| Description of Business, Basis of Presentation and Summary of Significant Accounting Policies | Note 1 – Description of Business, Basis of Presentation and Summary
of Significant Accounting Policies Description of Business Auddia Inc., formerly Clip Interactive, LLC, (the
“Company”, “Auddia”, “we”, “our”) is a technology company that is reinventing how consumers
engage with audio through the development of a proprietary AI platform for audio and innovative technologies for podcasts. Clip Interactive,
LLC was initially formed as a Colorado limited liability company on January 14, 2012, and on November 25, 2019 changed its trade name
to Auddia. On February 16, 2021, the Company completed an initial
public offering (the “IPO”) of 3,991,818 units, at $4.125 per unit, consisting of one share of common stock and one warrant
to purchase one share of common stock at an exercise price of $4.54 per share. In addition, the underwriters exercised their option to
purchase 598,772 Series A warrants to cover over-allotments and were issued 319,346 in representative warrants at an exercise price of
$5.15625 per share. After deducting underwriter’s commissions and expenses, the Company received net proceeds of approximately $15.1
million and its common stock commenced trading on Nasdaq under the ticker symbol “AUUD”. Concurrently with the IPO, holders
of the Company’s promissory notes, convertible notes, and related party notes, along with accrued interest, were converted into
6,814,570 shares of the Company’s common stock. Concurrently with the IPO the Company converted from
a Colorado limited liability company to a Delaware corporation. This accounting change has been given retrospective treatment in the condensed
financial statements. Basis of Presentation The accompanying financial statements have been prepared
in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Use of Estimates The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those estimates. The financial statements include some amounts that
are based on management's best estimates and judgments. The most significant estimates relate to valuation of capital stock, warrants
and options to purchase shares of the Company's common stock, and the estimated recoverability and amortization period for capitalized
software development costs. These estimates may be adjusted as more current information becomes available, and any adjustment could be
significant. Risks and Uncertainties The Company is subject to various risks and uncertainties
frequently encountered by companies in the early stages of development. Such risks and uncertainties include, but are not limited to,
its limited operating history, competition from other companies, limited access to additional funds, dependence on key personnel, and
management of potential rapid growth. To address these risks, the Company must, among other things, develop its customer base; implement
and successfully execute its business and marketing strategy; develop follow-on products; provide superior customer service; and attract,
retain, and motivate qualified personnel. There can be no guarantee that the Company will be successful in addressing these or other such
risks. Cash The Company considers all highly liquid instruments
purchased with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at December 31,
2022 or 2021. The Company maintains cash deposits at several financial
institutions, which are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company’s cash balance may at times
exceed these limits. At December 31, 2022 and December 31, 2021, the Company had approximately $ 1.4 million 5.9 million Property and Equipment Property and equipment are stated at cost, net
of accumulated depreciation. Depreciation is provided utilizing the straight-line method over the estimated useful lives for owned
assets, ranging from two
to five years Software Development Costs The Company accounts for costs incurred in the development
of computer software as software research and development costs until the preliminary project stage is completed, management has committed
to funding the project, and completion and use of the software for its intended purpose is probable. The Company ceases capitalization of development costs
once the software has been substantially completed and is available for its intended use. Software development costs are amortized over
a useful life estimated by the Company’s management of five years. Costs associated with significant upgrades and enhancements that
result in additional functionality are capitalized. Capitalized costs are subject to an ongoing assessment of recoverability based on
anticipated future revenues and changes in software technologies. Unamortized capitalized software development costs
determined to be in excess of anticipated future net revenues are considered impaired and expensed during the period of such determination.
Software development costs of $ 1,927,298 1,472,290 956,144 146,737 Deferred Offering Costs In November 2022, the Company entered into a
Common Stock Purchase Agreement. Pursuant to such, the Company has the right, but not the obligation, to require the investor
to purchase up to $10,000,000 in aggregate gross purchase price of newly issued shares of the Company common stock, subject to
eligibility under the Company’s Form S-3. The Company’s right to sell shares under this agreement extends to December
2023. In consideration for the commitments by the investor under the agreement, the Company issued 140,186 The Company recognized $ 222,896 The Company deferred direct and incremental costs
associated with its IPO that occurred in February 2021. The Company capitalized deferred offering costs of $ 142,049 Long-Lived Assets The Company reviews its tangible and limited
lived intangible long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of
the asset may not be recovered. If a potential impairment is indicated, the Company compares the carrying amount of the asset to the
undiscounted future cash flows associated with the asset. In the event the future cash flows are less than their carrying value, a
loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. The Company
determined long-lived assets were no Income Taxes The Company accounts for income taxes using an asset
and liability approach, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of
events. A valuation allowance is established to reduce deferred tax assets to their estimated realizable value when, in the opinion of
management, it is more likely than not that some portion or all of the deferred income tax assets will not be realized in the future. The Company recognizes benefits of uncertain tax positions
if it is more likely than not that such positions will be sustained upon examination based solely on their technical merits, as the largest
amount of benefit that is more likely than not to be realized upon the ultimate settlement. The Company’s policy is to recognize
interest and penalties related to unrecognized tax benefits as a part of income tax expense. Prior to the Company’s conversion to a Delaware
corporation in February 2021, the Company was a limited liability company and had elected to be treated as a pass-through entity for income
tax purposes. Accordingly, taxable income and losses of the Company were reported on the income tax returns of its members, and no provision
for federal income taxes have been recorded in the accompanying financial statements. Had the Company been a taxable entity, no Revenue Recognition Revenue will be measured according to Accounting
Standards Codification (“ASC”) 606, Revenue – Revenue from Contracts with Customers, and will be recognized based on
consideration specified in a contract with a customer and will exclude any sales incentives and amounts collected on behalf of third parties.
We will recognize revenue when we satisfy a performance obligation by transferring control over a service or product to a customer. We
will report revenues net of any tax assessed by a governmental authority that is both imposed on, and concurrent with, a specific revenue-producing
transaction between a seller and a customer in our statements of operations. Collected taxes, if applicable, will be recorded within other
current liabilities until remitted to the relevant taxing authority. Subscriber revenue will consist primarily of subscription
fees and other ancillary subscription-based revenues. Revenue is recognized on a straight-line basis when the performance obligations
to provide each service for the period are satisfied, which is over time as our subscription services are continuously available and can
be consumed by customers at any time. There is no revenue recognized for unpaid trial subscriptions. Customers may pay for the services in advance of the
performance obligation and therefore these prepayments are recorded as deferred revenue. The deferred revenue is recognized as revenue
in our statement of operations as the services are provided. Advertising Costs The Company expenses advertising costs as incurred.
Advertising expense for the year ended December 31, 2022, and December 31, 2021, was $ 760,940 130,565 Share-Based Compensation The Company accounts for share-based compensation
arrangements with employees, directors, and consultants and recognizes the compensation expense for share-based awards based on the estimated
fair value of the awards on the date of grant. Compensation expense for all share-based awards is
based on the estimated grant-date fair value and recognized in earnings over the requisite service period (generally the vesting period).
The Company records share-based compensation expense related to non-employees over the related service periods. Net Loss per Share Basic loss per share common share is calculated based
on the weighted-average number of common shares outstanding in accordance with FASB ASC Topic 260, Earnings per Share Liquidity, Capital Resources and Going Concern Our existing cash of $1.66 million at December 31, 2022 will only be sufficient
to fund our current operating plans into the second quarter of 2023. The Company has based these estimates, however, on assumptions that
may prove to be wrong. We will need additional funding to complete the development of our
full product line and scale products with a demonstrated market fit. Management has plans to secure such additional funding. If we are
unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce, or eliminate our technology development
and commercialization efforts. As a result of the Company’s recurring losses
from operations, and the need for additional financing to fund its operating and capital requirements, there is uncertainty regarding
the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to
the Company’s ability to continue as a going concern. Emerging Growth Company Status The Company is an emerging growth company, as defined
in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay
adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply
to private companies. The Company has elected to use this extended transition period for complying with certain new or revised accounting
standards that have different effective dates for public and private companies. Practical expedients and exemptions We expensed sales commissions when incurred because
the duration of the contracts for which we paid commissions were less than one year. These costs were included in the sales and marketing
line item of our Statements of Operations. Currently the Company does not have any significant acquisition costs which have been incurred
associated with the acquisition of its customer contracts and therefore, no deferred customer acquisition costs have been recorded. We did not disclose the value of unsatisfied performance
obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at
the amount to which we had the right to invoice for services performed. |
