What changed in this filing

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Item 1. Financial Statements

2021-11-12 compared with 2021-08-13 · 187 added, 160 removed, 409 unchanged (46% of the section changed)

Financial Statements

Condensed Balance Sheets (Unaudited)

Condensed Balance Sheets

September 30,

Current assets:

Restricted cash

Accounts receivable, net

17 unchanged sentences

Stockholders' equity (deficit):

Preferred stock - $ 0.001 par value, 10,000,000 authorized and 0 shares issued and outstanding at June 30, 2021 and December 31, 2020

Common stock - $ 0.001 par value, 100,000,000 authorized and 11,291,829 and 485,441 shares issued and outstanding at June 30, 2021 and December 31, 2020

Preferred stock - $ 0.001 par value, 10,000,000 authorized and 0 shares issued and outstanding at September 30, 2021 and December 31, 2020

Common stock - $ 0.001 par value, 100,000,000 authorized and 12,414,638 and 485,441 shares issued and outstanding at September 30, 2021 and December 31, 2020

Additional paid-in capital

8 unchanged sentences

Condensed Statements of Operations (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Operating expenses:

13 unchanged sentences

Interest expense

( 1,379,735 )

Interest income

1 unchanged sentence

( 8,176,116 )

( 1,379,694 )

Net loss before income taxes

14 unchanged sentences

Equity (Deficit) (Unaudited)

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Balance, December 31, 2020

2 unchanged sentences

Issuance of common shares

Exercise of warrants

Conversion of debt obligations

2 unchanged sentences

( 12,099,421 )

Balance, June 30, 2021

Balance, September 30, 2021

$ ( 63,459,741 )

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Balance, December 31, 2019

2 unchanged sentences

Issuance of common shares

Exercise of warrants

Conversion of debt obligations

Collection of subscription receivable

2 unchanged sentences

( 3,479,548 )

Balance, June 30, 2020

Balance, September 30, 2020

$ ( 50,788,647 )

3 unchanged sentences

Condensed Statements of Cash Flows (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

4 unchanged sentences

Depreciation and amortization

Bad debt provision

Share-based compensation

1 unchanged sentence

Issuance of common stock for consulting services

Issuance of related party debt for consulting services

Change in assets and liabilities:

21 unchanged sentences

Net cash provided by financing activities

Net increase in cash and restricted cash

Cash and restricted cash, beginning of period

Cash and restricted cash, end of period

Net increase (decrease) in cash

Cash, beginning of period

Cash, end of period

Supplemental disclosures of cash flow information:

Cash paid for interest

$ ( 1,379,046 )

Cash paid for income taxes

3 unchanged sentences

$ ( 268,662 )

Conversion of accounts payable to convertible notes

Note subscriptions receivable

The accompanying notes are an integral part of

1 unchanged sentence

Notes to Condensed Financial Statements (Unaudited)

Note 1 - Description of Business, Basis of Presentation and Summary

of Significant Accounting Policies

Note 1 - Description of Business, Basis of Presentation and

Summary of Significant Accounting Policies

Description of Business

Auddia Inc., formerly Clip Interactive, LLC, (the

“Company”, “Auddia”, “we”, “our”) is a technology company that makes radio broadcasts

and streaming audio content digitally actionable and measurable.

Clip Interactive, LLC was initially formed as a Colorado limited liability

company on January 14, 2012 and on November 25, 2019 changed its trade name to Auddia.

Auddia Inc., formerly Clip Interactive, LLC,

(the “Company”, “Auddia”, “we”, “our”) is a technology company that is reinventing how

consumers engage with audio through the development of a proprietary AI platform for audio and innovative technologies for podcasts.

Clip Interactive, LLC was initially formed as a Colorado limited liability company on January 14, 2012 and on November 25, 2019 changed

its trade name to Auddia.

On February 16, 2021, the Company completed an

1 unchanged sentence

warrant to purchase one share of common stock at an exercise price of $4.54 per share.

In addition, the underwriters exercised their option

to purchase 598,772 Series A warrants to cover over-allotments and were issued 319,346 in representative warrants at an exercise price

of $ 5.15625 per share.

In addition, the underwriters exercised their

option to purchase 598,772 Series A warrants to cover over-allotments and were issued 319,346 in representative warrants at an exercise

price of $5.15625 per share.

After deducting underwriters commissions and expenses, the Company received net proceeds of approximately

$15.1 million and its common stock commenced trading on Nasdaq under the ticker symbol “AUUD”.

Concurrently with the IPO, holders

of the Company’s promissory notes, convertible notes, and related party notes, along with accrued interest, were converted into

6,814,570 shares of the Company’s common stock.

Concurrently with the IPO,

holders of the Company’s promissory notes, convertible notes, and related party notes, along with accrued interest, were converted

into 6,814,570 shares of the Company’s common stock.

Concurrently with the IPO the Company converted

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Unaudited interim financial information

The condensed financial statements of

the Company included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission

Certain information and footnote disclosures normally included in financial statements prepared in accordance

with GAAP have been condensed or omitted from this Quarterly Report, as is permitted by such rules and regulations.

Accordingly, these

condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s

Annual Report on Form 10-K.

The condensed financial statements of the Company

included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the

Certain information and footnote disclosures normally included in financial statements prepared in accordance with

GAAP have been condensed or omitted from this Quarterly Report, as is permitted by such rules and regulations.

Accordingly, these condensed

financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual

Report on Form 10-K.

The results for any interim period are not necessarily indicative of results for any future period.

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retain, and motivate qualified personnel.

There can be no guarantee that the Company will be successful in addressing these or other such

There can be no guarantee that the Company will be successful in addressing these or other

Cash and Restricted Cash

1 unchanged sentence

all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

The Company had no cash

equivalents at June 30, 2021 or December 31, 2020.

Restricted cash at June 30, 2021 represents cash held as collateral for the outstanding

balance on our line of credit.

The Company had no

cash equivalents at September 30, 2021 or December 31, 2020.

The Company maintains

2 unchanged sentences

cash balance may at times exceed these limits.

At June 30, 2021 and December 31, 2020, the Company had approximately $ 6.1 million and

$ 0 , respectively, in excess of federally insured limits.

The Company continually monitors its positions with, and the credit quality of,

the financial institutions with which it invests.

At September 30, 2021 and December 31, 2020, the Company had approximately $7.8 million

and $0, respectively, in excess of federally insured limits.

The Company continually monitors its positions with, and the credit quality

of, the financial institutions with which it invests.

Deferred Offering Costs

10 unchanged sentences

apply to private companies.

The Company has elected to use this extended transition period for complying with certain new or revised accounting

standards that have different effective dates for public and private companies.

The Company has elected to use this extended transition period for complying with certain new or revised

accounting standards that have different effective dates for public and private companies.

Note 2 – Revenue Recognition

9 unchanged sentences

In addition to displaying album art for songs

played, and digital insertions for station promotions and programs (e.g., a radio station contest), the station feed also included a digital

element for each audio ad that was played.

These interactive, synchronized digital ads generate additional revenue for broadcasters and

allowed for the collection of meaningful advertising analytics which we presented to broadcasters through an analytics dashboard.

played, and digital insertions for station promotions and programs (e.g., a radio station contest), the station feed also included a

digital element for each audio ad that was played.

These interactive, synchronized digital ads generate additional revenue for broadcasters

and allowed for the collection of meaningful advertising analytics which we presented to broadcasters through an analytics dashboard.

The Company began phasing out its Interactive

3 unchanged sentences

Furthermore, our well

established relationships with more than a dozen broadcasters through the sales, marketing and digital services operations are being maintained

as we seek to deploy the Auddia App on a national scale.

established relationships with more than a dozen broadcasters through the sales, marketing and digital services operations are being

maintained as we seek to deploy the Auddia App on a national scale.

The Company’s legacy contracts with customers

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of transfer as the service to access the Company’s Platform and have been treated a single performance obligation.

Revenue was recognized

over time as the customer simultaneously receives and consumes the benefits provided by the Company’s platform services.

no longer provides these services.

recognized over time as the customer simultaneously receives and consumes the benefits provided by the Company’s platform services.

The Company no longer provides these services.

Advertising revenue

10 unchanged sentences

managed digital advertising for 2019 and discontinued revenue sharing agreements with clients for advertising sourced by the client.

was recognized as performance obligations were satisfied on a net basis as the Company was acting as an agent, which generally occurred

as ads were delivered through the platform.

We generally recognized revenue based on delivery information from the external providers

campaign trafficking systems.

Revenue was recognized as performance obligations were satisfied on a net basis as the Company was acting as an agent, which generally

occurred as ads were delivered through the platform.

We generally recognized revenue based on delivery information from the external

providers campaign trafficking systems.

The internal advertising revenues were comprised

of advertising fees for local and national interactive spot and local or digital only advertising campaign fees that were managed by the

of advertising fees for local and national interactive spot and local or digital only advertising campaign fees that were managed by

For these advertising spots, the Company retained all the money spent on the advertising campaigns run on the Company’s

4 unchanged sentences

Ad Fees which could include customer digital and interactive spot ad campaigns, interactive spot campaigns, the revenue was recognized

at a point in time under the “as-invoiced” practical expedient, since customer usage driven variability was not required to

be estimated but rather is allocated to the distinct time period in which the variable activity occurred.

at a point in time under the “as-invoiced” practical expedient, since customer usage driven variability was not required

to be estimated but rather is allocated to the distinct time period in which the variable activity occurred.

Certain customers received platform fee credits

10 unchanged sentences

associated with the acquisition of its customer contracts and therefore, no deferred customer acquisition costs have been recorded.

We did not disclose the value of unsatisfied performance

obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at

the amount to which we had the right to invoice for services performed.

We did not disclose the value of unsatisfied

performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize

revenue at the amount to which we had the right to invoice for services performed.

The following table presents revenues disaggregated

1 unchanged sentence

Disaggregated revenue table

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Platform Service Fees (hosting services, support, data analytics)

4 unchanged sentences

Schedule of accounts payable and accrued liabilities

September 30,

Accounts payable and accrued expenses

4 unchanged sentences

Note 4 – Line of Credit

On April 10, 2018 the Company refinanced its previous

line-of-credit with a different bank and this agreement was amended in July 2019 and March 2021.

The available principal balance under

the line of credit is currently $ 2,000,000 , and the outstanding balance accrues interest at a variable rate based on the bank’s

prime rate plus 1% ( 4.25 % at June 30, 2021 and December 31, 2020) but at no time less than 4.0%.

Monthly interest payments are required,

with any outstanding principal due on July 10, 2021 .

Interest expense for the six months ended June 30, 2021 and 2020 was $ 69,132 and

$ 146,667 , respectively.

The line of credit is collateralized by all assets

of the Company, including $2 million of cash held in a control account at the lender.

The Company also maintains a minimum balance at

the lender to cover two months of interest payments.

Prior to our IPO, the line of credit was collateralized by $6,000,000 of cash assets

of two shareholders held in control accounts at the lender.

On April 10, 2018 the Company refinanced its

previous line-of-credit with a different bank and this agreement was amended in July 2019 and March 2021.

The principal balance was paid

off in full as of July 8, 2021.

Interest accrued at a variable rate based on the bank’s prime rate plus 1% (4.25% at December 31,

2020) but at no time less than 4.0%.

Monthly interest payments were required, with any outstanding principal due on July 10, 2021.

expense for the three months ended September 30, 2021 and 2020 was ($2,720) and $65,855, respectively.

Interest expense for the nine

months ended September 30, 2021 and 2020 was $66,412 and $212,522, respectively.

The line of credit was collateralized by all

assets of the Company, including $2 million of cash held in a control account at the lender.

The Company also maintained a minimum balance

at the lender to cover two months of interest payments.

Prior to our IPO, the line of credit was collateralized by $6,000,000 of cash

assets of two shareholders held in control accounts at the lender.

Following the Company’s IPO in February

3 unchanged sentences

of cash collateral previously provided by the two shareholders was released.

As of June 30, 2021, $2.0 million of our cash serves as collateral

for our outstanding balance on the line of credit.

The remaining principal balance of $2 million was paid off

in full and the line of credit was terminated as of July 8, 2021.

The outstanding balance on the line of credit

at June 30, 2021 and December 31, 2020 was $ 2,000,000 and $ 6,000,000 , respectively and the line was fully drawn as of June 30, 2021.

discussed in Note 10, the Company paid off the principal balance of $ 2,000,000 and terminated the line of credit as of July 8, 2021.

shareholder who previously provided the $2,000,000 control account had a collateral agreement with the Company which is described in Note

at September 30, 2021 and December 31, 2020 was $0 and $6,000,000, respectively.

The shareholder who previously provided the $2,000,000

control account had a collateral agreement with the Company which is described in Note 5.

This agreement was terminated in March 2021.

8 unchanged sentences

ranging from 50% to 75% of the IPO price.

Interest expense for the six months ended June 30, 2021 and 2020 was $ 16,586 and $ 63,741 , respectively.

Interest expense for the three months ended September 30, 2021 and 2020 was $0 and $32,466,

respectively.

Interest expense for the nine months ended September 30, 2021 and 2020 was $16,586 and $96,207, respectively.

Accrued fees to a related party

10 unchanged sentences

of the collateral amount annually plus an annual renewal fee of $50,000.

Interest expense for the six months ended June 30, 2021 and 2020

was $ 208,727 and $ 655,175 , respectively.

The balance outstanding on the accrued collateral fees was $ 1,960,336 at December 31, 2020, excluding

the $ 725,000 unsecured note payable.

Interest expense for the three months ended September 30, 2021

and 2020 was $0 and $326,359, respectively.

Interest expense for the nine months ended September 30, 2021 and 2020 was $208,727 and $981,534,

respectively.

The balance outstanding on the accrued collateral fees was $1,960,336 at December 31, 2020, excluding the $725,000 unsecured

note payable.

This collateral agreement terminated in March 2021.

6 unchanged sentences

When issued, the notes incorporated the following attributes:

interest on the Notes accrue at 6% and upon the successful completion of a qualified IPO by December 31, 2021, the notes and accrued interest

would convert into equity at a per share valuation equal to $40.0 million.

In addition, each investor in the Promissory Notes would receive

shares and warrants based on a formula that takes into account the number of shares and warrants the investor owned before the investment

in these Promissory Notes, as well as a portion of the bonus allocation of 1,038,342 shares made available to the investors.

expense for the six months ended June 30, 2021 and 2020 was $ 14,454 and $ 7,125 , respectively.

interest on the Notes accrue at 6% and upon the successful completion of a qualified IPO by December 31, 2021, the notes and accrued

interest would convert into equity at a per share valuation equal to $40.0 million.

In addition, each investor in the Promissory Notes

would receive shares and warrants based on a formula that takes into account the number of shares and warrants the investor owned before

the investment in these Promissory Notes, as well as a portion of the bonus allocation of 1,038,342 shares made available to the

Interest expense for the three months ended September 30, 2021 and 2020 was $0 and $15,965, respectively.

Interest expense

for the nine months ended September 30, 2021 and 2020 was $14,454 and $23,091, respectively.

In conjunction with the February 2021 IPO, all

2 unchanged sentences

expense of $8,141,424 related to the conversion of the convertible notes, notes payable to related parties and promissory notes during

the six months ended June 30, 2021.

the nine months ended September 30, 2021.

Note 6 – Notes Payable

14 unchanged sentences

of $17,197 for services by the Company, also agreed to convert their payables into convertible Notes.

During 2019 the Company issued a

note payable to a related party for consulting services incurred by the Company in the amount of $486,198.

As of December 31, 2020, the

outstanding balance for consulting services was $ 440,904 .

During 2019 the Company issued

a note payable to a related party for consulting services incurred by the Company in the amount of $486,198.

As of December 31, 2020,

the outstanding balance for consulting services was $440,904.

In October 2019, a shareholder obtained $400,000

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required under such short term financing agreement.

Under the agreement the Company was advanced $ 188,000 , net of $ 12,000 in closing fees,

and the remaining $ 200,000 was put into an escrow account owned and controlled by the shareholder.

A loan financing fee in the amount

of $100,000 was due upon maturity, of which the amount relating to 2019 of $ 75,000 was included in accrued expenses at December 31, 2019.

In December 2019, the Company made a principal payment in the amount of $ 57,203 , and accordingly, the outstanding principal balance was

$ 142,797 at December 31, 2019, and was included in Notes payable to related parties on the balance sheet.

The remaining balance of $ 242,797

which included principal and loan financing fees, was repaid in January 2020.

Under the agreement the Company was advanced $188,000, net of $12,000 in closing

fees, and the remaining $200,000 was put into an escrow account owned and controlled by the shareholder.

A loan financing fee in the

amount of $100,000 was due upon maturity, of which the amount relating to 2019 of $75,000 was included in accrued expenses at December

In December 2019, the Company made a principal payment in the amount of $57,203, and accordingly, the outstanding principal

balance was $142,797 at December 31, 2019, and was included in Notes payable to related parties on the balance sheet.

The remaining balance

of $242,797 which included principal and loan financing fees, was repaid in January 2020.

In February 2020, the Company obtained a new

$500,000 short term loan from the same related party.

The Company was advanced $ 485,000 , net of $ 15,000 in closing fees, and immediately placed

$ 140,741 into an escrow account, owned and controlled by the shareholder to provide funds for the scheduled repayments.

Repayment of the

principal and loan financing fee occurs through weekly payments of $17,593 until the loan and financing fee is paid in full.

financing fee increases with the length of the payback period and was maximized at $165,000 after month five.

The Company was advanced $485,000, net of $15,000 in closing fees, and immediately

placed $140,741 into an escrow account, owned and controlled by the shareholder to provide funds for the scheduled repayments.

of the principal and loan financing fee occurs through weekly payments of $17,593 until the loan and financing fee is paid in full.

loan financing fee increases with the length of the payback period and was maximized at $165,000 after month five.

The outstanding balance

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Small Business Administration.

The First Loan was set to mature in April 2022 and the Second Loan matures in January 2023.

The First Loan was set to mature in April 2022

and the Second Loan matures in January 2023.

The PPP Loans bear interest at a rate of 1% per annum.

Beginning November 2020, the Company was required to make 18 monthly payments of principal and interest in the amount of $ 14,370 related to the First Loan.

The PPP Loans may be prepaid by the Company at any time prior to maturity with no prepayment penalties.

The proceeds from the Loans may only be used for payroll costs (including benefits), interest on mortgage obligations, rent, utilities and interest on certain other debt obligations.

Beginning November 2020, the Company

was required to make 18 monthly payments of principal and interest in the amount of $14,370 related to the First Loan.

The PPP Loans

may be prepaid by the Company at any time prior to maturity with no prepayment penalties.

The proceeds from the Loans may only be used

for payroll costs (including benefits), interest on mortgage obligations, rent, utilities and interest on certain other debt obligations.

The PPP Loans contain customary events of default

relating to, among other things, payment defaults, making materially false and misleading representations to the lender or breaching the

terms of the Loan documents.

The occurrence of an event of default will result in an increase in the interest rate to 18% per annum and

provides the lender with customary remedies, including the right to require immediate payment of all amounts owed under the PPP Loans.

relating to, among other things, payment defaults, making materially false and misleading representations to the lender or breaching

the terms of the Loan documents.

The occurrence of an event of default will result in an increase in the interest rate to 18% per annum

and provides the lender with customary remedies, including the right to require immediate payment of all amounts owed under the PPP Loans.

Pursuant to the terms of the CARES Act and the

PPP, the Company applied for forgiveness for the First Loan.

On June 15, 2021, the Company received confirmation that the First Loan was

approved for forgiveness and the Company recorded $ 268,662 in PPP loan extinguishment to other income during the three and six months

ended June 30, 2021.

The Company plans to apply to the lender for forgiveness for the amount due on the Second Loan.

The amount eligible

for forgiveness is based on the amount of Loan proceeds used by the Company (during the eight-week period after the lender makes the first

disbursement of Loan proceeds) for the payment of certain covered costs, including payroll costs (including benefits), interest on mortgage

obligations, rent and utilities, subject to certain limitations and reductions in accordance with the CARES Act and the PPP.

Company expects 100% of the Second Loan to be forgiven, no assurance can be given that the Company will obtain forgiveness of the Second

Loan in whole or in part.

On June 15, 2021, the Company received confirmation that the First Loan

was approved for forgiveness and the Company recorded $268,662 in PPP loan extinguishment to other income during the nine months ended

September 30, 2021.

The Company has applied to the lender for forgiveness for the amount due on the Second Loan and as noted in Note

10, the Company received confirmation of full forgiveness in November 2021.

The amount eligible for forgiveness is based on the amount

of Loan proceeds used by the Company (during the eight-week period after the lender makes the first disbursement of Loan proceeds) for

the payment of certain covered costs, including payroll costs (including benefits), interest on mortgage obligations, rent and utilities,

subject to certain limitations and reductions in accordance with the CARES Act and the PPP.

While the Company expects 100% of the Second

Loan to be forgiven, no assurance can be given that the Company will obtain forgiveness of the Second Loan in whole or in part.

Note 7 – Commitments and Contingencies

10 unchanged sentences

Schedule of rent expense

Three Months Ended June 30

Six Months Ended June 30

Three Months Ended September 30

Nine Months Ended September 30

In the normal course of business, the Company

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Schedule of stock option activity

Non-Qualified

Exercise Price

1 unchanged sentence

Forfeited/canceled

Outstanding – June 30, 2021

Outstanding – September 30, 2021

The following table presents the composition

1 unchanged sentence

Options outstanding and exercisable

Options Outstanding

Options Exercisable

Exercise Prices

Total - June 30,

Total - September 30, 2021

________________________

1 unchanged sentence

average remaining contractual life, respectively.

During the three and nine months ended September

30, 2021, the Company granted 1,235,500 stock options to certain executives and key employees.

Under the terms of the option agreements,

the options are subject to certain vesting requirements.

Restricted Stock Units

The following table presents the activity for

restricted stock units outstanding:

Schedule of restricted stock units activity

Exercise Price

Outstanding - December 31, 2020

Forfeited/canceled

Outstanding – September 30, 2021

During the three and nine months ended September

30, 2021, the Company granted 424,500 restricted stock units.

Under terms of the restricted stock agreements, the restricted stock units

are subject to a certain vesting schedule.

The Company recognized share-based compensation

expense related to stock options and restricted stock units of $735,592 and $767,543 for the three and nine months ended September 30,

2021, respectively.

The remaining unvested share-based compensation expense of $2,844,328 is expected to be recognized over the next 46

The following table presents the activity for

warrants outstanding:

Schedule of warrant activity

Schedule of warrants activity

Exercise Price

1 unchanged sentence

Forfeited/cancelled/restored

Outstanding – June 30, 2021

Outstanding – September 30, 2021

In connection with the February 2021 IPO, the

2 unchanged sentences

warrants contain a cashless exercise feature.

All of the outstanding warrants are exercisable and have a weighted average remaining contractual

life of approximately 4.48 years as of June 30, 2021.

During the three months ended September 30, 2021

certain holders of our publicly traded Series A Warrants exercised 1,091,692 warrants for 1,091,692 million shares of common stock at

the cash exercise price of $ 4.5375 per share.

In addition, certain holders of our Pre-IPO warrants exercised 1,489 warrants for 1,117

shares of common stock at the net exercise price of $ 0.87 per share.

All of the outstanding warrants are exercisable

and have a weighted average remaining contractual life of approximately 4.19 years as of September 30, 2021.

Note 9 – Net Loss Per Share

4 unchanged sentences

for basic net loss per share is adjusted by the effect of dilutive securities, including awards under our equity compensation plans.

As of June 30, 2021 and 2020, 4,239,600 shares

and 651,437 shares, respectively of potentially dilutive weighted average shares were excluded from the calculation of diluted net loss

per share because their effect would have been anti-dilutive for the periods presented.

As of September 30, 2021 and 2020, 4,632,777

shares and 654,141 shares, respectively of potentially dilutive weighted average shares were excluded from the calculation of diluted

net loss per share because their effect would have been anti-dilutive for the periods presented.

Note 10 – Subsequent Events

In July 2021, the Company received cash proceeds of approximately $5.0

million related to the exercise of Series A Warrants to purchase 1,091,692 shares of Common Stock.

In July 2021, the Company paid off the $2 million outstanding balance

on its line of credit, which released from restriction its restricted cash balance.

The line of credit has been terminated.

In July 2021, the Company finalized development and testing of the

Minimally Viable Product (“MVP”) version of the Auddia App and launched its first consumer trial.

The Company plans to commence

amortization of its capitalized development costs.

In November 2021, the Company received confirmation

from the SBA that the Second Loan was approved for forgiveness and recorded $267,482 in PPP loan extinguishment to other income.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements