Auddia Inc S-1, filed Apr 11, 2024

Auddia Inc. (AUUD)

S-1 2024-04-11

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		Rachael M. Bushey, Esq.
		Jennifer L. Porter, Esq.
James H. Carroll, Esq.		Justin Platt, Esq.
Carroll Legal LLC		Goodwin Procter LLP
1449 Wynkoop Street, Suite 507		2005 Market Street, 32^nd Floor
Denver, CO 80202		Philadelphia, PA 19103
(303) 888-4859		(445) 207-7805

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

	Page
Prospectus Summary	1
Information Regarding Forward-Looking Statements	8
The Offering	9
Risk Factors	10
The White Lion Transaction	13
Market and Industry Data	14
Use of Proceeds	15
Dividend Policy	15
Market for Registrants Common Equity, Related Stockholder Matters	16
Description of Capital Stock	17
Selling Securityholder	23
Plan of Distribution	24
Legal Matters	26
Experts	26
Where You Can Find More Information	26
Incorporation of Certain Information by Reference	27

	·	inclusion of only two years, as compared to three years, of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;

	·	an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);

	·	an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board (the “PCAOB”) requiring mandatory audit firm rotation;

	·	reduced disclosure about executive compensation arrangements; and

	·	an exemption from the requirement to seek non-binding advisory votes on executive compensation or golden parachute arrangements.

Securities Offered by the Selling Securityholder	This prospectus covers the resale of a total of up to 5,000,000 shares of our common stock that we may sell to White Lion pursuant to the Purchase Agreement from time to time after the registration statement that includes this prospectus is declared effective.

Common Stock Outstanding Prior to this Offering	2,394,196 shares

Common Stock to be Outstanding After this Offering	Up to 7,394,196 shares

Use of Proceeds	The Selling Securityholder will receive all of the proceeds from the sale of the shares offered for sale by it under this prospectus. We will not receive proceeds from the sale of the shares by the Selling Securityholder. However, we may receive proceeds of up to $5,863,492 million from the sale of our common stock to the Selling Securityholder under the Purchase Agreement described above and registered hereby. Any proceeds from the Selling Securityholder that we receive under the Purchase Agreement are expected to be used for general corporate purposes, including working capital. See “Use of Proceeds” on page 15 of this prospectus.

Nasdaq Capital Market Symbols	Common Stock “AUUD”. Series A Warrants “AUUDW”.

Risk Factors	Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 10 of this prospectus for a discussion of factors you should carefully consider before deciding to invest in our securities.

	·	9,877 shares of our common stock reserved for issuance under outstanding stock options granted under our 2013 Equity Incentive Plan,
	·	10,990 shares of our common stock reserved for issuance under outstanding restricted stock units granted under our 2020 Equity Incentive Plan,
	·	43,368 shares of our common stock reserved for issuance under outstanding stock options granted under our 2020 Equity Incentive Plan,
	·	147,256 shares of our common stock reserved for future grant under our 2020 Equity Incentive Plan,
	·	32,150 shares of our common stock reserved for issuance under outstanding stock options and outstanding RSUs granted as employment inducement awards to four of our former and current executives outside of our 2013 and 2020 Equity Incentive Plans,
	·	64,154 shares of common stock reserved for issuance upon the exercise of outstanding common stock warrants,
	·	139,956 shares of common stock reserved for issuance upon the exercise of our publicly traded outstanding Series A Warrants, and
	·	12,774 shares of common stock reserved for issuance upon the exercise of an outstanding IPO underwriter representative common stock warrant.

	·	before the stockholder became interested, our Board approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

	·	upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances, but not the outstanding voting stock owned by the interested stockholder; or

	·	at or after the time the stockholder became interested, the business combination was approved by our Board and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

	·	any merger or consolidation involving the corporation and the interested stockholder;

	·	any sale, transfer, lease, pledge, exchange, mortgage or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;

	·	subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; or

	·	the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

*	Represents beneficial ownership of less than 1% of the outstanding shares of our common stock.

(1)	In accordance with Rule 13d-3(d) under the Exchange Act, we have excluded from the number of shares beneficially owned prior to the offering all of the shares that White Lion may be required to purchase under the Purchase Agreement, because the issuance of such shares is solely at our discretion and is subject to conditions contained in the Purchase Agreement, the satisfaction of which are entirely outside of White Lion’s control, including the registration statement that includes this prospectus becoming and remaining effective. Furthermore, the purchase of common stock is subject to certain agreed upon maximum amount limitations set forth in the Purchase Agreement. Also, the Purchase Agreement prohibits us from issuing and selling any shares of our common stock to White Lion to the extent such shares, when aggregated with all other shares of our common stock then beneficially owned by White Lion, would cause White Lion’s beneficial ownership of our common stock to exceed 9.99% (the “Beneficial Ownership Cap”). The Beneficial Ownership Cap may not be amended or waived under the Purchase Agreement.

(2)	Applicable percentage ownership is based on 2,394,196 shares of our common stock outstanding as of April 9, 2024.

(3)	Assumes the sale of all shares being offered pursuant to this prospectus.

(4)	The business address of White Lion Capital, LLC (“WLC”), is 17631 Ventura Blvd., Suite 1008, Encino, CA 91316. WLC’s principal business is that of a private investor. Dmitriy Slobodskiy Jr., Yash Thukral, SamYaffa, and Nathan Yee are the managing principals of WLC. Therefore, each of Slobodskiy Jr., Thukral, Yaffa, and Yee may be deemed to have sole voting control and investment discretion over securities beneficially owned directly by WLC and, indirectly, by WLC. We have been advised that WLC is not a member of the Financial Industry Regulatory Authority or an independent broker-dealer. The foregoing should not be construed in and of itself as an admission by Slobodskiy Jr., Thukral, Yaffa, and Yee as to beneficial ownership of the securities beneficially owned directly by WLC and, indirectly, by WLC.

	·	ordinary brokers’ transactions;
	·	transactions involving cross or block trades;
	·	through brokers, dealers, or underwriters who may act solely as agents;
	·	“at the market” into an existing market for our common stock;
	·	in other ways not involving market makers or established business markets, including direct sales to purchasers or sales effected through agents;
	·	in privately negotiated transactions; or
	·	any combination of the foregoing.

	·	our Annual Report on Form 10-K for the year ended December 31, 2023;

	·	our Current Reports on Form 8-K filed with the SEC on January 26, 2024, February 2, 2024 and February 27, 2024; and

	·	the description of our securities registered pursuant to Section 12 of the Exchange Act our Registration Statement on Form 8-A (File No. 001-40071), filed with the SEC under Section 12(b) of the Exchange Act, on February 16, 2021, including any amendment or report filed for the purpose of updating such description.

Securities and Exchange Commission registration fee	$	1,066.41
Legal fees and expenses		40,000.00
Accountants’ fees and expenses		15,000.00
Printing expenses		7,500.00
Transfer agent and registrar fees and expenses		7,500.00
Miscellaneous		8,933.59
Total	$	80,000.00

	·	we may indemnify our directors, officers and employees to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions;

	·	we may advance expenses to our directors, officers and employees in connection with a legal proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions; and

	·	the rights provided in our bylaws are not exclusive.

Exhibit Number		Description of Document	Incorporated by reference from Form	Filing Date	Exhibit Number	Filed Herewith
2.1		Form of Plan of Conversion	8-K	02-22-2021	2.1
3.1		Certificate of Incorporation of the Company	8-K	02-22-2021	3.1
3.2		Bylaws of the Company	8-K	02-22-2021	3.2
3.3		Certificate of Amendment to the Certificate of Incorporation of the Company	8-K	02-27-2024	3.1
3.4		Certificate of Designation for Series A Preferred Stock	8-K	11-16-2023	3.1
4.1		Form of Warrant after Conversion from an LLC to a Corporation	S-1/A	01-28-2020	3.5
4.2		Form of Series A Warrant	S-1/A	02-05-2021	3.6
4.3		Form of Common Warrant	S-1/A	03-28-2023	4.3
4.4		Form of Pre-Funded Warrant	S-1/A	03-28-2023	4.4
4.5		Form of Common Stock Certificate	S-1/A	10-08-2020	4.1
4.6		Form of IPO Underwriter Common Stock Purchase Warrant	8-K	02-22-2021	4.1
4.7		Description of Securities	10-K	03-31-2021	4.3
5.1		Opinion of Carroll Legal LLC				X
10.1	#	Employment Agreement of Michael T. Lawless	S-1	01-10-2020	10.1
10.2	#	Employment Agreement of Peter Shoebridge	S-1	01-10-2020	10.2
10.3	#	Employment Agreement with John E. Mahoney	8-K	12-18-2023	10.1
10.4	#	Form of Auddia Inc. 2020 Equity Incentive Plan	S-1/A	10-22-2020	10.3
10.5		Collateral and Security Agreement with Related Party (Minicozzi)	S-1/A	01-28-2020	10.4
10.6		Form of Amendment to Collateral and Security Agreement with Related Party	S-1/A	10-08-2020	10.5
10.7		Form of Convertible Promissory Note	S-1/A	01-28-2020	10.6
10.8		Business Loan Agreement and Guaranty of Related Party with Bank of the West	S-1/A	01-28-2020	10.7
10.9	**	Agreement with Major United States Broadcast Company	S-1/A	01-28-2020	10.8
10.10		Form of Bridge Note	S-1/A	10-22-2020	10.9
10.11		Form of Warrant Agent Agreement	S-1/A	03-28-2023	10.10
10.12		Amendment to Bridge Note	S-1/A	10-22-2020	10.14
10.13		Amended Business Loan Agreement with Bank of the West	10-K	03-31-2021	10.15
10.14	#	First Amendment to 2020 Equity Incentive Plan	S-8	08-10-2021	99.2
10.15	#	Form of Stock Option Grant Notice and Stock Option Agreement under 2020 Equity Incentive Plan	S-8	08-10-2021	99.3
10.16	#	Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement under 2020 Equity Incentive Plan	S-8	08-10-2021	99.4
10.17	#	Form of Inducement Stock Option Grant Notice and Inducement Stock Option Agreement	S-8	08-10-2021	99.5
10.18	#	Clip Interactive, LLC 2013 Equity Incentive Plan	S-8	08-10-2021	99.6
10.19	#	Form of Stock Option Grant Notice and Stock Option Agreement under 2013 Equity Incentive Plan	S-8	08-10-2021	99.7

10.20	#	Executive Officer Employment Agreement for Michael Lawless dated October 13, 2021	8-K	10-15-2021	10.1
10.21	#	Executive Officer Employment Agreement for Peter Shoebridge dated October 13, 2021	8-K	10-15-2021	10.2
10.22	#	Executive Officer Employment Agreement for Brian Hoff dated October 13, 2021	8-K	10-15-2021	10.3
10.23	#	Executive Officer Employment Agreement for Timothy Ackerman effective as of February 6, 2023	8-K	02-16-2023	10.1
10.24		Secured Promissory Bridge Note dated November 14, 2022	8-K	11-14-2022	10.1
10.25		Common Stock Warrant dated November 14, 2022	8-K	11-14-2022	10.2
10.26		Security Agreement dated November 14, 2022	8-K	11-14-2022	10.3
10.27		Common Stock Purchase Agreement, dated November 14, 2022, by and between Auddia Inc. and White Lion Capital LLC	8-K	11-14-2022	10.4
10.28		White Lion Purchase Agreement	8-K	11-6-2023
10.29		White Lion Registration Rights Agreement	8-K	11-6-2023
10.30		Securities Purchase Agreement dated November 10, 2023 between Auddia Inc. and Jeffrey Thramann	8-K	11-16-23	10.1
23.1		Consent of Daszkal Bolton LLP, Independent Registered Public Accounting Firm				X
23.2		Consent of Haynie & Company, Independent Registered Public Accounting Firm				X
23.3		Consent of Carroll Legal LLC (included in Exhibit 5.1)				X
24.1		Power of Attorney (included on signature page)				X
107		Calculation of Filing Fee Table				X

+	Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish the omitted schedules and exhibits to the Securities and Exchange Commission upon request.
*	Previously filed.
**	Certain information contained in this Exhibit has been redacted and appears as “XXXXX” as the disclosure of same would be a disadvantage to the Registrant in the marketplace.
#	Indicates management contract or compensatory plan.

(a)	The undersigned registrant hereby undertakes:

(1)	To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

	i.	To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

	ii.	To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

	iii.	To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(3)	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)	That for the purpose of determining any liability under the Securities Act of 1933 in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

	i.	Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

	ii.	Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

	iii.	The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

	iv.	Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(5)	That for the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(6)	That for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(7)	Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

	AUDDIA INC.

	By:		/s/ Michael Lawless
			Michael Lawless
			Chief Executive Officer

Signature	Title	Date

/s/ Michael Lawless	President, Chief Executive Officer and Director	April 11, 2024
Michael Lawless	(Principal Executive Officer)


/s/ John E. Mahoney	Chief Financial Officer	April 11, 2024
John E. Mahoney	(Principal Financial and Accounting Officer)


/s/ Jeffrey Thramann	Executive Chairman and Director	April 11, 2024
Jeffrey Thramann


/s/ Stephen Deitsch	Director	April 11, 2024
Stephen Deitsch


/s/ Timothy Hanlon	Director	April 11, 2024
Timothy Hanlon


/s/ Thomas Birch	Director	April 11, 2024
Thomas Birch