UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March ~~September 30~~31, ~~2023~~2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

COMMISSION FILE NO. 333-222593

Vado Corp.

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction of incorporation)

30-0968244

(IRS Employer Identification No.)

~~13468~~73 ~~Beach~~Market ~~Ave~~St., Venice, CA 90291

Marina Del Rey, CA 90292

Tel: (888) 545-0009

(Address and telephone number of registrant's executive office)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
None	N/A	N/A

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:

Class Outstanding as of ~~November~~May 1213, ~~2023~~2024: 182,492,~~222~~221 Common Stock, $0.001

Vado Corp.

Table of Contents

		Page
PART I	Financial information
Item 1	Financial statements (unaudited)	3
Item 2	Management’s discussion and analysis of financial condition and results of operations	2221
Item 3	Quantitative and qualitative disclosures about market risk	2927
Item 4	Controls and procedures	2927
PART II	Other Information
Item 1	Legal proceedings	3028
Item 1A	Risk Factors	3028
Item 2	Unregistered sales of equity securities and use of proceeds	3028
Item 3	Defaults upon senior securities	3028
Item 4	Mine safety disclosures	3028
Item 5	Other information	3028
Item 6	Exhibits	3129
	Signatures	3230

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Vado Corp.

Condensed Consolidated Balance Sheets

	September 30,			December 31,
	March 31,			December 31,
	2023			2022
	2024			2023
ASSETS
Current assets
Cash	$	~~455~~32,~~352~~946		$	~~485~~133,~~053~~182
Investments - restricted		1,~~016~~042,~~236~~418			-1,029,256
Accounts receivable		32,~~391~~868,~~491~~769			2,~~080~~953,~~758~~497
Other current assets		~~294~~250,~~063~~197			~~245~~235,~~486~~242
Total current assets		54,~~157~~194,~~142~~330			24,~~811~~351,~~297~~177
Property and equipment, net of accumulated depreciation of $166,921 and $152,058		27,569			32,976
Property and equipment, net of accumulated depreciation of $175,800 and $170,854		24,110			26,463
Right of use operating leases, net		148,451			581,352
Intangible assets -amortizable		89,672			110,425
Intangible assets -amortizable		153,277			286,801
Total Assets		4,308,112		$	4,488,065
Total Assets	$	5,486,439		$	3,712,426
LIABILITIES AND (DEFICIENCY IN) STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities		34,~~426~~562,~~530~~392			23,~~272~~555,~~119~~630
Acquisition liabilities		~~50,000~~-			~~162~~12,500
Deferred revenue		~~389~~368,~~149~~760			72191,~~630~~766
Lease liability, operating leases, current		160,899			631,144
Accrued settlement		2,476,926			2,476,926
Accrued settlement		2,476,926			1,707,652
Loans payable, current		3,968,349			3,459,516
Loans payable, current		3,098,806			348,945
Loans payable, related party, current		1,178,240			996,700
Loans payable, related party, current		630,638			757,426
Bank overdraft		75,790			-
Convertible notes payable, related party, current, net of discount		739,503			-
Convertible notes payable, related party, current		800,000			800,000
Total current liabilities		1013,~~972~~430,~~451~~457			511,~~952~~493,~~416~~038
Loans payable		200,000			2200,~~127,836~~000
Notes payable, related party		469,362			342,574
Loans payable, related party		327,760			413,300
Convertible notes payable, related party, net of discount		1,021,670			-
Convertible notes payable, related party		1,924,000			1,529,973
Total Liabilities		1215,~~663~~882,~~483~~217			813,~~422~~636,~~826~~311
Commitments and contingencies		-			-
Stockholders' equity (deficit)
Common stock, $0.001 par value, 490,000,000 shares authorized, 182,492,222 and 173,757,921 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		182,493			173,758
Common stock, $0.001 par value, 490,000,000 shares authorized, 182,492,221 shares issued and outstanding at March 31, 2024 and December 31, 2023		182,493			182,493
Preferred stock, Series A; $0.001 par value, 1,000,000 shares authorized, 223,333 and 170,000 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		223			170
Preferred stock, Series A; $0.001 par value, 1,000,000 shares authorized, 223,333 shares issued and outstanding at March 31, 2024 and December 31, 2023		223			223
Additional paid-in capital		45,~~896~~491,~~756~~652			15,~~793~~868,~~966~~972
Accumulated deficit		(1217,~~256~~248,~~516~~473	)		(615,~~678~~199,~~294~~934	)
Total stockholders' equity (deficit)		(711,~~177~~574,~~044~~105	)		(49,~~710~~148,~~400~~246	)
Total liabilities and stockholders' equity (deficit)	$	54,~~486~~308,~~439~~112		$	34,~~712~~488,~~426~~065

The accompanying notes are an integral part of these financial statements.

Table of Contents

Vado Corp.

Condensed Consolidated Statements of Operations

(unaudited)

	For the Three Months Ended						~~For the Nine Months Ended~~
	September 30,						September 30,
	March 31,
	2023			2022			2023			2022
	2024			2023
Revenue	$	43,~~349~~578,~~533~~172		$	43,~~310~~535,~~536~~239		$	~~11,665,082~~		$	~~12,793,466~~
Cost of revenue		23,~~599~~130,~~210~~302			32,~~207~~339,~~119~~721			~~7,656,550~~			~~8,972,296~~
Gross Profit		1447,~~750,323~~870			1,~~103~~195,~~417~~518			~~4,008,532~~			~~3,821,170~~
Operating expenses:
Selling, general and administrative		21,~~222~~775,~~019~~234			2,~~006~~556,~~154~~489			~~7,081,210~~			~~7,273,281~~
Cost of legal settlement		-			-			894,274			-
Net operating loss		(1,327,364	)		(1,360,971	)
Total operating expenses		2,222,019			2,006,154			7,975,484			7,273,281
Other income (expense):
Net operating loss		(471,696	)		(902,737	)		(3,966,952	)		(3,452,111	)
Interest expense, net of interest income		(734,337	)		(195,377	)
Other expense:
Interest income, restricted investment		13,162			-
Interest expense, net of interest income		(1,165,641	)		(150,750	)		(1,611,270	)		(454,463	)
Total other expense		(721,175	)		(195,377	)
Total other expense		(1,165,641	)		(150,750	)		(1,611,270	)		(454,463	)
Net loss before provision for income taxes		(2,048,539	)		(1,556,348	)
Net loss before provision for income taxes		(1,637,337	)		(1,053,487	)		(5,578,222	)		(3,906,574	)
Provision for income taxes		-			-
Provision for income taxes		-			-			-			-
Net loss	$	(2,048,539	)	$	(1,556,348	)
Net loss	$	(1,637,337	)	$	(1,053,487	)	$	(5,578,222	)	$	(3,906,574	)
Net loss per share - basic	$	(0.01	)	$	(0.01	)
Net loss per share - basic	$	(0.01	)	$	(0.01	)	$	(0.03	)	$	(0.02	)
Net loss per share - diluted	$	(0.01	)	$	(0.01	)
Net loss per share - diluted	$	(0.01	)	$	(0.01	)	$	(0.03	)	$	(0.02	)
Weighted average shares outstanding - basic		182,492,222			179,549,853
Weighted average shares outstanding - basic		182,438,137			168,579,889			181,193,901			169,250,716
Weighted average shares outstanding - diluted		182,492,222			179,549,853
Weighted average shares outstanding - diluted		182,438,137			168,579,889			181,193,901			169,250,716

The accompanying notes are an integral part of these financial statements.

Table of Contents

Vado Corp.

Condensed Consolidated Statements of Cash Flows

(unaudited)

	For the Nine			For the Nine
	For the Three			For the Three
	Months Ended			Months Ended
	September 30,			September 30,
	March 31			March 31
	2023			2022
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(52,~~578~~048,~~222~~539	)	$	(31,~~906~~556,~~574~~348	)
Adjustment to reconcile net (loss) income to net cash used in operating activities:
Stock based compensation		~~512~~16,~~143~~707			~~208~~215,~~540~~048
Amortization of discount on investment		(1513,~~450~~162	)		-
Depreciation and amortization		~~169~~31,~~485~~449			~~150~~56,~~184~~924
Amortization of ROU asset		~~432,901~~-			~~409~~142,~~298~~252
Amortization of discount on convertible note payable		~~201,859~~-			-34,851
Provision for doubtful accounts		~~114~~(109,~~217~~505	)		8731,~~826~~956
Minimum interest liability on loan		1524,~~172,638~~590			-
Changes in assets and liabilities:
Accounts receivable		(1194,~~424,950~~233	)		1209,~~155,758~~660
Other current assets		51(14,~~423~~955	)		(58277,~~271~~543	)
Accounts payable		1,~~108~~006,~~089~~762			~~(551~~335,~~077~~489	)
Deferred revenue		316,519			(127,364	)
Bank overdraft		75,790			-
Acquisition liability		(112,500	)		(112,500	)
Deferred revenue		176,994			(3,824	)
Accrued settlement		769,274			(562,500	)
Acquisition liability		(12,500	)		(37,500	)
Operating lease liability		(470,245	)		(435,033	)
Accrued settlement		-			(62,500	)
Net cash (used in) provided by operating activities		(2,752,819	)		(3,741,713	)
Operating lease liability		-			(154,700	)
Net cash (used in) provided by operating activities		(172,136	)		(1,066,235	)
INVESTING ACTIVITIES
Cash paid for fixed assets		(82,~~706~~593	)		(162,~~213~~305	)
Cash paid for development of intangible assets		(215,~~848~~750	)		(7012,~~932~~006	)
Investment in securities		(1,000,786	)		-
Net cash provided by (used in) investing activities		(8,343	)		(14,311	)
Net cash provided by (used in) investing activities		(1,031,340	)		(87,145	)
FINANCING ACTIVITIES
Proceeds from sale of common stock		~~500,000~~-			500,000
Proceeds from notes payable - related parties		-96,000			~~500,000~~-
Proceeds from EIDL Loan		-			50,000
Proceeds from convertible notes payable		-			800,000
Proceeds from convertible notes payable - related parties		2,100,000			-
Issuance of Series A Preferred Stock for cash		-			750,000
Issuance of Series A Preferred Stock for cash		1,500,000			-
Principal payments on loan payable		(15,757	)		(12,535	)
Principal payments on loan payable		(350,613	)		(84,040	)
Net cash provided by (used in) financing activities		80,243			2,037,465
Stock options exercised for cash		5,071			-
Net (decrease) increase in cash and cash equivalents		(100,236	)		956,919
Net cash provided by (used in) financing activities		3,754,458			965,960
Cash and cash equivalents at beginning of period		133,182			485,053
Net increase in cash and cash equivalents		(29,701	)		(2,862,898	)
Cash and cash equivalents at end of period	$	32,946			1,441,972
Cash and cash equivalents at beginning of period		485,053			3,536,384
Cash and cash equivalents at end of period	$	455,352		$	673,486
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	$	~~365,039~~-		$	~~345~~123,~~020~~616
Income taxes paid	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
	$	-		$	-
Effect of reverse merger	$	-			53,308
Cumulative effect adjustment to implement ASU 2020-06	$	394,027			-

The accompanying notes are an integral part of these financial statements.

Table of Contents

Vado Corp.

Condensed Consolidated Statements of Stockholders’ Equity

For the Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023

									Additional
	Common Stock				Preferred Stock Series A				Additional Paid-in			Accumulated
	Common Stock				Preferred Stock Series A				Paid-in			Accumulated
	Shares		Amount		Shares		Amount		Capital			Deficit			Total
Balance, June 30, 2022		168,773,282	$	168,773		150,000	$	150	$	419,561		$	(4,728,712	)	$	(4,140,228	)
Balance, December 31, 2022		173,757,921		173,758		170,000		170		1,793,966			(6,678,294	)		(4,710,400	)
Proceeds from sale of common stock		2,751,578		2,752		-		-		497,248			-			500,000
Effect of reverse merger		6,985,500		6,986		-		-		(53,308	)		-			(46,322	)
Exercise of stock options		613		-		-		-		52			-			52
Share based compensation		-		-		-		-		215,048			-			215,048
Vesting of stock options		-		-		-		-		156,028			-			156,028
Net loss for the three months ended September 30, 2022		-		-		-		-		-			(1,053,487	)		(1,053,487	)
Balance, September 30, 2022		171,525,473	$	171,525		150,000	$	150	$	1,072,889		$	(5,782,199	)	$	(4,537,635	)
		-		-		-		-		-			-			-
Balance, December 31, 2021		168,579,889	$	168,580		150,000	$	150	$	367,242		$	(1,875,625	)	$	(1,339,653	)
Issuance of restricted stock awards to employee		193,393		193		-		-		(193	)		-			-
Proceeds from sale of common stock		2,751,578		2,752		-		-		497,248			-			500,000
Exercise of stock options		613		-		-		-		52			-			52
Vesting of stock options		-		-		-		-		208,540			-			208,540
Net loss for the nine months ended September 30, 2022		-		-		-		-		-			(3,906,574	)		(3,906,574	)
Balance, September 30, 2022		171,525,473	$	171,525		150,000	$	150	$	1,072,889		$	(5,782,199	)	$	(4,537,635	)
Balance, June 30, 2023		182,435,898	$	182,436		223,333	$	223	$	4,796,831			(10,619,179	)		(5,639,689	)
Share based compensation		-		-		-		-		94,911			-			94,911
Shares issued for conversion of stock options		56,324		57		-				5,014			-			5,071
Issuance of shares to service provider		-		-		-		-		-			-			-
Sale of Series A Preferred Stock for cash		-		-		-		-		-			-			-
Discount on convertible notes payable		-		-		-		-		-			-			-
Net loss for the three months ended September 30, 2023		-		-		-		-		-			(1,637,337	)		(1,637,337	)
Balance, September 30, 2023		182,492,222	$	182,493	$	223,333	$	223	$	4,896,756		$	(12,256,516	)	$	(7,177,044	)
Balance, December 31, 2022		173,757,921	$	173,758		170,000	$	170	$	1,793,966			(6,678,294	)		(4,710,400	)
Effect of reverse merger		6,985,500		6,986				-		(53,308	)		-			(46,322	)
Share based compensation		-		-		-		-		512,143			-			512,143
Issuance of shares to service provider		-		-		3,333		3		99,997						100,000
Sale of common stock for cash		1,692,477		1,692		-		-		498,308			-			500,000
Sale of Series A Preferred Stock for cash		-		-		5025,000		5025		1749,~~499,950~~975			-			1750,~~500,~~000
Discount on convertible notes payable		-		-		-		-		~~540~~215,686			-			~~540~~215,686
Shares issued for conversion of stock options		56,324		57						5,014			-			5,071
Net loss for the three months ended March 31, 2023		-		-		-		-		-			(1,556,348	)		(1,556,348	)
Net loss for the nine months ended September 30, 2023		-		-		-		-		-			(5,578,222	)		(5,578,222	)
Balance, March 31, 2023		182,435,898	$	182,436		195,000	$	195	$	3,419,675		$	(8,234,642	)	$	(4,632,336	)
Balance, September 30, 2023		182,492,222	$	182,493		223,333	$	223	$	4,896,756		$	(12,256,516	)	$	(7,177,044	)
Balance, December 31, 2023		182,492,221		182,493		223,333		223		5,868,972			(15,199,934	)		(9,148,246	)
Share based compensation		-		-		-		-		16,707			-			16,707
Cumulative effect adjustment to implement ASU 2020-06		-		-		-		-		(394,027	)		-			(394,027	)
Net loss for the three months ended March 31, 2024		-		-		-		-		-			(2,048,539	)		(2,048,539	)
Balance, March 31, 2024		182,492,221	$	182,493		223,333	$	223	$	5,491,652		$	(17,248,473	)	$	(11,574,105	)

The accompanying notes are an integral part of these financial statements.

Table of Contents

VADO CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2023~~2024 AND ~~2022~~2023

(UNAUDITED)

1. Organization and Business

~~Vado~~Our Corp. (“Vado” or the “Company”) is a Nevada corporation established on February 10, 2017. On February 24, 2023 the Company completed a share exchange agreement (the “Exchange Agreement”) with Socialcom, Inc, a California corporation (“Socialcom”) and the shareholders of Socialcom (the “Closing”). Pursuant to the closing of the Exchange Agreement, the Company issued to the Socialcom shareholders a total of 173,757,921 shares of the Company’s common stock, representing approximately 96% of the outstanding shares of common stock of the Company after giving effect to such issuance, in exchange for all of the shares of Socialcom common stock held by such Socialcom shareholders. The net amount of 6,985,500 shares of the Company’s common stock were held by the previous Vado Corp. shareholders subsequent to the Exchange Agreement. Following the Closing, in May 2023 the Company issued a total of 6,015,757 shares of common stock in exchange for 687,515 shares of Socialcom common stock held by the then minority shareholders of Socialcom. As a result of the foregoing Socialcom became a wholly-owned (rather than a 96.6% owned) subsidiary of the Company. As a result of the Closing, Socialcom became an approximately 96% owned subsidiary of the Company. The Company acquired no assets and $46,322 of liabilities in connection with the Exchange Agreement. Following the closing, the Company through Socialcom operates as a digital marketing and services company focused on delivering integrated advertising and technology performance solutions to independent agencies and brands through its omnichannel trading desk platform.History

In 2013 co-founders Reeve Benaron and Jason Wulfsohn formed Socialcom ~~was~~Inc ~~incorporated~~(“Socialcom”) inby ~~the~~bringing ~~State~~together ofthree ~~California~~businesses onthey ~~March~~held: 8a creative agency, ~~2013~~a digital performance agency, ~~for~~and ~~the~~a ~~purpose~~demand side platform (DSP) or programmatic media-buying platform. The core areas of ~~delivering~~expertise ~~integrated~~represented ~~advertising~~by each of these companies - creative and ~~technology~~brand ~~services~~building, performance marketing and ad tech - still defines Socialcom’s unique competitive advantage today, as it continues to lean into full-funnel and omnichannel performance solutions for independent agencies and brands. ~~The~~During ~~Company’s~~the ~~tech~~last ~~solution~~10 years Socialcom has experienced significant achievements in terms of growth, ~~both~~market ~~self-service~~relevance, and ~~managed~~product ~~service~~innovation, isevidenced ~~built~~by toan ~~deliver~~array ~~end-to-end~~of ~~omnichannel~~prestigious ~~performance~~industry awards, including ~~advertising~~being ~~technology,~~named ~~data~~one of the fastest-~~driven~~growing ~~campaign~~companies ~~optimization~~in ~~and~~America ~~creative~~by ~~services.~~Deloitte, ~~Since~~The ~~its~~Financial ~~inception~~Times and the ~~strategic~~Los ~~focus~~Angeles ofBusiness Journal, as well ranking on the ~~company~~Inc. ~~has~~5000 ~~been~~list ~~oriented~~for ~~toward~~four ~~mid-market~~consecutive ~~businesses~~years, starting in 2019 and most recently in 2022. In 2021 Socialcom was an AdExchanger finalist for Best Programmatic Capabilities, a ~~significant~~W3 Silver Award winner for best integrated campaign and ~~generally~~in ~~underserved~~2022 ~~segment~~Socialcom VP of Partnership Solutions, Danielle Gale, was honored by Cynoposis as one of the ~~larger~~Top USWomen ~~economy~~in Media. Socialcom is the operating subsidiary of Vado Corp (the “Company,” ~~especially~~“Vado,” ~~with~~“we,” ~~respect~~“our” toand ~~their~~“us”), ~~need~~which ~~for~~we acquired in the share exchange described below. Since 2023 the Company has been focused on developing powerful ~~enterprise~~data ~~advertising~~science ~~technology~~and predictive analytics solutions, tothrough ~~drive~~AXi, it’s proprietary suite of audience intelligence tools, that can help deliver significantly improved ~~business~~performance outcomes for their brand and ~~level~~agency ~~the~~clients, ~~playing~~driving ~~field~~differentiation ~~against~~for ~~often~~their ~~larger,~~tech ~~better-funded~~stack ~~competitors~~and competitive advantage for their clients.

Share Exchange

On February 24, 2023 the Company completed the share exchange (the “Exchange”) contemplated by the Share Exchange Agreement (the “Exchange Agreement”) dated January 30, 2023 with Socialcom and the stockholders of Socialcom signatory thereto (the “Closing”). Pursuant to the Closing of the Exchange, the Company issued the Socialcom stockholders signatory thereto a total of 169,434,640 shares of the Company’s common stock, representing approximately 96% of the shares of the Company’s outstanding common stock after giving effect to such issuance, in exchange for all of the shares of Socialcom common stock held by such Socialcom stockholders. As a result of the Closing of the Exchange, Socialcom became an approximately 96.6% owned subsidiary of the Company.

In connection with the Exchange, the Company also agreed to the following: (i) the cancellation of 93 million shares of common stock held by David Lelong, a director of the Company who at that time was also the Company’s sole officer, which cancellation was effected at the Closing, (ii) the issuance 22,793,540 options to purchase common stock of the Company to Socialcom directors, officers, employees and consultants under the Company’s 2023 Equity Incentive Plan in exchange for the cancellation of 2,604,976 outstanding Socialcom stock options held by such persons, and (iii) execution of the Stock Purchase Agreement (the “SPA”) for a financing resulting in gross proceeds to the Company of $1,500,000 (the “Secondary Financing”). The first tranche of the Secondary Financing, in which the Company sold 25,000 shares of Series A Convertible Preferred Stock (the “Series A”) for $750,000, closed simultaneously with the Closing of the Exchange. The second tranche of the Secondary Financing in which the Company sold an additional 25,000 shares of Series A for an additional $750,000 closed on May 25, 2023.

Effective at the Closing, the number of directors of the Company was fixed at three, and Jason Wulfsohn and Reeve Benaron were appointed to serve on the Board of Directors. Effective upon the Closing, David Lelong tendered his resignation as the sole officer of the Company, and Jason Wulfsohn was appointed as the Company’s Chief Executive Officer. Mr. Lelong remains as a director.

Summary of Business

Socialcom continues to embrace future-first solutions, recognizing ongoing changes in the ad tech space, from data usage and privacy, to emerging technologies and platforms. The Company operates tdX, an omnichannel trading desk platform, providing unified buy-side access to the full-breadth of the ad tech ecosystem, including 24 performance platforms across programmatic, display, CTV, DOOH, and audio, along with search and social. tdX represents a holistic performance solution, unified by the company’s robust data infrastructure, delivering powerful real-time campaign learnings and cross-channel performance optimizations, along with sophisticated analytics designed to deliver scalable and sustainable campaign outcomes. Tech-enabled creative services, delivered by the Company’s internal creative team, Socialcom Studio, ensures that creative is a powerful driver of campaign success, providing differentiated, performance-oriented brand and product ad units and other digital content for deployment within customer campaigns.

Each of these elements, seamlessly integrated within Socialcom’s tech stack, represents a unified customer acquisition and growth solution for the performance marketer, seeking a holistic advertising solution that can deliver measurable and scalable results against clearly defined business goals.

The preparation of unaudited condensed interim financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The unaudited interim condensed financial statements have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to such rules and regulations. These unaudited condensed interim financial statements should be read in conjunction with the audited consolidated financial statements and notes for the fiscal year ended December 31, 2022 of Socialcom, which was the accounting acquirer in the February 2023 share exchange described above as Vado was a shell company with no operations at the time of the closing of the share exchange. Such audited Socialcom financial statements are included in the Company’s Offering Statement on Form 1-A originally filed with the SEC on April 19, 2023, as amended.

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2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in US dollars. The Company has adopted a fiscal year end of December 31. The accompanying condensed consolidated financial statements include the accounts of Socialcom and Vado Corp. All material intercompany transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. The Company had cash of $~~455~~32,~~352~~946 and $~~485~~133,~~053~~182 and no cash equivalents as of ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023, respectively.

Restricted Investment

The Company has a restricted investment in the amount of $1,~~016~~042,~~236~~418 in connection with a complaint filed by a former services provider of the Company in the amount of $12,~~442~~476,~~441~~926 for amounts due. The restricted investment is held in the form of a United States Treasury Bill which matures on May 16, 2024. It is the Company’s intention to hold this investment to maturity. See notes 134, 14, and 1617.

Property, Plant, and Equipment

Property and equipment is recorded at the lower of cost or estimated net recoverable amount, and is depreciated using the straight-line method over its estimated useful life. Property acquired in a business combination is recorded at estimated initial fair value. Property, plant, and equipment are depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based upon the following life expectancy:

	Years
Office equipment		3 to 5
Furniture & fixtures		3 to 7
Leasehold improvements	Term of lease

Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which extend the useful life of an asset, are capitalized and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold, the cost and related accumulated depreciation are eliminated and any resulting gain or loss is reflected in operations.

Long-Lived Assets

The Company reviews its property and equipment and any identifiable intangibles including goodwill for impairment on an annual basis utilizing the guidance set forth in the Statement of Financial Accounting Standards Board ASC 350 “Intangibles – Goodwill and Other” and ASC 360 “Property, Plant, and Equipment.” At ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023, the net carrying value of intangible assets on the Company’s balance sheet was $~~153~~89,~~277~~672 and $~~286~~110,~~801~~425, respectively.

Concentrations of Credit Risk

The Company maintains its cash in bank deposit accounts and other accounts, the balances of which at times may be uninsured or exceed federally insured limits. From time to time, some of the Company’s funds are also held by escrow agents; these funds may not be federally insured. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts.

Advertising and Marketing Costs

All costs associated with advertising and promoting products are expensed as incurred. Total recognized advertising and marketing expenses were $123,820 and $282,071 for the nine months ended September 30, 2023 and 2022, respectively.

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Advertising and Marketing Costs

All costs associated with advertising and promoting products are expensed as incurred. Total recognized advertising and marketing expenses were $35,217 and $44,721 for the three months ended March 31, 2024 and 2023, respectively.

Fair Value of Financial Instruments

Pursuant to Accounting Standards Codification (“ASC”) No. 825 - Financial Instruments, the Company is required to estimate the fair value of all financial instruments included on its balance sheets. The carrying amounts of the Company’s cash and cash equivalents, notes receivable, convertible notes payable, accounts payable and accrued expenses, none of which is held for trading, approximate their estimated fair values due to the short-term maturities of those financial instruments.

A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.

Level 3 - Significant unobservable inputs that cannot be corroborated by market data.

Capitalized Software Development Costs

The Company capitalizes certain costs associated with creating and enhancing internally developed software related to the development of the Company’s platform solution. These costs include third party development expenses for that are directly associated with and devote time to software development projects. Software development costs that do not qualify for capitalization, as further discussed below, are expensed as incurred and recorded in operating expenses in the consolidated statements of operations.

The Company’s customers do not take possession of the software and cannot run the software on their own hardware. For these reasons, pursuant to ASC 985-20 Costs of Software to Be Sold, Leased, or Marketed (“ASC 982-20”), the software is considered a software hosting arrangement and the Company applied the guidance of ASC 350-40 Intangibles – Goodwill and Other: Internal Use Software” (“ASC 350-40"). Pursuant to ASC 350-40, software development activities typically consist of three stages: (1) the planning phase; (2) the application and infrastructure development stage; and (3) the post-implementation stage. Costs incurred in the planning and post implementation phases, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. The Company capitalizes costs associated with software developed when the preliminary project stage is completed, management implicitly or explicitly authorizes and commits to funding the project and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development phases, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete and the software is ready for its intended purpose. Software development costs are amortized using a straight-line method over the estimated useful life of three years, commencing when the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit will be derived.

Operating Leases

The Company accounts for its leasing arrangements by applying the guidance of Accounting Standards Update No. 2016-02, Leases (Topic 842), (“ASU 2016-02”). The Company enters into operating leases for its office space. The Company does not have finance leases.

The Company determines if an arrangement is, or contains, a lease at inception. Operating lease assets represent the Company’s right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right.

Operating lease assets and liabilities are initially recorded based on the present value of lease payments over the lease term, which includes the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. As the rate implicit for each of the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate, based on the information available at the lease commencement date in determining the present value of its expected lease payments. The Company has elected to not separate lease and non-lease components.

Operating lease assets are amortized on a straight-line basis in operating lease expense over the lease term on the consolidated statements of operations. The related amortization, along with the change in the operating lease liabilities, are separately presented within the cash flows from operating activities on the consolidated statements of cash flows. The Company records lease expense for operating leases, some of which have escalating rent payments, on a straight-line basis over the lease term.

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Certain leases contain provisions for property-related costs that are variable in nature for which the Company is responsible, including common area maintenance and other property operating services. These costs are calculated based on a variety of factors including property values, tax and utility rates, property services fees and other factors.

Refer to Note 8 for additional information.

Revenue Recognition

The Company generates its revenue by providing marketers and advertising agencies with the ability to deliver digital marketing and marketing-related solutions. The Company’s primary business is to deliver omnichannel programmatic, paid search, and paid social advertising services for its customers. The Company also does a limited amount of marketing-related project work for customers, including creative services, and also has a reseller solution with a partner. This results in the following revenue streams:

	●	Programmatic Solutions

	●	Paid Search & Social Solutions

	●	Services Revenue

	●	Self-Serve Revenue

The Company applies a five-step approach as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606: Revenue from Contracts with Customers (“ASC 606”) in determining the amount and timing of revenue to be recognized:

	●	Identification of a contract with a customer;

	●	Identification of the performance obligation in the contract;

	●	Determination of the transaction price;

	●	Allocation of the transaction price to the performance obligations in the contract; and

	●	Recognition of revenue when or as the performance obligations are satisfied.

The determination of whether revenue should be reported on a gross or a net basis is based upon an assessment of whether we are acting as the principal or agent in the transaction based upon the guidance in ASC 606. Making such determinations involves judgment and is based on an evaluation of the terms of each arrangement, none of which are considered presumptive or determinative. We act as a principal and recognize revenue on a gross basis if (i) we control the advertising inventory before it is transferred to our clients; (ii) we bear sole responsibility for fulfillment of the advertising promise and inventory risks and (iii) we have full discretion in establishing prices. We applied the guidance of ASC 606 to our revenue streams as follows:

Programmatic Solutions: Programmatic revenue consists of delivering our customer’s budget programmatically through our trading desk model, where multiple Demand Side Platforms (“DSP”) are utilized to deliver advertising budgets as paid impressions. The Company, through its deep understanding of DSP platforms, transacts to spend customer’s budgets within the platforms to execute against customer marketing goals as efficiently and effectively as possible. In this arrangement, our team will perform all of the setup, activation, strategy, tactic building, implementation and delivery of the campaign through a partner platform or platforms. We enter into an Insertion Order / Media Plan (“IO”) with all Programmatic customers. The IO states the services that are to be performed and a budget for each tactic or tactics. We bill our customers for a percentage of the total spend, and recognize revenue upon completion of the performance obligation. Because we are in control of this process and assume inventory risk, we recognize revenue on a gross basis.

Paid Search & Social Solutions: We also enter into an IO with all Paid Search & Social customers. The IO states the services that are to be performed and a budget for each tactic. We bill our customers for a percentage of the total spend, and recognize revenue upon completion of the performance obligation. In instances where we pay the third party for inventory, we recognize revenue on a gross basis because we bear the inventory risk. In instances where the customer pays the third party, we recognize revenue on a net basis.

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Services Revenue: We enter into Statement of Work (“SOW”) agreements with all Services customers. The SOW includes estimated costs to be applied against the services to be performed, and establishes payment and billing terms. Services revenue is recognized on a gross basis.

Self-Serve Revenue: Self-serve revenue consists of revenues generated through our Admatx platform, as well as through reselling access to a major enterprise DSP. Users of Admatx agree to our platform terms and conditions, and we enter into Master Services Agreements (“MSA”) with all reseller customers. The Platform Terms and Conditions and MSAs detail the work and responsibilities of each party and their respective obligations. Self-serve revenue is recognized on a net basis.

Deferred Revenue

Certain customer arrangements in the Company's business result in deferred revenues when cash payments are received in advance of performance.

The following table represents the changes in deferred revenue as reported on the Company’s consolidated balance sheets:

Balance acquired as of December 31, 2022		72,630
Balance acquired as of December 31, 2023		191,766
Cash payments received		1466,~~994,020~~376
Net sales recognized		(1289,~~677,501~~382	)
Balance as of September 30, 2023	$	389,149
Balance as of March 31, 2024	$	368,760

Stock-Based Compensation

We recognize compensation costs to employees under FASB ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). Under FASB ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation cost for stock options are estimated at the grant date based on each option’s fair-value as calculated by the Black-Scholes-Merton (“BSM”) option-pricing model. Share-based compensation arrangements may include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

Equity instruments issued to other than employees are recorded pursuant to the guidance contained in ASU 2018-07 (“ASU 2018-07”), Improvements to Non-employee Share-Based Payment Accounting, which simplified the accounting for share-based payments granted to non-employees for goods and services. Under the ASU 2018-07, most of the guidance on such payments to non-employees would be aligned with the requirements for share-based payments granted to employees.

Basic and Diluted Earnings or Loss Per Share

Basic net earnings per share is based on the weighted average number of shares outstanding during the period, while fully diluted net earnings per share is based on the weighted average number of shares of common stock and potentially dilutive securities assumed to be outstanding during the period using the treasury stock method. Potentially dilutive securities consist of options to purchase common stock. Basic and diluted net loss per share are computed based on the weighted average number of shares of common stock outstanding during the period. At ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023, the Company had the following potentially dilutive instruments outstanding: a total of 21,~~141~~430,~~015~~640 and 21,~~412~~684,~~527~~635 shares, respectively, issuable upon the exercise of stock options.

The Company uses the treasury stock method to calculate the impact of outstanding stock options and warrants. Stock options for which the exercise price exceeds the average market price over the period have an anti-dilutive effect on earnings per common share and, accordingly, are excluded from the calculations. At ~~September~~March 3031, ~~2023~~2024 and ~~2022~~December 31, 2023, 21,~~141~~430,~~015~~640 and 21,~~412~~684,~~527~~635 stock options, respectively, are excluded from the calculation of fully-diluted shares outstanding.

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Income Taxes

The Company accounts for income taxes under the asset and liability method in accordance with ASC 740. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred tax assets and liabilities are classified as current and non-current based on their characteristics. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

Commitments and Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company management may consult its legal counsel to evaluate the perceived merits of any legal proceedings or unasserted claims brought to such legal counsel’s attention as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock, as well as amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard was effective for us on January 1, ~~2022~~2023. The adoption of this standard did not have a material effect on our consolidated financial statements.

There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

3. ~~Accounts~~Transfer ~~Receivable~~of Customers and Employees

~~Accounts~~On ~~receivable~~March 15, ~~net~~2024, ~~was~~Socialcom $3Inc,~~391,491~~ ~~and~~a ~~$2,080,758~~subsidiary atof ~~September~~Vado 30Corp. (the “Company”), ~~2023~~entered ~~and~~into ~~December~~an ~~31,~~Agreement ~~2022,~~for ~~respectively.~~Transfer ~~During~~of Customers and Employees (the ~~nine~~“Agreement”) ~~months~~with ~~ended~~a ~~September~~third ~~30,~~party ~~2023~~(the ~~and~~“Counterparty”). ~~2022~~Under the Agreement, the Company ~~charged~~acquired the ~~amount~~customer base (comprised of ~~$114,217~~11 customers and ~~$87,826,~~one ~~respectively,~~prospective tocustomer) ~~bad~~and ~~debt~~hired ~~expense.~~14 Atemployees ~~September~~of 30the Counterparty, ~~2023~~ and ~~December~~assumed 31the related liabilities thereof, ~~2022~~with an effective date on March 1, 2024 (the “Transfer Date”). The Agreement provides that the Company ~~maintained~~will areceive ~~reserve~~payment for ~~doubtful~~all ~~accounts~~services inprovided on the ~~amount~~acquired ofcustomer ~~$204~~accounts beginning on the Transfer Date,~~122~~ ~~and~~including customer prepayments held by the Counterparty totaling $~~173~~4,~~382~~164,269 ~~respectively~~for future services to be rendered on customer accounts, subject to performance of the services on such accounts and on the Counterparty’s right to offset transferred employee compensation. The customer prepayments will be determined and paid on a monthly basis.

OnDuring ~~June 13, 2019,~~ the ~~Company~~three ~~entered~~months ~~into~~ended anMarch ~~accounts~~31, ~~receivable financing and security agreement (the “Financing Agreement”) in the maximum amount of $10~~2024,~~000,000~~ ~~whereby~~ the Company ~~would~~recorded berevenue ~~advanced~~in ~~85% of~~ the ~~gross value of accounts receivable invoices submitted to the lender for purchase. The cost of the financing consists of (i) an initial financing fee equal to one-twelfth of the net~~ amount ~~advanced multiplied by the facility rate, initially defined as LIBOR plus 6.5% per annum (the “Facility Rate”), and (ii) an additional financing fee consisting~~ of ~~one-twelfth of the amount advanced, prorated on a daily rate, multiplied by the Facility Rate. On June 11, 2021, the maximum amount available under the Financing Agreement was reduced to~~ $51,~~000~~008,~~000,~~485 and oncosts ~~June~~in ~~8, 2022,~~ the ~~maximum~~ amount available under the Financing Agreement was reduced to $3,000,000 and the Facility Rate was increased to LIBOR plus 7.25% per annum. On September 18, 2023, the maximum amount available under the Financing Agreement was reduced to $2,000,000 and the Facility Rate was increased to Prime Rate (defined as the higher of ~~the highest rate as reported by the Wall Street Journal or 8.5%) plus 5% per annum. During the nine months ended September 30, 2023 and 2022, the Company charged to interest expense the amount of~~ $88973,~~142~~235 ~~and~~in ~~$75,490,~~connection ~~respectively,~~with ~~pursuant to~~ the ~~Financing~~ Agreement.

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~~Accounts~~4. ~~receivable,~~Investments ~~net~~- ~~consisted~~Restricted ~~of the following at September 30, 2023 and December 31, 2022:~~

	September 30,			December 31,
	2023			2022
Accounts receivable	$	3,423,726		$	2,048,001
Due under Financing Agreement, net		171,887			257,731
Allowance for doubtful accounts		(204,122	)		(224,974	)
Total	$	3,391,491		$	2,080,758

The Company has a restricted investment in the amount of $1,042,418 in connection with a complaint filed by a former services provider of the Company in the amount of $1,442,441 for amounts due. The restricted investment is held in the form of a United States Treasury Bill which matures on May 16, 2024. It is the Company’s intention to hold this investment to maturity. See notes 14 and 17.

4.The ~~Other~~components ~~Current~~of ~~Assets~~restricted investments were as follows:

Other current assets consisted of the following at September 30, 2023 and December 31, 2022:

	Fair		Unrealized
March 31, 2024	Value		Losses
U.S. Treasury Bill	$	1,042,040	$	(378	)

	September 30,		December 31,
	Fair		Unrealized
	2023		2022
December 31, 2023	Value		Losses
Deposits	$	39,792		174,092
U.S. Treasury Bill	$	1,029,891	$	(365	)
Prepaid expenses		254,271		71,394
Total	$	294,063	$	245,486

5The investment consists of one U.S. ~~Property~~Treasury Bill with a maturity date of May 16, 2024 and ~~Equipment~~original par value of $1,049,000. This instrument was purchased June 13, 2023 at a price of $1,000,786 and an original issue discount of $48,214. During the three months ended March 31, 2024, the Company recorded interest income in the amount of $13,162 in connection with this investment.

~~Property~~5. ~~and~~Accounts ~~equipment~~Receivable ~~consisted of the following at September 30, 2023 and December 31, 2022:~~

	September 30,			December 31,
	2023			2022
Computer equipment	$	148,599		$	139,143
Leasehold improvements		45,891			45,891
Less: accumulated depreciation		(166,921	)		(152,058	)
Property and equipment, net	$	27,569		$	32,976

Accounts receivable, net was $2,868,769 and $2,953,497 at March 31, 2024 and December 31, 2023, respectively. During the three months ended March 31, 2024 and 2023, the Company (credited) charged the amount of $(109,505) and $31,956, respectively, to bad debt expense. At March 31, 2024 and December 31, 2023, the Company maintained a reserve for doubtful accounts in the amount of $171,557 and $571,773, respectively.

~~The~~On June 13, 2019, the Company ~~made~~entered ~~payments~~into an accounts receivable financing and security agreement (the “Financing Agreement”) in the ~~amounts~~maximum amount of $810,~~706~~000,000 ~~and~~whereby ~~$16,213~~the Company would be advanced 85% of the gross value of accounts receivable invoices submitted to the lender for ~~property~~purchase. ~~and~~The ~~equipment~~cost ~~during~~of the ~~nine~~financing ~~months~~consists ~~ended~~of ~~September~~(i) 30an initial financing fee equal to one-twelfth of the net amount advanced multiplied by the facility rate, ~~2023~~initially defined as LIBOR plus 6.5% per annum (the “Facility Rate”), and ~~2022~~(ii) an additional financing fee consisting of one-twelfth of the amount advanced, ~~respectively~~prorated on a daily rate, multiplied by the Facility Rate. ~~Depreciation~~On ~~expense~~June 11, 2021, the maximum amount available under the Financing Agreement was reduced to $45,~~325~~000,000, and on June 8, 2022, the maximum amount available under the Financing Agreement was reduced to $63,~~602~~000,000 ~~for~~and the ~~three~~Facility ~~months~~Rate ~~ended~~was increased to LIBOR plus 7.25% per annum. On September 3018, 2023, ~~and~~the ~~2022,~~maximum ~~respectively.~~amount ~~Depreciation~~available ~~expense~~under the Financing Agreement was reduced to $142,~~113~~000,000 and ~~$19,265~~the ~~for~~Facility Rate was increased to Prime Rate (defined as the ~~nine~~higher of the highest rate as reported by the Wall Street Journal or 8.5%) plus 5% per annum. During the three months ended ~~September~~March 3031, 2024 and 2023, the Company charged to interest expense the amount of $25,823 and ~~2022~~$29,072, respectively, pursuant to the Financing Agreement.

6.Accounts ~~Intangible~~receivable, ~~Assets~~net consisted of the following at March 31, 2024 and December 31, 2023:

In January 2021 the Company completed the acquisition of certain assets consisting of customer contracts and customer lists (the “BigBuzz Customer Lists”) from BigBuzz Marketing Group (“BigBuzz”). The cost of the BigBuzz Customer Lists was $475,000 payable over three years (see note 9). The Company also capitalized the direct costs of this transaction in the amount of $7,462 for a total cost basis of $482,462. The BigBuzz Customer Lists are being amortized over a period of three years based on the expected customer life of the assets acquired.

	March 31,			December 31,
	2024			2023
Accounts receivable	$	2,857,859		$	3,155,200
Due under Financing Agreement, net		182,467			370,070
Allowance for doubtful accounts		(171,557	)		(571,773	)
Total	$	2,868,769		$	2,953,497

~~The Company began to capitalize the costs of development of internal use software in August 2021, and software was first placed into service in May, 2022~~6. ~~During~~Other ~~the~~Current year ended December 31, 2022, the Company capitalized $89,094 of costs to develop internal use software, placed $123,937 of costs to develop internal use software into service, and amortized the amount of $19,969. During the nine months ended September 30, 2023, the Company capitalized $21,847 of costs to develop internal use software, placed $25,961 of costs to develop internal use software into service, and amortized the amount of $22,793.Assets

~~The~~Other ~~Company~~current ~~has~~assets ~~$4,497~~consisted ~~and~~of ~~$8,611~~the infollowing ~~capitalized software costs that have not yet been placed into service~~ at ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022, respectively.~~2023:

	March 31,		December 31,
	2024		2023
Deposits	$	-		39,792
Prepaid expenses		250,197		195,450
Total	$	250,197	$	235,242

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~~Intangible~~7. ~~assets~~Property ~~consisted of the following at September 30, 2023~~ and ~~December 31, 2022:~~Equipment

	September 30, 2023
			Accumulated
	Gross		Amortization			Net
Customer lists	$	482,462	$	(428,855	)	$	53,607
Internal use software		154,395		(54,725	)		99,670
Total	$	636,857	$	(483,580	)	$	153,277

Property and equipment consisted of the following at March 31, 2024 and December 31, 2023:

	December 31, 2022
	March 31,			December 31,
				Accumulated
	2024			2023
	Gross			Amortization			Net
Computer equipment	$	154,019		$	151,426
Customer lists	$	482,462		$	(308,240	)	$	174,222
Leasehold improvements		45,891			45,891
Internal use software		132,548			(19,969	)		112,579
Less: accumulated depreciation		(175,800	)		(170,854	)
Total	$	615,010		$	(328,209	)	$	286,801
Property and equipment, net	$	24,110		$	26,463

The Company ~~amortized~~made payments in the ~~amount~~amounts of $522,~~167~~593 and $422,~~390~~305 for property and equipment during the three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023, respectively. ~~The~~Depreciation ~~Company~~expense ~~amortized~~was ~~the amount of~~ $~~155~~4,~~371~~946 and $825,~~595~~880 ~~during~~for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023, respectively.

78. ~~Right~~Intangible ~~of Use~~ Assets ~~and Liabilities~~

~~The~~In January 2021 the Company ~~leases~~completed ~~its~~the ~~corporate~~acquisition ~~office~~of ~~under~~certain anassets ~~operating~~consisting ~~lease.~~of ~~Leased~~customer ~~assets~~contracts and ~~corresponding~~customer ~~liabilities~~lists ~~are~~(the ~~recognized~~“BigBuzz ~~based~~Customer onLists”) ~~the~~from ~~present~~BigBuzz ~~value~~Marketing Group (“BigBuzz”). The cost of the ~~lease~~BigBuzz ~~payments~~Customer Lists was $475,000 payable over three years (see note 10). The Company also capitalized the ~~lease~~direct ~~term~~costs of this transaction in the amount of $7,462 for a total cost basis of $482,462. The ~~lease~~BigBuzz ~~terms~~Customer ~~may~~Lists ~~include~~are ~~options~~being toamortized ~~extend~~over ~~when~~a itperiod isof ~~reasonably~~three ~~certain~~years ~~that~~based on the ~~Company~~expected ~~will~~customer ~~exercise~~life ~~that~~of ~~option~~the assets acquired.

~~Topic~~The ~~ASC~~Company ~~842~~began ~~requires~~to capitalize the ~~Company~~costs toof ~~recognize~~development inof ~~the~~internal ~~statement~~use ofsoftware ~~financial~~in ~~position~~August a2021, ~~liability~~and tosoftware ~~make~~was ~~lease~~first ~~payments~~placed ~~(the~~into ~~lease~~service ~~liability)~~in ~~and~~May a2022. ~~right~~In of2021, ~~use~~the ~~asset~~Company ~~representing~~capitalized ~~its~~$43,454 ~~right~~of costs to ~~use~~develop ~~the~~internal ~~underlying~~use ~~asset~~software. ~~for~~In 2022, the ~~lease~~Company ~~term.~~capitalized ~~Right~~an ofadditional ~~use~~$89,094 ~~assets~~of ~~are~~costs ~~recorded~~to indevelop ~~other~~internal ~~assets~~use onsoftware. ~~the~~The Company’s ~~condensed~~placed ~~consolidated~~$31,618 ~~balance~~of ~~sheets.~~costs ~~Current~~to ~~and~~develop ~~non-current~~internal ~~lease~~use ~~liabilities~~software ~~are~~into ~~recorded~~service inand ~~other~~amortized ~~accruals~~the ~~within~~amount ~~current~~of ~~liabilities~~$207,994 ~~and~~during ~~other~~the ~~non-current~~year ~~liabilities,~~ended ~~respectively~~December 31, on2023; ~~its~~the ~~condensed~~Company ~~consolidated~~placed ~~balance~~$5,751 ~~sheets.~~of ~~Costs~~costs ~~associated~~to ~~with~~develop ~~operating~~internal ~~leases~~use ~~are~~software ~~recognized~~into onservice aand ~~straight-line~~amortized ~~basis~~the ~~within~~amount ~~operating~~of ~~expenses~~$13,102 ~~over~~during the ~~term~~three ofmonths ~~the~~ended ~~lease~~March 31, 2024.

AtThe ~~September 30, 2023 and December 31, 2022, the~~ Company ~~had~~has ~~total right of use assets of~~ $~~148~~4,~~451~~497 and $~~581~~8,~~352,~~611 ~~respectively,~~in ~~and~~capitalized ~~lease~~software ~~liabilities~~costs ofthat ~~$160,899~~have ~~and~~not ~~$631,144,~~yet ~~respectively,~~been ~~which~~placed ~~were~~into ~~included~~service inat ~~the~~March ~~Company’s~~31, ~~balance~~2024 ~~sheets.~~and ~~Right~~December to31, ~~use assets – operating leases are summarized below:~~2023.

	September 30, 2023		December 31, 2022
Administrative office	$	148,451	$	581,352
Right to use assets, net	$	148,451	$	581,352

Intangible assets consisted of the following at March 31, 2024 and December 31, 2023:

Operating lease liabilities are summarized below:

	March 31, 2024
			Accumulated
	Gross		Amortization			Net
Customer lists	$	482,462	$	(482,462	)	$	-
Internal use software		169,917		(80,245	)		89,672
Total	$	652,379	$	(562,707	)	$	89,672

	September 30, 2023			December 31, 2022
	December 31, 2023
Administrative office	$	160,899		$	631,144
				Accumulated
Lease liability	$	160,899		$	631,144
	Gross			Amortization			Net
Less: current portion		(160,899	)		(631,144	)
Customer lists	$	482,462		$	(469,060	)	$	13,402
Lease liability, non-current	$	-		$	-
Internal use software		164,166			(67,143	)		97,023
Total	$	646,628		$	(536,203	)	$	110,425

The Company’s ~~lease~~amortized ~~expense~~the ~~was~~amount ~~entirely comprised~~ of ~~operating leases. Lease expense for the nine months ended September 30, 2023 and 2022 was~~ $~~449~~26,~~582~~504 and $~~449~~51,~~582,~~344 ~~respectively.~~during ~~The Company’s right of use (“ROU”) asset amortization for~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022 was $432~~2023,~~901~~ ~~and $409,298,~~ respectively~~; the difference between the lease expense and the associated ROU asset amortization consists of interest~~.

Maturity analysis under these lease agreements are as follows:

For the twelve months ended September 30, 2024	$	162,309
Less: Present value discount		(1,410	)
Lease liability	$	160,899

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89. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following at ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023:

	September 30,		December 31,
	March 31,		December 31,
	2023		2022
	2024		2023
Trade accounts payable	$	23,~~527~~375,~~929~~987	$	12,~~585~~632,~~352~~999
Credit cards payable		~~564~~864,~~435~~920		~~371~~661,~~773~~676
Accrued payroll and payroll taxes		~~194~~50,~~193~~866		~~261~~65,~~535~~565
Accrued interest		~~139~~270,~~973~~619		53195,~~459~~235
Total	$	34,~~426~~562,~~530~~392	$	23,~~272~~555,~~119~~475

910. Acquisition Liabilities

In January 2021 the Company recorded a liability in the amount of $475,000 in connection with the acquisition of the BigBuzz Customer Lists ~~(see note 6)~~, which consisted of a three-year employment agreement for each of the two founders of BigBuzz. As this was an acquisition of only certain assets consisting of customer contracts and customer lists (see note 68), no other assets were acquired that would give rise to acquisition related liabilities; there were no requirements to hire any other employees as part of the asset acquisition. The Company paid $25,000 of this amount on February 2, 2021; the remainder is payable at the rate of $12,500 per month through January 31, 2024. During the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023, the Company paid the amount of $~~112~~12,500 and $37,500, respectively, in connection with this liability.

1011. Loans Payable

	September 30, 2023		December 31, 2022
	March 31, 2024		December 31, 2023
Loan payable to Decathlon dated December 31, 2019 (the “Decathlon Loan”) in the principal amount of $3,000,000. The Decathlon Loan is due June 30, 2024 and is collateralized by all the assets of the Company. The Decathlon Loan accrues interest at a variable rate based upon internal rate of return targets. The effective rate of interest for the year ended December 31, 2022 and the nine months ended September 30, 2023 was approximately 17%. There are no restrictive covenants in the loan and it is not convertible. Repayments are required based upon a fixed percentage of our earned revenue. If not repaid prior the final balance is due on June 13, 2024. The Decathlon Loan is subject to minimum interest that escalates over the term of the loan. During the three months ended September 30, 2023, the minimum interest on this loan increased by $900,000 to a total of $3,900,000. The Company accounted for the minimum interest liability as a discount on the debt. At September 30, 2023 and December 31, 2022, the potential liability for unearned minimum interest was $1,388,866 and $1,661,504, respectively. During the nine months ended September 30, 2023, the Company made principal payments in the amount $350,613 on the Decathlon loan. During the nine months ended September 30, 2022, the Company made principal payments in the amount $84,040 respectively, on the Decathlon loan.	$	3,098,806	$	2,276,781
Loan payable to Decathlon dated December 31, 2019 (the “Decathlon Loan”) in the principal amount of $3,000,000. The Decathlon Loan is due June 30, 2024 and is collateralized by all the assets of the Company. The Decathlon Loan accrues interest at a variable rate based upon internal rate of return targets. The effective rate of interest for the year ended December 31, 2023 and the three months ended March 31, 2024 was approximately 17%. There are no restrictive covenants in the loan, and it is not convertible. Repayments are required based upon a fixed percentage of our earned revenue. If not repaid prior the final balance is due on June 13, 2024. The Decathlon Loan is subject to minimum interest that escalates over the term of the loan. During the three months ended September 30, 2023, the minimum interest on this loan increased by $900,000 to a total of $3,900,000. The Company accounted for the minimum interest liability as a discount on the debt. At March 31, 2024 and December 31, 2023, the potential liability for unearned minimum interest was $362,478 and $886,733, respectively. During the three months ended March 31, 2024, the Company made principal payments in the amount of $5,985 on the Decathlon loan.	$	3,968,349	$	3,459,516
Loan payable to the US Small Business Administration (the “EIDL Loan”) dated July 7, 2020 pursuant to the Small Business Administration Economic Injury Disaster Loan Program (the “EIDL”) established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) in the original principal amount of $150,000. Effective March 31, 2022, the Company borrowed an additional $50,000 under the EIDL Loan and the balance due was amended to $200,000. Interest payments in the amount of $989 per month were due beginning in January 2023. The term of the EIDL Loan is 30 years, and the annual interest rate is 3.75%. EIDL Loan recipients can apply for, and be granted forgiveness for, all or a portion of loans granted. During the nine months ended September 30, 2023 and 2022, the Company accrued interest in the amount of $8,901 and $3,154, respectively, on the EIDL Loan.		200,000		200,000
Loan payable to the US Small Business Administration (the “EIDL Loan”) dated July 7, 2020 pursuant to the Small Business Administration Economic Injury Disaster Loan Program (the “EIDL”) established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) in the original principal amount of $150,000. Effective March 31, 2022, the Company borrowed an additional $50,000 under the EIDL Loan and the balance due was amended to $200,000. Interest payments in the amount of $989 per month were due beginning in January 2023. The term of the EIDL Loan is 30 years, and matures on July 7, 2050; the annual interest rate is 3.75%. EIDL Loan recipients can apply for, and be granted forgiveness for, all or a portion of loans granted. During the three months ended March 31, 2024 and 2023, the Company accrued interest in the amount of $1,967 and $1,665, respectively, on the EIDL Loan.		200,000		200,000
Total	$	34,~~298~~168,~~806~~349	$	23,~~476~~659,~~781~~516
Current portion	$	3,~~098~~968,~~806~~349	$	~~348~~3,~~945~~459,516
Long-term maturities		200,000		2200,~~127,836~~000
Total	$	34,~~298~~168,~~806~~349	$	23,~~476~~659,~~781~~516

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Aggregate maturities of loans payable as of ~~September~~March 3031, ~~2023~~2024 are as follows:

For the twelve months ended ~~September~~March 3031,

2024	$	3,098,806
2025	$	3,968,349
2025		-
2026		-
2026		1,363
2027		2,843
2027		4,496
2028		4,581
2028 and thereafter		194,141
2029 and thereafter		192,576
Total	$	34,~~298~~168,~~806~~349

1112. Loans Payable – Related Parties

	September 30, 2023		December 31, 2022
	March 31, 2024		December 31, 2023
Loan payable to an entity affiliated to Jason Wulfsohn, the Company’s CEO and a director, originally dated March 21, 2020 and renewed March 21, 2021, March 21, 2022, and March 21, 2023 in the amount of $300,000 bearing interest at the rate of 15% and due March 21, 2024 (“March 2021 Loan 1”). During the three months ended September 30, 2023 and 2022, the Company made interest payments of $11,250 on the March 2021 Loan 1. During the nine months ended September 30, 2023 and 2022, the Company made interest payments of $33,750 on the March 2021 Loan 1.	$	300,000	$	300,000
Loan payable to an entity affiliated to Jason Wulfsohn, the Company’s CEO and a director, originally dated March 21, 2020 and renewed March 21, 2021, March 21, 2022, March 21, 2023 and March 31, 2024 in the amount of $300,000 bearing interest at the rate of 15% and due March 21, 2025 (“March 2021 Loan 1”). During the three months ended March 31, 2024 and 2023, the Company made interest payments of $11,250 on the March 2021 Loan 1.	$	300,000	$	300,000
Loan payable to an entity affiliated to Reeve Benaron, the Company’s Chairman, originally dated March 21, 2020 and renewed March 21, 2021, and March 21, 2022, and March 11, 2023 in the amount of $300,000 bearing interest at the rate of 15% and due March 21, 2024 (the “March 2021 Loan 2”). During the three months ended September 30, 2023 and 2022, the Company made interest payments of $11,250 on the March 2021 Loan 2. During the nine months ended September 30, 2023 and 2022, the Company made interest payments of $33,750 on the March 2021 Loan 2.		300,000		300,000
Loan payable to an entity affiliated to Reeve Benaron, the Company’s Chairman, originally dated March 21, 2020 and renewed March 21, 2021, March 21, 2022, March 11, 2023 and March 31, 2024 in the amount of $300,000 bearing interest at the rate of 15% and due March 21, 2025 (the “March 2021 Loan 2”). During the three months ended March 31, 2024 and 2023, the Company made interest payments of $11,250 on the March 2021 Loan 2.		300,000		300,000
Loan payable to an entity affiliated to Reeve Benaron, the Company’s Chairman and a principal stockholder, dated June 20, 2022 in the amount of $500,000 bearing interest at the rate of 2.19% and due December 31, 2024 (the “June 2022 Loan”). The June 2022 Loan is payable in eighteen monthly installments of $28,889 beginning on July 20, 2023. On November 13, 2023, the June 2022 Loan was amended to the loan being payable in eighteen monthly installments of $31,354 beginning on July 20, 2024, and the interest rate on the loan was increased to 8.25%. During the three months ended September 30, 2023 and 2022 the Company accrued interest in the amount of $10,312 and $2,738, respectively, on the June 2022 Loan. During the nine months ended September 30, 2023 and 2022 the Company accrued interest in the amount of $15,788 and $3,650, respectively, on the June 2022 Loan.		500,000		500,000
Loan payable to an entity affiliated to Reeve Benaron, the Company’s Chairman and a principal stockholder, dated June 20, 2022 in the amount of $500,000 bearing interest at the rate of 2.19% and due December 31, 2024 (the “June 2022 Loan”). The June 2022 Loan is payable in eighteen monthly installments of $28,889 beginning on July 20, 2023. On November 13, 2023, the June 2022 Loan was amended to the loan being payable in eighteen monthly installments of $31,354 beginning on July 20, 2024, and the interest rate on the loan was increased to 8.25%. During the three months ended March 31, 2024 and 2023 the Company accrued interest in the amount of $10,312 and $3,737, respectively, on the June 2022 Loan.		500,000		500,000
Total	$	1,100,000	$	1,100,000
Loan payable to Jason Wulfsohn, the Company’s CEO, in the original amount of $310,000 dated December 29, 2023, bearing interest at the rate of 7.25%, and due December 29, 2024 (the December 2023 Loan”). The Company accrued interest in the amount of $5,603 on the December 2023 loan during the three months ended March 31, 2024.		310,000		310,000
Current portion	$	630,638	$	757,426
Loan payable to Jason Wulfsohn, the Company’s CEO, in the original amount of $96,000 dated March 19, 2024, bearing interest at the rate of 7.25%, and due December 29, 2024 (the “March 2024 Loan”). The Company accrued interest in the amount of $229 on the March 2024 loan during three months ended March 31, 2024.		96,000		-
Long-term maturities		469,362		342,574
Total	$	1,506,000	$	1,410,000
Total	$	1,100,000	$	1,100,000
Current portion	$	1,178,240	$	996,700
Long-term maturities		327,760		413,300
Total	$	1,506,000	$	1,410,000

Aggregate maturities of loans payable – related parties as of ~~September~~March 3031, ~~2023~~2024 are as follows:

For the ~~nine~~twelve months ended ~~September~~March 3031,

2024	$	630,638
2025	$	1,178,240
2025		348,119
2026		267,351
2026		121,243
2027		60,409
Total	$	1,~~100~~506,000

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1213. Convertible Note Payable – Related Party

	September 30, 2023		December 31, 2022
	March 31, 2024		December 31, 2023
Convertible promissory note payable to an entity affiliated to Reeve Benaron, the Company’s Chairman and a principal shareholder, dated February 7, 2023 in the amount of $800,000 bearing interest at the rate of 7.25% and due December 31, 2023 (the “February Convertible Note”). The February Convertible Note is convertible into common stock of the Company at a price of $2.04 per share. The Company recorded a beneficial conversion feature in the amount $215,686 in connection with the February Convertible Note; during the three and nine months ended September 30, 2023, $60,497 and $155,189, respectively, of the discount was amortized to interest expense. During the three and nine months ended September 30, 2023, the Company accrued interest in the amount of $15,096 and $38,614, respectively, on the February Convertible Note.		800,000		-
Convertible promissory note payable to an entity affiliated to Reeve Benaron, the Company’s Chairman and a principal shareholder, dated February 7, 2023 in the amount of $800,000 bearing interest at the rate of 7.25% and due December 31, 2023 (the “February Convertible Note”). The February Convertible Note is convertible into common stock of the Company at a price of $2.04 per share. The Company recorded a beneficial conversion feature in the amount $215,686 in connection with the February Convertible Note which was amortized to interest expense during the year ended December 31, 2023. During the three months ended March 31, 2024 and 2023, the Company accrued interest in the amount of $14,397 and $8,603, respectively, on the February Convertible Note.	$	800,000	$	800,000
Convertible promissory note payable to an entity affiliated to Jason Wulfsohn, the Company’s CEO and a director, dated May 12, 2023, in the amount of $1,300,000 bearing interest at the rate of 7.25% and due December 31, 2025 (the “May Convertible Note”). The May Convertible Note is convertible into common stock of the Company at a price of $0.32 per share. The Company recorded a beneficial conversion feature in the amount $325,000 in connection with the May Convertible Note. During the three and nine months ended September 30, 2023, $31,113 and $46,670 of the discount, respectively, was amortized to interest expense. During the three and nine months ended September 30, 2023, the Company accrued interest in the amount of $24,531 and $36,667, respectively, on the May Convertible Note.		1,300,000		-
Convertible promissory note payable to an entity affiliated to Jason Wulfsohn, the Company’s CEO and a director, dated May 12, 2023, in the amount of $1,300,000 bearing interest at the rate of 7.25% and due December 31, 2025 (the “May Convertible Note”). The May Convertible Note is convertible into common stock of the Company at a price of $0.32 per share. The Company recorded a beneficial conversion feature in the amount $325,000 in connection with the May Convertible Note; $77,783 of this amount was amortized to interest expense during the year ended December 31, 2023. During the three months ended March 31, 2024, the remaining discount in the amount of $247,217 was charged to additional paid-in capital upon the Company’s implementation of ASU 2020-06. During the three months ended March 31, 2024, the Company accrued interest in the amount of $24,273 on the May Convertible Note.		1,300,000		1,300,000
Total	$	2,100,000	$	-
Convertible promissory note payable to an entity affiliated to Jason Wulfsohn, the Company’s CEO and a director, dated November 15, 2023, in the amount of $624,000 bearing interest at the rate of 8.5% and due December 31, 2025 (the “November Convertible Note”). The November Convertible Note is convertible into common stock of the Company at a price of $0.32 per share. The Company recorded a beneficial conversion feature in the amount of $156,250 in connection with the November Convertible Note. During the year ended December 31, 2023, $9,439 of the discount was amortized to interest expense. During the three months ended March 31, 2024, the remaining discount in the amount of $146,811 was charged to additional paid-in capital upon the Company’s implementation of ASU 2020-06. During the three months ended March 31, 2024, the Company accrued interest in the amount of $11,651 on the November Convertible Note.		624,000		624,000
Current portion	$	800,000	$	-
Total	$	2,724,000	$	2,724,000
Long-term maturities		1,300,000		-
Current portion	$	800,000	$	800,000
Total	$	2,100,000	$	-
Long-term maturities		1,924,000		1,924,000
Total	$	2,724,000	$	2,724,000

Principal	$	2,100,000		$	-
Discount		(338,827	)		-
Principal net of discount	$	1,761,173		$	-

Aggregate maturities of convertible notes payable – related parties as of March 31, 2024 are as follows:

~~13.~~For ~~Accrued~~the ~~Settlements~~twelve months ended March 31,

On December 31, 2019, the Company accrued the amount of $650,000 in connection with the settlement of a dispute with a former contractor. See note 16. At December 31, 2022, the balance due under this accrued liability was $62,500. During the nine months ended September 30, 2023 and 2022, the Company made payments on this accrued liability in the amount of $62,500 and $0, respectively. At September 30, 2023, the amount of $0 remains on the Company’s balance sheet as an accrued liability.

2025	$	800,000
2026		1,924,000
Total	$	2,724,000

On December 31, 2018, the Company accrued the amount of $100,000 in connection with the settlement of a dispute with a former employee. See note 16. During the nine months ended September 30, 2023 and 2022, the Company made payments on this accrued liability in the amount of $62,500 and $0, respectively. At September 30, 2023, the amount of $0 remains on the Company’s balance sheet as an accrued liability.

On December 31, 2019 the Company accrued $1,582,652 in connection with a vendor dispute. During the three months ended September 30, 2023, the Company accrued an additional $894,274 pursuant to this dispute. See note 16. At September 30, 2023, the amount of $2,476,926 remains on the Company’s balance sheet as an accrued liability. The Company has investments in the amount of $1,016,236 on its balance sheet at September 30, 2023 for the purpose of funding a surety bond in connection with this liability. See note 16.

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14. ~~Stockholders’~~Accrued ~~Equity~~ Settlements

~~The~~On ~~Company’s~~December ~~authorized~~31, ~~capital~~2019 ~~stock~~the ~~consists~~Company ofaccrued ~~490~~$1,~~000~~582,~~000~~652 ~~shares~~in ofconnection ~~common~~with ~~stock~~a vendor dispute. During the three months ended September 30, ~~par~~2023, ~~value~~the Company accrued an additional $~~0.001~~894,274 ~~and~~pursuant 10to this dispute. At March 31,~~000~~ 2024,~~000~~ ~~shares~~the amount of ~~preferred stock~~$2,476,926 ~~par~~remains ~~value~~on $0the Company’s balance sheet as an accrued liability.~~001,~~ The Company has investments in the amount of $1,~~000~~042,~~000~~418 ~~shares~~on its balance sheet at March 31, 2024 for the purpose of ~~which~~funding ~~are~~a ~~designated~~surety asbond ~~Series~~in Aconnection ~~Preferred~~with ~~Stock~~this liability. See note 17.

15. Stockholders’ Equity

The Company’s authorized capital stock consists of 490,000,000 shares of common stock, par value $0.001, and 10,000,000 shares of preferred stock, par value $0.001, 1,000,000 shares of which are designated as Series A Preferred Stock. The Company had 182,492,221 shares of common stock issued and outstanding as of March 31, 2024 and December 31, 2023.

Common Stock

~~Nine~~Three months ended ~~September~~March 3031, ~~2023~~2024:

OnNo ~~January 30, 2023, Socialcom sold 1,692,477 shares of common stock at a price of $0~~activity.295 per share for cash in the amount of $500,000. These shares of Socialcom common stock were later exchanged for Vado common stock at a ratio of one-for-8.75 pursuant to the Exchange Agreement described in the paragraph that immediately follows.

OnThree ~~February~~months ~~24,~~ended ~~2023~~March ~~the Company completed the Exchange Agreement with pursuant which to the Company issued to the Socialcom shareholders a total of 173~~31,~~757,921~~ shares of the Company’s common stock, representing approximately 96% of the outstanding shares of common stock of the Company after giving effect to such issuance, in exchange for all of the shares of Socialcom common stock held by such Socialcom shareholders. As a result of the foregoing, Socialcom became an approximately 96.6% owned subsidiary of the Company. Following the Closing, in May 2023 the Company issued a total of 6,015,757 shares of common stock in exchange for 687,515 shares of Socialcom common stock held by the then minority shareholders of Socialcom. As a result of the foregoing Socialcom became a wholly-owned (rather than a 96.6% owned) subsidiary of the Company. See note 1.:

On ~~August~~February 2924, 2023, the Company completed the Exchange Agreement with pursuant which to the Company issued 56to the Socialcom shareholders a total of 173,~~324~~757,921 shares of the Company’s common stock, representing approximately 96% of the outstanding shares of common stock of the Company after giving effect to such issuance, in exchange for all of the ~~exercise~~shares of Socialcom common stock ~~options~~held atby such Socialcom shareholders. As a ~~price~~result of $0the foregoing, Socialcom became an approximately 96.096% ~~per~~owned ~~shares~~subsidiary of the Company. See note 1.

Nine months ended September 30, 2022:

None.

Preferred Stock

Series A Convertible Preferred Stock

The Company has designated 1,000,000 shares of Series A Convertible Preferred Stock, par value $0.001. Subject to certain limitations set forth in the Certificate of Designation of the Series A, each share of Series A is convertible into 20 shares of the Company’s common stock. The Series A is non-voting except as may be required by applicable law. The Series A also provides the holders with senior ranking with respect to the Company’s capital stock upon the occurrence of a liquidation, dissolution or winding up, and a liquidation preference in the event of the merger or consolidation of the Company in which the Company is not the surviving entity, the sale of all of the assets of the Company in a transaction which requires stockholder approval or the dissolution or winding up of the Company, in each case at the stated value of $30 per share of Series A.

~~Nine~~Three months ended ~~September~~March 3031, ~~2023~~2024:

OnNo ~~February 24, 2023, the Company sold 25,000 shares of Series A Preferred Stock at a price of $30~~activity.00 per share for cash proceeds of $750,000 in the first tranche of a Securities Purchase Agreement entered into on January 30, 2023. On May 25, 2023, the Company sold an additional 25,000 shares of Series A Preferred stock for cash proceeds of $750,000.

OnThree June 1, 2023, the Company issued 3,333 shares of Series A Preferred Stock to a service provider with a fair value of $30 per shares. The amount of $100,000 was charged to prepaid expenses and will be amortized over the one year term of the agreement. During the three months ended ~~June~~March 3031, 2023~~, the Company charged to operations the amount of $3,333 in connection with this transaction.~~:

~~Nine~~On ~~months~~February ~~ended~~24, ~~September~~2023, the Company sold 25,000 shares of Series A Preferred Stock at a price of $30.00 per share for cash proceeds of $750,000 ~~2022:~~in the first tranche of a Securities Purchase Agreement entered into on January 30, 2023. The second tranche, which contemplated the sale of an additional 25,000 shares of Series A Preferred Stock for an additional $750,000, closed on May 25, 2023, the 90th day following the closing of the first tranche.

None.

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Options

The following table summarizes the options outstanding and the related prices for the options to purchase shares of the Company’s common stock issued by the Company as of ~~September~~March 3031, ~~2023~~2024:

									Weighted	~~Weighted~~					Weighted	~~Weighted~~
						Weighted	~~Weighted~~		Average	~~average~~					Average	~~average~~
							average			exercise						exercise
						Average			Exercise						Exercise
Range of	~~Range of~~		Number of	~~Number of~~		Remaining	~~Remaining~~		Price of	~~price of~~		Number of	~~Number of~~		Price of	~~price of~~
	exercise			options			contractual			outstanding			options			exercisable
Exercise			Options			Contractual			Outstanding			Options			Exercisable
Prices	~~Prices~~		Outstanding	~~Outstanding~~		Life (years)	~~life (years)~~		Options	~~Options~~		Exercisable	~~Exercisable~~		Options	~~Options~~
$	$0.035	~~0.035~~		350,000	~~525,000~~		2.75	~~3.25~~	$	$0.035	~~0.035~~		350,000	~~525,000~~	$	$0.035	~~0.035~~
$	$0.086	~~0.086~~		358,750	~~367,500~~		6.50	~~6.98~~	$	$0.086	~~0.086~~		301,324	~~271,793~~	$	$0.086	~~0.086~~
$	$0.088	~~0.088~~		2,896,250	~~2,900,625~~		6.98	~~7.47~~	$	$0.088	~~0.088~~		1,985,699	~~1,664,679~~	$	$0.088	~~0.088~~
$	$0.094	~~0.094~~		2,008,125	~~4,398,678~~		8.08	~~8.86~~	$	$0.094	~~0.094~~		1,367,730	~~1,646,645~~	$	$0.094	~~0.097~~
$	$0.104	~~0.104~~		12,949,212	~~12,949,212~~		5.82	~~6.32~~	$	$0.104	~~0.104~~		12,949,212	~~12,949,212~~	$	$0.104	~~0.104~~
					21,141,015			6.95		$	0.098			17,057,329		$	0.099
$	0.295			2,924,915			9.58		$	0.295			2,662,415		$	0.295
				21,487,252			6.66		$	0.125			19,616,380		$	0.126

Transactions involving stock options are summarized as follows:

	Number of Shares			Weighted Average Exercise Price
Options outstanding at December 31, 2021		7,076,563		$	0.083
Options outstanding at December 31, 2023		24,051,825		$	0.139
Granted		18,905,390			0.102
Exercised		(1,225	)		0.086
Cancelled / Expired		(3,187,188	)		0.089
Options outstanding at December 31, 2022		22,793,540		$	0.098
Granted		-			-
Exercised		~~(56,324~~-	)		~~0.089~~-
Cancelled / Expired		(12,~~596~~564,~~201~~573	)		0.~~092~~235
Options outstanding at September 30, 2023		21,141,015		$	0.098
Options outstanding at March 31, 2024		21,487,252		$	0.125
Options exercisable at March 31, 2024		19,616,380		$	0.126

During the three months ended ~~September~~March 3031, 2024 and 2023, the Company charged $9416,~~911~~707 toand ~~stock based compensation expense for stock options. During the three months ended September 30~~$215, ~~2022~~048, ~~the Company charged $56~~respectively,~~564~~ to stock based compensation expense, ~~including $48,102~~ for stock options ~~and $8,462 for stock awards~~.

~~During~~The ~~the~~aggregate ~~nine~~intrinsic ~~months~~value ~~ended~~of ~~September~~options ~~30,~~outstanding ~~2023,~~and ~~the~~exercisable ~~Company~~at ~~charged~~March ~~$512~~31,~~143~~ to2024 ~~stock~~and ~~based~~December ~~compensation~~31, ~~expense~~2023 ~~for~~was ~~stock~~$3,640,310 ~~options~~and $3,794,925, respectively. ~~During~~Aggregate intrinsic value represents the ~~nine~~difference ~~months~~between ~~ended~~the ~~September~~fair ~~30,~~value ~~2022,~~of the Company’s ~~charged~~stock ~~$208,540~~on tothe ~~stock~~last ~~based~~day ~~compensation~~of ~~expense~~the fiscal period, ~~including~~which was $~~200,078~~0.295 ~~for~~as ~~stock~~of ~~options~~March 31, 2024 and $8December 31,~~462~~ ~~for~~2023, ~~stock~~and ~~awards~~the exercise price multiplied by the number of options outstanding.

~~The~~There ~~aggregate~~were ~~intrinsic~~no ~~value of~~ options ~~outstanding~~valued ~~and~~during ~~exercisable~~the atthree ~~September~~months ~~30,~~ended ~~2023~~March ~~and December~~ 31, ~~2022 was $4,169,287 and $2,884,456, respectively~~2024. ~~Aggregate~~During ~~intrinsic value represents~~ the ~~difference~~year ~~between~~ended ~~the~~December ~~fair~~31, ~~value~~2023, of the Company’s ~~stock~~valued onoptions ~~the~~using ~~last day of~~ the ~~fiscal~~Black-Scholes ~~period,~~valuation ~~which~~model ~~was~~utilizing ~~$0.295 and $0.22 as of September 30, 2023 and December 31, 2022, respectively, and~~ the ~~exercise~~following ~~price multiplied by the number of options outstanding.~~variables:

There were no options valued during the nine months ended September 30, 2023. During the year ended December 31, 2022, the Company valued options using the Black-Scholes valuation model utilizing the following variables:

	December 31,
	2023
Volatility		76.03	%
Dividends	$	-
Risk-free interest rates		4.84	%
Expected term (years)		5.00

	December 31,
	2022
Volatility		69.93-79.02	%
Dividends	$	-
Risk-free interest rates		1.47-4.35	%
Expected term (years)		2.77-6.15

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1516. Income Taxes

The Company uses the asset and liability method to account for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. If a carryforward exists, the Company decides as to whether the carryforward will be utilized in the future. Currently, a valuation allowance is established for all deferred tax assets and carryforwards as their recoverability is deemed to be uncertain. If the Company’s expectations for future operating results at the federal or at the state jurisdiction level vary from actual results due to changes in healthcare regulations, general economic conditions, or other factors, it may need to adjust the valuation allowance, for all or a portion of the Company’s deferred tax assets. The Company’s income tax expense in future periods will be reduced or increased to the extent of offsetting decreases or increases, respectively, in the Company’s valuation allowance in the period when the change in circumstances occurs. These changes could have a significant impact on the Company’s future earnings.

Income tax expense was $0 for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024, compared to $0 for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023. The annual forecasted effective income tax rate for 2023 is 0%. The Company has no net operating loss carryforward due to the change of control inherent in the Exchange Agreement (see note 1). The Company has no uncertain tax positions at ~~September~~March 3031, ~~2023~~2024 or December 31, ~~2022~~2023.

1617. Commitments and Contingencies

In ~~September~~June 2019, ~~there~~a ~~was~~former anservices ~~allegation~~provider of ~~discrimination~~the ~~made~~Company byfiled a ~~former~~complaint ~~consultant.~~in ~~The~~the ~~Company~~amount ~~vigorously~~of ~~denies~~$1,442,441 ~~any~~for ~~wrongdoing.~~amounts ~~See Note 13~~due. The Company ~~has~~countersued ~~recorded~~for abreach ~~liability~~of inagreement. During the ~~amount~~three ofmonths ~~$650~~ended September 30,~~000~~ on2023, the ~~balance~~Company ~~sheet~~accrued ~~related~~an additional $894,274 pursuant to this ~~matter.~~dispute ~~During~~as ~~the~~a ~~nine~~result ~~months~~a ~~ended~~claim ~~September~~for ~~30,~~an ~~2023~~additional liability and ~~2022,~~a judgment for court costs against the Company. ~~made~~The ~~payments~~Company onplans to appeal this ~~accrued~~judgement which the Company believes is unlawful. The Company has recorded a liability in the amount of $622,~~500~~476,926 ~~and~~on $0the balance sheet at March 31, ~~respectively~~2024 in connection with this complaint. AtThe ~~September~~Company ~~30,~~has ~~2023,~~restricted cash in the amount of $01,042,418 ~~remains~~for onpurposes ~~the~~of ~~Company’s~~funding ~~balance~~a ~~sheet~~surety asbond anin ~~accrued~~connection ~~liability~~with this complaint. See note 14.

In October 2019, there was an allegation of discrimination made by a former employee. The Company vigorously denies any wrongdoing. See Note 13. The Company has recorded a liability in the amount of $100,000 on the balance sheet related to this matter. During the nine months ended September 30, 2023 and 2022, the Company made payments on this accrued liability in the amount of $62,500 and $0, respectively. At September 30, 2023, the amount of $0 remains on the Company’s balance sheet as an accrued liability.

In June 2019, a former services provider of the Company filed a complaint in the amount of $1,442,441 for amounts due. See Note 13. The Company countersued for breach of agreement. During the three months ended September 30, 2023, the Company accrued an additional $894,274 pursuant to this dispute as a result a claim for an additional liability and a judgment for court costs against the Company. The Company plans to appeal this judgement which the Company believes is unlawful. The Company has recorded a liability in the amount of $2,476,926 on the balance sheet at September 30, 2023 in connection with this complaint. The Company has restricted cash in the amount of $1,016,236 for purposes of funding a surety bond in connection with this complaint. See note 13.

From time to time, the Company has become and may become involved in certain lawsuits and legal proceedings which arise in the ordinary course of business, or current or previous employees, or current or previous directors, or as a result of acquisitions and dispositions or other corporate activities. The Company intends to vigorously defend its positions. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our financial position or our business, and the outcome of these matters cannot be ultimately predicted.

1718. Going Concern

As of ~~September~~March 3031, ~~2023~~2024, we had unrestricted cash on hand of $~~455~~(42,~~352~~844) net of an overdraft in the amount of $75,790 and a working capital deficit of $59,~~815~~236,~~309~~127. Management believes this amount is not sufficient to meet our operating needs for the 12 months subsequent to the date of this filing. In order to meet our working capital requirements, we will need to either raise sufficient capital and/or increase revenue by executing against our various ongoing strategic growth initiatives while continuing to actively reduce, maintain, or manage our current expenditures. The Company’s ability to continue as a going concern is dependent upon its ability to improve cash flow and the ability to obtain additional financing, including debt and equity offerings. These and other listed factors cause substantial doubt about the Company’s ability to continue as a going concern.

19. Related Party Transactions

See Notes 12 and 13 for a description of related party transactions.

20. Subsequent Events

On May 10, 2024, the due date of the Decathlon Loan was extended to December 13, 2024.

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18. Related Party Transactions

See Notes 11 and 12 for a description of related party transactions.

19. Subsequent Events

On October 27, 2023, the Board of Directors of the Company’s subsidiary Socialcom, approved the issuance of options to purchase a total of 607,810 shares of Socialcom common stock to Socialcom employees. The shares exercise price of the options is $2.58 per share, which is the fair market value per share of Socialcom common stock on the date of the grant. Except for a total of 35,000 options which vest over a four-year period ending in 2027, these options were fully vested at the date of the grant. Subject to regulatory compliance and the requisite approvals, it is the Company’s intention to exchange these Socialcom options into options to purchase shares of the Company’s common stock at the rate of 8.75 to 1, which is the exchange ratio used in the Exchange Agreement. See note 14. This exchange would result in the issuance of options to purchase approximately 5,318,338 shares of the Company’s common stock . with an exercise price of approximately $0.295.

On November 13, 2023, Amendment No. 1 to the Promissory Note related to June 2022 Loan with Reeve Benaron was entered into (see related disclosures in Footnote 11 above), wherein the repayment start date was amended to July, 2024, the interest rate was increased to 8.25%, the monthly repayment amount was amended to $31,354, and the noteholder was replaced with an entity affiliated with Mr. Benaron.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

~~Cautionary~~Company ~~Note~~Overview ~~Regarding~~and ~~Forward~~Business ~~Looking Statements~~Update

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our business and operations following our acquisition of Socialcom, a digital marketing and services company, future trends and operating results of such business, the planned expansion of those operations into new markets and applications, characteristics and trends in the digital marketing industry and the demand for products and services we offer, our plan to search for and acquire complementary businesses and the objectives and potential impacts of those efforts, the need for and use of proceeds from one or more financings for strategic arrangements and partnerships, our future capital needs and ability to obtain financings and liquidity. All statements other than statements of historical facts contained in this report, including statements regarding our future financial position, liquidity, working capital sources, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements include the future impact of the geopolitical conflicts in Israel and Ukraine, inflation and Federal Reserve interest rate increases in response thereto on the economy including the potential for a recession, downturn in economic activity and the capital markets and a resulting reduction in demand for our offerings, declines in expenditures for digital marketing campaigns and a trend towards in-housing those functions, our limited operating history and revenue, our ability to effectively navigate challenges posed by the complex industries we serve including the potential for rapid and unpredictable technological change, regulatory burdens and an intense competitive environment, and the delay in the launch of our Regulation A offering and any inability to raise sufficient capital therefrom. Further information on the risk factors affecting our business is contained in “Risk Factors” of our ~~Offering~~filings ~~Circular~~with onthe ~~Form~~Securities ~~1-A,~~and ~~filed~~Exchange ~~with~~Commission (the “SEC”), including our Annual Report on ~~April~~Form 1910-K for the fiscal year ended December 31, 2023, as may be amended or supplemented from time-to-time. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

Background of the Company

Vado, through Socialcom, operates as a digital marketing and services company focused on delivering integrated advertising and technology performance solutions to independent agencies and brands through its omnichannel trading desk platform.

During the fiscal year ended December 31, 2021, the Company acquired BigBuzz Marketing Group, a New York based creative digital marketing agency to expand its creative-based product and services offerings, including a focus on organic social content.

~~During~~In ~~the~~response ~~fiscal~~to ~~year~~a ~~ended~~decline ~~December~~in ~~31,~~customer ad purchasing which began in 2022, management has taken steps to (~~“FY~~i) ~~2022”~~improve the employee experience and in turn improve employee retention; and (ii) enhance our product offerings and strengthen our core solutions to the middle market. More specifically, in order to drive increased customer acquisition, the Company ~~partnered~~is ~~with~~focused ~~The~~on ~~Trade~~improved ~~Desk~~market differentiation related to ~~launch~~product ~~Admatx~~development ~~its~~and ~~self-serve~~innovation ~~demand~~in ~~side~~the ~~platform~~key three areas of: (~~DSP~~i) ~~centered~~predictive ~~around~~analytics, ~~the~~(ii) ~~principle~~supply ofoptimization, ~~democratizing~~and ~~access~~(iii) tocreative ~~enterprise~~automation. In 2023 we developed an industry leading, data-~~level~~driven ~~adtech~~addition byto ~~placing~~our ~~control~~tech ~~into~~stack, ~~the~~successfully ~~hands~~incorporating several layers of ~~the~~artificial ~~customer~~intelligence ~~without~~(AI), ~~requiring~~predictive aanalytics, ~~prohibitive~~and ~~minimum~~automation ~~spend~~in orthe aapplication ~~long~~of data science, audience insights and tech-~~term~~powered ~~subscription~~creative, ~~commitment.~~an ~~Admatx~~integrated isand ~~focused~~holistic onsystem ~~SMB~~designed ~~marketers,~~to ~~looking~~optimize performance in real time for anour ~~easy~~brand and agency customers. We have successfully taken our new AI-powered data science solutions to~~-use~~ ~~performance~~market ~~DSP~~through ~~without~~various ~~any~~ongoing ~~spend~~sales ~~minimums~~and marketing activities and are currently activating campaigns and delivering impact for both existing and new customers.

~~Strategic~~In ~~Growth~~addition, ~~Initiatives~~in March 2024 we obtained 11 customer accounts and 14 employees from a very large company, which includes over $4 million in prepaid amounts (and thereby potential additional revenue), in addition to the continued good will, subject to our provision of services to the new customers and to that party’s right to offset for personnel expenses.

During fiscal year 2022, and continuing into the first half of 2023, the Company lost certain key customers and saw decreased spend for certain existing customers, which had a material impact on revenue. We experienced turnover in members of our customer support team during the period, which directly impacted certain client relationships. We also saw an increasing trend toward in-housing of media buying by advertisers as well as increased access to enterprise technology and data-powered buying solutions by agencies, representing a competitive threat to the Company’s value proposition. Other reasons for the decline in revenue include macro-economic factors such as inflationary pressures and increased interest rates in response, economic uncertainty and diminished consumer spending, all contributing to reduced advertising budgets from customers in general.21

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InMoving ~~response~~forward, management has taken steps to (i) improve the employee experience and in turn improve employee retention; and (ii) enhance our product offerings and strengthen our core solutions to the middle market. More specifically, in order to drive increased customer acquisition, the Company is focused on improved market differentiation related to product development and innovation in the key three areas of: (i) predictive analytics, (ii) supply optimization, and (iii) creative automation. In the second quarter we have developed an industry leading, data-driven addition to our tech stack, successfully incorporating several layers of artificial intelligence (AI), predictive analytics, and automation in the application of data science, audience insights and tech-powered creative, an integrated and holistic system designed to optimize performance in real time for our brand and agency customers. We have successfully taken our new AI-powered data science solutions to market through various ongoing sales and marketing activities and are ~~currently activating campaigns and delivering impact for both existing and new customers. In addition, we are~~ actively assessing the mergers and acquisitions (M&A) landscape to identify potential acquisition targets, whether creative, media or technology companies, with stable customers and revenues, that can drive improved business outcomes through integrated access to the Socialcom media services solution.

Trends and Uncertainties

Our operations and industry are subject to the following trends and uncertainties:

Seasonality

In the advertising industry, companies commonly experience seasonal fluctuations in revenue. For example, some advertisers may allocate the largest portion of their budgets to the fourth quarter of the calendar year in order to coincide with increased holiday purchasing. Historically, the fourth quarter of the year reflects our highest level of advertising activity and the first quarter reflects the lowest level of such activity. We expect our revenue to continue to fluctuate based on seasonal factors that affect the advertising industry as a whole.

Developments in the Programmatic Advertising Market

Our operating results and prospects will be impacted by the overall adoption of programmatic advertising by inventory owners and content providers, as well as advertisers and the agencies and service providers that represent them. Programmatic advertising has grown rapidly in recent years, and any acceleration or slowing of this growth may affect our operating and financial performance. In addition, even if the programmatic advertising market continues to grow at its current rate, our ability to position ourselves within the market will impact the future growth of our business.

In addition, technological and other changes and developments in the digital ad space will also affect our operations and operating results. For example, many websites including Google are expected to update or alter their privacy settings and practices in the coming years, including by eliminating “cookies” and the collection of personal identifiable information about users, for which we and our industry will need to adjust in order to maintain and grow our operations.

Growth in and Retention of Customers

Our ability to generate and maintain revenue depends on retaining our existing customers and adding new customers. Our customers consist of small-to-medium sized businesses, with spending patterns that can be inconsistent or unpredictable. We also depend on a relatively small number of customers for a large proportion of our revenue streams. As a result, future revenue and growth depends upon our ability to retain our existing customers and to gain a larger amount of their advertising spend through our platform and related services.

Labor Shortages

Because of our focus on digital advertisements and the underlying technology and infrastructure involved in those processes, as well as providing a wide variety of businesses with their digital marketing needs, our operations depend on procuring, training and maintaining skilled personnel to assist us and our customers in fulfilling these demands. In recent periods, macroeconomic factors have contributed to labor shortages in the U.S. across industries. As a result of this and other factors, in FYfiscal year 2022 the loss of certain personnel, including members of our sales and customer support team, adversely impacted our operating results in that period. If the tightened labor market trend continues in general or for our business in particular, this trend could persist. In fiscal year 2023, we made significant strides in optimizing our operations, which not only reduced our operating expenses but also strategically positioned us for sustained incremental growth in the upcoming year. Through a combination of streamlining initiatives and technological advancements, we have enhanced our efficiency and productivity across all departments. Our team is now more agile, our cost structure more efficient, and our business model has been refined to capitalize on emerging opportunities in digital advertising and marketing services. We are confident that the measures taken to strengthen our workforce and operational practices will continue to yield beneficial results and drive growth in fiscal year 2024.

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Omnichannel Access

Because we assist in the selection and purchase of advertising inventory across a wide variety of formats for our customers, such as display, mobile, video, audio, social and native, our future growth will depend on our ability to maintain and grow the inventory of, and customer spend on, advertising channels. For instance, as we proceed further into the digital age, new channels can arise rapidly and gain popularity within relatively short periods, diverting attention from existing channels and forcing stakeholders in the industry, including us, to adapt quickly. Further, each channel we now or may in the future access to service our customers has its own policies in terms of content and use, and we must continually monitor and adhere to these requirements to continue to access those channels for our customers. We believe that our ability to integrate and offer access to new means of digital communication, such as Connected Television (CTV), digital out-of-home (DOOH), and digital radio advertising inventory and to manage the increased costs that will accompany these developments, will impact the operating results and future growth of our business.

Results of Operations for the Three Months Ended ~~September~~March 3031, ~~2023~~2024 Compared with the Three Months Ended ~~September~~March 3031, ~~2022~~2023

Revenue

Revenue was $43,~~349~~578,~~533~~172 for the three months ended ~~September~~March 3031, ~~2023~~2024, an increase of $3842,~~997,~~933 or 01.92% compared to revenue of $43,~~310~~535,~~536~~239 for the three months ended ~~September~~March 3031, ~~2022~~2023. ~~The increase in revenue was primarily due to a larger campaigns that ran during the period.~~

Costs of Revenue

Cost of revenue was $23,~~599~~130,~~210~~302 for the three months ended ~~September~~March 3031, ~~2023~~2024, aan ~~decrease~~increase of $~~607~~790,~~909,~~581 or 1933.08% compared to $32,~~207~~339,~~119~~721 during the three months ended ~~September~~March 3031, ~~2022~~2023. The ~~decrease~~increase was driven primarily by ~~higher margin on campaigns during the 2023 period resulting from~~ larger campaign sizes with lower margin in the period, as well as ~~reduced~~higher operational costs as a percentage of revenue related to the delivery of certain campaigns.

Our gross profit margins were 4013% during the three months ended ~~September~~March 3031, ~~2023~~2024 compared to 2634% during the three months ended ~~September~~March 3031, ~~2022~~2023. The ~~increase~~decrease was driven primarily by an increase in ~~higher~~lower margin revenue delivered during the three months ended ~~September~~March 3031, ~~2023~~2024.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses were $21,~~222~~775,~~019~~234 for the three months ended ~~September~~March 3031, ~~2023~~2024, ana ~~increase~~decrease of $~~215~~781,~~865,~~255 or 1030.86%, compared to $2,~~006~~556,~~154~~489 during the three months ended ~~September~~March 3031, ~~2022~~2023. The ~~increase~~decrease was driven primarily by ana ~~increase~~decrease in headcount related expenses and stock-based compensation expenses during the period.

~~Other~~Interest Expense, Net of Interest Income

~~Other~~Interest expense, ~~consisted of interest expense~~ net of interest income, ~~which~~ was $1734,~~165,641~~337 during the three months ended ~~September~~March 3031, ~~2023~~2024, an increase of $1538,~~014,891,~~960 or ~~737~~276%, compared to interest expense of $~~150~~195,~~750~~377 during the three months ended ~~September~~March 3031, ~~2022~~2023. The increase was driven primarily by the amortization of the discount on the Decathlon loan and to increased principal balances under our notes payable.

Results of Operations for the Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022

Revenue

Revenue was $11,665,082 for the nine months ended September 30, 2023, a decrease of $1,128,384, or 8.8% compared to revenue of $12,793,466 for the nine months ended September 30, 2022. The decrease in revenue was primarily due to a loss of certain key customers and decrease in revenue from certain key customers resulting in part from the loss of key personnel, as well as trends in our industry and the U.S. economy including an increased in-housing of media buying by advertisers and agencies, inflationary pressures, interest rate hikes and recessionary concerns resulting in diminished demand and consumer spending. In response to these developments, management has taken steps to improve the employee experience and in turn improve employee retention, and enhance our product offerings and strengthen our core solutions to the middle market in order to drive increased customer acquisition, improved market differentiation and also campaign performance.

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Costs of Revenue

Cost of revenue was $7,656,550 for the nine months ended September 30, 2023, a decrease of $1,315,746, or 14.7% compared to $8,972,296 during the nine months ended September 30, 2022. The decrease was driven primarily by a corresponding decrease in revenue as detailed above, as well as reduced operational costs related to the delivery of campaigns on lower revenues.

Our gross profit margins were 34% during the nine months ended September 30, 2023 compared to 30% during the nine months ended September 30, 2022. The increase was driven primarily by an increase in higher margin revenue delivered during the nine months ended September 30, 2023.

Selling, General, and Administrative Expenses

Operating expenses were $7,081,210 for the nine months ended September 30, 2023, a decrease of $702,203, or 9.7%, compared to $7,273,281 during the nine months ended September 30, 2022. The decrease was driven primarily by decreases in expenses related to sales and operations arising from the loss of certain members of those teams and lower operational costs due to lower revenue.

Legal Settlement

Legal settlement expense was $894,274 for the nine months ended September 30, 2023, an increase of $894,274, or 100%, compared to $0 during the nine months ended September 30, 2022. The increase is due to an increase in the amount of liability claimed by a vendor in a legal dispute and to court costs. See note 16.

Other Income (Expense), Net

Other income (expense) consisted of interest expense net of interest income, which was $1,611,270 during the nine months ended September 30, 2023, an increase of $1,014,891, or 673.2%, compared to interest expense of $454,463 during the nine months ended September 30, 2022. The increase was driven primarily by the amortization of the discount on the Decathlon loan and to increased principal balances under our notes payable.

Cash Flows from Operating Activities

Our cash flows from operating activities are primarily influenced by growth or decline in operations, increases or decreases in collections from our customers and related payments to suppliers for advertising media and data. Cash flows from operating activities are typically affected by changes in the components of working capital, particularly changes in accounts receivable, accounts payable, and accrued liabilities. Timing differences from cash receipts from customers and payments to suppliers have a significant impact on our cash flows from operating activities. We often pay suppliers in advance of collections from our customers. Our collection and payment cycles can vary from period to period, and we additionally expect seasonality to impact cash flows from operating activities on a quarterly basis during the year.

For the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024, cash used in operating activities of ($2172,~~752,819~~136) resulted primarily from a net loss of ($52,~~578~~048,~~222~~539) adjusted for non-cash items totaling $2450,~~587,303~~079 and a net increase of $~~237~~1,~~600~~426,324 in the components of working capital. The $2450,~~587,303~~079 in non-cash adjustments to net income are attributable to primarily to charges of $1524,~~172,638~~590 in connection with a minimum interest liability on the Decathlon Loan; $~~512~~31,~~153~~499 of depreciation and amortization; and $16,707 related to employee stock-based compensation, ~~and~~partially offset by a $~~432~~109,~~901~~5050 ~~for~~reduction ~~amortization~~in bad debt expense and $13,162 of ~~our~~interest ~~office~~income ~~lease~~restricted investment. The change in the components of working capital of $~~237~~1,~~600~~426,324 was due primarily to a ($1,424,950) increase in accounts ~~receivable and a $1,108,089 increase in accounts~~ payable, with the remaining change attributable to normal operational fluctuations in current assets and current liabilities.

For the nine months ended September 30, 2022, cash used in operating activities of ($3,741,713) resulted primarily from a net loss of ($3,906,574) adjusted for non-cash items totaling $855,848 and a net decrease of ($690,987) in the components of working capital. The $855,848 in non-cash adjustments to net income are attributable primarily to charges of $409,298 for amortization of our office lease and $208,540 related to employee stock-based compensation. The change in the components of working capital of ($690,987) during the period was due primarily to a $1,155,758 decrease in accounts receivable and a ($551,077) decrease in accounts payable, with the remaining change attributable to normal operational fluctuations in current assets and current liabilities.23

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For the three months ended March 31, 2023, cash used in operating activities of ($1,066,235) resulted primarily from a net loss of ($1,556,348) adjusted for non-cash items totaling $481,031 and a net increase of $9,082 in the components of working capital. The $481,031 in non-cash adjustments to net income are attributable to charges of $215,048 related to employee stock-based compensation, $142,252 for amortization of our office lease, $56,924 for depreciation and amortization, $31,956 for bad debt expense, and $34,851 for amortization of discount on convertible note payable. The change in the components of working capital of $9,082 was due to normal operational fluctuations in current assets and current liabilities.

Cash Flows Used in Investing Activities

Our primary investing activities consist primarily of the purchase of fixed assets and costs paid for the development of software to improve our platform. As our business grows, we expect our capital expenditures and our investment activity to continue to increase.

25For the three months ended March 31, 2024, we used $8,434 of cash in investing activities, consisting of $5,750 invested in capitalized software and $2,593 to purchase fixed assets.

~~Table~~For the three months ended March 31, 2023, we used $14,311 of ~~Contents~~cash in investing activities, consisting of $12,006 invested in capitalized software and $2,305 to purchase fixed assets.

For the nine months ended September 30, 2023, we used $1,031,340 of cash in investing activities, consisting of $1,000,786 invested into securities related to the funding of the surety bond described in Notes 13 and 16, $21,848 invested in capitalized software and $8,706 to purchase fixed assets.

For the nine months ended September 30, 2022, we used $87,145 of cash in investing activities, consisting of $70,932 of cash for the development of software and $16,213 of cash used to purchase fixed assets.

Cash Flows Provided by Financing Activities

Our financing activities consisted primarily of the sale of common and preferred stock, borrowings and repayments of our debt, proceeds from forgiveness on borrowings, proceeds from the exercise of options issued under our equity compensation plan.

For the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024, cash provided by financing activities of $380,~~754,458~~243 was due to $296,~~100,~~000 in proceeds from the issuance of ~~convertible~~ notes payable to related parties, ~~$1,500,000 in proceeds from the sale of preferred stock, $500,000 in proceeds from the sale of common stock, and $5,071 from the exercise of stock options,~~ partially offset by $~~350~~15,~~613~~757 in principal payments on loans.

For the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023, cash provided by financing activities of $~~965~~2,~~900~~037,465 was due to $~~500~~800,000 in proceeds from the issuance of convertible notes payable ~~to related parties~~, $~~500~~750,000 in proceeds from the sale of ~~common~~preferred stock, ~~and~~ $50500,000 in proceeds from ~~notes~~the ~~payable~~sale of common stock, partially offset by $8412,~~040~~535 in ~~principal~~principle payments on loans.

Non-GAAP Measures

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) before (a) certain stock-based compensation expense, (b) costs attributable to non-recurring settlement expense, legal activity, professional fees, and other transaction and offering costs, (c) interest, (d) tax, and (e) depreciation and amortization. We use Adjusted EBITDA to evaluate the performance of our core business operations. We believe that information about Adjusted EBITDA assists investors by allowing them to evaluate changes in the operating results of our business separate from non-operational factors that affect net income (loss), thus providing insights into both operations and the other factors that affect reported results. Adjusted EBITDA is not calculated or presented in accordance with GAAP. Accordingly, Adjusted EBITDA should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, Adjusted EBITDA as presented herein may not be comparable to similarly titled measures of other companies.

~~The following table sets forth the reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP financial measure for the three and nine months ended September 30, 2023 and 2022:~~24

	Three Months Ended September 30,						Nine Months Ended September 30,
Adjusted Net Loss	2023			2022			2023			2022
Net Loss	$	(1,637,337	)	$	(1,053,487	)	$	(5,578,222	)		(3,906,574	)
Interest, net		1,165,641			150,750			1,611,270			454,463
Taxes		-			-			25			1,791
Depreciation and Amortization		56,493			54,927			169,485			150,184
EBITDA	$	(412,203	)	$	(847,810	)	$	(3,797,442	)	$	(3,300,136	)
Stock-based compensation costs		94,911			156,028			512,153			208,540
Settlement expense (1)		-			-			894,274			-
Litigation expense (2)		3,000			-			28,122			105,067
Transaction costs (3)		27,727			-			198,174			-
Adjusted EBITDA	$	(289,565	)	$	(691,782	)	$	(2,164,719	)	$	(2,986,529	)

1. Relates to one-time settlement accrual for Zeta dispute as described in Part II. Other Information Item 1. Legal Proceedings. 2. Relates to litigation expense specific to Zeta dispute as described in Part II. Other Information Item 1. Legal Proceedings. 3. Relates to legal and consulting fees specific to share exchange as described in Note 1 to the financial statements contained in this report.

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The following table sets forth the reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP financial measure for the three months ended March 31, 2024 and 2023:

	Three Months Ended March 31,
Adjusted Net Loss	2024			2023
Net Loss	$	(2,048,539	)	$	(1,556,348	)
Interest, net		721,175			195,377
Taxes		-			-
Depreciation and Amortization		31,449			56,924
EBITDA	$	(1,295,915	)	$	(1,304,047	)
Stock-based compensation costs		16,707			215,048
Litigation expense (1)		-			5,334
Transaction costs (2)		-			143,164
Adjusted EBITDA	$	(1,279,208	)	$	(940,501	)

	1.	Relates to litigation expense specific to Zeta dispute as described in Part II. Other Information Item 1. Legal Proceedings.

	2.	Relates to legal and consulting fees specific to share exchange as described in Note 1 to the financial statements contained in this report.

Liquidity and Capital Resources

As of ~~October~~April 318, ~~2023~~ 2024, we have unrestricted cash on hand of approximately $~~112~~334,~~285~~578. Management believes this amount is not sufficient to meet our operating needs for the next 12 months, and in order to meet our working capital requirements, we will need to either raise sufficient capital or reduce our expenditures. We will rely on our ability to improve operating cash flow or raise additional capital through the sale of debt or equity securities and draw on our existing credit facility, in addition to our existing cash and cash equivalents to meet our working capital requirements for at least the next 12 months.

The Company’s ability to continue as a going concern is dependent upon its ability to improve cash flow and the ability to obtain additional financing, including potentially through proceeds raised infrom ~~this~~its Regulation A offering. These and other factors substantial doubt about the Company’s ability to continue as a going concern in the following 12-month period.

Our recent and potential future financing transactions, ~~and~~ outstanding indebtedness and other developments which will potentially impact our liquidity are summarized below.

During the ~~three~~year ~~months~~ ended ~~September~~December 3031, 2023, we recorded an increase in the minimum interest liability due on our Decathlon Loan in the amount of $900,000.

~~Series A Financings~~25

On September 28, 2021, the Company sold 50,000 shares of Series A to an accredited investor for a total of $100,000 in gross proceeds.

On November 22, 2022, the Company sold 20,000 shares of Series A to an accredited investor for $40,000 in gross proceeds.

On February 24, 2023, the Company sold 25,000 shares of Series A Preferred Stock at a price of $30.00 per share for cash proceeds of $750,000 in the first tranche of a Securities Purchase Agreement originally entered into on January 30, 2023. In the second tranche, which closed on May 25, 2023, the Company sold an additional 25,000 shares of Series A Preferred Stock for an additional $750,000.

Financing Agreements

On June 13, 2019, Socialcom entered into an accounts receivable financing and security agreement (the “Financing Agreement”) which was amended on September 18, 2023. The Financing Agreement as amended has a current maximum amount of $2,000,000 and an interest rate per annum equal to 5% plus the “prime rate”, which is defined as the higher of the highest rate as reported by the Wall Street Journal or 8.5%. The Financing Agreement provided for an initial financing fee equal to 1/12th of the facility interest rate and additional monthly financing fees of 1/12th of the facility interest rate. The Financing Agreement is subject to an early termination fee equal to 2% of the maximum amount available under the Financing Agreement. Further, the Financing Agreement provides that Socialcom shall at all times use at least 20% of the maximum amount. The revolving credit facility under the Financing Agreement is secured by the trade accounts receivable of Socialcom and guaranteed by its assets and the assets of Vado, including the Socialcom common stock Vado holds representing 100% of the outstanding Socialcom common stock. Upon any event of default, the lender may, among other things, immediately demand repayment of all advanced amounts thereunder. The Financing Agreement provides, among other things, that the lender can immediately terminate the Financing Agreement and demand payment. In addition, Jason Wulfsohn, our Chief Executive Officer and a principal stockholder, guaranteed the loan and pledged his shares of Vado common stock to secure payment.

On December 31, 2019, Socialcom borrowed $3,000,000 (the “Decathlon Loan”). The Decathlon Loan is due June 30, 2024 and is secured by all the assets of Socialcom. The Decathlon Loan accrues interest at a variable rate based upon internal rate of return targets, which interest multiple is subject to increase by 0.015 upon an event of default. The effective rate of interest for the years ended December 31, 2021 and 2020 was approximately 17%. Repayments are required based upon a fixed percentage of our earned revenue. If not repaid prior the final balance is due on June 13, 2024. The Decathlon Loan is subject to minimum interest that escalates over the term of the loan. At September 30, 2023 and December 31, 2022, the potential liability for unearned minimum interest was $1,502,197 and $1,661,504, respectively. During the nine months ended September 30, 2023, the Company made principal and interest payments in the amount $23,558 and $139,754, respectively, on the Decathlon loan. During the nine months ended September 30, 2022, the Company made principal and interest payments in the amount $67,407 and $203,043, respectively, on the Decathlon loan.

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Financing Agreements

On June 13, 2019, Socialcom entered into an accounts receivable financing and security agreement (the “Financing Agreement”) with SLR Digital Finance, LLC as the secured lender which was amended on September 18, 2023, January 31, 2024 and April 1, 2024. The Financing Agreement as amended has a current maximum amount of $2,000,000 and an interest rate per annum equal to 5% plus the “prime rate”, which is defined as the higher of the highest rate as reported by the Wall Street Journal or 8.5%. The Financing Agreement provided for an initial financing fee equal to 1/12th of the facility interest rate and additional monthly financing fees of 1/12th of the facility interest rate. The Financing Agreement is subject to an early termination fee equal to 2% of the maximum amount available under the Financing Agreement. Further, the Financing Agreement provides that Socialcom shall at all times use at least 20% of the maximum amount. The revolving credit facility under the Financing Agreement is secured by the trade accounts receivable of Socialcom and guaranteed by its assets and the assets of Vado, including the Socialcom common stock Vado holds representing 100% of the outstanding Socialcom common stock. Upon any event of default, the lender may, among other things, immediately demand repayment of all advanced amounts thereunder. The Financing Agreement provides, among other things, that the lender can immediately terminate the Financing Agreement and demand payment. In addition, Jason Wulfsohn, our Chief Executive Officer and a principal stockholder, guaranteed the loan and pledged his shares of Vado common stock to secure payment.

On December 31, 2019, Socialcom borrowed $3,000,000 (the “Decathlon Loan”). The Decathlon Loan is due December 13, 2024 and is secured by all the assets of Socialcom. The Decathlon Loan accrues interest at a variable rate based upon internal rate of return targets, which interest multiple is subject to increase by 0.015 upon an event of default. The effective rate of interest for the years ended December 31, 2023 and 2022 was approximately 17%. Repayments are required based upon a fixed percentage of our earned revenue. If not repaid prior the final balance is due on December 13, 2024. The Decathlon Loan is subject to minimum interest that escalates over the term of the loan. At March 31, 2024 and December 31, 2023, the potential liability for unearned minimum interest was $362,478 and $886,733, respectively. During the three months ended March 31, 2024, the Company made principal and interest payments in the amount $15,735 on the Decathlon loan.

Related Party Indebtedness

As disclosed in “Related Party Transactions” and in footnote 11 and 12 to our financial statements, Socialcom has a total of $34,~~200~~230,000 in outstanding related party indebtedness payable to our officers and directors or affiliated entities. $600,000 of this indebtedness accrues interest at 15% and matures inon March ~~2024~~21, 2025, $800,000 of this indebtedness accrues interest at 7.25%, matures December 31, ~~2023~~2024, and is convertible into our common stock at a conversion price of approximately $0.233 per share. $500,000 of this indebtedness accrues interest at the rate of 8.25% and matures in December 2025, $406,000 of this indebtedness accrued interest at the rate of 7.25% and matures December 29, 2024, with the remaining $1,~~300~~924,000 accruing interest at 7.25% and maturing in December 2025. Additional details concerning certain of these loans are provided in the paragraphs that immediately follow.

~~Litigation~~On ~~Indebtedness~~February 7, 2023, in connection with the Zeta litigation described under “Legal Proceedings,” Socialcom borrowed $800,000 from Kahala19 LLC, an entity controlled by Reeve Benaron, the Company’s director and a principal shareholder. In March 2023, we issued Kahala 19 LLC an identical note and it cancelled the Socialcom note. The principal and accrued interest on this note is convertible into the Company’s common stock at a conversion price of approximately $0.233 per share. The note as amended accrues interest at 7.25% per annum and matures on December 31, 2024. The interest rate is subject to increase to 18% upon the occurrence of an event of default.

On February 7, 2023, in connection with the Zeta litigation described under “Legal Proceedings,” Socialcom borrowed $800,000 from Kahala19 LLC, an entity controlled by Reeve Benaron, the Company’s director and a principal shareholder. The note accrues interest at 7.25% per annum and matures in December 2024. The interest rate is subject to increase to 18% upon the occurrence of an event of default. In March 2023, we issued Kahala 19 LLC an identical note and it cancelled the Socialcom note. The principal and accrued interest on this note is convertible into the Company’s common stock at a conversion price of approximately $0.233 per share.

On May 12, 2023, also in connection with the Zeta litigation, Socialcom borrowed $1,300,000 from an entity affiliated to Jason Wulfsohn, the Company’s CEO and a director. The note accrued interest at 7.25% per annum and matures on December 31, 2025. This note is convertible into common stock of the Company at a price of $0.32 per share.

~~These~~On ~~loans~~December ~~are~~29, ~~included~~2023 in the Company borrowed $3310,~~200~~000 from Jason Wulfsohn, the Company’s CEO and a director. On March 19, 2024 the Company borrowed an additional $96,000 on the same terms. The notes accrue interest at the rate of ~~related~~7.25% ~~party~~and ~~indebtedness~~mature ~~described~~on ~~above~~December 29, 2024.

~~SBA Loan~~26

One July 7, 2020, Socialcom borrowed $150,000 pursuant to the Small Business Administration Economic Injury Disaster Loan Program (the “EIDL Loan”) established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). On March 31, 2022, Socialcom borrowed an additional $50,000 under the EIDL Loan. Under the EIDL Loan, payments in the amount of $989 per month are due beginning in January 2023. The term of the EIDL Loan is 30 years, and the annual interest rate is 3.75%. EIDL Loan recipients can apply for, and be granted forgiveness for, all or a portion of loans granted if certain conditions are met. During the years ended December 31, 2022 and 2021, Socialcom accrued interest in the amount of $6,935 and $5,410, respectively, on the EIDL Loan. EIDL Loan amounts in excess of $25,000 are secured by Socialcom’s assets.

Regulation A Offering

On April 19, 2023, the Company filed an Offering Statement on Form 1-A (File No. 024-12227) contemplating the sale of up to 10,000,000 shares of its common stock for gross proceeds of up to $10,000,000, before deducting offering expenses, fees and commissions, in an offering exempt from registration under the Securities Act of 1933 as a Tier 2 offering pursuant to Regulation A promulgated thereunder. On July 25, 2023 we filed an amendment to the Offering Statement to, among other things, reduce the offering amount to $8,000,000, reduce the offering price per share to $0.40, and add a bonus share incentive feature wherein investors who purchase within enumerated thresholds are entitled to receive additional shares for no additional consideration. As of the date of this report, the Offering Circular has not been qualified by the SEC. The offering has been delayed due to a change in the initially contemplated broker-dealer for the offering and the offering terms, and there can be no assurance that we will be successful in raising all or a substantial portion of the offering proceeds sought.

General

Historically, we have financed the Company through a combination of debt and equity transactions. To meet future capital requirements, we plan to raise additional capital through the sale of equity securities or through equity-linked or debt-financing arrangements, to the extent our operating cash flow is insufficient to fund our operations in future periods.

There can be no assurances that we will be able to raise additional capital. The inability to raise capital would adversely affect our ability to achieve our business objectives. In addition, if our operating performance during the next 12 months is below our expectations, our liquidity and ability to operate our business could be adversely affected. We continue to monitor macro-economic factors such as inflationary pressures, continued Federal Reserve interest rate hikes and recessionary fears, as well as trends within our industry, all of which may affect our working capital requirements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Mr. Jason Wulfsohn, our Chief Executive Officer (principal executive officer) and Mr. ~~Ryan~~Steve ~~Carhart~~Dang, our ~~Chief~~Vice ~~Financial~~President ~~Officer~~– Finance principal financial officer), have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13(a)-15(e) and 15(d)-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q and have concluded that our disclosure controls and procedures ~~are~~were ~~not~~ effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.

Changes in Internal Controls over Financial Reporting

There have been no changes in the Company's internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

All material legal proceedings and material developments thereto have previously been disclosed.

ITEM 1A. RISK FACTORS

See the Company’s ~~Offering~~Annual ~~Circular~~Report on Form 110-AK ~~(File~~for ~~No.~~the ~~024-12227)~~fiscal year ended December 31, 2023 for the Risk Factors applicable to the Company and its securities.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

AsDuring described in “Part I – Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operation” under “Liquidity and Capital Resources - Financing Agreements,” on September 18, 2023, the ~~Company~~period ~~and~~covered ~~Socialcom~~by ~~entered~~this ~~into an amendment to the Financing Agreement and certain related agreements pursuant to which~~report, ~~among~~none ~~other things, (i) the Company guaranteed payment~~ of ~~Socialcom’s~~our ~~indebtedness~~directors ~~thereunder~~or ~~and~~officers ~~pledged its assets, including the shares of Socialcom common stock it holds representing 100% of the outstanding Socialcom common stock~~ (as ~~collateral~~defined toin ~~secure~~Rule ~~such indebtedness,~~ 16a-1(iif) ~~Jason~~under ~~Wulfsohn,~~ the ~~Company’s~~Exchange ~~Chief~~Act) ~~Executive~~adopted ~~Officer~~or ~~and~~terminated aany ~~principal stockholder~~contract, ~~pledged~~instruction ~~his~~or ~~74,311,816~~written ~~shares~~plan offor the ~~Company’s~~purchase ~~common~~or ~~stock~~sale ~~representing approximately 41%~~ of ~~the~~our ~~outstanding~~securities ~~shares~~that ~~of the Company’s common stock, to secure the indebtedness, (iii) the interest rate of the loan facility~~ was ~~increased~~intended to 5%satisfy ~~plus~~ the ~~“prime~~affirmative ~~rate,”~~defense ~~which~~conditions ~~is defined as the higher~~ of ~~the~~Rule ~~highest~~10b5-1(c) ~~rate~~under ~~as reported by~~ the ~~Wall~~Exchange ~~Street~~Act ~~Journal~~ or ~~8.5%,~~any ~~and (iv) the definition of event of default thereunder was revised to include a final,~~ “non-~~appealable~~Rule ~~judgment~~10b5-1 inarrangement” ~~respect of the previously disclosed Zeta litigation. The above description does not purport to be complete and is qualified in its entirety by the complete text of the Financing Agreement~~ as ~~amended~~defined ~~and certain related agreements entered into~~ in ~~connection~~Item ~~therewith,~~408(c) ~~copies~~ of ~~which~~Regulation ~~are filed as Exhibits 10~~S-K.~~2 – 10.9 to the report.~~

On November 13, 2023, Socialcom entered into an agreement with Reeve Benaron, its director and a principal stockholder, and Kahala19 LLC, his affiliated entity, pursuant to which Mr. Reeve’s promissory note issued by Socialcom in the principal amount of $500,000 was amended as follows: (i) the due date was extended to December 31, 2025, with payments scheduled beginning July 20, 2024, (ii) the interest rate was increased to 8.25%, and (iii) the Kahala19, LLC replaced Mr. Benaron as the holder of the promissory note as amended.28

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ITEM 6. EXHIBITS

		Incorporated by Reference			Filed or Furnished
Exhibit Number	Exhibit Description	Form	Date	Number	Herewith
3.1(a)	Articles of Incorporation	S-1	01/18/18	3.1
3.1(b)	Certificate of Amendment to Articles of Incorporation	10-Q	07/15/20	3.1B
3.1(c)	Certificate of Amendment to Articles of Incorporation	8-K	04/01/21	3.1
3.1(d)	Certificate of Amendment to Articles of Incorporation	10-Q	10/12/21	3.1D
3.2	Amended and Restated Bylaws	8-K	05/29/20	3.1
10.1	Form of Amended and Restated Share Exchange Agreement*	8-K	2/21/23	10.1
10.2	Form of Convertible Promissory Note	1-A/A	7/25/23	3.1
10.3	Financing and Security Agreement, as amended*				Filed
10.4	Corporate Guaranty				Filed
10.5	Guaranty Security Agreement*				Filed
10.6	Stock Pledge Agreement				Filed
4.1	Certificate of Designations of Series A Convertible Preferred Stock	8-K	06/29/20	4.1
4.1(a)	Certificate of Amendment to Certificate of Designation of Series A Convertible Preferred Stock	8-K	2/21/23	4.1
31.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)				Filed
10.1	Amendment to Decathlon Loan Agreement				Filed
31.2	Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)				Filed
31.1	Certification of Chief Executive Officer (Principal Executive Officer) pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)				Filed
31.2	Certification of Principal Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)				Filed
32.1	Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002				Filed
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Certain schedules and exhibits to this agreement have been omitted. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Vado Corp.
Dated: November 14, 2023	By:	/s/ Jason Wulfsohn
Dated: May 15, 2024	By:	/s/ Jason Wulfsohn
		Jason Wulfsohn, Chief Executive Officer (Principal Executive Officer)
Dated: November 14, 2023	By:	/s/ Ryan Carhart
Dated: May 15, 2024	By:	/s/ Steve Dang
		Ryan Carhart, Chief Financial Officer (Principal Financial Officer)
		Steve Dang, Vice President – Finance (Principal Financial Officer)

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Filing Compare · Vado Corp.