Financial Performance - Total revenues for the three months ended March 31, 2023, were $0 as the company continues to develop and enhance its faidr and podcasting Apps to establish new revenue streams [98]. - The company incurred a net loss of $2,155,312 for the three months ended March 31, 2023, compared to a net loss of $1,753,258 for the same period in 2022, representing an increase in loss of $402,054 [96]. - As of March 31, 2023, the company had an accumulated deficit of $73.9 million, indicating significant operating losses since inception [85]. - Operating expenses for the three months ended March 31, 2023, totaled $1,847,406, an increase of $95,158 compared to $1,752,248 for the same period in 2022 [96]. - Cash used in operating activities for Q1 2023 was $1,073,241, a decrease of 12.7% compared to $1,229,996 in Q1 2022 [114]. - As of March 31, 2023, the company had cash of $239,040, down from $1,661,434 as of December 31, 2022, with a working capital deficiency of approximately $2.2 million [106]. - The company has an accumulated deficit of $73.9 million as of March 31, 2023, indicating ongoing financial challenges [119]. Expenses Breakdown - Research and development expenses increased by $61,363 to $210,126 for the three months ended March 31, 2023, compared to $148,763 in 2022, reflecting ongoing investment in technology [96]. - Direct Cost of Services decreased by $10,261 or 19.5%, from $52,562 in Q1 2022 to $42,301 in Q1 2023, primarily due to reduced platform hosting costs [99]. - Sales and marketing expenses decreased by $131,948 or 37%, from $357,066 in Q1 2022 to $225,118 in Q1 2023, attributed to reduced staffing and marketing spending [100]. - General and administrative expenses decreased by $90,904 or 8.9%, from $1,017,730 in Q1 2022 to $926,826 in Q1 2023, due to reduced stock compensation expenses [102]. - Depreciation and amortization expenses increased by $266,908 or 151.5%, from $176,127 in Q1 2022 to $443,035 in Q1 2023, related to the amortization of faidr and podcasting Apps [103]. - Total other expense increased by $306,896, from $1,010 in Q1 2022 to $307,906 in Q1 2023, primarily due to interest expense related to debt [104]. Funding and Growth Strategy - The company had cash of $239,040 as of March 31, 2023, and raised $1.87 million in April 2023, which is expected to fund operations into the third quarter of fiscal 2023 [88]. - The company raised $750,000 from a new Secured Bridge Note financing and $1.12 million from common stock sales, which are expected to fund operations into Q3 2023 [112]. - The company is pursuing an acquisition strategy to accelerate user acquisition and growth of revenue and cash flow, currently in advanced discussions with three potential acquisition targets [89]. - The company expects significant increases in expenses and capital requirements as it continues to develop and commercialize its products, particularly the faidr App [85]. - The company plans to secure additional funding to support its growth strategy and operations, indicating reliance on equity or debt financing [86]. Company Classification - The company qualifies as an "emerging growth company" and will adopt new accounting standards when private companies do so, unless it opts out or no longer qualifies [127]. - The company is classified as a "smaller reporting company" with a market value of stock held by non-affiliates below $700 million and annual revenue under $100 million in the last fiscal year [128]. - The company may continue to be a smaller reporting company if its market value remains below $250 million or if it meets specific revenue criteria [128]. - As a smaller reporting company, the company can present only the two most recent fiscal years of audited financial statements in its Annual Report on Form 10-K [128]. - The company has reduced disclosure obligations regarding executive compensation due to its status as a smaller reporting company [128]. - The company is not required to provide quantitative and qualitative disclosures about market risk as it is classified as a smaller reporting company [129]. Product Development - The faidr App was fully launched on February 15, 2022, and includes features such as commercial-free AM/FM radio, podcasts, and exclusive content offerings [80].
Auddia(AUUD) - 2023 Q1 - Quarterly Report