Auddia Announces Interim Bridge Financing; Withdraws Pending S-1 Registration Statement; Provides Details on M&A Initiatives

Interim financing to bridge to advancement of ongoing buyside M&A discussions and anticipated favorable midyear performance metrics for faidr

M&A strategy will accelerate Auddia’s plans to scale, acquire subscribers, expand internationally, and deploy to broader platforms, including automobiles

BOULDER, CO – (NewMediaWire) – April 18, 2023 –  Auddia Inc. (NASDAQ:AUUD) (NASDAQ:AUUDW) (“Auddia” or the “Company”), developer of a proprietary AI platform for audio and innovative technologies for podcasts that is reinventing how consumers engage with audio, today announced that it has secured bridge financing from insiders and other investors on more favorable terms than are currently available in the public capital markets.

The Company believes this interim financing will bridge to potential critical milestone achievements that include improved faidr usage metrics and executing business development agreements with one or more streaming AM/FM radio station aggregators that could significantly accelerate Auddia’s growth trajectory. 

The bridge financing includes an increase in its existing $2 million non-convertible, term debt, from an existing affiliate investor to $2.75 million, as well draw downs on its previously disclosed $10M equity line, which includes more favorable terms than other currently available public financing alternatives. 

In light of the successful interim financing, the Company will withdraw its pending S-1 registration statement for a proposed secondary stock offering.

The Company has explored numerous potential acquisition targets over the past year and a half and continues to explore new opportunities. At present, the Company is in advanced active discussions with three properties and is targeting to execute one or more agreements in the near term.  

“Over the past 18 months, we have been in discussions with multiple AM/FM streaming aggregators, along with several leading media investment banks, to vet the merits of an acquisition strategy in our space. As we continue to improve user metrics on the faidr app, cost effectively acquiring users is key to significant revenue generation. Although to date we have been primarily focused on acquiring users through direct marketing, the progress we are making and the data we are seeing through our ongoing discussions with aggregators of AM/FM streams is demonstrating the power of an M&A strategy to potentially change our user acquisition trajectory,” said Theo Romeo, Chief Marketing Officer of Auddia.

Jeff Thramann, Executive Chairman of Auddia added, “Although we had the opportunity to price a public financing transaction last week, existing investors provided us a less dilutive alternative which provided us the financial runway to realize improved faidr metrics, and potentially execute one or more business development transactions that would accelerate our strategy. The potential to accelerate user acquisition by bringing in the long tail of the streaming AM/FM aggregator space became a high priority initiative for us after the successful launch of the faidr app last year. We have made excellent progress in our discussions with potential AM/FM aggregator targets to date, and beyond accelerating faidr user acquisitions, these deals would provide meaningful revenue and positive cash flow. The information we are learning in review of AM/FM aggregator targets is compelling for faidr and supports our strategy to accelerate user acquisition. These business development deals could be done with attractive financial terms for Auddia and will require additional financing in the future.”

Based on diligence to date the Company believes the three target properties under active discussion aggregate to approximately $6.5M in current annual revenue with greater than 50% free cash flow. Current revenue is primarily from digital ad revenue and software sales. The Company believes existing digital ad revenue from these properties can be increased through active management to provide immediate synergies.

The total user base listening to AM/FM streams across all three properties is over 10 million monthly active users (MAUs) worldwide, with 1.1 million being U.S. users that represent a free tier that can be offered a commercial free premium experience through faidr, resulting in new subscription revenue to Auddia.

Auddia CEO Michael Lawless commented, “Internally, we continue to make progress towards the key user metrics on faidr that justify a significant increase in user acquisition investments. Although our metric goals include hitting a cost per install of $1.80 by midyear, the cost of a retained user is obviously much higher than the cost of an install. We believe that potential acquisitions will enable us to acquire significant numbers of retained users on an ad supported free tier and then convert many of those users into high-margin subscribers, all at a very cost-effective price.”

The Company will provide updates as term sheets are executed, the M&A strategy unfolds, product improvements are completed, and faidr metrics develop.

Visit faidr.com for more information.

About Auddia Inc.

Auddia, through its proprietary AI platforms for audio is reinventing how consumers engage with AM/FM radio, podcasts, music, and other audio content. Auddia’s flagship audio superapp, called faidr, brings three industry firsts to the audio-streaming landscape: subscription-based, ad-free listening on any AM/FM radio station; podcasts with interactive digital feeds that support deeper stories and create new revenue streams for podcasters; and a proprietary chat interface for music. faidr also delivers exclusive content and playlists, and showcases exciting new artists, hand-picked by curators and DJs. All differentiated offerings address large and rapidly growing audiences.

For more information visit: www.auddia.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 about the Company’s current expectations about future results, performance, prospects and opportunities. Statements that are not historical facts, such as “anticipates,” “believes” and “expects” or similar expressions, are forward-looking statements. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of uncertainties and risks that could significantly affect the Company’s current plans and expectations, as well as future results of operations and financial condition. These and other risks and uncertainties are discussed more fully in our filings with the Securities and Exchange Commission. Readers are encouraged to review the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as well as other disclosures contained in the Annual Report and subsequent filings made with the Securities and Exchange Commission. Forward-looking statements contained in this announcement are made as of this date and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.