What changed in this filing

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Item 9A. Controls and Procedures

2024-04-01 compared with 2023-03-23 · 301 added, 301 removed, 679 unchanged (47% 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.

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, 2022.

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

control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual

and interim financial statements will not be detected or prevented on a timely basis.

The material weaknesses we identified are related

to the design and maintenance of an effective control environment commensurate with our financial reporting requirements.

Specifically,

we lacked a sufficient complement of professionals with an appropriate level of accounting knowledge, training and experience to appropriately

analyze, record and disclose accounting matters timely and accurately and we did not design and maintain controls to ensure adequate segregation

of duties within our financial reporting function including the preparation and review of journal entries.

In response to the material

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

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.

We maintain disclosure controls and procedures

(as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act),

that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized

and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated

to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions

regarding required disclosures.

In designing disclosure controls and procedures, our management necessarily was required to apply its

judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

The design of any disclosure controls

and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that

any design will succeed in achieving its stated goals under all potential future conditions.

Any controls and procedures, no matter how

well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

Under the supervision and with the participation

of our management, including our principal executive officer and principal financial officer, we are required to perform an evaluation

of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Exchange Act, as of December 31, 2023.

Management has completed such evaluation and has

concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information required to

be disclosed by us in reports we file or submit under the Exchange Act is appropriate to allow timely decisions regarding required disclosures.

As a result of the material weakness in internal controls over financial reporting described below, we concluded that our disclosure controls

and procedures as of December 31, 2023 were not effective.

Management’s Annual Report on Internal

Control Over Financial Reporting

Management is responsible for establishing and

maintaining adequate internal control over financial reporting.

Our internal control over financial reporting is a process designed under

the supervision of our principal executive and principal financial officer and effected by our Board of Directors, management and other

personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial

statements for external reporting purposes in accordance with GAAP.

Because of its inherent limitations, internal

control over financial reporting may not prevent or detect misstatements.

In addition, projections of any evaluation of effectiveness

to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance

with the policies or procedures may deteriorate.

We are a “smaller reporting company”

as defined in Item 10(f)(1) of Regulation S-K under the Securities Act.

For as long as we continue to be a smaller reporting company,

we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not smaller

reporting companies.

Additionally, this Report does not contain an attestation report of our registered public accounting firm regarding

internal control over financial reporting since the Company, as a smaller reporting company and non-accelerated filer, is not required

to provide such report.

Material Weaknesses in Internal Control over

Financial Reporting

Management assessed the effectiveness of our internal

control over financial reporting as of December 31, 2023 based on the framework established in Internal Control—Integrated Framework

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, management has determined

that our internal control over financial reporting as of December 31, 2023 was not effective.

A material weakness, as defined in the standards

established by Sarbanes-Oxley, is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that

there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be

prevented or detected on a timely basis.

The ineffectiveness of our internal control over

financial reporting was due to the following material weaknesses, which we identified during the course of preparing financial statements

to meet the requirements of our IPO, and which have existed since the 2018 fiscal year and remain un-remediated as of December 31, 2023:

Lack of sufficiently qualified professionals with an appropriate level of accounting knowledge, training, and experience to appropriately analyze, record and disclose accounting and reporting matters timely and accurately

Lack of adequate segregation of duties within the financial reporting review function, including preparation and review of journal entries.

Insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of GAAP and SEC disclosures.

Remediation Activities

Management has been actively engaged in remediating

the above described material weaknesses.

the above material weaknesses.

The following remedial actions have been taken during the year ended December 31, 2023:

continue to strengthen our internal policies, processes and reviews, including drafting of related documentation thereof;

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 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

reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory

environments and to expend significant resources to maintain a financial reporting system that is adequate to satisfy our reporting obligations.

As we continue to evaluate and take actions to improve our internal control over financial reporting, we may take additional actions to

address control deficiencies or modify certain of the remediation measures described above.

While progress has been made to enhance our internal

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,

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

Performed risk-based scoping

activities to identify key business processes, and engaged an outside internal control specialist team to assist in designing, documenting,

and implementing internal controls to address relevant risks;

Hired additional accounting

resources with appropriate levels of experience, including a new chief financial officer in 2023;

Continue to engage outside

consultants to ensure that the appropriate level of knowledge and experience is applied based on risk and complexity of transactions

and tasks under review.

The process of implementing

an effective financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and

the economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate

to satisfy our reporting obligations.

As we continue to evaluate and take actions to improve our internal control over financial reporting,

we may take additional actions to address control deficiencies or modify certain of the remediation measures described above.

While progress has been

made to enhance our internal control over financial reporting, we are still in the process of finalizing the controls documentation and

implementing these processes, procedures, and controls.

Additional time is required to complete these steps and to assess and demonstrate

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.

Once we can demonstrate an uninterrupted

effectively operating control environment evidenced by Management testing of controls, we will consider these deficiencies to be remediated.

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, 2023,

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

Other Information

During the quarter ended December

31, 2023, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement,

as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Executive officers and directors

Set forth below are the names, ages and positions

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

Set forth below are the names, ages and positions of our executive

officers and directors as of March 29, 2024.

Position(s) held

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Chief Executive Officer, Secretary & Director

Chief Financial Officer

Peter Shoebridge

Chief Technology Officer

Chief Financial Officer

Non-Employee Directors

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from The University of Dayton.

Mahoney, Chief Financial Officer:

Mahoney joined the Company as Chief Financial Officer in November 2023.

He brings over twenty years of finance and operational experience

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

From 2019 to 2023, he served as Chief Financial Officer

at Quality Biomedical, Inc., a private equity backed and leading service provider in the Home Medical Equipment industry.

Mahoney served as Principal and Chief Financial Officer at CFO Leadership Services, LLC, a fractional CFO service company.

2005 to 2014, Mr.

Mahoney served Vice President and Chief Financial Officer at TASQ Technology, Inc., a wholly owned subsidiary of First

Data Corporation, who merged with Fiserv.

a leading global credit card processing services company.

Mahoney is a certified public

He earned his BS in Public Accountancy from Long Island University.

Peter Shoebridge, Chief Technology Officer:

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

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

Since 2022, Mr.

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

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 B.S.

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

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following address:

tackerman@auddia.com.

jmahoney@auddia.com.

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

Auddia Inc., 2100 Central Avenue, Suite 200, Boulder, Colorado 80301, Attn:

All such communications will be initially received

and processed by the office of our CFO.

Auddia Inc., 1680 38 th Steet, Suite 130, Boulder, Colorado 80301, Attn:

All such communications will be initially

received and processed by the office of our CFO.

Communications concerning accounting, audit, internal accounting controls and other financial

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the applicable rules.

Policy on Trading, Pledging and Hedging of Company

Certain transactions in our securities (such as

purchases and sales of publicly traded put and call options, and short sales) create a heightened compliance risk or could create the

appearance of misalignment between management and stockholders.

In addition, securities held in a margin account or pledged as collateral

may be sold without consent if the owner fails to meet a margin call or defaults on the loan, thus creating the risk that a sale may occur

at a time when an officer or director is aware of material, non-public information or otherwise is not permitted to trade in Company securities.

Our insider trading policy expressly prohibits derivative transactions of our stock by our executive officers and directors.

Rule 10b5-1 Sales Plans

Our policy governing transactions in our securities

by directors, officers, and employees permits our officers, directors, and certain other persons to enter into trading plans complying

with Rule 10b5-1 under the Exchange Act.

Generally, under these trading plans, the individual relinquishes control over the transactions

once the trading plan is put into place and can only put such plans into place while the individual is not in possession of material non-public

Accordingly, sales under these plans may occur at any time, including possibly before, simultaneously with, or immediately

after significant events involving our company.

During 2023, none of our directors or executive officers had a Rule 10b5-1 trading plan

Compensation Clawback

The Company established

a policy regarding the recoupment of certain performance-based compensation payments (“Clawback Policy”), which became effective

as of December 1, 2023.

This policy is included as Exhibit 97 to this Annual Report.

The Audit Committee of

the Company determined that no performance-based compensation (or the vesting of such compensation) within the prior three years was based

upon the achievement of financial results, as reported in a Form 10-Q, Form 10-K or other report filed with the Securities and Exchange

Commission (“SEC”), and therefore had no obligation, pursuant to the Company’s Clawback Policy, to recover erroneously

paid or awarded compensation.

Number of Meetings

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.

of 10 meetings in 2023.

In 2023, our Audit Committee held six meetings, our Compensation Committee held two meetings, and our Nominating

and Governance Committee held one meeting.

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

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December 31, 2023:

Fees Earned or Paid

Fees Earned or Paid in Cash ($)

Stock Awards ($)(1)

Option Awards ($)

Compensation ($)

All Other Compensation ($)(1)

Stephen Deitsch

(1) Relates to cash payment made to directors for tax liability on RSUs.

Executive Compensation

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companies,” as such term is defined in the rules promulgated under the Securities Act.

This section provides

an overview of the compensation awarded to, earned by, or paid to each individual who served as our principal executive officer during

our fiscal year 2022, and our next two most highly compensated executive officers in respect of their service to our company for fiscal

Our named executive officers, or the Named Executive Officers, for the year ended December 31, 2022, are:

This section provides an overview of the compensation

awarded to, earned by, or paid to each individual who served as our principal executive officer during our fiscal year 2023, and our next

two most highly compensated executive officers in respect of their service to our company for fiscal year 2023.

Our named executive officers,

or the Named Executive Officers, for the year ended December 31, 2023, are:

Jeffrey Thramann, our Executive Chairman;

Michael Lawless, our Chief Executive Officer;

Lawless, our Chief Executive Officer;

Peter Shoebridge, our Chief Technical Officer

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Beginning after the Company’s IPO, Dr.

Thramann earns an

annual salary of $300,000.

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

incentive bonus program.

Thramann earns an annual salary of $300,000.

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

Thramann, 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.

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

As of the filing date of this Annual Report, the Company has not approved or paid any annual cash bonuses for the 2023 year.

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 6 to our consolidated financial statements included in this Annual Report.

Outstanding Equity

Awards at December 31, 2023

The following table sets forth information regarding outstanding equity

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

The following table sets forth information regarding outstanding

equity awards held by our Named Executive Officers as of December 31, 2023.

Option Awards(1)

Stock Awards(1)(2)

Unexercisable

Jeffrey Thramann

8/11/2021 (4)

2/16/2022 (5)

12/9/2022 (6)

Michael Lawless

8/15/2019 (8)

8/11/2021 (9)

9/8/2022 (10)

Peter Shoebridge

8/15/2019 (7)

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

Equity Incentive Plan.

8/11/2021 (8)

_______________________

Each equity award is subject to the terms of our 2021 or 2013 Equity Incentive Plan.

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.

Accordingly, there are no vested RSUs that remain outstanding.

Based on the closing price of a share of the Company’s common stock on the Nasdaq Capital Market of $6.25 on December 29, 2023.

Represents RSU awards that vest 50% on February 16, 2022, 25% on February 16, 2023, and 25% on February 16, 2024.

Represents RSU awards that vest 33% on February 16, 2023, 33% on February 16, 2024, and 34% on February 16, 2025.

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.

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.

2021 grant represents option awards that vest 50% on August 12, 2022, 25% on February 16, 2023, and 25% on February 16, 2024.

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.

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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

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

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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,

Unless otherwise indicated, the address of each executive officer and director is c/o Auddia, 1680 38 th Street, Suite

130, Boulder, CO 80301.

The number of shares

of common stock “beneficially owned” by each stockholder is determined under rules issued by the SEC regarding the beneficial

ownership of securities.

This information is not necessarily indicative of beneficial ownership for any other purpose.

Under these rules,

beneficial ownership of shares of our common stock includes (1) any shares as to which the person or entity has sole or shared voting

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 March 10, 2023.

The calculations set

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

The number of shares of common stock “beneficially

owned” by each stockholder is determined under rules issued by the SEC regarding the beneficial ownership of securities.

This information

is not necessarily indicative of beneficial ownership for any other purpose.

Under these rules, beneficial ownership of shares of our

common stock includes (1) any shares as to which the person or entity has sole or shared voting 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 March 29, 2024.

The calculations set forth below are based upon

2,194,196 shares of common stock outstanding at March 29, 2024.

Unless otherwise indicated

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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

Does not include 38,760 underlying outstanding common warrants due to the operation of a 4.99% beneficial ownership exercise restriction contained in such warrants.

Includes (i) 741 shares of common stock, and (ii) 16,246 shares of common stock underlying stock options exercisable within 60 days of December 31, 2023.

Does not include 4,330 of unvested options granted under our equity incentive plans.

Does not include 18,700 of unvested option granted under Mr.

Mahoney’s employment agreement.

Does not include 6,821 of unvested options granted under our equity incentive plans.

Includes 1,281 shares of common stock.

Does not include

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

Does not include 1,830 shares underlying currently unvested RSUs granted under our 2021 equity incentive plan.

Securities Authorized for Issuance under Equity Compensation Plans

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_______________

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

and the Auddia Inc.

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.

We ceased granting awards under the 2013 Plan upon the implementation of the 2021 Plan described below.

The Company’s 2021 Equity Incentive Plan

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Compensation” and “Executive Compensation.”

The Company previously had a line of credit with

Prior to the Company’s IPO, the available principal balance under the line of credit was $6,000,000.

The line of credit

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 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.

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.

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.

Minicozzi was terminated.

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.

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.

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

In February 2020, Dr.

Thramann obtained a new

$500,000 short term financing from the same 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 $485,000 net of $15,000 in closing fees

and immediately put $140,741 into an escrow account.

Repayment of the principal and loan financing fee occurs through weekly payments

of $17,593 until the loan and financing fee is paid in full.

The loan financing fee increases with the length of the payback period and

is maximized at $165,000 after month five.

The loan was repaid in full following the IPO.

Thramann purchased 969,000 IPO units in our

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

Due to liquidity constraints, most of Dr.

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.

Thramann has participated as an investor in

multiple private placements of the Company’s securities.

The terms of Dr.

Thramann’s participation in these private placements

were the same as were made available to other investors participating in these transactions.

During 2020, Dr.

Thramann purchased an aggregate

of $36,149 of our convertible notes.

As described in Note 5 to our financial statements, these convertible notes converted into shares

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.

bridge note financing with Richard Minicozzi, who is a significant existing stockholder of the Company, and 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 had a 10% interest

rate and maturity 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,

Minicozzi has the option to convert any original issue discount and accrued but unpaid interest into shares of our common stock.

connection with the secured note financing, we issued Mr.

Minicozzi 12,000 common stock warrants with a five-year term and a fixed $52.50

per share exercise price.

On April 17, 2023, we entered into an additional

Secured Bridge Note (“New Note”) financing with Mr.

We received $750,000 of gross proceeds from the New Note financing.

The New Note was issued with a principal amount of $825,000, 10% interest rate and a maturity date on July 31, 2023.

The New Note is secured

by a lien on substantially all of our assets.

At maturity of the New Note, Mr.

Minicozzi, has the option to convert any original issue

discount and accrued but unpaid interest into shares of our common stock at a fixed conversion price of $0.61 per share.

In connection with the New Note financing, we issued 26,000 common

stock warrants to Mr.

Minicozzi with a five-year term and a fixed $15.25 per share exercise price, from which 13,000 of these common stock

warrants are exercisable immediately.

The remaining 13,000 common stock warrants would only become exercisable if the maturity date of

the New Note is extended in accordance with the terms of the New Note.

As of July 31, 2023, we extended the maturity date of the New Note

to November 30, 2023.

Upon the July 31, 2023 extension, the interest rate on the New Note increased to 20% from 10%, and the remaining

portion of the 13,000 common stock warrants became exercisable.

The accredited investor did not exercise the common stock warrants as

of December 31, 2023 or subsequent to December 31, 2023 and as of the date of this filing.

Further, in connection with the New Note financing,

we agreed with Mr.

Minicozzi to make certain amendments to the Prior Note financing.

Specifically, we agreed with Mr.

Minicozzi to cancel

the 12,000 common stock warrants issued as part of the prior financing and, in lieu of the cancelled warrants, we issued to Mr.

common stock warrants for 24,000 common shares with an exercise price of $15.25 per common share and a five-year term.

From the newly

issued 24,000 common stock warrants, 12,000 common stock warrants were exercisable immediately, while the other 12,000 common stock warrants

became exercisable at the time of extension of the maturity date of the Prior Note during May of 2023.

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

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prior to the proposed issuance of shares of common stock.

We are currently in discussions

Minicozzi regarding an agreement where (i) the Company would agree to repay the $2.75 million principal of the bridge financing

out of the proceeds of a next round financing, and (ii) the accrued interest and original issue discount on the bridge financing would

be converted into equity securities.

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, 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

solely responsible for selecting Auddia’s independent registered public accounting firm and has appointed Daszkal Bolton LLP as

auditors for Auddia for the fiscal year ending December 31, 2022.

Stockholder approval is not required to appoint Daszkal Bolton LLP as

Auddia’s independent registered public accounting firm.

The firm of Haynie & Company, independent

registered public accounting firm, has been selected by the audit committee as auditors for Auddia Inc.

(“Auddia”) for the

fiscal year ending December 31, 2023.

The firm of Daszkal Bolton LLP, independent registered public accounting firm, was previously selected

by the audit committee as auditors for Auddia for the fiscal year ending December 31, 2022.

CohnReznick LLP was engaged as the Company's

independent registered public accounting firm on May 15, 2023 through August 25, 2023.

The audit committee is solely responsible for

selecting Auddia’s independent registered public accounting firm and has appointed Haynie & Company as auditors for Auddia for

the fiscal year ending December 31, 2023.

Stockholder approval is not required to appoint Haynie & Company as Auddia’s independent

registered public accounting firm.

Independent Registered Public Accounting

The following is a summary and description

of fees incurred by Daszkal Bolton LLP for the fiscal year ended December 31, 2022, and 2021:

of fees incurred by Haynie & Company for the year ended December 31, 2023:

Audit fees (1)

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________________________

(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 fees consist of fees for the audit of our 2023 annual financial statements and the review of our 2023 interim financial statements.

All other fees are comprised of expenses related to work performed on potential acquisition targets and S-1 filings.

The following is a summary and description

of fees incurred by Daszkal Bolton LLP for the years ended December 31, 2023 and 2022:

Audit fees (1)

All other fees

________________________

Audit fees consist of fees for the audit of our 2022 annual financial statements and the review of our interim 2023 financial statements.

On March 8, 2023, Daszkal Bolton LLP completed a business combination

with CohnReznick LLP.

Fees incurred by CohnReznick LLP for the year ended December 31, 2023 were $34,000, which is included in the $58,000

amount above.

Audit Committee Pre-approval Policy and

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in the Exhibit Index are incorporated by reference herein.

Description of Document

Incorporated by reference from

1 unchanged sentence

Certificate of Incorporation of the Company

Certificate of Designation of Series A Preferred Stock filed November 13, 2023

Certificate of Amendment to the Certificate of Incorporation of the Company dated February 23, 2024

Bylaws of the Company

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Collateral and Security Agreement with Related Party (Minicozzi)

Form of Amendment to Collateral and Security Agreement with Related Party

F orm of Amendment to Collateral and Security Agreement with Related Party

Form of Convertible Promissory Note

7 unchanged sentences

Form of Stock Option Grant Notice and Stock Option Agreement under 2020 Equity Incentive Plan

Description of Document

Incorporated by reference from

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and White Lion Capital LLC

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

Secured Promissory Bridge Note dated April 17, 2023

Common Stock Warrant for 600,000 shares dated April 17, 2023

Common Stock Warrant for 650,000 shares dated April 17, 2023

Form of Private Placement Agreement

Form of Securities Purchase Agreement dated June 13, 2023 between Auddia Inc.

and the Investors named therein

Common Stock Purchase Agreement, dated as of November 6, 2023, by and between White Lion Capital, LLC and Auddia Inc.

Registration Rights Agreement, dated as of November 6, 2023, by and between White Lion Capital, LLC and Auddia Inc.

Employment Agreement, effective as of November 27, 2023, between Auddia Inc.

Series A Preferred Securities Purchase Agreement dated November 11, 2023 between Auddia Inc.

and Jeffrey Thramann

Consent of Daszkal Bolton LLP, Independent Registered Public Accounting Firm

Power of Attorney (Included on Signature Page)

Consent of Haynie and Company, Independent Registered Public Accounting Firm

Power of Attorney (Included

on Signature Page)

Section 302 Certification by the Corporation’s Chief Executive Officer

2 unchanged sentences

Section 906 Certification by the Corporation’s Chief Financial Officer

Auddia Clawback Policy

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

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President, Chief Executive Officer and Director

/s/ Tim Ackerman

/s/ John Mahoney

Chief Financial Officer

March 23, 2023

April 1, 2024

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 Tim Ackerman,

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

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

6 unchanged sentences

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 23rd day of March, 2023.

and in the capacities indicated on the 1st day of April, 2024.

/s/ Jeffery Thamann, M.D.

3 unchanged sentences

President, Chief Executive Officer and Director

(Principal Executive Officer)

Michael Lawless

/s/ Tim Ackerman

(Principal Executive Officer)

/s/ John Mahoney

Chief Financial Officer

6 unchanged sentences

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