What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-05 compared with 2024-04-01 · 203 added, 268 removed, 343 unchanged (58% of the section changed)

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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

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.

Auddia is a technology

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

for audio and innovative technologies for podcasts.

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

faidr (previously known as the Auddia App).

faidr gives consumers

the opportunity to listen to any AM/FM radio station with 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.

Auddia has also developed

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

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

Auddia (the “Company”) is an AI technology

company headquartered in Boulder, CO that is reinventing how consumers engage with audio through the development of its faidr app, an

industry-first audio platform, which utilizes proprietary AI technology to personalize and customize both radio and podcast listening

faidr allows users to

listen to AM/FM radio stations without unwanted commercial breaks.

The app replaces these ad breaks in real time with streaming music

similar in format and genre to the radio station being played.

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, which includes new artist discovery, curated music stations, and exclusive music podcasts that allow hosts

to play full tracks within the episode.

The combination of AM/FM

streaming and podcasting, with Auddia’s unique, AI technology-driven differentiators, addresses large (radio streamers) and rapidly

growing (podcast listeners) 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.

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

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

Not only does the technology

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

The Company is leveraging

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

The faidr App is intended to be downloaded

by consumers who will pay a subscription fee in order to listen to any streaming AM/FM radio station 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.

For instance, the platform recognizes the difference between a commercial and a song and DJ conversation.

Not only does the technology learn the differences between the various types of audio segments, but it also identifies the beginning and

end of each piece of content.

The faidr app is intended

to be downloaded by consumers who are willing to pay for a customizable, commercial-free listening experience.

Our advanced features allow

subscribers 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, the first to give audio streamers a more personalized middle ground between passive content like

broadcast radio and fully on-demand content like Spotify.

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.

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

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

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.

addition of podcasts, exclusive content, and continued enhancement of its ad-free accuracy and functionality, the faidr app now boast

a strong 30-day retention rate of above 20% and is in the beginning phases of rolling out subscription products to users.

The faidr mobile App

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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.

obtained debt financing through a related party during November 2022 and April 2023, which was subsequently repaid in April 2024.

we sold common shares during 2023 and 2024 pursuant to our equity line facility.

Since our inception, we have incurred significant operating

As of December 31, 2024, we had an accumulated deficit of $89,428,436.

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:

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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we had cash of $2,706,319.

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.

We secured approximately $10.9 million in additional financing in 2024 and paid off $2.75 million of Secured

Bridge Notes.

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

Management has plans to secure such additional funding.

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.

Recent Developments

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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.

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.

During 2022, 2023 and 2024, the Company received

notices from Nasdaq indicating that the Company was not in compliance with (i) Nasdaq Listing Rule 5550(b)(1), which requires companies

listed on The Nasdaq Stock Market to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing or (ii) Nasdaq

Listing Rule 5550(a)(2) which requires companies listed on The Nasdaq Stock Market to maintain a minimum of a $1.00 bid price for continued

On May 24, 2024, we received

a letter from Nasdaq indicating that we had regained compliance with the equity requirement in Listing rule 5550(b) (1) (the Equity Rule”.)

We will be subject to a Mandatory Panel Monitor for a period of one year from the date of the letter in accordance with application of

Listing Rule 5815(d)(4)(B).

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.

If at any time during this 180 calendar day period the bid price of our common stock closes at or above $1.00 per

share for a minimum of ten consecutive business days, the Nasdaq staff will provide us with a written confirmation of compliance and the

matter will be closed.

Reverse Share Split

The Company filed an amendment to its Certificate

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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

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

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31, 2024 and 2023

following table summarizes our results of operations:

December 31, 2023

December 31, 2022

The following table summarizes our results

of operations:

Year Ended December 31,

Operating expenses:

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Loss from operations

Other (expense) income:

Other expense:

Interest expense

Interest income

Change in fair value of warrants

Total other expense

Loss before income taxes

(8,807,4958 )

Provision for income taxes

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The decrease in sales and marketing expenses as of December 31, 2024 compared to December 31, 2023 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.

marketing promotion costs.

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

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

Depreciation and

Depreciation and amortization

expenses increased by $146,764 or 8.0% to $1,987,601 for the year ended December 31, 2024 compared to $1,840,837 for the year ended December

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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

decreased by $526,228 or (39.5%) from $1,331,128 for the year ended December 31, 2023 to $804,900 for the year ended December 31, 2024.

Interest expense decreased by $172,512 due to the repayment of notes payable to related party in April 2024.

Since our inception in

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Going Concern

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.

Our existing cash was $2,706,319 at December 31,

We secured approximately $10.9 million in additional financing in 2024 and $0.6 million year-to-date through March 5,

2025, which enabled us to pay down $2.75 million in connection with the Secured Bridge Notes in 2024 and will only be sufficient

to fund our current operating plans into the second quarter of 2025.

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.

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 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.

We have incurred

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

faidr and podcasting Apps.

As of December 31, 2024, we had cash and cash equivalents of $2,706,319.

We have working capital in the

amount of approximately $2.2 million as of December 31, 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.

We secured $10.9 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 second quarter of 2025.

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.

Interim Bridge Financings

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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

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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

of Control within the meaning of Nasdaq Rule 5635(b).

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

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

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 of Control within the meaning of Nasdaq Rule 5635(b).

The “Beneficial Ownership Limitation” shall be 19.99% of the

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

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,

the Investor converted $911,384, which is equal to the (i) unpaid accrued interest on the Bridge Notes plus (ii) the OID on the Bridge

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 an initial per share exercise price equal to $1.967.

The per share exercise price has been adjusted to $0.4930.

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.

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

50,000 Fee Warrants with a five-year term as a loan extension fee.

The exercise price of these additional Fee Warrants was initially $1.967.

The Fee 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.

The per share exercise price has been adjusted to

In order to assure compliance with applicable Nasdaq 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,

and further to $0.4930.

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

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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

Through December 31, 2024, we have sold

4,815,263 shares to White Lion for total proceeds of $8,176,048.

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.

This Common Stock Purchase Agreement expired on December 31, 2024.

25, 2024, we entered into a new equity line Common Stock Purchase Agreement and a related registration rights agreement with White Lion.

Pursuant to 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, 2025, 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.

have effective registration statements that registers for resale by White Lion up to 20,000,000 shares of common stock that we may issue

to White Lion under the New Equity Line Purchase Agreement.

As of March 5, no

shares have been issued under this 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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Cash used in operating

activities for the year ended December 31, 2024 was $5,093,143, primarily resulting from our net loss of $8,722,039, offset by $3,440,638

of non-cash charges related to depreciation and amortization, share-based compensation expense, change in fair value of warrants, and

amortization of ROU asset.

The net loss was further impacted by a change in working capital of $188,258.

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, 2023, was $4,504,207, primarily resulting from our net loss of $8,807,496 and change in working

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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 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.

activities for the years ended December 31, 2024 and December 31, 2023 consisted primarily of capitalization of software development expenses

of $992,147 and $1,029,157, respectively.

Financing Activities

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in financing activities for the year ended December 31, 2024 was $7,999,251 and related primarily to cash proceeds from the issuance of

preferred and common shares of $10,959,602 and repayment of notes payable of $2,750,000.

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

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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.

$10.9 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 second quarter of 2025.

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.

We expect our expenses to increase in connection

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The following table summarizes

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

on our liquidity and cash flows in future periods:

our contractual obligations included on our Balance Sheet as of December 31, 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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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.

Represents minimum payments due for the lease of office space.

Off-balance sheet

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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

Critical Accounting Estimates

Our financial statements

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

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

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

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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.

Prior to our IPO in February

2021, we were a private company with no active public market for our common equity.

Therefore, we have periodically determined the overall

value of our company and the estimated per share fair value of our common equity at their various dates using contemporaneous valuations

performed with the assistance of a third-party specialist and in accordance with the guidance outlined in the American Institute of CPA’s

Practice Aid.

risk-free interest rate was the rate available 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.

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