Auddia to Present at the LD Micro Main Event XIXPresentation on Tuesday October 21, 2025 at 2:00 PM PTOctober 08, 2025 6:00 AM EDT | Source: LD MicroBoulder, Colorado--(Newsfile Corp. - October 8, 2025) - Auddia Inc. (NASDAQ: AUUD) (NASDAQ: AUUDW) ("Auddia" or the "Company"), an AI first technology company that has built a proprietary AI platform for audio identification and classification to reinvent how consumers engage with audio, announced today that it will be presenting at the 19th Annua ...

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]

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Auddia Inc.'s unaudited Q1 2025 financial statements, covering Balance Sheets, Operations, Equity, Cash Flows, and notes [Condensed Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Balance%20Sheets%20(Unaudited)) The company's financial position as of March 31, 2025, showing assets, liabilities, and shareholders' equity Condensed Balance Sheets (Unaudited) | ASSETS (March 31, 2025) | Amount ($) | | :---------------------- | :--------- | | Cash and cash equivalents | 1,689,913 | | Total current assets | 1,784,436 | | Total non-current assets| 2,289,189 | | **Total assets** | **4,073,625**| | LIABILITIES (March 31, 2025)| Amount ($) | | Total current liabilities| 391,762 | | Total liabilities | 436,723 | | SHAREHOLDERS' EQUITY (March 31, 2025)| Amount ($) | | Total shareholders' equity| 3,636,902 | | **Total liabilities and shareholders' equity**| **4,073,625**| - Total assets decreased from **$5,298,328** as of December 31, 2024, to **$4,073,625** as of March 31, 2025, a decrease of approximately **23.2%**[19](index=19&type=chunk) - Total liabilities decreased from **$604,008** as of December 31, 2024, to **$436,723** as of March 31, 2025, a decrease of approximately **27.7%**[19](index=19&type=chunk) - Total shareholders' equity decreased from **$4,694,320** as of December 31, 2024, to **$3,636,902** as of March 31, 2025, a decrease of approximately **22.5%**[19](index=19&type=chunk) [Condensed Statements of Operations (Unaudited)](index=5&type=section&id=Condensed%20Statements%20of%20Operations%20(Unaudited)) Analysis of Auddia Inc.'s financial performance for the three months ended March 31, 2025, compared to 2024 Condensed Statements of Operations (Unaudited) | Metric (Three Months Ended March 31) | 2025 ($) | 2024 ($) | Change ($) | Change (%) | | :----------------------------------- | :------- | :------- | :--------- | :--------- | | Revenue | – | – | – | – | | Total operating expenses | 1,751,013| 2,054,620| (303,607) | (14.8%) | | Loss from operations | (1,751,013)| (2,054,620)| 303,607 | (14.8%) | | Interest expense | (1,552) | (152,708)| 151,156 | (99.0%) | | Net loss | (1,752,565)| (2,207,328)| 454,763 | (20.6%) | | Net loss per share (Basic and diluted)| (3.86) | (33.69) | 29.83 | (88.5%) | | Weighted average common shares outstanding| 454,582 | 65,526 | 389,056 | 593.7% | - Net loss decreased by **20.6%** from **$(2,207,328)** in Q1 2024 to **$(1,752,565)** in Q1 2025[21](index=21&type=chunk) - Interest expense significantly decreased by **99.0%** due to the repayment of notes payable to a related party in April 2024[21](index=21&type=chunk)[118](index=118&type=chunk) [Condensed Statements of Changes in Shareholders' Equity (Unaudited)](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Shareholders'%20Equity%20(Unaudited)) Summary of changes in Auddia Inc.'s shareholders' equity for the three months ended March 31, 2025 - Shareholders' equity decreased from **$4,694,320** at December 31, 2024, to **$3,636,902** at March 31, 2025, primarily due to the net loss incurred during the period[24](index=24&type=chunk) - Issuance of common shares, net of costs, contributed **$672,795** to additional paid-in capital in Q1 2025[24](index=24&type=chunk) - Series B preferred stock converted to common stock resulted in a decrease of **$139,027** in additional paid-in capital and an increase in common stock par value[24](index=24&type=chunk) [Condensed Statements of Cash Flows (Unaudited)](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20(Unaudited)) Analysis of Auddia Inc.'s cash inflows and outflows from operating, investing, and financing activities for Q1 2025 Condensed Statements of Cash Flows (Unaudited) | Cash Flow Activity (Three Months Ended March 31) | 2025 ($) | 2024 ($) | | :----------------------------------------------- | :---------- | :---------- | | Net cash used in operating activities | (1,443,166) | (1,405,138) | | Net cash used in investing activities | (246,601) | (273,388) | | Net cash provided by financing activities | 673,361 | 3,606,508 | | Net increase (decrease) in cash | (1,016,406) | 1,927,982 | | Cash, beginning of year | 2,706,319 | 804,556 | | Cash and restricted cash, end of period | 1,689,913 | 2,732,538 | - Net cash used in operating activities increased slightly from **$(1,405,138)** in Q1 2024 to **$(1,443,166)** in Q1 2025[26](index=26&type=chunk) - Cash provided by financing activities significantly decreased from **$3,606,508** in Q1 2024 to **$673,361** in Q1 2025[26](index=26&type=chunk) - The company experienced a net decrease in cash of **$(1,016,406)** in Q1 2025, compared to a net increase of **$1,927,982** in Q1 2024[26](index=26&type=chunk) [Notes to Condensed Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20(Unaudited)) Detailed explanations of Auddia Inc.'s accounting policies, financial instruments, and recent transactions [Note 1 – Description of Business, Basis of Presentation and Summary of Significant Accounting Policies](index=8&type=section&id=Note%201%20%E2%80%93%20Description%20of%20Business,%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Overview of Auddia Inc.'s business, financial statement presentation, and key accounting principles - Auddia Inc. is a technology company focused on reinventing audio engagement through a proprietary AI platform for audio and innovative podcast technologies[28](index=28&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, retrospectively adjusting all share and per-share data[31](index=31&type=chunk)[32](index=32&type=chunk)[34](index=34&type=chunk) - Auddia Inc. is an emerging growth company and has elected to use the extended transition period for complying with new or revised accounting standards[38](index=38&type=chunk) - The company's current cash of **$1,689,913** as of March 31, 2025, is only sufficient into **Q3 2025**, raising substantial doubt about its ability to continue as a going concern without additional funding[39](index=39&type=chunk)[40](index=40&type=chunk) [Note 2 – Property & Equipment, Intangible Assets, and Software Development Costs](index=11&type=section&id=Note%202%20%E2%80%93%20Property%20%26%20Equipment,%20Intangible%20Assets,%20and%20Software%20Development%20Costs) Details on Auddia Inc.'s property, equipment, intangible assets, and capitalized software development costs Property & Equipment, Intangible Assets, and Software Development Costs | Asset Category (Net) | March 31, 2025 ($) | December 31, 2024 ($) | | :------------------- | :----------------- | :-------------------- | | Property and equipment | 10,932 | 12,281 | | Intangible assets | 13,021 | 3,416 | | Software development costs| 2,114,166 | 2,308,230 | - Software development costs, net, decreased by approximately **8.4%** from **$2,308,230** at December 31, 2024, to **$2,114,166** at March 31, 2025[53](index=53&type=chunk) - Intangible assets, net, significantly increased from **$3,416** to **$13,021**, primarily due to new patent capitalization[53](index=53&type=chunk) - Amortization of capitalized software development costs was **$431,037** for Q1 2025, down from **$476,918** in Q1 2024[53](index=53&type=chunk) [Note 3 – Accounts Payable and Accrued Liabilities](index=12&type=section&id=Note%203%20%E2%80%93%20Accounts%20Payable%20and%20Accrued%20Liabilities) Breakdown of Auddia Inc.'s accounts payable and accrued liabilities as of March 31, 2025 Accounts Payable and Accrued Liabilities | Category | March 31, 2025 ($) | December 31, 2024 ($) | | :------- | :----------------- | :-------------------- | | Accounts payable and accrued liabilities | 330,143 | 495,312 | | Credit cards payable | 15,892 | 12,351 | | **Total**| **346,035** | **507,663** | - Total accounts payable and accrued liabilities decreased by **31.8%** from **$507,663** at December 31, 2024, to **$346,035** at March 31, 2025[54](index=54&type=chunk) [Note 4 – Notes Payable to Related Party, net of debt issuance costs](index=12&type=section&id=Note%204%20%E2%80%93%20Notes%20Payable%20to%20Related%20Party,%20net%20of%20debt%20issuance%20costs) Information on Auddia Inc.'s notes payable to a related party, including repayment and conversion events - The company repaid **$2.75 million** of principal on its outstanding Secured Bridge Notes on April 26, 2024[57](index=57&type=chunk) - Unpaid accrued interest and original issue discount on Bridge Notes totaling **$911,384** were converted into equity securities (Prefunded Warrants and Non-Prefunded Warrants) effective April 9, 2024[57](index=57&type=chunk)[58](index=58&type=chunk) - The Non-Prefunded Warrants and Fee Warrants have a price adjustment provision and were not exercisable for **six months** post-issue to comply with Nasdaq rules[59](index=59&type=chunk)[60](index=60&type=chunk) [Note 5 – Commitments and Contingencies](index=13&type=section&id=Note%205%20%E2%80%93%20Commitments%20and%20Contingencies) Details on Auddia Inc.'s contractual obligations and potential legal liabilities - The company entered into a **37-month** operating lease for office space commencing April 1, 2024, with monthly base rent increasing over the term[62](index=62&type=chunk) - Rent expense for Q1 2025 was **$8,960**, a decrease from **$22,480** in Q1 2024, which included a temporary month-to-month lease[62](index=62&type=chunk) - A pre-IPO investor is claiming damages of less than **$300,000**, but no complaint has been filed, and the outcome is neither probable nor estimable as of the financial statement issuance date[63](index=63&type=chunk) [Note 6 – Share-based Issuances](index=13&type=section&id=Note%206%20%E2%80%93%20Share-based%20Issuances) Information on Auddia Inc.'s stock options and restricted stock units outstanding Stock Options (March 31, 2025) | Stock Options (March 31, 2025) | Number | Weighted Average Exercise Price ($) | | :----------------------------- | :------- | :---------------------------------- | | Outstanding | 34,341 | 123.88 | | Exercisable | 33,166 | 123.88 | Restricted Stock Units (March 31, 2025) | Restricted Stock Units (March 31, 2025) | Number | | :------------------------------------ | :----- | | Outstanding | – | - All **309** restricted stock units outstanding as of December 31, 2024, were vested/issued by March 31, 2025, resulting in **zero** outstanding RSUs[68](index=68&type=chunk) - Share-based compensation expense decreased from **$173,289** in Q1 2024 to **$76,906** in Q1 2025[68](index=68&type=chunk) [Note 7 – Equity Financings](index=15&type=section&id=Note%207%20%E2%80%93%20Equity%20Financings) Details on Auddia Inc.'s equity financing activities, including stock purchase agreements and convertible preferred stock - The company has an equity line Common Stock Purchase Agreement with White Lion, allowing it to sell up to **$10,000,000** in common stock[69](index=69&type=chunk) - During Q1 2025, Auddia issued **78,947 shares** for approximately **$0.7 million** through an At-the-Market Issuance Sales Agreement[70](index=70&type=chunk) - In April 2024, the company completed a **$2.3 million** convertible preferred stock and warrants financing, issuing Series B Preferred Stock and Warrants convertible into Common Stock[72](index=72&type=chunk)[73](index=73&type=chunk) - As of March 31, 2025, the company elected to capitalize all declared dividends on Series B Preferred Stock. **140 shares** of Series B Preferred stock and capitalized dividends were converted to **16,654 shares** of Common Stock on February 19, 2025[74](index=74&type=chunk)[75](index=75&type=chunk) [Note 8 – Leases under ASC 842](index=16&type=section&id=Note%208%20%E2%80%93%20Leases%20under%20ASC%20842) Information on Auddia Inc.'s operating lease accounting under ASC 842 - The company recognizes operating lease expense on a straight-line basis over the lease term[77](index=77&type=chunk) - Operating lease expense for Q1 2025 was **$8,960**, compared to **$0** in Q1 2024 (due to lease commencement in April 2024)[77](index=77&type=chunk) Lease Metric (March 31, 2025) | Lease Metric (March 31, 2025) | Value | | :---------------------------- | :---------- | | Weighted-average remaining lease term | 1.78 years | | Weighted-average discount rate| 8.6% | [Note 9 – Segment Reporting](index=16&type=section&id=Note%209%20%E2%80%93%20Segment%20Reporting) Disclosure of Auddia Inc.'s operating segments and how its business is managed - Auddia Inc. operates and manages its business as a single operating segment focused on AI audio technology and podcast innovation[79](index=79&type=chunk) - The Chief Financial Officer (CFO) serves as the Chief Operating Decision Maker (CODM) and reviews entity-wide financial and operational performance as a single unit[79](index=79&type=chunk) [Note 10 – Subsequent Events](index=16&type=section&id=Note%2010%20%E2%80%93%20Subsequent%20Events) Significant events occurring after the balance sheet date, up to the financial statement issuance - In April 2025, **447 shares** of Series B Preferred stock and capitalized dividends were converted to **85,225 shares** of Common stock[82](index=82&type=chunk) - Also in April 2025, the company issued **25,000 shares** of Common stock under the Equity Line Common Stock Purchase Agreement for total proceeds of **$0.1 million**[82](index=82&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion of Auddia Inc.'s Q1 2025 financial condition, operations, liquidity, and funding needs [Overview](index=17&type=section&id=Overview) A summary of Auddia Inc.'s business, product offerings, and financial position - Auddia is an AI technology company based in Boulder, CO, focused on its faidr app, which uses proprietary AI to personalize radio and podcast listening by removing ads and offering exclusive content[84](index=84&type=chunk)[85](index=85&type=chunk) - The faidr app launched fully on February 15, 2022, and expanded to include faidrRadio (exclusive content) in February 2023 and podcasts for iOS/Android in Q1/Q2 2023[89](index=89&type=chunk) - In Q1 2025, the company implemented new paywalls and is testing various price points and marketing strategies to optimize subscription conversions[90](index=90&type=chunk) - Auddia has an accumulated deficit of **$91,239,759** as of March 31, 2025, and requires substantial additional funding to complete product development and scale operations[92](index=92&type=chunk)[93](index=93&type=chunk) [Recent Developments](index=18&type=section&id=Recent%20Developments) Key events and strategic initiatives undertaken by Auddia Inc. in the recent period [Mergers and Acquisitions Strategy](index=18&type=section&id=Mergers%20and%20Acquisitions%20Strategy) Auddia Inc.'s strategic approach to mergers and acquisitions for business growth and market expansion - Auddia is exploring M&A options to rapidly scale the business, accelerate user adoption, enter international markets, and open new capital pathways[96](index=96&type=chunk) - The strategy focuses on acquiring radio-streaming app users, offering proprietary ad-free products to generate subscription revenue, and integrating differentiated features into a larger audio Superapp platform[96](index=96&type=chunk) [Nasdaq Deficiency Notices](index=19&type=section&id=Nasdaq%20Deficiency%20Notices) Information regarding Auddia Inc.'s compliance with Nasdaq listing requirements - Auddia received Nasdaq notices in 2022, 2023, and 2024 for non-compliance with minimum stockholders' equity and **$1.00** bid price requirements[98](index=98&type=chunk) - The company regained compliance with the equity requirement on **May 24, 2024**, and with the **$1.00** minimum bid price requirement on **April 14, 2025**[99](index=99&type=chunk)[101](index=101&type=chunk) [Reverse Stock Splits](index=19&type=section&id=Reverse%20Stock%20Splits) Details on Auddia Inc.'s reverse stock splits and their impact on outstanding shares - A **1-for-25** reverse stock split was effectuated on February 27, 2024, and a **1-for-17** reverse stock split on March 28, 2025[102](index=102&type=chunk)[103](index=103&type=chunk) - These splits adjusted outstanding warrants, stock options, and restricted stock units proportionately, without changing the authorized number of common shares[104](index=104&type=chunk) [Impact of Inflation](index=19&type=section&id=Impact%20of%20Inflation) Assessment of how inflationary pressures affect Auddia Inc.'s business operations and costs - The company has experienced higher costs due to inflation, particularly in employee compensation and outside services[105](index=105&type=chunk) - Inflation is expected to continue negatively impacting the business throughout 2025, with uncertainty about offsetting these pressures[105](index=105&type=chunk) [Components of our results of operations](index=19&type=section&id=Components%20of%20our%20results%20of%20operations) Explanation of the key financial components contributing to Auddia Inc.'s operating results [Direct costs of services](index=19&type=section&id=Direct%20costs%20of%20services) Analysis of expenses directly attributable to providing Auddia Inc.'s services - Direct costs primarily include hosting and technology-related expenses for app development[106](index=106&type=chunk) - These costs are expected to increase with continued development and enhancement of the faidr and podcasting apps[106](index=106&type=chunk) [Sales and marketing](index=20&type=section&id=Sales%20and%20marketing) Overview of Auddia Inc.'s expenses related to promoting and selling its products and services - Sales and marketing expenses consist of salaries, direct-to-consumer promotional spend, and consulting services[107](index=107&type=chunk) - These expenses are expected to fluctuate based on new app upgrades, enhancements, and efforts to drive customer acquisition, retention, and subscription conversion[107](index=107&type=chunk) [Research and development](index=20&type=section&id=Research%20and%20development) Details on Auddia Inc.'s investments in research and development for new technologies and product enhancements - Significant resources are allocated to R&D for software development, with costs capitalized once the preliminary project stage is complete and funding is committed[108](index=108&type=chunk) - Capitalized software development costs are amortized over an estimated useful life of three years[108](index=108&type=chunk) [General and administrative](index=20&type=section&id=General%20and%20administrative) Analysis of Auddia Inc.'s overhead expenses supporting overall business operations - G&A expenses include salaries, payroll taxes, benefits, stock-based compensation, and professional fees for auditing, tax, legal, and consulting services[109](index=109&type=chunk) - These expenses are expected to increase as the company prepares for commercialization and supports its operations as a public company[109](index=109&type=chunk) [Other income and expense](index=20&type=section&id=Other%20income%20and%20expense) Summary of non-operating income and expenses affecting Auddia Inc.'s financial results - This category primarily consists of interest expense related to debt and conversion features of notes payable to a related party[110](index=110&type=chunk) [Results of operations](index=21&type=section&id=Results%20of%20operations) Detailed comparison of Auddia Inc.'s financial performance for the three months ended March 31, 2025 and 2024 [Comparison of the Three Months Ended March 31, 2025 and 2024](index=21&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20March%2031,%202025%20and%202024) A comparative analysis of Auddia Inc.'s financial results for the first quarter of 2025 versus 2024 Comparison of the Three Months Ended March 31, 2025 and 2024 | Metric (Three Months Ended March 31) | 2025 ($) | 2024 ($) | Change ($) | Change (%) | | :----------------------------------- | :------- | :------- | :--------- | :--------- | | Revenue | – | – | – | – | | Direct cost of services | 55,571 | 48,173 | 7,398 | 15.4% | | Sales and marketing | 235,441 | 146,395 | 89,046 | 60.8% | | Research and development | 396,703 | 165,507 | 231,196 | 139.7% | | General and administrative | 630,891 | 1,210,799| (579,908) | (47.9%) | | Depreciation and amortization | 432,407 | 483,746 | (51,339) | (10.6%) | | Total operating expenses | 1,751,013| 2,054,620| (303,607) | (14.8%) | | Loss from operations | (1,751,013)| (2,054,620)| 303,607 | (14.8%) | | Interest expense | (1,552) | (152,708)| 151,156 | (99.0%) | | Net loss | (1,752,565)| (2,207,328)| 454,763 | (20.6%) | [Revenue](index=21&type=section&id=Revenue) Analysis of Auddia Inc.'s revenue generation for the reported periods - Total revenues for both Q1 2025 and Q1 2024 were **$0**, as the company continues to develop and enhance its apps to establish new revenue streams[112](index=112&type=chunk) [Direct cost of services](index=21&type=section&id=Direct%20cost%20of%20services) Examination of direct costs incurred by Auddia Inc. in delivering its services - Direct Cost of Services increased by **$7,398 (15.4%)** to **$55,571** in Q1 2025, remaining relatively flat due to ongoing maintenance costs for the faidr app[113](index=113&type=chunk) [Sales and marketing](index=21&type=section&id=Sales%20and%20marketing) Review of Auddia Inc.'s sales and marketing expenditures and their impact - Sales and marketing expenses increased by **$89,046 (60.8%)** to **$235,441** in Q1 2025, primarily due to increased marketing promotion costs[114](index=114&type=chunk) [Research and development](index=21&type=section&id=Research%20and%20development) Assessment of Auddia Inc.'s research and development expenses and their changes - Research and development expenses increased by **$231,196 (139.7%)** to **$396,703** in Q1 2025, mainly due to higher R&D consulting fees[115](index=115&type=chunk) [General and administrative](index=21&type=section&id=General%20and%20administrative) Analysis of Auddia Inc.'s general and administrative expenses and their fluctuations - General and administrative expenses decreased by **$579,908 (47.9%)** to **$630,891** in Q1 2025, driven by lower stock compensation expense and professional fees related to potential acquisition efforts in 2024[116](index=116&type=chunk) [Depreciation and amortization](index=22&type=section&id=Depreciation%20and%20amortization) Review of Auddia Inc.'s depreciation and amortization expenses - Depreciation and amortization expenses decreased by **$51,339 (10.6%)** to **$432,407** in Q1 2025, reflecting a decrease in capitalized software costs and their ongoing amortization[117](index=117&type=chunk) [Other expense, net](index=22&type=section&id=Other%20expense,%20net) Summary of Auddia Inc.'s other non-operating expenses - Total other expenses decreased by **$151,156 (99.0%)** to **$1,552** in Q1 2025, primarily due to the repayment of notes payable to a related party in April 2024[118](index=118&type=chunk) [Liquidity and capital resources](index=22&type=section&id=Liquidity%20and%20capital%20resources) Discussion of Auddia Inc.'s ability to meet its short-term and long-term financial obligations [Sources of liquidity](index=22&type=section&id=Sources%20of%20liquidity) Overview of Auddia Inc.'s available cash and working capital to fund operations - As of March 31, 2025, Auddia had cash and cash equivalents of **$1,689,913** and working capital of approximately **$1.4 million**[119](index=119&type=chunk) - The **$0.7 million** in additional financing secured in Q1 2025 is only sufficient to fund current operating plans into **Q3 2025**, indicating a need for further funding[119](index=119&type=chunk) [Equity Line Common Stock Purchase Agreement](index=22&type=section&id=Equity%20Line%20Common%20Stock%20Purchase%20Agreement) Details on Auddia Inc.'s agreement to sell common stock through an equity line - The company has an agreement with White Lion Capital, LLC, allowing it to sell up to **$10,000,000** in common stock, at its discretion[120](index=120&type=chunk) [At-the-Market Sales Agreement](index=22&type=section&id=At-the-Market%20Sales%20Agreement) Information on Auddia Inc.'s at-the-market equity offering program - Auddia issued **78,947 shares** for approximately **$0.7 million** in Q1 2025 through an At-the-Market Issuance Sales Agreement with Ascendiant Capital Markets, LLC[121](index=121&type=chunk) - The agreement allows for the sale of up to **$10,000,000** in common stock through an ATM offering[121](index=121&type=chunk) [Cash Flow Analysis](index=22&type=section&id=Cash%20Flow%20Analysis) Detailed breakdown of Auddia Inc.'s cash flows from operating, investing, and financing activities Cash Flow Analysis | Cash Flow Activity (Three Months Ended March 31) | 2025 ($) | 2024 ($) | | :----------------------------------------------- | :---------- | :---------- | | Operating activities | (1,443,166) | (1,405,138) | | Investing activities | (246,601) | (273,388) | | Financing activities | 673,361 | 3,606,508 | | Change in cash | (1,016,406) | 1,927,982 | [Operating activities](index=23&type=section&id=Operating%20activities) Analysis of cash flows generated from or used in Auddia Inc.'s primary business operations - Cash used in operating activities was **$(1,443,166)** in Q1 2025, primarily due to a net loss of **$(1,752,565)** and a decrease in working capital[124](index=124&type=chunk) - Non-cash charges, including depreciation, amortization, and share-based compensation, partially offset the net loss[124](index=124&type=chunk) [Investing activities](index=23&type=section&id=Investing%20activities) Review of cash flows related to Auddia Inc.'s investments in assets - Cash used in investing activities was **$(246,601)** in Q1 2025, consisting of capitalization of software development and patent expenses[126](index=126&type=chunk) - This represents a decrease from **$(273,388)** in Q1 2024, which was entirely for software development capitalization[126](index=126&type=chunk) [Financing activities](index=23&type=section&id=Financing%20activities) Examination of cash flows from Auddia Inc.'s debt and equity transactions - Cash generated from financing activities was **$673,361** in Q1 2025, primarily from the issuance of common shares[127](index=127&type=chunk) - This is a significant decrease from **$3,606,508** generated in Q1 2024, which also came entirely from common share issuance[127](index=127&type=chunk) [Funding Requirements](index=23&type=section&id=Funding%20Requirements) Assessment of Auddia Inc.'s future capital needs and ability to secure additional financing - Auddia has an accumulated deficit of **$91,239,759** as of March 31, 2025, and requires additional funding beyond the **$0.7 million** secured in Q1 2025, which is only sufficient until **Q3 2025**[128](index=128&type=chunk) - Future funding needs depend on market acceptance of products, ability to attract content creators and retain listeners, technology development costs, and managing competitive and intellectual property challenges[129](index=129&type=chunk)[130](index=130&type=chunk) [Off-balance sheet arrangements](index=23&type=section&id=Off-balance%20sheet%20arrangements) Disclosure of Auddia Inc.'s off-balance sheet transactions and obligations - The company did not have any off-balance sheet arrangements during the periods presented or currently[129](index=129&type=chunk) [Critical Accounting Estimates](index=24&type=section&id=Critical%20Accounting%20Estimates) Key accounting policies and estimates that require significant judgment and impact financial reporting - Key accounting estimates include the valuation of capital stock, warrants, and options, and the recoverability and amortization period for capitalized software development costs[36](index=36&type=chunk)[131](index=131&type=chunk) - Software development costs are capitalized once the preliminary project stage is complete and amortized over **three years**, subject to ongoing recoverability assessment[133](index=133&type=chunk) - Equity-based compensation awards are equity-classified and valued using the Black-Scholes option-pricing model[134](index=134&type=chunk)[135](index=135&type=chunk) - As an emerging growth company and smaller reporting company, Auddia has elected to use extended transition periods for new accounting standards and reduced disclosure obligations[136](index=136&type=chunk)[137](index=137&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&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 exempt from providing quantitative and qualitative disclosures about market risk[138](index=138&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management's evaluation of Auddia Inc.'s disclosure controls and procedures as of March 31, 2025 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of **March 31, 2025**[139](index=139&type=chunk) - Disclosure controls are designed to provide reasonable assurance that required information is recorded, processed, summarized, and reported timely[139](index=139&type=chunk) - There were no changes in internal control over financial reporting during the **three months** ended **March 31, 2025**[140](index=140&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) Auddia Inc. faces legal disputes, not expected to materially affect financial condition; no active litigations reported - The company is involved in various legal disputes but believes their resolution will not have a material adverse effect on its business or financial condition[143](index=143&type=chunk) - There are no active litigations as of the date the financial statements were issued[63](index=63&type=chunk) - A pre-IPO investor has claimed damages of less than **$300,000**, but no complaint has been filed, and the outcome is not probable or estimable, so no accrual has been made[63](index=63&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) No material changes to Auddia Inc.'s risk factors since the Annual Report on Form 10-K for December 31, 2024 - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[144](index=144&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable to Auddia Inc. for the reported period, and no equity securities were repurchased - This item is not applicable[145](index=145&type=chunk) - The company did not repurchase any equity securities during the quarter ended March 31, 2025[146](index=146&type=chunk) [Item 3. Defaults Upon Senior Securities](index=26&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[147](index=147&type=chunk) [Item 4. Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Auddia Inc. has no mine safety disclosures to report - There are no mine safety disclosures[148](index=148&type=chunk) [Item 5. Other Information](index=26&type=section&id=Item%205.%20Other%20Information) No director or officer of Auddia Inc. adopted or terminated any Rule 10b5-1 trading arrangements in Q1 2025 - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025[149](index=149&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) Lists all required exhibits, including agreements, certificates, policies, and XBRL taxonomy documents, incorporated by reference - The section lists exhibits required by SEC regulations, including the At-The-Market Issuance Sales Agreement, Certificate of Incorporation, Bylaws, Equity Incentive Plans, and various other agreements[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - It also includes Section 302 and 906 Certifications by the CEO and CFO, and XBRL instance and taxonomy documents[153](index=153&type=chunk)[154](index=154&type=chunk) [Signatures](index=30&type=section&id=Signatures) Report signed by Michael Lawless (CEO) and John Mahoney (CFO) on behalf of Auddia Inc. on May 8, 2025 - The report is signed by Michael Lawless, President, CEO, and Director, and John Mahoney, CFO, on **May 8, 2025**[157](index=157&type=chunk)

Core Insights - Auddia Inc. has introduced a new proprietary AI audio model that allows users to transform any FM music station into an ad-free and DJ talk-free experience, enhancing user control over their listening preferences [1][2][3] Group 1: New Features and Innovations - The new "binary AI model" enables subscribers to turn off ads and DJ talk, providing uninterrupted music listening [2] - This feature is available exclusively to subscribers of the faidr platform and can be adjusted at any time through new radio preference controls [2][3] - The new model is currently live on iOS and will be available on Android shortly, with positive feedback received during prototyping [3] Group 2: Company Vision and Market Position - Auddia aims to innovate within the radio space by transitioning radio listening from a passive to a more active experience for users [3] - The company seeks to balance preserving traditional radio elements while offering customization options to cater to diverse listener preferences [4] - Auddia's flagship audio superapp, faidr, is designed to reinvent consumer engagement with AM/FM radio and other audio content [5]

Core Insights - Auddia Inc. has updated its corporate overview to emphasize its superapp strategy, which leverages AI to enhance audio content engagement and retention metrics [1][4] - The company aims to consolidate various audio components into a single streaming platform, enhancing user experience through innovative AI features [2][4] Company Strategy - Auddia is executing a superapp strategy that integrates all major audio components into one platform, starting with AI-driven features like content skipping and ad-free listening [2][4] - Future enhancements to the faidr superapp will include a music player, audiobooks, and text-to-speech capabilities, allowing for a comprehensive audio experience [3] AI and Data Utilization - The company believes that the data generated from user interactions across its audio superapp will provide a competitive edge in developing advanced AI models [4] - Auddia's focus on leveraging user engagement data aims to improve content delivery and provide valuable insights to content creators [3][4] Performance Metrics - The updated corporate overview reflects significant improvements in user retention, with durable increases in 30-day retention metrics and the introduction of customer acquisition cost (CAC) targets for paid subscribers [4] - This marks the first time the company has set specific CAC targets, indicating a strategic shift towards more data-driven performance metrics [4]

Financial Performance - The company incurred net losses of $8,722,039 and $8,807,496 for the years ended December 31, 2024 and 2023, respectively[91]. - The company expects to continue incurring significant operating losses and expenses in the near term as it invests in technology and marketing[91]. - The company has a limited operating history and may struggle to generate meaningful revenue from future software products[96]. Cash and Financing - As of December 31, 2024, the company had cash and cash equivalents of $2,706,319, which is only sufficient to fund current operating plans into the second quarter of 2025[90]. - The company secured approximately $10.9 million in additional financing in 2024 and $0.6 million year-to-date through March 5, 2025[90]. - The company may need to raise additional capital, which could lead to dilution of existing stockholders' interests[95]. Growth Strategy - The company anticipates significant expenses related to the development and commercialization of the faidr product, which has substantial market potential[92]. - The company plans to pursue acquisitions as part of its growth strategy, but faces challenges due to capital market volatility[106]. - The company anticipates significant growth in operations, requiring expansion of managerial, operational, and financial systems to support product rollout and user projections[110]. Regulatory and Compliance Risks - The company faces challenges in complying with evolving privacy and data protection regulations, which may increase operational costs and affect data handling practices[115]. - New laws such as the GDPR and CCPA impose burdensome obligations that could impact the company's ability to collect and use personal information, potentially leading to increased costs[117]. - The company may incur significant costs related to compliance with privacy regulations, which could affect customer relationships and overall demand for its platform[118]. - The company operates in a highly regulated industry, and changes in laws or judicial decisions could negatively impact its financial condition and operations[123]. - The company may face litigation and regulatory inquiries that could adversely affect its results of operations and reputation[124]. Operational Risks - Cybersecurity threats pose a risk to the company, with potential unauthorized access to sensitive information leading to regulatory actions and reputational damage[111]. - The company is highly dependent on key personnel, and the loss of any key employees could adversely affect its objectives[108]. - The company relies on third-party vendors and developers, and any violations of laws or regulations by these parties could adversely affect its business[119]. Stock and Market Risks - The company has 8,594,308 shares of common stock issued and outstanding as of March 4, 2025, with substantial shares eligible for sale into the public market, potentially impacting stock price[144]. - The price of the company's common stock may be volatile and fluctuate substantially, influenced by various market factors[149]. - If quarterly operating results fall below investor expectations, the stock price could decline substantially[150]. - The company may face substantial costs and management distraction from potential securities class-action litigation following periods of stock price volatility[151]. - Lack of research coverage by analysts could lead to a decrease in the trading price of the company's stock[152]. - The company may not satisfy the requirements for continued listing on the Nasdaq Capital Market, which could limit stock liquidity and increase volatility[153]. - The company regained compliance with Nasdaq's equity requirement of $2,500,000 as of May 24, 2024[155]. - The company received a notice on October 16, 2024, indicating non-compliance with the $1.00 minimum bid price requirement, with a 180-day period to regain compliance[156]. Internal Control and Governance - The company has identified material weaknesses in its internal control over financial reporting, which may not be remediated in time for compliance with Section 404 of the Sarbanes-Oxley Act[166]. - The company is classified as an "emerging growth company" and intends to rely on reduced disclosure requirements until certain revenue or debt thresholds are met[161]. - The company is subject to anti-takeover provisions under Delaware law, which may discourage beneficial acquisitions[169]. - The company has taken advantage of exemptions from certain disclosure requirements, which may affect the attractiveness of its common stock to investors[162]. Dividend Policy - The company does not anticipate paying cash dividends in the foreseeable future, with capital appreciation being the sole source of gain for shareholders[173].