AUDDIA INC.

Auddia Inc. is an AI technology company based in Boulder, CO, focused on reinventing consumer audio engagement through its faidr app and Discovr Radio platform. The company operates in the digital audio ecosystem, which includes streaming services with promotional tools, digital promotion and playlist-placement services, social and alternative discovery platforms, niche and community-oriented platforms, and comprehensive artist development and marketing tools. 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 listening, and radio comprising 62% of that ad-supported time ¹. The company believes that despite the growth of on-demand streaming, AM/FM radio remains a significant driver of audio listening in the United States, particularly within ad-supported audio.

Auddia's competitive positioning is centered on its integrated ecosystem of the consumer-facing faidr app and the artist-facing Discovr Radio platform. The company states that no other audio streaming app, including category leaders like TuneIn, iHeart, and Audacy, can compete with faidr's full product offerings. Its differentiation points include owned audience and distribution workflow, a distinct discovery "placement" context by inserting emerging artist tracks into live radio streams during commercial breaks, and closed-loop measurement within its ecosystem. The effectiveness of this model is dependent on faidr user growth and retention, product functionality, and competitive responses from larger platforms.

The core business model of Auddia is evolving from a direct-to-consumer (B2C) subscription model for the faidr app, launched in February 2022, to a business-to-business (B2B) subscription model in Q1 2026 ². This strategic shift, announced in August 2025, targets artists and labels for SaaS subscription access to ad-free AM/FM streaming listeners on the faidr app ³. Saidr users will now enjoy free access to AI-driven ad-free AM/FM streams on all music stations, eliminating consumer subscriptions ⁴. The company generates revenue by offering artists and labels guaranteed radio plays through a modest monthly subscription, providing a new channel for music promotion.

The faidr app is a key component of Auddia's audio ecosystem, connecting customers with an engaged audience for Discovr Radio content. It allows users to select a streaming radio station, record it in real-time, and use AI to identify and replace ad breaks with songs from Discovr Radio artists ⁵. The app also provides features for users to skip content and request audio content on-demand, and includes podcasts with Forward+ ad skipping technology on iOS ⁶. The faidr app is built on a proprietary artificial intelligence platform developed using Google's TensorFlow open-source library, which differentiates between various audio content types like commercials, songs, and DJ conversations, and identifies their start and end points ⁷.

The Discovr Radio platform is Auddia's artist-facing distribution and promotional platform, expected to generate the majority of the company's future revenue ⁸. It enables artists, managers, and labels to upload and manage music campaigns for placement within live AM/FM radio streams delivered through the faidr app, specifically leveraging commercial-break time to introduce new music ⁹. The platform includes an AI Placement Engine to optimize music discovery by matching songs to listeners and stations, and an Artist Portal providing performance analytics such as total plays, likes, dislikes, and demographic data, facilitating artist-fan connections ¹⁰. The MVP version of Discovr Radio was released on January 20, 2026, and is supported by a pilot program ¹¹. As of February 12, 2026, participating artists are seeing an average of 116 plays per week, and artist pages have an average 30% clickthrough rate for outbound links ¹².

For the fiscal year ended December 31, 2025, Auddia reported total revenue of $0 ¹³. The company incurred a net loss of $7,693,197 ¹⁴. Operating expenses totaled $7,697,607 ¹⁵, resulting in a loss from operations of $7,697,607 ¹⁶. Direct cost of services was $221,672 ¹⁷. Sales and marketing expenses were $829,415 ¹⁸. Research and development expenses amounted to $1,145,578 ¹⁹. General and administrative expenses were $2,792,886 ²⁰. Restructuring costs were $1,150,139 ²¹. Depreciation and amortization expense was $1,557,916 ²². Basic and diluted EPS was $(5.60) ²³. Cash used in operating activities was $5,633,393 ²⁴. As of December 31, 2025, cash and cash equivalents were $3,186,985 ²⁵. The company had an accumulated deficit of $97,283,343 ²⁶. Total liabilities were $966,961 ²⁷.

Comparing the years ended December 31, 2025, and 2024, total revenue remained $0 ²⁸. Net loss decreased by $1,028,842, from $8,722,039 in 2024 to $7,693,197 in 2025 ²⁹. 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 ³⁰. 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 ³¹. 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 due to IT staff restructuring ³². General and administrative expenses decreased by $1,052,416, or 27.4%, to $2,792,886 in 2025 from $3,845,302 in 2024, primarily due to decreases in stock-based compensation and professional fees related to acquisition target evaluations in 2024 ³³. Restructuring expenses increased by $1,150,139, or 100%, to $1,150,139 in 2025 from $0 in 2024, reflecting one-time costs of $334,360 for IT organization changes and $815,779 for the proposed business combination ³⁴. 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 ³⁵. Total other income/(expenses) decreased by $809,309, or 100.5%, to $4,409 in 2025 from $(804,900) in 2024, due to the change in fair value of warrants issued in connection with debt repayment in April 2024 ³⁶.

During the reported period, 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 ³⁷. A definitive merger agreement was entered into on February 17, 2026 ³⁸. Upon closing, the company would be renamed McCarthy Finney, trading under the MCFN ticker, with Auddia becoming a wholly-owned subsidiary ³⁹. Auddia shareholders are expected to own a 20% economic interest, and Jeff Thramann, founder, CEO, and Executive Chairman, is expected to own an 80% economic interest in the combined company ⁴⁰. The merger is conditioned on Auddia having at least $12 million cash on hand at closing ⁴¹. The company also effectuated a 1-for-17 reverse stock split on March 28, 2025 ⁴², following a 1-for-25 reverse stock split on February 27, 2024 ⁴³.

Auddia has not provided specific revenue, margin, or EPS guidance for the upcoming period. However, the company explicitly states that it will need additional funding to complete the development of its full product line and scale products with a demonstrated market fit ⁴⁴. Management has plans to secure such additional funding, and failure to do so on acceptable terms could force delays, reductions, or termination of technology development and commercialization efforts ⁴⁵.

A major growth area for Auddia is the national launch of its Discovr Radio platform and faidr App user acquisition, as the company continues to obtain market acceptance ⁴⁶. The Discovr Radio platform, which was released as an MVP version on January 20, 2026, is designed to help emerging and independent artists reach new listeners and is expected to generate the majority of the company's future revenue ⁴⁷. This platform leverages AI to place artist songs into live radio streams delivered through the faidr app during commercial breaks, offering guaranteed plays ⁴⁸. The Artist Portal will provide performance analytics, including total plays, likes, dislikes, and demographic data, to facilitate artist-fan connections ⁴⁹. The company also plans to allow artists and labels to launch campaigns on streaming apps to promote new songs, albums, and tours ⁵⁰.

Another growth vector involves the continued development and expansion of its technology and functionality for the faidr app and Discovr Radio platform ⁵¹. The company aims to rollout its products on a national basis, which will involve increasing sales and marketing costs for promotion ⁵². Promotion strategies include purchasing ads directly from broadcasters, participating broadcasters promoting without purchasing ads but sharing subscription proceeds based on listening activity, or leveraging social media outlets ⁵³. The company is also exploring various merger and acquisition options to scale the business more rapidly, accelerate user adoption and subscriber growth, enter new international markets, and open new pathways for raising capital ⁵⁴. This M&A strategy focuses on acquiring retained customers for Discovr Radio, acquiring faidr users to supply the audience, and scaling both user bases once product-market fit is achieved ⁵⁵.

Operationally, Auddia expects its direct costs of services to increase in the future as it continues to develop and enhance its technology related to the faidr and podcasting apps ⁵⁶. Sales and marketing expenses are expected to fluctuate as new upgrades and enhancements are released and efforts are made to generate revenue through customer acquisition, retention, and subscriptions ⁵⁷. Research and development expenses and capitalization are also expected to continue as the company develops and enhances faidr and builds out the Discovr Radio platform ⁵⁸. General and administrative expenses are anticipated to increase as the company right-sizes its operating activities, prepares for product commercialization, and supports its operations as a public company, including increased legal, accounting, insurance, regulatory, and investor relations expenses ⁵⁹.

The company's existing cash of $3,186,985 at December 31, 2025, along with $7.1 million in additional financing secured in 2025 and $0.9 million year-to-date through March 4, 2026, is only sufficient to fund current operating plans into the second quarter of 2026 ⁶⁰. Auddia will need additional funding to complete its full product line development and scale products with demonstrated market fit ⁶¹. Management plans to secure this additional funding, potentially through the White Lion equity line of credit, additional future financing agreements, and the anticipated strategic benefits of the merger with Thramann Holdings ⁶². The equity line with White Lion was amended on July 30, 2025, increasing the aggregate gross purchase price from $10,000,000 to $50,000,000 and extending the commitment to December 31, 2027 ⁶³. The company also has an At-the-Market (ATM) facility with Ascendiant Capital Markets, LLC, allowing sales of common stock up to an aggregate offering price of $10,000,000 ⁶⁴. As of the filing date, $0.0 million of unsold availability remains under the ATM facility ⁶⁵.

The proposed merger with Thramann Holdings is 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 net operating loss carryforwards of $1,036,222 to an annual limitation ⁶⁶. This limitation is based on the fair market value of the company immediately prior to the ownership change multiplied by the applicable long-term tax-exempt rate, potentially making a substantial portion of NOLs unavailable to offset future taxable income ⁶⁷. However, since the company maintains a full valuation allowance against its deferred tax assets, any such limitation would not impact the financial statements ⁶⁸.

Auddia faces several material risks, including the substantial doubt about its ability to continue as a going concern, as indicated by its recurring losses from operations and the need for additional financing to fund operating and capital requirements ⁶⁹. The company's existing cash of $3,186,985 at December 31, 2025, along with $7.1 million in additional financing in 2025 and $0.9 million year-to-date through March 4, 2026, is only sufficient to fund current operating plans into the second quarter of 2026 ⁷⁰. The proposed merger with Thramann Holdings, while strategically important, is conditioned on Auddia having at least $12 million cash on hand at closing, and there is no assurance this condition will be met ⁷¹. Failure to obtain stockholder approval for the merger could result in Auddia paying a termination fee of $600,000 and reimbursing up to $200,000 for Thramann Holdings' expenses ⁷². The company's subscription revenue margins and ability to operate its faidr radio platform rely on the continuity of the established music licensing framework, and changes in licensing costs or rights could significantly impact operations or prohibit content access ⁷³. The faidr platform also relies on the "personal use exemption" for time-shifting, and a court ruling against this could lead to infringement liability, feature disablement, increased content costs, and higher consumer prices ⁷⁴. Furthermore, the company's intellectual property, including patents and trademarks, may not provide sufficient protection against competitors, and intellectual property litigation could be costly and divert management resources ⁷⁵. Cybersecurity risks are also present, as operations rely on IT systems for sensitive information, and attacks could lead to data breaches, service disruptions, and significant liabilities ⁷⁶. Changing regulations related to data privacy, such as GDPR and CCPA, could increase costs and limit how personal information is collected and used ⁷⁷.

Management's message to shareholders emphasizes a strategic shift towards an AI-driven music discovery B2B business model, moving away from a B2C subscription model for the faidr app. The company is focused on the national launch of its Discovr Radio platform and faidr App user acquisition, aiming to recruit and retain artists and labels on Discovr Radio and retain faidr listeners. A key strategic priority is securing additional funding, as the existing cash of $3,186,985 at December 31, 2025, and subsequent financing of $0.9 million year-to-date through March 4, 2026, is only sufficient to fund current operating plans into the second quarter of 2026 ⁷⁸. Another major strategic priority is the proposed business combination with Thramann Holdings, LLC, which is expected to close in the second quarter of 2026 ⁷⁹ and is conditioned on Auddia having at least $12 million cash on hand at closing ⁸⁰. Management also highlights the importance of continuing to develop and expand its technology and functionality for both the faidr app and Discovr Radio platform, along with exploring merger and acquisition options to scale the business more rapidly, accelerate user adoption, and enter new markets.