Auddia Announces Closing of $2.3M PIPE to Eliminate Debt and Regain Nasdaq Compliance

Rhea-AI Summary

Auddia announced the closing of a $2.3M private placement to eliminate debt and regain compliance with Nasdaq requirements. The financing aims to strengthen the company's balance sheet, allowing it to pursue future acquisitions and execute its business plan. With the proceeds, the company will repay existing debt and has converted accrued interest into equity securities. Auddia has raised a total of $4.5M from its existing equity line, with 2,594,196 common shares outstanding as of April 26, 2024.

Positive

• The private placement will eliminate existing debt, strengthening Auddia's balance sheet.
• Regaining compliance with Nasdaq requirements enhances the company's position for continued listing on the exchange.
• The financing activities, including the recent equity line activity and conversion of accrued interest, demonstrate the company's efforts to improve its financial position and meet stockholders' equity requirements.

Negative

• None.

Insights

Financial Analyst

The private placement of $2.3 million by Auddia Inc. to address its balance sheet concerns is a material event for stakeholders. The conversion of debt into equity exemplifies a company striving to solidify its financial structure. This move reduces the interest burden on the company, freeing up capital for strategic ventures such as acquisitions. The elimination of debt also minimizes insolvency risks, which could appeal to conservative investors. However, the dilution of current shareholders' equity cannot be ignored. While dilution might be unappealing in the short term, if the capital is deployed effectively to fuel growth, it could lead to increased shareholder value in the long term. Additionally, the company’s efforts to comply with Nasdaq requirements may restore investor confidence and potentially improve stock liquidity.

Market Research Analyst

Auddia's strategic focus on strengthening their balance sheet corresponds with broader market trends where investors are showing preference for companies with solid balance sheets amid the economic uncertainties. By regaining Nasdaq compliance, Auddia not only averts the risk of delisting but also signals potential investors about its commitment to governance standards. Moreover, by retiring debt and raising additional capital, Auddia may be positioning itself for future acquisitions, hinting at an aggressive growth strategy. Investors should note the competitive landscape of AI audio platforms and podcasts and how Auddia plans to navigate this space with its technology and any potential acquisitions.

BOULDER, CO, April 29, 2024 (GLOBE NEWSWIRE) -- via NewMediaWire -- Auddia Inc. (NASDAQ:AUUD) (NASDAQ:AUUDW) ("Auddia" or the "Company"), a 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 closed a private placement of $2.3 million of convertible preferred stock and common stock warrants.

“When I joined the Company at the end of last year, a primary objective was to strengthen our balance sheet by eliminating debt and better positioning the Company to meet Nasdaq’s stockholders’ equity requirement,” said John Mahoney, CFO for Auddia. “This financing retires all existing debt on our balance sheet. We believe that the closing of this private placement, together with other recent financing activities, will bring the Company back into compliance with the Nasdaq stockholders’ equity requirement for continued listing.”

By strengthening the balance sheet and regaining compliance with the Nasdaq stockholders’ equity listing requirement, the Company believes it is better positioned to execute on its business plan, including its plans to pursue potential future acquisitions of complementary businesses.

The Company will use the proceeds from this private placement. together with other available cash resources, to repay $2.75 million of existing debt.

As previously announced, the Company also recently converted approximately $900,000 of accrued interest and original issue discount on existing debt into equity securities of the Company.

In addition, since January 1, 2024, the Company has raised $4.5 million from its existing equity line. Following the Company’s most recent equity line activity, the Company has 2,594,196 common shares outstanding as of April 26, 2024.

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, 2023, 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.

Investor Relations:
Kirin Smith, President
PCG Advisory, Inc.
ksmith@pcgadvisory.com
www.pcgadvisory.com