What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-05-12 compared with 2021-11-12 · 201 added, 254 removed, 191 unchanged (70% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion

and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should

1 unchanged sentence

and our audited financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December

31, 2020, which was filed with the SEC on March 31, 2021.

31, 2021, which was filed with the SEC on February 17, 2022.

This discussion and analysis and other parts of this Quarterly Report contain

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technologies for podcasts.

We are leveraging these technologies to bring to market two industry first Apps, Auddia and Vodacast.

The Auddia app gives

We are leveraging these technologies to bring to market two industry first Apps, Faidr and Vodacast.

The Faidr app gives

consumers the opportunity to listen to any AM/FM radio station with no commercials while personalizing the listening experience through

skips, the insertion of on-demand content and the programming of audio routines to customize listening sessions such as a daily commute.

The Auddia App represents the first-time consumers can access the local content uniquely provided by radio in the commercial free and

The Faidr App represents the first-time consumers can access the local content uniquely provided by radio in the commercial free and

personalized manner many consumers have come to demand for media consumption.

We are leveraging our

legacy business to bring to market a premium AM/FM radio listening experience through the Auddia App.

The Auddia App is intended to be

downloaded by consumers who will pay a subscription fee in order to listen to any streaming AM/FM radio station without commercials.

Advanced features will allow consumers to skip any content heard on the station, request audio content on-demand, and program an audio

We believe the Auddia App represents a significant differentiated audio streaming product that will be the first to come to

market since the emergence of popular streaming music apps such as Pandora, Spotify, Apple Music, Amazon Music, etc.

We believe that

the most significant point of differentiation is that in addition to music, the Auddia App is intended to deliver non-music content that

includes local sports, news, weather, traffic and the discovery of new music.

Radio is the dominant audio platform for local content

and new music discovery.

We launched the Auddia

App and initiated our first consumer trial in July 2021 in a single market in southern Virginia and northern North Carolina.

continue with additional consumer trials in Santa Rosa, CA and Montgomery and Sylacauga, Alabama during the fourth quarter of 2021 to

measure consumer interest and engagement with the Auddia App.

We are continuing to advance the training of our proprietary AI technology

and once complete we are anticipating nationally launching all stations.

The Auddia mobile App

legacy business to bring to market a premium AM/FM radio listening experience through Faidr.

The Faidr App is intended to be downloaded

by consumers who will pay a subscription fee to listen to any streaming AM/FM radio station without commercials.

Advanced features will

allow consumers to skip any content heard on the station, request audio content on-demand, and program an audio routine.

We believe Faidr

represents a significant differentiated audio streaming product that will be the first to come to market since the emergence of popular

streaming music apps such as Pandora, Spotify, Apple Music, Amazon Music, etc.

We believe that the most significant point of differentiation

is that in addition to music, the App is intended to deliver non-music content that includes local sports, news, weather, traffic and

the discovery of new music.

Radio is the dominant audio platform for local content and new music discovery.

We recently launched

the Faidr App to include all major U.S.

radio stations on February 15, 2022.

We are currently providing consumers a 90-day free trial

of the App and expect to start converting users to paying subscribers during the second quarter.

We are also continuing to enhance the

listening experience for consumers by:

1) advancing the training of our proprietary AI technology primarily around talk stations and

2) exploring additional content choices that will become available in the App during the year.

The Faidr mobile App

is available today through the iOS and Android App stores.

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revenue generation and exercise higher margin monetization models, beyond basic audio advertising.

These revenue channels are expected

to be available to Podcasters starting late 2021 and into 2022.

The Vodacast mobile

App is available today through the iOS and Android App stores.

We have initiated efforts

to recruit podcast hosts to Vodacast to onboard their podcast, create digital feeds, and encourage their listening audience to download

and listen through the Vodacast App.

We expect to continue to attract podcasts and their listening audience to Vodacast through paid

promotion through the fourth quarter 2021 and into 2022.

We have funded our operations with proceeds from the February

2021 IPO and Series A warrants exercise in July 2021.

Since inception we have incurred significant operating losses.

As of September

30, 2021, we had an accumulated deficit of $63.5 million.

Our ability to generate product revenue sufficient to achieve profitability

will depend heavily on the successful development and commercialization of one or more of our Apps.

We expect that our expenses and capital

requirements will increase substantially in connection with our ongoing activities, particularly if and as we:

· continue consumer trials of our Auddia

App and as we continue training our proprietary AI technology;

· continue to develop and expand our

technology and functionality to advance the Auddia and Vodacast Apps;

· rollout our product on a national

basis, which will include increasing our sales and marketing costs related to the promotion

of our products.

Auddia promotion will include a combination of a) purchasing ads directly

from broadcasters or b) participating broadcasters to promote without purchasing ads, but

sharing a portion of subscription proceeds based on listening activity on those stations;

· hire additional business development,

product management, operational and marketing personnel;

· continue market studies of our products;

· add operational and general administrative

personnel which will support our product development programs, commercialization efforts

and our transition to operating as a public company.

As a result, we may need substantial additional funding to

support our continuing operations and pursue our growth strategy.

Until such time as we can generate significant revenue from product

sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, which may include

collaborations with other companies or other strategic transactions.

We may be unable to raise additional funds or enter into such other

agreements or arrangements when needed on favorable terms, or at all.

If we fail to raise capital or enter into such agreements as and

when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our

product candidates.

Because of the numerous risks and uncertainties associated

with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve

or maintain profitability.

We recently launched marketing campaigns for

Vodacast to continue to grow our user base and encourage listeners to download the Vodacast App and listen to all their favorite shows.

We are continuing to provide an immersive listening experience through digital feeds and additional content.

We are also continuing to

recruit podcast hosts to the Platform while we continue to develop and enhance monetization channels within the App.

We have funded our operations

with proceeds from the February 2021 IPO and Series A warrants exercise in July 2021.

Since inception we have incurred significant operating

As of March 31, 2022, we had an accumulated deficit of $66.6 million.

Our ability to generate product revenue sufficient to achieve

profitability will depend heavily on the successful development and commercialization of one or more of our Apps.

We expect that our

expenses and capital requirements will increase substantially in connection with our ongoing activities, particularly if and as we:

launch our Faidr App and as we continue training our proprietary AI technology and make product enhancements;

to develop and expand our technology and functionality to advance the Faidr and Vodacast Apps;

our product on a national basis, which will include increasing our sales and marketing costs related to the promotion of our products.

Faidr promotion will include a combination of a) direct to consumer marketing, b) purchasing ads directly from broadcasters, and/or

c) participating broadcasters to promote without purchasing ads, but sharing a portion of subscription proceeds based on listening

activity on those stations;

additional business development, product management, operational and marketing personnel;

market studies of our products;

operational and general administrative personnel which will support our product development programs, commercialization efforts and

our transition to operating as a public company.

As a result, we may

need substantial additional funding to support our continuing operations and pursue our growth strategy.

Until such time as we can generate

significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other

capital sources, which may include collaborations with other companies or other strategic transactions.

We may be unable to raise additional

funds or enter into such other agreements or arrangements when needed on favorable terms, or at all.

If we fail to raise capital or enter

into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization

of one or more of our product candidates.

Because of the numerous

risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when

or if we will be able to achieve or maintain profitability.

Even if we are able to generate product sales, we may not become profitable.

If we fail to become profitable

or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and

be forced to reduce or terminate our operations.

As of September 30, 2021, we had cash, cash equivalents and investments

of $8.1 million, which we believe will fund our operating expenses and capital expenditure requirements for at least the next 12 months.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than

See “—Liquidity and capital resources.” To finance our operations beyond that point, we will need to raise

additional capital, which cannot be assured.

If we are unable to raise additional capital in sufficient amounts or on terms acceptable

to us, we may have to significantly delay, scale back or discontinue the development or commercialization of our Apps or other research

and development initiatives.

If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations

at planned levels and be forced to reduce or terminate our operations.

As of March 31, 2022,

we had cash of approximately $4.4 million, which we believe should fund our operating expenses and capital expenditure requirements through

at least December 31, 2022.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available

capital resources sooner than we expect.

See “—Liquidity and capital resources.” To finance our operations beyond that

point, we will need to raise additional capital, which cannot be assured.

If we are unable to raise additional capital in sufficient

amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization

of our Apps or other research and development initiatives.

Components of our results of operations

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We expect our direct costs of services to increase in the

future as we continue to develop and enhance our technology related to the Auddia and Vodacast Apps.

future as we continue to develop and enhance our technology related to the Faidr and Vodacast Apps.

Sales and marketing

Our sales and marketing

expenses consist primarily of salaries and consulting services, related to the sales and promotion performed during the year related

to our products.

We expect our sales and marketing expenses to increase substantially as we continue to promote the national commercial

launch of our Faidr product and look to generate revenue for our products through customer acquisition and retention.

Research and development

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We expect to continue

to incur substantial research and development expenses and capitalization in the future as we continue to develop our Auddia and Vodacast

Sales and marketing

Our sales and marketing

expenses consist primarily of salaries and consulting services, related to the sales, promotion and commercial trials related to our

We expect our sales and marketing expenses to continue to increase as we look to commercialize and generate revenue for our

products to attract and retain users.

to incur substantial research and development expenses and capitalization in the future as we continue to develop and enhance our Faidr

and Vodacast Apps.

General and administrative

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We expect our general and administrative expenses to

continue to increase in the future as we expand our operating activities and prepare for potential commercialization of our products

and support our operations as a public company, including increased expenses related to legal, accounting, insurance, regulatory and

tax-related services associated with maintaining compliance with exchange listing and Securities and Exchange Commission requirements,

directors and officers liability insurance premiums and investor relations activities.

continue to increase in the future as we expand our operating activities and prepare for commercialization of our products and support

our operations as a public company, including increased expenses related to legal, accounting, insurance, regulatory and tax-related

services associated with maintaining compliance with exchange listing and Securities and Exchange Commission requirements, directors

and officers liability insurance premiums and investor relations activities.

Other income and

Our other income and expense consist of interest

income related to our cash at financial institutions, debt extinguishment related to our PPP loan, interest expense from our line of

credit, and a finance charge related to conversion of outstanding debt into shares of common stock related to the February 2021 IPO.

We expect our other expense to decrease as we paid off our outstanding balance on our line of credit.

Our other income and

expense consist of interest income related to our cash at financial institutions, debt extinguishment related to our PPP loans, interest

expense from our line of credit, and a finance charge related to conversion of outstanding debt into shares of common stock related to

the February 2021 IPO.

We expect our other expense to decrease as we paid off our outstanding balance on our line of credit and will

not incur any additional debt conversion charges.

Results of operations

Comparison of the three months ended

September 30, 2021 and 2020

The following table summarizes our results

of operations:

Three Months Ended September 30,

Operating expenses:

Direct costs of service

Sales and marketing

Research and development

General and administrative

Total operating expense

Loss from operations

Other income (expense), net:

$ (2,049,403 )

$ (1,122,216 )

Total revenues were

$0 for the three months ended September 30, 2021, compared to $1,040 for the three months ended September 30, 2020.

The decrease in revenue

can be attributed to the August 2020 termination of our legacy platform which eliminated all platform fee and advertising revenue while

we continue to develop the new Auddia and Vodacast products to establish new revenue streams.

Direct cost of services

decreased by $5,878 or 14%, from $42,379 for the three months ended September 30, 2020 compared to $36,501 for the three months ended

September 30, 2021.

This decrease primarily resulted from the termination of our legacy services and the decreased need for hosting,

staff reductions to the team working on the current platform, and other related direct expenses.

We continue to incur direct cost of

services expense related to hosting and other music services related to our Auddia App and expect these costs to increase in the future.

Sales and marketing

expenses increased by $132,748 or 174%, from $76,459 for the three months ended September 30, 2020 compared to $209,207 for the three

months ended September 30, 2021 as we increased marketing expenses primarily related to the promotion of the Auddia and Vodacast Apps.

Research and development

expenses increased by $28,356 or 31%, from $90,965 for the three months ended September 30, 2020 to $119,321 for the three months ended

September 30, 2021 primarily related to additional staffing on our development team as we continue to advance the Auddia and Vodacast

Our research and development staffing costs were $462,987 and capitalized software expenses of $353,418 for the three months ended

September 30, 2021 as compared to staffing costs of $259,626 and capitalized software expenses of $170,396 for the three months ended

September 30, 2020.

Majority of development time was spent on our Auddia and Vodacast Apps.

We have achieved MVP of our Vodacast App

and have started amortizing development expenses, however, we continue to make significant and enhancements to the Vodacast App and will

continue to incur capitalized costs on our Vodacast App.

We have not yet achieved MVP of our Auddia App and will continue to incur additional

capitalized costs.

General and administrative

expenses increased by $1,409,994 or 509%, from $277,105 for the three months ended September 30, 2020 compared to $1,687,099 for the

three months ended September 30, 2021.

The increase resulted primarily from increased stock compensation expense related to employee

stock options granted during the third quarter.

Stock compensation expense was $735,592 and $17,262 for the three months ended September

30, 2021 and 2020, respectively.

The increase in general and administrative expenses also related to being a public company and having

higher legal and other professional fees due to preparing to operate as a public company.

Interest expense/Other

We had total other income

of $2,725 for the three months ended September 30, 2021 as compared to other expense of ($441,319) for the three months ended September

30, 2020, which was a $444,044 or 101% change in other income / expense.

This was primarily related to a significant reduction in interest

expense in the current year as a result of us paying off our line of credit balance.

Comparison of the nine months ended

September 30, 2021 and 2020

March 31, 2022 and 2021

The following table summarizes our results

of operations:

Nine Months Ended September 30,

Three Months Ended March 31,

Increase/ (Decrease)

Operating expenses:

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General and administrative

Depreciation and amortization

Total operating expense

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$ (9,296,498 )

$ (8,619,873 )

Total revenues were

$0 for the nine months ended September 30, 2021, compared to $110,919 for the nine months ended September 30, 2020.

The decrease in revenue

can be attributed to the August 2020 termination of our legacy platform which eliminated all platform fee and advertising revenue while

we continue to develop the new Auddia and Vodacast products to establish new revenue streams.

$0 for the three months ended March 31, 2022 and March 31, 2021.

We are continuing to develop the new Faidr and Vodacast products to

establish new revenue streams and expect to start generating revenue during the third quarter of 2022.

Direct cost of services

Direct Cost of Services

decreased by $208,649 or 58%, from $361,181 for the nine months ended September 30, 2020 compared to $152,532 for the nine months ended

September 30, 2021.

This decrease primarily resulted from the termination of our legacy services and the decreased need for hosting,

staff reductions to the team working on the current platform, and other related direct expenses.

We continue to incur direct cost of

services expense related to hosting and other music services related to our Auddia App and expect these costs to increase in the future.

decreased $4,832 or 8.4%, from $57,394 for the three months ended March 31, 2021 compared to $52,562 for the three months ended March

We continue to incur direct cost of services expense related to hosting and other music services related to our Faidr App and

expect these costs to increase in the future.

Sales and marketing

expenses increased by $211,664 or 81%, from $260,658 for the nine months ended September 30, 2020 compared to $472,322 for the nine months

ended September 30, 2021 as we increased marketing expenses primarily related to the promotion and development of the Auddia and Vodacast

expenses increased by $233,608 or 189.2%, from $123,458 for the three months ended March 31, 2021 to $357,066 for the three months ended

March 31, 2022 as we established and hired our internal marketing team during Q4 of 2021 and we significantly increased our promotion

expenses during the first quarter of 2022 related to the national launch of our Faidr App and continued promotion and user acquisition

for our Vodacast App.

Research and development

expenses increased by $28,574 or 12%, from $233,403 for the nine months ended September 30, 2020 to $261,977 for the three months ended

September 30, 2021 primarily related to additional staffing on our development team as we continue to advance the Auddia and Vodacast

Our research and development staffing costs were $1,161,880 and capitalized software expenses of $904,956 for the nine months ended

September 30, 2021 as compared to staffing costs of $773,128 and capitalized software expenses of $543,835 for the nine months ended

September 30, 2020.

Majority of development time was spent on our Auddia and Vodacast Apps.

We have achieved MVP of our Vodacast App

during the third quarter and have started amortizing development expenses, however, we continue to make significant and enhancements

to the Vodacast App and will continue to incur capitalized costs on our Vodacast App.

We have not yet achieved MVP of our Auddia App

and will continue to incur additional capitalized costs.

expenses increased by $101,766 or 216.5%, from $46,997 for the three months ended March 31, 2021 to $148,763 for the three months ended

March 31, 2022 primarily related to additional staffing on our development team as we continue to advance the Faidr and Vodacast Apps.

Our research and development staffing costs were $809,976 and capitalized software expenses of $661,213 for the three months ended March

31, 2022 as compared to staffing costs of $339,072 and capitalized software expenses of $292,075 for the three months ended March 31,

Majority of development time was spent on our Faidr and Vodacast Apps.

We started amortizing development expenses associated with

Faidr during Q1 2022 and continue to amortize development expense related to Vodacast.

We continue to make significant enhancements to

both Apps and will continue to incur capitalized costs and additional amortization.

General and administrative

expenses increased by $1,680,943 or 124%, from $1,355,531 for the nine months ended September 30, 2020 compared to $3,036,474 for the

nine months ended September 30, 2021.

The increase resulted primarily from increased stock compensation expense related to employee stock

options granted during the third quarter.

Stock compensation expense was $767,543 and $52,579 for the nine months ended September 30,

2021 and 2020, respectively.

The increase in general and administrative expenses also related to being a public company and having higher

legal and other professional fees due to preparing to operate as a public company.

expenses increased by $380,022 or 59.6%, from $637,708 for the three months ended March 31, 2021 compared to $1,017,730 for the three

months ended March 31, 2022.

The increase resulted primarily from increased stock compensation expense related to employee stock options

granted in Q3 2021 and Q1 2022.

Stock compensation expense was $385,908 and $16,131 for the three months ended March 31, 2022 and 2021,

respectively.

Depreciation and

Depreciation and amortization

expenses increased by $173,944 or 7,968.1%, from $2,183 for the three months ended March 31, 2021 compared to $176,127 for the three

months ended March 31, 2022.

The increase is entirely related to amortization of our Faidr and Vodacast Apps, which started amortization

during Q1 2022 and Q4 2021, respectively.

Interest expense/Other

Total interest expense/other

expense increased by $6,796,422, from $1,379,694 for the nine months ended September 30, 2020 compared to $8,176,116 for the nine months

ended September 30, 2021.

The increase was due almost entirely to a finance charge of $8,141,424 to interest expense related to the conversion

of outstanding debt into 6.8 million shares of common stock related to the February 2021 IPO.

This was offset by our extinguishment of

debt related to our first PPP loan in the amount of $268,662, which was approved in full under the loan forgiveness program and reduced

interest expense related to lower outstanding line of credit and related party notes payable balances.

expense decreased by $8,427,748, from $8,428,758 for the three months ended March 31, 2021 to $1,010 for the three months ended March

The decrease was mostly related to a finance charge of $8,141,424 to interest expense related to the conversion of outstanding

debt into 6.8 million shares of common stock related to the February 2021 IPO.

In addition, we paid off and terminated our line of credit

during 2021 and no longer are incurring interest related to the line of credit.

Liquidity and capital

1 unchanged sentence

We have incurred operating

losses since our inception and have an accumulated deficit as a result of ongoing efforts to develop and commercialize our Auddia and

losses since our inception and have an accumulated deficit as a result of ongoing efforts to develop and commercialize our Faidr and

Vodacast Apps.

As of September 30, 2021 and December 31, 2020 we had cash of $8.1M and $0.1M, respectively.

We anticipate that operating

losses and net cash used in operating activities will increase over the next 12 months as we continue to develop and market our products,

perform commercial trials and work on nationally launching all stations on the Auddia App.

As of March 31, 2022 and December 31, 2021 we had cash of $4,361,550 and $6,345,291, respectively.

We anticipate that

operating losses and net cash used in operating activities will increase over the next 12 months as we continue to develop and market

our products, perform commercial trials and work on nationally launching all stations on the Faidr App.

In February 2021, we completed an IPO of 3,991,818

1 unchanged sentence

price of $4.54 per share.

After deducting underwriters commissions and expenses, the Company received net proceeds of approximately $15.2

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 into shares of common stock.

After deducting underwriters’ commissions and expenses, we received net proceeds of approximately $15.2

Due to the successful completion of the IPO, all of our existing convertible debt, accrued interest, accrued fees payable to

related parties, and promissory notes were converted into shares of common stock.

Following the Company’s IPO in February

2021, the Company paid down the outstanding principal balance on its bank line of credit from $6 million to $2 million.

The Company and

the bank agreed to reduce the maximum available balance for the line of credit to $2 million.

2021, we paid down the outstanding principal balance on our bank line of credit from $6 million to $2 million.

We and the bank agreed

to reduce the maximum available balance for the line of credit to $2 million.

In July 2021, certain holders of our publicly

2 unchanged sentences

we paid the remaining $2.0 million, out of our restricted cash, to pay off and terminate our line of credit.

During the nine months ended September 30, 2021,

we have reduced our bank debt by $6.0 million, paid down a significant percentage of our accounts payable, and eliminated all deferred

compensation owed to a related party.

Prior to our IPO, we

funded our operations from cash flows generated from operations and cash from the sale of equity securities and debt financing.

During the year ended December 31, 2021, we have

reduced our bank debt by $6.0 million, paid down a significant percentage of our accounts payable, and eliminated all deferred compensation

owed to a related party.

Cash Flow Analysis

6 unchanged sentences

material adverse effect on our ability to meet our liquidity needs and achieve our business objectives.

The following

table summarizes the statements of cash flows for the nine months ended September 30, 2021 and 2020:

Nine Months Ended September 30,

The following table

summarizes the statements of cash flows for the three months ended March 31, 2021 and 2020:

Three Months Ended March 31,

Net cash provided by (used in):

5 unchanged sentences

Change in cash

$ (1,983,741 )

Operating activities

Cash used in operating

activities for the nine months ended September 30, 2021 was $4,320,114, primarily resulting from our net loss of $12,099,421 and changes

in working capital of $944,792, partially offset by non-cash charges of $8,724,099 primarily related to our conversion of outstanding

debt to common stock from our February 2021 IPO.

Changes in working capital primarily related to paying off outstanding accounts payable.

Cash used in operating

activities for the nine months ended September 30, 2020 was $1,601,108, primarily resulting from our net loss of $3,479,548, partially

offset by non-cash charges of $485,709 and changes in working capital of $1,392,731.

activities for the three months ended March 31, 2022 was $1,229,996, primarily resulting from our net loss of $1,753,258 and change in

working capital of $38,773 related to an increase in prepaid expenses, partially offset by non-cash charges of $562,035 related to stock

compensation expense and depreciation and amortization.

Cash used in operating activities primarily consisted of personnel-related expenditures,

payments included costs of operations, and other sales efforts, research and development and administrative costs.

Cash used in operating

activities primarily consisted of personnel-related expenditures, payments included costs of operations, and other sales efforts, research

and development and administrative costs.

activities for the three months ended March 31, 2021 was $1,827,455, primarily resulting from our net loss of $9,296,498 and change in

working capital of $690,695 primarily related to paying off outstanding accounts payable after our February 2021 IPO.

This was partially

offset by non-cash charges of $8,159,738 primarily related to a finance charge associated with the debt conversion from our February

Cash used in operating activities primarily consisted of personnel-related expenditures, payments included costs of operations,

and other sales efforts, research and development and administrative costs.

Investing activities

Cash flows used in investing

activities for the nine months ended September 30, 2021 consisted primarily of capitalization of software development expenses of $904,957.

activities for the three months ended March 31, 2022 was $665,023, primarily consisting of capitalization of software development expenses

Cash flows used in investing

activities for the nine months ended September 30, 2020 consisted primarily of capitalization of software development expenses of $543,835.

activities for the three months ended March 31, 2021 was $302,117, primarily consisting of capitalization of software development expenses

Financing activities

Cash flows provided

by financing activities for the nine months ended September 30, 2021 increase by $20,182,244 related to the issuance of common shares

related to our February 2021 IPO, exercise of Series A warrants and proceeds from the second PPP loan, partially offset by a $6,000,000

repayment on our line of credit, and repayment of deferred salary and related party notes payable of $930,636.

Cash flows used in financing

activities for the three months ended March 31, 2022 was $88,722 related to cash paid by us related to the net-share settlement of vested

restricted stock units during the quarter.

Cash flows provided

by financing activities for the nine months ended September 30, 2020 was $1,920,356 primarily related to the proceeds related to the

issuance of convertible notes payable of $1,467,841, related party debt of $490,539 and proceeds from our first PPP loan of $268,662,

partially offset by repayments of related party debt and deferred salary of $257,797 and deferred offering costs capitalized of $91,624.

by financing activities for the three months ended March 31, 2021 was $10,174,305 primarily related to the issuance of common shares

for $14,822,459, related to our February 2021 IPO and $267,482 related to proceeds from our PPP Loan, offset by a repayment of our line

of credit of $4,000,000 and deferred salary and related party notes payable of $930,636.

Funding Requirements

We historically have

incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $63.4M and

$51.4M as of September 30, 2021 and December 31, 2020, respectively.

As of September 30, 2021 and December 31, 2020, we had cash of $8.1M

and $0.1M, respectively.

We believe that the net proceeds from our February 2021 IPO and additional net proceeds of $5.0 million received

from the July 2021 Series A Warrant exercises, 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

Our cash is comprised

primarily of demand deposit accounts and money market funds.

We believe our existing cash and cash generated from operations will be

sufficient to meet our working capital and capital expenditure needs over at least the next 12 months.

incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $66.6 million

and $64.8 million as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022 and December 31, 2021, we had cash of

$4.4 million and $6.3 million, respectively.

Our cash is comprised primarily of demand deposit accounts and money market funds.

our cash on hand should be sufficient to fund our current operating plans through at least December 31, 2022.

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.

We expect our expenses to increase substantially

in connection with our ongoing activities, particularly as we continue the development of the Auddia and Vodacast Apps.

we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor

relations and other expenses.

in connection with our ongoing activities, particularly as we continue the development of the Faidr and Vodacast Apps.

In addition, we

expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations

and other expenses.

Our future funding requirements will depend on many factors, including, but not limited to:

the scope, progress, results

and costs related to commercial trials and national launch related to our Auddia App and obtaining market acceptance

and costs related to our national launch of our Faidr App and obtaining market acceptance

the ability to attract

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against intellectual property infringement, misappropriation and other claims

Contractual Obligations

The following table

summarizes our contractual obligations not on our Balance Sheet as of March 31, 2022 and the effects that such obligations are expected

to have on our liquidity and cash flows in future periods:

Payments due by period

Operating lease commitments:

Total operating lease commitments

Represents minimum payments due for the lease of office

space without consideration of additional renewal options

Represents premium payments due related to D&O

insurance policy from February 2022 – February 2023

Off-balance sheet

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There were no material changes to our critical accounting policies during

the nine months ended September 30, 2021.

the three months ended March 31, 2022.

Emerging growth company and smaller reporting company status

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smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Quantitative and Qualitative

Disclosures about Market Risk

and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2

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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-Q

Item 2. Management’s Discussion and Analysis