AUUD 10-K & 10-Q changes, risk factors and insider trading
Auddia Inc. · Nasdaq · Services-Computer Processing & Data Preparation · CIK 1554818 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Summary of Risk Factors”
New heading “Risks related to the proposed merger with Thramann Holdings”
New heading “Risks related to our financial position and need for additional capital”
New heading “Risks related to the development of our products”
New heading “Risks related to our business operations”
New heading “Risks related to our intellectual property”
New heading “Risks related to ownership of common stock”
New heading “Risks Related to the proposed merger with Thramann Holdings”
New heading “The merger with Thramann Holdings and the resulting change in control from such merger must be approved by Auddia stockholders. Failure to obtain stockholder approval would prevent the closing of the Thramann Holdings merger.”
New heading “Failure to complete the merger may result in Auddia paying a termination fee to Thramann Holdings, and could harm the common stock price and future business and operations of Auddia.”
New heading “If the conditions to the merger are not satisfied or waived, the merger may not occur.”
New heading “Auddia stockholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger.”
New heading “Auddia’s stockholders will generally have a reduced ownership and voting interest in, and will exercise less influence over the management of, the holding company following the completion of the merger as compared to their current ownership and voting interests in Auddia.”
New heading “Risks related to our proposed merger with Thramann Holdings.”
Largest changes
“Auddia’s stockholders will generally have a reduced ownership and voting interest in, and will exercise less influence over the management of, the holding company following the completion of the merger as compared to their current ownership and voting interests in Auddia.”see in full comparison
“The merger with Thramann Holdings and the resulting change in control from such merger must be approved by Auddia stockholders. Failure to obtain stockholder approval would prevent the closing of the Thramann Holdings merger.”see in full comparison
“Failure to complete the merger may result in Auddia paying a termination fee to Thramann Holdings, and could harm the common stock price and future business and operations of Auddia.”see in full comparison
“Auddia stockholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger.”see in full comparison
“If the conditions to the merger are not satisfied or waived, the merger may not occur.”see in full comparison
“Risks related to our financial position and need for additional capital”see in full comparison
Full comparison: every changed paragraph (32)
Summary of Risk Factors
The following is a summary of the principal risks and uncertainties that could materially adversely affect our business, financial condition, or results of operations. You should read this summary together with the more detailed description of risk factors below under the heading “Risk Factors.”
Risks related to the proposed merger with Thramann Holdings
Risks related to our financial position and need for additional capital
Risks related to the development of our products
Risks related to our business operations
Risks related to our intellectual property
Risks related to ownership of common stock
RISK FACTORS
Risks Related to the proposed merger with Thramann Holdings
The merger with Thramann Holdings and the resulting change in control from such merger must be approved by Auddia stockholders. Failure to obtain stockholder approval would prevent the closing of the Thramann Holdings merger.
Before the Thramann Holdings merger can be completed, Auddia stockholders must approve, among other things, the exchange of Auddia common stock for holding company common stock pursuant to the Merger Agreement and the resulting change in control from the Thramann Holdings merger. Failure to obtain the required stockholder approval may result in a material delay in, or the abandonment of, the merger. Any delay in completing the merger may materially adversely affect the timing and benefits that are expected to be achieved from the Thramann Holdings merger.
Failure to complete the merger may result in Auddia paying a termination fee to Thramann Holdings, and could harm the common stock price and future business and operations of Auddia.
If the merger is not completed, Auddia is subject to the following risks: (i) if the Merger Agreement is terminated under specified circumstances, Auddia could be required to pay Thramann Holdings a termination fee of $600,000 and reimburse up to $200,000 for Thramann Holdings’ reasonable out-of-pocket expenses incurred in connection with the Merger Agreement and the transactions contemplated thereby; (ii) the price of Auddia common stock may decline and could fluctuate significantly; and (iii) Auddia will have to pay substantial costs related to the merger, such as financial advisor, legal and accounting fees, even if the merger is not completed. If the Merger Agreement is terminated and the board of directors of Auddia determines to seek another business combination, there can be no assurance that Auddia will be able to find another third party to transact a business combination with, yielding comparable or greater benefits.
If the conditions to the merger are not satisfied or waived, the merger may not occur.
Even if the merger is approved by the Auddia stockholders, specified conditions must be satisfied or, to the extent permitted by applicable law, waived to complete the merger. These conditions are set forth in the Merger Agreement. Auddia cannot assure you that all of the conditions to the consummation of the merger will be satisfied or waived. If the conditions are not satisfied or waived, the merger may not occur or the closing may be delayed.
It is a condition of the consummation of the merger that Auddia have at least $12 million of net cash immediately prior to the closing. Auddia will need to raise significant additional financing prior to the closing in order to satisfy this closing condition. The need for Auddia to issue additional equity securities or additional debt may cause significant dilution to Auddia’s current stockholders.
It is a condition of the consummation of the merger that the holding company’s stock is approved for listing on Nasdaq. There can be no assurance such listing condition will be met and, there can be no assurance that the common stock of the holding company will be listed on Nasdaq following the completion of the merger.
Auddia stockholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger.
If the holding company is unable to realize the full strategic and financial benefits currently anticipated from the merger, Auddia stockholders will have experienced substantial dilution of their ownership interests without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the holding company is able to realize only part of the strategic and financial benefits currently anticipated from the merger.
Auddia’s stockholders will generally have a reduced ownership and voting interest in, and will exercise less influence over the management of, the holding company following the completion of the merger as compared to their current ownership and voting interests in Auddia.
After the completion of the merger, the current stockholders of Auddia will generally own a smaller percentage of the holding company than their ownership of their respective companies prior to the merger.
Our past working capital deficiency, stockholders’
deficit and recurring losses from operations raised substantial doubt about our ability to continue as a going concern. As a result, our
independent registered public accounting firm has included an explanatory paragraph in its report on our financial statements for the
year ended December 31, 20242025 with respect to this uncertainty. Our existing cash was $2.7$3.2 million at December 31, 2024.2025. We secured
approximately $10.9$7.1 million in additional financing in 20242025 and $0.6$0.9 million year-to-date through March 5,
2025,4, 2026, which enabled us to pay down $2.75 million in connection with the Secured Bridge Notes in 2024 and will only be sufficient
to fund
our current operating plans into the second quarter of 2025.2026. 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 demonstrated
market fit. Management has plans to secure such additional funding. If we are unable to raise capital when needed or on acceptable
terms, terms,
we would be forced to delay, reduce, or eliminate our technology development and commercialization efforts.
We expect our expenses to increase in connection
with our ongoing activities, particularly as we continue to invest in sales, marketing and engineering resources and bring our products
to market. Furthermore, we continue to incur additional costs associated with operating as a public company. Our existing cash ofwas $2,706,319$3.2
million at December 31, 20242025. We secured approximately $10.9$7.1 million in additional financing in 20242025 and $0.6$0.9 million year-to-date through
March March
5,4, 2025,2026, which enabled us to pay down $2.75 million in connection with the Secured Bridge
Notes in 2024 and will only be sufficient to fund our current operating plans into the second quarter of 2025.2026. The Company has based
these these
estimates, however, on assumptions that may prove to be wrong. We will need additional funding to complete the development of our
full full
product line and scale products with a demonstrated market fit. Management has plans to secure such additional funding. If we are
unable unable
to raise capital when needed or on acceptable terms, we would be forced to delay, reduce, or eliminate our technology development
and and
commercialization efforts.
Risks related to our proposed merger with Thramann Holdings.
The issuance of common stock pursuant to our
our equity line facility or our ATM facility may cause substantial dilution to our existing shareholders, and the sale of such shares acquiredin
connection bywith our equity
line provideror ATM facilities could cause the price of our common stock to decline.
On
November November
25, 2024, we entered into a new equity line and a related registration rights agreement with White Lion. Pursuant to the new
Common Stock
Purchase Agreement, we have the right, but not the obligation to require White Lion to purchase, from time to time until
December 31,
2025, up to $10,000,000 in aggregate gross purchase price of newly issued shares of our common stock, subject to certain
limitations and
conditions set forth in the Common Stock Purchase Agreement. On July 30, 2025, we amended the equity line Common
Stock Purchase Agreement from $10,000,000 to $50,000,000 and extended the commitment period to December 31, 2027.
We also have an At-the-Market (“ATM”) facility with Ascendiant Capital Markets, LLC, as sales agent (the “Agent”). Under the ATM facility, we may sell shares of our common stock having an aggregate offering price of up to $10,000,000 from time to time, through an “at the market offering” (the “ATM Offering”).
During the year ended December 31, 2025, we issued 1,007,761 shares for aggregate proceeds of approximately $2.7 million pursuant to our ATM facility. Subsequent to December 31, 2025, and as of the date of this filing, we have sold 754,925 shares under our ATM facility for proceeds of $0.9 million Shares issued by us through our equity line or ATM facilities may result in substantial dilution to the interests of holders of our common stock.
We currently
have effective registration statements that registers for resale by White Lion up to 20,000,000 shares of common stock that we may issue
to White Lion under the New Equity Line Purchase Agreement. As of March 5, no
shares have been issued under this agreement. After White Lion has acquired shares under the Equity Line Purchase Agreement, it
may sell all, some or none of those shares. Sales to White Lion by us pursuant to the Equity Line Purchase Agreement may result in substantial
dilution to the interests of other holders of our common stock.
The sale of a substantial number of shares tothrough
Whiteour Lion,equity line and ATM facilities, or anticipation of such sales, could make it more difficult for us to sell equity or equity-related
securities in the future
at a time and at a price that we might otherwise desire. The number of shares of our common stock ultimately offered for resaleissued by Whiteus
Lionthrough isour dependentequity uponline or ATM facilities and sold into the numberpublic ofmarkets sharesdepends of common stock issued to the White Lion pursuant to the Equity Line Purchase Agreement. Depending
on a variety of factors, including market liquidity
of our common stock,stock. theThe issuance of shares tothrough Whiteour Lionequity line and ATM facilities may cause the trading price
of our common stock
to decline.
On April 14, 2025, Nasdaq notified us that we were in compliance with the $1.00 minimum bid price requirement.
Management's Discussion & Analysis (MD&A)
New heading “Proposed Business Combination”
New heading “Restructuring Costs”
New heading “Other income/(expense), net”
New heading “At-the-Market Sales Agreement”
New heading “Series C Preferred Stock and Warrants Financing”
Removed heading “RFM Acquisition”
Removed heading “Other expense, net”
Removed heading “Interim Bridge Financings”
Removed heading “Replacement Equity Line with White Lion”
Largest changes
“Our restructuring costs consist primarily of employee severance and related benefits, contract termination fees, and other costs incurred in connection with actions taken to streamline operations and align our cost structure with current business priorities. During the year ended December 31, 2025, we implemented a restructuring plan that included workforce reductions and the termination of certain consulting arrangements. Additionally, we incurred legal and financial related costs in connection with the proposed business combination during the year ended December 31, 2025.”see in full comparison
“In order for the accredited investor to receive common shares from a conversion or exercise of the common stock warrants, an approval is required from the shareholders, if the number of common shares to be issued to the accredited investor, when aggregated with all other shares of common stock beneficially or deemed beneficially owned by the accredited 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 …”see in full comparison
Full comparison: every changed paragraph (96)
On August 20, 2025, the Company announced that it is in the process of building its proprietary Discovr Radio platform and integrating it into the newly configured free faidr app. The Discovr Radio platform, a web-based portal will allow artists and record labels to promote songs on radio streams, through an integration with faidr.
faidr allowshistorically allowed
users to
listen to AM/FM radio stations without unwanted commercial breaks. The app replaces these ad breaks in real time with streamingsongs musicsupplied
similarby inDiscovr formatRadio, andgiving genreartists toexposure theon radiomainstream station being played.airwaves. The faidr app represents the first-time consumers can combine the local
content uniquely provided by AM/FM radio with commercial-free and personalized listening many consumers demand from digital-media consumption.consumption
and preference-based new music discovery. In addition to commercial-free AM/FM, faidr includes podcasts – also with adsits removedForward+ orad easilyskipping
technology skippedon by listeners – as
well as exclusive content, which includes new artist discovery, curated music stations, and exclusive music podcasts that allow hosts
to play full tracks within the episode.iOS.
The combination of AM/FM
streaming and podcasting,new-music distribution, with Auddia’s unique, AI technology-driven differentiators, addresses large (radio streamers)
and rapidly growing (independent and rapidly
growingemerging (podcast listenersartists) audiences.audiences and customer bases.
The faidr app iswith intendedits
to be downloaded by consumers who are willing to pay for a customizable, commercial-free listening experience. Our advanced features allow
subscribers users to skip any content heard on the station and request audio content on-demand. We believe the faidr App represents
a significant
differentiated audio streaming product, the first to give audio streamers a more personalized middle ground between passive
content like
broadcast radio and fully on-demand content like Spotify. No other audio streaming app available today, including category
leaders like
TuneIn, iHeart, and Audacy, can compete with faidr’s full product offerings.
We launched an MVP version
of faidr through several
consumer trials in 2021 to measure consumer interest and engagement with the App. The full app launched on February
15, 2022, and included
all major U.S. radio stations in the US. In February 2023, we added faidrRadio, our exclusive content offerings,
to the app. Podcasts
were added to the app for the iOS version before the end of Q1 2023 as planned and added to the Android app in May of 2023. Since the
addition of podcasts, exclusive content, and continued enhancement of its ad-free accuracy and functionality, the faidr app now boast
a strong 30-day retention rate of above 20% and is in the beginning phases of rolling out subscription products to users.
The Company initially launched faidr with a B2C subscription model in February of 2022 and is transitioning to a B2B subscription model.
In August 2025, the Company announced a new B2B business model with a strategic shift to AI driven music discovery. Auddia is targeting artists and labels for SaaS subscription access to ad-free AM/FM streaming listeners on the faidr app, while faidr users will enjoy free access to AI driven ad-free AM/FM streams on all music stations. Consumer subscriptions will no longer be required to enjoy faidr’s ad-free and content personalization listening experience.
New music platforms like Bandcamp and SoundCloud are integral tools for artists to connect with new fans and even monetize their content, but those platforms only cater to a subset of the total addressable market for an artist. The Company believes the largest group of potential fans for most artists remains on commercial radio, listening to music passively and not searching for new artists even though Company surveys and research indicate radio listeners are interested in hearing new music when listening to their favorite radio stations. Auddia’s new Discovr Radio platform will deliver the experience of passively listening to commercial AM/FM radio streams while passively being exposed to new music instead of radio ads.
Unlike other new music discovery platforms, which allow artists to upload songs in the hopes that new listeners will find them among the other songs available, Discovr Radio delivers guaranteed plays to artists, leveraging AI to place their songs into radio feeds as part of a custom programming experience and as unique content during what would typically be an ad break. This gives artists opportunities to be heard by the many millions of streaming radio listeners worldwide.
The new Discovr Radio platform will consist of a new AI Placement Engine and Artist Portal. The AI Placement Engine will aim to put the right new song in front of the right listener, on the right station, adjacent to the right artist, to optimize music discovery and the connection between artists and fans. The Artist Portal will give artists performance analytics on number of total plays, likes and dislikes, demographic data, and facilitate the connection of artists to their new fans. In addition to streaming songs on live radio streams, the Discovr Radio offering will eventually allow artists and labels to launch campaigns on streaming apps to promote new songs, albums, and tours.
Auddia is evolving its business model from direct-to-consumer to business-to-business, shifting its focus from individual radio-streaming subscribers to artists and labels as subscribers. Through a modest monthly subscription, artist and label customers gain guaranteed radio plays—offering a new channel for music promotion.
The faidr mobile App is available today through the iOS and Android App stores and the MVP version of the Discovr Radio platform was released on January 20, 2026. The MVP is expected to be supported by a pilot program of participating customers.
The faidr mobile App
is available today through the iOS and Android App stores.
We have funded our operations
with proceeds from the February 2021 IPO, Series A warrants exercised in July 2021 and common share issuance during June of 2023. We also
obtained debt financing through a related party during November 2022 and April 2023, which was subsequently repaid in April 2024. In addition,
we sold common shares during 20232025 and 2024 pursuant to our equity line facility.and at-the-market facilities and issued preferred stock in our
Series B and Series C issuances. Since our inception, we have incurred significant operating
losses. As of December 31, 2024,2025, we had an
accumulated deficit of $89,428,436.$97,283,343. Our ability to generate product revenue sufficient to achieve
profitability will depend heavily on
the successful development and commercialization of one or more of our Apps. We expect that our expenses
and capital requirements will
increase substantially in connection with our ongoing activities, particularly if and as we:
As of December 31, 2024,
2025, we had cash and cash
equivalents of $2,706,319.$3,186,985. WeThrough the date of this report, we have secured approximately $10.9$0.9 million in additional financing in 2024 and paid off $2.75 million of Secured2026.
Bridge Notes. 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. However, if we are unable to raise capital when needed or on acceptable terms,
terms, we would be forced to delay, reduce, or eliminate our technology development and commercialization efforts.
Proposed Business Combination
On August 5, 2025, the Company issued a press release announcing that it had entered into a non-binding letter of intent (“LOI”) for a proposed business combination between the Company and Thramann Holdings, LLC (“Thramann Holdings”). Thramann Holdings is a privately held holding company that controls LT350, Influence Healthcare, and Voyex, three early stage AI-native companies founded by Jeff Thramann, Auddia’s founder, CEO and Executive Chairman.
The Company has established a special committee of independent directors to evaluate the related party transaction. The special committee has engaged its own counsel and financial advisor.
On February 17, 2026, Auddia, acting upon the recommendation of its special committee of independent directors, entered into a definitive merger agreement for a business combination between Auddia and Thramann Holdings.
Upon closing of the proposed transaction, the Company would be renamed McCarthy Finney and would trade under its new MCFN ticker symbol. Auddia would become a wholly owned subsidiary of McCarthy Finney, and each of the three Thramann Holdings entities would also be wholly owned by McCarthy Finney. Jeff Thramann would remain as CEO of McCarthy Finney and John Mahoney would remain as CFO. Auddia’s current board members are expected to continue as members of the board of the combined company.
Auddia shareholders at the time of closing are expected to own a 20% economic interest of McCarthy Finney, with an 80% economic interest of the combined company expected to be owned at closing by Jeff Thramann. Under certain circumstances, these ownership percentages may be adjusted upward or downward based on the level of Auddia’s cash at closing.
The consideration to be paid to Thramann Holdings in the proposed transaction will consist of (i) shares of McCarthy Finney convertible preferred stock and (ii) $3.5 million aggregate principal amount of McCarthy Finney notes with a two year maturity date.
The closing of the merger will be conditioned on Auddia having at least $12 million cash on hand at closing in order to provide cash runway to fund McCarthy Finney to key future business milestones. There can be no assurances as to Auddia’s level of cash at closing.
The transaction has been unanimously approved by the board of directors of both companies. In connection with the approval of the merger agreement, Houlihan Capital provided a fairness opinion to Auddia’s special committee and board of directors.
The proposed transaction is expected to close in the second quarter of 2026, subject to customary closing conditions, including approvals by the Auddia stockholders, the effectiveness of the S-4 registration statement to be filed with the SEC to register the shares of McCarthy Finney stock to be issued in connection with the merger, and the continued listing of the combined company’s common stock on Nasdaq.
The proposed business combination is subject to a number of known and unknown risk and uncertainties. There can be no assurances that that such business combination will be approved by stockholders or will ultimately be consummated.
For more information about the business combination transaction, please see Auddia's Current Report on Form 8-K filed with the SEC on February 17, 2026.
We are exploring various
merger and acquisition
options as part of a broader strategy which aims to scale the business more rapidly; accelerate user adoption and
subscriber growth; enter
new markets (international); and open new pathways toward raising capital. The overall strategy focuses on three
areas: (1) acquiring
retained userscustomers of athe radio-streamingDiscovr app,Radio (2) bringing our proprietary ad-free products to that userbaseplatform to generate significant subscription
revenue, and(2) acquiring retained
users of faidr to supply the audience to Discovr Radio customers (3) bringing together other differentiated features intoscaling the largerfaidr audiouserbase Superappand platform.the Discovr Radio customer base once
we’ve achieved product-market fit.
RFM Acquisition
On January 26, 2024, we entered into a Purchase
Agreement (the “RFM Purchase Agreement”), pursuant to which we agreed to acquire RadioFM (the “RFM Acquisition”),
which is currently a component of both AppSmartz and RadioFM (partnerships under common control). The aggregate consideration for the
RFM Acquisition is $13,000,000 (plus $2,000,000 in contingent consideration if certain post-close milestones are reached), in addition
to the assumption of certain liabilities, as may be adjusted pursuant to the terms of the RFM Purchase Agreement.
In March 2024, the parties mutually agreed to
terminate the RFM Purchase Agreement.
On May 24, 2024, we received
a letter from Nasdaq indicating that we had regained compliance with the equity requirement in Listing ruleRule 5550(b) (1). (the Equity Rule”.)
We will be subject
to a Mandatory Panel Monitor for a period of one year from the date of the letter in accordance with application of
Listing Rule 5815(d)(4)(B).
On April 14, 2025, Nasdaq notified us that we were in compliance with the $1.00 minimum bid price requirement.
2024Reverse
ReverseStock Share SplitSplits
On February 27, 2024, the Company effectuated a 1-for-25 reverse stock split.
On March 28, 2025, the Company effectuated a 1-for-17 reverse stock split.
The reverse stock splits did not change the authorized number of shares of the Company’s common stock. No fractional shares were issued and any fractional shares resulting from the reverse stock splits were rounded up to the nearest whole share.
The Company filed an amendment to its Certificate
of Incorporation with the Secretary of State in Delaware which became effective as of 5:00 P.M. Eastern Time on February 26, 2024. As
a result, every twenty-five (25) issued shares of common stock were automatically combined into one share of common stock.
Shares of the Company’s common stock were
assigned a new CUSIP number (05072K 206) and began trading on a split-adjusted basis on February 27, 2024.
The reverse stock split did not change the authorizedsplits
number of shares of the Company’s common stock. No fractional shares were issued and any fractional shares resulting from the reverse
stock split were rounded up to the nearest whole share. Therefore, stockholders with less than 25 shares received one share of stock.
The reverse stock split applied to the Company’s outstanding warrants, stock options and restricted stock units. The number of shares
of common stock into
which these outstanding securities are convertible or exercisable were adjusted proportionately as a result of the
reverse stock split. splits.
The exercise prices of any outstanding warrants or stock options were also proportionately adjusted in accordance
with the terms of those
securities and the Company’s equity incentive plans.
Our sales and marketing
expenses consist primarily of salaries, direct to consumer (users for faidr and Discovr Radio) promotional spend and consulting services,
all of which are related to the
sales and promotion performed during the period. We expect our sales and marketing expenses to fluctuate
period by period as we release
new upgrades and enhancements within our Apps and look to generate revenue through customer acquisition,
retention, and subscription conversion.subscriptions.
Since our inception,
we have focused significant resources on our research and development activities related to the software development of our technology.
We account 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. We cease 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 our management of three 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 impaired and expensed during the period of
such determination. We expect to continue to incur research and development expenses and capitalization in the future as we continue to
develop and enhance our faidr and podcastingdevelop Apps.the Discovr Radio platform.
Restructuring Costs
Our restructuring costs consist primarily of employee severance and related benefits, contract termination fees, and other costs incurred in connection with actions taken to streamline operations and align our cost structure with current business priorities. During the year ended December 31, 2025, we implemented a restructuring plan that included workforce reductions and the termination of certain consulting arrangements. Additionally, we incurred legal and financial related costs in connection with the proposed business combination during the year ended December 31, 2025.
The other income and expense category primarily consists of interest income on our money market account and interest expense attributed to the debt and conversion features of the Notes payable to related party.
Total revenues for the
years ended December 31, 20242025 and 20232024 were $0 as we continue to develop and enhance our faidr App and podcastingbuild Appsout our Discovr Radio artist
portal to establish new revenue
streams.
Direct Cost of Services
increased by $21,271$18,722 or 11.7%9.2% to $221,672 for the year ended December 31, 2025, compared to $202,950 for the year ended December 31, 2024, compared to $181,679 for the year ended December 31, 2023.2024
This remained relatively flat due to ongoingincreased costmusic oflicensing services to maintain the faidr app.costs.
Sales and marketing expenses
decreased by $235,429$31,262 or 21.5%3.6% to $829,415 for the year ended December 31, 2025 compared to $860,677 for the year ended December 31, 2024 compared to $1,096,106 for the year ended December 31,2024.
2023. The decrease in sales and marketing expenses as of December 31, 2024 compared to December 31, 2023 was primarily attributed to reduced
a decrease in marketing promotion costs. We expect our sales and marketing expenses to fluctuate period by periodcosts as we releaseare focus on building
out our new upgradesDiscovr andRadio enhancements
withinartist our apps and look to generate revenue through customer acquisition, retention, and subscription conversion.portal.
Research and development
expenses increased by $239,592$124,969 or 30.7%12.2% to $1,020,609$1,145,578 for the year ended December 31, 20242025 from $781,017$1,020,609 for the year ended December
31, 20232024 primarily due to aan reductionincrease in theresearch leveland ofdevelopment consulting fees incurred and lower amount capitalized softwareas expenses.a result of
IT staff restructuring. We arecontinue continually
developingto develop enhancements to both our faidr App and podcastingbuild Appsout our Discovr Radio artist portal and will continue
capitalize software costs to the extent that such development
qualifies for capitalization.
General and administrative
expenses increaseddecreased by $268,572$1,052,416 or 7.5%27.4% to $3,845,302$2,792,886 for the year ended December 31, 20242025 compared to $3,576,729$3,845,302 for the year ended
December December
31, 2023.2024. The increasedecrease resulted primarily from ana increasedecrease in stock based compensation and professional fees, such as, accountingaccounting,
audit and legal expenses.expenses associated with acquisition target evaluations in 2024.
Restructuring
Restructuring expenses increased by $1,150,139 or 100% for the year ended December 31, 2025 compared to $0 for the year ended December 31, 2024. The increase reflects one-time costs of $334,360 associated with changes to our IT organization, including payroll and benefits, severance, and the transition to an outsourced IT team. Restructuring expenses also include $815,779 in certain costs incurred in connection with the proposed business combination.
Depreciation and amortization
expenses increased by $146,764 or 8.0% to $1,987,601 for the year ended December 31, 2024 compared to $1,840,837 for the year ended December
31, 2023. The increase is entirely related to the increased amortization of our faidr and podcasting Apps.
Other expense,
net
TotalDepreciation otherand amortization
expenses
decreased by $526,228$429,685 or (39.5%)21.6% fromto $1,331,128$1,557,916 for the year ended December 31, 20232025 compared to $804,900$1,987,601 for the year ended December
31, 2024.
Interest expenseCapitalized software costs have decreased byas $172,512a due to the repaymentresult of notespreviously payablecapitalized tosoftware relateddevelopment partycosts inthat Aprilhave 2024.been fully
amortized.
Other income/(expense), net
Total other income/(expenses) decreased by $809,309 or 100.5% to $4,409 for the year ended December 31, 2025 compared to $804,900 for the year ended December 31, 2024, which was due to the change in fair value of warrants issued in connection with the repayment of notes payable to related party in April 2024.
The Company has significant federal and state net operating loss carryforwards (“NOLs”). The proposed merger with Thramann Holdings is expected to result in an ownership change under Internal Revenue Code Section 382. An ownership change would subject the Company’s NOLs to an annual limitation based on the fair market value of the Company immediately prior to the ownership change multiplied by the applicable long-term tax-exempt rate. As a result, a substantial portion of the Company’s NOLs may not be available to offset future taxable income.
Because the Company maintains a full valuation allowance against its deferred tax assets, any such limitation would not impact the Company’s financial statements. The Company will continue to evaluate the potential impact of Section 382 limitations in future periods.
Our existing cash was $2,706,319$3,186,985 at December 31,
2024.2025. We secured approximately $10.9$7.1 million in additional financing in 20242025 and $0.6$0.9 million year-to-date through March 5,
2025,4, 2026, which enabled us to pay down $2.75 million in connection with the Secured Bridge Notes in 2024 and
will only be sufficient
to fund our current operating plans into the second quarter of 2025.2026. 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 development
and commercialization efforts.
What changed in the latest 10-Q
Risk Factors
In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors disclosed under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our risk factors from those included in our Annual Report on Form 10-K for the year ended December 31, 2025.
No wording changes found in this section (only numbers or dates changed in 1 paragraph).
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Results of operations”
New heading “Comparison of the Six Months Ended June 30, 2026 and 2025”
New heading “Sales and marketing”
New heading “Research and development”
New heading “General and administrative”
New heading “Depreciation and amortization”
New heading “Other income (expense), net”
Largest changes
“Our restructuring costs consist primarily of employee severance and related benefits, contract termination fees, and other costs incurred in connection with actions taken to streamline operations and align our cost structure with current business priorities. During the three months ended March 31, 2026, we implemented a restructuring plan that included workforce reductions and the termination of certain consulting arrangements. Additionally, we incurred legal and financial related costs in connection with the proposed business combination during the three months ended March 31, 2026.”see in full comparison
Full comparison: every changed paragraph (58)
Auddia (the “Company”)
is an AI technology company headquartered in Boulder, CO that is reinventing how consumers engage with audio through the development of
its faidr app, an industry-first audio platform, which utilizes proprietary AI technology to personalize and customize both radio and
podcast listening experiences.experiences and Discovr Radio, a web-based portal that allows artists and record labels to promote songs on radio streams,
through an integration with the free faidr app.
On August 20, 2025, the Company
announced that it is in the process of building its proprietary Discovr Radio platform and integrating it into the newly configured free
faidr app for an anticipated launch in early 2026., The Discovr Radio platform, a web-based portal will allow artists and record labels
to promote songs on radio streams, through an integration with faidr.
faidr historically allowed
users to listen to AM/FM radio stations without unwanted commercial breaks. The app replaces these ad breaks in real time with songs supplied
by Discovr Radio, giving artists exposure on mainstream airwaves. The faidr app represents the first-time consumers can combine the local
content uniquely provided by AM/FM radio with commercial-free and personalized listening many consumers demand from digital-media consumption
and preference-based new music discovery. In addition to commercial-free AM/FM, faidr includes podcasts with its Forward+ ad skipping
technology on iOS.
The Company initially
launched launched
faidr with a B2C subscription model in February of 2022 and isfully transitioningtransitioned to a B2B subscription model.model in Q1 of 2026 after
announcing its intentions to transition in August of 2025.
InThe August 2025, the Company
announced aCompany’s new
B2B business model withrepresents a strategic shift to AI driven music discovery. Auddia istargets targetingartists, artistslabels, distributors, and labelsmanagers for
SaaS SaaS
subscription access to ad-free AM/FM streaming listeners on the faidr app, while faidr users will enjoy free access to AI driven
ad-free ad-free
AM/FM streams on all music stations. Consumer subscriptions willare no longer be required to enjoy faidr’s ad-free and content
personalization personalization
listening experience.
New music platforms like
Bandcamp and SoundCloud are integral tools for artists to connect with new fans and even monetize their content, but those platforms only
cater to a subset of the total addressable market for an artist. The Company believes the largest group of potential fans for most artists
remains on commercial radio, listening to music passively and not searching for new artists even though Company surveys and research indicate
radio listeners are interested in hearing new music when listening to their favorite radio stations. Auddia’s new Discovr Radio
platform will deliverdelivers the experience of passively listening to commercial AM/FM radio streams while passively being exposed to new music instead
instead of radio ads.
The new Discovr Radio platform
will consistconsists of a new AI Placement Engine and Artist Portal. The AI Placement Engine will aim to putputs the right new song in front of the
right listener,
on the right station, adjacent to the right artist, to optimize music discovery and the connection between artists and
fans. The Artist
Portal will givegives artists performance analytics on number of total plays, likes and dislikes, demographic data, and facilitate
the connection
of artists to their new fans. In addition to streaming songs on live radio streams, the Discovr Radio offering willallows eventuallyartists, managers
allow artists and labels toleverage launch campaigns on streaming appsanalytics to promotesupport newtheir songs,own albums,pitches for editorial placements, terrestrial radio play, and tours.many other opportunities
within the music industry.
Auddia is evolvingevolved its business
model from direct-to-consumer to business-to-business, shifting its focus from individual radio-streaming subscribers to artists and labels
as subscribers. Through a modest monthly subscription, artist and label customers gain guaranteed radio plays—offering a new channel
for music promotion.
The faidr mobile App
is available
today through the iOS and Android App stores and the MVP version of thestores.The Discovr Radio platform that was released on January 20, 2026.2026, and fully launched
Thewith MVPself-serve issign expectedup toand betwo supported by a pilot programtiers of participatingmonthly customers.subscriptions in June of 2026.
We have funded our operations
with proceeds from the February 2021 IPO, Series A warrants exercised in July 2021 and common share issuance during June of 2023. We also
also obtained debt financing through a related party during November 2022 and April 2023, which was subsequently repaid in April 2024.
In addition,
we sold common shares during 2025 and 2024 pursuant to our equity line facility and issued preferred stock in our Series
B and Series
C issuances. Since our inception, we have incurred significant operating losses. In April 2026, we raised approximately $12.0 million
before offering expenses of around $1.2 million. As of MarchJune 31,30, 2026, we had an accumulated
deficit of $99,595,218.$102,570,485. Our ability to generate
product revenue sufficient to achieve profitability will depend heavily on the successful
development and commercialization of one or
more of our Apps. We expect that our expenses and capital requirements will increase substantially
in connection with our ongoing activities,
particularly if and as we:
As
of MarchJune 31,30, 2026, we had cash and cash
equivalents of $1,413,387.$9,558,190. ThroughDuring the2026 datethrough ofJune this
report,30, 2026, we have secured approximately $12.9 million in additional financing in
2026. 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. However,
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.
The proposed
transaction is expected to close in the
second third quarter of 2026, subject to customary closing conditions, including approvals by
the Auddia stockholders, the effectiveness of
the S-4 registration statement to be filed with the SEC to register the shares of McCarthy
Finney stock to be issued in connection with
the merger, and the continued listing of the combined company’s common stock on Nasdaq.
Revenue
Revenue consists of subscription fees paid by subscribers of our Discovr Radio platform, recognized ratably over the applicable subscription period. We expect this revenue stream to fluctuate based on subscriber growth, retention, and pricing changes.
During the three and six months ended June 30, 2026, we incurred audit, accounting and legal costs in connection with the proposed business combination.
Our restructuring costs consist
primarily of employee severance and related benefits, contract termination fees, and other costs incurred in connection with actions taken
to streamline operations and align our cost structure with current business priorities. During the three months ended March 31, 2026,
we implemented a restructuring plan that included workforce reductions and the termination of certain consulting arrangements. Additionally,
we incurred legal and financial related costs in connection with the proposed business combination during the three months ended March
31, 2026.
Comparison of the Three Months Ended
June March
31,30, 2026 and 2025
Total revenues for the
three three
months ended MarchJune 31,30, 2026 and 2025 were $0$7,584 asand we$0. continueThe increase was primarily related to developa and enhance our faidr App and build out oursuccessful Discovr artistRadio portalplatform
topilot establish new revenue streams.launch
Sales and marketing expenses
increased by $215,005$271,808 or 91.3%147% to $450,446$456,965 for the three months ended MarchJune 31,30, 2026 compared to $235,441$185,157 for the three months ended June
March 31,30, 2025. The increase in sales and marketing expenses was primarily attributed to increase in marketing and promotional activities and
and trade show expenses.
Research and development
expenses decreasedincreased by $111,719$169,536 or 28.2%72% to $284,984$405,951 for the three months ended MarchJune 31,30, 2026 from $396,703$236,415 for the three months ended June
March 31,30, 2025 primarily due to an decreaseincrease in research and development related consulting fees incurred related to the launch of Discovr Radio
Platform.
General and administrative expenses increased
by $158,183$679,815 or 25.1%93% to $789,075$1,409,257 for the three months ended MarchJune 31,30, 2026 compared to $630,891$729,442 for the three months ended MarchJune 31,30, 2025.
The increase was due to anbonuses increase related toand public relations professional fees.
Restructuring expenses increased by $472,689$432,041 or
100% 100%
for the three months ended MarchJune 31,30, 2026 compared to $0 for the three months ended MarchJune 31,30, 2025. The increase is due to audit and
legal expenses related to reverse merger.
Depreciation and amortization
expenses decreased by $196,311$96,227 or (45.4%27%) to $236,096$261,401 for the three months ended MarchJune 31,30, 2026 compared to $432,407$357,628 for the three months
ended MarchJune 31,30, 2025. The decrease is due to fully amortized capitalized cost and lower capitalized software costs.
Total other income (expenses)
increased by $8,453$50,157 or 545%3,471% to $6,901$48,712 for the three months ended MarchJune 31,30, 2026 compared to ($1,552$1,445) for the three months ended MarchJune
31,30, 2025 primarily due to increase in interest income on return on funds in money market account.
Results of operations
Comparison of the Six Months Ended June 30, 2026 and 2025
The following table summarizes our results of operations:
Revenue
Total revenues for the six months ended June 30, 2026 and 2025 were $7,584 and $0. The increase was primarily related to a successful Discovr Radio platform pilot launch.
Sales and marketing
Sales and marketing expenses increased by $486,813 or 116% to $907,411 for the six months ended June 30, 2026 compared to $420,598 for the six months ended June 30, 2025. The increase in sales and marketing expenses was primarily attributed to increase in marketing and promotional activities and trade show expenses for the launch of Discovr Radio.
Research and development
Research and development expenses increased by $57,817 or 9% to $690,935 for the six months ended June 30, 2026 from $633,118 for the six months ended June 30, 2025 primarily due to an increase in research and development related consulting fees to launch Discovr Radio Platform.
General and administrative
General and administrative expenses increased by $837,999 or 62% to $2,198,332 for the six months ended June 30, 2026 compared to $1,360,333 for the six months ended June 30, 2025. The increase was due to bonuses and corporate public market consulting.
Restructuring
Restructuring expenses increased by $904,730 or 100% for the six months ended June 30, 2026 compared to $0 for the six months ended June 30, 2025. The increase is due to audit and legal expenses related to reverse merger.
Depreciation and amortization
Depreciation and amortization expenses decreased by $292,538 or (37%) to $497,497 for the six months ended June 30, 2026 compared to $790,035 for the six months ended June 30, 2025. The decrease is due to fully amortized capitalized cost and lower capitalized software costs.
Other income (expense), net
Total other income (expenses) increased by $58,611 or 1,955% to $55,613 for the six months ended June 30, 2026 compared to ($2,998) for the six months ended June 30, 2025 primarily due to increase in interest income on return on funds in money market account.
Our existing cash was
$1,413,387$9,558,190 at MarchJune 31,30, 2026. We secured approximately $12.9 million in additional funding in 2026 through Maythe 12,
2026,date of this report, which
will only be sufficient to fund our current operating plans into the firstsecond quarter of 2027. 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.
We have incurred operating losses since our inception
and have an accumulated deficit as a result of ongoing efforts to develop and commercialize our faidr and podcasting Apps. As of MarchJune
31,30, 2026, we had cash and cash equivalents of $1,413,387.$9,558,190. We have working capital of approximately $858,095$8,831,451 as of MarchJune 31,30, 2026. We
anticipate anticipate
that operating losses and net cash used in operating activities will increase over the next 12 months as we continue to develop
and market
our products. We secured $0.9$12.9 million of financing during the threesix months ended MarchJune 31,30, 2026, and an additional $12.0 million subsequent
to March 31, 2026,2026 which will only be sufficient
to fund our current operating plans into the firstsecond quarter of 2027. We have 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.
WeThe haveCompany has entered
into an
At-the-Market Issuance Sales Agreement (the “Sales Agreement”) with Ascendiant Capital Markets, LLC, as sales agent
(the
“Agent”). Under the Sales Agreement, the Company may sell shares of its common stock having an aggregate offering price
of up to $10,000,000 from time to time, through an “at the market offering” (the “ATM Offering”). The aggregate
aggregate market value of shares that the Company can sell under the Sales Agreement will be subject to the limitations of General
Instruction I.B.6
of Form S-3, to the extent required under such instruction.
During the three and
six months
ended MarchJune 31,30, 2026, the Company sold 0 and 98,043 sharesshares, respectively under the Sales Agreement for proceeds of $0.9 million
and currently has
$0.0 million of unsold availability under the ATM facility.
Holders of the Series
B B
Preferred Stock will be entitled to dividends in the amount of 10% per annum, payable quarterly. The Company has the option to pay dividends
on the Series B Preferred Stock in additional shares of Common Stock. The Company also has the option to cumulate or “capitalize”
the dividends, in which case the accrued dividend amount shall be added to the stated value of each share of Series B Preferred Stock.
As of March 31, 2026, the Company has elected to capitalize all dividends declared.
As of MarchJune 31,30, 2026, no Series B Preferred Stock
remains outstanding.
Subsequent to March 31, 2026, onOn April 23, 2026,
the Company entered into an
exchange agreement (the “Exchange Agreement”) with the accredited investors to exchange 750 outstanding
shares of the Company’s
Series C preferred stock (includingplus accruedcapitalized dividends thereon)to date for 216,525 shares of common stock at an
exchange price of $3.91 per common
share. No shares of Series C preferred stock remain outstanding.
As of AprilJune 24,30, 2026, no Series C Preferred
Stock Stock
remains outstanding.
April 2026 Registered Direct Offering
On April 27, 2026, the Company closed a best-efforts registered direct offering (the "Offering") of 1,405,006 shares of common stock, together with, in lieu of common stock for certain investors, 3,679,737 pre-funded warrants to purchase common stock (the "Pre-Funded Warrants"), and accompanying common stock purchase warrants to purchase up to 5,084,743 shares of common stock (the "Common Warrants"). The combined public offering price was $2.36 per share (or per Pre-Funded Warrant) and accompanying Common Warrant. Gross proceeds were $11,999,993 (approximately $12.0 million), before deduction of a 7.0% cash fee payable to the placement agent and other offering expenses, together totaling approximately $1.2 million. Gross proceeds were allocated among the common stock, pre-funded warrants and common warrants on a relative fair value basis.
The Pre-Funded Warrants have an exercise price of $0.001 per share, which was pre-funded at closing, and no stated expiration date; they remain exercisable until exercised in full. The Common Warrants have an exercise price of $2.36 per share and expire earlier of (i) five years from the initial exercise date and (ii) the consummation of the Company's pending merger with Thramann Holdings, LLC (the "Merger"). All 3,679,737 Pre-Funded Warrants were exercised by April 30, 2026 for an aggregate exercise price of $3,680; As of June 30, 2026, 1000 common warrants were exercised at $2.36 with the proceeds of $2,360.
All 3,679,737 Pre-Funded Warrants were exercised in full as of June 30, 2026. Upon exercise, the Company received aggregate cash proceeds of $3,680 and reclassified $5,812,540 from the Pre-Funded Warrants equity account to common stock and additional paid-in capital. No Pre-Funded Warrants remain outstanding. This exercise activity does not affect the fair value classification or measurement of the Common Warrant liability.
The following table summarizes
the statements of cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025:
Cash used in operating
activities for the threesix months ended MarchJune 31,30, 2026 was $2,275,114,$4,782,917, primarily resulting from our net loss of ($2,281,553$5,256,819), change in working
working capital of $252,435$69,513 primarily related to ana increasedecrease in accounts payable and accrued liabilities, lease liability,liability and prepaid assets, and
non-cash charges of $236,096
$497,497 related to depreciation and amortization, $7,878 amortization of ROU and $14,897$29,984 in share based compensation expense.expense and $15,935 in amortization
of ROU. Cash used in operating
activities for both periods consisted of personnel-related expenditures, marketing and promotion costs,
and public company administrative
support costs such as legal and other professional support services.
Cash flows used in investing activities for the
threesix months ended MarchJune 31,30, 2026 was $307,517,$561,911, consisting of capitalization of software development expenses and patent expenses.
Cash flows generated
in financing activities for the threesix months ended MarchJune 31,30, 2026 was $809,033$11,716,032 primarily related to cash proceeds from the issuance of
commonoffering sharesof prefunded warrant, Common warrant and Common stock partially offset by repayments to related party notes payable of $45,390$60,520 and offering
costs of $37,500.$1,117,723.
We historically have
incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $99,595,219$102,570,485
and $97,283,343 as of MarchJune 31,30, 2026 and December 31, 2025, respectively. As of MarchJune 31,30, 2026 and December 31, 2025, we had cash and cash
cash equivalents of $1,413,387$9,558,190 and $3,186,985, respectively. Our cash is comprised primarily of demand deposit accounts and money market funds.
funds. We secured $0.9$12.9 million of financing during the threesix months ended MarchJune 31,30, 2026, and an additional $12 million of financing subsequent
to March 31, 2026,2026 which will only be sufficient to fund our current operating
plans into the firstsecond quarter of 2027. We have 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.
AUUD insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding AUUD (13F)
None of the 59 investors we track reported a position in their latest 13F.