What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-23 compared with 2022-02-17 · 425 added, 461 removed, 355 unchanged (71% of the section changed)

Financial Statements and Supplementary Data

INDEX TO FINANCIAL

INDEX TO FINANCIAL STATEMENTS

Annual Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent

Registered Public Accounting Firm (PCAOB ID:

Balance Sheets as of December 31, 2022, and 2021

Statements of Operations, Years Ended December 31, 2022, and 2021

Statements of Changes in Stockholders’ Equity (Deficit), Years Ended December 31, 2021, and 2020

Statements of Changes in Stockholders’ Equity, Years Ended December 31, 2022, and 2021

Statements of Cash Flows, Years Ended December 31, 2022, and 2021

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Boulder, Colorado

Opinion on the Financial Statements

We have audited the accompanying balance sheets

of Auddia Inc.

(f/k/a Clip Interactive, LLC.)(the “Company”) at December 31, 2021 and 2020, and the related statements of

operations, changes in stockholders’ equity (deficit) and cash flows for each of the years in the two-year period ended December

31, 2021, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations

and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally

accepted in the United States of America.

Opinion on the Financial

We have audited the accompanying

balance sheets of Auddia Inc.

(the “Company”) at December 31, 2022 and 2021, and the related statements of operations, changes

in stockholders’ equity and cash flows for the years ended December 31, 2022 and 2021, and the related notes (collectively referred

to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position

of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years ended December

31, 2022 and 2021, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty

The accompanying financial statements

have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the

Company has suffered recurring losses from operations and has a deficiency in working capital and shareholders’ equity that raise

substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

These financial statements are

the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements

based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance

with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were

we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an

understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the

Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to

assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that

respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well

as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audits included performing

procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management,

as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for

Critical Audit Matters

The critical audit matters communicated below

are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to

the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our

especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion

on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate

The critical audit matters communicated

below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated

to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved

our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our

opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate

opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Intangible Assets Impairment Assessments

As described in Notes 1 to the financial statements,

the Company has software development costs of approximately $3.2 million at December 31, 2021.

No directly observable market inputs are

available to measure the fair value to determine if the asset is recoverable.

Therefore, an estimate is derived indirectly and is based

on net present value techniques utilizing post-tax cash flows and discount rates.

The estimates that management used in calculating the

net present values depend on assumptions specific to the nature of the markets in which its product operates with regard to the amount

and timing of projected future cash flows;

long-term subscriber demand forecasts;

actions of competitors (competing content), future tax

and discount rates.

The principal considerations for our determination that performing

procedures relating to the intangible assets impairment assessment is a critical audit matter are the significant judgment by management

when developing the net present value of the intangible assets.

This in turn led to a high degree of auditor judgment, subjectivity,

and effort in performing procedures and evaluating management’s significant assumptions related to the amount and timing of projected

future cash flows and the discount rate.

Addressing the matter involved performing procedures

and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

These procedures included testing

management’s process for developing the fair value estimate;

evaluating the appropriateness of the net present value techniques;

Intangible Assets Impairment

As described in Notes 1 and 2 to

the financial statements, the Company has software development costs of approximately $4.1 million at December 31, 2022.

No directly observable

market inputs are available to measure the fair value to determine if the asset is recoverable.

Therefore, an estimate is derived indirectly

and is based on a mix of cash flow and market models.

The estimate that management used in calculating the fair values depend on assumptions

specific to the nature of the markets in which its product operates with regard to the amount and timing of projected future revenues,

operating cash flows, long-term subscriber demand forecasts, actions of competitors (competing content), capital expenditures, and future

The principal considerations for

our determination that performing procedures relating to the intangible assets impairment assessment is a critical audit matter are the

significant judgment by management when developing the fair value of the intangible assets.

This led to a high degree of auditor judgment,

subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the amount and

timing of projected future cash flows.

Addressing the matter involved performing

procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

These procedures

included testing management’s process for developing the fair value estimate;

evaluating the appropriateness of the valuation techniques;

testing the completeness and accuracy of underlying data used in the model;

and evaluating the significant assumptions used by management,

including the amount and timing of projected future cash flows and the discount rate.

Evaluating management’s assumptions related

to the amount and timing of projected future cash flows and the discount rate involved evaluating whether the assumptions used by management

were reasonable considering the current and past performance of the intangible assets, the consistency with external market and industry

data, and whether these assumptions were consistent with evidence obtained in other areas of the audit.

including the amount and timing of projected future cash flows.

Evaluating management’s assumptions related to the amount and timing

of projected future cash flows and evaluating whether the assumptions used by management were reasonable considering the current and past

performance of the intangible assets, the consistency with external market and industry data, and whether these assumptions were consistent

with evidence obtained in other areas of the audit.

/s/ Daszkal Bolton LLP

Daszkal Bolton LLP

We have served as the Company’s auditor since 2020

Boca Raton, Florida February 17, 2022

We have served as the Company’s

auditor since 2020

Boca Raton, Florida

March 20, 2023

Balance Sheets

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Non-current assets:

Property and equipment, net

Software development costs, net

Property and equipment, net of accumulated depreciation

Software development costs, net of accumulated amortization

Deferred offering costs

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Total non-current assets

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities

Line of credit

Convertible notes payable

Notes payable to related parties and deferred salary

Promissory Notes Payable

Accrued fees to a related party

Notes payable to investors

Stock awards liability

Total current liabilities

Commitments and contingencies

Stockholders’ equity (deficit):

Shareholders' equity:

Preferred stock - $ 0.001 par value, 10,000,000 authorized and 0 shares issued and outstanding

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( 64,838,389 )

Total stockholders’ equity (deficit)

( 13,103,250 )

Total liabilities and stockholders’ equity (deficit)

Total shareholders' equity

Total liabilities and shareholders' equity

See Accompanying Notes to Financial Statements.

Statement of Operations

Statements of Operations

For the Years Ended December 31, 2022, and 2021

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( 8,141,424 )

PPP loan extinguishment

Extinguishment of PPP loan

Interest expense

( 1,668,413 )

Interest income

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( 7,908,634 )

Net loss before taxes

( 6,897,446 )

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$ ( 6,897,446 )

Net loss per share attributable to common stockholders

$ ( 13,478,069 )

Net loss per share attributable to common shares

Basic and diluted

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See Accompanying Notes to Financial Statements.

Statement of Changes in Stockholders’

Equity (Deficit)

Statements of Changes in Stockholders’ Equity

For the Years Ended December 31, 2022, and 2021

Additional Paid-In

Balance, December 31, 2020

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Issuance of common shares

Collection of subscription receivable

Exercise of Series A Warrants

Exercise of Pre-IPO Warrants

Conversion of debt obligations

Share-based compensation

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$ ( 64,838,389 )

$ ( 13,103,250 )

Issuance of common shares

Exercise of warrants

Conversion of debt obligations

Issuance of warrants

Exercise of restricted stock units and warrants

Reclassification of share-based compensation award to liability

Share-based compensation

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See Accompanying Notes to Financial Statements.

Statement of Cash Flows

Statements of Cash Flows

For the Years Ended December 31, 2022, and 2021

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Adjustments to reconcile net loss to net cash used in operating activities:

Finance charge associated with debt-to-equity conversion

Finance charge associated with debt issuance cost

Depreciation and amortization

Share-based compensation

Gain on PPP loan extinguishment

Share-based compensation expense

Extinguishment of PPP loan

Change in assets and liabilities:

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Prepaids and other non-current assets

Accrued fees to a related party

Accounts payable and accrued liabilities

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( 1,927,298 )

( 1,472,290 )

Purchase of property and equipment

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( 1,931,107 )

Cash flows from financing activities:

Repayment of line of credit

( 1,552,686 )

Cash flows from financing activities:

Proceeds from PPP Loan

Proceeds from issuance of promissory notes payable, net of OID

Repayment of deferred salary

Repayments to Line of Credit

( 6,000,000 )

Repayments of related parties notes payable and deferred salary

Proceeds from related party debt

Repayments of related party debt

Proceeds from issuance of promissory notes payable

Proceeds from issuance of common stock

Proceeds from issuance of PPP Loan

Proceeds from issuance of convertible and related party notes payable

Proceeds from issuance of common shares

Deferred offering costs capitalized

Net cash provided by financing activities

Net increase (decrease) in cash

Net (decrease) increase in cash

( 4,683,857 )

Cash, beginning of year

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Cash paid for interest

$ ( 1,337,140 )

Supplemental disclosures of non-cash activity:

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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

On February 16, 2021, the Company completed an

initial public offering (the “IPO”) of 3,991,818 units, at $4.125 per unit, consisting of one share of common stock and one

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.

After deducting underwriters commissions and expenses, the Company received net proceeds of approximately $15.1

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

On February 16, 2021, the Company completed an initial

public offering (the “IPO”) of 3,991,818 units, at $4.125 per unit, consisting of one share of common stock and one 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.

After deducting underwriter’s 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”.

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

Concurrently with the IPO the Company converted

from a Colorado limited liability company to a Delaware corporation.

This accounting change has been given retrospective treatment in

the condensed financial statements.

Concurrently with the IPO the Company converted from

a Colorado limited liability company to a Delaware corporation.

This accounting change has been given retrospective treatment in the condensed

financial statements.

Basis of Presentation

The accompanying financial statements have been

prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

The accompanying financial statements have been prepared

in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

Use of Estimates

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Actual results could differ from those estimates.

The financial statements include some amounts

that are based on management's best estimates and judgments.

The financial statements include some amounts that

are based on management's best estimates and judgments.

The most significant estimates relate to valuation of capital stock, warrants

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These estimates may be adjusted as more current information becomes available, and any adjustment could be

Reclassification of Presentation

Certain prior year amounts have been reclassified

for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations.

Risks and Uncertainties

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The Company had no cash equivalents at December 31,

2021 or December 31, 2020.

The Company maintains cash deposits at several

financial institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000.

The Company’s cash balance

may at times exceed these limits.

At December 31, 2021 and December 31, 2020, the Company had approximately $ 5.9

million and $ 0 , respectively, in excess

of federally insured limits.

2022 or 2021.

The Company maintains cash deposits at several financial

institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000.

The Company’s cash balance may at times

exceed these limits.

At December 31, 2022 and December 31, 2021, the Company had approximately $ 1.4 million and $ 5.9 million , respectively,

in excess of federally insured limits.

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

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of accumulated depreciation.

Depreciation is provided utilizing the straight-line method over the estimated useful lives for owned assets,

ranging from two to five years.

Depreciation is provided utilizing the straight-line method over the estimated useful lives for owned

assets, ranging from two

to five years .

Software Development Costs

The Company accounts for costs incurred in the

development of computer software as software research and development costs until the preliminary project stage is completed, management

has committed to funding the project, and completion and use of the software for its intended purpose is probable.

The Company ceases capitalization of development

costs once the software has been substantially completed and is available for its intended use.

Software development costs are amortized

over a useful life estimated by the Company’s management of five years.

Costs associated with significant upgrades and enhancements

that result in additional functionality are capitalized.

Capitalized costs are subject to an ongoing assessment of recoverability based

on anticipated future revenues and changes in software technologies.

The Company accounts for costs incurred in the development

of computer software as software research and development costs until the preliminary project stage is completed, management has committed

to funding the project, and completion and use of the software for its intended purpose is probable.

The Company ceases capitalization of development costs

once the software has been substantially completed and is available for its intended use.

Software development costs are amortized over

a useful life estimated by the Company’s management of five years.

Costs associated with significant upgrades and enhancements that

result in additional functionality are capitalized.

Capitalized costs are subject to an ongoing assessment of recoverability based on

anticipated future revenues and changes in software technologies.

Unamortized capitalized software development costs

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Software development costs of $ 1,927,298 and $ 1,472,290 were capitalized for the years ended December 31, 2022, and 2021, respectively.

of capitalized software development costs were $ 146,737 and $ 368,332 for the years ended December 31, 2021 and 2020, respectively and

are included in depreciation and amortization expense.

Amortization of capitalized software development costs were $ 956,144 and $ 146,737 for the years ended December 31, 2022 and 2021, respectively

and are included in depreciation and amortization expense.

Deferred Offering Costs

The Company deferred direct and incremental

costs associated with its IPO that occurred in February 2021.

The Company capitalized deferred offering costs of $ 142,049

and $ 141,908

during the years ended December 31, 2021 and 2020, respectively which were netted against IPO proceeds in February 2021.

In November 2022, the Company entered into a

Common Stock Purchase Agreement.

Pursuant to such, the Company has the right, but not the obligation, to require the investor

to purchase up to $10,000,000 in aggregate gross purchase price of newly issued shares of the Company common stock, subject to

eligibility under the Company’s Form S-3.

The Company’s right to sell shares under this agreement extends to December

In consideration for the commitments by the investor under the agreement, the Company issued 140,186

shares of common stock to the investor.

The Company recognized $ 222,896

of deferred offering costs relating to the issuance of these shares.

The Company deferred direct and incremental costs

associated with its IPO that occurred in February 2021.

The Company capitalized deferred offering costs of $ 142,049 during the year ended

December 31, 2021, which was netted against IPO proceeds in February 2021.

Deferred offering costs consisted principally of legal, advisory,

1 unchanged sentence

Long-Lived Assets

The Company reviews its tangible and limited lived

intangible long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset

may not be recovered.

If a potential impairment is indicated, the Company compares the carrying amount of the asset to the undiscounted

future cash flows associated with the asset.

In the event the future cash flows are less than their carrying value, a loss is recognized

based on the amount by which the carrying value exceeds the fair value of the long-lived asset.

The Company determined long-lived assets

were no t impaired at December 31, 2021 and December 31, 2020.

The Company accounts for income taxes using an

asset and liability approach, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences

A valuation allowance is established to reduce deferred tax assets to their estimated realizable value when, in the opinion

of management, it is more likely than not that some portion or all of the deferred income tax assets will not be realized in the future.

The Company recognizes benefits of uncertain tax

positions if it is more likely than not that such positions will be sustained upon examination based solely on their technical merits,

as the largest amount of benefit that is more likely than not to be realized upon the ultimate settlement.

The Company’s policy

is to recognize interest and penalties related to unrecognized tax benefits as a part of income tax expense.

The Company reviews its tangible and limited

lived intangible long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of

the asset may not be recovered.

If a potential impairment is indicated, the Company compares the carrying amount of the asset to the

undiscounted future cash flows associated with the asset.

In the event the future cash flows are less than their carrying value, a

loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset.

determined long-lived assets were no t

impaired at December 31, 2022 and 2021.

The Company accounts for income taxes using an asset

and liability approach, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of

A valuation allowance is established to reduce deferred tax assets to their estimated realizable value when, in the opinion of

management, it is more likely than not that some portion or all of the deferred income tax assets will not be realized in the future.

The Company recognizes benefits of uncertain tax positions

if it is more likely than not that such positions will be sustained upon examination based solely on their technical merits, as the largest

amount of benefit that is more likely than not to be realized upon the ultimate settlement.

The Company’s policy is to recognize

interest and penalties related to unrecognized tax benefits as a part of income tax expense.

Prior to the Company’s conversion to a Delaware

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Revenue Recognition

Revenue is measured according to Accounting Standards

Codification (“ASC”) 606, Revenue – Revenue from Contracts with Customers, and is recognized based on consideration

specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties.

revenue when we satisfy a performance obligation by transferring control over a service or product to a customer.

We report revenues net

of any tax assessed by a governmental authority that is both imposed on, and concurrent with, a specific revenue-producing transaction

between a seller and a customer in our consolidated statements of comprehensive income.

Collected taxes are recorded within Other current

liabilities until remitted to the relevant taxing authority.

Subscriber revenue consists primarily of subscription

Revenue will be measured according to Accounting

Standards Codification (“ASC”) 606, Revenue – Revenue from Contracts with Customers, and will be recognized based on

consideration specified in a contract with a customer and will exclude any sales incentives and amounts collected on behalf of third parties.

We will recognize revenue when we satisfy a performance obligation by transferring control over a service or product to a customer.

will report revenues net of any tax assessed by a governmental authority that is both imposed on, and concurrent with, a specific revenue-producing

transaction between a seller and a customer in our statements of operations.

Collected taxes, if applicable, will be recorded within other

current liabilities until remitted to the relevant taxing authority.

Subscriber revenue will consist primarily of subscription

fees and other ancillary subscription-based revenues.

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There is no revenue recognized for unpaid trial subscriptions.

Customers may pay for the services in advance

of the performance obligation and therefore these prepayments are recorded as deferred revenue.

The deferred revenue is recognized as

revenue in our statement of operations as the services are provided.

Customers may pay for the services in advance of the

performance obligation and therefore these prepayments are recorded as deferred revenue.

The deferred revenue is recognized as revenue

in our statement of operations as the services are provided.

Advertising Costs

The Company expenses advertising costs as incurred.

Advertising expense for the year ended December 31, 2021 was $ 130,565 .

Advertising expense for the year ended December 31, 2020 was not

Advertising expense for the year ended December 31, 2022, and December 31, 2021, was $ 760,940 and $ 130,565 , respectively.

Share-Based Compensation

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fair value of the awards on the date of grant.

Compensation expense for all share-based awards

is based on the estimated grant-date fair value and recognized in earnings over the requisite service period (generally the vesting period).

Compensation expense for all share-based awards is

based on the estimated grant-date fair value and recognized in earnings over the requisite service period (generally the vesting period).

The Company records share-based compensation expense related to non-employees over the related service periods.

Net Loss per Share

Basic loss per share common share is calculated

based on the weighted-average number of common shares outstanding in accordance with FASB ASC Topic 260, Earnings per Share .

Basic loss per share common share is calculated based

on the weighted-average number of common shares outstanding in accordance with FASB ASC Topic 260, Earnings per Share .

net (loss) income per share is calculated based on the weighted-average number of common shares outstanding plus the effect of dilutive

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and warrants.

Geographic Locations & Segments

For the year ended December 31, 2021 and 2020,

100% of revenue attributable to customers and 100% of our net assets are located within the United States.

Liquidity, Capital Resources and Going Concern

Our existing cash of $1.66 million at December 31, 2022 will only be sufficient

to fund our current operating plans into the second quarter of 2023.

The Company has based these estimates, however, on assumptions that

may prove to be wrong.

We will need additional funding to complete the development of our

full product line and scale products with a demonstrated market fit.

Management has plans to secure such additional funding.

unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce, or eliminate our technology development

and commercialization efforts.

As a result of the Company’s recurring losses

from operations, and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding

the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to

the Company’s ability to continue as a going concern.

Emerging Growth Company Status

The Company is an emerging growth company, as

defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Under the JOBS Act, emerging growth companies

can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards

apply to private companies.

The Company is an emerging growth company, as defined

in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Under the JOBS Act, emerging growth companies can delay

adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards 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.

Note 2 – Revenue Recognition

Legacy platform phase out

From 2014 through 2020, the Company was successful

in deploying its platform across 580 major radio stations and 1.6 million monthly active users.

The Company’s legacy product served

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

and streaming audio ads.

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

Our Interactive Radio Platform provided mobile and web products that provide 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

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

The Company began phasing out its Interactive

Radio Platform in early 2020 and ceased operations related to the legacy platform by August 1, 2020.

Much of the core technology of this

platform is being leveraged for re-use with our new products, Faidr and Vodacast, currently under development.

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 on a national scale.

The Company’s legacy contracts with customers

generally fell within two formats:

(1) those that encompass development services, access to the Company’s interactive technology

platform through a hosted business model and the ability to execute placement of spot advertising through the Company’s interactive

technology platform, or (2) contracts exclusively for digital advertising placement of spot ads through the Company’s mobile Apps

and web players.

The Company allocated the transaction price to each separate performance obligation as applicable within each contract

based upon their relative selling prices.

Development service fee revenue

Revenue generated from development services were

comprised of services for the development, design and customization of software applications for station branded mobile Apps and web/desktop

players for radio stations.

The mobile Apps enabled our customer’s users to interact with the live broadcast and streaming content

while providing attribution to each station and enabling local and national digital monetization capabilities.

The web/desktop player provided a listening platform

that enables full interactive radio capabilities for desktop users that prefer web based listening.

The Company determined that the development,

design, build and deployment, configuration, and customization are a bundle of professional services provided to the customer for the

purpose of the Mobile and Web Desktop Apps and were considered a single performance obligation.

Revenue was recognized over time as the

services are satisfied and any advanced payments received were not recognized as revenue but instead was recorded in a deferred contract

liability until the customer’s services were satisfied.

The Company no longer provides these services.

Platform services fee revenue

Revenue generated from platform services were

comprised of the customer’s use of the Company’s interactive technology platform that includes access rights to use the licensed

software, software hosting, support and maintenance, data tracking analytics, advertising trafficking and monitoring of the mobile App

and web/desktop player applications.

The Company determined that the hosting of software, license access, support, training, maintenance

and unspecified periodic upgrades or updates, monitoring hardware, interactive content management, access to content library, data and

analytics dashboard, programming and Ad campaign training were a bundle of product and services that have the same period and pattern

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.

Advertising revenue

The Company legacy contracts generated advertising

revenue in two distinctive forms:

one which was from third party advertisers that placed ads on the Company’s mobile Apps and web

players which were separate customer contracts whereby such advertising access was the only service and performance obligation within

those contracts, and second was ad placements on the same platform but managed by the Company for its customers in connection with its

contracts to provide development services and Platform access services to its customers.

The external advertising revenues were comprised

of local and national interactive spots that were sourced and managed by customers or by third party service providers (such as Google),

whereby the Company received a portion of the dollars spent by the advertiser.

In late 2018, the Company decided to move to only internally

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.

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

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

interactive platform.

Revenue was recognized as performance obligations were satisfied, which generally occurred as ads were delivered

through the platform.

For Interactive and Digital Campaign and Spot

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.

Certain customers received platform fee credits

or advertising discounts, which were considered as variable consideration in the determination of the transaction price.

These performance

obligations related to the fixed price arrangements were discounted ratably based on their relative standalone selling prices.

The Company no longer provides these services.

Practical expedients and exemptions

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

The following table presents revenues disaggregated

by revenue source:

Schedule of disaggregated revenue

Year Ended December 31,

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

Digital advertising served by Clip Interactive

Note 3 – Property & Equipment

and Software Development Costs

Property and equipment and software development

costs consisted of the following as of:

Schedule of property, equipment and software development

Note 2 – Property & Equipment and

Software Development Costs

Property and equipment and software development costs

consisted of the following as of:

Schedule of property, equipment and software development costs

Computers and equipment

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The Company recognized depreciation expense of $ 35,495

$ 17,813 and $ 4,034 for the years ended December 31, 2021 and 2020, respectively related to property and equipment and amortization expense

of $ 146,737 and $ 368,332 for the years ended December 31, 2021 and 2020, respectively related to software development costs.

Note 4 – Balance Sheet Disclosures

Accounts payable and accrued liabilities consist

of the following:

and $ 19,919 for the years ended December 31, 2022, and 2021, respectively related to property and equipment and amortization expense of

$ 956,144 and $ 146,737 for the years ended December 31, 2022, and 2021, respectively related to software development costs.

3 – Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of

the following:

Schedule of accounts payable and accrued liabilities

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Accrued interest

Wages payable

Accounts payable and accrued liabilities

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.

On April 10, 2018, the Company entered into a

line of credit with a financial institution, which was amended in July 2019 and March 2021.

The principal balance was repaid in full

on 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.

Interest expense

for the year ended December 31, 2021 and 2020 was $ 66,412 and $ 276,980 , respectively.

Interest expense for the year ended December 31, 2021 was $ 66,412 .

The line of credit was collateralized by all assets

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

The outstanding balance on the line of credit

at December 31, 2020 was $ 6,000,000 .

The shareholder who previously provided the $2,000,000 control account had a collateral agreement

with the Company which is described in Note 6.

The shareholder who previously provided the $2

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

This agreement was terminated in March

Note 6 – Convertible Notes Payable,

Notes Payable to Related Parties and Deferred Salary and Promissory Notes

Note 5 – Convertible Notes Payable, Notes

Payable to Related Parties and Deferred Salary and Promissory Notes

Convertible notes payable

During the year ended December 31, 2020 investors

purchased an additional $ 404,601 of our convertible notes, such that at December 31, 2020 the balance of the convertible notes, including

accrued interest, was $ 2,295,305 .

These convertible notes accrued interest at 6.0 % per year and were scheduled to mature on December 31,

In conjunction with the February 2021 IPO, the Notes automatically converted into 2,066,176 shares of common stock at discounts

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

Interest expense for the year ended December 31, 2021 and 2020 was $ 16,586 and $ 128,674 , respectively.

During the year ended December 31, 2020,

existing investors purchased $ 404,601 of

our convertible notes.

These convertible notes accrued interest at 6.0 %

per year and were scheduled to mature on December

In conjunction with the February 2021 IPO, the Notes automatically converted into 2,066,176 shares

of common stock at discounts ranging from 50% to 75% of the IPO price.

Interest expense for the year ended December 31, 2021, was

Accrued fees to a related party

The Company had an agreement with a shareholder

to provide collateral for a bank line of credit described in Note 5 – Line of Credit.

The amount of the cash collateral provided

by the shareholder to the bank was $2.0 million.

The Company had an agreement with a shareholder to

provide collateral for a bank line of credit described in Note 4 – Line of Credit.

The amount of the cash collateral provided by

the shareholder to the bank was $2.0 million.

The collateral agreement required a commitment to pay collateral fees of $710,000 (comprised

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

Interest expense for the year ended December 31, 2021 and 2020

was $ 208,727 and $ 942,397 , 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 year ended December 31, 2021, $ 208,727 .

This collateral agreement terminated in March 2021.

In conjunction with the February 2021 IPO, the

notes payable and accrued interest due to this shareholder were converted to 1,667,859 shares of common stock.

In conjunction with the February 2021 IPO, the notes

payable and accrued interest due to this shareholder were converted to 1,667,859 shares of common stock.

Promissory notes payable

During the twelve months ended December 31, 2020,

2020, the Company issued, to a number of existing shareholders, in four separate tranches, $ 1,857,764 of Promissory Notes that

accrue interest at a rate of 6 % per year and were scheduled to mature on December 31, 2021 .

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.

Interest expense for the year ended December 31, 2021 and 2020 was $ 14,454 and

$ 44,182 , respectively.

In conjunction with the February 2021 IPO, all

of the Promissory Notes collectively converted into 3,080,535 shares of common stock.

the Company issued, to a number of existing shareholders, in four separate tranches, $ 1,857,764 of Promissory Notes that accrue interest

at a rate of 6 % per year and were scheduled to mature on December 31, 2021 .

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 year ended December 31, 2021, was $ 14,454 .

In conjunction with the February 2021 IPO, all of

the Promissory Notes collectively converted into 3,080,535 shares of common stock.

The Company recognized a finance charge to interest

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Note 6 – Notes Payable

Notes payable to related parties and deferred

An executive officer of the Company agreed to

defer receipt of compensation to preserve liquidity in the Company.

The accumulated amount of compensation owed to this executive officer

was approximately $ 631,000 at December 31, 2020.

Notes payable to related parties and deferred salary

An executive officer of the Company agreed to defer

receipt of compensation to preserve liquidity in the Company.

The accumulated amount of compensation owed to this executive officer was

approximately $ 631,000 at December 31, 2020.

The Company paid this deferred compensation in the first quarter of 2021.

During 2019, the Company issued notes payable

(the “Notes”) to three related parties for $ 80,000 , $ 200,000 and $ 50,000 , respectively.

The Notes did not accrue interest or

have a stated maturity date.

During 2019, the Company issued notes payable (the

“Notes”) to three related parties for $ 80,000 , $ 200,000 , and $ 50,000 , respectively.

The Notes did not accrue interest or have

a stated maturity date.

The outstanding note payable for $ 80,000 was repaid in January 2020.

In December 2019, the two other note

holders elected to convert their notes into convertible Notes due December 31, 2021.

Two other existing investors, who were owed a total

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 .

In December 2019, the two other note holders

elected to convert their notes into convertible Notes due December 31, 2021.

Two other existing investors, who were owed a total 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 .

The Company paid these Notes in the first quarter of 2021.

In October 2019, a shareholder obtained $ 400,000

of short term financing from an unrelated lender.

The shareholder then agreed to make the proceeds of that short term financing available

to the Company.

In exchange, the Company assumed responsibility for all payments and charges (including principal, interest and fees)

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.

In February 2020, the Company obtained a new $500,000

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was repaid in February 2021.

Interest expense related to notes payable for

related parties for the year ended December 31, 2020 was $ 209,145 .

In November 2022, the Company entered into a

Secured Bridge Note (“Note”) financing with an existing stockholder of the Company.

The principal amount of the Note is

including an original issue discount of $ 200,000 .

The Note bears interest at an annual rate of 10 %

and matures in May 2023.

The Note is secured by a lien on substantially all of the Company’s assets.

At maturity, the lender

has the option to convert any original issue discount and accrued but unpaid interest into shares of the Company’s common

stock at a fixed conversion price of $ 1.23

The conversion right is available to the lender at the earlier of (i) maturity, or (ii) payback of all the principal.

connection with the Note financing, the Company issued 300,000

common stock warrants with a five-year term and an exercise price of $ 2.10

The warrants were valued at $ 361,878 , which was recorded as an additional debt discount.

The Company has the option to

extend the maturity date by six months to November 2023.

In the event of an extension, the interest rate on the Note will increase

to 20% and the Company will issue to the lender an additional 300,000 warrants.

As of December 31, 2022, the balance of the Note,

net of debt issuance costs, was $ 1,775,956 .

Interest expense related to the Note for the year ended December 31, 2022, was $ 165,945 .

Cares Act Paycheck Protection Program loan

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Small Business Administration.

The First Loan was set to mature in April 2022

and the Second Loan was set to mature in January 2023.

The First Loan was set to mature in April 2022 and

the Second Loan was set to mature in January 2023.

The PPP Loans bore 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.

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.

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 contained customary events of default

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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 both the PPP Loans.

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 year ended December

Pursuant to the terms of the CARES Act and the PPP,

the Company applied for forgiveness for both the PPP Loans.

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 year ended December 31,

On November 2, 2021, the Company received confirmation that the Second Loan was approved for forgiveness and the Company recorded

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Operating Lease

In April 2021, the Company entered into a lease agreement for a new

primary office space in Boulder, Colorado comprising of 8,639 square feet.

The lease commenced on May 15, 2021 and terminates after 12

The lease has an initial base rent of $7,150 per month, with the first 15 days rent free and includes 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.

Rent expense $ 75,336 and $ 72,999 for the year ended December 31, 2021 and 2020, respectively.

In the normal course of business, the Company

is party to litigation from time to time.

The Company maintains insurance to cover certain actions and believes that resolution of such

litigation will not have a material adverse effect on the Company.

In April 2021, the Company entered into a lease agreement

for office space in Boulder, Colorado comprising of 8,639 square feet.

The lease commenced on May 15, 2021, and terminated after 12 months.

The lease had an initial base rent of $7,150 per month, with the first 15 days rent free and included three separate six month renewal

options, subject to fixed rate escalation increases.

In November 2022, the Company amended the lease reducing the square footage rented

to 2,160 with a base rent of $4,018 per month.

The amended lease terminates after 13 months.

The Company previously leased approximately

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

Rent expense was $ 104,223 and $ 75,336 for the years

ended December 31, 2022, and 2021, respectively.

In the normal course of business, the Company is party

to litigation from time to time.

The Company maintains insurance to cover certain actions and believes that resolution of such litigation

will not have a material adverse effect on the Company.

Contingencies

pre-IPO investor has contacted the Company claiming damages caused by alleged acts and omissions arising from a private financing by

No complaint has been filed by the investor.

The alleged damages asserted by the investor are less than

approximately $300,000.

The Company believes it has meritorious defense to the investor's claims.

Note 8 - Share-based Compensation

Stock Options

The following table presents the activity for

stock options outstanding:

The following table presents the activity for stock

options outstanding:

Schedule of stock option activity

Non-Qualified

Exercise Price

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Outstanding - December 31, 2022

The following table presents the composition

of options outstanding and exercisable:

The following table presents the composition of options

outstanding and exercisable:

Options outstanding and exercisable

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Restricted Stock Units

The following table presents the activity for

restricted stock units outstanding:

Schedule of restricted stock unit activity

Exercise Price

The following table presents the activity for restricted

stock units outstanding:

Schedule of restricted stock outstanding

Restricted Stock

Average Exercise

Outstanding - December 31, 2020

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Outstanding - December 31, 2021

Forfeited/canceled

Outstanding - December 31, 2022

During the year ended December 31, 2022, the Company

granted 282,983 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 $ 1,237,481 and $ 69,841 for the year ended December 31, 2021 and 2020, respectively.

Under terms of the restricted stock agreements, the restricted stock units are subject to certain

vesting requirements.

The Company recognized share-based compensation expense

related to stock options and restricted stock units of $ 1,001,889 and $ 1,237,481 for the years ended December 31, 2022, and 2021, respectively.

The remaining unvested share-based compensation expense of $ 1,616,569 is expected to be recognized over the next 37 months.

The following table presents the activity for

warrants outstanding:

The following table presents the activity for warrants

Schedule of warrant activity

Exercise Price

Average Exercise

Outstanding - December 31, 2020

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Outstanding - December 31, 2021

Forfeited/cancelled/restored

Outstanding - December 31, 2022

In connection with the February 2021 IPO, the

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warrants contain a cashless exercise feature.

During the year ended December 31, 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 4,331 warrants for 2,887 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 3.94 years as of December 31, 2021.

During the year ended December 31, 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 4,331 warrants for 2,887 shares of common stock

at the net exercise price of $ 0.87 per share.

During the year ended December 31, 2022, in connection

with the issuance of a Secured Bridge Note, the Company issued 300,000 warrants to purchase shares of common stock at the exercise price

of $ 2.10 per share.

During the year ended December 31, 2022, 148 warrants

were exercised using the cashless option into 112 shares of common stock.

All the outstanding warrants are exercisable and have

a weighted average remaining contractual life of approximately 3 years as of December 31, 2022.

Note 9 – Stockholders’ Equity

On February 17, 2021, the Company converted its

LLC membership equity units into 485,441 shares of Common Stock with a $0.001 par value.

On February 17, 2021, the Company converted its LLC

membership equity units into 485,441 shares of Common Stock with a $0.001 par value.

The conversion has been given retrospective treatment.

During 2020, the Company issued 14,783 shares

of common stock for cash.

Note 10 – Income Taxes

For the year ended December 31, 2021, the Company

recorded no income tax benefit for the net operating losses incurred during the year, due to the uncertainty of realizing a benefit from

For the year ended December 31, 2022 and 2021, the

Company recorded no income tax benefit for the net operating losses incurred during the year, due to the uncertainty of realizing a

benefit from those items.

The following is a reconciliation of the statutory

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State and local income taxes, net of federal tax benefit

Transaction costs

Change in valuation allowance

Income taxed as pass-through prior to IPO

Change in entity status

PPP loan forgiveness

Significant components of the Company’s

deferred taxes consisted of the following:

Prior year true-ups

Changes in valuation allowance

Total provision expense (benefit) for income taxes

Significant components of the Company’s deferred

taxes consisted of the following:

Schedule of deferred taxes

December 31, 2022

Deferred income tax assets:

Deferred tax assets:

Stock based compensation

Business interest limitation

Federal net operation losses

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Total deferred tax assets, net of valuation allowance

Deferred income tax liabilities:

Deferred tax liabilities:

Capitalized software

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Total deferred tax liabilities

$ ( 566,595 )

Total net deferred tax asset (liability)

period ended December 31, 2022, the Company has federal and state net operating loss carryforwards of $ 11,068,185 and $ 11,068,185 , respectively.

net operating loss carryforwards do not have an expiration, however, are limited to 80% of the excess of taxable income over the total

Net Operating Loss Deduction, the state net operating loss carryforwards will conform to the federal provisions.

Additionally,

after weighting all available and positive and negative evidence for the period ended December 31, 2022, the Company has recorded a valuation

allowance of $(2,787,033).

Company continuously monitors its current and prior filing positions in order to determine if any unrecognized tax positions need to

The analysis involves considerable judgement and is based on the best information available.

For the period ended

December 31, 2022, the Company is not aware of any positions which require an uncertain tax position liability.

is subject to taxation in the United States and Colorado.

The statute of limitations on the initial tax return filed for 2021 tax year

will expire in 2025 for federal and in 2026 for state jurisdictions.

Note 11 – Net Loss Per Share

Basic net loss per share is computed by dividing

net loss, which is allocated based upon the proportionate amount of weighted average shares outstanding, to each class of stockholder’s

Basic net loss per share is computed by dividing net

loss, which is allocated based upon the proportionate amount of weighted average shares outstanding, to each class of stockholder’s

stock outstanding during the period.

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

December 31, 2021 and 2020, 5,009,315 and 655,485 ,

As of December 31, 2022, and 2021, 6,318,758 and 5,009,315 ,

respectively of potentially dilutive weighted average shares were excluded from the calculation of diluted net loss per share because

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Note 12 – Subsequent Events

On February 15, 2022,

the Company released nationally it’s Faidr App for both iOs and Android devices.

The Company plans to commence amortization of its

capitalized development costs.

The Company anticipates it will continue to incur future capitalized costs as it relates to enhancements

and additional functionality related to the Faidr and Vodacast Apps.

On February 17, 2022,

the Company approved a grant of 350,000 restricted stock units and 293,750 stock options to employees and directors subject to certain vesting

requirements.

10, 2023, the Company’s board of directors appointed Timothy J.

Ackerman as the Company’s new Chief Financial Officer.

connection with Mr.

Ackerman's appointment, the compensation committee of Auddia's board of directors granted Mr.

Ackerman (i) an inducement

stock option to purchase an aggregate of 150,200 shares of Auddia common stock, and (ii) 37,500 restricted stock units for Auddia common

These stock options and RSUs were agreed to and granted as an inducement material to Mr.

Ackerman entering into employment with

Auddia in accordance with Nasdaq Listing Rule 5635(c)(4).

The RSUs and options are both subject to certain vesting requirements.

Changes and Disagreements with Accountants on Accounting and Financial Disclosure

8, 2023, we were advised by Daszkal Bolton, LLP (“Daszkal”), the Company’s independent registered public accounting

firm, that Daszkal completed a business combination agreement with CohnReznick LLP (“CohnReznick”).

As a result of this transaction,

Daszkal will resign as the Company’s independent registered public accounting firm following the filing of this Annual Report.

Company’s current Daszkal audit team is now part of CohnReznick and the Company expects it will likely engage CohnReznick to serve

as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2023 but

has not engaged them at this time.

Daszkal’s reports on the Company’ financial statements for the past two years did not contain an adverse opinion or a disclaimer

of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles.

During the years ended December 31, 2022 and 2021, there were (i) no disagreements (as described in Item 304(a)(1)(iv) of Regulation S-K

and the related instructions) between the Company and Daszkal on any matter of accounting principles or practices, financial statement

disclosure, or auditing scope or procedure, which, if not resolved to Daszkal’s satisfaction, would have caused Daszkal to make

reference thereto in its reports on the financial statements for such years;

and (ii) no “reportable events” within the meaning

of Item 304(a)(1)(v) of Regulation S-K, except that Daszkal advised the Company of material weaknesses in its internal control over financial

reporting as of December 31, 2021 and 2020.

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 8. Financial Statements and Supplementary Data