What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-04-01 compared with 2023-03-23 · 431 added, 313 removed, 180 unchanged (81% of the section changed)

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

You should read the following

discussion and analysis of our financial condition and results of operations in conjunction with the audited financial statements (prepared

in accordance with accounting principles generally accepted in the United States (“U.S.

GAAP”) and related notes included

elsewhere in this Annual Report on Form 10-K (this “Form 10-K”).

The following discussion contains forward-looking statements

that are subject to risks and uncertainties.

See “Special Note Regarding Forward-Looking Statements” for a discussion of the

uncertainties, risks, and assumptions associated with those statements.

Actual results could differ materially from those discussed in

or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Form 10-K,

particularly in the section entitled “Risk Factors.” Unless we state otherwise or the context otherwise requires, the terms

“we,” “us,” “our” and the “Company” refer Auddia Inc.

You should read the

following discussion and analysis of our financial condition and results of operations in conjunction with the audited financial statements

(prepared in accordance with accounting principles generally accepted in the United States (“U.S.

GAAP”) and related notes

included elsewhere in this Annual Report on Form 10-K (this “Form 10-K”).

The following discussion contains forward-looking

statements that are subject to risks and uncertainties.

See “ Special Note Regarding Forward-Looking Statements ” for a discussion

of the uncertainties, risks, and assumptions associated with those statements.

Actual results could differ materially from those discussed

in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Form

10-K, particularly in the section entitled “ Risk Factors .” Unless we state otherwise or the context otherwise requires, the

terms “we,” “us,” “our” and the “Company” refer Auddia Inc.

and its subsidiaries.

presented in tables, other than per share amounts, are in thousands unless otherwise noted.

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

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.

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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.

faidr gives consumers

the opportunity to listen to any AM/FM radio station with commercial breaks replaced with personalized audio 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 – also with ads removed or easily skipped by listeners – as well as 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.

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.

a differentiated podcasting capability with ad-skipping features and also 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 podcasting feature 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.

The combination of AM/FM streaming and podcasting,

with Auddia’s unique, technology-driven differentiators, addresses large and rapidly growing audiences.

The Company has developed

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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.

by consumers who will pay a subscription fee in order to listen to any streaming AM/FM radio station and podcasts, all with commercial

interruptions removed from the listening experience, in addition to the faidrRadio exclusive content offerings.

Advanced features will

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

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 and ad-free podcasts, 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.

No other radio streaming app available

today, including category leaders like TuneIn, iHeart, and Audacy, can compete with faidr’s full product offerings.

The Company launched

an MVP version of faidr through several consumer trials in 2021 to measure consumer interest and engagement with the App.

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

radio stations in the US.

In February 2023, we added faidrRadio, our exclusive content offerings,

Podcasts will be added before the end of 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.

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.

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.

These revenue

channels are expected to be available to Podcasters in 2022.

The faidr mobile App is available

today through the iOS and Android App stores.

In February 2023, we added faidrRadio, our exclusive

content offerings, to the app.

Podcasts (standard) 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 2024, including the deployment of

the Company’s ad-reduction technology.

The Company also developed

a testbed differentiated podcasting capability called Vodacast, which leveraged 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 Vodacast podcast platform was conceptualized to fill a void in the emerging audio media space.

The platform was built

to become 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,

on-demand fees for exclusive content, and through direct donations from their listeners.

Throughout 2023, Auddia has been migrating their

podcasting capabilities into the flagship faidr app with the intention to sunset the Vodacast platform and instead bring the advanced

podcasting functionality that was found on Vodacast into faidr as part of the overall strategy to build a single audio Superapp.

includes Auddia’s new podcast ad-reduction technology.

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

By creating significant differentiation 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 Auddia’s

podcast capabilities, originally presented on their Vodacast differentiated podcasting capability, 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.

will be able to build these interactive feeds using The Podcast Hub, a content management system that was originally developed and trialed

as part of Auddia’s Vodacast platform, which 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 interactive feed for podcasts

has been developed and tested on Vodacast and is expected to be another differentiator added into faidr for podcast listeners later in

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 in 2024, beginning with subscription plans to access ad-reduction

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

As of December 31, 2022, we had an accumulated deficit of $71.7 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:

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 pursuant to our equity line facility.

Since its inception, we have incurred significant operating losses.

Since inception

we have incurred significant operating losses.

As of December 31, 2023, we had an accumulated deficit of $80,517,841.

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;

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faidr promotion will include a combination of a) purchasing ads directly from broadcasters or b) participating broadcasters to promote without purchasing ads, but sharing a portion of subscription proceeds based on listening activity on those stations;

continue to pursue and complete potential acquisitions of other companies;

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

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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.

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

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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.

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.

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As of December 31, 2023,

we had cash of $1.66 million, which will only be sufficient to fund our current operating plans into the second quarter of 2023.

has based these estimates, however, on assumptions that may prove to be wrong.

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.

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 had cash of $804,556.

The Company secured approximately $3.6 million in additional financing in February and March 2024.

had approximately $2.8 million in cash and approximately $4M million in debt due at March 31, 2024 and the Company is actively working

to refinance the existing debt and raise additional capital, but cannot be certain of the outcome and timing.

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.

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 potential targets and seeking to execute one or more agreements in the near term.

These business development transactions would require

additional funding.

Recent Developments

Mergers and Acquisitions Strategy

We are exploring various merger and acquisition

options as part of a broader strategy which aims to scale the business more rapidly;

accelerate user adoption and subscriber growth;

new markets (international);

and open new pathways toward raising capital.

The overall strategy focuses on three areas:

(1) acquiring

retained users of a radio-streaming app, (2) bringing our proprietary ad-free products to that userbase to generate significant subscription

revenue, and (3) bringing together other differentiated features into the larger audio Superapp platform.

RFM Acquisition

On January 26, 2024, we entered into a Purchase

Agreement (the “RFM Purchase Agreement”), pursuant to which we agreed to acquire RadioFM (the “RFM Acquisition”),

which is currently a component of both AppSmartz and RadioFM (partnerships under common control).

The aggregate consideration for the

RFM Acquisition is $13,000,000 (plus $2,000,000 in contingent consideration if certain post-close milestones are reached), in addition

to the assumption of certain liabilities, as may be adjusted pursuant to the terms of the RFM Purchase Agreement.

In March 2024, the parties mutually agreed to

terminate the RFM Purchase Agreement.

Nasdaq Deficiency Notices

The Nasdaq listing rules require listed securities

to maintain a minimum bid price of $1.00 per share.

As previously reported in our Current Report on Form 8-K filed on November 28, 2023,

we received a written notice from Nasdaq indicating that the Company was not in compliance with the $1.00 minimum bid price requirement

set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing.

As a result, the Nasdaq staff determined to delist the Company’s

Common Stock from Nasdaq, unless the Company timely requests an appeal of the Staff’s determination to a Hearings Panel (the “Panel”),

pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series.

Our hearing with the Panel occurred on January 18, 2024.

On November 21, 2023,

we received a written notice from Nasdaq indicating that we are not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires

companies listed on The Nasdaq Capital Market to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing

(the “Stockholders’ Equity Requirement”).

In our quarterly report on Form 10-Q for the period ended September 30, 2023,

we reported stockholders’ equity of $2,415,012, and, as a result, did not satisfy Listing Rule 5550(b)(1).

Nasdaq’s November

written notice had no immediate impact on the listing of our common stock.

Our hearing with the Panel occurred on January 18, 2024

and addressed all outstanding listing compliance matters, including compliance with the Stockholders’ Equity Notice as well as compliance

with the Bid Price Requirement.

On January 30, 2024, the Panel granted the Company’s

request for an exception to Nasdaq’s listing rules until April 22, 2024, to demonstrate compliance with all applicable continued

listing requirements for the Nasdaq Capital Market.

On March 20, 2024, we received a letter from Nasdaq stating we had

regained compliance with the minimum bid requirement.

The Panel reminded us that although we regained compliance with the minimum bid

requirement, we are also required to regain compliance with the equity requirement.

Therefore, this matter will remain open until we demonstrate

compliance with all requirements.

We intend to consider

all options to regain and maintain compliance with all Nasdaq continued listing requirements.

The Company filed an amendment to its Certificate

of Incorporation with the Secretary of State in Delaware which became effective as of 5:00 P.M.

Eastern Time on February 26, 2024.

a result, every twenty-five (25) issued shares of common stock were automatically combined into one share of common stock.

Shares of the Company’s common stock were

assigned a new CUSIP number (05072K 206) and began trading on a split-adjusted basis on February 27, 2024.

The reverse stock split did not change the authorized

number of shares of the Company’s common stock.

No fractional shares were issued and any fractional shares resulting from the reverse

stock split were rounded up to the nearest whole share.

Therefore, stockholders with less than 25 shares received one share of stock.

The reverse stock split applied to the Company’s outstanding

warrants, stock options and restricted stock units.

The number of shares of common stock into which these outstanding securities are convertible

or exercisable were adjusted proportionately as a result of the reverse stock split.

The exercise prices of any outstanding warrants or

stock options were also proportionately adjusted in accordance with the terms of those securities and the Company’s equity incentive

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 into 2024, 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

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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.

We will continue to incur such costs as we develop and enhance our technology related to faidr and the Vodacast platform.

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 podcasting Apps.

Sales and marketing

Our sales and marketing expenses

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

related to our products.

We expected our sales and marketing expenses to increase substantially as we promoted the national commercial

launch of our faidr product on February 15, 2022, and look to generate revenue for our products through customer acquisition and retention.

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.

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.

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 our management of three years.

Costs associated

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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

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Other income and expense

Our other income and

expense during 2021 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.

On November 14, 2022, the Company entered into a secured bridge note (“Note”) financing with one

accredited investor, who is a significant existing shareholder of the Company, for $2.2 million.

The interest expense for 2022 is primarily

attributed to the debt and conversion features of such Note.

The other income and

expense category primarily consists of interest expense attributed to the debt and conversion features of the Notes payable to related

Results of operations

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31, 2023, and 2022

The following table summarizes our results of

Year Ended December 31,

following table summarizes our results of operations:

December 31, 2023

December 31, 2022

Operating expenses:

Direct cost of service

Direct cost of services

Sales and marketing

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Depreciation and amortization

Total operating expense

Total operating expenses

Loss from operations

Other income (expense), net

Other (expense) income:

Interest expense

Interest income

Total other expense

Loss before income taxes

(8,807,4958 )

Provision for income taxes

$ (8,807,495 )

Total revenues for the twelve

months ended December 31, 2022, and 2021 were $0 as we continue to develop our faidr product and the Vodacast platform to establish new

revenue streams.

$ (6,897,446 )

Total revenues for the

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

Direct Cost of

Direct Cost of Services

Direct Cost of Services decreased

by $9,497 or 5%, from $190,187 for the year ended December 31, 2021, to $180,690 for the year ended December 31, 2022.

This decrease was

primarily the result of a reduction in platform hosting costs which were partially offset by an increase in other music services.

to incur direct cost of services expense related to hosting and other music services related to faidr and Vodacast and expect these costs

to increase in the future.

increased by $989 or 0.5% to $181,679 for the year ended December 31, 2023, compared to $180,690 for the year ended December 31, 2022.

This remained relatively flat due to ongoing cost of services to maintain the faidr app.

Sales and marketing

Sales and marketing expenses

increased by $933,040 or 126%, from $740,652 for the year ended December 31, 2021, to $1,673,692 for the year ended December 31, 2022,

primarily attributed to the increased marketing and promotion costs associated with faidr and Vodacast.

decreased by $577,586 or 34.5% to $1,096,106 for the year ended December 31, 2023 compared to $1,673,692 for the year ended December 31,

The decrease in sales and marketing expenses as of December 31, 2023 compared to December 31, 2022 was primarily attributed to reduced

marketing promotion costs 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 $255,358 or 64%, from $399,521 for the year ended December 31, 2021, to $654,879 for the year ended December 31,

2022, primarily related to additional staffing on our development team as we continue to advance the faidr Superapp.

Our research and

development staffing costs were $2,408,737 and our software amortization expenses were $956,144 for the year ended December 31, 2022,

as compared to staffing costs of $1,835,451 and software amortization expenses of $146,737 for the year ended December 31, 2021.

expenses increased by $126,138 or 19.3% to $781,017 for the year ended December 31, 2023 from $654,879 for the year ended December 31,

2022 primarily due to a 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 $848,899 or 21%, from $4,072,419 for the year ended December 31, 2021, compared to $3,223,520 for the year ended

December 31, 2022.

The decrease resulted primarily from reduced stock compensation expense related to cancelled employee stock option

Stock compensation expense was $951,106 and $1,237,480 for the year ended December 31, 2022, and 2021, respectively.

a reduction of approximately $522,000 in public company expenses related to legal and other professional fees associated with the IPO

expenses increased by $353,209 or 11.0% to $3,576,729 for the year ended December 31, 2023 compared to $3,223,520 for the year ended December

The increase resulted primarily from an increase in professional fees, such as, accounting and legal expenses.

Depreciation and

Depreciation and amortization

expenses increased by $849,198 or 85.6% to $1,840,837 for the year ended December 31, 2023 compared to $991,639 for the year ended December

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

Other expense,

Total other expense decreased

by $7,735,608 or 98%, from $7,908,634 for the year ended December 31, 2021, to $173,026 for the year ended December 31, 2022.

was due almost entirely to a finance charge of $8,141,424 to interest expense related to the conversion of outstanding debt into 6.8 million

shares of common stock related to the February 2021 IPO.

This was offset by our extinguishment of debt related to our PPP loans in 2021

in the amount of $536,144, which was approved in full under the loan forgiveness program.

Total other expenses

increased by $1,158,102 to $1,331,128 for the year ended December 31, 2023 compared to $173,026 for the year ended December 31, 2022.

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

Since our inception in

until the corporate conversion in February 2021, we were organized as a Colorado limited liability company for federal and state income

tax purposes and treated as a partnership for U.S.

2012, until the corporate conversion in February 2021, we were organized as a Colorado limited liability company for federal and state

income tax purposes and treated as a partnership for U.S.

income tax purposes.

As such, we were not viewed as a taxpaying entity in any jurisdiction

and do not require a provision for income taxes.

Each member of our company was responsible for the tax liability, if any, related to

its proportionate share of our taxable income.

As such, we were not viewed as a taxpaying entity in any

jurisdiction and do not require a provision for income taxes.

Each member of our company was responsible for the tax liability, if any,

related to its proportionate share of our taxable income.

Effective on February

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Going Concern

Our existing cash of

$1.66 million at December 31, 2022 will only be sufficient to fund our current operating plans into the second quarter of 2023.

has based these estimates, however, on assumptions that may prove to be wrong.

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.

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.

Our existing cash of $804,556 at December

31, 2023 will only be sufficient to fund our current operating plans into February 2024.

The Company secured approximately $3.6 million

in additional financing in February and March 2024.

The Company had approximately $2.8 million in cash and approximately $4.0 million

in debt due at March 31, 2024 and the Company is actively working to refinance the existing debt and raise additional capital, but cannot

be certain of the outcome and timing.

The Company has based these estimates, however, on assumptions that may prove to be wrong.

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

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

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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 app and

Vodacast platform.

As of December 31, 2022, and 2021 we had cash of $1,661,434 and $6,345,291, respectively.

We have a deficiency in working

capital in the amount of approximately $600,000 at December 31, 2022.

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.

$2.0 Million Secured

Bridge Note Financing

On November 14, 2022,

the Company entered into a secured bridge note (“Note”) financing with one accredited investor who is a significant existing

stockholder of the Company.

The Company received $2.0 million of net proceeds in connection with the Note.

The principal amount of the

Note is $2.2 million.

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

The Note is secured by a lien on substantially all

of the Company’s assets.

At maturity, the investor has the option to convert any original issue discount and accrued but unpaid

interest into shares of the Company’s Common stock at a fixed conversion price of $1.23 per share.

In connection with the Note financing,

the Company issued to the investor 300,000 common stock warrants with a five-year term and a fixed $2.10 per share exercise price.

Company has the option to extend the maturity date by six months to November 30, 2023.

In the event of an extension, the interest rate

on the Note will increase to 20% and the Company will issue to the investor an additional 300,000 warrants.

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

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 app and podcasting apps.

As of December

31, 2023, and 2022 we had cash of $804,556 and $1,661,434, respectively.

We have a deficiency in working capital in the amount of approximately

$3.1 million at December 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.

Our existing cash of $804,556 at December 31, 2023 will only be sufficient

to fund our current operating plans into February 2024.

The Company secured approximately $3.6 million in additional financing in February

and March 2024.

The Company had approximately $2.8 million in cash and approximately $4.0 million in debt due at March 31, 2024 and the

Company is actively working to refinance the existing debt and raise additional capital, but cannot be certain of the outcome and timing.

The Company has based these estimates, however, on assumptions that may prove to be wrong.

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

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.

Interim Bridge Financings

As previously disclosed,

on November 14, 2022, we entered into a Secured Bridge Note (“Prior Note”) financing with one of our accredited investors,

a significant existing shareholder of the Company.

We received $2,000,000 of gross proceeds from the Prior Note financing.

On April 17, 2023, we

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

We received $750,000 of gross proceeds from the New Note financing.

The New Note was issued with a principal amount of $825,000,

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

The New Note is secured by a lien on substantially all of our assets.

of the New Note, the accredited investor, or our lender, has the option to convert any original issue discount and accrued but unpaid

interest into shares of our common stock at a fixed conversion price of $15.25 per share.

In connection with the

New Note financing, we issued 26,000 common stock warrants to the accredited investor with a five-year term and a fixed $15.25 per share

exercise price, from which 13,000 of these common stock warrants are exercisable immediately.

The remaining 13,000 common stock warrants

would only become exercisable if the maturity date of the New Note is extended in accordance with the terms of the New Note.

31, 2023, we extended the maturity date of the New Note to November 30, 2023.

Upon the July 31, 2023 extension, the interest rate on the

New Note increased to 20% from 10%, and the remaining portion of the 13,000 common stock warrants became exercisable.

As of November 30,

2023, we extended the maturity date of the Prior Note and New Note to March 31, 2024.

All terms of the Prior Note and New Note, such as

interest rate and exercisable common stock warrants remained the same.

The accredited investor did not exercise the common stock warrants

as of December 31, 2023 or subsequent to December 31, 2023 and as of the date of this filing.

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 12,000 common stock warrants issued as part of the prior financing and, in lieu of the cancelled warrants, issued the investor

common stock warrants for 24,000 common shares with an exercise price of $15.25 per common share and a five-year term.

From the newly

issued 24,000 common stock warrants, 12,000 common stock warrants were exercisable immediately, while the other 12,000 common stock warrants

became exercisable at the time of extension of the maturity date of the Prior Note during May of 2023.

In order for the accredited investor to receive

common shares from a conversion or exercise of the common stock warrants, an approval is required from the shareholders, if the number

of common shares to be issued to the accredited investor, when aggregated with all other shares of common stock beneficially or deemed

beneficially owned by the accredited 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

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

foregoing description of the Note and related security agreement and warrants is qualified in its entirety by reference to the full text

of those agreements.

Equity Line Common Stock

Purchase Agreement

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”).

Pursuant to the White Lion Purchase Agreement, the Company has the right,

but not the obligation to require White Lion to purchase, from time to time, the lesser of (a) $10,000,000 and (b) the amount eligible

under Form S-3 (the “Commitment Amount”) in aggregate gross purchase price of newly issued shares of the Company’s common

Subject to the satisfaction

of certain customary conditions, the Company’s right to sell shares to White Lion will extend until the earlier of (a) December

and (b) the date that all shares are sold under the White Lion Purchase Agreement (the “Commitment Period”).

such term, subject to the terms and conditions of the White Lion Purchase Agreement, the Company may notify White Lion when the Company

exercises its right to sell shares (the effective date of such notice, a “Notice Date”), and shall delivery the applicable

shares of common stock to White Lion along with the purchase notice.

The number of shares sold pursuant to any such notice may not exceed

the lesser of:

(i) 30% of the average of the daily trading volume of the Company’s common stock over the five business days immediately

preceding the date of delivery of a purchase notice;

or (ii) $500,000, divided by the highest closing price of the Common Stock over the

most recent five business days immediately preceding receipt of a purchase notice;

and the maximum dollar amount of any purchase notice

cannot exceed $500,000, subject to White Lion’s wavier of such limitations.

The closing date of each sale of shares of common stock

under the White Lion Purchase Agreement occurs one business day after the end of the Valuation Period (defined below).

The purchase price to

be paid by white Lion for any such shares will equal 97% of the lowest daily volume-weighted average price of common stock during a period

of three consecutive trading days commencing on, and following, the applicable Notice Date (the “Valuation Period”).

notice shall result in White Lion beneficially owning (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934,

as amended, and Rule 13d-3 thereunder) more than 4.9% of the number of shares of the common stock outstanding immediately prior to the

issuance of shares of common stock issuable pursuant to a purchase notice.

The Company may terminate

the White Lion Purchase Agreement at any time in the event of a material breach of the Agreement by White Lion.

In addition, the White

Lion Purchase Agreement automatically terminates on the earlier of (i) the end of the Commitment Period or (ii) the date that, pursuant

to or within the meaning of any bankruptcy law, the Company commences a voluntary case or any person commences a proceeding against the

In consideration for the

commitments of White Lion, as described above, the Company issued to White Lion, 140,186 shares of common stock (the “Commitment

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 stockholder approval

is obtained to issue purchase shares above the Exchange Cap, in which case the Exchange Cap will no longer apply.

Equity Line Sales

of Common Stock

On November 14, 2022,

we 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, 2023 and

April 20, 2023, we closed on two sales of Common Stock under the White Lion Purchase Agreement.

We issued an aggregate of 78,489 common

shares and received aggregate proceeds of approximately $1.12 million.

Replacement Equity

Line with White Lion

6, 2023, we entered into a new Common Stock Purchase Agreement and a related registration rights agreement with White Lion.

the new Common Stock Purchase Agreement, we have the right, but not the obligation to require White Lion to purchase, from time to time

until December 31, 2024, up to $10,000,000 in aggregate gross purchase price of newly issued shares of our common stock, subject to certain

limitations and conditions set forth in the Common Stock Purchase Agreement.

In connection with the new Common Stock Purchase Agreement,

the parties agreed to terminate the previous Common Stock Purchase Agreement with White Lion.

From February 15, 2024 through March 19, 2024, the Company has sold

1,340,000 shares to White Lion for total proceeds of $3,606,508.

We currently have an effective registration statement that registers

for resale by White Lion up to 765,263 shares of common stock that we may issue to White Lion under the Equity Line Purchase Agreement.

After White Lion has acquired shares under the Equity Line Purchase Agreement, it may sell all, some or none of those shares.

White Lion by us pursuant to the Equity Line Purchase Agreement may result in substantial dilution to the interests of other holders of

our common stock.

Cash Flow Analysis

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the statements of cash flows for the years ended December 31, 2023, and 2022:

Cash Flow Analysis

Year Ended December 31,

1 unchanged sentence

Operating activities

$ (4,752,750 )

$ (5,471,545 )

Investing activities

Financing activities

(11,251,608 )

Change in cash, cash equivalents, restricted cash and restricted cash equivalents

$ (4,683,857 )

$ (10,911,234 )

Change in cash

Operating Activities

Cash used in operating activities

for the year ended December 31, 2022, was $4,752,750, primarily resulting from our net loss of $6,897,446, partially offset by non-cash

charges of $2,131,362.

Cash used in operating activities

for the year ended December 31, 2021, of $5,471,545 was primarily the result of our net loss of $13,478,069, and a change in working capital

of $1,002,893 related to paying down our accounts payable balance from the prior year.

These uses were partially offset by non-cash charges

totaling $9,009,417.

Cash used in operating activities

for both years primarily consisted of personnel-related expenditures, marketing and promotion costs, and public company administrative

support costs such as legal and other professional support services.

Cash used in operating

activities for the year ended December 31, 2023, was $4,504,207, primarily resulting from our net loss of $8,807,496 and change in working

capital of $554,983 related to an increase in accounts payable and accrued liabilities, offset by non-cash charges of $3,748,306 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

costs, and public company administrative support costs such as legal and other professional support services.

Cash used in operating

activities for the year ended December 31, 2022, was $4,752,750, primarily resulting from our net loss of $6,897,446, partially offset

by non-cash charges of $2,131,362.

Investing Activities

Cash flows used in investing

activities for the year ended December 31, 2022, and December 31, 2021, consisted primarily of capitalization of software development

activities for the years ended December 31, 2023, and December 31, 2022, consisting primarily of capitalization of software development

expenses of $1,029,157 and $1,927,298, respectively.

Financing Activities

Cash flows provided by financing

activities for the year ended December 31, 2022, of $2,000,000 was associated with the proceeds from the secured bridge note financing

in November 2022.

Cash flows provided by financing

activities for the year ended December 31, 2021, increased by $13,251,608 from the prior year, primarily related to $20,041,811 from the

issuance of common shares related to our February 2021 IPO.

This was partially offset by a $6,000,000 repayment on our line of credit,

and repayment of deferred salary and related party notes payable of $960,849.

Cash flows generated

in financing activities for the year ended December 31, 2023 was $4,678,895 and related primarily to cash proceeds from the issuance of

common shares of $4,016,523 and proceeds from related party debt of $750,000.

Cash flows provided by

financing activities for the year ended December 31, 2022 of $2,000,000 was associated with the proceeds from the secured bridge note

financing in November 2022.

Funding Requirements

1 unchanged sentence

incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $80,543,330

and $64,838,389 as of December 31, 2022, and 2021, respectively.

As of December 31, 2022, and 2021, we had cash of $1,661,434 and $6,345,291,

respectively.

Our existing cash of $1.66 million at December 31, 2022, will only be sufficient to fund our current operating plans into

the second quarter of 2023.

The Company has based these estimates, however, on assumptions that may prove to be wrong.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.

and $71,735,834 as of December 31, 2023 and December 31, 2022, respectively.

As of December 31, 2023, and December 31, 2022, we had cash

of $804,556 and $1,661,434, respectively.

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

secured approximately $3.6 million in additional financing in February and March 2024.

The Company had approximately $2.8 million in cash

and approximately $4.0 million in debt due at March 31, 2024 and the Company is actively working to refinance the existing debt and raise

additional capital, but cannot be certain of the outcome and timing.

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.

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:

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Operating lease commitments:

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

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.

Office lease (1)

Total operating lease commitments

Represents minimum payments due for the lease of the month-to-month office space

of $1,600 for three months and base rent under the operating lease commencing on April 1, 2024.

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

25 unchanged sentences

Software development costs of $1,029,157 and $1,927,298 were capitalized in 2023 and 2022, respectively.

Amortization of expense of capitalized

software development costs were $956,144 and $146,737 for the years ended December 31, 2022, and 2021, respectively and are included in

depreciation and amortization expense.

Amortization expense of capitalized

software development costs were $1,815,447 and $956,144 for the years ended December 31, 2023, and 2022, respectively and are included

in depreciation and amortization expense.

Equity-based compensation

5 unchanged sentences

common shares receive distributions if any in an order of priority in accordance with our limited liability company agreement.

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.

volatility was determined considering comparable companies historical stock prices as a peer group for the fiscal year the grant occurred

and prior fiscal years for a period equal to the expected life of the option.

The risk-free interest rate was the rate available from

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 historical stock prices as a peer group for the fiscal year the

grant occurred and prior fiscal years for a period equal to the expected life of the option.

The risk-free interest rate was the rate

available from the St.

Louis Federal Reserve Bank with a term equal to the expected life of the option.

The expected life of the option was estimated

based on a mid-point method calculation.

The expected life of the option

was estimated based on a mid-point method calculation.

Prior to our IPO in February

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis