All premium AI features within faidr are now free to all users Discovr Radio integration into the free faidr app to be completed by end of Q4 2025 to early Q1 2026 First B2B revenue from select labels and artists expected in Q1 2026 BOULDER, Colo., Nov. 19, 2025 (GLOBE NEWSWIRE) -- Auddia Inc. (NASDAQ: AUUD) (NASDAQ: AUUDW), an AI-first technology company revolutionizing the audio landscape, today announced a pivotal milestone in its transition to a B2B business model where artists and labels subscribe to D ...

Financial Performance - As of September 30, 2025, the company had an accumulated deficit of $95,262,663, indicating significant operating losses since inception[107]. - Total revenues for the three months ended September 30, 2025, were $0, consistent with the same period in 2024, as the company continues to develop the faidr App and the Discovr artist portal[132][141]. - The net loss for the three months ended September 30, 2025, was $2,381,151, a 22.1% increase from the net loss of $1,949,428 in the same period of 2024[131]. - For the nine months ended September 30, 2025, cash used in operating activities was $(4,335,812), compared to $(3,803,324) for the same period in 2024, reflecting a net loss of $(5,702,369) in 2025[159][160]. - The company reported an accumulated deficit of $95,262,663 as of September 30, 2025, up from $89,428,436 at the end of 2024[165]. Cash and Financing - The company had cash and cash equivalents of $2,727,165 as of September 30, 2025, and secured approximately $7.2 million in additional financing in 2025[110]. - Cash and cash equivalents stood at $2,727,166 as of September 30, 2025, slightly up from $2,706,319 at the end of 2024[165]. - The company secured $5.1 million in financing during the nine months ended September 30, 2025, and an additional $2.1 million after that date[149]. - Cash flows from financing activities for the nine months ended September 30, 2025, generated $4,890,671, primarily from the issuance of common shares and Series C preferred stock[163]. - The company raised $750,000 in gross proceeds from the Series C Preferred Stock and Warrants Financing, issuing 750 shares at $1,000 each, convertible at an initial price of $4.77 per share[155][156]. - The company has secured $5.1 million in financing during the nine months ended September 30, 2025, with an additional $2.1 million secured subsequently, which is projected to fund operations into Q3 2026[165]. Operating Expenses - Operating expenses are expected to increase as the company continues to develop and enhance its technology related to the faidr and podcasting apps[125]. - The company has experienced higher costs due to inflation, impacting employee compensation and outside services, with expectations of continued negative effects throughout 2025[123]. - Total operating expenses for the three months ended September 30, 2025, were $2,379,958, an increase of 22.2% compared to $1,947,850 in 2024[131]. - Research and development expenses increased by $84,541 or 36.3% to $317,626 for the three months ended September 30, 2025, primarily due to increased consulting fees and lower capitalized costs[135]. - General and administrative expenses decreased by $182,499 or 20.7% to $698,940 for the three months ended September 30, 2025, due to reductions in accounting, legal, and stock option expenses[136]. - Restructuring expenses increased by $806,432 or 100% for the three months ended September 30, 2025, reflecting changes in the IT department and related costs[137]. - Direct cost of services increased by $336 or 0.6% to $55,252 for the three months ended September 30, 2025, due to higher music licensing costs[133]. - Sales and marketing expenses decreased by $138,688 or 49.1% to $143,762 for the three months ended September 30, 2025, primarily due to reduced marketing promotion costs[134]. Business Strategy and Development - The company is transitioning from a B2C subscription model to a B2B subscription model, targeting artists and labels for SaaS subscription access to ad-free AM/FM streaming[101]. - The new Discovr Radio platform is expected to launch in early 2026, allowing artists to promote songs on radio streams and providing guaranteed plays[94][103]. - The MVP version of the Discovr Radio platform is expected to be released before the end of Q1 2026, supported by a pilot program of participating customers[106]. - The company is exploring merger and acquisition options to accelerate user adoption and enter new markets[115]. - The company anticipates needing additional funding to complete the development of its full product line and scale products with market fit[165]. Compliance and Regulatory - The company has received notices from Nasdaq for non-compliance with listing rules but regained compliance with the equity requirement in May 2024 and the bid price requirement in April 2025[116][119]. - The company has no off-balance sheet arrangements as defined by SEC rules[167].

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - rYojbaba Co., Ltd. (RYOJ) increased by 134% to $5.09 - Linkage Global Inc (LGCB) rose by 101% to $3.33 - MIRA Pharmaceuticals, Inc. (MIRA) gained 87% to $2.46 - Auddia Inc. (AUUD) went up by 23% to $2.54 - SOPHiA GENETICS SA (SOPH) increased by 16% to $4.99 - J.B. Hunt Transport Services, Inc. (JBHT) rose by 13% to $157.44 - AlphaVest Acquisition Corp (ATMV) increased by 11% to $13.09 - New Era Energy & Digital, Inc. (NUAI) went up by 10% to $3.71 - Critical Metals Corp. (CRML) rose by 9% to $24.80 - Blaize Holdings, Inc. (BZAI) increased by 9% to $6.90 [3] Premarket Losers - Fossil Group, Inc. (FOSL) decreased by 40% to $2.23 - Pinnacle Food Group Limited (PFAI) fell by 25% to $3.41 - American Battery Technology Company (ABAT) declined by 22% to $6.91 - Sadot Group Inc. (SDOT) dropped by 20% to $6.15 - TechCreate Group Ltd. (TCGL) decreased by 14% to $4.14 - PMGC Holdings Inc. (ELAB) fell by 13% to $6.43 - Arcadia Biosciences, Inc. (RKDA) decreased by 13% to $4.73 - ATIF Holdings Limited (ZBAI) dropped by 11% to $9.28 - Roma Green Finance Limited (ROMA) fell by 7% to $2.62 - Australian Oilseeds Holdings Limited (COOT) decreased by 6% to $2.46 [4]

Core Viewpoint - Auddia Inc. is undergoing a restructuring to become a holding company focused on delivering AI and web3 capabilities to its portfolio companies, with a shift from a direct-to-consumer model to a B2B business model centered on AI-driven music discovery [2][3][5]. Group 1: Corporate Restructuring - Auddia has signed a non-binding Letter of Intent (LOI) for a proposed business combination aimed at restructuring the company [3]. - The new holding company will be named McCarthy Finney, honoring John McCarthy, the father of AI, and Hal Finney, a pioneer in digital currency [4]. - The company has secured the URL www.mccarthyfinney.com and reserved the NASDAQ ticker MCFN [4]. Group 2: Business Model Shift - Auddia is transitioning from a subscription-based direct-to-consumer business model to a B2B model focused on AI-driven music discovery [5]. - The updated corporate overview reflects this pivot and incorporates the ongoing restructuring activities [6]. Group 3: Upcoming Events - Auddia will present at the 19th Annual Main Event on October 21, 2025, at 2:00 PM PT, with CEO Jeff Thramann leading the presentation [7]. - A webcast is scheduled for the same date and time, allowing for virtual attendance [2]. Group 4: Product Offerings - Auddia's flagship audio superapp, faidr, aims to reinvent consumer engagement with audio content, including AM/FM radio and podcasts [8]. - The app features industry-first capabilities such as ad-free listening and content skipping across various audio platforms [10].

Company Overview - Auddia Inc. is an AI-first technology company focused on audio identification and classification, aiming to transform consumer engagement with audio content [1][4]. - The company's flagship product, faidr, is an audio superapp that offers ad-free listening on AM/FM music stations, content skipping, and exclusive playlists featuring new artists [4][7]. Event Details - Auddia will present at the 19th Annual LD Micro Main Event on October 21, 2025, at 2:00 PM PT in San Diego, California [1][2]. - The LD Micro Main Event XIX will take place from October 19 to 21, 2025, featuring around 120 companies presenting and engaging in one-on-one investor meetings [2][3]. Industry Context - LD Micro serves as a key resource in the small-cap space, providing insights and access to emerging companies [5].

Core Insights - Auddia Inc. is restructuring its engineering team to reduce costs by $750,000 annually while preparing for an AI-native holding company structure following a proposed business combination [1][3] - The company is shifting its business model from a consumer subscription model to a B2B SaaS model, targeting artists and labels to leverage AM/FM radio streams [4] Engineering Restructuring - The current lead AI engineer will join the AI engineering team at the holding company level, enhancing the company's focus on AI [1][2] - The restructuring aims to utilize internal and outsourced engineering talent to accelerate product development [1][5] - Key AI talent will be retained while less specialized engineering tasks will be outsourced, allowing for parallel development of multiple projects [3] Leadership Changes - Peter Shoebridge, the CTO, will leave the company at the end of August as part of the restructuring [3][4] - The CEO expressed gratitude for Shoebridge's contributions and professionalism during the transition [4] Product Development Focus - The internal AI team will concentrate on training and productizing the AI Placement Engine, while the outsourced team will develop the Discovr Radio Portal [5] - This new structure is expected to be more capital efficient and expedite the product development process [5]

Core Viewpoint - Auddia Inc. is transitioning its business model from a direct-to-consumer (B2C) approach to a business-to-business (B2B) model, focusing on providing artists and labels with access to its AI-driven music discovery platform, Discovr Radio, which will offer guaranteed radio plays and promote new music to mainstream audiences [2][7][8] Business Model Shift - The company will no longer charge consumers for premium AI features; instead, it will monetize artists who wish to promote their music to AM/FM streaming audiences [3][7] - Auddia's new strategy aims to connect emerging artists with new fans through radio, which has traditionally favored already popular tracks [4][5] Discovr Radio Platform - The Discovr Radio platform will include an AI Placement Engine that optimizes music discovery by matching new songs with appropriate listeners and stations [6] - An Artist Portal will provide artists with performance analytics, including total plays and demographic data, enhancing their connection with fans [6][9] Market Potential - Auddia's internal research indicates a serviceable addressable market of over 100 million prospects for its services, positioning Discovr as a significant tool for artist promotion [8] - The company plans to release a minimum viable product (MVP) version of the Discovr Radio platform by the end of 2025 or early 2026, supported by a pilot program with participating labels [8] Future Integration - While faidr will be the first audio app integrated into the Discovr Radio platform, Auddia intends to expand this integration to other radio streaming apps in the future [9]

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) This section details Auddia Inc.'s Form 10-Q filing, its Nasdaq listings, and company classifications [Filing Details](index=1&type=section&id=Filing%20Details) Auddia Inc.'s Form 10-Q details its Nasdaq listings and classifications as a Non-accelerated Filer, Smaller Reporting Company, and Emerging Growth Company - Auddia Inc. is a Delaware corporation, with its common stock (AUUD) and warrants (AUUDW) listed on The Nasdaq Stock Market[2](index=2&type=chunk)[3](index=3&type=chunk)[4](index=4&type=chunk) - The company is classified as a Non-accelerated Filer, a Smaller Reporting Company, and an Emerging Growth Company[4](index=4&type=chunk)[5](index=5&type=chunk) - As of August 7, 2025, there were **1,147,683 shares** of the registrant's common stock outstanding[5](index=5&type=chunk) [Special Note Regarding Forward-Looking Statements](index=4&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section cautions readers about forward-looking statements, highlighting inherent risks and uncertainties [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) The report contains forward-looking statements, subject to risks and uncertainties, with actual results potentially differing due to factors like capital needs and revenue generation - The report contains forward-looking statements, subject to inherent uncertainties, risks, and changes in circumstances, and are not guarantees of future performance[14](index=14&type=chunk)[15](index=15&type=chunk) - Key factors that could cause actual results to differ include the sufficiency of existing cash, ability to generate revenue from new software services, limited operating history, and the need to raise additional capital[15](index=15&type=chunk)[17](index=17&type=chunk) - The company does not undertake to update or revise forward-looking statements unless required by law[16](index=16&type=chunk) [PART I – FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents Auddia Inc.'s unaudited condensed financial statements and management's discussion and analysis [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Auddia Inc.'s unaudited condensed financial statements, including balance sheets, statements of operations, equity changes, and cash flows, with accompanying notes [Condensed Balance Sheets (Unaudited)](index=5&type=section&id=Condensed%20Balance%20Sheets%20(Unaudited)) This section provides a snapshot of Auddia Inc.'s financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :------------------ | | Cash and cash equivalents | $1,067,756 | $2,706,319 | | Total current assets | $1,173,804 | $2,762,378 | | Total assets | $3,435,748 | $5,298,328 | | Total current liabilities | $528,415 | $550,920 | | Total liabilities | $563,841 | $604,008 | | Total shareholders' equity | $2,871,907 | $4,694,320 | | Accumulated deficit | $(92,852,762) | $(89,428,436) | - The company's common stock outstanding as of December 31, 2024, has been retroactively restated for the effect of the 1-for-17 reverse stock split effective March 28, 2025[21](index=21&type=chunk) [Condensed Statements of Operations (Unaudited)](index=6&type=section&id=Condensed%20Statements%20of%20Operations%20(Unaudited)) This section presents Auddia Inc.'s unaudited financial performance, detailing revenues, expenses, and net loss for the three and six months ended June 30, 2025 and 2024 | Metric (Unaudited) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $– | $– | $– | $– | | Total operating expenses | $1,567,208 | $1,654,390 | $3,318,220 | $3,709,010 | | Loss from operations | $(1,567,208) | $(1,654,390) | $(3,318,220) | $(3,709,010) | | Net loss | $(1,568,653) | $(2,303,425) | $(3,321,218) | $(4,510,753) | | Net loss per share (Basic & Diluted) | $(2.95) | $(14.62) | $(6.73) | $(40.54) | | Weighted average common shares outstanding (Basic & Diluted) | 532,314 | 157,512 | 493,448 | 111,268 | - The company reported **no revenue** for both the three and six months ended June 30, 2025 and 2024[23](index=23&type=chunk) - Net loss decreased for both the three-month period (from **$(2,303,425) to $(1,568,653)**) and the six-month period (from **$(4,510,753) to $(3,321,218)**) year-over-year[23](index=23&type=chunk) [Condensed Statements of Changes in Shareholders' Equity (Unaudited)](index=7&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity%20(Unaudited)) This section outlines the changes in Auddia Inc.'s shareholders' equity, including preferred and common stock activity, for the period ended June 30, 2025 | Metric | Balance, Dec 31, 2024 | Balance, June 30, 2025 | | :--------------------------------- | :-------------------- | :--------------------- | | Series B Preferred Stock (Shares) | 2,314 | 1,535 | | Series C Preferred Stock (Shares) | – | 750 | | Common Stock (Shares) | 397,731 | 654,959 | | Additional Paid-In Capital | $94,122,356 | $95,724,012 | | Accumulated Deficit | $(89,428,436) | $(92,852,762) | | Total Shareholders' Equity | $4,694,320 | $2,871,907 | - Issuance of common shares, net of costs, contributed **$672,795** and **$82,500** during the first and second quarters of 2025, respectively[26](index=26&type=chunk) - Series B preferred stock conversions to common stock and issuance of Series C preferred stock significantly impacted equity composition[26](index=26&type=chunk) [Condensed Statements of Cash Flows (Unaudited)](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section details Auddia Inc.'s cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Cash Flow Activity (Six Months Ended June 30) | 2025 | 2024 | | :-------------------------------------------- | :------------ | :------------ | | Net cash used in operating activities | $(2,508,649) | $(2,633,821) | | Net cash used in investing activities | $(490,650) | $(537,120) | | Net cash provided by financing activities | $1,360,736 | $4,248,590 | | Net (decrease) increase in cash | $(1,638,563) | $1,077,649 | | Cash, beginning of year | $2,706,319 | $804,556 | | Cash and restricted cash, end of period | $1,067,756 | $1,882,205 | - Cash used in operating activities decreased slightly in 2025 compared to 2024, primarily due to a lower net loss[28](index=28&type=chunk) - Net cash provided by financing activities significantly decreased from **$4,248,590** in 2024 to **$1,360,736** in 2025[28](index=28&type=chunk) [Notes to Condensed Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations and additional information supporting the unaudited condensed financial statements [Note 1 – Description of Business, Basis of Presentation and Summary of Significant Accounting Policies](index=9&type=section&id=Note%201%20%E2%80%93%20Description%20of%20Business%2C%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note describes Auddia Inc.'s business, accounting policies, impact of reverse stock splits, and going concern considerations - Auddia Inc. is a technology company developing a proprietary AI platform for audio and innovative podcast technologies[30](index=30&type=chunk) - The company effectuated a **1-for-25 reverse stock split** on February 27, 2024, and a **1-for-17 reverse stock split** on March 28, 2025, retroactively adjusting all share and per-share data[33](index=33&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk) - There is substantial doubt about the company's ability to continue as a going concern, as cash and cash equivalents of **$1,067,756** as of June 30, 2025, along with recent funding, are only sufficient into the fourth quarter of 2025[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) [Note 2 – Property & Equipment, Intangible Assets, and Software Development Costs](index=12&type=section&id=Note%202%20%E2%80%93%20Property%20%26%20Equipment%2C%20Intangible%20Assets%2C%20and%20Software%20Development%20Costs) This note details the company's property, equipment, intangible assets, and software development costs, including changes and amortization expenses | Asset Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :------------------ | | Total property and equipment, net | $9,584 | $12,281 | | Total intangible assets, net | $17,406 | $3,416 | | Total software development costs, net | $1,997,550 | $2,308,230 | - Amortization of capitalized software development costs decreased to **$356,227** for the three months ended June 30, 2025, from **$486,764** in the prior year, and to **$787,286** for the six months ended June 30, 2025, from **$963,682** in the prior year[56](index=56&type=chunk) - Patents increased significantly from **$0 to $14,174**, contributing to the rise in intangible assets[55](index=55&type=chunk) [Note 3 – Accounts Payable and Accrued Liabilities](index=13&type=section&id=Note%203%20%E2%80%93%20Accounts%20Payable%20and%20Accrued%20Liabilities) This note provides a breakdown of Auddia Inc.'s accounts payable and accrued liabilities as of June 30, 2025, and December 31, 2024 | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :------------------ | | Accounts payable and accrued liabilities | $474,398 | $495,312 | | Credit cards payable | $5,765 | $12,351 | | Total | $480,163 | $507,663 | [Note 4 – Notes Payable to Related Party, net of debt issuance costs](index=13&type=section&id=Note%204%20%E2%80%93%20Notes%20Payable%20to%20Related%20Party%2C%20net%20of%20debt%20issuance%20costs) This note details the repayment of related party notes and the conversion of accrued interest and discount into equity securities - The company repaid **$2.75 million** of principal on its outstanding Secured Bridge Notes on April 26, 2024[59](index=59&type=chunk) - Unpaid accrued interest and original issue discount totaling **$911,384** were converted into **27,256 prefunded common stock warrants** and **27,256 non-prefunded warrants**[60](index=60&type=chunk)[61](index=61&type=chunk) - The non-prefunded warrants and fee warrants had a total valuation of **$811,402**, and prefunded warrants had a valuation of **$732,370**[64](index=64&type=chunk) [Note 5 – Commitments and Contingencies](index=14&type=section&id=Note%205%20%E2%80%93%20Commitments%20and%20Contingencies) This note outlines the company's operating lease obligations and a pre-IPO investor claim for damages - The company entered into a 37-month operating lease for office space commencing April 1, 2024, with monthly base rent escalating over the term[65](index=65&type=chunk) - Rent expense was **$8,960** for the three months ended June 30, 2025 and 2024, and **$17,920** and **$25,385** for the six months ended June 30, 2025 and 2024, respectively[65](index=65&type=chunk) - A pre-IPO investor has claimed damages of less than **$300,000**, but no complaint has been filed, and the outcome is neither probable nor estimable[66](index=66&type=chunk) [Note 6 – Share-based Issuances](index=14&type=section&id=Note%206%20%E2%80%93%20Share-based%20Issuances) This note details the activity and expense related to stock options and restricted stock units Stock Options Activity | Stock Options Activity | December 31, 2024 | June 30, 2025 | | :--------------------------------- | :---------------- | :------------ | | Outstanding (Number) | 34,341 | 34,341 | | Weighted Average Exercise Price | $123.88 | $123.88 | Restricted Stock Units Activity | Restricted Stock Units Activity | December 31, 2024 | June 30, 2025 | | :--------------------------------- | :---------------- | :------------ | | Outstanding (Number) | 309 | – | - Share-based compensation expense decreased from **$132,488** for the three months ended June 30, 2024, to **$21,158** for the same period in 2025, and from **$305,777** to **$98,064** for the six-month periods[69](index=69&type=chunk) [Note 7 – Equity Financings](index=16&type=section&id=Note%207%20%E2%80%93%20Equity%20Financings) This note describes the company's equity financing activities, including agreements with White Lion and At-the-Market sales - The company has an Equity Line Common Stock Purchase Agreement with White Lion for up to **$10,000,000**, under which **$0.1 million** was raised in April 2025[70](index=70&type=chunk)[71](index=71&type=chunk) - An At-the-Market Issuance Sales Agreement allowed the company to issue **78,901 shares** for approximately **$0.7 million** during the six months ended June 30, 2025[72](index=72&type=chunk) - On June 30, 2025, the company closed a Series C Preferred Stock and Warrants Financing, receiving **$750,000** in gross proceeds and issuing **750 shares** of Series C preferred stock and warrants for **314,466 common shares**[80](index=80&type=chunk)[81](index=81&type=chunk) [Note 8 – Leases under ASC 842](index=18&type=section&id=Note%208%20%E2%80%93%20Leases%20under%20ASC%20842) This note outlines the accounting treatment for the company's operating lease under ASC 842, including lease term and discount rate - The company recognizes operating lease expense on a straight-line basis over the lease term[84](index=84&type=chunk) | Metric | June 30, 2025 | | :--------------------------------- | :-------------- | | Weighted-average remaining lease term | 1.57 years | | Weighted-average discount rate | 8.6% | Undiscounted Cash Flows | Years Ended December 31, | Undiscounted Cash Flows | | :----------------------- | :---------------------- | | 2025 | $18,419 | | 2026 | $41,749 | | 2027 | $14,735 | | Less imputed interest | $(6,078) | | Total | $68,825 | [Note 9 – Segment Reporting](index=19&type=section&id=Note%209%20%E2%80%93%20Segment%20Reporting) This note states that Auddia Inc. operates as a single operating segment, with the CFO as the Chief Operating Decision Maker - The company operates as a single operating segment, focused on technology for consumer engagement with audio through its proprietary AI platform and podcast innovations[87](index=87&type=chunk) - The Chief Financial Officer (CFO) is identified as the Chief Operating Decision Maker (CODM), reviewing entity-wide financial and operational performance[87](index=87&type=chunk) [Note 10 – Subsequent Events](index=19&type=section&id=Note%2010%20%E2%80%93%20Subsequent%20Events) This note discloses significant events after June 30, 2025, including a proposed business combination and additional equity issuances - On August 5, 2025, the company announced a non-binding letter of intent for a proposed business combination with Thramann Holdings, LLC, where Holdings' equity holders would receive an **80% ownership interest** in the combined company[90](index=90&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - Subsequent to June 30, 2025, the company issued an additional **360,000 shares** of common stock under its Equity Line Common Stock Purchase Agreement for total proceeds of **$1.9 million**[90](index=90&type=chunk) - On August 5, 2025, the company entered into exchange agreements to convert **569 outstanding shares** of Series B preferred stock (including accrued dividends) into **132,724 shares** of common stock[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Auddia Inc.'s financial condition and results, including its AI platform, recent developments, and liquidity challenges [Overview](index=20&type=section&id=Overview) This section provides an overview of Auddia Inc.'s AI-driven faidr app, its commercialization efforts, and significant accumulated deficit - Auddia's faidr app uses proprietary AI to personalize radio and podcast listening by replacing ad breaks with streaming music and offering commercial-free content[94](index=94&type=chunk)[95](index=95&type=chunk)[98](index=98&type=chunk) - The company is implementing new paywalls and testing various price points and marketing strategies to optimize subscription conversions[100](index=100&type=chunk) - As of June 30, 2025, Auddia had an accumulated deficit of **$92,851,762** and requires substantial additional funding to support operations and growth[102](index=102&type=chunk)[103](index=103&type=chunk)[105](index=105&type=chunk) [Recent Developments](index=22&type=section&id=Recent%20Developments) This section highlights recent events, including a proposed business combination, Nasdaq compliance, and reverse stock splits - Auddia entered a non-binding LOI for a business combination with Thramann Holdings, LLC, where Holdings' equity holders would receive an **80% ownership interest** in the combined company[107](index=107&type=chunk)[108](index=108&type=chunk) - The company regained compliance with Nasdaq's minimum stockholders' equity requirement on May 24, 2024, and the **$1.00 minimum bid price** requirement on April 14, 2025[112](index=112&type=chunk)[114](index=114&type=chunk) - A **1-for-25 reverse stock split** was effective on February 27, 2024, and a **1-for-17 reverse stock split** was effective on March 28, 2025[115](index=115&type=chunk) [Components of our results of operations](index=23&type=section&id=Components%20of%20our%20results%20of%20operations) This section outlines the primary components of Auddia's operating expenses and other income/expense - Direct cost of services primarily consists of technology and development costs, expected to increase with app enhancements[118](index=118&type=chunk) - Research and development expenses include capitalized software development costs, amortized over three years, and are expected to continue as apps are enhanced[120](index=120&type=chunk) - General and administrative expenses are expected to increase due to public company operating costs and preparations for product commercialization[121](index=121&type=chunk) [Results of operations](index=24&type=section&id=Results%20of%20operations) This section analyzes Auddia Inc.'s financial performance, detailing revenue, operating expenses, and net loss for recent periods Three Months Ended June 30, 2025 vs 2024 | Metric | June 30, 2025 | June 30, 2024 | Change $ | Change % | | :--------------------------------- | :-------------- | :-------------- | :------- | :------- | | Revenue | $– | $– | $– | 0.0% | | Direct cost of services | $58,566 | $50,227 | $8,339 | 16.6% | | Sales and marketing | $185,157 | $216,868 | $(31,711)| -14.6% | | Research and development | $236,415 | $159,588 | $76,827 | 48.1% | | General and administrative | $729,442 | $734,325 | $(4,883) | -0.7% | | Depreciation and amortization | $357,628 | $493,382 | $(135,754)| -27.5% | | Total operating expenses | $1,567,208 | $1,654,390 | $(87,182)| -5.3% | | Net loss | $(1,568,653) | $(2,303,425) | $734,772 | -31.9% | Six Months Ended June 30, 2025 vs 2024 | Metric | June 30, 2025 | June 30, 2024 | Change $ | Change % | | :--------------------------------- | :-------------- | :-------------- | :------- | :------- | | Revenue | $– | $– | $– | 0.0% | | Direct cost of services | $114,136 | $98,400 | $15,736 | 16.0% | | Sales and marketing | $420,598 | $363,263 | $57,335 | 15.8% | | Research and development | $633,118 | $325,095 | $308,023 | 94.7% | | General and administrative | $1,360,333 | $1,945,124 | $(584,791)| -30.1% | | Depreciation and amortization | $790,035 | $977,128 | $(187,093)| -19.1% | | Total operating expenses | $3,318,220 | $3,709,010 | $(390,790)| -10.5% | | Net loss | $(3,321,218) | $(4,510,753) | $1,189,535| -26.4% | - The significant decrease in 'Other expense, net' for both periods (**99.8%** for three months, **99.6%** for six months) was entirely due to the repayment of notes payable to a related party in April 2024[129](index=129&type=chunk)[137](index=137&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Auddia Inc.'s cash position, financing activities, and ongoing need for additional funding to support operations - As of June 30, 2025, cash and cash equivalents were **$1,067,756**, and the company had working capital of approximately **$0.6 million**[138](index=138&type=chunk) - Additional financing of **$1.5 million** (H1 2025) and **$1.9 million** (post-June 30, 2025) is only sufficient to fund current operating plans into the fourth quarter of 2025, necessitating further funding[138](index=138&type=chunk)[152](index=152&type=chunk) Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--------------------------------- | :------------ | :------------ | | Operating activities | $(2,508,649) | $(2,633,821) | | Investing activities | $(490,650) | $(537,120) | | Financing activities | $1,360,736 | $4,248,590 | | Change in cash | $(1,638,563) | $1,077,649 | [Critical Accounting Estimates](index=29&type=section&id=Critical%20Accounting%20Estimates) This section highlights key accounting estimates, including software development costs and equity-based compensation, and the company's reporting status - Software development costs are capitalized after the preliminary project stage and amortized over an estimated **three-year useful life**[156](index=156&type=chunk) - Equity-based compensation awards are valued using the Black-Scholes option-pricing model, considering factors like stock price, expected life, volatility, and risk-free interest rate[159](index=159&type=chunk) - As an emerging growth company and smaller reporting company, Auddia has elected to use extended transition periods for new accounting standards and benefits from reduced disclosure obligations[160](index=160&type=chunk)[161](index=161&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Auddia Inc. is not required to provide quantitative and qualitative disclosures about market risk - Auddia Inc. is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[162](index=162&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that Auddia Inc.'s disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control - The company's disclosure controls and procedures were evaluated as effective as of June 30, 2025[163](index=163&type=chunk) - No changes in internal control over financial reporting occurred during the six months ended June 30, 2025[164](index=164&type=chunk) [PART II – OTHER INFORMATION](index=31&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part provides additional information on legal proceedings, risk factors, equity sales, and other disclosures [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) Auddia Inc. is involved in various legal disputes, but believes their resolution will not materially affect its financial condition - The company is party to litigation from time to time but believes current pending legal matters will not have a material adverse effect[166](index=166&type=chunk) - Further details on commitments and contingencies are provided in Note 4 to the financial statements[166](index=166&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the Annual Report on Form 10-K for risk factors, noting no material changes since the last filing - Readers should refer to the risk factors in the Annual Report on Form 10-K for the year ended December 31, 2024[167](index=167&type=chunk) - There have been no material changes to the company's risk factors since the last Annual Report[167](index=167&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the quarter ended June 30, 2025, with subsequent sales detailed in Item 5 - No unregistered sales of equity securities occurred during the quarter ended June 30, 2025, that were not previously reported[168](index=168&type=chunk) - Information on unregistered sales of equity securities during July and August 2025 is detailed in Item 5[169](index=169&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Auddia Inc. reported no defaults upon senior securities during the period - There were no defaults upon senior securities[171](index=171&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Auddia Inc. reported no mine safety disclosures - There were no mine safety disclosures[172](index=172&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) This section discloses no Rule 10b5-1 trading arrangements and details subsequent equity issuances and conversions - No director or officer adopted or terminated Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[173](index=173&type=chunk) - In July and August 2025, **360,000 shares** of common stock were issued under the Equity Line Common Stock Purchase Agreement for total proceeds of **$1.9 million**[173](index=173&type=chunk) - On August 5, 2025, exchange agreements were entered into to convert **569 shares** of Series B preferred stock into **132,724 shares** of common stock at an exchange price of **$4.486 per share**[174](index=174&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all required exhibits, including various agreements, certificates, and certifications, incorporated by reference - The exhibit index lists documents incorporated by reference, including the At-The-Market Issuance Sales Agreement, Certificates of Incorporation and Designations for preferred stock, and various equity agreements[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk) - Key exhibits filed herewith include the Form of Exchange Agreement dated August 5, 2025, and Section 302 and 906 Certifications by the CEO and CFO[178](index=178&type=chunk) [Signatures](index=36&type=section&id=Signatures) The report is duly signed by Auddia Inc.'s President, CEO, and CFO on August 8, 2025 - The report was signed by Jeffrey Thramann, President, CEO, and Director, and John Mahoney, CFO, on August 8, 2025[181](index=181&type=chunk)[182](index=182&type=chunk)

Core Viewpoint - Auddia Inc. is restructuring into a holding company focused on leveraging AI and web3 efficiencies to enhance its portfolio companies, with a proposed business combination with Thramann Holdings, LLC [1][3]. Group 1: Business Combination Details - Auddia's Board has approved a non-binding letter of intent for a business combination with Thramann Holdings, which controls three early-stage AI-native companies [1][2]. - The proposed terms indicate that Holdings' equity holders will receive an 80% ownership interest in the combined company, while Auddia equity holders will own 20% [4]. - The business combination is a related party transaction, with Jeff Thramann being the founder and majority shareholder of Holdings [6]. Group 2: Leadership and Management - Following the business combination, Auddia's current board will initially oversee the new holding company, with Jeff Thramann continuing as CEO and John Mahoney as CFO [5]. - Auddia's leadership has formed a Special Committee of Independent Directors to address potential conflicts of interest related to the transaction [6]. Group 3: Financial and Operational Conditions - The closing of the business combination is contingent upon Auddia raising at least $10 million in additional capital to support ongoing operations [7]. - The parties have agreed to a 30-day exclusivity period to negotiate a definitive business combination agreement, which will include customary closing conditions [7]. Group 4: Portfolio Companies - Thramann Holdings controls LT350, Influence Healthcare, and Voyex, which are focused on AI applications in various sectors [2][10]. - LT350 has developed a solar parking lot canopy that can transform parking lots into distributed AI data centers, while Influence Healthcare leverages AI and blockchain for value-based care [11][12].

Core Viewpoint - Auddia Inc. is undergoing a leadership change and restructuring to enhance its focus on AI capabilities, with Jeff Thramann appointed as the new CEO following Michael Lawless's retirement [1][3][6] Leadership Changes - Jeff Thramann has succeeded Michael Lawless as CEO, who is retiring after 13 years of leadership [1][3] - Three new independent board members with expertise in AI infrastructure and entrepreneurial evaluation have been appointed: Nick Balletta, Emmanuel de Boucaud, and Josh Sroge [2] Restructuring Plans - A special committee has been formed to evaluate a transformative business combination that would restructure Auddia as a subsidiary of an AI native holding company [2][4] - The proposed holding company aims to deliver enhanced AI capabilities through a proprietary AI data center solution, which is expected to lower costs for training AI models [4][5] AI Strategy - The AI leadership team will promote an AI-first culture among portfolio companies, focusing on operational efficiencies and providing world-class data analytics and machine learning expertise [5] - Centralizing AI talent is expected to enhance innovation and improve AI model development across portfolio companies [5] Strategic Analysis - The leadership changes and restructuring proposal are the result of a comprehensive analysis of strategic alternatives conducted over the past nine months [6] - The restructuring is seen as a potential catalyst for the company's growth and strategic direction [6] Company Overview - Auddia is focused on reinventing consumer engagement with audio content through its proprietary AI platform, particularly with its flagship audio superapp, faidr [8]