What changed in this filing

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Item 1. Financial Statements

2022-08-12 compared with 2022-05-12 · 645 added, 196 removed, 314 unchanged (73% of the section changed)

Condensed Balance Sheets

Financial Statements

Condensed Balance Sheets (Unaudited)

Current assets:

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Total non-current assets

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

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Stockholders' equity:

Preferred stock - $ 0.001 par value, 100,000,000 authorized and

0 shares issued and outstanding at March 31, 2022 and December 31, 2021

Common stock - $ 0.001 par value, 100,000,000 authorized and

12,514,763 and 12,416,408 shares issued and outstanding at March 31, 2022 and December 31, 2021

Preferred stock - $ 0.001 par value, 100,000,000 authorized and 0 shares issued and outstanding at June 30, 2022 and December 31, 2021

Common stock - $ 0.001 par value, 100,000,000 authorized and 12,514,763 and 12,416,408 shares issued and outstanding at June 30, 2022 and December 31, 2021

Additional paid-in capital

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these unaudited condensed financial statements.

Condensed Statements of

Operations (Unaudited)

Three Months Ended March 31,

Condensed Statements of Operations (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

Operating expenses:

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( 2,048,362 )

Other (expense) income:

( 1,003,438 )

( 3,800,609 )

( 1,871,178 )

Other income (expense):

Finance charge – convertible debt

( 8,141,424 )

PPP loan extinguishment

Interest expense

Interest income

Total other expense

Total other income (expense)

( 8,178,841 )

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$ ( 2,050,385 )

$ ( 753,521 )

$ ( 3,803,644 )

$ ( 10,050,019 )

Net loss per share attributable to common stockholders

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these unaudited condensed financial statements.

Condensed Statements of

Changes in Shareholders’ Equity (Unaudited)

Three Months Ended March 31, 2021

Additional Paid-In

Condensed Statements of Changes in Stockholders’

Equity (Unaudited)

Six Months Ended June 30, 2021

Balance, December 31, 2020

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( 10,050,019 )

Balance, March 31, 2021

Balance, June 30, 2021

$ ( 61,410,339 )

Three Months Ended March 31, 2022

Additional Paid-In

Six Months Ended June 30, 2022

Balance, December 31, 2021

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( 3,803,644 )

Balance, March 31, 2022

Balance, June 30, 2022

$ ( 68,642,033 )

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these unaudited condensed financial statements.

Condensed Statements of

Cash Flows (Unaudited)

Three Months Ended March 31,

Condensed Statements of Cash Flows (Unaudited)

Six Months Ended June 30,

Cash flows from operating activities:

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Share-based compensation

Gain on PPP loan extinguishment

Change in assets and liabilities:

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Software capitalization

( 1,278,625 )

Purchase of property and equipment

Net cash used in investing activities

( 1,282,433 )

Cash flows from financing activities:

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Shares issued for conversion of indebtedness

PPP loan extinguishment

$ ( 268,662 )

The accompanying notes are an integral part of

these unaudited condensed financial statements.

Notes to Condensed Financial

Statements (Unaudited)

Note 1 - Description of Business, Basis of Presentation and

Summary of Significant Accounting Policies

Notes to Condensed Financial Statements (Unaudited)

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 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 Auddia.

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

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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.

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

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Unaudited interim financial information

The condensed financial statements of

the Company included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission

Certain information and footnote disclosures normally included in financial statements prepared in accordance

with GAAP have been condensed or omitted from this Quarterly Report, as is permitted by such rules and regulations.

Accordingly, these

condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s

Annual Report on Form 10-K.

The condensed financial statements of the Company

included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the

Certain information and footnote disclosures normally included in financial statements prepared in accordance with

GAAP have been condensed or omitted from this Quarterly Report, as is permitted by such rules and regulations.

Accordingly, these condensed

financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual

Report on Form 10-K.

The results for any interim period are not necessarily indicative of results for any future period.

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 condensed 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.

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

The condensed 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.

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retain, and motivate qualified personnel.

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

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 March 31, 2022 or December 31, 2021.

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 March 31, 2022 and December 31, 2021, the Company had $ 3,861,550 and $ 5,845,291 , 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.

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 June 30, 2022

or December 31, 2021.

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 June 30, 2022 and December 31, 2021, the Company had $ 2,022,091 and $ 5,910,758 , 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.

Software Development Costs

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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 $ 661,213 and $ 292,075 were capitalized for the three months ended March 31, 2022 and 2021, respectively.

Amortization of capitalized software development costs were $ 168,036 and $ 0 for the three months ended March 31, 2022 and 2021, respectively

and are included in depreciation and amortization expense.

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 $ 617,411 and $ 259,463 were capitalized for the three months ended June 30, 2022 and 2021, respectively and

$ 1,278,625 and $ 551,538 were capitalized for the six months ended June 30, 2022 and 2021, respectively.

Amortization of capitalized software

development costs were $ 262,703 and $ 0 for the three months ended June 30, 2022 and 2021, respectively and $ 430,739 and $ 0 for the six

months ended June 30, 2022 and 2021, respectively and are included in depreciation and amortization expense.

Revenue Recognition

Revenue will be 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.

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

We will report

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

Standards Codification (“ASC”) 606, Revenue – Revenue from Contracts with Customers, and will be recognized based on

consideration specified in a contract with a customer and will exclude any sales incentives and amounts collected on behalf of third parties.

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

will 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 condensed statements of operations.

Collected taxes will be recorded within Other

current liabilities until remitted to the relevant taxing authority.

Subscriber revenue will consist primarily of

subscription fees and other ancillary subscription-based revenues.

Revenue will be 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.

Collected taxes will be recorded within Other current

liabilities until remitted to the relevant taxing authority.

Subscriber revenue will consist primarily of subscription

fees and other ancillary subscription-based revenues.

Revenue will be 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.

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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.

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 – Property & Equipment

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The Company recognized depreciation expense of

$ 8,091 and $ 2,183 for the three months ended March 31, 2022 and 2021, respectively related to property and equipment and amortization

expense of $ 168,036 and $ 0 for the three months ended March 31, 2022 and 2021, respectively related to software development costs.

$ 16,393 and $ 5,040 for the six months ended June 30, 2022 and 2021, respectively related to property and equipment and amortization expense

of $ 430,739 and $ 0 for the six months ended June 30, 2022 and 2021, respectively related to software development costs.

Note 3 – Balance Sheet Disclosures

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Note 4 – 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

The Company had a line of credit which was repaid

in full on July 8, 2021.

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

expense for the three months ended March 31, 2022 and 2021 was $ 0 and $ 47,296 , respectively.

The line of credit was collateralized by all

assets of the Company, including $2,000,000 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.

expense for the six months ended June 30, 2022 and 2021 was $ 0 and $ 69,132 , respectively.

The line of credit was collateralized by all assets

of the Company, including $2,000,000 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

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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.

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.

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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

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.

Interest expense for the three months ended March 31, 2022 and 2021 was $ 0 and $ 16,586 , respectively.

The Company had convertible notes outstanding

at December 31, 2020 in the amount of $ 2,295,305 , inclusive of accrued interest.

These convertible notes accrued interest at 6.0 % per

year and were scheduled to mature on December 31, 2021 .

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.

Interest expense for the six months ended June

30, 2022 and 2021 was $ 0 and $ 16,586 , respectively.

Accrued fees to a related party

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

Interest expense for the three months ended March 31, 2022 and

Interest expense for the six months ended June 30, 2022 and 2021

was $ 0 and $ 208,727 , 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.

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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 three months ended March 31, 2022 and 2021 was $ 0 and $ 14,454 , respectively.

The Company had promissory notes payable outstanding

that were scheduled to mature on December 31, 2021 and accrue interest at 6 %.

The notes and accrued interest would convert into equity,

upon a qualified IPO 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.

expense for the six months ended June 30, 2022 and 2021 was $ 0 and $ 14,454 , respectively.

In conjunction with the February 2021 IPO, all

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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 three months ended March 31, 2021.

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

Note 6 – Notes Payable

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The accumulated amount of compensation owed to this executive officer

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

was approximately $ 631,000 .

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 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.

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 February 2020, the Company obtained a $500,000

The Company had convertible notes payable to related

parties in the amounts of $ 200,000 and $ 50,000 , without a stated interest rate or stated maturity date.

Two other existing investors entered

into a convertible note related to services provided to the Company in the amount of $ 17,197 .

The Company also issued a convertible note

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

The Company paid these Notes in

the first quarter of 2021.

The Company had a short term loan of $ 500,000

short term loan from a 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.

The loan financing

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

The outstanding balance was repaid

in February 2021.

The balance was repaid in February 2021.

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.

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

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

Small Business Administration.

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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

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.

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

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$ 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.

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 7 – Commitments and Contingencies

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expired on April 30, 2021.

Rent expense was $ 21,449 and $ 18,053 for the three months ended March 31, 2022 and 2021, respectively.

Rent expense was as follows:

Schedule of rent expenses

Three Months Ended June 30

Six Months Ended June 30

In the normal course of business, the Company

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

Note 8 - Share-based Compensation

Note 8 - Share-based Issuances

Stock Options

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Exercise Price

Outstanding -

December 31, 2021

Outstanding - December 31, 2021

Forfeited/canceled

- March 31, 2022

The following table presents the composition

of options outstanding and exercisable:

Outstanding – June 30, 2022

The following table presents the composition of

options outstanding and exercisable:

- March 31, 2022

Options outstanding and exercisable

Options Outstanding

Options Exercisable

Exercise Prices

Total – June 30, 2022

________________________

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

average remaining contractual life, respectively.

During the three months ended March 31, 2022,

the Company granted 293,750 stock options to certain executives and key employees.

Under the terms of the option agreements, the options

are subject to certain vesting requirements.

The fair value of each award is determined using the Black-Scholes option-pricing model

which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock,

and the risk-free interest rate over the expected life of the option.

Price and Life reflect the weighted average exercise price and weighted average remaining contractual life, respectively.

During the six months ended June 30, 2022, the

Company granted 293,750 stock options to certain executives and key employees.

Under the terms of the option agreements, the options are

subject to certain vesting requirements.

The fair value of each award is determined using the Black-Scholes option-pricing model which

values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, and

the risk-free interest rate over the expected life of the option.

The expected volatility was determined considering comparable companies

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Exercise Price

Outstanding -

December 31, 2021

Outstanding - December 31, 2021

Forfeited/canceled

Vested/issued

– March 31, 2022

During the three months ended March 31, 2022,

the Company granted 150,000 restricted stock units.

Outstanding – June 30, 2022

During the six months ended June 30, 2022, the

Company granted 150,000 restricted stock units.

Under terms of the restricted stock agreements, the restricted stock units are subject

to a certain vesting schedule.

During the three months ended March 31, 2022,

certain restricted stock unit holders elected a net-share settlement for vested shares to satisfy income tax requirements.

applied modification accounting in accordance with ASC 718, and reclassified these share-based awards from equity classification to liability

to a four year vesting schedule.

During the six months ended June 30, 2022, certain

restricted stock unit holders elected a net-share settlement for vested shares to satisfy income tax requirements.

The Company applied

modification accounting in accordance with ASC 718, and reclassified these share-based awards from equity classification to liability

classification.

The Company recognized a share-based compensation liability as of March 31, 2022 of $ 39,812 related to the fair value

of vested shares over the service period.

The Company recognized a share-based compensation liability as of June 30, 2022 of $ 47,073 related to the fair value of

vested shares over the service period.

The Company recognized share-based compensation

expense related to stock options and restricted stock units of $ 385,908 and $ 16,131 for the three months ended March 31, 2022 and 2021,

respectively.

The remaining unvested share-based compensation expense of $ 2,598,005 is expected to be recognized over the next 47 months.

expense related to stock options and restricted stock units in the amounts of $ 671,829 and $ 31,951 for the six months ended June 30, 2022

and 2021, respectively.

The remaining unvested share-based compensation expense of $ 2,444,906 is expected to be recognized over the next

The following table presents the activity for

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Schedule of warrant activity

Exercise Price

Outstanding - December 31, 2021

Forfeited/cancelled/restored

Outstanding - March 31, 2022

Outstanding – June 30, 2022

In connection with the February 2021 IPO, the

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warrants contain a cashless exercise feature.

During the three months ended March 31, 2022

certain holders of our Pre-IPO warrants exercised 148 warrants for 112 shares of common stock at the net exercise price of $ 0.87 per

During the six months ended June 30, 2022 certain

holders of our Pre-IPO warrants exercised 148 warrants for 112 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 3.69 years as of March 31, 2022.

and have a weighted average remaining contractual life of approximately 3.44 years as of June 30, 2022.

Note 9 – Net Loss Per Share

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

As of March 31, 2022 and 2021, 6,248,131 shares

and 2,750,331 shares, 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.

As of June 30, 2022 and 2021, 6,325,245 shares

and 4,239,600 shares, 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 10 – Subsequent Events

In accordance with Financial Accounting Standards Board (FASB) Accounting

Standards Codification (ASC) Topic 855, Subsequent Events, management has performed an evaluation of subsequent events through the date

that the financial statements were available to be issued on August 12, 2022 and has determined

that it does not have any material subsequent events to disclose in these financial statements.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

The following discussion and analysis should

be read in conjunction with the unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report

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

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

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

forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such

as statements regarding our plans, objectives, expectations, intentions and projections.

Our actual results and the timing of selected

events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those

set forth under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report.

You should carefully read the “Risk

Factors” section of this Quarterly Report and of our Annual Report on Form 10-K for the year ended December 31, 2021 to gain an

understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

also see the section entitled “Special Note Regarding Forward-Looking Statements.”

We are 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.

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.

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 look 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, Faidr

is intended to deliver non-music content that includes local sports, news, weather, traffic and the discovery of new music.

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 and launched marketing campaigns for Faidr to build an audience

and demonstrate consumer interest.

We are currently providing consumers a free trial of the App and started trialing subscriptions with

a subset of consumers in late second quarter.

In addition, we are continuing to enhance the listening experience for consumers by:

advancing the training of our proprietary AI technology primarily around talk stations and talk segments on music stations;

improvements to the user interface and consumer interaction within the App;

and 3) exploring additional content choices, including podcasting,

some of which will become available in the App during the year.

We expect to continue to understand consumer interest for subscription

during the third quarter.

The Faidr mobile App

is available today through the iOS and Android App stores.

We also have developed

a podcasting platform called Vodacast.

Vodacast provides a unique suite of tools that helps Podcasters create additional digital content

for their podcast episodes as well as plan their episodes, build their brand around their Podcast and monetize their content with new

monetization channels.

One innovative and proprietary part of the Vodacast platform is the availability of tools to create and distribute

an interactive digital feed which supplements podcast episode audio with additional digital content.

These content feeds allow podcasters

to tell deeper stories to their listeners while giving podcasters access to digital revenue for the first time.

Podcasters will be able

to build these interactive feeds using The Vodacast Hub, a content management system that also serves as a tool to plan and manage podcast

The digital feed activates a new digital ad channel that turns every audio ad into a direct-response digital ad, increasing

the effectiveness and value of their established audio ad model.

The feed also presents a richer listening experience, as any element

of a podcast episode can be supplemented with images, videos, text and web links.

This feed appears fully synchronized in the Vodacast

mobile App, and it also can be hosted and accessed independently (e.g., through any browser), making the content feed universally distributable.

Vodacast will also introduce

a unique and industry first multi-channel, highly flexible set of revenue channels that podcasters can activate in combination to allow

listeners to choose how they want to consume and pay for content.

“Flex Revenue” allows podcasters to continue to run their

standard audio ad model and complement those ads with direct response enabled digital ads in each episode content feed, increasing the

value of advertising on any podcast.

“Flex Revenue” will also activate subscriptions, on-demand fees for content (e.g., listen

without audio ads for a micro payment fee) and direct donations from listeners.

Using these channels in combination, podcasters can maximize

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

The Vodacast mobile App

is available today through the iOS and Android App stores.

We launched marketing campaigns for Vodacast during

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

Because podcasting is the type of audio content that music app users expect to find in their preferred apps and platforms (e.g.

TuneIn, iHeart, Audacy, Spotify), we are currently exploring the migration of podcasting and the full suite of tools and features from

Vodacast into our Faidr App to provide an all-inclusive and immersive listening experience.

During this time, we have paused direct marketing

promotion related to the Vodacast App while we explore podcasting into Faidr.

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 June 30, 2022, we had an accumulated deficit of $68.6 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.

As a part of our capital

strategy, we recently implemented certain cost saving initiatives that reduced our quarterly cash spend.

This includes certain cost saving

initiatives related to our research and development and sales and marketing costs and includes a reduction of headcount and direct promotion

of our Apps while we continue to enhance our listening experience.

We expect that our expenses and capital requirements will increase

again sometime in the future, particularly if and as we:

continue training our proprietary AI technology and make additional product enhancements;

gain significant consumer interest in our products and increase marketing promotion to drive users to our Apps and convert users to subscribers;

identify and license new content that will add value to our products and drive consumer interest;

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 will

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

Until such time as we can generate

significant revenue from subscriptions, 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 in addition to the cost saving initiatives we have already made effective.

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 June 30, 2022,

we had cash of approximately $2.3 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

Operating expenses

Direct costs of services

Direct cost of services

consists primarily of costs incurred related to our technology and development of our Apps, including hosting and other technology related

We expect our direct costs of services to increase in the 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, direct to consumer promotional spend and consulting services, all of which are related to the

sales and promotion performed during the period.

We expect our sales and marketing expenses to fluctuate period by period as we continue

to promote the national commercial launch of our Faidr product and look to generate revenue for our products through customer acquisition,

retention and subscription conversion.

Research and development

Since our inception,

we have focused significant resources on our research and development activities related to the software development of our technology.

We account 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

We cease 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 three 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.

capitalized software development costs determined to be in excess of anticipated future net revenues are impaired and expensed during

the period of such determination.

We recently implemented

certain cost saving initiatives which includes the reduction of a part of our research and development staff.

We still expect to continue

to incur substantial research and development expenses and capitalization in the future, even after the reduction of headcount as we continue

to develop and enhance our Faidr and Vodacast Apps.

General and administrative

Our general and administrative

expenses consist primarily of salaries and related costs, including payroll taxes, benefits, stock-based compensation, and professional

fees related to auditing, tax, general legal services, and consulting services.

We expect our general and administrative expenses 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 expense

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.

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

June 30, 2022 and 2021

The following table summarizes our results

of operations:

Three Months Ended June 30,

Increase/(Decrease)

Operating expenses:

Direct costs of service

Sales and marketing

Research and development

General and administrative

Depreciation and amortization

Total operating expense

Loss from operations

Other income (expense), net:

$ (2,050,385 )

$ (1,296,864 )

Total revenues were $0

for the three months ended June 30, 2022 and June 30, 2021.

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

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

Direct cost of services

Direct Cost of Services

decreased $32,526 or 42.8%, from $76,058 for the three months ended June 30, 2021 compared to $43,532 for the three months ended June

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

Sales and marketing expenses

increased by $600,408 or 430.1%, from $139,611 for the three months ended June 30, 2021 to $740,019 for the three months ended June 30,

2022 due to our increase in promotional activity related to the national launch of our Faidr App, and continued promotion for our Vodacast

The increase in marketing promotion was primarily understanding consumer interest and demand for our Faidr App.

As a part of that

increased marketing spend, we were able to identify key metrics and user data which exceeded our initial targets for consumer downloads

and monthly active users (MAUs).

Research and development

expenses increased by $72,966 or 93.2%, from $78,285 for the three months ended June 30, 2021 to $151,251 for the three months ended June

30, 2022 primarily related to additional staffing on our development team as we continued to advance the Faidr and Vodacast Apps.

research and development staffing and related development costs were $766,779 and capitalized software expenses of $617,411 for the three

months ended June 30, 2022 as compared to staffing and related development costs of $354,188 and capitalized software expenses of $259,463

for the three months ended June 30, 2021.

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

We started amortizing

capitalized development costs associated with Faidr during Q1 2022 and continue to amortize development expense related to Vodacast.

General and administrative

expenses increased by $135,928 or 19.2%, from $706,627 for the three months ended June 30, 2021 compared to $842,555 for the three months

ended June 30, 2022.

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

in Q3 2021 and Q1 2022 partially offset by lower professional fees related to our IPO and recruiting fees incurred during 2021.

compensation expense was $285,920 and $15,820 for the three months ended June 30, 2022 and 2021, respectively.

Depreciation and amortization

expenses increased by $268,148, from $2,857 for the three months ended June 30, 2021 compared to $271,005 for the three months ended June

The increase is related to amortization of our Faidr and Vodacast Apps, which started amortization during Q1 2022 and Q4 2021,

respectively.

Other income (expense),

Total other income (expense)

decreased by $251,940, from $249,917 for the three months ended June 30, 2021 to ($2,023) for the three months ended June 30, 2022.

decrease was mostly related to a net gain from the extinguishment of our first PPP loan during 2021.

Comparison of the six months ended June

30, 2022 and 2021

The following table summarizes our results

of operations:

Six Months Ended June 30,

Increase/(Decrease)

Operating expenses:

Direct costs of service

Sales and marketing

Research and development

General and administrative

Depreciation and amortization

Total operating expense

Loss from operations

Other income (expense), net:

$ (3,803,644 )

$ (10,050,019 )

Total revenues were $0

for the three months ended June 30, 2022 and June 30, 2021.

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

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

Direct cost of services

Direct Cost of Services

decreased $37,313 or 28.0%, from $133,406 for the six months ended June 30, 2021 compared to $96,093 for the six months ended June 30,

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

Sales and marketing expenses

increased by $833,971 or 317.0%, from $263,115 for the six months ended June 30, 2021 to $1,097,086 for the six months ended June 30,

2022 due to our increase in promotional activity related to the national launch of our Faidr App, and continued promotion for our Vodacast

The increase in marketing promotion was primarily understanding consumer interest and demand for our Faidr App.

As a part of that

increased marketing spend, we were able to identify key metrics and user data which exceeded our initial targets for consumer downloads

and monthly active users (MAUs).

Research and development

expenses increased by $174,733 or 139.5%, from $125,282 for the six months ended June 30, 2021 to $300,015 for the six months ended June

30, 2022 primarily related to additional staffing on our development team as we continue to advance the Faidr and Vodacast Apps.

and development staffing and related development costs were $1,578,637 and capitalized software expenses of $1,278,625 for the six months

ended June 30, 2022 as compared to staffing and related development costs of $692,976 and capitalized software expenses of $551,538 for

the six months ended June 30, 2021.

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

We started amortizing capitalized

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

General and administrative

expenses increased by $515,948 or 38.4%, from $1,344,335 for the six months ended June 30, 2021 compared to $1,860,283 for the six months

ended June 30, 2022.

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

in Q3 2021 and Q1 2022 partially offset by lower professional fees related to our IPO and recruiting fees incurred during 2021.

compensation expense was $671,829 and $31,951 for the six months ended June 30, 2022 and 2021, respectively.

Depreciation and amortization

expenses increased by $442,092, from $5,040 for the six months ended June 30, 2021 compared to $447,132 for the six months ended June

The increase is related to amortization of our Faidr and Vodacast Apps, which started amortization during Q1 2022 and Q4 2021,

respectively.

Other income (expense),

Total other expense decreased

by $8,175,806, from $8,178,841 for the six months ended June 30, 2021 to $3,035 for the six months ended June 30, 2022.

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

Sources of liquidity

We have incurred operating

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

As of June 30, 2022 and December 31, 2021 we had cash of $2,341,289 and $6,345,291, respectively.

We reduced our future quarterly

cash spend through a series of cost saving initiatives during the third quarter of 2022 and deferral of promotional activity on the Faidr

and Vodacast Apps.

We anticipate that operating losses and net cash used in operating activities will continue over the next 12 months

as we continue to develop and market our products and work through consumer conversion to subscriptions throughout 2022 and expect the

start of subscription conversion during 2023.

In February 2021, we 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, 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, 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

traded Series A Warrants exercised approximately 1.1 million warrants for approximately 1.1 million shares of common stock at the cash

exercise price of $4.5375 per share and as a result, we received additional cash proceeds of approximately $5.0 million.

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

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

Our cash flows from operating

activities have historically been significantly impacted by revenues received, our investment in sales and marketing to drive growth,

and research and development expenses.

Our ability to meet future liquidity needs will be driven by our operating performance and the

extent of continued investment in our operations.

Failure to generate sufficient revenues and related cash flows could have a 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 six months ended June 30, 2022 and 2021:

Six Months Ended June 30,

Net cash provided by (used in):

Operating activities

$ (2,632,846 )

$ (3,133,635 )

Investing activities

Financing activities

Change in cash and restricted cash

$ (4,004,002 )

Operating activities

Cash used in operating

activities for the six months ended June 30, 2022 was $2,632,846, primarily resulting from our net loss of $3,803,644, partially offset

by non-cash charges of $1,118,961 primarily related to stock compensation expense and depreciation and amortization.

Cash used in operating

activities for the six months ended June 30, 2021 was $3,133,635, primarily resulting from our net loss of $10,050,019 and changes in

working capital of $993,369, partially offset by non-cash charges of $7,909,753 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 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 six months ended June 30, 2022 and 2021, consisted primarily of capitalization of software development expenses of

$1,278,625 and $551,538, respectively.

Financing activities

Cash flows used in financing

activities for the six months ended June 30, 2022 was $88,723 all from cash used in relation to the net settlement of share-based compensation.

Cash flows provided by

financing activities for the six months ended June 30, 2021 was $10,174,305 primarily related to the issuance of common shares for $14,822,459

related to our February 2021 IPO and proceeds from the second PPP loan in the amount of $267,482, partially offset by a $4,000,000 repayment

on our line of credit, and repayment of 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.

As of June 30, 2022, we had cash of $2.3 million.

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

We believe our current cash on hand should be sufficient

to fund our operations through at least December 31, 2022.

We are currently in the process of raising additional short-term funding that,

if completed, would extend our current cash availability through the second quarter 2023.

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 therefore would

need to raise longer term funding 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.

As a part of our funding strategy, we recently

implemented cost saving initiatives to ensure our cash on hand will allow us enough time to finalize certain product enhancements and

optimize consumer adoption and subscription.

We expect these cost saving measures to reduce our quarterly cash burn rate by

$500,000 to $700,000 as compared to the second quarter 2022.

With the combination of cost saving initiatives and the additional short-term

funding we are pursuing, we believe our cash availability will be able to extend through the second quarter 2023.

We expect to continue to incur costs associated with operating as a public company, including legal, accounting, investor

relations and other expenses.

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

the scope, progress, results and costs related to our Faidr App and obtaining market adoption and subscription conversion;

the costs, timing and ability to continue to develop our technology;

effectively addressing any competing technological and market developments;

avoiding and defending against intellectual property infringement, misappropriation and other claims

Contractual Obligations

The following table summarizes

our contractual obligations not on our Balance Sheet as of June 30, 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:

Office lease (1)

Insurance premiums (2)

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

We did not have during

the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the

Critical Accounting Policies and Estimates

Our condensed financial

statements and accompanying notes have been prepared in accordance with U.S.

The preparation of these condensed financial statements

requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and

expenses, and related disclosures.

On an ongoing basis, we continually evaluate our estimates and assumptions believed to be reasonable

under current facts and circumstances.

Actual amounts and results may materially differ from these estimates made by management under

different assumptions and conditions.

A summary of our critical accounting policies

is presented in Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual

Report on Form 10-K for the year ended December 31, 2021.

There were no material changes to our critical accounting policies during the

six months ended June 30, 2022.

Emerging growth company and smaller reporting company status

The Jumpstart Our Business

Startups Act of 2012 permits an “emerging growth company” such as us to take advantage of an extended transition period to

comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private

We have elected to not “opt out” of this provision and, as a result, we will adopt new or revised accounting standards

at the time private companies adopt the new or revised accounting standard and will do so until such time that we either (i) irrevocably

elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.

We are also a “smaller reporting company”

meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100

million during the most recently completed fiscal year.

We may continue to be a smaller reporting company if either (i) the market value

of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently

completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million.

If we are a smaller reporting

company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements

that are available to smaller reporting companies.

Specifically, as a smaller reporting company we may choose to present only the two

most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies,

smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Quantitative and Qualitative Disclosures about Market Risk

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

of the Exchange Act and are not required to provide the information required under this item.

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 1. Financial Statements