| ORGANIZATION AND BUSINESS DESCRIPTION | NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION Corporate Information and Business Overview Collective Audience, Inc.
(the “Company”) operates primarily through its subsidiaries, DLQ INC., a Nevada corporation ( “DLQ”) and DSL Digital,
LLC, a Utah Limited Liability Company (“DSL”) DLQ DLQ is a Nevada corporation,
originally incorporated in December 2019 as Origin 8, Inc. DLQ has two wholly owned subsidiaries, Tamble, Inc., a Delaware corporation,
and Push Interactive, LLC, a Minnesota limited liability company, located in Minneapolis, Minnesota, USA. Tamble, Inc. is not an operating
business. Its sole purpose is to hire independent contractors for DLQ’s marketing business. On January 8, 2020, DLQ’s,
then parent completed the acquisition of substantially all of the assets of Push Holdings, Inc. and the assets were transferred to Push
Interactive, LLC. This acquired business operates a consumer data management platform powered by lead generation, online marketing, and
multichannel reengagement strategies through its owned and operated brands. DLQ has developed a proprietary data management platform and
integrated with several third-party service providers to optimize the return on its marketing efforts. DLQ focuses on consumer engagement
and enrichment to maximize its return on acquisition through repeat monetization of each consumer. As part of the transaction, Logiq,
Inc. issued 35,714,285 shares to Conversion Point Technologies, Inc. as consideration for the acquisition of all the assets of Push Holdings,
Inc. in the amount of $14,285,714. On March 31, 2022, DLQ and
its then parent completed the acquisitions of certain customer contractual agreements of Battle Bridge Labs, LLC and Section 2383 LLC,
a Tulsa, Oklahoma based digital brand marketing agency. The purchase price was $2,929,612 and consisted of the issuance of 2,912,621 shares
of restricted common stock of Logiq, Inc. with a fair value of $2,679,612 and cash consideration of $250,000, of which Logiq, Inc. paid
$200,000 and DLQ paid $50,000, respectively. Battle Bridge Acquisition
Co., LLC became the third wholly owned subsidiary of DLQ. Battle Bridge is a full-service branding and digital marketing agency serving
both external clients and internal parts of the Company. Battle Bridge offers branding and identity development in additional to digital
strategy and media busing services, as well as all of the requisite ancillary and supporting services to enable the branding and digital
practices. On September 9, 2022, DLQ
and its then parent Logiq Inc. entered into a definitive merger agreement for a business combination whereby it will merge with Abri Merger
Sub Inc., a wholly owned subsidiary of Abri SPAC I, Inc., a special purpose acquisition company (“SPAC”). The business combination between
was be affected through the merger of Abri Merger Sub, Inc. with and into DLQ, with DLQ surviving the merger as a wholly owned subsidiary
of the Company. Upon the closing of the acquisition, the Company changed its name to “Collective Audience, Inc.” Abri issued
11.4 million shares in exchange for all of the outstanding shares of DLQ. At $10 per Abri share, the valuation of the Company was $114
million. The accompanying consolidated
financial statements represent the financial position and result of operations of the Company, with its subsidiary DLQ, Inc. as the source
of operations. DSL On June 28, 2024 the Company
acquired DSL Digital LLC, a Utah limited liability company (“DSL”). DSL is a global marketing platform with proprietary artificial
intelligence technology that enables it to triple the performance of its competitors (for Fortune 500 companies such as SAP and Accenture).
DSL’s fast-growing B2B and DTC advertising channels are now able to create unique, never-before-seen programs for brands and publishers
using the BeOp platform, forming the basis for the launch of Collective Audience, Inc’s “Audience Service” offering
and its expansion into B2B advertising and media. The Business Combination As previously announced, on
September 9, 2022, Abri SPAC I, Inc., a Delaware corporation (“Abri”), Abri Merger Sub, Inc., a Delaware corporation and wholly
owned subsidiary of Abri (“Merger Sub”), Logiq, Inc., a Delaware corporation (“Logiq or “DLQ Parent”) whose
common stock is quoted on OTCQX Market under the ticker symbol “LGIQ” and, DLQ, Inc., a Nevada corporation and wholly owned
subsidiary of DLQ Parent (“DLQ”) entered into a Merger Agreement (the “Merger Agreement”). On November 2, 2023 (the “Closing
Date”), the Business Combination, among other transactions contemplated by the Merger Agreement, was completed (the “Closing”).
On the Closing Date, 11,400,000 shares of Company Common Stock and were issued to DLQ Parent as Merger Consideration. After giving effect
to the issuances in connection with the Closing, 13,220,063 shares of Company Common Stock were outstanding. On October 23, 2023 stockholders
holding 619,963 of the Abri’s public shares exercised their right to redeem such shares, after giving effect to certain redemption
elections prior to Closing, for a pro rata portion of the funds in Abri’s trust account (the “Trust Account”). As a
result, $ 6,651,963 (approximately $10.72 per share) was removed from the Trust Account to pay such holders. Following redemptions, the
Company had 62,185 public shares of common stock outstanding. On November 3, 2023, the Company’s
Common Stock began trading on the Nasdaq Global Market under the symbol “CAUD.” The units previously trading under the symbol
“ASPAU” were separated into their separate components and ceased to trade. The settlement of the Abri
convertible note, related party, in the amount of $1,931,250 and promissory note, related party, in the amount of $1,671,784, warrants
for $250,000 and $114,893 for a total of $3,967,927. The Merger Consideration and Treatment of Securities At
Closing, pursuant to the terms of the Merger Agreement and after giving effect to the redemptions of shares of Abri Common Stock:
● The total consideration paid at Closing (the “Merger
Consideration”) by Abri to DLQ security holders was 11,400,000 shares of the Company common stock valued at $114 million
(the “Consideration Shares”);
● Each share of DLQ Common Stock, if any, that was owned by
Abri, Merger Sub, DLQ or any other affiliate of Abri immediately prior to the effective time of the Merger (the “Effective Time”)
was automatically cancelled and retired without any conversion or consideration;
● each share of Merger Sub common stock, par value $0.0001 per
share (“Merger Sub Common Stock”), issued and outstanding immediately prior to the Effective Time was converted into one
newly issued share of Common Stock of the Surviving Corporation. Concurrent
with Closing, upon issuance of the Consideration Shares, DLQ Parent declared a share dividend of 3,762,000 Consideration Shares
(representing 33% of the total Consideration Shares) to the DLQ Parent stockholders (the “Logiq Dividend”) of record
as of October 24, 2023 (the “Dividend Record Date”). Certain DLQ Parent stockholders which are entitled to 1,500,000 of
such Logiq Dividend shares agreed to become subject to an Escrow Agreement (the “Reset Shares”). The Reset Shares may be released
to certain institutional investors to cover any reset in the amount of Consideration Shares to cover a $5 million investment in DLQ
(the “DLQ Investment”) in the form of convertible promissory notes issued by DLQ (the “DLQ Notes”). Additionally,
an aggregate of $5,000,000 of DLQ Notes converted into shares of common stock of DLQ representing an aggregate of 14% of the
outstanding capital stock of DLQ and were exchanged for an aggregate of 1,600,000 Consideration Shares. The remaining 53%
of Consideration Shares were issued to DLQ Parent, are subject to an 11-month lock-up, and will be deposited into a separate escrow account,
and such escrow which will be released once the DLQ Investors recoup their original investment amounts. The Company has authorized 200,000,000 shares
of common stock, and 100,000,000 shares of preferred stock, par value $0.0001 per share. The outstanding shares of the
Company’s common stock are fully paid and non-assessable. As of the Closing Date, there were 13,220,263 shares
of Common Stock outstanding, no shares of preferred stock outstanding, and warrants to purchase 6,028,518 shares of Common Stock.
Company stockholders who hold their shares in electronic format in U.S. brokerage accounts are not deemed to be separate stockholders,
as such shares are held of record by CEDE and Co., which is counted by our transfer agent as a single stockholder of record. Such holder
numbers do not include Depository Trust Company participants or beneficial owners holding shares through nominee names. The settlement of the Abri
convertible note, related party, in the amount of $1,931,250 and promissory note, related party, in the amount of $1,671,784, warrants
for $250,000 and $114,893 for a total of $3,967,927. On December 19, 2023, the
Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors (the “Investors”),
pursuant to which the Company agreed to issue and sell to the Investors in a private placement (the “Offering”) (i) 465,118 shares
(the “Shares”) of common stock of the Company, $0.0001 par value (the “Common Stock”) for a purchase price
of $1.29 per share of Common Stock, which was equal to the “Minimum Price” under Nasdaq rules, and (ii) warrants to purchase
up to 697,678 shares of Common Stock (the “Warrants” and together with the shares underlying the Warrants, the “Warrant
Shares,” and the Shares, the “Securities”) for a total aggregate gross proceeds of approximately $600,000. The Offering
closed on December 19, 2023 The following table reconciles
the elements of the Business Combination to the consolidated statement of changes in stockholders’ deficit for the year ended December
31, 2023:
Cash - Trust and Escrow $ 5,667,221
Less: Transaction Expenses Paid 5,557,206
Net proceeds from the Business Combination 110,016
Less: Recognition of SPAC closing balance sheet (3,603,034 )
Reverse capitalization, net (3,493,018 ) The number of shares of Common
Stock issued immediately following the consummation of the Business Combination are as follows:
Abri common stock outstanding prior to Business Combination 5,733,920
Less: Redemption of Abri common stock (5,671,735 )
Common stock of Abri 62,185
Abri private units outstanding 294,598
Abri founder shares outstanding 1,433,480
Other 29,800
Business Combination shares 1,820,063
CAUD common stock 11,400,000
Common stock immediately following Business Combination 13,220,063
Brownstone investment 232,559
Timothy Wong (Brownstone) 232,559
Other shares issued during FY23 41,629
Weighted-average common shares outstanding – Basic and Diluted 13,726,810 |
