What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-07 compared with 2024-08-07 · 323 added, 331 removed, 351 unchanged (65% 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 31,

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, 2023, which was filed with the SEC on April 1, 2024.

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, 2023, 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

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, 2023, 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.

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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 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.

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

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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

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

The combination of AM/FM

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

We have developed our

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.

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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 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 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-reduced 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 audio 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.

The full app launched

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

We are leveraging this

technology platform within our 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 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 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-reduced 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 audio 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.

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.

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

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

We 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

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

Throughout 2023 and early

2024, 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.

This 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)

Throughout 2023 and 2024,

Auddia has been migrating their podcasting capabilities into the flagship faidr app bringing the advanced podcasting functionality from

Vodacast into faidr as part of the overall strategy to build a single audio Superapp.

In July 2024, Auddia sunsetted the Vodacast app.

Podcast functionality continues to be developed in faidr and in August 2024, we released our Forward+ and Chapter Visualization into our

differentiated AI Podcast Player which delivers ad-reduction controls to a listener.

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.

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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.

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.

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to access ad-reduction in podcasts.

The faidr mobile App is available

today through the iOS and Android App stores.

The faidr mobile App

is available today through the iOS and Android App stores.

We have funded our operations

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Since our inception, we have incurred significant operating

As of June 30, 2024, we had an accumulated deficit of $85,054,083.

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:

As of September 30, 2024, we had an accumulated deficit of $87,003,511.

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

As of June 30, 2024, we had

cash and cash equivalents of $1,882,205.

The Company secured approximately $7.1 million in additional financing during 2024.

As of September 30, 2024,

we had cash and cash equivalents of $3,773,827.

We secured approximately $10.4 million in additional financing during 2024.

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

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forced to delay, reduce, or eliminate our technology development and commercialization efforts.

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.

accelerate user acquisition, revenue, and cash flow, we have explored numerous potential acquisition targets of AM/FM streaming aggregators

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

Recent Developments

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

We incurred $370,228 in costs

related to evaluating potential acquisitions during the six months ended June 30, 2024.

We incurred $426,572

in costs related to evaluating potential acquisitions during the nine months ended September 30, 2024.

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.

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

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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.

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

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.

On April 16, 2024, the Company

received a letter from Nasdaq granting an exception to the Exchange’s listing rules until May 20, 2024, to demonstrate compliance

On April 16, 2024, the

Company received a letter from Nasdaq granting an exception to the Exchange’s listing rules until May 20, 2024, to demonstrate compliance

with Listing Rule 5550(b)(1) (the “Equity Rule”.)

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5815(d)(4)(B).

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

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

The Nasdaq listing rules

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

On October 16, 2024, we received a written notice from Nasdaq

indicating that we were not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for

continued listing.

The Bid Price Notice does not result in the immediate delisting of our common stock from the Nasdaq Capital Market.

The Bid Price Notice indicated that we have 180 calendar days (or until April 14, 2025) in which to regain compliance.

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.

on February 26, 2024.

As 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.

exercise prices of any outstanding warrants or stock options were also proportionately adjusted in accordance with the terms of those

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 plans.

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 2024, and it is uncertain whether we will be able to offset the impact of inflationary pressures

in the near term.

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 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 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.

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, 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.

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.

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 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.

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

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Other income and expense

The other income and expense

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

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

Comparison of the three months ended June

30, 2024 and 2023

The following table summarizes our results of operations:

Comparison of the three months ended

September 30, 2024 and 2023

The following table summarizes our results of

Three Months Ended

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

Operating expenses:

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$ (2,116,482 )

Total revenues for the three

months ended June 30, 2024 and 2023 were $0 as we continue to develop and enhance our faidr and podcasting Apps to establish new revenue

Total revenues for the

three months ended September 30, 2024 and 2023 were $0 as we continue to develop and enhance our faidr and podcasting Apps to establish

new revenue streams.

Direct cost of services

Direct cost of services increased

$5,189 or 11.5% from $45,038 for the three months ended June 30, 2023 compared to $50,227 for the three months ended June 30, 2024.

increase was primarily the result of an increase in hosting costs and music service costs.

Direct cost of services

increased $11,446 or 26.3% from $43,470 for the three months ended September 30, 2023 compared to $54,916 for the three months ended September

This increase was primarily the result of an increase in hosting costs and music service costs.

Sales and marketing

Sales and marketing expenses

decreased by $6,892 or (3.1%) from $223,760 for the three months ended June 30, 2023 to $216,868 for the three months ended June 30, 2024,

which 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.

decreased by $33,847 or (10.7%) from $316,297 for the three months ended September 30, 2023 to $282,450 for the three months ended September

30, 2024, which was primarily attributed to reduced marketing promotion costs associated with the national launch of the faidr app as

the quarter was focused on ASO optimization.

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

upgrades and enhancements within our faidr App and look to generate revenue through customer acquisition, retention, and subscription

Research and development

expenses decreased by $20,775 or (11.5%) from $180,363 for the three months ended June 30, 2023 to $159,588 for the three months ended

June 30, 2024, which was primarily due to lower salary, consulting and content creator fees.

expenses increased by $5,952 or 2.6% from $227,133 for the three months ended September 30, 2023 to $233,085 for the three months ended

September 30, 2024, which was primarily due to an increase in capitalized R&D expenses, partially offset by a decrease in content

creator fees.

General and administrative

expenses decreased by $158,185 or (17.7%) from $892,510 for the three months ended June 30, 2023 compared to $734,325 for the three months

ended June 30, 2024.

The decrease was primarily driven by lower stock compensation expense, partially offset by an increase in salary

expense and professional fees to support compliance requirements related to recent equity funding.

expenses increased by $103,943 or 13.4% from $777,496 for the three months ended September 30, 2023 compared to $881,439 for the three

months ended September 30, 2024.

The change was primarily driven by an increase in consulting, legal, and public company fees associated

with the 2024 equity offerings.

Depreciation and amortization

expenses increased by $50,764 or 11.5% from $442,618 for the three months ended June 30, 2023 compared to $493,382 for the three months

ended June 30, 2024.

expenses increased by $30,794 or 6.6% from $465,166 for the three months ended September 30, 2023 compared to $495,960 for the three months

ended September 30, 2024.

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

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Total other expenses

increased by $110,463 or 20.5% from $538,572 for the three months ended June 30, 2023 to $649,035 for the three months ended June 30,

decreased by $285,342 or (99.5%) from $286,920 for the three months ended September 30, 2023 to $1,578 for the three months ended September

Interest expense decreased by $285,342 due to the repayment of notes payable to related party in April 2024.

Interest expense was

offset by $632,388 due to the change in the fair value of the notes payable converted to equity.

Comparison of the six months ended June

30, 2024 and 2023

The following table summarizes our results of operations:

Six Months Ended

June 30, 2024

June 30, 2023

Comparison of the nine months ended

September 30, 2024 and 2023

The following table summarizes our results of

Nine Months Ended

September 30, 2024

September 30, 2023

Operating expenses:

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$ (6,594,656 )

Total revenues for the six

months ended June 30, 2024 and 2023 were $0 as we continue to develop and enhance our faidr and podcasting Apps to establish new revenue

Total revenues for the

nine months ended September 30, 2024 and 2023 were $0 as we continue to develop and enhance our faidr and podcasting Apps to establish

new revenue streams.

Direct cost of services

Direct cost of services increased

$11,061 or 12.7% from $87,339 for the six months ended June 30, 2023 compared to $98,400 for the six months ended June 30, 2024.

increase was primarily the result of an increase in hosting costs and data subscription fees.

Direct cost of services

increased $22,507 or 17.2% from $130,809 for the nine months ended September 30, 2023 compared to $153,316 for the nine months ended September

This increase was primarily the result of an increase in hosting costs and data subscription fees.

Sales and marketing

Sales and marketing expenses

decreased by $85,616 or (19.1%) from 448,879 for the six months ended June 30, 2023 to $363,263 for the six months ended June 30, 2024,

decreased by $119,463 or (15.6%) from $765,176 for the nine months ended September 30, 2023 to $645,713 for the nine months ended September

30, 2024, which 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.

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 decreased by $65,394 or (16.7%) from $390,489 for the six months ended June 30, 2023 to $325,095 for the three months ended June

30, 2024, which was primarily due to lower consulting fees.

expenses decreased by $59,442 or (9.6%) from $617,622 for the nine months ended September 30, 2023 to $558,180 for the nine months ended

September 30, 2024, which was primarily due to lower consulting and content creator fees.

General and administrative

expenses increased by $125,788 or 6.9% from $1,819,336 for the six months ended June 30, 2023 compared to $1,945,124 for the six months

ended June 30, 2024.

The increase was primarily driven by an increase in salary expense and professional fees to support compliance requirements

related to potential acquisitions, partially offset by lower stock compensation expense.

expenses increased by $229,732 or 8.8% from $2,596,831 for the nine months ended September 30, 2023 compared to $2,826,563 for the nine

months ended September 30, 2024.

The increase was primarily driven by an increase in salary expense and professional fees to support compliance

requirements related to potential acquisitions and equity offerings, partially offset by lower stock compensation expense.

Depreciation and amortization

expenses increased by $91,475 or 10.3% from $885,653 for the six months ended June 30, 2023 compared to $977,128 for the six months ended

June 30, 2024.

expenses increased by $122,268 or 9.1% from $1,350,820 for the nine months ended September 30, 2023 compared to $1,473,088 for the nine

months ended September 30, 2024.

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

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Total other expenses

decreased by $44,735 or 5.3% from $846,478 for the six months ended June 30, 2023 to $801,743 for the six months ended June 30, 2024.

decreased by $330,077 or (29.1%) from $1,133,398 for the nine months ended September 30, 2023 to $803,321 for the nine months ended September

Interest expense decreased by $962,465 due to the repayment of notes payable to related party in April 2024.

Interest expense was offset

by $632,388 due to the change in the fair value of the notes payable converted to equity.

Interest expense

was offset by $632,388 due to the change in the fair value of the notes payable converted to equity.

Liquidity and capital

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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, 2024 and December 31, 2023, we had cash and cash equivalents of $1,882,205 and $804,556, respectively.

We have working

capital in the amount of approximately $1.7 million as of June 30, 2024.

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.

As of September 30, 2024 and December 31, 2023, we had cash and cash equivalents of $3,773,827 and $804,556, respectively.

working capital in the amount of approximately $3.4 million as of September 30, 2024.

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.

secured $10.4 million of additional financing in 2024, which enabled us to pay down $2.75 million in connection with the Secured Bridge

Notes and will only be sufficient to fund our current operating plans into the fourth quarter of 2024.

Notes and will only be sufficient to fund our current operating plans into the first quarter of 2025.

The Company has based these estimates,

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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 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 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.

At maturity 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.

As of July 31,

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.

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

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.

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

On April 9, 2024, we entered

into an Amendment and Waiver Agreement with the Investor relating to the Bridge Notes.

We agreed to pay $2.75 million

in cash to the Investor in repayment of the principal of the Bridge Notes (exclusive of the $275,000 of original issue discount on the

Bridge Notes) shortly after the closing of one or more equity financings with total gross proceeds to us of not less than $6,000,000.

On April 26, 2024, we repaid

$2.75 million of principal on our Secured Bridge Notes.

On April 9, 2024, we

entered into an Amendment and Waiver Agreement with the Investor relating to the Bridge Notes.

We agreed to pay $2.75

million in cash to the Investor in repayment of the principal of the Bridge Notes (exclusive of the $275,000 of original issue discount

on the Bridge Notes) shortly after the closing of one or more equity financings with total gross proceeds to us of not less than $6,000,000.

On April 26, 2024, we

repaid $2.75 million of principal on our Secured Bridge Notes.

Effective April 9, 2024,

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Notes, into equity securities.

The Rollover Securities consist

of (i) 463,337 Prefunded Warrants with a per share exercise price of $0.001 per share and (ii) 463,337 Non-Prefunded Warrants with a per

share exercise price equal to $1.967.

As of the date and time of the Amendment and Waiver Agreement, the Nasdaq Minimum Price (as defined

in the applicable Nasdaq listing rules) for our common stock was $1.966.

The number of Prefunded Warrants

was determined by dividing the Rollover Amount by $1.967.

The number of Non-Prefunded Warrants is equal to the number of Prefunded Warrants

The Rollover Securities

consist of (i) 463,337 Prefunded Warrants with a per share exercise price of $0.001 per share and (ii) 463,337 Non-Prefunded Warrants

with a per share exercise price equal to $1.967.

As of the date and time of the Amendment and Waiver Agreement, the Nasdaq Minimum Price

(as defined in the applicable Nasdaq listing rules) for our common stock was $1.966.

The number of Prefunded

Warrants was determined by dividing the Rollover Amount by $1.967.

The number of Non-Prefunded Warrants is equal to the number of Prefunded

Warrants (i.e.

100% warrant coverage).

The Non-Prefunded Warrants have a price adjustment provision which will adjust the exercise price downward

in the event that we issue equity securities in the future at an effective per share price below the then current exercise price.

to assure compliance with applicable Nasdaq rules, the Non-Prefunded Warrants shall not be exercisable for six months following the date

The Non-Prefunded Warrants have a price adjustment provision which will adjust the exercise price

downward in the event that we issue equity securities in the future at an effective per share price below the then current exercise price.

In order to assure compliance with applicable Nasdaq rules, the Non-Prefunded Warrants shall not be exercisable for six months following

the date of issue.

We issued to the Investor

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rules, the Fee Warrants shall not be exercisable for six months following the date of issue.

We agreed to adjust the exercise

price of the Investor’s Existing Warrants from $15.25 (after adjustment for the recent reverse stock) to $1.967 per share.

The Investor will not be

able to receive shares upon exercise of any of the foregoing securities, unless prior stockholder approval is obtained, if (i) the number

of shares to be issued would exceed 20% of our outstanding number of shares at a discount to the applicable Nasdaq Minimum Price or (ii)

the number of shares to be issued would result in in a Change of Control within the meaning of Nasdaq Rule 5635(b).

Equity Line Sales of Common

On November 14, 2022, we

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

We agreed to adjust the

exercise price of the Investor’s Existing Warrants from $15.25 (after adjustment for the recent reverse stock) to $1.967 per share.

The Investor will not

be able to receive shares upon exercise of any of the foregoing securities, unless prior stockholder approval is obtained, if (i) the

number of shares to be issued would exceed 20% of our outstanding number of shares at a discount to the applicable Nasdaq Minimum Price

or (ii) the number of shares to be issued would result in in a Change of Control within the meaning of Nasdaq Rule 5635(b).

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.

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and received aggregate proceeds of approximately $1.12 million.

Replacement Equity Line

with White Lion

Replacement Equity

Line with White Lion

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

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

June 30, 2024, we have sold 1,940,000 shares to White Lion for total net proceeds of $4,852,508.

September 30, 2024, we have sold 4,815,263 shares to White Lion for total proceeds of $8,176,048.

We currently have effective registration

statements that registers for resale by White Lion up to 5,165,263 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.

Sales to 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.

statements that registers for resale by White Lion up to 2,200,090 remaining 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.

Sales to 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 following table summarizes

the statements of cash flows for the six months ended June 30, 2024 and 2023:

Six Months Ended June 30,

the statements of cash flows for the nine months ended September 30, 2024 and 2023:

Nine Months Ended September 30,

Net cash provided by (used in):

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Cash used in operating

activities for the six months ended June 30, 2024 was ($2,633,821), primarily resulting from our net loss of ($4,510,753) and change in

working capital of $45,275, offset by non-cash charges of $1,922,207 related to depreciation and amortization, share based compensation

activities for the nine months ended September 30, 2024 was ($3,803,324), primarily resulting from our net loss of ($6,460,181) and change

in working capital of $112,262, offset by non-cash charges of $2,544,594 related to depreciation and amortization, share based compensation

expense, and the change in fair value of warrants.

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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 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

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

Cash used in operating

activities for the nine months ended September 30, 2023, was ($3,404,954), primarily resulting from our net loss of ($6,594,656) and change

in working capital of $188,517 related to an increase in accounts payable and accrued liabilities, offset by non-cash charges of $3,001,184

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.

Investing activities

Cash flows used in investing

activities for the six months ended June 30, 2024 were ($537,120), consisting of the capitalization of software development expenses and

purchase of computer equipment.

Cash flows used in investing activities for the

six months ended June 30, 2023 were ($529,503), consisting entirely of capitalization of software development expenses.

Cash used in investing

activities for the nine months ended September 30, 2024 was ($799,535), consisting of the capitalization of software development expenses

and purchase of computer equipment.

Cash used in investing activities for the nine months ended September

30, 2023 was ($743,208), consisting entirely of capitalization of software development expenses.

Financing activities

Cash flows generated

in financing activities for the six months ended June 30, 2024 were $4,248,590, which consisted of cash proceeds from the issuance of

common shares of $4,852,508 and cash proceeds from the issuance of preferred shares of $2,238,575.

This was partially offset by the repayment

of the note payable to related party of $2,750,000, payment of offering costs of $72,807 and net settlement of share-based compensation

liability of $19,686.

Cash flows generated in financing

activities for the six months ended June 30, 2023, were $4,687,941 and related primarily to cash proceeds from the issuance of common

Cash provided by financing

activities for the nine months ended September 30, 2024 was $7,572,130, which consisted of cash proceeds from the issuance of common shares

of $8,176,048 and cash proceeds from the issuance of preferred shares of $2,238,575.

This was partially offset by the repayment of the

note payable to related party of $2,750,000, payment of offering costs of $72,807 and net settlement of share-based compensation liability

Cash provided by financing

activities for the nine months ended September 30, 2023 was $4,686,406 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.

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incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $87,003,511

and $80,543,330 as of June 30, 2024 and December 31, 2023, respectively.

As of June 30, 2024 and December 31, 2023, we had cash and cash

equivalents of $1,882,205 and $804,556, respectively.

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

We secured $7.1 million of additional financing in 2024, which enabled us to pay down $2.75 million

in connection with the Secured Bridge Notes and will only be sufficient to fund our current operating plans into the fourth quarter of

and $80,543,330 as of September 30, 2024 and December 31, 2023, respectively.

As of September 30, 2024 and December 31, 2023, we had cash

and cash equivalents of $3,773,827 and $804,556, respectively.

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

We secured $10.4 million of additional financing in 2024, which enabled us to pay down $2.75

million in connection with the Secured Bridge Notes and will only be sufficient to fund our current operating plans into the first quarter

We have 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.

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

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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.

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,

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The following table summarizes

our contractual obligations as of June 30, 2024, and the effects that such obligations are expected to have on our liquidity and cash

flows in future periods:

our contractual obligations as of September 30, 2024, and the effects that such obligations are expected to have on our liquidity and

cash flows in future periods:

Payments due by period

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Represents minimum payments due for the lease of office space.

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.

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 Estimates

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condition and results of operations.

Software Development Costs

The Company accounts for

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

Software Development

The Company accounts

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

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

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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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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