Auddia Inc. (AUUD) stock surged 91.66% in overnight trading to $1.60 on Tuesday, and the reason is a bit unusual: the company's CEO is essentially merging it with his own private company.

The move followed an SEC filing disclosing a definitive merger agreement with Colorado-based Thramann Holdings, LLC. Here's the kicker—Thramann Holdings is wholly owned by Auddia's President and CEO, Jeff Thramann.

A Deal With Interesting Ownership Dynamics

According to the filing, both entities would merge under a holding company called McCarthy Finney Inc., a Delaware corporation. The ownership split is notable: former Thramann members would receive approximately 80% economic interest, while existing AUUD shareholders would retain roughly 20%.

So if you're an Auddia shareholder, you're looking at significant dilution here. That 80/20 split means current shareholders will own just a fifth of the combined entity.

Independent Directors Sign Off on Related-Party Transaction

Because this is a related-party deal under U.S. securities laws—the CEO buying his own company, essentially—a special committee of independent directors had to weigh in. They unanimously approved the merger, calling it "advisable, fair to and in the best interests of Auddia and its stockholders," according to the filing.

The deal isn't done yet, though. The filing states that closing conditions include stockholder approval, the effectiveness of the SEC registration statement, and Auddia maintaining at least $12 million in net cash.

Where the Stock Stands

The Relative Strength Index (RSI) of AUUD stands at 45.94, suggesting neither oversold nor overbought conditions.

The technology company has a market capitalization of just $2.60 million, with a 52-week high of $14.58 and a 52-week low of $0.66. Over the past 12 months, the stock has fallen 88.90%. It's currently positioned very close to its annual low, just about 1.2% above its 52-week low.

Price Action: On Tuesday, the stock closed at $0.83, up 24.12%, before the overnight surge.

Market data indicates that AUUD has a negative price trend across all time frames, which isn't surprising given the brutal yearly performance.