What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-24 compared with 2023-05-19 · 477 added, 380 removed, 86 unchanged (91% of the section changed)

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

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,

2022, which was filed with the SEC on March 23, 2023.

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, 2022, 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.”

Auddia is a technology company headquartered in

Boulder, CO that is reinventing how consumers engage with audio through the development of a proprietary AI platform for audio and innovative

technologies for podcasts.

Auddia is leveraging these technologies within its industry-first audio Superapp, faidr (previously known as

the Auddia App).

faidr gives consumers the opportunity to listen

to any AM/FM radio station with no commercials while personalizing the listening experience through skips and the insertion of on-demand

content, including popular and new music, news, and weather.

The faidr app represents the first-time consumers can combine the local content

uniquely provided by AM/FM radio with commercial-free and personalized listening many consumers demand from digital-media consumption.

In addition to commercial-free AM/FM, faidr includes podcasts and exclusive content, branded faidrRadio, which includes new artist discovery,

curated music stations, and Music Casts.

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, 2022, to gain an understanding of the important

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

Please also see the section entitled

“Special Note Regarding Forward-Looking Statements.”

Auddia is a technology company

headquartered in Boulder, CO that is reinventing how consumers engage with audio through the development of a proprietary AI platform

for audio and innovative technologies for podcasts.

Auddia is leveraging these technologies within its industry-first audio Superapp,

faidr (previously known as the Auddia App).

faidr gives consumers the

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

insertion of on-demand content, including popular and new music, news, and weather.

The faidr app represents the first-time consumers

can combine the local content uniquely provided by AM/FM radio with commercial-free and personalized listening many consumers demand from

digital-media consumption.

In addition to commercial-free AM/FM, faidr includes podcasts and exclusive content, branded faidrRadio, which

includes new artist discovery, curated music stations, and Music Casts.

Music Casts are unique to faidr.

Hosts and DJs can combine on-demand talk segments with dynamic

music streaming, which allows users to hear podcasts with full music track plays embedded in the episodes.

Auddia has also developed a podcasting platform

that 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, and monetize their content with new content distribution channels.

This podcast platform also gives

users the ability to go deeper into the stories through supplemental, digital content, and eventually comment and contribute their own

content to episode feeds.

Both of Auddia’s offerings address large

and rapidly growing audiences.

The Company has developed its AI platform on top

of Google’s TensorFlow open-source library that is being “taught” to know the difference between all types of audio

content on the radio.

For instance, the platform recognizes the difference between a commercial and a song and is learning the differences

between all other content to include weather reports, traffic, news, sports, DJ conversation, etc.

Not only does the technology learn

the differences between the various types of audio segments, but it also identifies the beginning and end of each piece of content.

The Company is leveraging this technology platform

within its premium AM/FM radio listening experience through the faidr App.

The faidr 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, podcasts and the faidrRadio exclusive

content offerings.

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 the faidr App represents a significant differentiated audio streaming product, or Superapp, that

will be the first to come to market since the emergence of popular streaming music apps such as Pandora, Spotify, Apple Music, Amazon

We believe that the most significant point of differentiation is that in addition to ad-free AM/FM streaming, the faidr App

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

programming and podcasts.

No other radio streaming app available today, including category leaders like TuneIn, iHeart, and Audacy, can

compete with faidr’s full product offerings.

We launched an MVP version of faidr through several

consumer trials in 2021 to measure consumer interest and engagement with the App.

The full app launched on February 15, 2022, and included

all major U.S.

radio stations in the US.

Hosts and DJs can combine on-demand

talk segments with dynamic music streaming, which allows users to hear podcasts with full music track plays embedded in the episodes.

Auddia has also developed

a podcasting platform that 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, and monetize their content with new content distribution channels.

platform also gives users the ability to go deeper into the stories through supplemental, digital content, and eventually comment and

contribute their own content to episode feeds.

Both of Auddia’s offerings

address large and rapidly growing audiences.

The Company has developed

its AI platform on top of Google’s TensorFlow open-source library that is being “taught” to know the difference between

all types of audio content on the radio.

For instance, the platform recognizes the difference between a commercial and a song and is learning

the differences between all other content to include weather reports, traffic, news, sports, DJ conversation, etc.

Not only does the technology

learn the differences between the various types of audio segments, but it also identifies the beginning and end of each piece of content.

The Company is leveraging

this technology platform within its premium AM/FM radio listening experience through the faidr App.

The faidr 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, podcasts and

the faidrRadio exclusive content offerings.

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 the faidr App represents a significant differentiated audio streaming product,

or Superapp, 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 ad-free AM/FM streaming,

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

alongside exclusive programming and podcasts.

No other radio streaming app available today, including category leaders like TuneIn, iHeart,

and Audacy, can compete with faidr’s full product offerings.

We launched an MVP version of faidr through several consumer trials in 2021

to measure consumer interest and engagement with the App.

The full app launched on February 15, 2022, and included all major U.S.

stations in the US.

In February 2023, we added faidrRadio, our exclusive content offerings, to the app.

for iOS were added in Q1, 2023.

The Company has also developed its podcasting

platform, which leverages technologies and proven product concepts to differentiate its podcasts offering from other competitors in the

radio streaming product category.

With podcasting growing and predicted to grow

at a rapid rate, the Auddia podcast platform was conceptualized to fill a void in the emerging audio media space.

The platform aims to

be the preferred podcasting solution for podcasters by enabling them to deliver digital content feeds that match the audio of their podcast

episodes, and by enabling podcasters to make additional revenue from new digital advertising channels;

subscription channels;

fees for exclusive content;

Podcasts were added to the app

for the iOS version before the end of Q1 2023 as planned, and added to the Android app in May of 2023.

Podcast functionality will

continue to be enhanced through 2023 and into 2024.

The Company has also developed

its podcasting platform, which leverages technologies and proven product concepts to differentiate its podcasts offering from other competitors

in the radio streaming product category.

With podcasting growing and

predicted to grow at a rapid rate, the Auddia podcast platform was conceptualized to fill a void in the emerging audio media space.

platform aims to be the preferred podcasting solution for podcasters by enabling them to deliver digital content feeds that match the

audio of their podcast episodes, and by enabling podcasters to make additional revenue from new digital advertising channels;

on-demand fees for exclusive content;

and through direct donations from their listeners.

Today, podcasters do not have a preference as to where

their listeners access their episodes, as virtually all listening options (mobile apps and web players) deliver only their podcast audio.

By creating a platform on which they can make net new and higher margin revenue, we believe that podcasters will promote faidr to their

listeners, thus creating a powerful, organic marketing dynamic.

One innovative and proprietary part of the podcast

platform is the availability of tools to create and distribute an interactive digital feed which supplements podcast episode audio with

additional digital.

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 Podcast Hub, a content management system

that also serves as a tool to plan and manage podcast episodes.

The digital feed activates a new digital ad channel that turns every audio

ad into a direct-response, relevant-to-the-story, 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.

Today, podcasters do not have a preference

as to where their listeners access their episodes, as virtually all listening options (mobile apps and web players) deliver only their

podcast audio.

By creating a platform on which they can make net new and higher margin revenue, we believe that podcasters will promote

faidr to their listeners, thus creating a powerful, organic marketing dynamic.

One innovative and proprietary

part of the podcast platform is the availability of tools to create and distribute an interactive digital feed which supplements podcast

episode audio with additional digital.

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 Podcast Hub, a content

management system that also serves as a tool to plan and manage podcast episodes.

The digital feed activates a new digital ad channel

that turns every audio ad into a direct-response, relevant-to-the-story, 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 will appear fully synchronized in the faidr mobile App, and it also can be hosted and accessed independently

(e.g., through any browser), making the content feed universally distributable.

Over time, users will be able to comment, and

podcasters will be able to grant some users publishing rights to add content directly into the feed on their behalf.

This will create

another first for podcasting, a dialog between creator and fan, synchronized to the episode content.

The podcast capabilities within faidr 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 faidr mobile App is available today through

the iOS and Android App stores.

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.

March 31, 2023, we had an accumulated deficit of $73.9 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:

Over time, users will be

able to comment, and podcasters will be able to grant some users publishing rights to add content directly into the feed on their behalf.

This will create another first for podcasting, a dialog between creator and fan, synchronized to the episode content.

The podcast capabilities within faidr 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.

Flex Revenue and

the initial inclusion of the new revenue channels that come with it will be added to podcasting in the faidr app, and the first elements

of this new monetization capability is expected to be commercially available before the end of 2023.

The faidr mobile App is available

today through the iOS and Android App stores.

We have funded our operations

with proceeds from the February 2021 IPO, Series A warrants exercised in July 2021 and common share issuance during June of 2023.

obtained debt financing through a related party during November 2022 and April 2023.

In addition, we sold common shares during April 2023

and June 2023.

Since its inception, we have incurred significant operating losses.

Since inception we have incurred significant operating

As of June 30, 2023, we had an accumulated deficit of $76.2 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:

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

5 unchanged sentences

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

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.

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 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.

At March 31, 2023, the Company had cash of

As described above (see Note 8 – Subsequent Events), in April 2023 the Company raised $1.87 million that we believe

will fund our operations into the third quarter of fiscal 2023.

The Company has based this estimate, however, on assumptions that may

prove to be wrong.

We will need additional funding to complete the development of our full product line, scale products with a

demonstrated market fit and generate revenue and cash flow.

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, 2023, we had

cash of $3,605,144.

We will need additional funding to complete the development of our full product line and scale products with a demonstrated

Management has plans to secure such additional funding.

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 result of the Company’s recurring losses

from operations, and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding

the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to

the Company’s ability to continue as a going concern.

In April 2023, the Company announced that it had

begun to pursue an acquisition strategy to accelerate user acquisition and growth of revenue and cash flow.

The Company has explored numerous

potential acquisition targets of AM/FM streaming aggregators over the past year and a half and continues to explore new opportunities.

At present, the Company is in advanced active discussions with three properties.

Additional funding would be required to complete any

of these potential acquisitions.

Refer to Item 1A.

Risk Factors under PART II – OTHER INFORMATION in this Form 10-Q for risk

factors associated with this growth strategy.

However, 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.

To accelerate

user acquisition, revenue, and cash flow, the Company has explored numerous potential acquisition targets of AM/FM streaming aggregators

over the past year and a half and continues to explore new opportunities.

At present, the Company is in advanced active discussions with

two properties and is targeting to execute one or more agreements in the near term.

These business development transactions would require

additional funding.

Recent Developments

Nasdaq Deficiency Notice

On May 23, 2023, we received a letter (the “Notice”)

from the Listing Qualifications Staff of the Nasdaq Stock Market, LLC (“Nasdaq”) indicating that, based upon the Company’s

reported stockholder’s equity of $2,095,247 at the end of March 31, 2023, we are not in compliance with the requirement to maintain

a minimum stockholder’s equity of $2,500,000 for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing

Rule 5550(b)(1) the “Stockholder’s Equity”).

We were provided a compliance period of 45 calendar days from the date

of the Notice, or until July 7, 2023, to submit a plan to regain compliance with the Stockholder’s Equity Requirement, pursuant

to Nasdaq Listing Rule 5810(c)(2)(A).

On July 10, 2023, the Company received a letter

from Nasdaq advising that the Company had been granted an extension to file a Form 10-Q for the quarter-ended June

30, 2023 evidencing compliance with Stockholder’s Equity requirement.

If we do not regain compliance within the allotted compliance

period, Nasdaq will provide notice that the Company’s Common Stock will be subject to delisting.

The Company would then be entitled

to appeal that determination to a Nasdaq hearings panel.

As disclosed elsewhere in the Quarterly Report,

the Company’s stockholder’s equity as of June 30, 2023 is $4,331,778, which is $1,831,778 over the $2.5 million Nasdaq continued

listing requirement.

Separately, on April

24, 2023 we received a letter from Nasdaq indicating that the Company is not in compliance with the $1.00 Minimum Bid Price requirement

set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market (the “Bid Price Requirement”).

The letter indicated

that the Company will be provided 180 calendar days (or until October 23, 2023) in which to regain compliance.

If at any time during this

180 calendar day period the bid price of the Company’s common stock closes at or above $1.00 per share for a minimum of ten consecutive

business days, Nasdaq will provide the Company with a written confirmation of compliance and the matter will be closed.

Alternatively, if the

Company fails to regain compliance with Rule 5550(a)(2) prior to the expiration of the initial 180 calendar day period, the Company may

be eligible for an additional 180 calendar day compliance period, provided (i) it meets the continued listing requirement for market value

of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market (except for the Bid Price

Requirement) and (ii) it provides written notice to Nasdaq of its intention to cure this deficiency during the second compliance period

by effecting a reverse stock split, if necessary.

In the event the Company does not regain compliance with Rule 5550(a)(2) prior to the

expiration of the initial 180 calendar day period, and if it appears to the Staff that the Company will not be able to cure the deficiency,

or if the Company is not otherwise eligible, the Staff will provide the Company with written notification that its securities are subject

to delisting from The Nasdaq Capital Market.

At that time, the Company may appeal the delisting determination to a Hearings Panel.

The Company intends to

consider all options to regain compliance with all Nasdaq continued listing requirements.

The Company’s receipt

of these Nasdaq letters does not affect the Company’s business, operations or reporting requirements with the Securities and Exchange

Impact of Inflation

We have recently experienced higher costs across

our business as a result of inflation, including higher costs related to employee compensation and outside services.

We expect inflation

to continue to have a negative impact throughout 2023, and it is uncertain whether we will be able to offset the impact of inflationary

pressures in the near term.

Components of our results of operations

1 unchanged sentence

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 expenses.

our direct costs of services to increase in the future as we continue to develop and enhance our technology related to the faidr and podcasting

Direct cost of services consists

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

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 podcasting 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 release new upgrades and enhancements

within our Apps and look to generate revenue through customer acquisition, retention, and subscription conversion.

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 release new upgrades

and enhancements within our Apps and look to generate revenue 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 is probable.

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.

Unamortized capitalized software development costs determined

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

We expect to continue

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

Since our inception, we have

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

for costs incurred in the development of computer software as software research and development costs until the preliminary project stage

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

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.

Unamortized capitalized

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

such determination.

We expect to continue to incur research and development expenses and capitalization in the future as we continue to

develop and enhance our faidr and podcasting 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 continue to increase

in the future as we right-size 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.

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 continue

to increase in the future as we right-size 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

The other income and expense category primarily

consists of interest expense attributed to the debt and conversion features of the Secured Bridge Note (aka the Prior Note).

our other expense to fluctuate period by period dependent upon either the payoff of the Prior Note or an extension of its term.

The other income and expense

category primarily consists of interest expense attributed to the debt and conversion features of the Secured Bridge Note (aka the Prior

We expect our other expense to fluctuate period by period dependent upon either the payoff of the Prior Note or an extension of

Results of operations

Comparison of the three months ended March 31, 2023, and 2022

The following table summarizes our results of

Three Months Ended March 31,

Comparison of the three months ended June

30, 2023, and 2022

The following table summarizes our results of operations:

Three Months Ended

Operating expenses:

Direct costs of service

Direct cost of services

Sales and marketing

2 unchanged sentences

Depreciation and amortization

Total operating expense

Total operating expenses

Loss from operations

Other income (expense), net:

Other (expense) income:

Interest expense

Total other expense

Loss before income taxes

Provision for income taxes

$ (2,322,862 )

$ (2,050,385 )

Total revenues for the three months ended March

31, 2023, and 2022 were $0 as we continue to develop and enhance our faidr and podcasting Apps to establish new revenue streams.

Net loss per share attributable to common stockholders

Basic and diluted

Weighted average common shares outstanding

Basic and diluted

Total revenues for the three

months ended June 30, 2023, and 2022 were $0 as we continue to develop and enhance our faidr and podcasting Apps to establish new revenue

Direct cost of services

Direct Cost of Services decreased $10,261 or 19.5%

from $52,562 for the three months ended March 31, 2022, compared to $42,301 for the three months ended March 31, 2023.

This decrease was

primarily the result of a reduction in both platform hosting costs and other music services.

We continue to incur direct cost of services

expense related to hosting and other music services related to the faidr and podcasting Apps and expect these costs to increase in the

Direct Cost of Services increased

$1,506 or 3.5% from $43,532 for the three months ended June 30, 2022, compared to $45,038 for the three months ended June 30, 2023.

increase was primarily the result of a slight increase in both platform hosting costs and other music services.

Sales and marketing

Sales and marketing expenses decreased by $131,948

or 37%, from $357,066 for the three months ended March 31, 2022, to $225,118 for the three months ended March 31, 2023, primarily attributed

to reduced staffing, consulting expense, and marketing and promotions spending as we right sized the marketing organization and ramped

down other spending from the Q1 2022 levels that were associated with the national launch of the faidr App.

We expect our sales and marketing

expenses to fluctuate period by period as we release new upgrades and enhancements within our Apps and look to generate revenue through

customer acquisition, retention, and subscription conversion.

Sales and marketing expenses

decreased by $516,259 or 70%, from $740,019 for the three months ended June 30, 2022, to $223,760 for the three months ended June 30,

2023, primarily attributed to reduced staffing, consulting expense, and marketing and promotions costs as compared to Q2 2022 that were

associated with the national launch of the faidr App.

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

new upgrades and enhancements within our Apps and look to generate revenue through customer acquisition, retention, and subscription conversion.

Research and development

Research and development expenses increased by

$61,363 or 41.3%, from $148,763 for the three months ended March 31, 2022, to $210,126 for the three months ended March 31, 2023, primarily

related to reduced staffing, and an associated reduction in the level of capitalized software expenses.

Our research and development staffing

costs were $480,700 and capitalized software expenses were $270,574 for the three months ended March 31, 2023, as compared to staffing

costs of $809,976 and capitalized software expenses of $661,213 for the three months ended March 31, 2022.

We are continually developing

enhancements to both our faidr and podcasting Apps and will continue capitalize software costs to the extent that such development qualifies

for capitalization.

Research and development

expenses increased by $29,112 or 19%, from $151,251 for the three months ended June 30, 2022, to $180,363 for the three months ended June

30, 2023, primarily related to slightly increased staffing cost.

We are continually developing enhancements to both our faidr and podcasting

Apps and will continue capitalize software costs to the extent that such development qualifies for capitalization.

General and administrative

General and administrative expenses decreased

by $90,904 or 8.9%, from $1,017,730 for the three months ended March 31, 2022, compared to $926,826 for the three months ended March 31,

The decrease resulted from reduced stock compensation expense related to cancelled employee stock option grants from Q1 2022.

compensation expense was $357,680 and $385,908 for the three months ended March 31, 2023, and 2022, respectively.

The remainder of the

expense reduction was attributed to the timing and a decrease in the cost of our D&O insurance policy.

General and administrative

expenses increased by $49,955 or less than 1%, from $842,555 for the three months ended June 30, 2022, compared to $892,510 for the three

months ended June 30, 2023.

The increase resulted from an increase in legal fees during Q2 2023 not

directly related to debt and equity issuance costs.

Depreciation and amortization

Depreciation and amortization expenses increased

by $266,908 or 151.5%, from $176,127 for the three months ended March 31, 2022, compared to $443,035 for the three months ended March

The increase is entirely related to the amortization of our faidr and podcasting Apps, which started amortization during Q1

2022 and Q4 2021, respectively.

Other income (expense), net

Total other expense increased by $306,896, from

$1,010 for the three months ended March 31, 2022, to $307,906 for the three months ended March 31, 2023.

The increase is related to interest

expense attributed to the debt and conversion features of the Secured Bridge Note (aka the Prior Note), which included the finance charges

associated with debt issuance costs totaling $250,941 and interest expense of $55,000, respectively.

Liquidity and capital resources

Depreciation and amortization

expenses increased by $171,613 or 63%, from $271,005 for the three months ended June 30, 2022, compared to $442,618 for the three months

ended June 30, 2023.

The increase is entirely related to the increased amortization of our faidr and podcasting Apps.

Other income (expense),

Total other expenses increased

by $536,549, from $2,023 for the three months ended June 30, 2022, to $538,572 for the three months ended June 30, 2023.

is related to actual and imputed interest expense attributed to the Secured Bridge Notes issued during November of 2022 and April 2023

(Refer to Note 4 of the condensed unaudited financial statements for additional information regarding the secured bridge notes).

Comparison of the six

months ended June 30, 2023, and 2022

Six Months Ended

Operating expenses:

Direct cost of services

Sales and marketing

Research and development

General and administrative

Depreciation and amortization

Total operating expenses

Loss from operations

Other (expense) income:

Interest expense

Total other expense

Loss before income taxes

Provision for income taxes

$ (4,478,174 )

$ (3,803,644 )

Net loss per share attributable to common stockholders

Basic and diluted

Weighted average common shares outstanding

Basic and diluted

Total revenues for the six

months ended June 30, 2023, and 2022 were $0 as we continue to develop and enhance our faidr and podcasting Apps to establish new revenue

Direct cost of services

Direct Cost of Services decreased

$8,754 or 9% from $96,093 for the six months ended June 30, 2022, compared to $87,339 for the six months ended June 30, 2023.

This decrease

was primarily the result of a reduction in both platform hosting costs and other music services.

Sales and marketing

Sales and marketing expenses

decreased by $648,207 or 59%, from $1,097,086 for the six months ended June 30, 2022, to $448,879 for the six months ended June 30, 2023,

primarily attributed to reduced staffing, consulting expense, and marketing and promotions costs as compared to the six months ended June

30, 2022 that were associated with the national launch of the faidr App.

We expect our sales and marketing expenses to fluctuate period

by period as we release new upgrades and enhancements within our Apps and look to generate revenue through customer acquisition, retention,

and subscription conversion.

Research and development

expenses increased by $90,474 or 30%, from $300,015 for the six months ended June 30, 2022, to $390,489 for the six months ended June

30, 2023, primarily related to increased staffing, and an associated reduction in the level of capitalized software expenses.

We are continually

developing enhancements to both our faidr and podcasting Apps and will continue capitalize software costs to the extent that such development

qualifies for capitalization.

General and administrative

expenses decreased by $40,947 or 2%, from $1,860,283 for the six months ended June 30, 2022, compared to $1,819,336 for the six months

ended June 30, 2023.

The decrease resulted from reduced stock compensation expense related to forfeited employee stock option grants.

Depreciation and amortization

expenses increased by $438,521 or 98%, from $447,132 for the six months ended June 30, 2022, compared to $885,653 for the six months ended

June 30, 2023.

The increase is entirely related to the increased amortization of our faidr and podcasting Apps, which started amortization

during Q1 2022 and Q4 2021, respectively.

Other income (expense),

Total other expense increased

by $843,443, from $3,035 for the six months ended June 30, 2022, to $846,478 for the six months ended June 30, 2023.

The increase is related

to interest expense attributed to the Secured Bridge Notes issued during November of 2022 and April of 2023, which included the finance

charges associated with debt issuance cost.

(Refer to Note 4 of the condensed unaudited financial statements for additional information

regarding the secured bridge notes)

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 podcasting Apps.

31, 2023, and December 31, 2022, we had cash of $239,040 and $1,661,434, respectively.

We have a deficiency in working capital in the

amount of approximately $2.2 million at March 31, 2023.

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.

Interim Bridge Financing

Additional Secured Bridge Note Financing

As previously disclosed, on November 14, 2022,

the Company entered into a Secured Bridge Note (“Prior Note”) financing with one accredited investor who is a significant

existing stockholder of the Company.

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 podcasting

As of June 30, 2023, and December 31, 2022, we had cash of $3,605,144 and $1,661,434, respectively.

We have a deficit in working

capital in the amount of approximately $0.4 million at June 30, 2023.

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.

Interim Bridge Financings

As previously disclosed, the Company entered into

a Secured Bridge Note (“Prior Note”) financing on November 14, 2022 with one accredited investor who is a significant existing

shareholder of the Company.

The Company received $2,000,000 of gross proceeds in connection with that financing.

On April 17, 2023, the Company entered into an

additional Secured Bridge Note (“New Note”) financing with the same accredited investor.

The Company received $750,000 of

gross proceeds in connection with the New Note financing.

On April 17, 2023, the Company

entered into an additional Secured Bridge Note (“New Note”) financing with the same accredited investor.

The Company received

$750,000 of gross proceeds in connection with the New Note financing.

The principal amount of the New Note is $825,000.

The New Note has a 10% interest rate and matures on July 31, 2023.

The New Note is secured by a lien on substantially all of the Company’s

At maturity, the investor has the option to convert

any original issue discount and accrued but unpaid interest on the New Note into shares of the Company’s common stock.

conversion price is $0.61 per share.

In connection with the New Note financing, the

Company issued to the investor 650,000 common stock warrants with a five-year term and a fixed $0.61 per share exercise price.

The New Note has

a 10% interest rate and matures on July 31, 2023.

The New Note is secured by a lien on substantially all of the Company’s assets.

At maturity, the lender has the option to convert any original issue discount and accrued but unpaid interest on the New Note into shares

of the Company’s common stock.

The fixed conversion price is $0.61 per share.

In connection with the

New Note financing, the Company issued to the investor 650,000 common stock warrants with a five-year term and a fixed $0.61 per share

exercise price.

325,000 of such warrants are exercisable immediately.

The other 325,000 of such warrants would only become exercisable if the maturity date of

the New Note is extended in accordance with the terms of the New Note.

If the New Note remains outstanding as of July

31, 2023, the Company has the option to extend the maturity date of the New Note to November 30, 2023.

Upon such extension, the interest

rate on the New Note will be increased to 20% rather than 10%, and the 325,000 portion of the warrants shall become exercisable.

Amendments to Prior Secured Bridge Note Financing

In connection with the New Note financing, the

parties agreed to make certain amendments to the Prior Note financing.

The parties agreed to cancel the 300,000 common

stock warrants issued November 14, 2022, in connection with the Prior Note financing.

In addition, the Company issued to the investor

The other 325,000 of such warrants would only become exercisable

if the maturity date of the New Note is extended in accordance with the terms of the New Note.

Further, if the New Note remains outstanding

as of July 31, 2023, the Company has the option to extend the maturity date of the New Note to November 30, 2023.

Upon such extension,

the interest rate on the New Note will be increased to 20% from 10%, and the 325,000 portion of the warrants shall become exercisable.

Further, in connection with

the New Note financing, the parties agreed to make certain amendments to the Prior Note financing.

Specifically, the parties agreed to

cancel the 300,000 common stock warrants issued as part of the prior financing and, in lieu of the cancelled warrants, issued the investor

common stock warrants for 600,000 common shares with an exercise price of $0.61 per common share and a five-year term.

300,000 of such

warrants are exercisable immediately.

The other 300,000 of such warrants would only become exercisable if the maturity date of the Prior

Note is extended in accordance with the terms of the Prior Note.

The investor will not be able to receive shares

upon conversion or exercise, unless prior stockholder approval is obtained, if the number of shares to be issued to the investor, when

aggregated with all other shares of common stock then owned by the investor beneficially or deemed beneficially owned by the investor,

would (i) result in the investor owning more than the Beneficial Ownership Limitation (as defined below), as determined in accordance

with Section 13 of the Securities Exchange Act of 1934 or (ii) otherwise constitute a Change of Control within the meaning of Nasdaq Rule

The “Beneficial Ownership Limitation” shall be 19.99% of the number of shares of the common stock outstanding immediately

prior to the proposed issuance of shares of common stock.

Equity Line Sales of Common Stock

As previously disclosed, on November 14, 2022,

the Company entered into a Common Stock Purchase Agreement (the “White Lion Purchase Agreement”) with White Lion Capital,

LLC, a Nevada limited liability company (“White Lion”) for an equity line facility.

On April 17 and April 20, 2023, the Company closed

on two sales of Common Stock under the White Lion Purchase Agreement.

The Company issued an aggregate of 1,962,220 common shares and received

aggregate proceeds of approximately $1.12 million.

The Company believes that with its cash on hand as

of March 31, 2023, of $239,040, combined with the proceeds from the New Note and the White Lion Common Stock sales of $750,000 and $1.12

million, respectively, and by exercising our option to extend the Prior Note to November 30, 2023, we will be able to fund our operations

into the third quarter of fiscal 2023.

The Company has based this estimate, however, on assumptions that may prove to be wrong.

need additional funding to complete the development of our full product line, scale products with a demonstrated market fit and generate

revenue and cash flow.

Management intends to secure such additional funding.

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.

warrants were exercisable immediately, while the other 300,000 warrants became exercisable upon the maturity date extension of the Prior

Note during May of 2023.

The investor will not be

able to receive shares upon conversion or exercise, unless prior shareholder approval is obtained, if the number of shares to be issued

to the investor, when aggregated with all other shares of common stock then owned by the investor beneficially or deemed beneficially

owned by the investor, would (i) result in the investor owning more than the Beneficial Ownership Limitation (as defined below), as determined

in accordance with Section 13 of the Securities Exchange Act of 1934 or (ii) otherwise constitute a Change of Control within the meaning

of Nasdaq Rule 5635(b).

The “Beneficial Ownership Limitation” shall be 19.99% of the number of shares of the common stock

outstanding immediately prior to the proposed issuance of shares of common stock.

Equity Line Sales of Common

As previously disclosed,

on November 14, 2022, the Company entered into a Common Stock Purchase Agreement (the “White Lion Purchase Agreement”) with

White Lion Capital, LLC, a Nevada limited liability company (“White Lion”) for an equity line facility.

On April 17 and April 20,

2023, the Company closed on two sales of Common Stock under the White Lion Purchase Agreement.

The Company issued an aggregate of 1,962,220

common shares and received aggregate proceeds of approximately $1.12 million.

Any proceeds that the

Company receives under the White Lion Purchase Agreement are expected to be used for working capital and general corporate purposes.

the aggregate number of shares of common stock that the Company can sell to White Lion under the White Lion Purchase Agreement (including

the Commitment Shares) may in no case exceed 2,501,700 shares of the common stock (which is equal to approximately 19.99% of the shares

of the common stock outstanding immediately prior to the execution of the White Lion Purchase Agreement) (the “Exchange Cap”),

unless shareholder approval is obtained to issue purchase shares above the Exchange Cap, in which case the Exchange Cap will no longer

The Company had cash on hand of $3,605,144 as of June

The Company will need to raise additional funds to continue funding our technology development and commercialization efforts

beyond such time.

Management intends to secure such funding.

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.

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 three months ended March 31, 2023, and 2022:

Three Months Ended March 31,

Our cash flows from operating

activities have historically been significantly impacted by 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, 2023, and 2022:

Six Months Ended June 30,

Net cash provided by (used in):

6 unchanged sentences

$ (4,004,002 )

$ (1,983,741 )

Operating activities

Cash used in operating activities for the three

months ended March 31, 2023, was $1,073,241, primarily resulting from our net loss of $2,155,312 and change in working capital of $30,415

related to an increase in accounts payable and accrued liabilities, offset by non-cash charges of $1,051,656 related to depreciation and

amortization, share based compensation expense, and finance charges associated with the debt issuance costs of the Secured Bridge Note

(aka the Prior Note).

Cash used in operating activities

for the six months ended June 30, 2023, was ($2,214,729), primarily resulting from our net loss of ($4,478,174) and change in working

capital of $99,309 related to an increase in accounts payable and accrued liabilities, offset by non-cash charges of $2,164,136 related

to depreciation and amortization, share based compensation expense, and finance charges associated with the debt issuance costs of the

Secured Bridge Notes.

Cash used in operating activities for both periods consisted of personnel-related expenditures, marketing and promotion

1 unchanged sentence

Investing activities

Cash flows used in investing activities for the

three months ended March 31, 2023, was $270,574, consisting entirely of capitalization of software development expenses.

Cash flows used in investing activities for the

three months ended March 31, 2022, was $665,023, primarily consisting of capitalization of software development expenses of $661,214.

Cash flows used in investing

activities for the six months ended June 30, 2023, was $529,503, consisting entirely of capitalization of software development expenses.

Cash flows used in investing

activities for the six months ended June 30, 2022, was $1,282,433, primarily consisting of capitalization of software development expenses

Financing activities

Cash flows used in financing activities for the

three months ended March 31, 2023, was $78,580 related to cash paid by us related to the net-share settlement of vested restricted stock

units during the quarter.

Cash flows used in financing activities for the

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

stock units during the quarter.

Cash flows generated

in financing activities for the six months ended June 30, 2023, was $4,687,941 and related primarily to cash proceeds from the issuance

of common shares of $4,016,521 and proceeds from related party debt of $750,000.

Cash flows used in financing

activities for the three months ended June 30, 2022, was $88,722 related to cash paid by the Company related to the net-share settlement

of vested restricted stock units during the quarter.

Funding Requirements

We historically have incurred significant losses

and negative cash flows from operations since our inception and had an accumulated deficit of $73.9 million and $71.7 million as of March

31, 2023, and December 31, 2022, respectively.

As of March 31, 2023, and December 31, 2022, we had cash of $239,040 and $1.66 million,

respectively.

We historically have incurred

significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $76.2 million and $71.7

million as of June 30, 2023, and December 31, 2022, respectively.

As of June 30, 2023, and December 31, 2022, we had cash of $3,605,144

and $1,661,434, respectively.

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

At March 31, 2023, the Company had cash of

As described above (see Note 8 – Subsequent Events), in April 2023 the Company raised $1.87 million that we believe

will fund our operations into the third quarter of fiscal 2023.

The Company has based this estimate, however, on assumptions that may

prove to be wrong.

We will need additional funding to complete the development of our full product line, scale products with a

demonstrated market fit and generate revenue and cash flow.

Management has plans to secure such additional funding.

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 result of the Company’s recurring losses

from operations, and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding

the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to

the Company’s ability to continue as a going concern.

We expect our expenses to increase in connection

with our ongoing activities, particularly as we continue the development, and marketing and promotion of faidr.

In addition, we expect

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

other expenses.

We will need additional

funding to complete the development of our full product line and scale products with a demonstrated market fit.

Management has plans to

secure such additional funding.

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 in connection with

our ongoing activities, particularly as we continue the development, and marketing and promotion of faidr.

In addition, we expect to continue

to incur additional costs associated with operating as a public company, including legal, accounting, investor relations and other expenses.

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

5 unchanged sentences

Contractual Obligations

The following table summarizes our contractual

obligations not on our Balance Sheet as of March 31, 2023, and the effects that such obligations are expected to have on our liquidity

and cash flows in future periods:

The following table summarizes

our contractual obligations not on our Balance Sheet as of June 30, 2023, and the effects that such obligations are expected to have on

our liquidity and cash flows in future periods:

Payments due by period

3 unchanged sentences

Total operating lease commitments

Represents minimum payments due for the lease of office space without consideration of additional renewal options

Represents minimum payments due for the lease of office space.

Represents premium payments due related to D&O insurance policy from February 2023 – February 2024

Off-balance sheet arrangements

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 SEC.

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, 2022.

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

three months ended March 31, 2023.

Company recorded all adjustments necessary for a fair statement of the results

for the interim period and all such adjustments are of a normal recurring nature.

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 SEC.

Critical Accounting 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.

Our critical accounting estimates are 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, 2022 filed with SEC on March 23, 2023.

There were no material changes to our critical accounting

estimates during the six months ended June 30, 2023.

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 companies.

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.

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”

11 unchanged sentences

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.

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 2. Management’s Discussion and Analysis