What changed in this filing

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Item 9A. Controls and Procedures

2023-03-23 compared with 2022-02-17 · 376 added, 282 removed, 604 unchanged (52% of the section changed)

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Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our

Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined

in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this report.

Based on that evaluation, our Chief Executive

Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this

report were not effective at a reasonable assurance level due to the material weaknesses in internal control over financial reporting

described below.

The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information

required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported

within the time periods specified in the SEC’s rules and forms;

and (ii) accumulated and communicated to management, including our

Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.

that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control

system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within

a company have been detected.

Our management, with the participation of our Chief

Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule

13a-15(e) of the Exchange Act) as of the end of the period covered by this report.

Based on that evaluation, our Chief Executive Officer

and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were

not effective at a reasonable assurance level due to the material weaknesses in internal control over financial reporting described below.

The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed

by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods

specified in the SEC’s rules and forms;

and (ii) accumulated and communicated to management, including our Chief Executive Officer

and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.

We believe that a control system,

no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no

evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been

Internal Control Over Financial Reporting

In preparation of our financial statements to

meet the requirements of our IPO, we determined that material weaknesses in our internal control over financial reporting existed during

fiscal 2018 and remained unremediated as of December 31, 2021.

In preparation of our financial statements to meet

the requirements of our IPO, we determined that material weaknesses in our internal control over financial reporting existed during fiscal

2018 and remained unremediated as of December 31, 2022.

A material weakness is a deficiency or combination of deficiencies in internal

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weaknesses, we took a number of actions to improve our internal control over financial reporting and determined that as of December 31,

2021, that the controls that were designed have not been operating effectively for a sufficient period of time to conclude that the material

weaknesses have been remediated.

2022, that although the controls that were designed have been implemented, the documentation and testing of such controls was not yet

completed sufficiently enough to conclude that the material weaknesses have been remediated.

Remediation Activities

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engage outside consultants to ensure that appropriate level of knowledge and experience is applied based on risk and complexity of transactions and tasks under review;

started internal control documentation along with engage outside consultants to assist in the design, implementation and documentation of internal controls to address the relevant risks

hired additional accounting resources with appropriate levels of experience, including a new Chief Financial Officer

started internal control documentation along with engaging outside

consultants to assist in the design, implementation and documentation of internal controls to address the relevant risks;

hired additional accounting resources with appropriate levels of experience, including a new chief financial officer in 2021

The process of implementing an effective financial

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While progress has been made to enhance our internal

control over financial reporting, we are still in the process of implementing these processes, procedures and controls.

Additional time

is required to complete implementation and to assess and ensure the sustainability of these procedures.

We believe the above actions will

be effective in remediating the material weaknesses described above and we will continue to devote significant time and attention to these

remedial efforts.

However, the material weaknesses cannot be considered remediated until the applicable remedial controls operate for

a sufficient period of time and management has concluded that these controls are operating effectively.

Management’s Report on Internal Control

Over Financial Reporting

This Annual Report does not include a report of

management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered

public accounting firm due to a transition period established by rules of the SEC for newly public companies.

Changes in Internal Control Over Financial

Other than the applicable remediation efforts

described in “Remediation of Previously Reported Material Weaknesses” above, there have been no changes in our internal control

over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the fiscal year ended December 31, 2021

control over financial reporting, we are still in the process of documenting and testing these processes, procedures and controls.

time is required to complete this phase and to assess and ensure the sustainability of these procedures.

We believe the above actions

will be effective in remediating the material weaknesses described above and we will continue to devote significant time and attention

to these remedial efforts.

However, the material weaknesses cannot be considered remediated until the applicable remedial controls have

been documented and tested such that management has concluded that these controls are operating effectively.

Management’s Report on Internal Control Over

Financial Reporting

This Annual Report does not include a report of management’s

assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting

firm due to a transition period established by rules of the SEC for newly public companies.

Changes in Internal Control Over Financial Reporting

Other than the applicable remediation efforts described

in “Remediation of Previously Reported Material Weaknesses” above, there have been no changes in our internal control over

financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the fiscal year ended December 31, 2022,

that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers, and Corporate Governance

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Set forth below are the names, ages and positions

of our executive officers and directors as of February 17, 2022.

of our executive officers and directors as of March 1, 2023.

Position(s) held

Served as a Director

and/or Officer Since

Served as a Director and/or Officer Since

Executive Officers

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Military Academy in West

Thramann currently serves as the Executive Chairman of Aclarion, Inc.

ACON), a healthcare technology company that

is leveraging MR Spectroscopy, biomarkers, and augmented intelligence algorithms to improve the diagnosis and treatment of chronic low

Michael Lawless,

Chief Executive Officer:

Lawless is a technology startup veteran having held key leadership positions in research and development,

engineering, product development and operations.

Prior to joining the Company in 2012, from 2009 to 2011 he was one of the founding executives

and Chief Operating Officer of Trada, Inc., a company engaged in the business of crowdsourced digital ad campaign creation and management.

In addition to establishing the business operations and processes for Trada, he was responsible for building and managing the product

team and operating their internet advertising marketplace SaaS product.

He earned a BS in Human Factors Engineering from the U.S.

Force Academy and his master’s degree in Experimental Psychology with an emphasis on Human-Computer Interaction from The University

Peter Shoebridge,

Chief Technology Officer:

Shoebridge joined the Company in 2013 and has over 35 years of professional experience in the software

development industry.

Chief Executive Officer and Director:

Lawless is a technology startup veteran having held key leadership positions in research

and development, engineering, product development and operations.

Prior to joining the Company in 2012, from 2009 to 2011 he was one of

the founding executives and Chief Operating Officer of Trada, Inc., a company engaged in the business of crowdsourced digital ad campaign

creation and management.

In addition to establishing the business operations and processes for Trada, he was responsible for building

and managing the product team and operating their internet advertising marketplace SaaS product.

He earned a BS in Human Factors Engineering

from the U.S.

Air Force Academy and his master’s degree in Experimental Psychology with an emphasis on Human-Computer Interaction

from The University of Dayton.

Peter Shoebridge, Chief Technology Officer:

Shoebridge joined the Company in 2013 and has over 35 years of professional experience in the software development industry.

He has been involved with internet related technologies since 1996.

From 2008 to 2012, he was the CEO and co-founder

of Blue Yonder Gaming, Corp., a casino gaming systems and gaming company.

Prior to Blue Yonder he was Vice President of engineering at

Sona Mobile, Inc and led the team that built the first wireless gaming system to receive federal regulatory approval.

He also led the

team that built the Sona Gaming System, a server-based gaming platform.

Shoebridge has worked in many different technology sectors

including the real-time financial industry, casino gaming including bingo systems, accounting and automotive.

He was educated in London,

Brian Hoff, Chief

Financial Officer:

Hoff has extensive experience in leading high growth accounting and finance teams.

From 2019 – 2021

he was Vice President, Controller at STACK Infrastructure, a leading provider of digital infrastructure to high growth companies.

to STACK, he was Corporate Controller from 2011 - 2019 at Coalfire, a leading provider cyber-security firm owned by The Carlyle Group

later to be acquired by Apax Partners.

He spent the majority of his tenure at Coalfire building out the accounting and finance functions

in a high growth environment, completing numerous acquisitions and helping grow the organization from 80 employees to over 700 employees.

He is a certified public accountant and earned a BS from The University of Colorado.

From 2008 to 2012, he was the CEO and co-founder of Blue Yonder Gaming,

Corp., a casino gaming systems and gaming company.

Prior to Blue Yonder he was Vice President of engineering at Sona Mobile, Inc and led

the team that built the first wireless gaming system to receive federal regulatory approval.

He also led the team that built the Sona

Gaming System, a server-based gaming platform.

Shoebridge has worked in many different technology sectors including the real-time

financial industry, casino gaming including bingo systems, accounting and automotive.

He was educated in London, England.

Ackerman, Chief Financial Officer:

Ackerman joined the Company in 2023.

He brings over twenty years of finance and operational

experience in the software and services industry with both publicly traded and privately held companies.

From 2020 to 2022, he served

as Chief Financial Officer and a board member at Premier Crop Systems, LLC (“PCS”), a venture capital backed and leading

precision agronomy data processing and analytics software and services company.

PCS was sold to another privately held company in 2022.

From 2016 to 2020, Mr.

Ackerman attended business school and also took a career sabbatical.

From 1997 to 2016, Mr.

Ackerman served as

Vice President of Finance with CSG Systems International, Inc.

CSGS), a leading multinational SaaS software and services company.

Ackerman is a certified public accountant and a chartered global management accountant.

He earned both his MBA and BS in Business

Administration from the University of Nebraska.

Non-employee directors

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privately held companies.

Since September 2020, Mr.

Deitsch has served as Chief Financial Officer of Paragon 28, Inc.

FNA), a leading global orthopedics

FNA), a leading

global orthopedics company.

From April 2017 to August 2019, Mr.

Deitsch served as Senior Vice President and Chief Financial Officer of BioScrip, Inc.

Deitsch served as Senior Vice President and Chief Financial Officer of

BioScrip, Inc.

(formerly Nasdaq:

BIOS) which is now part of Option Care Health, Inc.

From August 2015 to April 2017, Mr.

Deitsch served

as Executive Vice President, Chief Financial Officer and Corporate Secretary of Coalfire, Inc., a leading cyber-security firm.

served as the Chief Financial Officer of Biomet Spine, Bone Healing, and Microfixation from July 2014 to July 2015 and as Vice

President Finance, Corporate Controller of Biomet, Inc.

From August 2015 to April 2017,

Deitsch served as Executive Vice President, Chief Financial Officer and Corporate Secretary of Coalfire, Inc., a leading cyber-security

Deitsch served as the Chief Financial Officer of Biomet Spine, Bone Healing, and Microfixation from July 2014 to July 2015

and as Vice President Finance, Corporate Controller of Biomet, Inc.

from February 2014 to July 2014.

Deitsch was the Chief Financial Officer

of Lanx, Inc.

Deitsch was the Chief Financial

Officer of Lanx, Inc.

from September 2009 until it was acquired by Biomet in October 2013.

From 2002 to 2009, Mr.

Deitsch served in various

senior financial leadership roles at Zimmer Holdings, Inc.

Deitsch served

in various senior financial leadership roles at Zimmer Holdings, Inc.

(formerly NYSE:

ZMH) and now part of Zimmer Biomet, Inc (NYSE:

has been a director of Green Sun Medical, a privately held medical device company, since October 2017.

Hanlon is the founder and has been Chief Executive Officer of The Vertere Group LLC since 2012, a boutique media

industry strategic advisory and consulting firm specializing in helping innovation-seeking clients navigate the complex intersections

among media, marketing, advertising, and technology.

Prior to 2012, he was founder and Managing Director of Mediabrands Velocite (Interpublic

Group), the innovation-centric partnership and strategic investment arm of Interpublic Group’s corporate media agency division Mediabrands,

where he was chiefly responsible for entrepreneurial innovation through proprietary relationships with more than a dozen innovative venture-backed

media/marketing startups.

Hanlon has over 20 years of, digital and “emerging” media and marketing experience, including

senior management positions at marketing promotions agency Frankel (Chicago, IL), regional advertising agency Creative Alliance (Louisville,

KY), digital content pioneer Starwave (Bellevue, WA), and credit card issuer MBNA America (Wilmington, DE).

Hanlon holds an MBA from

the University of Chicago, Booth Graduate School of Business, and a BA from Georgetown University.

Deitsch has been a director of Green Sun Medical, a privately held medical device company, since October 2017.

Deitsch has served as a director of Aclarion, Inc.

ACON), a healthcare technology company that is leveraging MR Spectroscopy,

biomarkers, and augmented intelligence algorithms to improve the diagnosis and treatment of chronic low back pain.

Deitsch holds a

in Accounting from Ball State University and has an inactive CPA license.

Hanlon is the founder and Chief Executive Officer of the Chicago-based Vertere Group, LLC – a boutique strategic

consulting and advisory firm focused on helping forward-leaning media companies, brands, entrepreneurs, and investors benefit from rapidly

changing technological advances in marketing, media and consumer communications.

Prior to forming Vertere in 2012, Mr.

Hanlon created

and led corporate ventures practices at marketing agency holding companies Publicis Groupe and Interpublic Group, overseeing 70+ early-stage

investments and partnerships – including over two dozen successful M&A and IPO exits – with notable firms such as:

(acquired by ViacomCBS);

Data+Math (LiveRamp);

Clypd (AT&T/Xandr);

Sling Media (Echostar/Dish Network);

Navic Networks (Microsoft);

Brightcove (IPO);

and Visible World (Comcast), among others.

Previously, Mr.

Hanlon was Senior Vice President/Director, Emerging Contacts

for Publicis’ iconic media agency Starcom MediaVest Group, where he was chiefly responsible for pioneering all US client activity

and agency initiatives in the field of emerging media technologies – including the establishment of the firm’s ground-breaking

“TV 2.0 Practice,” centered around evolutionary television platforms.

Hanlon has over 25 years of extensive executive

experience in traditional, digital and “emerging” media & marketing – and his insights into the future of media,

advertising and marketing are regularly seen in major electronic, print and trade press outlets.

Hanlon holds an MBA from the University

of Chicago, Booth Graduate School of Business, and a BA from Georgetown University .

Thomas Birch, Director :

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of reports furnished to us, or written representations from reporting persons, we believe all directors, executive officers, and 10% owners

timely filed all reports regarding transactions in our securities required to be filed to date in 2021 by Section 16(a) under the Exchange

Act, except that (i) each of Messrs.

Deitsch, Hanlon, Thramann, Lawless, Shoebridge, Liebman and Minicozzi filed a late Form 3, and (ii)

Thramann filed one late Form 4.

timely filed all reports regarding transactions in our securities required to be filed to date in 2022.

Election of Officers

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following address:

bhoff@auddia.com.

tackerman@auddia.com.

Alternatively, a stockholder may contact our board, or specific members of our board, by writing

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Number of Meetings

The board held a total of seven meetings in 2021.

Our Audit Committee

held five meetings, our Compensation Committee held two meetings, and our Nominating and Governance Committee did not meet in 2021.

director attended at least 75% of the aggregate of the total number of meetings of the board and the board committees on which he served.

The board held a total

of eight meetings in 2022.

In 2022, our Audit Committee held five meetings, our Compensation Committee held five meetings, and our Nominating

and Governance Committee held four meetings.

Each director attended at least 75% of the aggregate of the total number of meetings of the

board and the board committees on which he served.

Board Member Attendance at Annual Stockholder Meetings

Although we do not have a formal policy regarding director attendance

at annual stockholder meetings, directors are encouraged to attend these annual meetings absent extenuating circumstances.

hold an annual meeting during 2021.

Although we do not have

a formal policy regarding director attendance at annual stockholder meetings, directors are encouraged to attend these annual meetings

absent extenuating circumstances.

Non-Employee Director Compensation

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began serving on our board following our February 2021 IPO.

Accordingly, our current non-employee directors did not receive any cash or

equity compensation from the Company for the year ended December 31, 2020.

Our Executive Chairman, Dr.

Thramann, and our President and

Chief Executive Officer, Mr.

Thramann, and our President and Chief Executive

Lawless, do not receive compensation for their services as a director.

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Our non-employee directors will receive annual cash compensation

of (i) $25,000 for service on the board (ii) $20,000 for service as the Audit Committee chair, and (iii) $10,000 for Nominating and Governance

Committee chair.

All cash payments will be made quarterly in arrears, and pro-rated for any partial quarters of service.

of (i) $25,000 for service on the board (ii) $20,000 for service as the Audit Committee chair, (iii) $10,000 for Compensation Committee

chair, and (iv) $10,000 for Nominating and Governance Committee chair.

All cash payments will be made quarterly in arrears, and pro-rated

for any partial quarters of service.

The following Director

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December 31, 2022:

Fees Earned or Paid in Cash ($)

Fees Earned or Paid

Option Awards ($)

All Other Compensation

Compensation ($)

Stephen Deitsch

Represents the grant date fair value of RSU awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures.

For information regarding assumptions underlying the valuation of equity awards, see Note 9 to our consolidated financial statements included in this Annual Report on Form 10-K.

In August 2021, we issued

91,500 restricted stock units to each of our non-employee directors under our 2021 Equity Incentive Plan as compensation for their board

Executive Compensation

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(1) Beginning after the Company’s IPO, Dr.

Thramann earns an annual salary of $300,000.

During 2020, Dr.

Thramann earned a salary of $165,000.

Due to liquidity constraints, most of Dr.

Thramann’s salary payments for 2020 and prior years were deferred.

He was only paid cash compensation of $19,760 in 2020 while 145,240 was deferred.

The total deferred amount owed to Dr.

Thramann from 2020 and prior years was approximately $661,000 at the time of our February 2021 IPO, and was included in our financial statements as a portion of “Accrued fees to a related party”.

The Company paid this deferred compensation in early 2021.

The “Bonus” column represents discretionary bonuses earned pursuant to our annual incentive bonus program.

Under the terms of their respective employment agreements, Mr.

Lawless and Mr.

Shoebridge is each eligible to receive a bonus based on the achievement of certain business goals set by our Board on an annual basis.

The target annual bonuses for Mr.

Thramann earns an

annual salary of $300,000.

(2) The “Bonus” column represents discretionary bonuses earned pursuant to our annual

incentive bonus program.

Thramann, Mr.

Lawless and Mr.

Shoebridge, expressed as a percentage of their base salary, is 50%.

Represents the grant date fair value of RSU and stock option awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures.

For information regarding assumptions underlying the valuation of equity awards, see Note 9 to our consolidated financial statements included in this Annual Report on Form 10-K.

Shoebridge is each eligible to receive a bonus based on the

achievement of certain business goals set by our Board on an annual basis.

The maximum bonus opportunity for each of Messrs.

Thramann, Lawless and Shoebridge, expressed as a percentage of their base salary, is 50%.

As of the filing date of this Annual

Report, the Company has not approved or paid any annual cash bonuses for the 2022 year.

(3) Represents the grant date fair value of RSU and stock option awards

computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures.

For information regarding assumptions

underlying the valuation of equity awards, see Note8 to our consolidated financial statements included in this Annual Report on Form

Outstanding Equity

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awards held by our Named Executive Officers as of December 31, 2022.

Option Awards

Exercisable(1)(2)

Unexercisable

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Peter Shoebridge

(1) Each equity award is subject to the terms

of our 2021 or 2013 Equity Incentive Plan.

(2) August 11, 2021 issuance represents option

awards that vest 25% upon grant date, 25% on February 16, 2023, 25% on February 16, 2024 and 25% on February 16, 2025.

(3) Represents RSU awards that vest 50% on

February 17, 2022, 25% on February 16, 2023, and 25% on February 16, 2024.

(4) Based on the closing price of a share

of the Company’s common stock on the Nasdaq Capital Market of $1.78.

_______________________

(1) Each equity award is subject to the terms of our 2021 or 2013

Equity Incentive Plan.

(2) All RSUs are settled, and shares delivered on the vesting date.

Accordingly, there are no vested RSUs that remain

(3) Based on the closing price of a share of the Company’s common stock on the Nasdaq Capital Market of $0.96

on December 30, 2022.

(4) Represents RSU awards that vest 50% on February 16, 2022, 25%

on February 16, 2023, and 25% on February 16, 2024.

(5) Represents RSU awards that vest 33% on February 16, 2023, 33%

on February 16, 2024, and 34% on February 16, 2025.

(6) Represents RSU awards that vest 100% on February 16, 2023.

(7) 2019 grant represents option awards that vest 50% on August 15,

2019, grant date.

The remaining portion of the option vests equally over 48 months.

(8) 2021 grant represents option awards that vest 50% on August 12,

2022, 25% on February 16, 2023, and 25% on February 16, 2024.

(9) 2022 grant represents option awards that vest 50% on the September

8, 2022, grant date.

The remaining portion of the option vests in two equal installments on February 16, 2023, and February 16, 2024.

Employment Arrangement with Dr.

Commencing after our

February 2021 IPO, Dr.

Thramann earns an annual salary of $300,000 for his service as our Executive Chairman.

Commencing after our February 2021 IPO, Dr.

earns an annual salary of $300,000 for his service as our Executive Chairman.

Employment Agreement with Mr.

On October 13, 2021,

we entered into an employment agreement with Mr.

On October 13, 2021, we entered into an employment

agreement with Mr.

Lawless, which supersedes and replaces a prior employment agreement dated February 6, 2012.

The employment agreement provides for an initial annual base salary of $260,000 as well as an entitlement to an annual incentive

bonus, upon certain conditions, in an amount determined by our board of directors.

The employment agreement

provides for an initial annual base salary of $260,000 as well as an entitlement to an annual incentive bonus, upon certain conditions,

in an amount determined by our board of directors.

The target annual bonus for Mr.

Lawless, expressed

as a percentage of base salary, is 50%.

If the Company terminates

Lawless’s employment without cause or Mr.

Lawless terminates for good reason, he is entitled to receive nine months of base

salary, (ii) up to nine months of paid health insurance under COBRA, and (iii) any earned but unpaid bonus for a prior completed fiscal

In addition, in the event of a change of control and a subsequent termination of Mr.

Lawless’ employment without cause, the

Company will accelerate the vesting of all of unvested stock options as of the later of the effective date of the change in control and

the last day of service.

Employment Agreement

On October 13, 2021,

we entered into an employment agreement with Mr.

Lawless, expressed as a percentage of base salary,

If the Company terminates Mr.

employment without cause or Mr.

Lawless terminates for good reason, he is entitled to receive nine months of base salary, (ii) up to nine

months of paid health insurance under COBRA, and (iii) any earned but unpaid bonus for a prior completed fiscal year.

In addition, in

the event of a change of control and a subsequent termination of Mr.

Lawless’ employment without cause, the Company will accelerate

the vesting of all of unvested stock options as of the later of the effective date of the change in control and the last day of service.

Employment Agreement with Mr.

On October 13, 2021, we entered into an employment

agreement with Mr.

Shoebridge, which supersedes and replaces a prior employment agreement dated April 1, 2014.

The employment agreement provides for an initial annual base salary of $225,000 as well as an entitlement to an annual incentive

bonus, upon certain conditions, in an amount determined by our board of directors.

The employment agreement

provides for an initial annual base salary of $225,000 as well as an entitlement to an annual incentive bonus, upon certain conditions,

in an amount determined by our board of directors.

The target annual bonus for Mr.

Shoebridge, expressed

as a percentage of base salary, is 50%.

If the Company terminates

Shoebridge’s employment without cause or Mr.

Shoebridge terminates for good reason, he is entitled to receive nine months of

base salary, (ii) up to nine months of paid health insurance under COBRA, and (iii) any earned but unpaid bonus for a prior completed

In addition, in the event of a change of control and a subsequent termination of Mr.

Shoebridge’s employment without

cause, the Company will accelerate the vesting of all of unvested stock options as of the later of the effective date of the change in

control and the last day of service.

Employment Agreement with Mr.

On October 13, 2021,

we entered into an employment agreement with Mr.

The employment agreement provides for an initial annual base salary of $220,000

as well as an entitlement to an annual incentive bonus, upon certain conditions, in an amount determined by our board of directors.

target annual bonus for Mr.

Hoff, expressed as a percentage of base salary, is 50%.

If the Company terminates

Hoff’s employment without cause or Mr.

Hoff terminates for good reason, he is entitled to receive six months of base salary,

(ii) up to six months of paid health insurance under COBRA, and (iii) any earned but unpaid bonus for a prior completed fiscal year.

addition, in the event of a change of control and a subsequent termination of Mr.

Hoff’s employment without cause, the Company will

Shoebridge, expressed as a percentage of base salary,

If the Company terminates Mr.

employment without cause or Mr.

Shoebridge terminates for good reason, he is entitled to receive nine months of base salary, (ii) up to

nine months of paid health insurance under COBRA, and (iii) any earned but unpaid bonus for a prior completed fiscal year.

in the event of a change of control and a subsequent termination of Mr.

Shoebridge’s employment without cause, the Company will

accelerate the vesting of all of unvested stock options as of the later of the effective date of the change in control and the last day

Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters

The following table sets

forth information regarding the beneficial ownership of our common stock as of February 17, 2022 by (i) each person who beneficially owned

more than 5% of our outstanding shares of common stock, (ii) each director, (iii) each Named Executive Officer and (iv) all of our directors

and executive officers as a group.

Unless otherwise indicated, the address of each executive officer and director is c/o Auddia, 2100

Central Avenue, Suite 200, Boulder, CO 80301.

Employment Agreement with Mr.

Effective February 6, 2023, we entered into an

employment agreement with Mr.

The employment agreement provides for an initial annual base salary of $225,000 as well as an

entitlement to an annual incentive bonus, upon certain conditions, in an amount determined by our board of directors.

The target annual

bonus for Mr.

Ackerman, expressed as a percentage of base salary, is 50%.

In connection with Mr.

Ackerman's employment,

he was granted (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 stock.

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

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

If the Company terminates Mr.

employment without cause or Mr.

Ackerman terminates for good reason, he is entitled to receive six months of base salary, (ii) up to six

months of paid health insurance under COBRA, and (iii) any earned but unpaid bonus for a prior completed fiscal year.

In addition, in

the event of a change of control and a subsequent termination of Mr.

Ackerman’s employment without cause, the Company will accelerate

the vesting of all of unvested stock options and RSUs as of the later of the effective date of the change in control and the last day

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information regarding

the beneficial ownership of our common stock as of March 10, 2023, by (i) each person who beneficially owned more than 5% of our outstanding

shares of common stock, (ii) each director, (iii) each Named Executive Officer and (iv) all of our directors and executive officers as

Unless otherwise indicated, the address of each executive officer and director is c/o Auddia, 2100 Central Avenue, Suite 200,

Boulder, CO 80301.

The number of shares

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power or investment power, and (2) any shares as to which the person or entity has the right to acquire beneficial ownership within 60

days after February 17, 2022.

days after March 10, 2023.

The calculations set

forth below are based upon 12,416,520 shares of common stock outstanding at February 17, 2022.

forth below are based upon 12,850,709 shares of common stock outstanding at March 10, 2023.

Unless otherwise indicated

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Name of Beneficial Owner

Number of Shares

Percentage of

Shares Beneficially

Number of Shares Beneficially Owned

Percentage of Shares Beneficially Owned

5% Stockholders:

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Thramann is also a director of the Company.

Includes (i) 712,652 shares of common stock owned immediately following the corporate conversion, (ii) 969,000 shares of common stock purchased in the IPO, (iii) 134,136 shares of common stock underlying warrants exercisable within 60 days of March 26, 2021, (iv) 969,000 shares of common stock underlying Series A warrants purchased in the IPO and exercisable within 60 days of February 17, 2022, and (v) 75,000 restricted stock units granted under the 2021 equity incentive plan and vested within 60 days of February 17, 2022.

Includes (i) 1,750,450 shares of common stock owned immediately following the corporate conversion, and (ii) 62,495 shares of common stock underlying warrants exercisable within 60 days of February 17, 2022.

Includes (i) 18,501 shares of common stock owned immediately following the corporate conversion, and (ii) 344,146 shares of common stock underlying stock options exercisable within 60 days of February 16, 2021.

Includes 171,799 shares of common stock underlying stock options exercisable within 60 days of February 17, 2022.

Includes 22,875 shares of common stock underlying restricted stock units vested within 60 days of February 17, 2022.

Includes (i) 1,888,583 shares of common stock, and (ii) 134,136 shares underlying outstanding common stock warrants.

Does not include (i) 969,000 shares of common stock underlying Series A warrants (which warrants are not currently exercisable by Dr.

Thramann due to the operation of a 4.99% beneficial ownership exercise restriction contained in such warrants), and (ii) 138,000 shares underlying currently unvested RSUs granted under our 2021 equity incentive plan.

Includes (i) 1,750,450 shares of common stock, and (ii) 362,495 shares underlying outstanding common stock warrants.

Does not include any shares relating to the conversion feature contained in the senior secured bridge note held by Mr.

Minicozzi because such conversion feature will not be exercisable within 60 days of March 10, 2023.

Includes (i) 18,501 shares of common stock, and (ii) 416,629 shares of

common stock underlying stock options exercisable within 60 days of March 10, 2023.

Does not include 144,008 of unvested

options granted under our equity incentive plans.

Includes 235,042 shares of common stock underlying stock options

exercisable within 60 days of March 10, 2023.

Does not include 102,458 of unvested options granted under our equity incentive

Includes 32,024 shares of common stock.

Does not include

45,750 shares underlying currently unvested RSUs granted under our 2021 equity incentive plan.

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides certain information

as of December 31, 2022, with respect to all of our equity compensation plans in effect on that date:

Plan Category

Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)

Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights

Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))

Equity Compensation Plans Approved by Stockholders (1)

Equity Compensation Plans Not Approved by Stockholders

_______________

(1) Consists of stock options granted under the Clip Interactive, LLC 2013 Equity Incentive Plan, as amended

and the Auddia Inc.

2021 Equity Incentive Plan, as amended.

We ceased granting awards under the 2013 Plan upon the implementation of the

2021 Plan described below.

The Company’s 2021 Equity Incentive Plan

became effective upon the completion of the IPO in February 2021 and serves as the successor equity incentive plan to the 2013 Plan.

The 2021 Equity Incentive Plan contains an “evergreen”

provision, pursuant to which the number of shares of common stock reserved for issuance pursuant to awards under such plan shall be increased

on the first day of each year beginning in 2022 and ending in 2030 equal to the lesser of (a) five percent (5%) of the shares of stock

outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (b) such smaller number of shares

of stock as determined by our board of directors.

On January 1, 2022 and 2023, the Company had an additional 620,820 and 632,747 shares

added to the 2021 Equity Incentive Plan, respectively, pursuant to the evergreen provision.

Certain Relationships and Related Party Transactions and Director Independence

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was collateralized by all assets of the Company as well as certain cash assets of two shareholders in control accounts at the lender,

Richard Minicozzi, who beneficially owns approximately 14% of our outstanding common stock, and Jeffrey Thramann, our Executive Chairman.

Minicozzi’s control account had a balance of $2,000,000 and Dr.

Richard Minicozzi, who is a significant stockholder of the Company, and Jeffrey Thramann, our Executive Chairman.

control account had a balance of $2,000,000 and Dr.

Thramann’s control account had a balance of $4,000,000.

Thramann also personally guaranteed the full amount of the loan.

The outstanding balance on the line of credit at December 31, 2020

was $6,000,000.

Following the closing of our IPO, the Company used $4,000,000 of the proceeds to repay $4,000,000 to the bank.

outstanding amount of the line of credit was then reduced to $2,000,000.

The bank has released the control accounts of Mr.

Minicozzi and

Thramann no longer personally guarantees the line of credit.

In July 2021, we paid the remaining outstanding $2.0 million

out of our restricted cash and terminated our line of credit

Thramann also personally

guaranteed the full amount of the loan.

The outstanding balance on the line of credit at December 31, 2020 was $6,000,000.

Following the

closing of our IPO, the Company used $4,000,000 of the proceeds to repay $4,000,000 to the bank.

The maximum outstanding amount of the

line of credit was then reduced to $2,000,000.

The bank released the control accounts of Mr.

Minicozzi and Dr.

no longer personally guarantees the line of credit.

In July 2021, we paid the remaining outstanding $2.0 million out of our restricted

cash and terminated our line of credit.

The fees paid by the Company to Mr.

on the $2,000,000 collateral arrangement were 33% percent of the collateral amount annually, plus there is an annual renewal fee of $50,000

and a $15,000 delayed payment fee for the first year in addition to warrants to purchase 300,000 shares of LLC common units due annually

with $867,398 and $843,817 being recorded as interest expense for the years ended December 31, 2019 and 2018, respectively.

a partial payment was made on the accruing collateral fees due of $364,944.

Subsequently in 2018, the shareholder subscribed to purchase

4,530,861 LLC common units for $0.023 per share for a total of $104,210 which was offset against the interest due on the collateral arrangement.

The balance outstanding on the collateral at December 31, 2019 and 2018 was $1,017,938 and $875,540, respectively.

In connection with

our IPO, all unpaid amounts owed to Mr.

Minicozzi on the $2,000,000

collateral arrangement were 33% percent of the collateral amount annually, plus there is an annual renewal fee of $50,000 and a $15,000

delayed payment fee for the first year in addition to warrants to purchase 300,000 shares of LLC common units due annually with $867,398

and $843,817 being recorded as interest expense for the years ended December 31, 2019 and 2018, respectively.

During 2018 a partial payment

was made on the accruing collateral fees due of $364,944.

Subsequently in 2018, the shareholder subscribed to purchase 4,530,861 LLC common

units for $0.023 per share for a total of $104,210 which was offset against the interest due on the collateral arrangement.

outstanding on the collateral at December 31, 2019 and 2018 was $1,017,938 and $875,540, respectively.

In connection with our IPO, all

unpaid amounts owed to Mr.

Minicozzi were converted at a discount to the per share IPO price into shares of common stock.

Following the closing of our IPO, the collateral arrangement with Mr.

Following the

closing of our IPO, the collateral arrangement with Mr.

Minicozzi was terminated.

During 2017 and 2018,

the Company entered into notes payable (the "Notes") with Dr.

Thramann for $330,000 and $100,000, respectively, $60,000 of the

$100,000 was repaid in 2018.

The Notes did not accrue interest and did not have a stated maturity date.

The Notes were expected to be

repaid as cash flow permitted.

During 2018, the Notes, with an outstanding balance of $370,000, were converted into 3,217,065 Series C

LLC preferred units at $0.115 per unit in connection with the Series C unit exchange.

(See Notes 9 and 10 in the Financial Statements).

During 2017 and 2018, the Company entered into notes payable (the "Notes")

Thramann for $330,000 and $100,000, respectively, $60,000 of the $100,000 was repaid in 2018.

The Notes did not accrue interest

and did not have a stated maturity date.

The Notes were expected to be repaid as cash flow permitted.

During 2018, the Notes, with an

outstanding balance of $370,000, were converted into 3,217,065 Series C LLC preferred units at $0.115 per unit.

In October 2019, Dr.

Thramann obtained $400,000

of short term financing from an unrelated lender.

Thramann 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.

Under the agreement, the Company was advanced $200,000 net of $12,000 in closing fees and the

remaining $200,000 was put into an escrow account.

Thramann obtained $400,000 of short term financing

from an unrelated lender.

Thramann then agreed to make the proceeds of that short term financing available to the Company.

the Company assumed responsibility for all payments and charges (including principal, interest and fees) required under such short term

Under the agreement, the Company was advanced $200,000 net of $12,000 in closing fees and the remaining $200,000 was put into

an escrow account.

A $100,000 loan financing fee is also due at maturity.

On December 2019, the Company

made a principal payment of $57,000.

On December 2019, the Company made a principal payment of $57,000.

The remaining $243,000 of principal and loan financing fees was paid on January 30, 2020.

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IPO at the per unit public offering price of $4.125.

Beginning after our February 2021 IPO, Dr.

Thramann earns an annual

salary of $300,000.

During 2020, Dr.

Thramann earned a salary of $165,000.

[Correct???] Due to liquidity constraints, most of Dr.

Due to liquidity constraints, most of Dr.

salary payments for 2020 and prior years were deferred.

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of common stock in connection with our February 2021 IPO.

On November 14, 2022, we entered into a secured

bridge note financing with Richard Minicozzi, who is a significant existing stockholder of the Company.

The Company received $2,000,000

of gross proceeds in connection with this financing.

The principal amount of the secured note is $2,200,000.

The secured note has a 10%

interest rate and matures on May 31, 2023.

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

At maturity, Mr.

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

common stock.

The fixed conversion price is $1.23 per share.

In connection with the secured note financing, the Company issued Mr.

300,000 common stock warrants with a five-year term and a fixed $2.10 per share exercise price.

The Company has the option to extend the maturity

date of the secured notes by six months to November 30, 2023.

In the event of an extension, the interest rate on the secured note will

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

Minicozzi will not be able to receive

shares upon conversion or exercise, unless prior stockholder approval is obtained, if the number of shares to be issued to the investor,

when aggregated with all other shares of common stock then owned by the investor beneficially or deemed beneficially owned by the investor,

would (i) result in the investor owning more than the Beneficial Ownership Limitation (as defined below), as determined in accordance

with Section 13 of the Securities Exchange Act of 1934 or (ii) otherwise constitute a Change of Control within the meaning of Nasdaq Rule

The “Beneficial Ownership Limitation” shall be 19.99% of the number of shares of the common stock outstanding immediately

prior to the proposed issuance of shares of common stock.

Principal Accountant Fees and Services

The firm of Daszkal Bolton

LLP, independent registered public accounting firm, has been selected by the audit committee as auditors for Auddia for the fiscal years

ending December 31, 2021 and December 31, 2020.

Daszkal Bolton LLP has served as the independent registered public accounting firm for

Auddia since 2019.

The firm of Daszkal Bolton LLP, independent registered

public accounting firm, has been selected by the audit committee as auditors for Auddia for the fiscal years ending December 31, 2022,

and December 31, 2021.

Daszkal Bolton LLP has served as the independent registered public accounting firm for Auddia since 2020.

The audit committee is

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________________________

(1) Audit fees consist

of fees for the audit of our annual financial statements, the review of our interim financial statements,

(2) Consists of services

provided in connection with the registration statement for the IPO of our common stock, which was completed in February 2021.

(1) Audit fees consist of fees for the audit of our annual financial

statements and the review of our interim financial statements.

(2) Consists of services provided in connection with the registration

statement for the IPO of our common stock, which was completed in February 2021.

Audit Committee Pre-approval Policy and

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Executive Officer Employment Agreement for Brian Hoff dated October 13, 2021

Executive Officer Employment Agreement for Timothy Ackerman effective as of February 6, 2023

Secured Promissory Bridge Note dated November 14, 2022

Common Stock Warrant dated November 14, 2022

Security Agreement dated November 14, 2022

Common Stock Purchase Agreement, dated November 14, 2022, by and between Auddia Inc.

and White Lion Capital LLC

Consent of Daszkal Bolton LLP, Independent Registered Public Accounting Firm

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President, Chief Executive Officer and Director

/s/ Brian Hoff

/s/ Tim Ackerman

Chief Financial Officer

February 17, 2022

March 23, 2023

POWER OF ATTORNEY

KNOW ALL PERSONS BY

THESE PRESENTS, that each person whose individual signature appears below hereby authorizes and appoints each of Michael Lawless and

Brian Hoff, with full power of substitution and re-substitution and full power to act without the other, as his or her true and lawful

attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually

and in each capacity stated below, and to file any and all amendments to this annual report on Form 10-K and to file the same, with all

exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact

and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that

said attorneys-in-fact and agents or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue

KNOW ALL PERSONS BY THESE

PRESENTS, that each person whose individual signature appears below hereby authorizes and appoints each of Michael Lawless and Tim Ackerman,

with full power of substitution and re-substitution and full power to act without the other, as his or her true and lawful attorney-in-fact

and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each

capacity stated below, and to file any and all amendments to this annual report on Form 10-K and to file the same, with all exhibits thereto,

and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents,

and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact

and agents or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements

of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant

and in the capacities indicated on the 17th day of February, 2022.

and in the capacities indicated on the 23rd day of March, 2023.

/s/ Jeffery Thamann, M.D.

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Michael Lawless

/s/ Brian Hoff

/s/ Tim Ackerman

Chief Financial Officer

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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 9A. Controls and Procedures