10-K: Auddia Shifts to B2B, Reports $7.7M Loss, Merger Pending

Auddia Inc. announced a strategic shift to a B2B model for its AI-driven music discovery platform, Discovr Radio, alongside a proposed merger with Thramann Holdings and a reported net loss of $7.7 million for fiscal year 2025.

Summary

• Auddia transitioned its faidr app from a B2C subscription model to a B2B SaaS model in Q1 2026, targeting artists and labels for music promotion via its new Discovr Radio platform.
• faidr app users will now receive free access to AI-driven ad-free AM/FM streams on all music stations.
• The MVP version of the Discovr Radio platform launched on January 20, 2026, showing initial engagement with an average of 116 plays per week and a 30% clickthrough rate to artist pages as of February 12, 2026.
• A proposed business combination with Thramann Holdings, LLC, a related party controlled by Auddia's founder/CEO, was announced on August 5, 2025, and a definitive merger agreement was entered into on February 17, 2026.
• Upon closing of the merger, the combined company will be renamed McCarthy Finney (MCFN), with Auddia shareholders expected to own a 20% economic interest and Jeff Thramann an 80% interest, subject to Auddia having at least $12 million cash at closing.
• The company reported a net loss of $7,693,197 for the year ended December 31, 2025, an improvement from $8,722,039 in 2024.
• Cash and cash equivalents stood at $3,186,985 as of December 31, 2025.
• Auditors expressed substantial doubt about the company's ability to continue as a going concern due to recurring losses and the need for additional financing.
• Auddia secured $7.1 million in additional financing in 2025 and $0.9 million year-to-date through March 4, 2026, which is only sufficient to fund current operating plans into Q2 2026.
• The company effectuated two reverse stock splits: 1-for-25 on February 27, 2024, and 1-for-17 on March 28, 2025.
• Nasdaq compliance issues regarding minimum stockholders' equity and minimum bid price were resolved in May 2024 and April 2025, respectively.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a highly speculative situation. The company faces severe liquidity challenges and a going concern warning, with no revenue generation despite product development. The proposed merger, while strategic, comes with significant dilution for current shareholders and a substantial cash requirement that is not yet met.

Positives

• Strategic shift to a B2B model with Discovr Radio targeting artists and labels for guaranteed radio plays offers a new channel for music promotion.
• faidr app users will now enjoy free access to AI-driven ad-free AM/FM streams on all music stations, potentially increasing user base and engagement.
• The MVP version of Discovr Radio launched on January 20, 2026, showing initial positive engagement with an average of 116 plays per week and a 30% clickthrough rate to artist pages.
• Net loss decreased to $7,693,197 in 2025 from $8,722,039 in 2024, indicating a reduction in losses.
• Regained compliance with Nasdaq's minimum stockholders' equity and minimum bid price requirements in 2024 and 2025, respectively, avoiding delisting.
• Secured $7.1 million in additional financing in 2025 and $0.9 million year-to-date through March 4, 2026, providing some capital runway.
• The proposed merger with Thramann Holdings, LLC, aims to scale the business more rapidly, accelerate user adoption, enter new markets, and open new pathways for capital raising.
• The company holds issued patents and has patents pending in audio content monitoring, identification, distribution, and presentation, including a patent for 'Seamless Integration of Radio Broadcast Audio with Streaming Audio'.

Negatives

• Auditors expressed substantial doubt about the company's ability to continue as a going concern.
• The company reported $0 revenue for both 2025 and 2024, indicating a lack of commercialization success for its core products.
• Incurred a significant net loss of $7,693,197 in 2025, contributing to an accumulated deficit of $97,283,343 as of December 31, 2025.
• Existing cash and recent financing are only sufficient to fund operations into Q2 2026, necessitating significant additional capital soon.
• The proposed merger with Thramann Holdings is conditioned on Auddia having at least $12 million cash on hand at closing, requiring substantial additional financing.
• The merger will result in significant dilution for existing Auddia shareholders, who are expected to own only a 20% economic interest in the combined company.
• The proposed merger is a related-party transaction, as Thramann Holdings is controlled by Auddia's founder, CEO, and Executive Chairman, Jeff Thramann.
• Two reverse stock splits (1-for-25 in Feb 2024, 1-for-17 in March 2025) indicate significant share price depreciation and efforts to maintain Nasdaq listing.
• The proposed merger is expected to result in an ownership change under Internal Revenue Code Section 382, which would subject the company's Net Operating Losses (NOLs) to an annual limitation.

Risks

• Failure to obtain Auddia stockholder approval for the merger with Thramann Holdings.
• Potential payment of a termination fee of $600,000 and expense reimbursement of up to $200,000 to Thramann Holdings if the merger is not completed.
• Inability to satisfy closing conditions for the merger, particularly the requirement of having at least $12 million cash on hand.
• Significant dilution for existing Auddia stockholders due to the merger, resulting in a 20% ownership in the combined company.
• Reduced ownership and voting interest for Auddia stockholders in the holding company following the merger.
• Auditors' expression of substantial doubt about the company's ability to continue as a going concern, which may hinder future financing.
• Continued significant net losses and potential inability to achieve or maintain profitability.
• Need for additional funding, which may not be available on acceptable terms or at all, potentially forcing delays or termination of product development efforts.
• Dilution to existing stockholders from raising additional capital through equity or convertible debt securities.
• Reliance on new software services for future revenue growth, with no guarantee of successful development or commercialization.
• Limited operating history of the current business plan making it difficult for investors to evaluate future viability.
• Past material weaknesses in internal control over financial reporting and potential future failures to maintain effective internal controls.
• Reliance on continuity of the established music licensing framework for subscription revenue margins and faidr radio platform operation.
• Reliance on the established personal use exemption for time-shifting content, with a risk of legal challenges to faidr app functionality.
• Inability to obtain and maintain broad patent protection for products, allowing competitors to commercialize similar products.
• Real or perceived errors, failures, or bugs in the platform or products could materially and adversely affect operating results and growth prospects.
• Inability to successfully identify, make, and integrate future business or asset acquisitions.
• Dependence on key employees, consultants, and advisors, and the ability to attract, retain, and motivate qualified personnel.
• Inability to manage expected growth in the scale and complexity of operations.
• Cybersecurity-related attacks, significant data breaches, or disruptions of information technology systems or networks.
• Changing regulations and increased awareness relating to privacy, information security, and data protection, increasing costs and limiting data use.
• Inability to develop, maintain, and enhance the brand, or harm from significant negative publicity.
• Enacted and future legislation increasing the difficulty and cost of commercializing products or affecting pricing.
• Exposure to litigation, disputes, or regulatory inquiries for a variety of claims, including intellectual property infringement.
• Business subject to risks of earthquakes, fire, floods, other natural catastrophic events, and man-made problems such as power disruptions, computer viruses, cyberattack, data security breaches, or terrorism.
• Substantial sales of total outstanding shares into the public market could cause the market price of common stock to drop significantly.
• Dilution from issuance of common stock pursuant to equity line facility or ATM facility.
• Volatility and substantial fluctuation in the price of common stock.
• Lack of research coverage by securities analysts could cause the stock price to decline.
• Potential delisting from the Nasdaq Capital Market.
• Reduced disclosure requirements as an emerging growth company making common stock less attractive to investors.
• Increased costs and management time required for operating as a public company and new compliance initiatives.
• Provisions in corporate charter, bylaws, and Delaware law could make an acquisition more difficult and may prevent attempts by stockholders to replace or remove current management.
• No anticipated cash dividends, making capital appreciation the sole source of gain for the foreseeable future.
• Exclusive forum provisions in the charter limiting stockholders' ability to obtain a favorable judicial forum for certain disputes.
• The proposed merger with Thramann Holdings is expected to result in an ownership change under Internal Revenue Code Section 382, which would subject the company's NOLs to an annual limitation.

Future Outlook

The company expects to continue incurring net losses for the foreseeable future and anticipates substantial increases in expenses related to the national launch of its Discovr Radio platform and faidr App user acquisition, recruiting artists and labels, technology development, and public company operating costs. Substantial additional funding will be required to support continuing operations and the growth strategy. The proposed merger with Thramann Holdings is expected to close in the second quarter of 2026, subject to stockholder approvals, the effectiveness of the S-4 registration statement, and Nasdaq listing. While the merger is expected to strengthen the company's long-term strategic and operational position, it will not provide sufficient near-term liquidity, and management plans to secure additional financing through existing facilities and future agreements. The merger is also expected to result in an ownership change under IRC Section 382, which would limit the use of Net Operating Losses (NOLs).

Management Comments

• Auddia is reinventing how consumers engage with audio through the development of its faidr app and the Discovr Radio platform.
• The faidr app represents the first-time consumers can combine the local content uniquely provided by AM/FM radio with commercial-free and personalized listening many consumers demand from digital-media consumption and preference-based new music discovery.
• No other audio streaming app available today, including category leaders like TuneIn, iHeart, and Audacy, can compete with faidr's full product offerings.
• The Company believes the largest group of potential fans for most artists remains on commercial radio, listening to music passively and not searching for new artists.
• Discovr Radio delivers guaranteed plays to artists, leveraging AI to place their songs into radio feeds as part of a custom programming experience and as unique content during what would typically be an ad break.
• Auddia is evolving its business model from direct-to-consumer to business-to-business, shifting its focus from individual radio-streaming subscribers to artists and labels as subscribers.
• Since the release of Discovr Radio, participating artists are seeing an average of 116 plays over radio per week.
• As of February 12, 2026, artist pages are seeing an average 30% clickthrough rate, meaning nearly a third of all artist-page visits results in a user clicking to listen to the artists full library elsewhere, or following them on socials, or buying the artists merch, tickets, or music.
• Our auditors have expressed substantial doubt about our ability to continue as a going concern.
• We will need additional funding to complete the development of our full product line and scale products with a demonstrated market fit.

Industry Context

StockSavvy.ai notes that Auddia's strategic shift to a B2B model for music discovery via Discovr Radio addresses a significant gap in the digital audio ecosystem. While major streaming services like Spotify and Apple Music offer promotional tools, and platforms like TikTok and SoundCloud facilitate viral discovery, none offer a direct pathway to traditional radio audiences for emerging artists. Auddia's model uniquely leverages commercial-break time on AM/FM streams to introduce new music, differentiating it from existing solutions that primarily focus on on-demand playlists or third-party pitching services. This positions Auddia to capitalize on the persistent scale of ad-supported AM/FM radio listening (62% of daily ad-supported audio time, per Nielsen Q3 2025) and consumer demand for personalization, while also providing a solution for the rapidly expanding music supply (106,000 new tracks daily in 2025, per Luminate) struggling for airplay on traditional radio.

Comparison to Industry Standards

• Auddia's faidr app is positioned as a 'more personalized middle ground between passive content like broadcast radio and fully on-demand content like Spotify,' claiming no other audio streaming app, including 'category leaders like TuneIn, iHeart, and Audacy,' can compete with its full product offerings.
• SiriusXM, Inc. demonstrates the viability of a commercial-free broadcast audio product, with an estimated average of $13 per month from 33 million subscribers (end of 2025), but does not offer the local content and personalities that local broadcast radio exclusively delivers, which faidr aims to provide.
• Discovr Radio differentiates from platforms like Bandcamp and SoundCloud by offering 'guaranteed plays' to artists on radio feeds, rather than relying on artists to be discovered among other uploaded songs.
• Nielsen's 'The Record' (Q3 2025) indicates 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, compared to 20% for podcasts and 15% for streaming music. This highlights radio's continued dominance in ad-supported audio, which Auddia aims to disrupt.
• Luminate-cited reporting indicates approximately 106,000 new tracks (new ISRCs) were delivered to streaming services daily in 2025, underscoring the intense competition for artist discovery that Discovr Radio aims to address by providing a unique channel for exposure.

Management Changes

Corporate Governance

Legal Proceedings

• Not currently a party to any material legal proceedings that would have a material adverse effect on operations or financial position.
• A pre-IPO investor has contacted the company claiming damages of less than approximately $300,000 caused by alleged acts and omissions arising from a private financing, but no complaint has been filed, and the outcome is neither probable nor estimable.

Related Party Transactions

• Proposed business combination with Thramann Holdings, LLC, which is controlled by Jeff Thramann, Auddia's founder, CEO, and Executive Chairman. This is explicitly identified as a related-party transaction.
• Consideration to Thramann Holdings will consist of shares of McCarthy Finney convertible preferred stock and $3.5 million aggregate principal amount of McCarthy Finney notes with a two-year maturity date.
• Jeff Thramann is expected to own an 80% economic interest of the combined company at closing, with Auddia shareholders owning 20%.

Stakeholder Impact

• Shareholders face significant dilution from the proposed merger, with expected ownership of only 20% in the combined entity, and potential further dilution from ongoing capital raises.
• Employees experienced workforce reductions and IT staff restructuring in 2025, leading to severance costs, and changes in key management roles (CEO, CTO).
• Artists and labels are targeted as new customers for the Discovr Radio platform, offering a new channel for music promotion with guaranteed plays and performance analytics.
• faidr app users will benefit from the transition to a free, ad-free AM/FM streaming experience with AI-driven music discovery.
• Creditors face heightened risk due to the company's recurring losses, going concern warning, and the need for substantial additional funding to meet operational and merger-related cash requirements.

Next Steps

• Complete the proposed business combination with Thramann Holdings, LLC, expected to close in Q2 2026.
• Obtain Auddia stockholder approvals for the merger.
• Ensure effectiveness of the S-4 registration statement for McCarthy Finney stock.
• Secure continued listing of the combined company's common stock on Nasdaq.
• Raise significant additional financing to meet the $12 million cash condition for the merger closing.
• Continue national launch of the Discovr Radio platform and faidr App user acquisition.
• Recruit and retain artists and labels on Discovr Radio and faidr listeners.
• Continue to develop and improve technology for faidr and Discovr Radio.
• Pursue and complete potential acquisitions as part of growth strategy.
• Address and remediate any material weaknesses in internal control over financial reporting.
• Evaluate the impact of new accounting standards (ASU 2024-03, ASU 2025-01, ASU 2025-06, and ASU 2025-03).

Key Dates

Recommendation

Auddia Inc. faces critical financial instability, evidenced by a going concern warning from its auditors, zero revenue for two consecutive years, and an accumulated deficit nearing $100 million. The proposed merger with Thramann Holdings, a related-party transaction, is highly dilutive, leaving existing Auddia shareholders with only a 20% economic interest in the combined entity. Furthermore, the merger is contingent on Auddia raising an additional $12 million in cash, a significant challenge given its current financial state. While the new B2B model for Discovr Radio shows early engagement, it has not yet generated revenue, and the company's liquidity is insufficient to fund operations beyond the second quarter of 2026 without further capital raises, which will likely lead to more dilution. The overall risk profile is extremely high, making the stock a strong sell for investors.

Keywords

AI technology, Audio streaming, Music discovery, faidr app, Discovr Radio, B2B SaaS, SEC filing, 10-K, Financial results, Merger, Thramann Holdings, Nasdaq compliance, Reverse stock split, Going concern, Intellectual property, Capital raise, Corporate governance, Digital audio recorder, Podcast, Artist promotion, Music licensing