AUDDIA INC. 10-Q

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds In February 2021, upon the closing of our IPO, all of our outstanding pre-IPO equity and convertible debt securities automatically converted into 7,300,010 shares of common stock. The issuance of such common stock was exempt from the registration requirements of the Securities Act, pursuant to Section 3(a)(9) of the Securities Act, involving an exchange of securities exchanged by the issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange. No underwriters were involved in this issuance of shares. Use of Proceeds On February 16, 2021, the U.S. Securities and Exchange Commission declared effective our registration statement on Form S-1 (File No. 333-235891), as amended, filed in connection with our IPO. There has been no material change in the planned use of proceeds from our IPO from that described in the related prospectus dated February 16, 2021, filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act. As described in such IPO prospectus, we have used IPO proceeds to reduce our bank debt by $4.0 million, to fund a $2.0 million cash reserve to serve as collateral for our remaining $2.0 million of bank debt that replaced collateral previously provided by a related party, to pay down a significant percentage of our accounts payable as of December 31, 2020, and to pay deferred compensation owed to a related party. In July 2021, certain holders of our publicly traded Series A Warrants exercised approximately 1.1 million warrants for approximately 1.1 million shares of common stock at the cash exercise price of $4.5375 per share and as a result, we received additional cash proceeds of approximately $5.0 million. In addition, we paid the remaining $2.0 million, out of our restricted cash, to pay off and terminate our line of credit. On November 14, 2022, the Company entered into a secured debt financing agreement with one accredited investor who is an existing stockholder of the Company. The Company will receive $2 million in net proceeds from this financing. In addition, on November 14, 2022, the Company entered into an equity line stock purchase agreement with one accredited investor. The equity line facility is for up to $10 million of potential sales, subject to certain limitations, would occur, at the Company's option, from time to time over the period ending December 31, 2023. These proceeds will be used to fund ongoing operations. Issuer Purchases of Equity Securities We did not repurchase any of our equity securities during the nine months ended September 30, 2022. Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures None.