Auddia Inc. (AUUD) - Q2 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026. Auddia Inc. is an AI technology company developing the "faidr" app and "Discovr Radio" platform to personalize audio streaming and facilitate music discovery. The company recently transitioned from a B2C to a B2B subscription model. Auddia is currently an Emerging Growth Company and Smaller Reporting Company. As of August 13, 2026, there were 5,803,050 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|
| Revenue | $7,584 | $7,584 | $0 |
| Net Loss | $(2,975,266) | $(5,256,819) | $(3,321,218) |
| Operating Expenses | $3,031,562 | $5,320,016 | $3,318,220 |
| Cash and Equivalents (End of Period) | $9,558,190 (as of June 30, 2026) | ||
| Working Capital | ~$8.83 million | ||
| Accumulated Deficit | $(102,570,485) | ||
| Debt | $0 (Notes payable fully repaid) |
Material Changes vs. Prior Period
- Revenue Generation: The company recorded $7,584 in revenue for the first time, attributed to a pilot launch of the Discovr Radio platform, compared to $0 in the prior year periods.
- Expense Growth: Total operating expenses increased by 93.4% quarter-over-quarter and 60.3% year-over-year (YTD). This was driven by a 147% increase in Sales & Marketing and a 93% increase in General & Administrative expenses.
- Restructuring Costs: The company incurred $432,041 in restructuring expenses for Q2 2026 (and $904,730 YTD), primarily related to audit and legal fees for a proposed business combination. There were no such costs in the prior year.
- Capital Raise: In April 2026, the company completed a registered direct offering raising approximately $12.0 million in gross proceeds. This significantly increased cash balances from $3.2 million at year-end 2025 to $9.6 million.
- 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.
Outlook, Risks, and Contingencies
- Going Concern: Management states that current cash ($9.6 million) is sufficient to fund operations only into the second quarter of 2027. Additional funding is required to complete product development and scale. This raises substantial doubt about the company's ability to continue as a going concern without further capital.
- Proposed Merger: Auddia has entered a definitive merger agreement with Thramann Holdings, LLC. Upon closing, the company will be renamed McCarthy Finney (ticker: MCFN). The transaction is expected to close in Q3 2026, subject to shareholder approval and a condition that Auddia holds at least $12 million in cash at closing.
- Bridge Funding: Subsequent to the period end (July 17, 2026), Auddia provided bridge notes totaling $920,728 to the target companies (Thramann Holdings, LT350, Influence, and Voyex) to support operations pending the merger.
- Legal Contingencies: Two potential claims exist: one from a pre-IPO investor alleging damages under $300,000, and another from an investor regarding warrant payments in the merger. No complaints have been filed, and the company believes it has meritorious defenses.
- Nasdaq Compliance: The company previously received deficiency notices regarding stockholders' equity and minimum bid price but regained compliance in 2024 and 2025 respectively.
Investor Verification Checklist
- Cash Runway: Verify the accuracy of the "second quarter of 2027" cash runway estimate given the high burn rate (~$5.3M net loss YTD).
- Merger Conditions: Confirm the status of the $12 million cash closing condition for the Thramann Holdings merger, especially after the subsequent bridge funding disbursements.
- Revenue Sustainability: Assess whether the $7,584 in revenue represents a scalable B2B model or a one-time pilot anomaly.
- Dilution: Review the impact of the 5.1 million outstanding common warrants (exercise price $2.36) and the potential dilution from the merger transaction.
- Legal Exposure: Monitor for any filed complaints regarding the two disclosed investor disputes.