Auddia Inc. (AUUD) - Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. Auddia Inc. is an AI technology company developing the "faidr" app and the "Discovr Radio" platform to personalize audio streaming and music discovery. The company is currently transitioning from a direct-to-consumer (B2C) model to a business-to-business (B2B) SaaS model targeting artists and record labels. The company is classified as a Smaller Reporting Company and an Emerging Growth Company.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(2,281,553) | $(1,752,565) |
| Loss Per Share (Basic/Diluted) | $(5.09) | $(29.69) |
| Cash and Cash Equivalents (End of Period) | $1,413,387 | $1,689,913 |
| Working Capital | $858,095 | N/A |
| Notes Payable | $15,130 | $60,520 |
| Accumulated Deficit | $(99,595,219) | $(91,239,759) |
Material Changes vs. Prior Period
- Operating Expenses: Total operating expenses increased by 30.7% to $2.29 million, driven primarily by a new $472,689 restructuring charge (workforce reductions and merger-related legal/financial costs) and a 91.3% increase in sales and marketing expenses.
- Revenue: Remained at $0 as the company continues to develop its B2B platform and has not yet recognized revenue from the Discovr Radio launch.
- Stock Structure: A 1-for-7.7 reverse stock split was effectuated on March 31, 2026. All share data in the filing has been retroactively restated to reflect this split.
- Preferred Stock: All Series B Preferred Stock was converted to common stock during the period. Series C Preferred Stock remained outstanding at period-end but was subsequently exchanged in April 2026.
Guidance, Outlook, and Risks
- Going Concern: The filing raises substantial doubt about the company's ability to continue as a going concern. Cash on hand ($1.4M) plus secured financing ($12.9M) is projected to fund operations only into the first quarter of 2027. Additional capital is required to scale products.
- Proposed Merger: A definitive merger agreement was signed with Thramann Holdings, LLC. Upon closing, the company will be renamed McCarthy Finney (ticker: MCFN). Auddia shareholders are expected to retain a 20% economic interest. Closing is conditioned on Auddia having at least $12 million in cash on hand.
- Recent Financing: Subsequent to the quarter-end, on April 24, 2026, the company completed a public offering raising $12 million in gross proceeds.
- Risks: Key risks include the failure to secure additional funding, the uncertainty of the proposed merger closing, and the challenge of transitioning to a profitable B2B model.
Investor Verification Checklist
- Verify the status and closing conditions of the proposed merger with Thramann Holdings (McCarthy Finney).
- Confirm the utilization of the $12 million raised in the April 2026 public offering and its impact on the cash runway.
- Monitor the timeline for the full commercial launch of the Discovr Radio B2B platform and initial revenue recognition.
- Review the details of the restructuring plan and its impact on future operating costs.
- Check for any updates regarding Nasdaq listing compliance following the reverse stock splits.