Company’s policy

is to recognize interest and penalties related to unrecognized tax benefits as a part of income tax expense.

Prior to the Company’s conversion to a Delaware

corporation in February 2021, the Company was a limited liability company and had elected to be treated as a pass-through entity for income

tax purposes.

Accordingly, taxable income and losses of the Company were reported on the income tax returns of its members, and no provision

for federal income taxes have been recorded in the accompanying financial statements.

Had the Company been a taxable entity, no provision

for income taxes would have been recorded as the Company has sustained losses since inception

Revenue Recognition

Revenues are recognized when a contract

with a customer exists, and the control of the promised services are transferred to our customers, in an amount that reflects the

consideration we expect to receive in exchange for those services.

Substantially all revenues are generated from contracts

with customers in the United States.

Revenue is measured according to Accounting Standards

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

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

revenue when we satisfy a performance obligation by transferring control over a service or product to a customer.

We report revenues net

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

between a seller and a customer in our consolidated statements of comprehensive income.

Collected taxes are recorded within Other current

liabilities until remitted to the relevant taxing authority.

Subscriber revenue consists primarily of subscription

fees and other ancillary subscription based revenues.

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

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

be consumed by customers at any time.

There is no revenue recognized for unpaid trial subscriptions.

Customers may pay for the services in advance

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

The deferred revenue is recognized as

revenue in our statement of operations as the services are provided.

Advertising Costs

The Company expenses advertising costs

Advertising expense for the year ended December 31, 2020 and 2019, were not significant.

The Company expenses advertising costs as incurred.

Advertising expense for the year ended December 31, 2021 was $ 130,565 .

Advertising expense for the year ended December 31, 2020 was not

Share-Based Compensation

The Company accounts for share-based compensation

arrangements with employees, directors, and consultants and recognizes the compensation expense for share-based awards based on

the estimated fair value of the awards on the date of grant.

Compensation expense for all share-based

awards is based on the estimated grant-date fair value and recognized in earnings over the requisite service period (generally

the vesting period).

arrangements with employees, directors, and consultants and recognizes the compensation expense for share-based awards based on the estimated

fair value of the awards on the date of grant.

Compensation expense for all share-based awards

is based on the estimated grant-date fair value and recognized in earnings over the requisite service period (generally the vesting period).

The Company records share-based compensation expense related to non-employees over the related service periods.

2 unchanged sentences

based on the weighted-average number of common shares outstanding in accordance with FASB ASC Topic 260, Earnings per Share .

Diluted net (loss) income per share is calculated based on the weighted-average number of common shares outstanding plus the effect

of dilutive potential common shares.

When the Company reports a net loss, the calculation of diluted net loss per share excludes

potential common shares as the effect would be anti-dilutive.

Potential common shares are composed of shares of common issuable

upon the exercise of options and warrants.

net (loss) income per share is calculated based on the weighted-average number of common shares outstanding plus the effect of dilutive

potential common shares.

When the Company reports a net loss, the calculation of diluted net loss per share excludes potential common

shares as the effect would be anti-dilutive.

Potential common shares are composed of shares of common issuable upon the exercise of options

and warrants.

Geographic Locations & Segments

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Emerging Growth Company Status

The Company is an emerging growth company,

as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Under the JOBS Act, emerging growth

companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such

time as those standards apply to private companies.

The Company has elected to use this extended transition period for complying

with certain new or revised accounting standards that have different effective dates for public and private companies.

Liquidity, Capital Resources and Going Concern

At December 31, 2019, the Company had liabilities

in excess of assets in the amount of approximately $9.2 million.

During 2020, the Company received approximately $2.7 million from

the proceeds from the issuance of indebtedness, but sustained a net loss of approximately $4.1 million and had consumed cash in

operating activities of approximately $2.0 million during the year.

Prior to the IPO, the Company has satisfied

its capital needs with the net proceeds from its sales of equity securities, the issuance of convertible debt and bank debt.

management expects to continue to incur net losses and have significant cash outflows for at least the next 12 months.

Subsequent to December 31, 2020, the Company

completed its IPO and received proceeds of approximately $15.2 million from the sale of its securities and extinguished approximately

$4.6 million of indebtedness via the conversion of convertible and related party debt to shares of Common Stock (see Note 11).

These events served to mitigate the conditions that historically raised substantial doubt about the Company’s ability to

continue as a going concern.

Based on this analysis the

Company concluded it has the ability to continue as a going concern for at least the next 12 months.

Note 2 –

Revenue Recognition

The Company is an emerging growth company, as

defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Under the JOBS Act, emerging growth companies

can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards

apply to private companies.

The Company has elected to use this extended transition period for complying with certain new or revised accounting

standards that have different effective dates for public and private companies.

Note 2 – Revenue Recognition

Legacy platform phase out

From 2014 through 2020, the Company was

successful in deploying its platform across 580 major radio stations and 1.6 million monthly active users.

The Company’s

legacy product served the broadcast industry by providing a platform that allows for the delivery of actionable digital ads that

are synchronized with broadcast and streaming audio ads.

Broadcasters offer mobile and web digital interfaces to their listeners,

typically for their individual stations.

Our Interactive Radio Platform provides mobile and web products that provide end users

(listeners) with a visual display of everything a radio station has played in recent history (referred to as a “station feed”).

In addition to displaying album art for

songs played, and digital insertions for station promotions and programs (e.g., a radio station contest), the station feed also

includes a digital element for each audio ad that was played.

These interactive, synchronized digital ads generate additional revenue

for broadcasters and allowed for the collection of meaningful advertising analytics which we present to broadcasters through an

analytics dashboard.

From 2014 through 2020, the Company was successful

in deploying its platform across 580 major radio stations and 1.6 million monthly active users.

The Company’s legacy product served

the broadcast industry by providing a platform that allows for the delivery of actionable digital ads that are synchronized with broadcast

and streaming audio ads.

Broadcasters offer mobile and web digital interfaces to their listeners, typically for their individual stations.

Our Interactive Radio Platform provided mobile and web products that provide end users (listeners) with a visual display of everything

a radio station has played in recent history (referred to as a “station feed”).

In addition to displaying album art for songs

played, and digital insertions for station promotions and programs (e.g., a radio station contest), the station feed also included a digital

element for each audio ad that was played.

These interactive, synchronized digital ads generate additional revenue for broadcasters and

allowed for the collection of meaningful advertising analytics which we presented to broadcasters through an analytics dashboard.

The Company began phasing out its Interactive

Radio Platform in early 2020 and ceased operations related to the legacy platform by August 1, 2020.

Much of the core technology

of this platform is being leveraged for re-use with our new products, Auddia and Vodacast, currently under development.

our well established relationships with more than a dozen broadcasters through the sales, marketing and digital services operations

are being maintained as we seek to deploy the Auddia App at national scale.

The Company’s legacy contracts with

customers generally fell within two formats:

(1) those that encompass development services, access to the Company’s interactive

technology platform through a hosted business model and the ability to execute placement of spot advertising through the Company’s

interactive technology platform, or (2) contracts exclusively for digital advertising placement of spot ads through the Company’s

mobile apps and web players.

The Company allocated the transaction price to each separate performance obligation as applicable

within each contract based upon their relative selling prices.

Much of the core technology of this

platform is being leveraged for re-use with our new products, Faidr and Vodacast, currently under development.

Furthermore, our well-established

relationships with more than a dozen broadcasters through the sales, marketing and digital services operations are being maintained as

we seek to deploy the Faidr App on a national scale.

The Company’s legacy contracts with customers

generally fell within two formats:

(1) those that encompass development services, access to the Company’s interactive technology

platform through a hosted business model and the ability to execute placement of spot advertising through the Company’s interactive

technology platform, or (2) contracts exclusively for digital advertising placement of spot ads through the Company’s mobile Apps

and web players.

The Company allocated the transaction price to each separate performance obligation as applicable within each contract

based upon their relative selling prices.

Development service fee revenue

Revenue generated from development services

were comprised of services for the development, design and customization of software applications for station branded mobile apps

and web/desktop players for radio stations.

The mobile apps enabled our customer’s users to interact with the live broadcast

and streaming content while providing attribution to each station and enabling local and national digital monetization capabilities.

The web/desktop player provided a listening

platform that enables full interactive radio capabilities for desktop users that prefer web based listening.

The Company determined

that the development, design, build and deployment, configuration, and customization are a bundle of professional services provided

to the customer for the purpose of the Mobile and Web Desktop Apps and were considered a single performance obligation.

was recognized over time as the services are satisfied and any advanced payments received are not recognized as revenue but instead

was recorded in a deferred contract liability until the customer’s services were satisfied.

Under the Company’s current

outstanding contracts such services have been minimal and are not expected to be a significant performance obligation under its

existing contracts in the future.

Revenue generated from development services were

comprised of services for the development, design and customization of software applications for station branded mobile Apps and web/desktop

players for radio stations.

The mobile Apps enabled our customer’s users to interact with the live broadcast and streaming content

while providing attribution to each station and enabling local and national digital monetization capabilities.

The web/desktop player provided a listening platform

that enables full interactive radio capabilities for desktop users that prefer web based listening.

The Company determined that the development,

design, build and deployment, configuration, and customization are a bundle of professional services provided to the customer for the

purpose of the Mobile and Web Desktop Apps and were considered a single performance obligation.

Revenue was recognized over time as the

services are satisfied and any advanced payments received were not recognized as revenue but instead was recorded in a deferred contract

liability until the customer’s services were satisfied.

The Company no longer provides these services.

Platform services fee revenue

Revenue generated from platform services

were comprised of the customer’s use of the Company’s interactive technology platform that includes access rights to

use the licensed software, software hosting, support and maintenance, data tracking analytics, advertising trafficking and monitoring

of the mobile app and web/desktop player applications.

The Company determined that the hosting of software, license access, support,

training, maintenance and unspecified periodic upgrades or updates, monitoring hardware, interactive content management, access

to content library, data and analytics dashboard, programming and Ad campaign training are a bundle of product and services that

have the same period and pattern of transfer as the service to access the Company’s Platform and have been treated a single

performance obligation.

Revenue is recognized over time as the customer simultaneously receives and consumes the benefits provided

by the Company’s platform services.

Revenue generated from platform services were

comprised of the customer’s use of the Company’s interactive technology platform that includes access rights to use the licensed

software, software hosting, support and maintenance, data tracking analytics, advertising trafficking and monitoring of the mobile App

and web/desktop player applications.

The Company determined that the hosting of software, license access, support, training, maintenance

and unspecified periodic upgrades or updates, monitoring hardware, interactive content management, access to content library, data and

analytics dashboard, programming and Ad campaign training were a bundle of product and services that have the same period and pattern

of transfer as the service to access the Company’s Platform and have been treated a single performance obligation.

Revenue was recognized

over time as the customer simultaneously receives and consumes the benefits provided by the Company’s platform services.

no longer provides these services.

Advertising revenue

The Company legacy contracts generated

advertising revenue in two distinctive forms:

one which can be from third party advertisers that place ads on the Company’s

mobile apps and web players which are separate customer contracts whereby such advertising access is the only service and performance

obligation within those contracts, and second is ad placements on the same platform but managed by the Company for its customers

in connection with its contracts to provide development services and Platform access services to its customers.

The external advertising revenues are comprised

of local and national interactive spots that are sourced and managed by customers or by third party service providers (such as

Google), whereby the Company receives a portion of the dollars spent by the advertiser.

In late 2018, the Company decided to move

to only internally managed digital advertising for 2019 and discontinue revenue sharing agreements with our clients for advertising

sourced by the client.

Revenue is recognized as performance obligations are satisfied on a net basis as the Company is acting as

an agent, which generally occurs as ads are delivered through the platform.

We generally recognize revenue based on delivery information

from the external providers campaign trafficking systems.

The internal advertising revenues are comprised

of advertising fees for local and national interactive spot and local or digital only advertising campaign fees that are managed

by the Company.

For these advertising spots, the Company retains all the money spent on the advertising campaigns run on the Company’s

The Company legacy contracts generated advertising

revenue in two distinctive forms:

one which was from third party advertisers that placed ads on the Company’s mobile Apps and web

players which were separate customer contracts whereby such advertising access was the only service and performance obligation within

those contracts, and second was ad placements on the same platform but managed by the Company for its customers in connection with its

contracts to provide development services and Platform access services to its customers.

The external advertising revenues were comprised

of local and national interactive spots that were sourced and managed by customers or by third party service providers (such as Google),

whereby the Company received a portion of the dollars spent by the advertiser.

In late 2018, the Company decided to move to only internally

managed digital advertising for 2019 and discontinued revenue sharing agreements with clients for advertising sourced by the client.

was recognized as performance obligations were satisfied on a net basis as the Company was acting as an agent, which generally occurred

as ads were delivered through the platform.

We generally recognized revenue based on delivery information from the external providers

campaign trafficking systems.

The internal advertising revenues were comprised

of advertising fees for local and national interactive spot and local or digital only advertising campaign fees that were managed by the

For these advertising spots, the Company retained all the money spent on the advertising campaigns run on the Company’s

interactive platform.

Revenue is recognized as performance obligations are satisfied, which generally occurs as ads are delivered

Revenue was recognized as performance obligations were satisfied, which generally occurred as ads were delivered

through the platform.

For Interactive and Digital Campaign and

Spot Ad Fees which may include customer digital and interactive spot ad campaigns, interactive spot campaigns, the revenue is recognized

at a point in time under the “as-invoiced”

practical expedient, since customer usage driven variability is not required

to be estimated but rather is allocated to the distinct time period in which the variable activity occurs.

Certain customers may receive platform

fee credits or advertising discounts, which are considered as variable consideration in the determination of the transaction price.

These performance obligations related to the fixed price arrangements is discounted ratably based on their relative standalone

selling prices.

Contract Assets and Liabilities

The Company had no contract assets or contract

liabilities at December 31, 2020 or December 31, 2019 as the Company does not receive payments in advance and is generally entitled

to bill for monthly services as they are provided under its existing customer contracts.

For Interactive and Digital Campaign and Spot

Ad Fees which could include customer digital and interactive spot ad campaigns, interactive spot campaigns, the revenue was recognized

at a point in time under the “as-invoiced” practical expedient, since customer usage driven variability was not required to

be estimated but rather is allocated to the distinct time period in which the variable activity occurred.

Certain customers received platform fee credits

or advertising discounts, which were considered as variable consideration in the determination of the transaction price.

These performance

obligations related to the fixed price arrangements were discounted ratably based on their relative standalone selling prices.

The Company no longer provides these services.

Practical expedients and exemptions

We generally expense sales commissions

when incurred because the duration of the contracts for which we pay commissions are less than one year.

These costs are included

in the sales and marketing line item of our Statements of Operations.

Currently the Company does not have any significant

acquisition costs which have been incurred associated with the acquisition of its customer contracts and therefore, no deferred

customer acquisition costs have been recorded.

We do not disclose the value of unsatisfied

performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we

recognize revenue at the amount to which we have the right to invoice for services performed.

We expensed sales commissions when incurred because

the duration of the contracts for which we paid commissions were less than one year.

These costs were included in the sales and marketing

line item of our Statements of Operations.

Currently the Company does not have any significant acquisition costs which have been incurred

associated with the acquisition of its customer contracts and therefore, no deferred customer acquisition costs have been recorded.

We did not disclose the value of unsatisfied performance

obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at

the amount to which we had the right to invoice for services performed.

The following table presents revenues disaggregated

by revenue source:

Schedule of disaggregated revenue

Year Ended December 31,

Platform Service Fees (hosting services, support, data analytics)

Digital advertising served by 3 rd parties

Digital advertising served by Clip Interactive

Note 3 –

Balance Sheet Disclosures

Note 3 – Property & Equipment

and Software Development Costs

Property and equipment and software development

costs consisted of the following as of:

Schedule of property, equipment and software development

Computers and equipment

Accumulated depreciation

Total property and equipment, net

Software development costs

Accumulated amortization

( 1,535,680 )

( 1,388,943 )

Total software development costs, net

The Company recognized depreciation expense of

$ 17,813 and $ 4,034 for the years ended December 31, 2021 and 2020, respectively related to property and equipment and amortization expense

of $ 146,737 and $ 368,332 for the years ended December 31, 2021 and 2020, respectively related to software development costs.

Note 4 – Balance Sheet Disclosures

Accounts payable and accrued liabilities consist

of the following:

Schedule of accounts payable and accrued liabilities

Accounts payable and accrued liabilities

consist of the following:

Accounts payable

Credit cards payable

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Wages payable

Note 4 –

Line-of-Credit

The Company entered into a line of credit

with a bank originally dated November 7, 2012 and amended it on November 5, 2016.

On April 10, 2018 the Company refinanced its

line-of-credit with a different bank and amended this agreement on July 10, 2019.

The available principal balance under the line

of credit is $6,000,000, and the outstanding balance accrues interest at a variable rate based on the bank’s prime rate plus

1% (3.75% at December 31, 2020 and 5.75% at December 31, 2019) but at no time less than 4.0%.

Monthly interest payments are required,

with any outstanding principal due on July 10, 2021.

The Company maintains a minimum balance at the lender to cover two months

of interest payments.

The line of credit is collateralized by all assets of the Company as well as certain cash assets of two shareholders

in control accounts at the lender.

One control account has a balance of $2,000,000 and the other control account has a balance

of $4,000,000.

The shareholder with the $2,000,000 control account has a collateral agreement with the Company which is described

The shareholder with the $4,000,000 control account at the lender personally guarantees the full amount of the loan.

The outstanding balance on the line-of-credit at December 31, 2020 and December 31, 2019 was $6,000,000.

As described in Note 11,

as a result of the IPO, the balance on the line of credit was reduced by $4.0 million to make the outstanding balance $2.0 million.

Note 5 –

Convertible Notes

During the year ended December 31, 2020

investors purchased an additional $404,601 of our convertible notes, such that at December 31, 2020 the balance of the convertible

notes, including accrued interest, was $2,146,775.

These convertible notes accrue interest at 6.0% per year and were scheduled

to mature on December 31, 2021.

In the event of an IPO being completed, the Notes automatically convert into Common Stock at discounts

Accounts payable and accrued liabilities

Note 5 – Line of Credit

On April 10, 2018 the Company refinanced its previous

line of credit with a different bank and this agreement was amended in July 2019 and March 2021.

The principal balance was repaid in full

on July 8, 2021.

Interest accrued at a variable rate based on the bank’s prime rate plus 1% (4.25% at December 31, 2020) but at

no time less than 4.0%.

Monthly interest payments were required, with any outstanding principal due on July 10, 2021.

Interest expense

for the year ended December 31, 2021 and 2020 was $ 66,412 and $ 276,980 , respectively.

The line of credit was collateralized by all assets

of the Company, including $2 million of cash held in a control account at the lender.

The Company also maintained a minimum balance at

the lender to cover two months of interest payments.

Prior to our IPO, the line of credit was collateralized by $6,000,000 of cash assets

of two shareholders held in control accounts at the lender.

Following the Company’s IPO in February

2021 the line of credit was amended and the Company paid down the outstanding principal balance on its bank line of credit from $6 million

to $2 million and the available principal balance for the line of credit was reduced from $6 million to $2 million.

Further, the $6 million

of cash collateral previously provided by the two shareholders was released.

The remaining principal balance of $2 million was repaid

in full and the line of credit was terminated on July 8, 2021 .

The outstanding balance on the line of credit

at December 31, 2020 was $ 6,000,000 .

The shareholder who previously provided the $2,000,000 control account had a collateral agreement

with the Company which is described in Note 6.

This agreement was terminated in March 2021.

Note 6 – Convertible Notes Payable,

Notes Payable to Related Parties and Deferred Salary and Promissory Notes

Convertible notes payable

During the year ended December 31, 2020 investors

purchased an additional $ 404,601 of our convertible notes, such that at December 31, 2020 the balance of the convertible notes, including

accrued interest, was $ 2,295,305 .

These convertible notes accrued interest at 6.0 % per year and were scheduled to mature on December 31,

In conjunction with the February 2021 IPO, the Notes automatically converted into 2,066,176 shares of common stock at discounts

ranging from 50% to 75% of the IPO price.

As described in Note 11, all the convertible notes converted into shares of common stock

in February 2021 upon the completion of the IPO.

Note 6 –

Notes Payable and

Accrued Fees to Related Parties

Interest expense for the year ended December 31, 2021 and 2020 was $ 16,586 and $ 128,674 , respectively.

Accrued fees to a related party

The Company had an agreement with a

shareholder to provide collateral for a bank line of credit described in Note 4 –

Line-of-Credit.

The amount of the cash

collateral provided by the shareholder to the bank was $2.0 million.

The collateral agreement required a commitment to pay

collateral fees of $710,000 (comprised of annual interest of $660,000 plus the $50,000 renewal fee) to the shareholder and issue

3,454 common stock warrants.

In January 2019, in connection with the collateral agreement, the Company converted accrued fees of

$725,000 into an unsecured note payable, which bears interest at 33% annually and had a maturity date of December 31, 2021.

accruing on the collateral arrangement are 33% percent of the collateral amount annually plus an annual renewal fee of $50,000, with

$942,397 being recorded as interest expense for the twelve months ended December 31, 2020.

The balance outstanding on the accrued

collateral fees was $1,960,336 at December 31, 2020, excluding the $725,000 unsecured note payable.

The collateral agreement

automatically renews annually on April 13.

As described in Note 11, the notes payable and accrued interest due to this shareholder

converted to shares of common stock in February 2021 due to the IPO.

Notes Payable

to Related Parties and Deferred Salary

The Company had an agreement with a shareholder

to provide collateral for a bank line of credit described in Note 5 – Line of Credit.

The amount of the cash collateral provided

by the shareholder to the bank was $2.0 million.

The collateral agreement required a commitment to pay collateral fees of $710,000 (comprised

of annual interest of $660,000 plus the $50,000 renewal fee) to the shareholder and issue 3,454 common stock warrants.

In January 2019,

in connection with the collateral agreement, the Company converted accrued fees of $ 725,000 into an unsecured note payable, which bore

interest at 33 % annually and had a maturity date of December 31, 2021 .

The fees that accrued on the collateral arrangement were 33% percent

of the collateral amount annually plus an annual renewal fee of $50,000.

Interest expense for the year ended December 31, 2021 and 2020

was $ 208,727 and $ 942,397 , respectively.

The balance outstanding on the accrued collateral fees was $1,960,336 at December 31, 2020, excluding

the $725,000 unsecured note payable.

This collateral agreement terminated in March 2021.

In conjunction with the February 2021 IPO, the

notes payable and accrued interest due to this shareholder were converted to 1,667,859 shares of common stock.

Promissory notes payable

During the twelve months ended December 31,

2020, the Company issued, to a number of existing shareholders, in four separate tranches, $ 1,857,764 of Promissory Notes that

accrue interest at a rate of 6 % per year and were scheduled to mature on December 31, 2021 .

When issued, the notes incorporated the

following attributes:

interest on the Notes accrue at 6% and upon the successful completion of a qualified IPO by December 31, 2021,

the notes and accrued interest would convert into equity at a per share valuation equal to $40.0 million.

In addition, each investor

in the Promissory Notes would receive shares and warrants based on a formula that takes into account the number of shares and

warrants the investor owned before the investment in these Promissory Notes, as well as a portion of the bonus allocation of

1,038,342 shares made available to the investors.

Interest expense for the year ended December 31, 2021 and 2020 was $ 14,454 and

$ 44,182 , respectively.

In conjunction with the February 2021 IPO, all

of the Promissory Notes collectively converted into 3,080,535 shares of common stock.

The Company recognized a finance charge to interest

expense of $ 8,141,424 related to the conversion of the convertible notes, notes payable to related parties and promissory notes during

the year ended December 31, 2021.

Note 7 – Notes Payable

Notes payable to related parties and deferred

An executive officer of the Company agreed to

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was approximately $ 631,000 at December 31, 2020.

The Company paid this deferred compensation in 2021.

As discussed above in Accrued Fees to

a Related Party, i n January 2019, in connection with the collateral agreement, the Company converted accrued fees of $725,000

into an unsecured note payable, which bears interest at 33% annually and had a maturity date of December 31, 2021.

The Company paid this deferred compensation in the first quarter of 2021.

During 2019, the Company issued notes payable

(the "Notes") to three related parties for $80,000, $200,000 and $50,000, respectively.

The Notes did not accrue interest

or have a stated maturity date.

(the “Notes”) to three related parties for $ 80,000 , $ 200,000 and $ 50,000 , respectively.

The Notes did not accrue interest or

have a stated maturity date.

The outstanding note payable for $ 80,000 was repaid in January 2020.

In December 2019, the two

other note holders elected to convert their notes into convertible Notes due December 31, 2021.

Two other existing investors, who

were owed a total of $17,197 for services by the Company, also agreed to convert their payables into convertible Notes.

2019 the Company issued a note payable to a related party for consulting services incurred by the Company in the amount of $486,198.

As of December 31, 2020, the outstanding balance for consulting services was $440,904.

In December 2019, the two other note

holders elected to convert their notes into convertible Notes due December 31, 2021.

Two other existing investors, who were owed a total

of $17,197 for services by the Company, also agreed to convert their payables into convertible Notes.

During 2019 the Company issued a

note payable to a related party for consulting services incurred by the Company in the amount of $ 486,198 .

As of December 31, 2020, the

outstanding balance for consulting services was $ 440,904 .

The Company paid these Notes in the first quarter of 2021.

In October 2019, a shareholder obtained $ 400,000

of short term financing from an unrelated lender.

The shareholder then agreed to make the proceeds of that short term

financing available to the Company.

In exchange, the Company assumed responsibility for all payments and charges (including principal,

interest and fees) required under such short term financing agreement.

Under the agreement the Company was advanced $188,000, net

of $12,000 in closing fees, and the remaining $200,000 was put into an escrow account owned and controlled by the shareholder.

A loan financing fee in the amount of $100,000 is due upon maturity, of which the amount relating to 2019 of $75,000 is included

in accrued expenses at December 31, 2019.

In December 2019, the Company made a principal payment in the amount of $57,203, and

accordingly, the outstanding principal balance was $142,797 at December 31, 2019, and is included in Notes payable to related parties

on the balance sheet.

The remaining balance of $242,797 which included principal and loan financing fees, was repaid in January

In February 2020, the Company obtained

a new $500,000 short term loan from the same related party.

The Company was advanced $485,000, net of $15,000 in closing fees,

and immediately placed $140,741 into an escrow account, owned and controlled by the shareholder to provide funds for the scheduled

Repayment of the principal and loan financing fee occurs through weekly payments of $17,593 until the loan and financing

fee is paid in full.

The loan financing fee increases with the length of the payback period and is maximized at $165,000 after

The outstanding balance of principal at December 31, 2020 was $271,759.

Promissory Notes Payable

During the twelve months ended December

31, 2020, the Company issued, to a number of existing shareholders, in four separate tranches, $1,857,764 of Promissory Notes that

accrue interest at a rate of 6% per year and mature on December 31, 2021.

When issued, the notes incorporated the following attributes;

interest on the Notes accrue at 6% and upon the successful completion of a qualified IPO by December 31, 2021, the notes and accrued

interest would convert into equity at a per share valuation equal to $40.0 million.

In addition, each investor in the Promissory

Notes would receive shares and warrants based on a formula that takes into account the number of shares and warrants the investor

owned before the investment in these Promissory Notes, as well as a portion of the bonus allocation of 1,038,342 shares made

available to the investors.

As described in Note 11, all the Promissory Notes converted into common shares in February 2021 due

to the completed IPO.

Cares Act Paycheck Protection Program

In April 2020, the Company entered into

a promissory note evidencing an unsecured loan (the “Loan”) in the amount of $268,662 made to the Company under the

Paycheck Protection Program (the “PPP”).

The PPP was established under the CARES Act and is administered by the U.S.

The shareholder then agreed to make the proceeds of that short term financing available

to the Company.

In exchange, the Company assumed responsibility for all payments and charges (including principal, interest and fees)

required under such short term financing agreement.

Under the agreement the Company was advanced $188,000, net of $12,000 in closing fees,

and the remaining $200,000 was put into an escrow account owned and controlled by the shareholder.

A loan financing fee in the amount

of $100,000 was due upon maturity, of which the amount relating to 2019 of $ 75,000 was included in accrued expenses at December 31, 2019.

In December 2019, the Company made a principal payment in the amount of $ 57,203 , and accordingly, the outstanding principal balance was

$ 142,797 at December 31, 2019, and was included in Notes payable to related parties on the balance sheet.

The remaining balance of $ 242,797

which included principal and loan financing fees, was repaid in January 2020.

In February 2020, the Company obtained a new $500,000

short term loan from the same related party.

The Company was advanced $485,000, net of $15,000 in closing fees, and immediately placed

$140,741 into an escrow account, owned and controlled by the shareholder to provide funds for the scheduled repayments.

Repayment of the

principal and loan financing fee occurs through weekly payments of $17,593 until the loan and financing fee is paid in full.

financing fee increases with the length of the payback period and was maximized at $165,000 after month five.

The outstanding balance

was repaid in February 2021.

Interest expense related to notes payable for

related parties for the year ended December 31, 2020 was $ 209,145 .

Cares Act Paycheck Protection Program loan

In April 2020, the Company entered into a promissory

note evidencing an unsecured loan (the “First Loan”) in the amount of $ 268,662 made to the Company under the Paycheck Protection

Program (the “PPP”).

In January 2021, the Company entered into a second promissory note (the “Second Loan” or

combined with the first loan, the “PPP Loans”) of $ 267,482 under the PPP.

The PPP was established under the CARES Act and

is administered by the U.S.

Small Business Administration.

The promissory note matures in April 2022

and bears interest at a rate of 1% per annum.

Beginning November 2020, the Company is required to make 18 monthly payments of principal

and interest in the amount of $14,370.

The Loan may be prepaid by the Company at any time prior to maturity with no prepayment

The proceeds from the Loan may only be used for payroll costs (including benefits), interest on mortgage obligations,

rent, utilities and interest on certain other debt obligations.

The Note contains customary events of default

relating to, among other things, payment defaults, making materially false and misleading representations to the lender or breaching

the terms of the Loan documents.

The occurrence of an event of default will result in an increase in the interest rate to 18% per

annum and provides the lender with customary remedies, including the right to require immediate payment of all amounts owed under

the promissory note.

Pursuant to the terms of the CARES Act

and the PPP, the Company plans to apply to the lender for forgiveness for the amount due on the Loan, which it has already initiated.

The amount eligible for forgiveness is based on the amount of Loan proceeds used by the Company (during the eight-week period after

the lender makes the first disbursement of Loan proceeds) for the payment of certain covered costs, including payroll costs (including

benefits), interest on mortgage obligations, rent and utilities, subject to certain limitations and reductions in accordance with

the CARES Act and the PPP.

While the Company expects 100% of the loan to be forgiven, no assurance can be given that the Company

will obtain forgiveness of the Loan in whole or in part.

Note 7 –

Commitments and Contingencies

The First Loan was set to mature in April 2022

and the Second Loan was set to mature in January 2023.

The PPP Loans bore interest at a rate of 1% per annum.

Beginning November 2020,

the Company was required to make 18 monthly payments of principal and interest in the amount of $14,370 related to the First Loan.

PPP Loans may be prepaid by the Company at any time prior to maturity with no prepayment penalties.

The proceeds from the Loans may only

be used for payroll costs (including benefits), interest on mortgage obligations, rent, utilities and interest on certain other debt obligations.

The PPP Loans contained customary events of default

relating to, among other things, payment defaults, making materially false and misleading representations to the lender or breaching the

terms of the Loan documents.

The occurrence of an event of default will result in an increase in the interest rate to 18 % per annum and

provides the lender with customary remedies, including the right to require immediate payment of all amounts owed under the PPP Loans.

Pursuant to the terms of the CARES Act and the

PPP, the Company applied for forgiveness for both the PPP Loans.

On June 15, 2021, the Company received confirmation that the First Loan

was approved for forgiveness and the Company recorded $ 268,662 in PPP loan extinguishment to other income during the year ended December

On November 2, 2021, the Company received confirmation that the Second Loan was approved for forgiveness and the Company recorded

$ 267,482 in PPP loan extinguishment to other income during the year ended December 31, 2021.

The amount eligible for forgiveness was based

on the amount of Loan proceeds used by the Company (during the eight-week period after the lender makes the first disbursement of Loan

proceeds) for the payment of certain covered costs, including payroll costs (including benefits), interest on mortgage obligations, rent

and utilities, subject to certain limitations and reductions in accordance with the CARES Act and the PPP.

Note 8 – Commitments and Contingencies

Operating Lease

The Company leases approximately 3,000 square

feet of office space under a non-cancelable operating sublease.

Rent expense was $72,999 and $144,853 for the year ended December 31,

2020 and 2019, respectively.

In October 2019, the Company entered into a new sublease, with monthly rent of $5,000 plus a pro-rata share

of utilities.

In October 2020, the Company renewed this sublease for an additional seven months, on the same terms, which will expire

on April 30, 2021.

We are currently searching for a new principal office and believe that suitable space, at commercially reasonable terms,

is readily available to accommodate the current and future needs of our operations.

In April 2021, the Company entered into a lease agreement for a new

primary office space in Boulder, Colorado comprising of 8,639 square feet.

The lease commenced on May 15, 2021 and terminates after 12

The lease has an initial base rent of $7,150 per month, with the first 15 days rent free and includes three separate six month

renewal options, subject to fixed rate escalation increases.

The Company previously leased approximately 3,000 square feet of office space

that expired on April 30, 2021.

Rent expense $ 75,336 and $ 72,999 for the year ended December 31, 2021 and 2020, respectively.

In the normal course of business, the Company

is party to litigation from time to time.

The Company maintains insurance to cover certain actions and believes that resolution

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

Collateral Fees

The Company has a commitment to pay annual

collateral fees as described in Note 6.

The Company maintains insurance to cover certain actions and believes that resolution of such

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

Note 9 - Share-based Compensation

Stock Options

The following table presents the activity

for stock options outstanding:

The following table presents the activity for

stock options outstanding:

Schedule of stock option activity

Non-Qualified

3 unchanged sentences

Outstanding - December 31, 2020

The following table presents the

composition of options outstanding and exercisable:

Forfeited/canceled

Outstanding - December 31, 2021

The following table presents the composition

of options outstanding and exercisable:

Options outstanding and exercisable

Options Outstanding

Options Exercisable

Exercise Prices

Total - December 31, 2021

________________________

* Price and Life reflect the weighted average exercise price

and weighted average remaining contractual life, respectively.

The following table presents the activity

for warrants outstanding:

* Price and Life reflect the weighted average exercise price and weighted

average remaining contractual life, respectively.

During the year ended December 31, 2021, the Company

granted 1,235,500 stock options to certain executives and key employees.

Under the terms of the option agreements, the options are subject

to certain vesting requirements.

Restricted Stock Units

The following table presents the activity for

restricted stock units outstanding:

Schedule of restricted stock unit activity

Exercise Price

Outstanding - December 31, 2020

Forfeited/canceled

Outstanding – December 31, 2021

During the year ended December 31, 2021, the Company

granted 424,500 restricted stock units.

Under terms of the restricted stock agreements, the restricted stock units are subject to a certain

vesting schedule.

The Company recognized share-based compensation

expense related to stock options and restricted stock units of $ 1,237,481 and $ 69,841 for the year ended December 31, 2021 and 2020, respectively.

The remaining unvested share-based compensation expense of $ 2,374,390 is expected to be recognized over the next 43 months.

The following table presents the activity for

warrants outstanding:

Schedule of warrant activity

Exercise Price

Outstanding - December 31, 2020

Forfeited/cancelled/restored

( 1,096,023 )

Outstanding - December 31, 2021

In connection with the February 2021 IPO, the

Company issued 3,991,818 warrants to purchase shares of common stock and issued to 598,772 warrants to its underwriters to cover over-allotments.

The Company also issued 319,346 of representative warrants to its underwriters to purchase shares of common stock and these representative

warrants contain a cashless exercise feature.

During the year ended December 31, 2021 certain

holders of our publicly traded Series A Warrants exercised 1,091,692 warrants for 1,091,692 million shares of common stock at the cash

exercise price of $ 4.5375 per share.

In addition, certain holders of our Pre-IPO warrants exercised 4,331 warrants for 2,887 shares of

common stock at the net exercise price of $ 0.87 per share.

All of the outstanding warrants are exercisable

and have a weighted average remaining contractual life of approximately 3.94 years as of December 31, 2021.

Note 9 –

Deficiency in Shareholders’

On February 17, 2021, the Company converted

its LLC membership equity units into 485,441 shares of Common Stock with a $0.001 par value.

The conversion has been given retrospective

As a result, the Company has reflected 419, 365 shares of Common Stock outstanding at December 31, 2018.

During 2019, the Company issued 43,629

shares of common stock for cash, and 7,664 shares of common stock for services valued at $146,773.

During 2020, the Company issued 14,783

shares of common stock for cash.

Note 10 –

Net Loss Per Share

Basic net loss per share is computed by

dividing net loss, which is allocated based upon the proportionate amount of weighted average shares outstanding, to each class

of stockholder’s stock outstanding during the period.

For the calculation of diluted net loss per share, net loss per share

attributable to common stockholders for basic net loss per share is adjusted by the effect of dilutive securities, including awards

under our equity compensation plans.

Note 10 – Stockholders’ Equity

On February 17, 2021, the Company converted its

LLC membership equity units into 485,441 shares of Common Stock with a $0.001 par value.

The conversion has been given retrospective treatment.

During 2020, the Company issued 14,783 shares

of common stock for cash.

Note 11 – Income Taxes

For the year ended December 31, 2021, the Company

recorded no income tax benefit for the net operating losses incurred during the year, due to the uncertainty of realizing a benefit from

The following is a reconciliation of the statutory

federal income tax rate to the effective tax rate reported in the financial statements:

Schedule of effective income tax rate reconciliation

December 31, 2021

Income tax expense (benefit) at federal statutory rate

( 2,830,394 )

State and local income taxes, net of federal tax benefit

Transaction costs

Change in valuation allowance

Income taxed as pass-through prior to IPO

Change in entity status

PPP loan forgiveness

Significant components of the Company’s

deferred taxes consisted of the following:

Schedule of deferred taxes

December 31, 2021

Deferred income tax assets:

Stock based compensation

Business interest limitation

Federal net operation losses

State net operation losses

Total deferred tax assets

valuation allowance

( 1,211,055 )

Total deferred tax assets, net of valuation allowance

Deferred income tax liabilities:

Capitalized software

Property & equipment

Total deferred tax liabilities

Total net deferred tax asset (liability)

Note 12 – Net Loss Per Share

Basic net loss per share is computed by dividing

net loss, which is allocated based upon the proportionate amount of weighted average shares outstanding, to each class of stockholder’s

stock outstanding during the period.

For the calculation of diluted net loss per share, net loss per share attributable to common stockholders

for basic net loss per share is adjusted by the effect of dilutive securities, including awards under our equity compensation plans.

December 31, 2021 and 2020, 5,009,315 and 655,485 ,

44,178, respectively of potentially dilutive weighted average shares were excluded from the calculation of diluted net loss per

share because their effect would have been anti-dilutive for the periods presented.

Note 11 –

Subsequent Events

The Company has evaluated all subsequent events

after December 31, 2020, and there were no material subsequent events requiring disclosure, except the following.

In January 2021, the Company applied for and received

a second loan of $267,000 the under the Paycheck Protection Program (the “PPP”) on the same terms as the first PPP Loan.

PPP was established under the CARES Act and is administered by the U.S.

Small Business Administration.

In January 2021, a majority of the holders of

all of the Company’s debt securities, including its Convertible Debt, Promissory Notes, Notes and Accrued Fees Payable to Related

Parties agreed to extend the maturity date of the approximately $7.3 million of debt securities, which were in technical default, from

December 31, 2020 to December 31, 2021.

In February 2021, the Company completed an IPO

of 3,991,818 units, at $4.125 per unit, consisting of one share of common stock and one warrant to purchase one share of common stock

at an exercise price of $4.54 per share.

After deducting Underwriters commissions and expenses, the Company received net proceeds of approximately

$15.2 million.

Due to the successful completion of the IPO, all the Company’s existing Convertible Debt, Accrued Interest, Accrued

Fees payable to Related Parties, and Promissory Notes were converted in common shares.

In conjunction with the

Company’s conversion from a limited liability company to a corporation in February 2021, all of the Company’s then outstanding

LLC membership units were converted into shares of common stock.

Concurrently with the

IPO, holders of the Company’s promissory notes, convertible notes, and related party notes, along with accrued interest, were converted

into approximately 6.8 million shares of the Company’s common stock, with beneficial conversion rates charged to interest expense

upon conversion.

respectively of potentially dilutive weighted average shares were excluded from the calculation of diluted net loss per share because

their effect would have been anti-dilutive for the periods presented.

Note 13 – Subsequent Events

On February 15, 2022,

the Company released nationally it’s Faidr App for both iOs and Android devices.

The Company plans to commence amortization of its

capitalized development costs.

The Company anticipates it will continue to incur future capitalized costs as it relates to enhancements

and additional functionality related to the Faidr and Vodacast Apps.

On February 17, 2022,

the Company approved a grant of 350,000 restricted stock units and 293,750 stock options to employees and directors subject to certain vesting

requirements.

Changes and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data