What changed in this filing

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Item 1. Business

2023-03-23 compared with 2022-02-17 · 317 added, 286 removed, 284 unchanged (68% of the section changed)

Overview of Auddia

Auddia is a technology

company headquartered in Boulder, CO that is reinventing how consumers engage with audio through the development of a proprietary AI platform

Auddia is a technology company

headquartered in Boulder, CO that is reinventing how consumers engage with audio through the development of a proprietary AI platform

for audio and innovative technologies for podcasts.

Auddia is leveraging these technologies to bring to market two industry first apps,

Faidr (previously known as the Auddia App) and Vodacast.

Faidr gives consumers

the opportunity to listen to any AM/FM radio station with no commercials while personalizing the listening experience through skips, the

insertion of on-demand content and programming of audio routines to customize listening sessions such as a daily commute.

The Faidr app

represents the first-time consumers can access the local content uniquely provided by radio in the commercial free and personalized manner

many consumers have come to demand for media consumption.

Vodacast is a podcasting

platform that provides a unique suite of tools that helps Podcasters create additional digital content for their podcast episodes as well

as plan their episodes, build their brand around their Podcast and monetize their content with new monetization channels.

Vodacast also

gives users the ability to go deeper into the stories through supplemental, digital content, comment, and contribute their own content

to episode feeds.

Both of Auddia’s

offerings address large and rapidly growing audiences.

Auddia is leveraging these technologies within its industry-first audio Superapp,

faidr (previously known as the Auddia App).

faidr gives consumers the

opportunity to listen to any AM/FM radio station with no commercials while personalizing the listening experience through skips and the

insertion of on-demand content, including popular and new music, news, and weather.

The faidr app represents the first-time consumers

can combine the local content uniquely provided by AM/FM radio with commercial-free and personalized listening many consumers demand from

digital-media consumption.

In addition to commercial-free AM/FM, faidr includes podcasts and exclusive content, branded faidrRadio, which

includes new artist discovery, curated music stations, and Music Casts.

Music Casts are unique to faidr.

Hosts and DJs can combine on-demand

talk segments with dynamic music streaming, which allows users to hear podcasts with full music track plays embedded in the episodes.

Auddia has also developed

a podcasting platform that provides a unique suite of tools that helps Podcasters create additional digital content for their podcast

episodes as well as plan their episodes, build their brand, and monetize their content with new content distribution channels.

platform also gives users the ability to go deeper into the stories through supplemental, digital content, and eventually comment and

contribute their own content to episode feeds.

Both of Auddia’s offerings

address large and rapidly growing audiences.

The Company has developed

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Not only does the technology

learn the differences between the various types of audio segments, it also identifies the beginning and end of each piece of content.

learn the differences between the various types of audio segments, but it also identifies the beginning and end of each piece of content.

The Company is leveraging

this technology platform to bring to market a premium AM/FM radio listening experience through the Faidr App.

The Faidr App is intended

to be downloaded by consumers who will pay a subscription fee in order to listen to any streaming AM/FM radio station without commercials.

Advanced features will allow consumers to skip any content heard on the station, request audio content on-demand, and program an audio

We believe the Faidr App represents a significant differentiated audio streaming product that will be the first to come to market

since the emergence of popular streaming music apps such as Pandora, Spotify, Apple Music, Amazon Music, etc.

We believe that the most

significant point of differentiation is that in addition to music, the Faidr App is intended to deliver non-music content that includes

local sports, news, weather, traffic and the discovery of new music.

Radio is the dominant audio platform for local content and new music

this technology platform within its premium AM/FM radio listening experience through the faidr App.

The faidr App is intended to be downloaded

by consumers who will pay a subscription fee in order to listen to any streaming AM/FM radio station without commercials, podcasts and

the faidrRadio exclusive content offerings.

Advanced features will allow consumers to skip any content heard on the station, request audio

content on-demand, and program an audio routine.

We believe the faidr App represents a significant differentiated audio streaming product,

or Superapp, that will be the first to come to market since the emergence of popular streaming music apps such as Pandora, Spotify, Apple

Music, Amazon Music, etc.

We believe that the most significant point of differentiation is that in addition to ad-free AM/FM streaming,

the faidr App is intended to deliver non-music content that includes local sports, news, weather, traffic and the discovery of new music

alongside exclusive programming and podcasts.

No other radio streaming app available today, including category leaders like TuneIn, iHeart,

and Audacy, can compete with faidr’s full product offerings.

The Company commissioned

research to establish subscription pricing in accordance with an industry standard pricing analysis.

Results of the research, which included

nearly 2,000 responses, suggested $12/month as the optimal price to maximize revenue and indicated that 29% of respondents were at least

likely to subscribe to the product.

The majority of respondents who self-identified as being listeners to paid services such as SiriusXM

and streaming music providers indicated a likely intent to purchase.

We believe this implies a preference for the local content inherent

in AM/FM broadcasting.

The Company is launching

all major U.S.

two separate surveys to establish subscription pricing in accordance with an industry standard pricing analysis.

Results of both surveys,

which included nearly 3,000 responses, suggested $12/month as the optimal price to maximize revenue and $7.99 to maximize market share

and indicated that 29% of respondents were at least likely to subscribe to the product.

The majority of respondents who self-identified

as being listeners to paid services such as SiriusXM and streaming radio indicated a likely intent to purchase.

We believe this implies

a preference for the local content inherent in AM/FM broadcasting.

The Company launched all

radio stations on its faidr App on February 15, 2022.

The Company has also

developed its podcasting platform called Vodacast.

Vodacast leverages technologies and proven product concepts from the Company’s

previously developed and deployed platform to deliver on these objectives for the radio industry.

With podcasting growing

and predicted to grow at a rapid rate, Vodacast was conceptualized to fill a void in the emerging audio media space.

Vodacast aims to

be the preferred podcasting solution for podcasters by offering a platform that allows podcasters to deliver digital content feeds that

match the audio of their podcast episodes, and by enabling podcasters to make additional revenue from new digital advertising channels;

subscription channels;

The Company has also developed

its podcasting platform, which leverages technologies and proven product concepts to differentiate its podcasts offering from other competitors

in the radio streaming product category.

With podcasting growing and

predicted to grow at a rapid rate, the Auddia podcast platform was conceptualized to fill a void in the emerging audio media space.

platform aims to be the preferred podcasting solution for podcasters by enabling them to deliver digital content feeds that match the

audio of their podcast episodes, and by enabling podcasters to make additional revenue from new digital advertising channels;

on-demand fees for exclusive content;

and through direct donations from their listeners.

Today, podcasters do not

have a preference as to where their listeners access their episodes, as virtually all listening options (mobile apps and web players)

deliver only their podcast audio.

By creating a platform on which they can make net new and higher margin revenue, we believe that podcasters

will promote Vodcast to their listeners, thus creating a powerful, organic marketing dynamic.

Today, podcasters do not have a preference

as to where their listeners access their episodes, as virtually all listening options (mobile apps and web players) deliver only their

podcast audio.

By creating a platform on which they can make net new and higher margin revenue, we believe that podcasters will promote

faidr to their listeners, thus creating a powerful, organic marketing dynamic.

One innovative and proprietary

part of the Vodacast platform is the availability of tools to create and distribute an interactive digital feed which supplements podcast

part of the podcast platform is the availability of tools to create and distribute an interactive digital feed which supplements podcast

episode audio with additional digital.

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access to digital revenue for the first time.

Podcasters will be able to build these interactive feeds using The Vodacast Hub, a content

Podcasters will be able to build these interactive feeds using The Podcast Hub, a content

management system that also serves as a tool to plan and manage podcast episodes.

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videos, text and web links.

This feed appears fully synchronized in the Vodacast mobile App, and it also can be hosted and accessed independently

This feed will appear fully synchronized in the faidr mobile App, and it also can be hosted and accessed independently

(e.g., through any browser), making the content feed universally distributable.

Over time, users will

be able to comment and podcasters will be able to grant some users publishing rights to add content directly into the feed on their behalf.

Over time, users will be

able to comment, and podcasters will be able to grant some users publishing rights to add content directly into the feed on their behalf.

This will create another first for podcasting, a dialog between creator and fan, synchronized to the episode content.

Vodacast will also introduce

a unique and industry first multi-channel, highly flexible set of revenue channels that podcasters can activate in combination to allow

listeners to choose how they want to consume and pay for content.

“Flex Revenue” allows podcasters to continue to run their

standard audio ad model and complement those ads with direct response enabled digital ads in each episode content feed, increasing the

value of advertising on any podcast.

“Flex Revenue” will also activate subscriptions, on-demand fees for content (e.g., listen

without audio ads for a micro payment fee) and direct donations from listeners.

Using these channels in combination, podcasters can maximize

revenue generation and exercise higher margin monetization models, beyond basic audio advertising.

These revenue channels are expected

to be available to Podcasters in 2022.

Faidr and Vodacast mobile

apps are available today through the iOS and Android app stores.

The podcast capabilities

within faidr will also introduce a unique and industry first multi-channel, highly flexible set of revenue channels that podcasters can

activate in combination to allow listeners to choose how they want to consume and pay for content.

“Flex Revenue” allows podcasters

to continue to run their standard audio ad model and complement those ads with direct response enabled digital ads in each episode content

feed, increasing the value of advertising on any podcast.

“Flex Revenue” will also activate subscriptions, on-demand fees

for content (e.g., listen without audio ads for a micro payment fee) and direct donations from listeners.

Using these channels in combination,

podcasters can maximize revenue generation and exercise higher margin monetization models, beyond basic audio advertising.

faidr is available today

through the iOS and Android app stores.

Recent Developments

On March 16, 2023, the

Company announced the following recent results for its products:

· A 10% user subscription conversion rate since launching subscriptions in its iOS only app 45 days previously.

· faidrRadio, the Company’s exclusive content programming available in the iOS faidr app, has maintained

33% of the app’s total plays alongside traditional AM/FM radio.

· The Company has continued to make significant progress in cost per installs, a top metric for indicating

consumer interest in the faidr product.

Across the combined iOS and Android platforms, the Company is on track to reach its mid-2023 target

of $1.80 cost per install.

History of Auddia

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began to conceptualize what would become Auddia, a commercial-free subscription platform for broadcasters and radio listeners.

Management of the Company commenced evaluating

essential aspects of the opportunity such as technical feasibility, consumer viability, basic economics, intellectual property matters

and basic legality.

The Company’s Executive Chairman, Chief Executive Officer and Chief Technology Officer all have experience in

performing similar assessments for consumer facing products in various industries, including elections, gaming, secure document processing,

and digital advertising.

Further, our Executive Chairman has extensive experience developing strategy and determining business viability

of products in the several previous companies that he founded.

Management of the Company commenced evaluating essential

aspects of the opportunity such as technical feasibility, consumer viability, basic economics, intellectual property matters and basic

The Company’s Executive Chairman, Chief Executive Officer and Chief Technology Officer all have experience in performing

similar assessments for consumer facing products in various industries, including elections, gaming, secure document processing, and digital

Further, our Executive Chairman has extensive experience developing strategy and determining business viability of products

in the several previous companies that he founded.

Management’s assessment also included metrics

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SiriusXM does not offer the local content and personalities that local broadcast radio exclusively

In early 2018 and over the period of next year,

management analyzed and assessed the commercial viability of the proposed Faidr platform to determine whether a subscription-based commercial

free radio service would generate consumer interest.

In early 2018 and over the period of next year, management

analyzed and assessed the commercial viability of the proposed faidr platform to determine whether a subscription-based commercial free

radio service would generate consumer interest.

This assessment was based upon:

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in subscribing to commercial free local audio content that only local radio produces and broadcasts, and that faidr would have commercial

The Company’s Vodcast platform was conceptualized

The Company’s podcast platform was conceptualized

during this transition period described above, when management recognized the opportunity to leverage previously developed technology

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Eventually, with further support and interest from prospect podcasters and

listeners, the product was expanded to include both iOS and Android mobile apps and the development of the Vodcast Hub, which is the platform’s

listeners, the product was expanded to include both iOS and Android mobile apps and the development of the podcast Hub, which is the platform’s

content management system.

The Company is poised to execute early, small-scale

marketing trials in which podcasters will promote the Vodcast mobile app to their listeners via the audio of their podcast episodes.

incentive for podcasters to promote Vodacast comes from the monetization features that are inherent on the platform, where podcasters

understand that a “download” or unique listening session generates more revenue for podcasters when it occurs on the Vodcast

The expectation is that listeners will convert at sufficiently high rates to justify wide scale launch and broad promotion

by podcasters.

The Company was poised to execute early, small-scale

marketing trials in which podcasters would promote the Vodcast mobile app to their listeners via the audio of their podcast episodes.

The incentive for podcasters to promote Vodacast came from the monetization features that are inherent on the platform, where podcasters

understand that a “download” or unique listening session would generate more revenue for podcasters when it occurs on the

Vodcast mobile app.

The expectation was that listeners will convert at sufficiently high rates to justify wide scale launch and broad

promotion by podcasters.

After the launch of the proof-of-concept Vodacast app, and monitoring engagement and retention for close to a

year, Auddia was confident the podcast platform achieved differentiation and should be moved into the company’s audio Superapp faidr

as the podcast offering.

Overview of the Evolving

Audio Ecosystem and the Positioning of AM/FM Broadcast Radio

We believe that audio

as a medium is experiencing a renaissance as advanced artificial intelligence capabilities such as voice recognition are ushering in an

era where voice is becoming the most efficient interface to interact with audio and video content.

We believe that audio as

a medium is experiencing a renaissance as advanced artificial intelligence capabilities such as voice recognition are ushering in an era

where voice is becoming the most efficient interface to interact with audio and video content.

Historically, audio has been a passive

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The 2022 Share of Ear Study shows broadcast radio with a 39% share of listening and the next most popular form of listening being

streaming audio at 17%.

Although AM/FM radio continues to dominate audio listening, streaming audio is the fastest growing segment according

to Share of Ear studies going back to 2014.

We believe streaming audio will continue to grow as on-demand content in the form of streaming

music podcasting, short-form audio and other emerging formats of audio content become more prevalent and artificial intelligence technologies

facilitate the introduction of new and improved listening experiences.

As streaming audio has demonstrated its growth trajectory, AM/FM

radio has responded by streaming their radio stations but with, we believe, very little success in comparison to the streaming music players

as measured by consumer listening.

Most common streaming

platforms in the U.S.

music videos on YouTube at 14% followed by owned music at 10%.

Although AM/FM radio continues to dominate audio listening, streaming audio

is the fastest growing segment according to Share of Ear studies going back to 2014.

We believe streaming audio will continue to grow

as on-demand content in the form of streaming music podcasting, short-form audio and other emerging formats of audio content become more

prevalent and artificial intelligence technologies facilitate the introduction of new and improved listening experiences.

audio has demonstrated its growth trajectory, AM/FM radio has responded by streaming their radio stations but with, we believe, very little

success in comparison to the streaming music players as measured by consumer listening.

Most common streaming platforms

offer a paid subscription model to eliminate or reduce advertisements during the listening experience.

few exceptions, AM/FM radio has not adopted this model to date.

Most AM/FM streams are simulcasts of the on-air station and carry the

same advertisement load as the on-air product.

In 2020, the average advertisement load was 16.7 minutes per hour (an increase of approximately

2 30-second ads from 2018’s average of 16.1 minutes).

This means that if these 16.7 minutes were filled with the common 30-second

spot, this would equate to 33.4 advertisements per hour.

Given that the free ad-supported tiers of the music streaming services commonly

limit ads to 4 per hour, a streaming service with 32 audio ads per hour is more disruptive to the content listening experience.

the combination of AM/FM radio’s advertisement load and the inability for listeners to skip content or request on-demand content

in an AM/FM radio stream is the main reason broadcast radio is not gaining ground in the audio streaming market relative to the other

music players.

The Company believes

the Faidr App will give subscribers the technology solution they need to enjoy the local content presented by AM/FM radio while not only

avoiding the interruption of 16.7 minutes of ads per hour, but also personalizing the listening experience with skips and on-demand content.

We believe the Faidr App represents the consumer product broadcast radio needs to maintain or expand the lead it currently enjoys from

a time spent listening perspective.

With very few exceptions,

AM/FM radio has not adopted this model to date.

Most AM/FM streams are simulcasts of the on-air station and carry the same advertisement

load as the on-air product.

In 2020, the average advertisement load was 16.7 minutes per hour (an increase of approximately 2 30-second

ads from 2018’s average of 16.1 minutes).

This means that if these 16.7 minutes were filled with the common 30-second spot, this

would equate to 33.4 advertisements per hour.

Given that the free ad-supported tiers of the music streaming services commonly limit ads

to 4 per hour, a streaming service with 32 audio ads per hour is more disruptive to the content listening experience.

We believe the combination

of AM/FM radio’s advertisement load and the inability for listeners to skip content or request on-demand content in an AM/FM radio

stream is the main reason broadcast radio is not gaining ground in the audio streaming market relative to the other music players.

There are a handful of

successful radio-streaming mobile applications on the market today.

Between the top five, there are more than 150 million users, which

includes some overlap.

According to Statista, the reach of online radio, which includes AM/FM streaming, has increased sharply over the

past decade, with 68% of the US population having listened to online radio within a month in 2021 compared to only 34% ten years earlier.

This migration of audience is expected to continue.

The total addressable market for radio streaming is expanding year-over-year, and

faidr is the only app currently available that can (1) provide ad-free listening and (2) can aggregate all stations in the US in one place,

as it is not beholden to any exclusivity deals with the larger AM/FM media corporations.

The Company believes the

faidr App will give subscribers the technology solution they need to enjoy the local content presented by AM/FM radio while not only avoiding

the interruption of 16.7 minutes of ads per hour, but also personalizing the listening experience with skips and on-demand content.

believe the faidr App represents the consumer product that modernizes the radio-listening experience, combines AM/FM with the right mix

of other content options—podcasts and exclusive content and programming—and gives users the control they expect in the current

audio-streaming landscape.

Overview of Podcasting

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for listeners while providing a more robust platform on which podcasters as content creators can more effectively monetize their work.

Software Products

Software Products and

The faidr App

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segments with other content such as additional music.

The Company is developing strategies and content

relationships to access additional content sources to cover commercials and respond to skips across many content segments in addition

to music and commercials, such as sports, news, talk and weather.

As the audio content ecosystem continues to expand, the Company believes

Faidr will represent an attractive distribution platform for content providers.

There is no guarantee the audio content ecosystem will

continue to expand along its current trajectory or that the Company will be able to secure access to content in an economically advantageous

manner, both of which would negatively impact the user experience within Faidr.

The Company has not yet secured the rights from content

providers to place any audio content into the platform in an on-demand use case.

The Company is developing strategies and content relationships

to access additional content sources to cover commercials and respond to skips across many content segments in addition to music and commercials,

such as sports, news, talk and weather.

As the audio content ecosystem continues to expand, the Company believes faidr will represent

an attractive distribution platform for content providers.

There is no guarantee the audio content ecosystem will continue to expand along

its current trajectory or that the Company will be able to secure access to content in an economically advantageous manner, both of which

would negatively impact the user experience within faidr.

The Company has not yet secured the rights from content providers to place any

audio content into the platform in an on-demand use case.

Users of faidr can also access any podcast that’s

publicly available as well as exclusive programming, music stations and Music Casts, through faidrRadio.

The faidr App is built on a proprietary artificial

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To secure the rights to stream music and other

content through the Faidr app, the Company may enter into license agreements with copyright owners of sound recordings and musical works

or their authorized agents.

In June 2021, the Company filed a Notice of Use of Sound Recordings Under Statutory License in accordance

with 37 CFR § 370.2, which authorized the Company to make noninteractive digital audio transmissions and reproductions of certain

sound recordings pursuant to the statutory licenses set forth in 17 U.S.C.

To secure the rights to stream music and other content

through the faidr app, the Company may enter into license agreements with copyright owners of sound recordings and musical works or their

authorized agents.

In June 2021, the Company filed a Notice of Use of Sound Recordings Under Statutory License in accordance with 37 CFR

§ 370.2, which authorized the Company to make noninteractive digital audio transmissions and reproductions of certain sound recordings

pursuant to the statutory licenses set forth in 17 U.S.C.

§§ 112 and 114.

The Company is also in the process

of obtaining licenses with the performing rights organizations (“PROs”) in the United States, which negotiate blanket licenses

with copyright users for the public performance of compositions in their repertory, collect royalties under such licenses, and distribute

those royalties to copyright owners.

The Faidr App’s architecture presents a

built-in digital audio recorder (“DAR”) that will allow consumers to record third-party transmissions made available through

the Faidr App.

The Company believes such consumer-initiated recordings are authorized as non-infringing, fair use time shifting by consumers

pursuant to the Supreme Court’s decision in Sony Corp.

The Company is also in the process of obtaining licenses

with the performing rights organizations (“PROs”) in the United States, which negotiate blanket licenses with copyright users

for the public performance of compositions in their repertory, collect royalties under such licenses, and distribute those royalties to

The faidr App’s architecture presents a built-in

digital audio recorder (“DAR”) that will allow consumers to record third-party transmissions made available through the faidr

The Company believes such consumer-initiated recordings are authorized as non-infringing, fair use time shifting by consumers pursuant

to the Supreme Court’s decision in Sony Corp.

of America v.

Universal City Studios, Inc.

Supreme Court also ruled that the manufacturers of home video recording devices were not liable for reproductions made by consumers where

the devices had substantial non-infringing uses.

Faidr’s DAR is analogous to the Betamax television recorders found non-infringing

in the Universal City Studios decision.

Court also ruled that the manufacturers of home video recording devices were not liable for reproductions made by consumers where the

devices had substantial non-infringing uses.

faidr’s DAR is analogous to the Betamax television recorders found non-infringing in

the Universal City Studios decision.

With the faidr’s DAR, users can select radio stations to record.

Users can also control

their listening experience by deciding whether they will listen to commercials or other programming categories selected by the user.

Company believes giving users the ability to avoid commercials is protected, non-infringing activity.

Users can also control their

listening experience by deciding whether they will listen to commercials or other programming categories selected by the user.

believes giving users the ability to avoid commercials is protected, non-infringing activity.

If a court were to hold that one or more functionalities

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infringement, the damages for which could be material.

Vodacast is an interactive podcasting platform

(the “Vodacast App”) the Company is building that will allow podcasters to give their audiences an interactive audio experience.

Podcast listeners will be able to see video and other digital content that correlates with the podcast audio and is presented to the listener

as a digital feed within the Vodacast App.

Podcast Platform

Auddia’s Podcast Platform, which includes

the Vodacast mobile app, is an interactive podcasting platform the Company has built that allows podcasters to give their audiences

an interactive audio experience.

Podcast listeners are able to see video and other digital content that correlates with the podcast audio

and is presented to the listener as a digital feed.

All content presented in the digital feed can be synched to the podcast audio content.

allows podcast listeners to visually experience, interact with, and eventually comment on audio content in podcasts.

Much of the technology we use in Vodacast to create

the feed of digital content synchronized to the audio content of the podcast is based on the core functionality and product concepts the

Company has used historically to provide synchronized digital feeds to over 580 radio stations.

Additional technology needs to be built

to fully develop the Vodacast user interface and distributed content management system.

Vodacast introduces a new digital revenue stream

to podcasters, such as synchronized digital advertising while providing end users a new digital content channel that compliments the core

audio channel of the podcast.

This allows podcast listeners to visually experience, interact with, and eventually comment on audio content in podcasts.

Much of the technology we use in this platform to

create the feed of digital content synchronized to the audio content of the podcast is based on the core functionality and product concepts

the Company has used historically to provide synchronized digital feeds to over 580 radio stations.

The digital feed introduces a new digital revenue

stream to podcasters, such as synchronized digital advertising while providing end users a new digital content channel that compliments

the core audio channel of the podcast.

Below are hypothetical screenshots for a generic Podcast.

The image on the right is an example of an episode

feed in Vodacast while the image on the left is an example of a typical user experience of a podcast episode in most other listening apps.

The image on the right is an example

of an episode feed in the Vodacast mobile app while the image on the left is an example of a typical user experience of a podcast episode

in most other listening apps.

Within the Vodacast episode feed, digital ads can be placed to drive revenue.

All of the content and functionality that is made

available within the Podcast Platform, through the Vodacast mobile app, is currently being added to the faidr app, diversifying the podcast

offering of faidr and bringing that app up to parity with the major, competing apps like iHeart Radio, TuneIn and Audacy.

Business Model and Customer Acquisition Strategy

for Faidr and Vodacast

The Company has an eight-year plus history of

working closely with the broadcast radio industry in the United States to help the industry adapt to both digital advertising and digital

media technologies.

The Company has an eight-year plus history of working

closely with the broadcast radio industry in the United States to help the industry adapt to both digital advertising and digital media

technologies.

The Company announced several broadcast radio

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trials, the Company believes consumers are drawn to an interruption-free radio experience.

We are anticipating a full launch in February

2022 that will initially include approximately 4,000 radio stations on the Faidr App.

The Company will look to onboard participating broadcasters

shortly after our full launch to participate in our revenue share model and drive customers to Faidr.

We executed a full launch in February 2022

that initially included approximately 4,000 radio stations on the faidr App.

The Company has continued to add stations to the App which

now presents more than 6,200 AM/FM streams.

Radio stations owned by broadcasters will be economically

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history and existing relationships with broadcast radio will drive customer acquisition for the faidr App.

Our business model is based on creating a pool

of subscription revenue across all streaming stations and other content providers utilizing the Faidr platform.

This subscription pool,

less direct subscriber acquisition costs and increased music streaming fees, is expected to be shared with radio stations and other content

Our business model is based on creating a pool of

subscription revenue across all streaming stations and other content providers utilizing the faidr platform.

This subscription pool, less

direct subscriber acquisition costs and increased music streaming fees, is expected to be shared with radio stations and other content

providers based on the time each listener spends listening to a station on faidr.

We believe this business model will result in broadcasters

promoting the listening of their stations within Faidr, similar to how radio stations are currently using air time to promote the listening

promoting the listening of their stations within faidr, similar to how radio stations are currently using airtime to promote the listening

of their stations on Alexa and other smart speaker systems.

Broadcasters who intend to participate, but not promote Faidr will share in

the subscription pool at a standard percentage (40%), while Broadcasters who participate and promote Faidr to their listeners will share

in the subscription pool at 2X the standard percentage (80%).

The Vodacast platform

will be marketed to podcasters and podcasting companies with business-to-business strategies that focus on communicating the value propositions

of the Vodacast platform.

The potential to earn new, incremental revenue on the Vodacast platform, in addition to the other key value

propositions of the platform, is expected to organically drive podcasters to promote the platform directly to their listeners.

Direct-to-consumer

marketing will be done independently by the Company and, in some cases, in partnership with podcasters who leverage their audio content

programs to promote to their established audiences.

As is the case with other proven marketing strategies, we intend to have our partners

benefit from a participative revenue share, higher ad revenue, and higher margins on advertising through the Vodacast platform.

The podcast platform, once

implemented in faidr, will be marketed to podcasters and podcasting companies with business-to-business strategies that focus on communicating

the value proposition.

The potential to earn new, incremental revenue on the faidr platform, in addition to the other key value propositions

of the platform, is expected to organically drive podcasters to promote the platform directly to their listeners.

Direct-to-consumer marketing

will be done independently by the Company and, in some cases, in partnership with podcasters who leverage their audio content programs

to promote to their established audiences.

As is the case with other proven marketing strategies, we intend to have our partners benefit

from a participative revenue share, higher ad revenue, and higher margins on advertising through the Vodacast platform.

Our Legacy Interactive

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to incorporate a premium offering that includes skips, on-demand content and a commercial-free option.

The Company’s legacy product served the

broadcast industry by providing a platform that allowed for the delivery of actionable digital ads that are synchronized with broadcast

and streaming audio ads.

The Company’s legacy product served the broadcast

industry by providing a platform that allowed for the delivery of actionable digital ads that are synchronized with broadcast and streaming

Broadcasters offered mobile and web digital interfaces to their listeners, typically for their individual stations.

Our Interactive Radio Platform provided mobile and web products that provided end users (listeners) with a visual display of everything

a radio station has played in recent history (referred to as a “station feed”).

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

allow for the collection of meaningful advertising analytics which we present to broadcasters through an analytics dashboard.

The Company began phasing out the Interactive

Radio Platform in 2020 and ceased operations related to all legacy deployments and services by July 1, 2020.

Much of the core technology

of this platform is being leveraged for re-use with our new products, Faidr and Vodacast.

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 Faidr App at national scale.

Our Interactive

Radio Platform provided mobile and web products that provided end users (listeners) with a visual display of everything a radio station

has played in recent history (referred to as a “station feed”).

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 allow

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

The Company began phasing out the Interactive Radio

Platform in 2020 and ceased operations related to all legacy deployments and services by July 1, 2020.

Much of the core technology of

this platform is being leveraged for re-use within faidr.

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 faidr App at national scale.

Intellectual Property

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to develop, strengthen, and maintain our proprietary position in the field of interactive audio.

The Company holds issued patents and has patents

pending in the areas of audio content monitoring, identification, distribution and presentation.

The Company’s intellectual property

has been used in the development of products that allow broadcasters and audio content distributors to present digital content and supplemental

The Company holds issued patents and has patents pending

in the areas of audio content monitoring, identification, distribution and presentation.

The Company’s intellectual property has

been used in the development of products that allow broadcasters and audio content distributors to present digital content and supplemental

audio and video content along with and even synchronized with their standard audio content.

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they may have heard and/or receive additional information about what they heard.

On March 12, 2019, the United States Patent and

Technology Office issued a patent to the Company (titled “Method and System for Sub-Audible Signaling”) that covers an advanced

“watermarking” technology to attach source-attribution information, as well as highly detailed content descriptors into an

audio broadcast or stream.

We believe this technology improves the state of the art by potentially increasing the amount of information

that can be embedded in an audio stream or broadcast, as well as supporting the real time addition of sub-audio information.

does not utilize this patent technology in its current products, but the technology may be useful for future products or potential licensing

However, there can be no assurance that this patent or the technology underlying the patent will be utilized or licensed by

the Company or, even if utilized or licensed, this patented technology will result in revenues or profits.

On March 12, 2019, the United States Patent and Technology

Office issued a patent to the Company (titled “Method and System for Sub-Audible Signaling”) that covers an advanced “watermarking”

technology to attach source-attribution information, as well as highly detailed content descriptors into an audio broadcast or stream.

We believe this technology improves the state of the art by potentially increasing the amount of information that can be embedded in an

audio stream or broadcast, as well as supporting the real time addition of sub-audio information.

The Company does not utilize this patent

technology in its current products, but the technology may be useful for future products or potential licensing to others.

However, there

can be no assurance that this patent or the technology underlying the patent will be utilized or licensed by the Company or, even if utilized

or licensed, this patented technology will result in revenues or profits.

The most recent intellectual property to be submitted

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the Company’s commercial free radio service.

The Company holds the trademark for VODACAST which is used as the brand name for their

podcasting platform.

The Company holds the trademark for faidr, which is used as the brand name for their

audio Superapp.

In addition, any intellectual property litigation

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redesign the allegedly infringing products to avoid infringement, misappropriation, or violation, which could be costly, time-consuming, or impossible.

Intellectual property litigation is typically complex, time consuming,

and expensive to resolve and would divert the time and attention of our management and technical personnel.

It may also result in adverse

publicity, which could harm our reputation and ability to attract or retain customers.

As we grow, we may experience a heightened risk

of allegations of intellectual property infringement.

An adverse result in any litigation claims against us could have a material adverse

effect on our business, financial condition, and results of operations.

Intellectual property litigation

is typically complex, time consuming, and expensive to resolve and would divert the time and attention of our management and technical

It may also result in adverse publicity, which could harm our reputation and ability to attract or retain customers.

grow, we may experience a heightened risk of allegations of intellectual property infringement.

An adverse result in any litigation claims

against us could have a material adverse effect on our business, financial condition, and results of operations.

Our audio service offerings

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These alternative

platforms and technology are offered by much larger and well-established music service company’s such as SiriusXM, iHeart Media,

Spotify, and TuneIn.

platforms and technology are offered by much larger and well-established radio-streaming applications such as iHeart Media, Audacy, and

These technologies and alternative media platforms compete with our services for audience share and advertising revenues.

There can be no assurance that we will be able to compete successfully in the audio marketplace.

We are a small, relatively new company

and we do not currently consider the Company to be a significant participant in its industry.

Further, our success

is dependent upon our development of new services and products for both broadcasters and consumer listeners, and there can be no assurance

that we will have the resources to acquire new technologies or to introduce new services to compete with other new technologies or services.

Other companies employing new technologies or services could more successfully implement such new technologies or services or otherwise

increase competition with our business.

can be no assurance that we will be able to compete successfully in the audio marketplace.

We are a small, relatively new company and

we do not currently consider the Company to be a significant participant in its industry.

All the top-three radio streamers

listed above have the same core weaknesses against faidr.

First, none of them can offer complete commercial-free listening.

one is willing to aggregate all the US stations within their platform due to various conflicts of interest.

iHeart and Audacy are only

interested in allowing users to stream the stations they own and operate, and TuneIn’s relationship with iHeart prevents it from

offering Audacy stations.

However, our success is dependent

upon our development of new services as well as competitive advertising spend, and there can be no assurance that we will have the resources

to acquire new users at a compelling rate to out-compete those top-three platforms or to introduce new services to compete with other

new technologies or services.

Other companies employing new technologies or services could more successfully implement such new technologies

or services or otherwise increase competition with our business.

As of December 31, 2022,

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Additionally, we provide our employees

and paid vacation, holiday, family leave and sick leave, with numerous other benefits offered to our employees.

with paid vacation, holiday, family leave and sick leave, with numerous other benefits offered to our employees.

response to the COVID-19 pandemic, we took immediate steps to protect our employees, clients, and communities in which we operate by making

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Legal Proceedings

From time to time, we

may be involved in litigation relating to claims arising out of our operations in the normal course of business.

We are not currently

a party to any material legal proceedings, the adverse outcome of which, in our management’s opinion, individually or in the aggregate,

From time to time, we may

be involved in litigation relating to claims arising out of our operations in the normal course of business.

We are not currently a party

to any material legal proceedings, the adverse outcome of which, in our management’s opinion, individually or in the aggregate,

would have a material adverse effect on the results of our operations or financial position.

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party or has a material interest adverse to our interest.

The Company leases approximately 8,600 square

feet of office space under a non-cancelable operating sublease.

In April 2021, the Company entered a twelve-month

non-cancelable operating sublease for approximately 8,600 square feet of office space, with an initial base rent of $7,150 per month with

three, separate six-month renewal options, subject to fixed rate escalation increases.

In November of 2022, the Company amended the sublease

to reflect a new term that now expires on December 14, 2023, unless specifically renewed by the parties.

The square footage rented was

reduced to approximately 2,160 square feet at the cost of $4,018 per month.

Rent expense was $104,223 and $75,336 for the year ended December

31, 2022, and 2021, respectively.

In April 2021, the Company entered into a sublease for twelve months, with an initial base rent of $7,150 per

month with three separate six month renewal options, subject to fixed rate escalation increases.

The Company previously leased approximately

3,000 square feet of office space that expired on April 30, 2021.

Regulatory and Certifications

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and enforcement, differ significantly among those jurisdictions.

Data privacy has become

a significant issue in the United States and in other countries.

Data privacy has become a

significant issue in the United States and in other countries.

The regulatory framework for privacy issues worldwide is rapidly evolving

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Segment Information

We operate in a single

operating segment and a single reporting segment.

Operating segments are defined as components of an enterprise about which separate financial

information is regularly evaluated by the chief operating decision maker function (which is fulfilled by our chief executive officer)

in deciding how to allocate resources and in assessing performance.

Our chief executive officer allocates resources and assesses performance

based upon financial information at the level.

Since we operate in one operating segment, all required financial segment information is

presented in the financial statements.

We operate in a single operating

segment and a single reporting segment.

Operating segments are defined as components of an enterprise about which separate financial information

is regularly evaluated by the chief operating decision maker function (which is fulfilled by our chief executive officer) in deciding

how to allocate resources and in assessing performance.

Our chief executive officer allocates resources and assesses performance based

upon financial information at the level.

Since we operate in one operating segment, all required financial segment information is presented

in the financial statements.

Corporate Information

We were originally formed as Clip Interactive,

LLC in January 2012, as a limited liability company under the laws of the State of Colorado.

We were originally formed as Clip Interactive, LLC

in January 2012, as a limited liability company under the laws of the State of Colorado.

In connection with our initial public offering

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address in this Annual Report solely as an inactive textual reference.

We are an “emerging growth company”

as defined in the Jumpstart Our Business Startups Act of 2012.

We are an “emerging growth company” as

defined in the Jumpstart Our Business Startups Act of 2012.

We will remain an emerging growth company until the earlier of:

last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which we have total annual gross

revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our

common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, and (ii) the date on which we have issued

more than $1.0 billion in non-convertible debt during the prior three-year period.

day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which we have total annual gross revenue

of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock

that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, and (ii) the date on which we have issued more than $1.0

billion in non-convertible debt during the prior three-year period.

Available Information

Our internet address

is www.Auddia.com and our investor relations website is located at investors.Auddiainc.com.

Our Annual Reports on Form 10-K, Quarterly

Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports can be found on our investor relations website, free

of charge, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Information contained

on our website is not incorporated by reference into this Form 10-K.

The SEC maintains a public website, www.sec.gov, which includes information

about and the filings of issuers that file electronically with the SEC.

Our internet address is www.auddia.com

and our investor relations website is located at investors.auddiainc.com.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,

Current Reports on Form 8-K and amendments to those reports can be found on our investor relations website, free of charge, as soon as

reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Information contained on our website

is not incorporated by reference into this Form 10-K.

The SEC maintains a public website, www.sec.gov, which includes information about

and the filings of issuers that file electronically with the SEC.

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-K

Item 1. Business