Business Context and Reporting Period
Auddia Inc. (AUUD), a Delaware corporation headquartered in Boulder, Colorado, filed this Form 8-K on May 26, 2023, regarding events occurring on May 23, 2023. The Company is an emerging growth company with common stock and warrants listed on the Nasdaq Stock Market.
Key Financial Metrics
The filing references the Company's most recent quarterly report (Form 10-Q) for the period ended March 31, 2023, to establish the basis for a listing deficiency.
- Stockholders' Equity: $2,095,247 (as of March 31, 2023).
- Nasdaq Minimum Requirement: $2,500,000.
- Deficiency: The Company is below the minimum stockholders' equity requirement for continued listing.
The filing does not provide specific values for revenue, profit, cash flow, margins, or debt levels.
Material Changes and Listing Status
On May 23, 2023, the Company received a notice from Nasdaq indicating non-compliance with Listing Rule 5550(b)(1) due to insufficient stockholders' equity. Additionally, the Company is under a separate compliance period for failing to meet the $1.00 minimum bid price requirement (Listing Rule 5550(a)(2)), a notice received on April 24, 2023.
Despite these notices, the Company's common stock continues to be listed and traded on Nasdaq pending the resolution of these deficiencies.
Outlook, Management Commentary, and Risks
Compliance Plan and Deadlines:
- Equity Requirement: The Company has 45 calendar days (until July 7, 2023) to submit a plan to regain compliance. If accepted, it may receive up to 180 days (until November 19, 2023) to evidence compliance.
- Bid Price Requirement: The Company has a 180-day compliance period (until October 23, 2023) to regain the $1.00 minimum bid price. An additional 180-day period may be available if the Company meets other listing requirements and notifies Nasdaq of an intention to cure via a reverse stock split.
Management Commentary: Management intends to take all reasonable measures to regain compliance and is evaluating available options. The Company plans to submit the required compliance plan by the July 7 deadline.
Risks and Contingencies: There is no assurance that the Company will regain compliance or that its plan will be accepted. Failure to comply could result in delisting. The Company retains the right to a hearing before an independent panel if a plan is rejected or compliance is not achieved within the extension period.
Investor Verification Checklist
- Verify the Company's submission of a compliance plan to Nasdaq by July 7, 2023.
- Monitor the Company's stockholders' equity levels to ensure they meet the $2,500,000 threshold by November 19, 2023.
- Track the daily closing bid price of AUUD common stock to assess progress toward the $1.00 minimum requirement by October 23, 2023.
- Review future filings for any announcements regarding a reverse stock split or capital raise intended to cure the deficiencies.
- Confirm whether the Company has received acceptance of its compliance plan from Nasdaq staff.