AUDDIA INC.

Auddia Inc. is an AI technology company based in Boulder, CO, focused on reinventing consumer engagement with audio through its faidr app and Discovr Radio platform. The company operates in the digital audio ecosystem, specifically targeting radio streamers and independent/emerging artists. Nielsen's "The Record" (Q3 2025) indicates that Americans spend 3 hours and 53 minutes per day with audio, with ad-supported audio accounting for 64% of all listening, and radio comprising 62% of that ad-supported time, highlighting the persistent scale of broadcast radio ¹. The company's strategy addresses the challenge emerging artists face in gaining airplay on traditional radio, where programming often favors established music.

Auddia's core business model has transitioned from a B2C subscription model for its faidr app, launched in February 2022, to a B2B subscription model in Q1 2026, with a strategic shift to AI-driven music discovery ². The company now targets artists and labels for SaaS subscription access to ad-free AM/FM streaming listeners on the faidr app. Saidr users will enjoy free access to AI-driven ad-free AM/FM streams on all music stations, eliminating consumer subscriptions ³. This model aims to provide guaranteed plays for artists on radio streams, leveraging AI to place their songs into ad breaks, offering a new channel for music promotion.

The faidr app is a consumer-facing audio streaming product that allows users to listen to AM/FM radio stations without commercial breaks, replacing ads with songs from Discovr Radio ⁴. It also includes podcasts with "Forward+ ad skipping technology" on iOS ⁵. The app is built on a proprietary AI platform developed using Google's TensorFlow open-source library, capable of distinguishing between various audio content types like commercials, songs, and DJ conversations, and identifying their start and end points ⁶. Saidr also offers features for users to skip content and request audio on-demand ⁷.

The Discovr Radio platform is Auddia's artist-facing distribution and promotional product, expected to generate the majority of the company's future revenue ⁸. It consists of an AI Placement Engine and an Artist Portal. The AI Placement Engine aims to optimize music discovery by placing new songs in front of the right listener, on the right station, adjacent to the right artist ⁹. The Artist Portal provides artists with performance analytics, including total plays, likes/dislikes, demographic data, and facilitates connections with new fans ¹⁰. The platform also plans to allow artists and labels to launch campaigns on streaming apps to promote new songs, albums, and tours ¹¹. The MVP version of Discovr Radio was released on January 20, 2026, and is supported by a pilot program ¹². As of February 12, 2026, participating artists are seeing an average of 116 plays over radio per week, with artist pages experiencing an average 30% clickthrough rate ¹³.

For the fiscal year ended December 31, 2025, Auddia reported no revenue ¹⁴. The company incurred a net loss of $7,693,197 ¹⁵, compared to a net loss of $8,722,039 in 2024 ¹⁶. Operating expenses totaled $7,697,607 ¹⁷. Cash used in operating activities was $5,633,393 ¹⁸. As of December 31, 2025, cash and cash equivalents stood at $3,186,985 ¹⁹, with an accumulated deficit of $97,283,343 ²⁰. Total liabilities were $966,961 ²¹, and total shareholders' equity was $4,235,494 ²². Basic and diluted net loss per share was $(5.60) ²³.

Year-over-year, total revenue remained at $0 for both 2025 and 2024 ²⁴. Direct cost of services increased by $18,722, or 9.2%, to $221,672 in 2025 from $202,950 in 2024, primarily due to increased music licensing costs ²⁵. Sales and marketing expenses decreased by $31,262, or 3.6%, to $829,415 in 2025 from $860,677 in 2024, attributed to a decrease in marketing promotion costs as the company focuses on building the Discovr Radio artist portal ²⁶. Research and development expenses increased by $124,969, or 12.2%, to $1,145,578 in 2025 from $1,020,609 in 2024, mainly due to increased consulting fees and lower capitalization of IT staff restructuring ²⁷. General and administrative expenses decreased by $1,052,416, or 27.4%, to $2,792,886 in 2025 from $3,845,302 in 2024, driven by lower stock-based compensation and professional fees related to acquisition target evaluations ²⁸. Restructuring expenses increased by $1,150,139 to $1,150,139 in 2025 from $0 in 2024, reflecting $334,360 for IT organization changes and $815,779 for costs related to the proposed business combination ²⁹. Depreciation and amortization expenses decreased by $429,685, or 21.6%, to $1,557,916 in 2025 from $1,987,601 in 2024, as previously capitalized software development costs were fully amortized ³⁰.

During 2025, Auddia announced a non-binding letter of intent on August 5, 2025, for a proposed business combination with Thramann Holdings, LLC, a privately held holding company controlling three early-stage AI-native companies founded by Auddia's CEO, Jeff Thramann ³¹. The transaction, unanimously approved by both boards, is expected to close in Q2 2026, subject to Auddia stockholder approval and the effectiveness of an S-4 registration statement ³². Auddia shareholders are expected to own a 20% economic interest in the combined entity, McCarthy Finney, with Jeff Thramann owning 80% ³³. The closing is conditioned on Auddia having at least $12 million cash on hand ³⁴. The company also effectuated a 1-for-17 reverse stock split on March 28, 2025 ³⁵, following a 1-for-25 reverse stock split on February 27, 2024 ³⁶.

Auddia's management anticipates continued net losses in the near term and expects expenses to increase substantially as it invests in sales, marketing, and engineering resources to bring its products to market ³⁷. The company will need additional funding to complete the development of its full product line and scale products with demonstrated market fit ³⁸. Management has plans to secure such additional funding, but if unable to raise capital on acceptable terms, it may be forced to delay, reduce, or eliminate technology development and commercialization efforts ³⁹.

A major growth area for Auddia is the national launch of its Discovr Radio platform and faidr App user acquisition ⁴⁰. The company aims to recruit and retain artists and labels on Discovr Radio and retain faidr listeners ⁴¹. Promotion of faidr and Discovr Radio will involve purchasing ads directly from broadcasters, participating broadcasters promoting without purchasing ads but sharing subscription proceeds based on listening activity, or leveraging social media outlets ⁴². The Discovr Radio platform, with its AI Placement Engine and Artist Portal, is designed to deliver guaranteed plays to artists by inserting their songs into radio feeds during ad breaks, providing a direct pathway to traditional radio audiences that other discovery platforms lack ⁴³. The company believes this addresses a gap between the rapidly expanding music supply on digital platforms and the limited new-music capacity of traditional broadcast programming ⁴⁴.

Another growth vector involves potential mergers and acquisitions, which are being explored as part of a broader strategy to scale the business more rapidly, accelerate user adoption and subscriber growth, enter new international markets, and open new pathways for raising capital ⁴⁵. This strategy focuses on three areas: acquiring retained customers for the Discovr Radio platform to generate significant subscription revenue, acquiring retained users of faidr to supply the audience to Discovr Radio customers, and scaling both the faidr user base and Discovr Radio customer base once product-market fit is achieved ⁴⁶.

Operationally, Auddia expects its direct costs of services to increase due to continued development and enhancement of its technology for the faidr and podcasting apps ⁴⁷. Research and development expenses and capitalization are also expected to continue as the company develops enhancements to faidr and builds out the Discovr Radio artist portal ⁴⁸. General and administrative expenses are projected to increase as the company "right-sizes" its operating activities and prepares for product commercialization and public company operations, including higher legal, accounting, insurance, regulatory, and investor relations expenses ⁴⁹. The company's workforce structure, a mix of 5 full-time employees and approximately 10 independent contractors as of December 31, 2025, provides operational flexibility and access to specialized expertise ⁵⁰.

Regarding capital allocation, Auddia secured approximately $7.1 million in additional financing in 2025 and $0.9 million year-to-date through March 4, 2026 ⁵¹. These funds are expected to be sufficient to fund current operating plans only into the second quarter of 2026 ⁵². The company has an equity line facility with White Lion, amended on July 30, 2025, to allow for the purchase of up to $50,000,000 in common stock until December 31, 2027 ⁵³. During 2025, 995,000 shares were issued under this facility for total proceeds of approximately $3.7 million ⁵⁴. An At-the-Market (ATM) facility with Ascendiant Capital Markets allows for the sale of up to $10,000,000 in common stock ⁵⁵. During 2025, 1,007,761 shares were issued under the ATM facility for aggregate proceeds of approximately $2.7 million ⁵⁶, and subsequent to December 31, 2025, an additional 754,925 shares were sold for proceeds of $0.9 million, exhausting the ATM facility ⁵⁷. The company also received $750,000 in gross proceeds from a Series C convertible preferred stock and warrants financing on June 30, 2025 ⁵⁸.

The proposed business combination with Thramann Holdings, LLC, expected to close in the second quarter of 2026, is conditioned on Auddia having at least $12 million cash on hand at closing to fund the combined entity to key future business milestones ⁵⁹. There is no assurance as to Auddia's cash level at closing ⁶⁰. The merger is also expected to result in an ownership change under Internal Revenue Code Section 382, which would subject Auddia's federal net operating loss carryforwards of $29,496,111 and state NOLs of $1,036,222 as of December 31, 2025, to an annual limitation ⁶¹.

Auddia faces substantial risks, including a going concern uncertainty, as indicated by its auditors, with existing cash of $3.186 million ⁶² at December 31, 2025, and additional financing of $0.9 million ⁶³ year-to-date through March 4, 2026, only sufficient to fund operations into the second quarter of 2026 ⁶⁴. The proposed merger with Thramann Holdings, LLC, while strategically important, is subject to Auddia stockholder approval and the condition of having at least $12 million cash on hand at closing ⁶⁵, with no assurance this will be met ⁶⁶. Failure to complete the merger could result in a termination fee of $600,000 ⁶⁷ and reimbursement of up to $200,000 ⁶⁸ for Thramann Holdings' expenses. The company has incurred significant net losses, totaling $7,693,197 ⁶⁹ in 2025 and $8,722,039 ⁷⁰ in 2024, and expects to continue incurring losses, making future profitability uncertain ⁷¹. The business model relies on the continuity of the established music licensing framework and the "personal use exemption" for time-shifting content, and adverse changes could significantly increase costs or restrict content access ⁷². Cybersecurity risks are present, as operations rely on IT systems for sensitive information, and any attack or breach could lead to service disruptions, data loss, reputational damage, and significant liabilities ⁷³. The company also faces risks related to intellectual property infringement claims, as well as the potential for dilution to existing stockholders from future equity financings, such as the amended equity line facility with White Lion for up to $50,000,000 ⁷⁴ and the ATM facility for up to $10,000,000 ⁷⁵.

Management's message emphasizes a strategic pivot to a B2B business model focused on AI-driven music discovery through the Discovr Radio platform, which integrates with the now free faidr app. This shift aims to monetize artist and label subscriptions for guaranteed radio plays, leveraging AI to place new music into ad breaks on AM/FM streams, thereby connecting emerging artists with traditional radio audiences. Management explicitly states that the MVP version of the Discovr Radio platform was released on January 20, 2026, and is supported by a pilot program ⁷⁶. They highlight early engagement metrics, noting that as of February 12, 2026, participating artists are seeing an average of 116 plays over radio per week, and artist pages are experiencing an average 30% clickthrough rate ⁷⁷. A key strategic priority is the proposed business combination with Thramann Holdings, LLC, which is expected to close in the second quarter of 2026 ⁷⁸ and is conditioned on Auddia having at least $12 million cash on hand at closing ⁷⁹. Management also stresses the need for additional funding to complete product development and scale products with demonstrated market fit, acknowledging that current financing will only fund operations into the second quarter of 2026 ⁸⁰. They are actively pursuing additional financing arrangements, including the potential use of the White Lion equity line of credit, which was amended to $50,000,000 ⁸¹ and extended to December 31, 2027 ⁸².