[8-K] Auddia Inc. Warrants Reports Material Event

Rhea-AI Filing Summary

Citigroup Global Markets Holdings Inc., guaranteed by Citigroup Inc., is offering 1-Year Barrier Securities linked to the S&P 500 Index (SPX). Each $1,000 security participates 100% in any positive index performance, but returns are capped at a minimum of 11.75%*. If, on the 8/03/26 valuation date, SPX closes between 80% and 100% of its initial level, holders receive full principal ($1,000). Should SPX fall below the 80% final barrier, repayment is reduced 1-for-1 with index decline, exposing investors to substantial loss—potentially their entire investment. The notes pay no coupons, provide no dividend participation, and will not be exchange-listed. All payments are subject to the credit risk of both Citigroup Global Markets Holdings Inc. and its parent, Citigroup Inc. Key dates include a 7/31/25 pricing date and 8/06/26 maturity. The preliminary pricing supplement (File Nos. 333-270327 & 333-270327-01) contains complete terms and risk factors, including an initial estimated value below the issue price.

Positive

• 20% downside buffer protects principal unless SPX drops more than 20% at valuation.
• 100% upside participation up to at least an 11.75% cap offers equity-like returns in moderate rally scenarios.
• Short 1-year tenor reduces long-term market and credit exposure compared with multi-year notes.

Negative

• Upside capped at 11.75%, materially lower than unrestricted SPX participation in strong bull markets.
• No coupons or dividends, resulting in negative carry relative to equities.
• Barrier breach leads to 1:1 losses, exposing investors to significant principal erosion.
• Credit risk of Citigroup Global Markets Holdings Inc. and parent guarantor Citigroup Inc.
• Illiquidity due to absence of exchange listing; resale depends on issuer’s bid.
• Estimated value below issue price means investors pay an upfront premium.

Insights

Structured Products Analyst

TL;DR: 100% upside to ~11.75% cap, 20% downside buffer, but below barrier losses match SPX decline; no coupons, credit risk applies.

The securities combine a short-term (≈1 year) index-linked payoff with a hard 20% buffer. Investors receive full participation in SPX gains until the cap, after which returns are fixed. The design suits investors expecting moderate positive index performance but unwilling to risk more than a 20% drop. However, once the barrier is breached, downside becomes linear, mirroring equity risk without dividend benefit. The lack of interim liquidity (no listing) and an issue price above the bank’s estimated value imply negative carry. Credit exposure to Citigroup, while investment-grade, must also be priced in. Overall, risk/return is finely balanced and chiefly attractive to yield-seeking clients comfortable with structured credit exposure.

Risk Analyst

TL;DR: Product offers limited upside and uncompensated tail risk once SPX <80%; credit, liquidity and valuation discounts heighten downside.

From a risk standpoint, the notes embed a digital call spread plus a short put: investors finance the 20% buffer by surrendering dividends and upside beyond 11.75%. Should systemic stress hit within a year, SPX could breach the barrier, forcing losses up to 100%. Secondary market depth is uncertain since Citigroup is the only expected liquidity provider. Furthermore, the preliminary supplement discloses an estimated value below par, meaning investors pay a premium over fair value at issuance. These factors, coupled with Citigroup senior unsecured credit risk, make the structure appropriate only for diversified portfolios with clear risk budgets.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): June 30, 2025

AUDDIA INC.

(Exact name of registrant as specified in its charter)

Delaware		001-40071		45-4257218
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

1680 38th Street, Suite 130
Boulder, Colorado		80301
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (303) 219-9771

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock	AUUD	Nasdaq Stock Market
Common Stock Warrants	AUUDW	Nasdaq Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 1.01. Entry into a Material Definitive Agreement.

Convertible Preferred Stock and Warrants Financing

On June 30, 2025, Auddia Inc. (the “Company”, “we” and “us”) entered into a securities purchase agreement (the “Securities Purchase Agreement”) with accredited investors for a convertible preferred stock and warrants financing. The Company will receive $750,000 of gross proceeds in connection with the closing of this financing.

At the closing, the Company issued 750 shares of Series C convertible preferred stock (“Series C Preferred Stock”) at a purchase price of $1,000 per share of Series C Preferred Stock. The Series C Preferred Stock is convertible into Common Stock at an initial conversion price (“Series C Conversion Price”) of $4.77 per share of Common Stock. The Company also issued warrants (“Warrants”) exercisable for 314,466 shares of Common Stock with a five year term and an initial exercise price of $4.77 per share.

The proceeds of this financing, together with other available cash resources, will be used to repay outstanding debt and for general corporate purposes.

The Securities Purchase Agreement contains customary representations and warranties and agreements and obligations of the parties.

Terms of the Series C Preferred Stock

The Company has filed a Certificate of Designations of Preferences, Rights and Limitations of Series C Preferred Stock (“Certificate of Designation”) with the Secretary of State of the State of Delaware authorizing 750 shares of Series C Preferred Stock.

Rank

The Certificate of Designation provides that the Series C Preferred Stock ranks senior to the Common Stock with respect to dividends and right upon liquidation.

Voting Rights

Except as otherwise required by law (or with respect to approval of certain actions), the Series C Preferred Stock will not have voting rights.

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Dividends

Holders of the Series C Preferred Stock will be entitled to dividends in the amount of 15% per annum (the “Dividend Rate”), payable quarterly.

The Company has the option to pay dividends on the Series C Preferred Stock in additional shares of Common Stock, subject to certain conditions. The number of dividend shares to be issued shall be calculated by using a “Dividend Conversion Price” equal to the lower of (i) the then applicable Series C Conversion Price as in effect on the applicable dividend date, or (ii) 90% of the lowest VWAP of the Common Stock during the five (5) consecutive trading day period ending and including the trading day immediately preceding the applicable dividend date.

The Company also has the option to elect to cumulate or “capitalize” the dividends, in which case the accrued dividend amount shall be added to the stated value of each share of Series C Preferred Stock.

Conversion Rights; Anti-Dilution Adjustments

The stated value of each share of Series C Preferred Stock (including all the unpaid dividends and other amounts payable on the Series C Preferred Stock) will be convertible into Common Stock at an initial fixed Conversion Price of $4.77 per share of Common Stock. The Series C Preferred Stock may be converted into shares of Common Stock at any time at the option of the holder. The Series C Preferred Stock may also be converted into shares of Common Stock at the option of the Company if the closing sale price of the Common Stock exceeds 300% of the Conversion Price for 20 consecutive trading days, subject to certain conditions.

The Conversion Price of the Series C Preferred Stock is subject to certain anti-dilution adjustments, including in the event of any stock splits or combinations, certain dividends and distributions, reclassification, exchange or substitution of the Company’s Common Stock or in the event that the Company grants, issues or sells (or enters into any agreement to grant, issue or sell), or is deemed to have granted, issued or sold, any shares of Common Stock for a consideration per share (the “New Issuance Price”) less than a price equal to the Conversion Price in effect immediately prior to such granting, issuance or sale or deemed granting, issuance or sale (the foregoing a “Dilutive Issuance”); provided that any Conversion Price adjustment due to a Dilutive Issuance may not be effected until after stockholder approval of the issuance of all of the securities under the Securities Purchase Agreement in compliance with the rules and regulations of the Nasdaq Stock Market has been obtained (the “Stockholder Approval”). Immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New Issuance Price. Additionally, if on the earlier of (x) the effective date of the registration statement to be filed pursuant to the Registration Rights Agreement (as defined below) and (y) the date that the Series C Preferred Stock is eligible to be resold without restriction under Rule 144 of the Securities Act, as amended (the “Securities Act”) (the “Applicable Date”), the Conversion Price then in effect is greater than the greater of (A) the Floor Price (as defined below), and (B) the closing bid price of the Common Stock as of the trading day ended immediately prior to such date of determination (the “Market Price”), the Conversion Price shall automatically lower to the Adjustment Price.

Exchange Right

If a holder participates in a Subsequent Placement (as defined in the Certificate of Designation), such holder may elect to satisfy the purchase price of the securities to be sold to such holder in such Subsequent Placement, in whole or in part, with shares of the Series C Preferred Stock valued at 125% of the Conversion Amount of such shares delivered by such holder as payment.

Defaults; Triggering Events; Alternate Conversion Price

The Certificate of Designations contains customary events of default, or “Triggering Events”, including, among others, (i) certain events of bankruptcy, insolvency or reorganization; (ii) failure to comply with the listing rules of Nasdaq; (iii) certain breaches of the transaction agreements related to this financing; and (iv) any of the shares of the Series C Preferred Stock remaining outstanding on or after June 30, 2027.

Upon the occurrence of a Triggering Event, (i) the Dividend Rate on the Series C Preferred Stock will increase by 18%, and (ii) the Conversion Price then in effect will be adjusted to an “Alternate Conversion Price” equal to the lowest of (i) the applicable Conversion Price as then in effect, and (ii) the greater of (x) the “Floor Price” of $0.954 and (y) 80% of the lowest VWAP of the Common Stock during the five (5) consecutive trading day period immediately preceding the delivery or deemed delivery of the applicable conversion notice.

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Redemption

At any time, the Company shall have the right to redeem all, but not less than all, of the shares of Series C Preferred Stock then outstanding in cash at a price (the “Company Optional Redemption Price”) equal to 125% of the applicable redemption amount.

Liquidation Value

Upon our liquidation, dissolution or winding up, holders of Series C Preferred Stock shall be entitled to receive in cash out of the assets of the Company, before any amount shall be paid to the holders of any of shares of Common Stock, an amount per Series C Preferred Share equal to the sum of (i) the Black Scholes Value (as defined in the Warrants) with respect to the outstanding portion of all Warrants held by such Holder (without regard to any limitations on the exercise thereof) as of the date of such event and (ii) the greater of (A) 125% of the applicable liquidation value and (B) the amount per share such holder would receive if such holder converted such share of Series C Preferred Stock into Common Stock immediately prior to the date of such payment.

Terms of the Warrants

In connection with the closing, the Company issued to the investors Warrants exercisable for 314,466 shares of Common Stock with a five year term and an initial exercise price of $4.77 per share.

The exercise price of the Warrants is subject to certain anti-dilution adjustments, including in the event of any stock splits or combinations, certain dividends and distributions, reclassification, exchange or substitution of the Company’s Common Stock or in the event of a Dilutive Issuance, the exercise price then in effect shall be reduced to an amount equal to the New Issuance Price; provided that any exercise price adjustment due to a Dilutive Issuance may not be effected until after Stockholder Approval has been obtained. The Warrants are exercisable beginning six months after the issuance date (the “Initial Exercisability Date”) and expire on the fifth anniversary of the Initial Exercisability Date.

Ownership, Exercise and Conversion Limitations

The holders will not be able to receive shares upon exercise of the Warrants or the conversion of the Series C Preferred Stock, unless prior stockholder approval is obtained, if (i) the number of shares to be issued would exceed 20% of the Company’s outstanding number of shares at a discount to the applicable Nasdaq Minimum Price or (ii) the number of shares to be issued to any holder would result in in a Change of Control within the meaning of Nasdaq Rule 5635(b).

The Company shall not effect the conversion of any of the shares of Series C Preferred Stock or the exercise of any of the Warrants held by a holder, and such holder shall not have the right to convert any of the shares of Series C Preferred Stock or exercise any of the Warrants held by such holder to the extent that after giving effect to such conversion or exercise, such holder would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such conversion or exercise. The Maximum Percentage may be raised or lowered to any other percentage not in excess of 9.99% at the option of the applicable holder of shares of the Series C Preferred Stock or Warrants, except that any raise will only be effective upon 61-days’ prior notice to the Company.

4

Terms of the Registration Rights Agreement

Pursuant to a registration rights agreement, the Company has agreed to file, not later than the 90th day following the closing, with the Securities and Exchange Commission a registration statement (the “Registration Statement”) relating to the resale by the investors of all of the shares of Common Stock issuable upon the conversion of the Series C Preferred Stock or the exercise of the Warrants. The Company shall use its best efforts to cause the Registration Statement to be declared effective as promptly as possible after the filing thereof. The Company shall use its best efforts to keep such Registration Statement continuously effective thereafter.

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

The securities described above have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state, and were offered and sold in reliance on the exemption from registration under the Securities Act afforded by Section 4(a)(2) thereof.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are filed with this Form 8-K:

3.1		Series C Convertible Preferred Stock Certificate of Designations dated June 30, 2025
10.1		Form of Securities Purchase Agreement dated June 30, 2025
10.2		Form of Common Stock Warrant dated June 30, 2025
10.4		Form of Registration Rights Agreement dated June 30, 2025
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AUDDIA INC.
June 30, 2025	By:	/s/ John E. Mahoney
		Name: John E. Mahoney
		Title: Chief Financial Officer

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FAQ

What is the maximum return on Citigroup's 1-Year SPX Barrier Securities?

The maximum return at maturity is at least 11.75%, to be finalized on the 7/31/25 pricing date.

How much downside protection do the securities provide?

They include a 20% barrier; if SPX stays above 80% of its initial level, investors receive no loss of principal.

When do the Citigroup (C) Barrier Securities mature?

The maturity date is August 6, 2026, with a valuation date of August 3, 2026.

Do these securities pay interest or dividends?

No. The notes are non-interest-bearing and provide no SPX dividend participation.

What happens if the S&P 500 drops more than 20%?

If SPX closes below the 80% barrier, repayment is $1,000 × (1 + underlying return), leading to 1:1 losses beyond the barrier.

Is there secondary market liquidity for these notes?

The securities will not be exchange-listed; any resale will rely on Citigroup's willingness to repurchase.

Are investors exposed to Citigroup credit risk?

Yes. All payments depend on the creditworthiness of Citigroup Global Markets Holdings Inc. and Citigroup Inc.