Business Context and Reporting Period
Company: AUDDIA INC. (AUUD)
Filing Type: Form 8-K (Current Report)
Date of Report: February 17, 2026
Event: Entry into a Material Definitive Agreement (Merger Agreement) with Thramann Holdings, LLC ("Thramann") and McCarthy Finney, Inc. ("Holdco"). The transaction involves a reverse merger structure where Auddia will become a wholly-owned subsidiary of Holdco. Thramann is wholly owned by Jeff Thramann, Auddia's President and CEO, making this a related-party transaction approved by a Special Committee of independent directors.
Key Financial Metrics and Transaction Terms
Ownership Structure (Pro Forma):
- Thramann Holders: Approximately 80.0% economic interest in Holdco.
- Auddia Shareholders: Approximately 20.0% economic interest in Holdco.
Consideration for Auddia Shareholders:
- 1-for-1 exchange of Auddia Common Stock for Holdco Common Stock.
- 1-for-1 exchange of Auddia Preferred Stock for Holdco Series C Preferred Stock.
- Equity awards (options and RSUs) will convert to Holdco equivalents on the same terms.
Consideration for Thramann Holders:
- Holdco Special Preferred Stock (Stated Value: $1,000/share; Liquidation Preference: $20.5 million).
- Holdco Notes: $3.5 million aggregate principal amount, 2-year maturity, 8.0% annual interest (18.0% default rate). Notes are non-convertible but exchangeable for Special Preferred Stock.
Financial Conditions:
- Cash Condition: Closing requires Auddia's net cash to be at least $12.0 million.
- Ownership Adjustment: If Auddia's net cash exceeds $20.0 million, Auddia's ownership percentage increases by 0.50% for every $1.0 million excess. If net cash is below $12.0 million, Auddia's ownership decreases by 0.50% for every $1.0 million deficit.
Termination Fees: Auddia may be required to pay Thramann a termination fee of $600,000 plus up to $200,000 in reimbursable expenses under specified circumstances.
Material Changes and Governance
Corporate Structure: The transaction results in Auddia becoming a subsidiary of Holdco. The combined company is expected to trade on Nasdaq under the ticker symbol "MCFN" (subject to approval).
Management Continuity:
- Jeff Thramann is expected to continue as President and CEO.
- John Mahoney is expected to continue as CFO.
- The four current Auddia board members are expected to continue serving on the Holdco board.
Related Party Transaction: Because Thramann is owned by the CEO, the deal was reviewed and unanimously approved by a Special Committee of independent directors as fair and in the best interests of stockholders.
Guidance, Risks, and Contingencies
Closing Conditions: The merger is subject to several conditions, including:
- Effectiveness of a Form S-4 registration statement.
- Approval by Auddia stockholders.
- Auddia maintaining Nasdaq listing until closing.
- Net cash at closing of at least $12.0 million.
- Nasdaq listing approval for the combined company.
Key Risks:
- Financing Risk: Uncertainty regarding the completion of anticipated pre-closing financing.
- Ownership Dilution/Adjustment: Final ownership percentages depend on Auddia's net cash position at closing.
- Regulatory and Listing Risk: Failure to obtain necessary approvals or maintain Nasdaq listing.
- Forward-Looking Statements: No assurance that the transaction will close or that anticipated benefits will be realized.
Financial Data Availability: This 8-K filing does not provide specific revenue, profit, or cash flow figures for Auddia or Thramann. Audited and unaudited financial statements for Thramann and pro forma combined information are referenced as Exhibits 99.2, 99.3, and 99.4 but are not detailed in the text of this summary.
Investor Verification Checklist
- Verify Net Cash Position: Confirm Auddia's current net cash to determine if the $12.0 million closing condition is met and to calculate potential ownership adjustments.
- Review Form S-4: Wait for the filing of the Form S-4 and Proxy Statement for detailed financial data, risk factors, and the full text of the Merger Agreement.
- Assess Financing Status: Monitor announcements regarding the status of any pre-closing financing required to fund operations.
- Check Nasdaq Status: Verify Auddia's current compliance with Nasdaq listing requirements to ensure the transaction can proceed.
- Examine Holdco Notes Terms: Review the specific terms of the $3.5 million Holdco Notes (Exhibit 4.1) regarding interest payments and exchange rights.