What changed in this filing

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Item 1. Business

2025-03-05 compared with 2024-04-01 · 90 added, 222 removed, 427 unchanged (42% of the section changed)

Overview of Auddia

Auddia (the “Company”)

is a technology company headquartered in Boulder, CO that is reinventing how consumers engage with audio through the development of a

proprietary AI platform for audio and innovative technologies for podcasts.

Auddia is leveraging these technologies within its industry-first

audio Superapp, faidr (previously known as the Auddia App).

faidr gives consumers

the opportunity to listen to any AM/FM radio station with commercial breaks replaced with personalized audio content, including popular

and new music, news, and weather.

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.

In addition to commercial-free

AM/FM, faidr includes podcasts also with ads removed or easily skipped by listeners as well as exclusive content, branded faidrRadio,

which includes new artist discovery, curated music stations, and Music Casts.

Music Casts are unique to faidr.

Hosts and DJs can combine

on-demand talk segments with dynamic music streaming, which allows users to hear podcasts with full music track plays embedded in the

Auddia has also developed

a differentiated podcasting capability with ad-skipping features and also provides a unique suite of tools that helps Podcasters create

additional digital content for their podcast episodes as well as plan their episodes, build their brand, and monetize their content with

new content distribution channels.

This podcasting feature also gives users the ability to go deeper into the stories through supplemental,

digital content, and eventually comment and contribute their own content to episode feeds.

The combination of AM/FM streaming and podcasting,

with Auddia’s unique, technology-driven differentiators, addresses large and rapidly growing audiences.

The Company has developed

its AI platform on top of Google’s TensorFlow open-source library that is being “taught” to know the difference between

Auddia (the “Company”) is an AI technology

company headquartered in Boulder, CO that is reinventing how consumers engage with audio through the development of its faidr app, an

industry-first audio platform, which utilizes proprietary AI technology to personalize and customize both radio and podcast listening

faidr allows users to

listen to AM/FM radio stations without unwanted commercial breaks.

The app replaces these ad breaks in real time with streaming music

similar in format and genre to the radio station being played.

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.

In addition to commercial-free AM/FM, faidr includes podcasts – also with ads removed or easily skipped by listeners – as

well as exclusive content, which includes new artist discovery, curated music stations, and exclusive music podcasts that allow hosts

to play full tracks within the episode.

The combination of AM/FM

streaming and podcasting, with Auddia’s unique, AI technology-driven differentiators, addresses large (radio streamers) and rapidly

growing (podcast listeners) audiences.

We have developed our

AI platform on top of Google’s TensorFlow open-source library that is being “taught” to know the difference between

all types of audio content on the radio.

For instance, the platform recognizes the difference between a commercial and a song and is learning

the differences between all other content to include weather reports, traffic, news, sports, DJ conversation, etc.

Not only does the technology

learn the differences between the various types of audio segments, but it also identifies the beginning and end of each piece of content.

The Company is leveraging this technology platform

within its premium AM/FM radio listening experience through the faidr App.

The faidr App is intended to be downloaded by consumers who

will pay a subscription fee in order to listen to any streaming AM/FM radio station and podcasts, all with commercial interruptions removed

from the listening experience, in addition to the faidrRadio exclusive content offerings.

Advanced features will allow consumers to skip

any content heard on the station and request audio content on-demand.

We believe the faidr App represents a significant differentiated

audio streaming product, or Superapp, that will be the first to come to market since the emergence of popular streaming music apps such

as Pandora, Spotify, Apple Music, Amazon Music, etc.

We believe that the most significant point of differentiation is that

in addition to ad-free AM/FM streaming and ad-free podcasts, the faidr App is intended to deliver non-music content that includes local

sports, news, weather, traffic and the discovery of new music alongside exclusive programming.

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 launched an MVP version of faidr through

several consumer trials in 2021 to measure consumer interest and engagement with the App.

The full app launched on February 15, 2022,

and included all major U.S.

For instance, the platform recognizes the difference between a commercial and a song and DJ conversation.

Not only does the technology learn the differences between the various types of audio segments, but it also identifies the beginning and

end of each piece of content.

The faidr app is intended

to be downloaded by consumers who are willing to pay for a customizable, commercial-free listening experience.

Our advanced features allow

subscribers to skip any content heard on the station and request audio content on-demand.

We believe the faidr App represents a significant

differentiated audio streaming product, the first to give audio streamers a more personalized middle ground between passive content like

broadcast radio and fully on-demand content like Spotify.

No other audio streaming app available today, including category leaders like

TuneIn, iHeart, and Audacy, can compete with faidr’s full product offerings.

We launched an MVP version of faidr through several

consumer trials in 2021 to measure consumer interest and engagement with the App.

The full app launched on February 15, 2022, and included

all major U.S.

radio stations in the US.

In February 2023, the Company added faidrRadio, Auddia’s exclusive content

offerings, to the app.

Podcasts (standard) were added to the app for the iOS version before the end of Q1 2023 as planned and added to

the Android app in May of 2023.

Podcast functionality will continue to be enhanced through 2024, including the deployment of the Company’s

ad-reduction technology.

The Company also developed a testbed differentiated

podcasting capability called Vodacast, which leveraged technologies and proven product concepts to differentiate its podcasts offering

from other competitors in the radio-streaming product category.

With podcasting growing and predicted to grow

at a rapid rate, the Vodacast podcast platform was conceptualized to fill a void in the emerging audio media space.

The platform was built

to become the preferred podcasting solution for podcasters by enabling them to deliver digital content feeds that match the audio of their

podcast episodes, and by enabling podcasters to make additional revenue from new digital advertising channels, subscription channels,

on-demand fees for exclusive content, and through direct donations from their listeners.

Throughout 2023, Auddia has been migrating their

podcasting capabilities into the flagship faidr app with the intention to sunset the Vodacast platform and instead bring the advanced

podcasting functionality that was found on Vodacast into faidr as part of the overall strategy to build a single audio Superapp.

includes Auddia’s new podcast ad-reduction technology.

Today, podcasters do not have a preference as

to where their listeners access their episodes, as virtually all listening options (mobile apps and web players) deliver only their podcast

By creating significant differentiation on which they can make net new and higher margin revenue, we believe that podcasters will

promote faidr to their listeners, thus creating a powerful, organic marketing dynamic.

One innovative and proprietary part of Auddia’s

podcast capabilities, originally presented on their Vodacast differentiated podcasting capability, is the availability of tools to create

and distribute an interactive digital feed, which supplements podcast episode audio with additional digital.

These content feeds allow

podcasters to tell deeper stories to their listeners while giving podcasters access to digital revenue for the first time.

will be able to build these interactive feeds using The Podcast Hub, a content management system that was originally developed and trialed

as part of Auddia’s Vodacast platform, which also serves as a tool to plan and manage podcast episodes.

The digital feed activates

a new digital ad channel that turns every audio ad into a direct-response, relevant-to-the-story, digital ad, increasing the effectiveness

and value of their established audio ad model.

The feed also presents a richer listening experience, as any element of a podcast episode

can be supplemented with images, videos, text and web links.

This feed will appear fully synchronized in the faidr mobile App, and it

also can be hosted and accessed independently (e.g., through any browser), making the content feed universally distributable.

Over time, users will be able to comment, and

podcasters will be able to grant some users publishing rights to add content directly into the feed on their behalf.

This will create

another first for podcasting, a dialog between creator and fan, synchronized to the episode content.

The interactive feed for podcasts

has been developed and tested on Vodacast and is expected to be another differentiator added into faidr for podcast listeners later in

The podcast capabilities within faidr will also

introduce a unique and industry first multi-channel, highly flexible set of revenue channels that podcasters can activate in combination

to allow listeners to choose how they want to consume and pay for content.

“Flex Revenue” allows podcasters to continue to

run their standard audio ad model and complement those ads with direct response enabled digital ads in each episode content feed, increasing

the value of advertising on any podcast.

“Flex Revenue” will also activate subscriptions, on-demand fees for content (e.g.,

listen without audio ads for a micro payment fee) and direct donations from listeners.

Using these channels in combination, podcasters

can maximize revenue generation and exercise higher margin monetization models, beyond basic audio advertising.

“Flex Revenue”

and the initial inclusion of the new revenue channels that come with it will be added to podcasting in the faidr app, and the first elements

of this new monetization capability is expected to be commercially available in 2024, beginning with subscription plans to access ad-reduction

The faidr mobile App is available today through

the iOS and Android App stores.

In February 2023, we added faidrRadio, our exclusive content offerings, to the app.

were added to the app for the iOS version before the end of Q1 2023 as planned and added to the Android app in May of 2023.

addition of podcasts, exclusive content, and continued enhancement of its ad-free accuracy and functionality, the faidr app now boast

a strong 30-day retention rate of above 20% and is in the beginning phases of rolling out subscription products to users.

The faidr mobile App is available today

through the iOS and Android App stores.

Recent Developments

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The aggregate consideration for the

RFM Acquisition is $13,000,000 (plus $2,000,000 in contingent consideration if certain post-close milestones are reached), in addition

RFM Acquisition was $13,000,000 (plus $2,000,000 in contingent consideration if certain post-close milestones are reached), in addition

to the assumption of certain liabilities, as may be adjusted pursuant to the terms of the RFM Purchase Agreement.

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terminate the RFM Purchase Agreement.

Reverse Share Split

The Company filed an amendment to its Certificate

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and digital advertising.

Further, our Executive Chairman has extensive experience developing strategy and determining business viability

Further, the Executive Chairman has extensive experience developing strategy and determining business viability

of products in the several previous companies that he founded.

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Based upon management’s analysis, the above

discussions, and industry research, the Company concluded that a subscription product for local radio’s audio content, where commercials

discussions, and industry research, the Company concluded that a subscription product for local radio audio content, where commercials

are removed, was of great interest to the radio broadcast industry.

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as the podcast offering.

In February of 2022, Auddia launched faidr and

began acquiring users to assess App performance and adoption.

The faidr App has gone through multiple iterations since launch, including

the major feature additions of podcasts and faidrRadio.

We launched an MVP version of faidr through several

consumer trials in 2021 to measure consumer interest and engagement with the App.

The full app launched on February 15, 2022, and included

all major U.S.

radio stations in the US.

In February 2023, we added faidrRadio, our exclusive content offerings, to the app.

were added to the app for the iOS version before the end of Q1 2023 as planned and added to the Android app in May of 2023.

addition of podcasts, exclusive content, and continued enhancement of its ad-free accuracy and functionality, the faidr app now boast

a strong 30-day retention rate of above 20% and is in the beginning phases of rolling out subscriptions products to users.

Overview of the Evolving

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The Q4 2024 Share of Ear Study shows broadcast radio with a 36% share of listening and the next most popular form of listening

being music videos on YouTube at 14% followed by owned music at 5%.

being music videos on YouTube at 13% followed by podcasts at 10%.

Although AM/FM radio continues to dominate audio listening, streaming

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music players.

There are a handful of

successful radio-streaming mobile applications on the market today.

Between the top five, there are more than 150 million users, which

includes some overlap.

According to Statista, the reach of online radio, which includes AM/FM streaming, has increased sharply over the

past decade, with 68% of the US population having listened to online radio within a month in 2021 compared to only 34% ten years earlier.

There are a handful of successful radio-streaming mobile applications

on the market today.

Between the top five, there are more than 150 million users, which includes some overlap.

According to Statista,

the reach of online radio, which includes AM/FM streaming, has increased sharply over the past decade, with 68% of the US population having

listened to online radio within a month in 2021 compared to only 34% ten years earlier.

This migration of audience is expected to continue.

The total addressable market for radio streaming is expanding year-over-year, and

faidr is the only app currently available that can (1) provide ad-free listening and (2) can aggregate all stations in the US in one place,

as it is not beholden to any exclusivity deals with the larger AM/FM media corporations.

The total addressable market for radio streaming is expanding year-over-year, and faidr is the only app currently available that can (1)

provide ad-free listening and (2) can aggregate all stations in the US in one place, as it is not beholden to any exclusivity deals with

the larger AM/FM media corporations.

The Company believes

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segments with other content such as additional music.

The Company is developing strategies and content

relationships to access additional content sources to cover commercials and respond to skips across many content segments in addition

to music and commercials, such as sports, news, talk and weather.

As the audio content ecosystem continues to expand, the Company believes

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Users of faidr can also access any podcast that’s

publicly available as well as exclusive programming, music stations and Music Casts, through faidrRadio.

publicly available as well as exclusive programming, music stations and Music Casts, through its exclusive content offering.

The faidr App is built on a proprietary artificial

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infringement, the damages for which could be material.

Podcast Platform

Auddia’s Podcast Platform, which includes

the previously developed and commercially trialed Vodacast mobile app, is an interactive differentiated podcasting capability the Company

has built that allows podcasters to give their audiences an interactive audio experience.

Podcast listeners are able to see video and

other digital content that correlates with the podcast audio and is presented to the listener as a digital feed.

All content presented

in the digital feed can be synched to the podcast audio content.

This allows podcast listeners to visually experience, interact with,

and eventually comment on audio content in podcasts.

Much of the technology we use in this platform

to create the feed of digital content synchronized to the audio content of the podcast is based on the core functionality and product

concepts the Company has used historically to provide synchronized digital feeds to over 580 radio stations.

The digital feed introduces a new revenue stream

to podcasters, such as synchronized digital advertising while providing end users a new digital content channel that compliments the core

audio of the podcast.

All of the content and functionality that is

made available within the Podcast Platform, through the Vodacast mobile app, is currently being added to the faidr app, diversifying

the podcast offering of faidr and bringing that app up to parity with the major, competing apps like iHeart Radio, TuneIn and

In addition, new ad-skipping features are also being added to faidr in 2024 which demonstrates the company’s

differentiation in the podcasting arena, for both podcasters and consumers.

Business Model and Customer Acquisition Strategy

The Company has an eight-year plus history of

working closely with the broadcast radio industry in the United States to help the industry adapt to both digital advertising and digital

media technologies.

The Company announced several broadcast radio

partnerships during 2021 in which we performed commercial trials within these markets.

Based on the initial results from our commercial

trials, the Company believes consumers are drawn to an interruption-free radio experience.

We executed a full launch in February 2022

that initially included approximately 4,000 radio stations on the faidr App.

The Company has continued to add stations to the faidr App

which now presents more than 6,200 AM/FM streams.

Radio stations owned by broadcasters will be economically

incentivized to promote faidr to their listeners.

We intend to leverage subscription revenue to compensate participating radio broadcasters

for promotional support and their increased music streaming fees.

We believe that if participating broadcasters can generate increased

revenue from their content, they can decrease their on-air advertising load while increasing the price paid for each commercial, as the

commercial is more likely to be heard by consumers in a less cluttered advertising environment.

In addition, we intend to offer tiered

subscriptions to the faidr App where lower priced subscriptions allow a lower level of functionality and control.

We believe that our

history and existing relationships with broadcast radio will drive customer acquisition for the faidr App.

Our business model is based on creating a pool

of subscription revenue across all streaming stations and other content providers utilizing the faidr platform.

This subscription pool,

excluding direct subscriber acquisition costs and increased music streaming fees, is expected to be shared with radio stations and other

content providers, such as podcasters whose episodes are available ad-free, based either on the time each listener spends listening or

the amount of plays on faidr.

We believe this business model will result in broadcasters and podcasters promoting the listening of their

content within faidr, similar to how radio stations are currently using airtime to promote the listening of their stations on Alexa and

other smart speaker systems.

Our major podcast differentiators once implemented

in faidr, will be marketed to podcasters and podcasting companies with business-to-business strategies that focus on communicating the

value proposition and monetization opportunity.

The potential to earn new, incremental revenue on the faidr platform, in addition to the

other key value propositions of the platform, is expected to organically drive podcasters to promote the platform directly to their listeners.

Direct-to-consumer marketing will be done independently by the Company and, in some cases, in partnership with podcasters who leverage

their audio content programs to promote to their established audiences.

As is the case with other proven marketing strategies, we intend

to have our partners benefit from a participative revenue share through faidr podcasting.

The Company is following a direct-to-consumer,

go-to-market strategy to bring paid and organic installers to its app.

Once there, users are prompted to subscribe either to a monthly

or annual plan.

In addition to monetizing users through premium subscription products, the platform will also monetize free users through

native advertising.

Our Legacy Interactive

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As of December 31, 2024,

we had 13 total employees, 8 of whom were engaged in full-time research and development activities and 5 of whom were engaged in general

administration.

The Company also works with 1 full-time contractor who supports research and development and 2 part-time contractors who

support general administration activities.

None of our employees is represented by any collective bargaining unit.

We believe that we

maintain good relations with our employees.

we had 12 total employees, 6 of whom were engaged in full-time research and development activities and 6 of whom were engaged in sales

and marketing and general administration activities.

The Company also works with 2 full-time contractors who support research and development

and 2 part-time contractors who support general administration activities.

None of our employees is represented by any collective bargaining

We believe that we maintain good relations with our employees.

Health, Safety and Wellness

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with paid vacation, holiday, family leave and sick leave, with numerous other benefits offered to our employees.

response to the COVID-19 pandemic, we took immediate steps to protect our employees, clients, and communities in which we operate by making

changes to work locations, work protocols, and information services.

We continue to maintain our commitment to ensuring our employees’

health, safety, and wellness by providing our employees the option to work in office or fully remote.

Any employee who works in office

must adhere to the Auddia’s policy regarding vaccination status to ensure the health and safety of our employees.

We continue to maintain our commitment to ensuring

our employees’ health, safety, and wellness by providing our employees with the option to work in office or fully remote.

who works in office must adhere to the Auddia’s policy regarding vaccination status to ensure the health and safety of our employees.

Legal Proceedings

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We are not currently

a party to any material legal proceedings, the adverse outcome of which, in our management’s opinion, individually or in the aggregate,

a party to any material legal proceedings, the adverse outcome of which, in our management’s opinion, individually or in aggregate,

would have a material adverse effect on the results of our operations or financial position.

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party or has a material interest adverse to our interest.

In April 2021, the Company entered a twelve-month

non-cancelable operating sublease for approximately 8,600 square feet of office space, with an initial base rent of $7,150 per month with

three, separate six-month renewal options, subject to fixed rate escalation increases.

In November of 2022, the Company amended the sublease

to reflect a new term that expired on December 14, 2023, and was not renewed by the parties.

The square footage rented was reduced to

approximately 2,160 square feet at the cost of $4,018 per month.

As of December 31, 2023, the Company was negotiating a new office space

lease and entered into a temporary month-to-month lease for $1,600 per month until negotiations were finalized.

On March 25, 2024, the

Company entered into a new 37-month operating lease commencing on April 1, 2024 with two separate two year renewal options.

base rent for months two through 14 is $2,456, increasing to $3,070 for months 15 through 26, and ending at $3,684 for months 27 through

On March 25, 2024, the Company entered into a

new 37-month operating lease for approximately 2,900 square feet of office space commencing on April 1, 2024 with two separate two year

renewal options.

The monthly base rent for months two through 14 is $2,456, increasing to $3,070 for months 15 through 26, and ending

at $3,684 for months 27 through 37.

Rent expense was $85,842 and $61,724 for the years ended December 31, 2024 and 2023, respectively.

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(“IPO”) in February 2021, we converted into a Delaware corporation pursuant to a statutory conversion under the name Auddia

Our principal executive offices are located at 1680 38 th Street, Suite 130, Boulder, CO 80301.

Our main telephone number

is (303) 219-9771.

Our internet website is www.auddia.com and corporate website is www.auddiainc.com.

The information contained in

or accessible from our website is not incorporated into this Annual Report, and you should not consider it part of this Annual Report.

We have included our website address in this Annual Report solely as an inactive textual reference.

Our principal executive offices are located in Boulder, Colorado.

Our internet website is www.auddia.com and our corporate website

is www.auddiainc.com.

The information contained in or accessible from our website is not incorporated into this Annual Report, and you

should not consider it part of this Annual Report.

We have included our website address in this Annual Report solely as an inactive textual

We are an “emerging growth company”

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business