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Item 7. Management’s Discussion and Analysis

2024-03-27 compared with 2023-03-30 · 426 added, 450 removed, 117 unchanged (88% of the section changed)

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Annual Report.

Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial

Condition and Results of Operations” to “we,” “our,” “Rumble” and “the Company”

refer to the business and operations of Rumble Canada Inc.

and its consolidated subsidiaries prior to the Business Combination (as defined

below) and to Rumble Inc.

and its consolidated subsidiaries following the consummation of the Business Combination.

This discussion contains

forward-looking statements that involve risks and uncertainties.

Our actual results could differ materially from such forward-looking

Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those

discussed in the sections titled “1A.

Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements”

included elsewhere in this Annual Report and those discussed in our other filings with the SEC.

Additionally, our historical results are

not necessarily indicative of the results that may be expected in any future period.

Amounts are presented in U.S.

This discussion contains forward-looking statements that involve risks and uncertainties.

Our actual results could differ

materially from such forward-looking statements.

Factors that could cause or contribute to those differences include, but are not limited

to, those identified below and those discussed in the sections titled “1A.

Risk Factors” and “Cautionary Note Regarding

Forward-Looking Statements” included elsewhere in this Annual Report and those discussed in our other filings with the SEC.

Additionally,

our historical results are not necessarily indicative of the results that may be expected in any future period.

Amounts are presented

We are a high growth, video

sharing platform designed to help content creators manage, distribute, and monetize their content by connecting them with brands, publishers,

and directly to their subscribers and followers.

Our registered office is 444 Gulf of Mexico Drive, Longboat Key, Florida, 34228.

shares of Class A common stock and warrants are traded on The Nasdaq Global Market (“Nasdaq”) under the symbols “RUM”

and “RUMBW”, respectively.

sharing and cloud services provider platform designed to help content creators manage, distribute, and monetize their content by connecting

them with brands, publishers, and directly to their subscribers and followers.

Our registered office is 444 Gulf of Mexico Drive, Longboat

Key, Florida, 34228.

Our shares of Class A common stock and warrants are traded on The Nasdaq Global Market (“Nasdaq”) under

the symbols “RUM” and “RUMBW”, respectively.

Significant Events and Transactions

As previously announced, on

December 1, 2021, CF Acquisition Corp.

VI, a Delaware corporation (“CFVI”), and Rumble Inc., a corporation formed under the

laws of the Province of Ontario, Canada (“Legacy Rumble”), entered into a business combination agreement (the “Business

Combination”).

On September 16, 2022, CFVI and Legacy Rumble consummated the business combination contemplated by the business combination

In connection with the consummation of the Business Combination, CFVI changed its name

from CF Acquisition Corp.

On December 1, 2021, CF Acquisition

VI, a Delaware corporation (“CFVI”), and Rumble Inc., a corporation formed under the laws of the Province of Ontario,

Canada (“Legacy Rumble”), entered into a business combination agreement (the “Business Combination”).

16, 2022, CFVI and Legacy Rumble consummated the business combination contemplated by the business combination agreement.

connection with the consummation of the Business Combination, CFVI changed its name from CF Acquisition Corp.

VI to Rumble Inc.

and Legacy Rumble changed its name from Rumble Inc.

Legacy Rumble changed its name from Rumble Inc.

to Rumble Canada Inc.

Refer to Note 2, Significant

Events and Transactions, to the consolidated financial statements.

Refer to Note 12, Qualifying Transaction, to the Company’s

annual consolidated financial statements for the year ended December 31, 2023.

On May 15, 2023, the Company

acquired 100% of the outstanding equity of Callin Corp.

(“Callin”), a podcasting and live streaming platform.

Refer to Note 3,

Acquisitions, to our consolidated financial statements included elsewhere in this Annual Report.

On October 3, 2023, the Company

acquired 100% of the outstanding equity of North River Project Inc.

(“North River”), an entity that holds intellectual property.

Refer to Note 3, Acquisitions, to our consolidated financial statements included elsewhere in this Annual Report.

We generate revenues primarily

from advertising and licensing fees.

The revenues are generated by delivering content either via our own or third-party platforms.

with the past two years, our focus remains on growing users and usage consumption — and not maximizing revenue —

while continuing to experiment with various levers to grow revenue.

from advertising fees, other services and cloud.

Advertising fees are generated

by delivering both display advertisements and cost-per-message-read advertisements.

Display advertisements are placed on Rumble and third-party

publisher websites or mobile applications.

Customers pay for advertisements either directly or through their relationships with advertising

agencies or resellers, based on the number of impressions delivered or the number of actions such as clicks, or purchases taken, by our

The Company recognizes revenue from display advertisements when a user engages with the advertisement, such as an impression, click,

For cost-per-message-read advertising, customers pay to have their products or services promoted by a content creator and

advertising revenue is recognized when the performance obligation is fulfilled, usually when the message is read.

Licensing fees are charged

on a per video or on a flat-fee per month basis.

Licensing fee revenue is recognized as the related performance obligations are satisfied

in line with the nature of the intellectual property being licensed.

Other revenues include fees

earned from tipping features within the Company’s platform as well as certain cloud, subscription, platform hosting, and professional

Fees from tipping features are recognized at a point in time when a user tips on the platform.

Both cloud and subscription services

are recognized over time for the duration of the contract.

Revenues related to platform hosting are recognized over time as the Company

provides access to the platform.

Professional service revenues have stand-alone functionality to the customer and are recognized at a

point in time as services are provided or earned.

by delivering digital video and display advertisements as well as cost-per-message-read advertisements.

Digital video and display advertisements

are placed on Rumble and third-party publisher websites or mobile applications.

Customers pay for advertisements either directly or through

relationships with advertising agencies or resellers, based on the number of impressions delivered or the number of actions such as clicks,

or purchases taken, by our users.

Other services include:

fees earned primarily from consumer product offerings such as Locals and badges;

revenues generated from content that is licensed by third-parties;

pay-per-view;

fees from tipping and platform hosting fees.

Cloud includes consumption-based fees, subscriptions for infrastructure and

professional services.

Refer to Note 2, Summary

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Expenses primarily include

costs of services, general and administrative, research and development, sales and marketing, finance costs, share-based compensation,

foreign exchange gain or loss, and amortization and depreciation.

The most significant component of our expenses on an ongoing basis are

programming and content, service provider costs, and staffing-related costs.

cost of services, general and administrative, research and development, sales and marketing, acquisition-related transaction costs, amortization

and depreciation, and changes in fair value of contingent consideration.

The most significant component of our expenses on an ongoing

basis are programming and content, service provider costs, and staffing-related costs.

We expect to continue to invest

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Cost of Services

Cost of services consists of

costs related to obtaining, supporting and hosting the Company’s product offerings.

Cost of services consists

of costs related to obtaining, supporting and hosting the Company’s product offerings.

These costs primarily include:

Programming and content costs related to payments to content providers from whom video and other content are licensed.

These costs are typically paid to these providers based on revenues generated.

In certain circumstances, we incur additional costs related to incentivizing top content creators to promote and join our platform.

costs of services include third-party service provider costs such as data center and networking, staffing costs directly related to professional

services fees, and costs paid to publishers.

General and Administrative Expenses

● Programming and content costs

related to compensation to content providers, including share-based compensation, from whom video and other content are licensed.

costs are paid to these providers based on revenues generated, or in fixed amounts.

In certain circumstances, we incur additional costs

related to incentivizing top content creators to promote and join our platform;

● Other cost of services such

as third-party service provider costs, including data center and networking, and costs paid to publishers.

General and Administrative Expenses

consist primarily of salaries, employee benefits and bonuses related to our executives, finance team, and administrative employees.

also includes legal and professional fees, business insurance costs, operating lease costs and other costs.

As a public company, we expect

to continue to incur additional audit, tax, accounting, legal and other costs related to compliance with applicable securities and other

regulations, as well as additional insurance, investor relations and other costs.

General and administrative

expenses consist primarily of payroll and related expenses, which include bonuses and share-based compensation for our executives and

certain other employees.

General and administrative expenses also include legal and professional fees, business insurance costs, operating

lease costs and other costs.

As a public company, we expect to continue to incur material costs related to compliance with applicable

laws and regulations, including audit and accounting fees, legal, insurance, investor relations and other costs.

Research and Development Expenses

Research and development expenses

consist primarily of salaries, employee benefits, employee bonuses and consultant fees related to our development activities to originate,

consist primarily of payroll and related expenses, which include bonuses and share-based compensation for our employees on our engineering

and development teams.

Research and development expenses also include consultant fees related to our development activities to originate,

develop and enhance our platforms.

Sales and Marketing Expenses

Sales and marketing expenses consist

primarily of costs related to salaries, employee benefits, employee bonuses, consultant fees, direct marketing costs related to the promotion

of our platforms/solutions.

Sales and marketing expenses are expected to increase over time as we promote our platform, increase marketing

activities, grow domestic and international operations, and continues to build brand awareness.

Sales and marketing expenses

consist primarily of payroll and related expenses, which include bonuses and share-based compensation for our employees associated with

our sales and marketing functions.

Sales and marketing expenses also include consultant fees and direct marketing costs related to the

promotion of our platforms and solutions.

We expect our sales and marketing expenses to increase over time as we promote our platform

and brand, increase marketing activities, and grow domestic and international operations.

Acquisition-related Transaction Costs

Acquisition-related transaction

costs consist of transaction expenses related to the Business Combination and other acquisitions.

Amortization and Depreciation

Amortization and depreciation

represent the recognition of costs of assets used in operations, including property and equipment and intangible assets, over their estimated

service lives.

Change in Fair Value of Contingent Consideration

Certain contingent consideration

associated with the Callin acquisition does not meet the criteria for equity classification, and must be recorded as a liability in accordance

with guidance contained in ASC 815-40, Derivatives and Hedging Contracts in Entity’s Own Equity (“ASC 815-40”).

Because the contingent consideration meets the definition of a liability under ASC 815, Derivatives and Hedging (“ASC 815”),

it is measured at fair value at inception and at each reporting date in accordance with the guidance in ASC 820, Fair Value Measurement

(“ASC 820”), with any subsequent changes in fair value recognized in the consolidated statement of operations in the applicable

period of change.

Non-Operating Income and Other Items

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treasury bills and term deposits.

Finance Costs

Finance costs consist of transaction

expenses related to the Business Combination and other financing rounds.

Other Income (Expense)

Other income (expense) consists of miscellaneous income earned outside

of normal company revenue as well as foreign exchange gains and losses relates to gains and losses on transactions denominated in currencies

other than the U.S.

Change in Fair Value of Warrant Liability

We account for our outstanding

warrants in accordance with guidance in ASC 815-40, Derivatives and Hedging Contracts in Entity’s Own Equity (“ASC

815-40”), under which the warrants issued in connection with the public offerings, private placements, and forward purchase contract

(“FPA”) entered into with CFAC Holdings VI, LLC (such contract, the “FPA”) do not meet the criteria for equity

classification, and must be recorded as liabilities.

As these warrants meet the definition of a liability under ASC 815, Derivatives

and Hedging (“ASC 815”), they are measured at fair value at inception and each reporting date in accordance with the guidance

in ASC 820, Fair Value Measurement (“ASC 820”), with any subsequent changes in fair value recognized in the statement

of operations in the period of change.

Change in Fair Value of Option Liability

Change in the fair value

of option liability relates to the May 14, 2021, issuance of Class A preferred shares of Legacy Rumble, which included the right to exercise

options for an additional 172,070 Class A common shares of Legacy Rumble subject to certain conditions.

The grant date fair value was

determined based on the maximum discount available to these Class A preferred shareholders and the probability of the conditions attached

to this option being met.

The change in fair value of this option liability is on account of the re-assessment of the probability of

the conditions attached to this option at each reporting period.

The option liability associated with these Class A preferred shares

of Legacy Rumble was exercised on November 24, 2021.

warrants in accordance with ASC 815-40, under which the warrants issued in connection with Business Combination do not meet the criteria

for equity classification, and must be recorded as liabilities.

As these warrants meet the definition of a liability under ASC 815, they

are measured at fair value at inception and at each reporting date in accordance with the guidance in ASC 820, with any subsequent changes

in fair value recognized in the consolidated statement of operations in the applicable period of change.

Income and Deferred Tax Recovery (Expense)

Income and deferred tax recovery

(expense) consists of the estimated federal, state, and foreign income taxes incurred in the U.S.

and other jurisdictions in which we

Key Business Metrics

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Monthly Active Users (“MAUs”)

We use MAUs as a measure of audience engagement to help us understand

the volume of users engaged with our content on a monthly basis.

MAUs represent the total web and app users of Rumble for each month,

which allows us to measure our total user base calculated from data provided by third-party analytics providers using company-set parameters.

The analytics systems and the resulting data have not been independently verified.

There is a potential for minor overlap in the resulting

data due to users who access Rumble’s content from both the web and the app in a given measurement period;

however, given that we

believe this minor overlap to be immaterial, we do not separately track or report “unique users” as distinct from MAUs.

do not include embedded video, certain connected TV users, or users of the Locals platform.

Like many other major social media companies,

we rely on paid advertising in order to attract users to our platform;

however, we cannot be certain that all or substantially all activity

that results from such advertising is genuine.

Spam activity, including inauthentic and fraudulent user activity, if undetected, may contribute,

from time to time, to some amount of overstatement of our performance indicators, including reporting of MAUs by our third-party analytics

We use MAUs as a measure of

audience engagement to help us understand the volume of users engaged with our content on a monthly basis.

MAUs represent the total web,

mobile app, and connected TV users of Rumble for each month, which allows us to measure our total user base calculated from data provided

by Google, a third-party analytics provider.

Google defines “active users” as the “[n]umber of distinct users who visited

your website or application.” 1 We have used the Google

analytics systems since we first began publicly reporting MAU statistics, and the resulting data have not been independently verified.

As of July 1, 2023, Universal

Analytics (“UA”), Google’s analytics platform on which we historically relied for calculating MAUs using company-set

parameters, was phased out by Google and ceased processing data.

At that time, Google Analytics 4 (“GA4”) succeeded UA as

Google’s next-generation analytics platform, which has been used to determine MAUs since the third quarter of 2023 and which we

expect to continue to use to determine MAUs in future periods.

Although Google has disclosed certain information regarding the transition

to GA4, 2 Google does not currently make available sufficient

information relating to its new GA4 algorithm for us to determine the full effect of the switch from UA to GA4 on our reported MAUs.

Google has publicly stated that metrics in UA “may be more or less similar” to metrics in GA4, and that “[i]t is not

unusual for there to be apparent discrepancies” between the two systems, 3

we are unable to determine whether the transition from UA to GA4 has had a positive or negative effect, or the magnitude of such effect,

if any, on our reported MAUs.

It is therefore possible that MAUs that we reported based on the UA methodology (“MAUs (UA)”)

for periods prior to July 1, 2023, cannot be meaningfully compared to MAUs based on the GA4 methodology (“MAUs (GA4)”) in

subsequent periods.

MAUs (GA4) represent the total

web, mobile app, and connected TV users of Rumble for each month, 4

which allows us to measure our total user base calculated from data provided by Google.

Connected TV users were not counted within MAUs within MAUs (UA) for periods prior to July 1, 2023, and we believe the number of such

users was immaterial in those prior periods.

We also believe that fewer than 1 million MAUs in the current period are from connected TV,

making them similarly immaterial.

Google’s parameters for measuring “active users” appear to exclude many, but not all,

users who access content on Rumble through “embedded” videos on domains other than rumble.com, and we are unable to determine

the exact number of users who access “embedded” content within our total number of MAUs.

In addition, MAUs (GA4) may rely

on statistical sampling and may be based on estimates of data that Google is missing “due to factors such as cookie consent.” 6

1 Google, “[UA → GA4]

Comparing Metrics:

Google Analytics 4 vs.

Universal Analytics, https://support.google.com/analytics/answer/11986666#zippy=%2Cin-this-article

(last accessed Mar.

15, 2024) [hereinafter:

“Google, Comparing Metrics.”] (providing the technical criteria Google uses to

calculate active users).

4 During the measurement period, Rumble was available on the

following connected TV systems:

Roku, Android TV, Amazon Fire, LG, and Samsung TVs.

5 Google provides additional information on its definition

of an “active user,” see Google, Comparing Metrics.

6 According to the GA4 dashboard, “[a]s of August 26,

2023, Analytics is estimating data that’s missing due to factors such as cookie consent.”

As with our earlier MAU reporting,

there is a potential for minor overlap in the resulting data due to users who access Rumble’s content through the web, our mobile

apps, and connected TVs in a given measurement period;

however, given that we believe this minor overlap to be immaterial, we do not separately

track or report “unique users” as distinct from MAUs.

Our reported MAUs do not include users of Locals.

We also do not separately

report the number of users who register for accounts in any given period, which is different from MAUs.

Like many other major social

media companies, we rely on significant paid advertising in order to attract users to our platform;

however, we cannot be certain that

all or substantially all activity that results from such advertising is genuine.

Spam activity, including inauthentic and fraudulent user

activity, if undetected, may contribute to some amount of overstatement of our performance indicators, including reporting of MAUs by

We continually seek to improve our ability to estimate the total number of spam-generated users, and we eliminate material activity

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We will not, however, succeed in identifying and removing all

MAUs were 80 million on average

in the fourth quarter of 2022, an increase of 142% from the fourth quarter of 2021.

This growth is attributable to:

our growing pool of

content, content creators and formats;

our value proposition as competing platforms continue to censor and cancel the voices of creators;

and increased activity due to U.S.

mid-term elections.

Minutes Watched Per Month (“MWPM”)

We use MWPM as a measure of

audience engagement to help us understand the volume of users engaged with our content on a monthly basis and the intensity of users’

engagement with the platform.

MWPM represents the monthly average of minutes watched per user within a quarterly period, which helps us

measure user engagement.

MWPM is calculated by converting actual bandwidth consumption into minutes watched, using our management’s

best estimate of video resolution quality mix and various encoding parameters.

Bandwidth consumption includes video traffic across the

entire Rumble platform (website, apps, embedded video, connected TV, etc.), as well as what our management believes is a nominal amount

of non-video traffic.

Starting in the second quarter of 2022 we began transitioning a portion of Locals’ bandwidth consumption to

our infrastructure.

While this currently represents an immaterial amount of consumption, we expect this to grow in the coming quarters.

MWPM was 11.1 billion on average

in the fourth quarter of 2022, an increase of 31% from the fourth quarter of 2021.

This growth is attributable to:

our growing pool of

content creators;

our value proposition as competing platforms continue to censor and cancel the voices of creators;

and a number of new

platform features.

MAUs (GA4) were 67 million

on average in the fourth quarter of 2023, an increase of 16% from the third quarter of 2023.

We believe the growth from the third quarter

of 2023 is attributable to increased interest in geopolitical events, high profile seasonal sporting events and increased interest in

certain Rumble content creators.

Estimated Minutes Watched Per Month (“MWPM”)

We use estimated MWPM as a

measure of audience engagement to help us understand the volume of users engaged with our content on a monthly basis and the intensity

of users’ engagement with the platform.

Estimated MWPM represents the monthly average of minutes watched per user within a quarterly

period, which helps us measure user engagement.

Estimated MWPM is calculated by converting actual bandwidth consumption into minutes watched,

using our management’s best estimate of video resolution quality mix and various encoding parameters.

We continually seek to improve

our best estimates based on our observations of creator and user behavior on the Rumble platform, which changes based on the introduction

of new product features, including livestreaming.

We are currently limited, however, in our ability to collect data from certain aspects

of our systems.

These limits may result in errors that are difficult to quantify, especially as the proportion of livestreaming on the

Rumble platform increases over time, and as we improve the quality of various video formats by increasing bit rates.

Bandwidth consumption includes

video traffic across the entire Rumble platform (website, apps, embedded video, connected TV, RAC, etc.).

In addition, our management

believes bandwidth consumption includes a nominal amount of non-video traffic on the Rumble and Locals platforms and a potentially significant

amount of consumption of Rumble videos outside of the Rumble video player and Rumble apps, due in part to intentional user circumvention

of the Rumble platform that, despite our continuous efforts, we are unable to eliminate.

Combined, the bandwidth consumption for this

traffic may be material and difficult to quantify, resulting in an inability for us to monetize a potentially significant portion of our

estimated MWPM.

Estimated MWPM was 10.5 billion

on average in the fourth quarter of 2023, a decrease of 5% from the fourth quarter of 2022 and a decrease of 2% from the third quarter

We believe the decline from the fourth quarter of 2022 and third quarter of 2023 is due to a portion of our bandwidth consumption

moving from third-party service providers’ content delivery networks (“CDNs”) to our own proprietary CDN beginning in

the second half of the third quarter of 2023.

Based on preliminary testing, our own CDN indicates less bandwidth consumption than one

of our service providers’ CDNs for comparable user activity.

Because we calculate estimated MWPM by converting bandwidth consumption

into minutes watched, consumption measured through our own CDN yields a lower estimated MWPM than when measured through that service provider’s

Hours of Uploaded Video Per Day

We use the amount of hours

of uploaded video per day as a measure of content creation to help us understand the volume of content being created and uploaded

to us on a daily basis.

Hours of uploaded video per

day were 10,373 on average in the fourth quarter 2022, an increase of 216% from the fourth quarter of 2021.

This growth is attributable

our growing pool of content creators;

our value proposition as competing platforms continue to censor and cancel the voices of creators;

and a number of new platform features.

We regularly review, have adjusted in the past,

and may in the future adjust our processes for calculating our key business metrics to improve their accuracy, including through the application

of new data or technologies or product changes that may allow us to identify previously undetected spam activity.

As a result of such

adjustments, our key business metrics may not be comparable period-over-period.

We use the amount of hours of uploaded video per

day as a measure of content creation to help us understand the volume of content being created and uploaded to us on a daily basis.

of uploaded video per day were 12,520 on average in the fourth quarter of 2023, representing an increase of 21% from the fourth quarter

of 2022 and a 20% decrease from the third quarter of 2023.

We believe the growth from the fourth quarter of 2022 is due to our expanding

pool of content creators and increased user watch time as a result of livestreaming and continued improvement of user experience.

that the decrease from the third quarter of 2023 is related to YouTube’s decision in the fourth quarter of 2023, to disable the

ability of its users to utilize our tool that automatically imports videos from creators’ YouTube channels to their Rumble channels,

commonly known as the “YouTube sync” tool.

We provided additional information about this issue in a current report on Form

8-K, filed with the SEC on January 16, 2024.

We regularly review, have

adjusted in the past, and may in the future adjust our processes for calculating our key business metrics to improve their accuracy, including

through the application of new data or technologies or product changes that may allow us to identify previously undetected spam activity.

As a result of such adjustments, our key business metrics may not be comparable period-over-period.

Results of Operations

The following table sets forth our results of operations

data for the periods presented:

Comparisons for the year ended December 31, 2022 and 2021:

The following table sets forth

our consolidated statements of comprehensive loss for the year ended December 31, 2022 and 2021 and the dollar and percentage change

between the two periods:

our consolidated statements of operations for the years ended December 31, 2023 and 2022 and the dollar and percentage change between

the two periods:

For the year ended December 31,

Cost of services (content, hosting and other)

$ 146,156,734

$ 102,411,216

General and administrative

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Sales and marketing

Finance costs

Share-based compensation

Foreign exchange loss

Acquisition-related transaction costs

Amortization and depreciation

Changes in fair value of contingent consideration

Total expenses

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(99,946,701 )

Interest income, net

Other income, net

Interest income

Other income (expense)

Change in fair value of warrant liability

Change in fair value of option liability

(18,644,605 )

Loss before income taxes

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(11,619,422 )

(108,092,743 )

Income tax recovery

Deferred tax recovery

Net and comprehensive loss

$ (116,420,462 )

$ (11,403,994 )

$ (105,016,468 )

*NM- Percentage change not meaningful.

Revenues increased by $29.9 million to $39.4 million in the year ended

December 31, 2022, compared to the year ended December 31, 2021, of which $24.3 million is attributable to higher advertising and $5.6

million is attributable to higher licensing and other revenue.

The increase in advertising revenue was driven by an increase in consumption

as well the introduction of new advertising solutions for creators, publishers and advertisers, including host read advertising and our

online advertising management exchange (“Rumble Advertising Center” or “RAC”), both of which we started to build

and test in the second half of 2022.

The increase in licensing and other revenue was driven by tipping features within our platform as

well as certain cloud, subscription, platform hosting fees, provision of one-time content, and professional services.

Revenues increased by $41.6 million

to $81.0 million in the year ended December 31, 2023 compared to the year ended December 31, 2022, of which $28.9 million is attributable

to higher advertising revenue and $12.7 million is attributable to higher revenue from other services and cloud.

The increase in advertising

revenue was driven by an increase in consumption as well as the introduction of new advertising solutions for creators, publishers and

advertisers, including host read advertising and our online advertising management exchange (“Rumble Advertising Center” or

“RAC”), both of which we started to build and test in the second half of 2022 and continued to scale testing throughout 2023.

The increase in revenue from other services and cloud was driven mainly by subscriptions, content licensing, tipping features, and cloud

services offered.

Cost of Services

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by $102.4 million to $146.2 million in the year ended December 31, 2023 compared to the year ended December 31, 2022.

was due to an increase in programming and content costs of $30.0 million, hosting expenses of $4.7 million, and other service costs of

$1.2 million.

The increase was

due to an increase in programming and content costs of $98.9 million, hosting expenses of $2.7 million, and other service costs of $0.8

General and Administrative Expenses

General and administrative expense

increased by $11.4 million to $14.5 million in the year ended December 31, 2022, compared to the year ended December 31, 2021.

increase was due to a $4.4 million increase in staffing-related costs, as well as a $7.0 million increase in other administrative

expenses, most of which are public company-related and include accounting, legal, investor relations, insurance and other administrative

General and administrative expenses increased by $21.0 million

to $37.1 million in the year ended December 31, 2023 compared to the year ended December 31, 2022.

The increase was due to an increase

in payroll and related expenses of $9.0 million, share-based compensation of $2.5 million related to the recognition of contingent shares

issued in connection with the Callin acquisition that were accounted for as post-combination expense, as well as a $9.5 million increase

in other administrative expenses, most of which are public company-related, including accounting, legal, investor relations, insurance,

and other administrative services.

Research and Development Expenses

Research and development expense

increased by $4.7 million to $6.3 million in the year ended December 31, 2022, compared to the year ended December 31, 2021.

increase was due to a $3.2 million increase in staffing-related costs, as well as a $1.5 million increase in costs related to computer

software, hardware and other administrative expenses.

Research and development expenses increased by $9.4 million to

$15.7 million in the year ended December 31, 2023 compared to the year ended December 31, 2022.

The increase was due to an increase in

payroll and related expenses of $7.4 million, as well as a $2.0 million increase in costs related to computer hardware, software, and

other expenses used in research and development related activity.

Sales and Marketing Expenses

Sales and marketing expense increased

by $3.2 million to $6.1 million in the year ended December 31, 2022, compared to the year ended December 31, 2021.

The increase was due

to a $1.6 million increase in staffing-related and consulting services cost, as well as a $1.6 million increase in other marketing

Sales and marketing expenses

increased by $7.3 million to $13.4 million in the year ended December 31, 2023 compared to the year ended December 31, 2022.

was due to a $2.6 million increase in staffing-related and consulting service costs as well as a $4.7 million increase in other marketing

and public relations activities.

Finance Costs

Finance costs decreased by $1.8 million to $1.1 million in the year

ended December 31, 2022, compared to the year ended December 31, 2021.

Finance costs for the year ended December 31, 2022 consisted of

$1.1 million in transaction costs, which included legal and other professional fees related to the Business Combination.

ended December 31, 2021, finance costs consisted of $2.9 million related to transaction costs on the issuances of Legacy Rumble Class A

preferred shares and Class A common shares.

Additionally, the transaction costs allocated to the debt component of Class A preferred

shares of Legacy Rumble and the Option Liability were recorded as finance costs.

Refer to Note 13, Temporary Equity, to the consolidated

financial statements for more details.

Share-based Compensation

Share-based compensation increased

by $0.3 million to $1.7 million in the year ended December 31, 2022, compared to the year ended December 31, 2021, due to the vesting

conditions of certain previously and newly granted restricted stock units and stock options.

Foreign Exchange Loss

Foreign exchange loss increased

by $41.9 thousand to $49.1 thousand in the year ended December 31, 2022, compared to year ended December 31, 2021.

The increase was primarily

due to higher foreign currency rate fluctuation as we maintained the majority of our cash balance in its functional currency as of December

Acquisition-related transaction costs

Acquisition-related transaction costs increased by $35.3 thousand to

$1.2 million in the year ended December 31, 2023 compared to the year ended December 31, 2022.

Acquisition-related transaction costs for

the year ended December 31, 2023 consisted of $1.2 million related to the Callin and North River acquisitions in 2023.

For the year ended

December 31, 2022, acquisition-related transaction costs consisted of $1.1 million, which included legal and other professional fees related

to the Business Combination.

Amortization and Depreciation

Amortization and depreciation

increased by $1.4 million to $1.6 million in the year ended December 31, 2022, compared to the year ended December 31, 2021 as we commenced

building out our infrastructure subsequent to Q2 2021.

increased by $3.3 million to $4.8 million in the year ended December 31, 2023 compared to the year ended December 31, 2022.

was due to an increase of $2.2 million from depreciation on our property and equipment as we continue to build out our infrastructure

as well as an increase in amortization from intangible assets of $1.1 million.

Change in Fair Value of Contingent Consideration

Change in fair value of contingent

consideration increased by $1.9 million resulting in a gain of $1.9 million in the year ended December 31, 2023.

The contingent consideration

liability arose in connection with the Callin acquisition and the fair value of this contingent consideration was measured using the fair

value of the expected number of shares to be issued and Company’s share price at closing.

The gain from the change in fair value

of contingent consideration can be directly attributable to changes in the Company’s share price since the closing.

Interest Income

Interest income increased by

$3.0 million to $3.0 million in the year ended December 31, 2022, compared to the year ended December 31, 2021.

The increase was primarily

due to carrying a higher balance in cash, cash equivalents, and marketable securities which was the result of the Business Combination

Interest income increased

by $10.6 million to $13.6 million in the year ended December 31, 2023 compared to the year ended December 31, 2022.

The increase was due

to carrying a higher balance of cash, cash equivalents, and marketable securities as a result of the Business Combination.

The funds were

invested in money market funds, treasury bills, and term deposits.

Other Income (Expense)

Other income decreased by $0.2

million to $0 in the year ended December 31, 2022, compared to the year ended December 31, 2021.

The decrease was related to the settlement

of litigation during the year ended December 31, 2021.

There was no comparable income in the year ended December 31, 2022.

Other expense increased by

$76.4 thousand to $0.1 million in the year ended December 31, 2023 compared to the year ended December 31, 2022.

Change in Fair Value of Warrant Liability

Change in fair value of warrant

liability increased by $21.0 million to $21.0 million in the year ended December 31, 2022.

The increase relates to the issuance of 8,050,000

warrants in connection with the public offerings, private placements, and FPA.

liability decreased by $18.6 million resulting in a gain of $2.4 million in the year ended December 31, 2023.

The warrant liability arose

in connection with the warrants offered as part of the Business Combination.

As these warrants meet the classification of a financial

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The fair value of this warrant liability was measured using the fair value of the Company’s warrants

listed on the Nasdaq (Level 1 fair value hierarchy input).

Refer to Note 2, Significant Events and Transactions, of the consolidated financial

Change in Fair Value of Option Liability

Change in fair value of the

option liability decreased by $3.2 million to $0 in the year ended December 31, 2022.

The decrease is measured in reference to the issuance

of Legacy Rumble’s 606,360 Class A preferred shares, which allowed the holders of these preferred shares to purchase additional

common shares of Legacy Rumble at a discount of 30%, subject to certain conditions.

The total fair value of this financing arrangement

was determined to be $35.7 million due to the upper limit on the discount price provided to the investors.

Gross proceeds of $25.0 million

were allocated between the Class A preferred shares of Legacy Rumble and the option liability by first determining the fair value of the

option liability at $7.5 million using a probability weighted scenario over the likelihood of this option to be exercised, with the remaining

$17.5 million allocated to equity (using a residual value method).

Change in the fair value of the option liability in the amount of $1.1

million was calculated based on an update of management’s estimate related to the likelihood of the option to purchase additional

common shares being exercised (Level 3 fair value hierarchy input).

The option liability associated with these Class A preferred shares

of Legacy Rumble was exercised on November 24, 2021.

listed on the Nasdaq.

The decrease in the change in fair value of warrant liability is directly attributable to changes in the trading

price of Rumble’s warrants.

Income Tax Recovery

Income tax recovery increased

by $216.0 thousand to $215.4 thousand in the year ended December 31, 2022, compared to the year ended December 31, 2021.

Income tax recovery decreased

by $0.2 million to $nil in the year ended December 31, 2023 compared to the year ended December 31, 2022.

Deferred Tax Recovery

Deferred tax recovery decreased by $128.5 thousand

to zero in the year ended December 31, 2022, compared to the year ended December 31, 2021.

Deferred tax recovery increased by $3.3 million to $3.3 million in

the year ended December 31, 2023 compared to the year ended December 31, 2022.

The increase was mainly driven by the recognition of deferred

tax liabilities of Callin and North River as of the acquisition date, which were subsequently reversed resulting in a deferred tax benefit.

Liquidity and Capital Resources

We have historically financed

operations primarily through cash generated from operating activities and most recently through proceeds from financings.

short-term requirements for liquidity and capital are to fund general working capital and capital expenditures.

As of December 31, 2022, our

cash, cash equivalents, and marketable securities balance was $338.3 million.

Cash, cash equivalents, and marketable securities consist

of cash on deposit with banks and amounts held in money market funds, treasury bills, and term deposits.

The existing cash, cash equivalents,

and marketable securities are sufficient to fund our liquidity needs for at least the next 12 months.

At this time, we do not anticipate

the need to raise additional capital as a result of the completion of the Business Combination on September 16, 2022.

Our present focus

is to grow users and usage consumption, experiment with monetization levers, and not to maximize revenue and profitability in the immediate

This business strategy could have a negative impact on our liquidity.

The following table shows our

cash flows from operating activities, investing activities and financing activities for the stated periods:

Since the completion of our

Business Combination in September 2022, we have financed operations primarily through cash generated from operating activities and the

funds raised from our Business Combination.

The primary short-term requirements for liquidity and capital are to fund general working

capital and capital expenditures.

As of December 31, 2023, our cash, cash equivalents, and marketable

securities balance was $219.5 million.

Cash, cash equivalents, and marketable securities consist of cash on deposit with banks and

amounts held in money market funds, treasury bills, and term deposits.

we have consistently stated, we intend to use a substantial portion of funds that we have raised to acquire content by providing economic

incentives to a small number of content creators, including sports leagues.

This content acquisition strategy will allow us to enter key

content verticals and secure top content creators in those verticals before we have full monetization capabilities in place.

in 2023 was to grow users and usage consumption and experiment with monetization levers, which may not maximize profitability in the immediate

term, but which we believe positions our business for the long term.

As a result, we expect this strategy will require us to consume a

significant portion of our capital raised.

As of December 31, 2023, we had entered into programming and content agreements with a minimum

contractual cash commitment of $106 million.

A significant amount of these minimum contractual cash commitments will be paid over 12 to

36 months, commencing in 2024.

In addition to the minimum contractual cash commitments, we have programming and content agreements that

have variable cost arrangements.

These future costs are dependent upon many factors and are difficult to anticipate, however, these costs

may be substantial.

The following table presents

a summary of the consolidated statement of cash flows for the years ended December 31, 2023 and 2022:

Year ended December 31,

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(10,139,167 )

(13,632,147 )

Financing activities

(334,940,487 )

Operating Activities

Net cash used in operating

activities for the year ended December 31, 2022 was $32.3 million compared to $5.3 million for the year ended December 31, 2021.

was from an overall increase in expenses and prepaid expenses as a result of business growth coupled with a partial offset from an increase

in accounts payable and accrued liabilities.

Investing Activities

Net cash used in investing

activities for the year ended December 31, 2022 was $10.1 million compared to $1.6 million provided for the year ended December 31,

Investing activities for the year ended December 31, 2022, consisted of $8.5 million used in the purchases of capital assets, $1.1

million used in purchase of marketable securities and $0.5 million used in the purchase of intellectual property.

activities for the year ended December 31, 2023 primarily consisted of net loss adjusted for certain non-cash items, including a $4.3

million gain on the change in fair value of warrants and contingent consideration, offset by a $16.3 million change in share-based compensation,

$5.6 million change in amortization and depreciation as well as changes in operating assets and liabilities.

The increase in net cash

used in operating activities during the year ended December 31, 2023 compared to the year ended December 31, 2022 was mostly due to an

increase in expenses partially offset by changes in revenue and operating assets and liabilities.

Investing Activities

for the year ended December 31, 2021, consisted of $1.3 million used in the purchases of capital assets and $0.5 million used in the purchase

of intellectual property, offset by $3.4 million in cash acquired on the acquisition of Locals Technology Inc.

Financing Activities

Net cash provided by financing activities for the year ended December

31, 2022 was $332.8 million compared to $49.1 million provided for the year ended December 31, 2021.

Financing activities in the year

ended December 31, 2022, mostly consisted of the cash proceeds, net of transaction costs, from the Business Combination.

Net cash used in investing activities for the year ended December 31,

2023 consisted of $24.8 million in purchases of property, equipment, and intangible assets, offset by $1.0 million in cash acquired in

connection with the Callin acquisition.

The increase in net cash used in investing activities during the year ended December 31, 2023

compared to the year ended December 31, 2022, was mostly due to an increase in purchases of property, equipment, and intangible assets,

which includes assets acquired from North River of $7.2 million, offset by cash acquired in connection with the Callin acquisition.

Financing Activities

in the year ended December 31, 2021, mostly consisted of the cash proceeds, net of transaction costs, from the issuance of Legacy Rumble

Class A preferred shares and Class A common shares.

Net cash used in financing activities for the year ended December 31,

2023 mainly consisted of $2.1 million in taxes paid from net share settlement of share-based compensation.

The increase in net cash used

in financing activities was mainly due to the taxes paid from the net share settlement of share-based compensation in the year ended December

31, 2023 compared to the receipt of cash proceeds, net of transactions costs, from the Business Combination in the year ended December

Summary of Quarterly Results

Information for the most recent quarters presented are as follows:

Net and comprehensive loss

Total revenue

$ (29,277,227 )

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$ (29,454,080 )

Net and comprehensive income (loss)

$ (28,668,113 )

Total revenue

$ (1,858,452 )

Critical Accounting Policies and Significant Management Estimates

$ (4,688,680 )

$ (3,912,194 )

Critical Accounting Policies and Estimates

We prepare our consolidated

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of assets, liabilities, revenue, costs and expenses and related disclosures.

We base our estimates on historical experience and on various

other assumptions that we believe to be reasonable under the circumstances.

Actual results could differ significantly from the estimates

made by our management.

To the extent that there are differences between our estimates and actual results, our future financial statement

presentation, financial condition, results of operations and cash flows will be affected.

We believe that the accounting policies discussed

below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving

our management’s judgments and estimates.

Critical accounting policies and estimates are those that we consider the most important

to the portrayal of our financial condition and results of operations because they require our most difficult, subjective or complex judgments,

often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

We believe that the accounting

policies described below involve a significant degree of judgment and complexity.

Accordingly, we believe that these are the most critical

to aid in fully understanding and evaluating our financial condition and results of operations.

For further information, see Note 3,

Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report.

On January 1, 2018, we

adopted ASC Topic 606, Revenue from Contracts with Customers .

To determine revenue recognition for contractual arrangements

that we determine are within the scope of ASC 606, we perform the following five steps:

(1) identify each contract with a customer;

(2) identify the performance obligations in the contract;

(3) determine the transaction price;

(4) allocate the transaction

price to performance obligations in the contract;

and (5) recognize revenue when (or as) the relevant performance obligation is satisfied.

We only apply the five-step model to contracts when it is probable that we will collect the consideration to which we are entitled to

in exchange for the goods or services we provide to the customer.

We generate revenues primarily

from advertising and licensing fees.

The revenues are generated by delivering content either via our own or third-party platforms.

Advertising fees are generated

by delivering both display advertisements and cost-per-message-read advertisements.

Display advertisements are placed on Rumble and third-party

publisher websites or mobile applications.

Customers pay for advertisements either directly or through their relationships with advertising

agencies or resellers, based on the number of impressions delivered or the number of actions such as clicks, or purchases taken, by our

The Company recognizes revenue from display advertisements when a user engages with the advertisement, such as an impression, click,

For cost-per-message-read advertising, customers pay to have their products or services promoted by a content creator and

advertising revenue is recognized when the performance obligation is fulfilled, usually when the message is read.

Licensing fees are charged

on a per video or on a flat-fee per month basis.

Licensing fee revenue is recognized as the related performance obligations are satisfied

in line with the nature of the intellectual property being licensed.

Other revenues include fees

earned from tipping features within the Company’s platform as well as certain cloud, subscription, platform hosting, and professional

Fees from tipping features are recognized at a point in time when a user tips on the platform.

Both cloud and subscription services

are recognized over time for the duration of the contract.

Revenues related to platform hosting are recognized over time as the Company

provides access to the platform.

Professional service revenues have stand-alone functionality to the customer and are recognized at a

point in time as services are provided or earned.

Share-Based Compensation Expense

Stock Options

We estimate the fair value

of stock options granted to employees and directors using the Black-Scholes option-pricing model (“BSM”).

The grant date fair

value of stock options is recognized as share-based compensation expense on a straight-line basis over the requisite service period.

are accounted for when they occur.

BSM considers several variables

and assumptions in estimating the fair value of stock-based awards.

These variables include:

Fair value of common stock:

Legacy Rumble Class A common shares (also referred to as “Rumble’s common stock” below) were not publicly traded

prior to the closing of the Business Combination, we estimated the fair value of our common stock in 2019, 2020 and 2021 using Level 3

inputs as defined in the ASC 820 fair value hierarchy.

Our board of directors considers numerous objective and subjective factors to determine

the fair value of our common stock as discussed in “ Common Stock Valuations ” below.

Fair value of Rumble’s Class

A common shares following the closing of the Business Combination is determined based on the Nasdaq closing price of the Company’s

Class A common stock as at the date of measurement.

Expected Term:

expected term represents the period that our stock-based awards are expected to be outstanding and was determined to be the contractual

term of the options.

Expected Volatility:

we have only a limited trading history of our common stock, the expected volatility was derived from the average historical stock volatilities

of several public companies within our industry that we consider to be comparable to our business over a period equivalent to the expected

term of the stock option grants.

Risk-Free Interest Rate:

risk-free interest rate is based on the implied yield available on U.S.

Treasury zero-coupon issues with the remaining term equivalent

to the expected term.

Expected Dividend:

have not paid any dividends in our history and do not expect to pay any dividends over the life of the options and, therefore, have estimated

the dividend yield to be zero.

Common Stock Valuations

Prior to the closing of the

Business Combination, given the absence of a public trading market for our common stock and in accordance with the American Institute

of Certified Public Accountants Accounting and Valuation Guide, Valuation of Privately Held Company Equity Securities Issued as Compensation,

our board of directors determined the best estimate of fair value of our common stock exercising reasonable judgment and considering numerous

objective and subjective factors.

These factors included:

● the valuation at which we conducted our most recent rounds

of equity financing;

● contemporaneous third-party valuations of our common stock;

● the transaction prices at which we or other holders sold our

common stock to outside investors in arms-length transactions;

● our financial condition, results of operations and capital

● the industry outlook;

● consideration that the options awarded reflected rights in

illiquid securities in a private company;

● the valuation of comparable companies;

● the lack of marketability of our common stock;

● the likelihood of achieving a liquidity event, such as an

initial public offering or a sale of us given prevailing market conditions;

● the history and nature of our business, industry trends and

the competitive environment;

● the general economic outlook, including with respect to economic

growth, inflation, unemployment, the interest rate environment and global economic trends.

Our board of directors determined

the fair value of our common stock by first determining the enterprise value of our business, and then using the enterprise value to derive

the per share value of our common stock.

The enterprise value of our

business was estimated by considering several factors, including estimates using the market approach.

The market approach was estimated

based on the projected value of comparable public companies in a similar line of business that are publicly traded.

In addition to the

market approach described above, our board of directors factored in recent arms-length transactions such as the closest round of equity

financing preceding the date of valuation.

After determining our enterprise

value, an allocation of the enterprise value is assigned to each of our various classes of shares with consideration of the different

rights associated with each share class, including liquidation preferences, seniority of shares, and conversion rights.

The value attributed

to common shares through this allocation determines the per share value of our common stock.

The BSM implementation of the option pricing

method treats the rights of holders of various classes of securities (common shares, preferred shares, warrants, and options) as call

options on any value of the Company above a series of break points.

The values of the break points were calculated by reviewing the liquidation

preferences of preferred shares (including seniority of any series of preferred shares), the participation rights of preferred shares

(including any caps on such participation), and the strike prices of warrants and options.

Application of these approaches

involves the use of estimates, judgments and assumptions that are highly complex and subjective, such as those regarding discount rates,

market multiples, the selection of comparable companies and the probability of possible future events.

Changes in any or all of these

estimates and assumptions, or the relationships between those assumptions, impact our valuations as of each valuation date and may have

a material impact on the valuation of our common stock.

For valuations after the completion

of the Business Combination, our board of directors determines the fair value of each share of underlying Class A common stock based

on the closing price of Class A common Stock as reported on the date of grant.

Measurement of the Company’s

warrants issued to purchase shares of Class A common stock post-closing of the Business Combination is based on the Nasdaq closing price

of the Company’s warrants as at the date of measurement.

Warrants issued to purchase common stock of Legacy Rumble prior to the

closing of the Business Combination were freestanding financial instruments classified as equity, and measured using the BSM option pricing

model, which included assumptions related to the inputs of exercise price, fair value of the underlying common stock, risk-free interest

rate, expected term, expected volatility, and expected dividend yield, which were all determined in the same manner as our stock options

detailed in the above “ Stock Based Compensation Expense” section.

As the outstanding warrants (prior to the closing

of the Business Combination) were also subject to a performance condition, management assessed the probability of the performance condition

being met at each reporting date.

These Legacy Rumble warrants were exchanged for 14,153,048 shares of Class A common stock of the Company

as part of the Business Combination, for a par value of $731,281.

We evaluate our estimates on a continuous basis.

our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.

results could differ significantly from the estimates made by our management.

To the extent that there are differences between our estimates

and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

We believe the following key

accounting policies require significant judgments and estimates used in the preparation of our consolidated financial statements.

accounting policies and estimates are those that we consider the most important to the portrayal of our financial condition and results

of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates

about the effects of matters that are inherently uncertain.

We believe the following key accounting policies require significant judgments

and estimates used in the preparation of our consolidated financial.

Accordingly, we believe that these are the most critical to aid in

fully understanding and evaluating our financial condition and results of operations.

For further information on

the summary of significant accounting policies and the effect on our consolidated financial statements, see Note 2, Summary of Significant

Accounting Policies, to the consolidated financial statements.

Acquisitions (Business Combination vs Asset

The Company evaluates whether

acquired net assets should be accounted for as a business combination or an asset acquisition by first applying a screen test to determine

whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar

identifiable assets.

If so, the transaction is accounted for as an asset acquisition.

If not, the Company applies its judgment to determine

whether the acquired net assets meets the definition of a business by considering if the set includes an acquired input, process, and

the ability to create outputs.

Valuation of Intangible Assets

The Company acquired intangible

assets in connection with acquisitions of Callin and North River.

A valuation was performed to determine the estimated fair value of identifiable

intangible assets related to the acquisition.

Judgment is required to estimate the fair value of these identifiable intangible assets.

We may use quoted market prices, prices for similar assets, present value techniques, and other valuation techniques such as the depreciated

replacement cost and relief from royalty methods to prepare these estimates.

We may need to make estimates of future cash flows and discount

rates as well as other assumptions in order to implement these valuation techniques.

Due to the degree of judgment involved in our estimation

techniques, our estimate may result in significant difference in the estimation of fair value.

Share-based Compensation

The Company issues equity awards such as stock options and restricted

stock units to certain of its employees, directors, officers and consultants.

We account for equity awards by recognizing the fair value

of share-based compensation expense on a straight-line basis over the service period of the award.

For equity awards with a service

condition, the fair value is estimated on the grant date using the Black-Scholes option pricing model which takes into account the following

stock price, expected term, volatility, and risk-free interest rate.

For equity awards with a market condition, the fair value

is estimated on the grant date using a Monte Carlo simulation methodology that includes simulating the stock price using a risk-neutral

Geometric Brownian Motion-based pricing model.

Changes in the estimated inputs or using other option valuation methods may result in materially

different option values and share-based compensation expense.

For equity awards with a

performance condition, the Company assesses the likelihood of the performance condition underlying an award being met and recognizes a

share-based compensation expense associated with that award only if it is probable the performance condition will be met.

Where the performance

condition underlying an award is a change in control, the Company considers the performance condition to be probable only when it occurs.

The Company is subject to

income taxes in the United States and other foreign jurisdictions.

Significant judgment is required in determining our provision for income

taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex

Uncertain tax positions are

accounted for using a comprehensive model for the manner in which a company should recognize, measure, present and disclose in its financial

statements all material uncertain income tax positions.

The Company reviews its nexus in various tax jurisdictions and the Company’s

tax positions related to all open tax years for events that could change the status of its tax liability, if any, or require an additional

liability to be recorded.

Such events may be the resolution of issues raised by a taxing authority, expiration of the statute of limitations

for a prior open tax year or new transactions for which a tax position may be deemed to be uncertain.

Those positions, for which management’s

assessment is that there is more than a 50 percent probability of sustaining the position upon challenge by a taxing authority based

upon its technical merits, are subjected to the measurement criteria.

New Accounting Pronouncements

See Note 2, Summary of

Significant Accounting Policies, to our consolidated financial statements for the year ended December 31, 2022 and 2021.

Significant Accounting Policies, to our consolidated financial statements for the years ended December 31, 2023 and 2022.

JOBS Act Accounting Election

We are an emerging growth company,

as defined in the JOBS Act.

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until

such time as those standards apply to private companies.

We are an emerging growth

company, as defined in the JOBS Act.

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards

until such time as those standards apply to private companies.

We intend to elect to adopt new or revised accounting standards under private

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What changed 10-K

Item 7. Management’s Discussion and Analysis