Aether Holdings, Inc.: Form 10-Q for the period ended Mar 31, 2025
Filed with the SEC on May 16, 2025 and accepted by EDGAR at May 16, 2025, 21:06 ET.
Management's discussion and analysis
As filed, 43,907 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed financial statements and the related notes appearing elsewhere in this Report. In addition to unaudited condensed financial statements, the following discussions and other parts of this Report contain forward-looking statements that reflect our plans, objectives, expectations, intentions, and beliefs, which involve risks, uncertainties and assumptions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections titled “Cautionary Note on Forward-Looking Statements” and “Risk Factors” included elsewhere in this Report .
Overview of Our Company
We are an emerging financial technology platform company that offers proprietary research analytics, data and tools for both institutional and retail equity traders (who we refer to herein as “Users”) through our flagship, cloud-based software platform, SentimenTrader.com. By integrating advanced technologies, including artificial intelligence (“AI”) tools, with the critical thinking and analytical abilities of our team of evidenced-based trading veterans, we aim to provide our Users with a powerful combination of technology and expertise, enabling them to make informed decisions to level-up their trading in the markets.
Our platform is powered by an advanced data collection system that operates utilizing API calls and web scraping, fetching raw data 24/7 from a wide array of authoritative sources, including industry leaders like Bloomberg, Chicago Board Options Exchange, Consensus, Commodity Futures Trading Commission, End of Day Historical Data and Intercontinental Exchange. This automated process allows us to remain abreast of the latest market trends, trading volumes, and essential financial indicators.
Our platform currently provides coverage of U.S. equity and option securities, evaluating the equities and options markets and conducting assessments through our analysts and technology daily. SentimenTrader utilizes technical indicators of market sentiment (meaning our proprietary gauge of the overall attitude of investors towards a particular market or security) as the cornerstone for our analyses and integrates technological advancements and the potential of deep learning techniques to create trade ideas, strategies, models, and other market analysis. We intend to target a wider audience than our current User base by broadening the scope and variety of our products, expanding the types of securities our platform covers, and broadening our coverage to include more markets and exchanges.
We currently generate revenue from subscriptions to SentimenTrader. Cloud-based services allow our Users to access tailor-made stock research reports without taking possession of the software. Revenue is generally recognized ratably over the subscription term beginning on the commencement date of each subscription, which is the date our cloud-based software is first made available to a User. Subscription agreements generally have terms ranging from one month to one year. For the three and six months ended March 31, 2025, our total revenue were approximately $341,906 and $696,549, respectively. For the three and six months ended March 31, 2024, our total revenue were approximately $365,220 and $730,633, respectively.
On April 9, 2025, the registration statement for our initial public offering (the “IPO”) became effective. The IPO was consummated on April 11, 2025, with the issuance of 1,800,000 shares of our common stock at a public offering price of $4.30 per share, generating gross proceeds of $7,740,000. In connection with the IPO, we granted the underwriters an over-allotment option to purchase up to 270,000 additional shares at the same public offering price. On April 16, 2025, the over-allotment option was fully exercised, resulting in additional gross proceeds of $1,161,000. With the full exercise of the over-allotment option, the total gross proceeds from the IPO amounted to $8,901,000, before deducting underwriting discounts, commissions, and offering expenses. We believe the IPO proceeds have significantly enhanced our financial position and liquidity.
Additionally, on April 30, 2025, we incorporated a new subsidiary, Alpha Edge Media, Inc. (“AEM”), to support our expanding newsletter business. The newsletters published by AEM will target both institutional and retail investors, focusing on topics such as macroeconomic trends, market insights, and market psychology, while broadening our overall coverage of securities, markets and exchanges. We believe the expansion of our newsletter business will complement the newsletters currently published through our SentimenTrader platform and enable us to continue to build brand authority, expand recurring engagement with our Users, generate new User engagement with SentimenTrader, and open up new revenue streams through potential advertisements, sponsorships, and premium content.
We continue to focus on achieving our mission of establishing ourselves as a preeminent fintech information company dedicated to the development of smart platforms tailored to empower the investing community with actionable strategic insights. To this end, in addition to our establishing AEM to further develop our newsletter business and expand the securities, markets, and exchanges we currently cover, we are also actively exploring research and development initiatives to focus on advancing proprietary analytics and AI-driven models, as well as the possibility of growth through acquisition of complementary tools and technologies that would enhance our platform’s capabilities and value to Users.
Financial Highlights
The following table presents the revenue, cost of sales, gross margin and the net cash provided by or used in operating activities for the six months ended March 31, 2025 and 2024.
| Six Months ended March 31, 2025 | 2024 | % Change | |
|---|---|---|---|
| Revenue | $696,549 | $730,633 | (4.7)% |
| Cost of sales | $217,174 | $222,884 | (2.6)% |
| Gross profit margin | 68.8% | 69.5% | (0.7)% |
| Net cash used in operating activities | $(361,771) | $(157,093) | 130.1% |
Factors and Trends Affecting Our Business and Results of Operations
We believe the most significant factors that affect our business and results of operations including the following:
Increasing Usage by Our Existing Customers
Our existing Userbase presents a significant opportunity for further sales expansion through increased usage of our platform and adoption of additional product offerings. We are highly focused on gaining a better understanding of the needs and growth plans of our existing Users. Developing a deeper relationship with our Users will help us identify opportunities to educate our customer base on ways to utilize the platform more effectively for their individual use cases, as well as provide a feedback loop to inform our product roadmap. We are focusing our sales and support teams on preventing User churn by working to ensure our products and services provide a high level of value. Our goal is to continue to increase our revenue from existing Users through the introduction of new products and features tailored to our User base in addition to expanded User outreach focused on larger Users and specific use cases.
Growing Our Base of Higher Spend Customers
We believe there is a substantial opportunity to further expand our User base to attract more businesses that can scale on our platform. We are investing in strategies that we believe will attract enterprise Users, including new marketing and partnership initiatives that further improve our self-service revenue funnel and help Users expand their usage.
Investing in Our Platform and Product Offerings
We have a history of, and plan to continue investing significantly in, delivering innovative products, features and functionality targeted at our core User base. The market opportunity for our core services of providing proprietary research analytics, data, and tools for equity traders through a flagship platform continues to expand and we intend to make targeted investments to expand this revenue. Beyond the SentimentTrader platform, we continue to see large growth opportunities in U.S. markets and, accordingly, we have expanded our portfolio of products and offerings over the last few years. In addition, we may pursue both strategic partnerships and acquisitions that we believe will be complementary to our business, accelerate User acquisition, increase usage of our platform and/or expand our product offerings in our core markets. Our results of operations may fluctuate as we make these investments to drive usage and take advantage of our expansive market opportunity.
Increasing Importance of AI
Our future success depends in large part on the continuing adoption of AI, proliferation of retail investors and the increasing importance of research, all of which are driving the adoption of our equity research platform. We believe our market opportunity is large and that these factors will continue to drive our growth.
Macroeconomic Conditions
Unfavorable conditions in the economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, supply chain disruptions, inflationary pressures, interest rates, financial and credit market fluctuations, volatility in the capital markets, liquidity concerns at, and failures of, banks and other financial institutions, international trade relations, political turmoil, political instability, natural catastrophes, outbreaks of contagious diseases, warfare and terrorist attacks on the United States, Europe or elsewhere, including military actions affecting Russia, Ukraine, the Middle East or elsewhere, could cause a decrease in business investments in information technology and negatively affect the growth of our business and our results of operations. While our business model provides some resilience against these factors, we will continue to monitor the impacts of these or similar circumstances on our business, and will take appropriate measures, to minimize potential risk exposure.
Key Business Metrics
We review the following key business metrics to measure our performance, identify trends, formulate financial projections, and make strategic decisions. We are not aware of any uniform standards for calculating these key metrics, which may hinder comparability with other companies who may calculate similarly titled metrics in a different way.
| For the Three Months Ended March 31, 2025 | 2024 | % change | For the Six Months Ended March 31, 2025 | 2024 | % change | |
|---|---|---|---|---|---|---|
| Free Subscribers | 325 | 207 | 57.0% | 593 | 5,085 | (88.3)% |
| Average conversion rate from free to paid subscribers | 20.9% | 28.7% | (27.3)% | 23.0% | 26.9% | (14.4)% |
| Paid Subscribers | 2,331 | 2,497 | (6.6)% | 2,357 | 3,263 | (27.7)% |
| Average Revenue Per User (“ARPU”) | $147 | $146 | 0.3% | $295 | $224 | 31.9% |
| Total Revenue | $341,906 | $365,220 | (6.4)% | $696,549 | $730,633 | (4.7)% |
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Free Subscribers
“Free Subscribers” are defined as Users who subscribe to our free investment publications using a valid email address and remain directly opted in, excluding Paid Subscribers who also receive free subscription materials. These free subscriptions often feature daily publications with commentary on the stock market, investment ideas, and other specialized topics. Our free publications include advertisements and editorial support for our current marketing campaigns. Through these publications, Free Subscribers become acquainted with our editors and analysts, explore our products and services, and discover how we could help them become better investors.
The number of Free Subscribers decreased by 4,492, or 88.3%, from 5,085 for the six months ended March 31, 2024 to 593 for the six months ended March 31, 2025. This decline was primarily due to the limited number of marketing campaigns for free subscriptions during the six months ended March 31, 2025, compared to the large-scale marketing campaigns conducted throughout the six months ended March 31, 2024. The marketing campaigns in fiscal 2024 took place in October 2023, attracting 4,450 Free Subscribers. After this campaign, we shifted our focus to developing strategies aimed at improving Average Revenue Per User (“ARPU”) and facilitating subscription plan migrations.
The number of Free Subscribers increased by 118, or 57.0%, from 207 for the three months ended March 31, 2024 to 325 for the three months ended March 31, 2025. The increase in number of Free Subscribers could be attributed to the increased brand awareness driven by the recent marketing advertising and marketing campaigns.
We acknowledge that Free Subscribers play a critical role in our business ecosystem, serving as the foundation of the customer acquisition funnel. They represent a low-barrier entry point for potential Users, allowing them to explore and engage with the platform without financial commitment. This group often acts as a pipeline for converting Users into paid subscribers, which directly drives revenue growth. To address the decline in Free Subscribers in fiscal 2025, we plan to implement more diversified and targeted marketing campaigns, enhance our User interface to simplify the free User sign-up process, and foster a sense of community through exclusive events, forums, and social media groups, which encourage retention and advocacy.
Paid Subscribers
“Paid Subscribers” are defined as the number of monthly average Users with paid subscriptions during the period or year. We view the number of Paid Subscribers at the end of a given period as a key indicator of the attractiveness of our products and services, as well as the efficacy of our marketing in converting Free Subscribers to Paid Subscribers and generating direct-to-paid Paid Subscribers. We grow our Paid Subscriber base through performance marketing directly to prospective and existing Users across a variety of media, channels, and platforms. Management anticipates the conversion rate will increase when the business becomes more mature in the future.
Paid Subscribers decreased by 906, or 27.7%, from 3,263 for the six months ended March 31, 2024 to 2,357 for the six months ended March 31, 2025. This decline was largely driven by the expiration of a targeted promotional campaign that began in October 2023, which resulted in the sale of 1-month subscription packages to approximately 4,450 new subscribers. Excluding the effect of this promotional boost, the normalized Paid Subscribers for the six months ended March 31, 2024, was approximately 2,520. For the three months ended March 31, 2025, the decrease in Paid Subscribers was similarly attributable to the absence of this promotional campaign. The increase in new subscriber sign-ups in October 2023 contributed to higher conversion rates and a corresponding increase in paid subscribers for the three months ended March 31, 2024. These reflected the slight decrease in Paid Subscribers for the three and six months ended March 31, 2025.
The average conversion rate was approximately 23.0% and 26.9% for the six months ended March 31, 2025 and 2024, respectively. The average conversion rate was approximately 20.9% and 28.7% for the three months ended March 31, 2025 and 2024, respectively. The lower conversion rates for the three and six months ended March 31, 2025 was attributable to the absence of a large-scale promotional campaign. The Campaign held in October 2023 attracted a large volume of new subscribers, resulting in a partial conversion to paid plans in the following months, temporarily boosting conversion metrics during the comparative periods. Additionally, during fiscal 2024, we experienced challenges associated with subscription plan migrations and identified technical issues related to billing information. These factors contributed to customer attrition and further pressure on the conversion rate.
To reverse this downward trend and drive future growth, management is focused on several strategic initiatives. We are actively incorporating new features and improvements into SentimenTrader to enhance User experience and increase conversion rates. This includes introducing advanced analytical tools, expanding data sources, and refining our platform’s design to improve accessibility and ease of use. Additionally, we are exploring targeted marketing strategies to attract new paid subscribers while retaining existing ones. Through these efforts, we are confident in our ability to enhance User engagement and improve both subscriber growth and conversion rates in the coming periods.
Average Revenue Per User (“ARPU”)
The ARPU is calculated based on the total revenue divided by the number of monthly average Paid Subscribers over that period or year. We believe ARPU is a key indicator of how successful we are in attracting Users to higher-value content. We believe that our high ARPU is indicative of the trust we build with our Users and of the value they see in our products and services.
ARPU increased by $71, or 31.9%, to $295 for the six months ended March 31, 2025, as compared to $224 for the six months ended March 31, 2024. This increase was primarily attributable to the promotional campaign conducted in October 2023, which resulted in the sale of 1-month subscription packages to approximately 4,450 new subscribers. Excluding the impact of this promotion, the normalized Paid Subscribers for the six months ended March 31, 2024, was approximately 2,520. Based on the normalized number of Paid Subscribers, ARPU would have increased to $290. The ARPU was comparable for the six months ended March 31, 2025 and 2024.
ARPU was $147 and $146 for the three months ended March 31, 2025 and 2024, respectively. The ARPU was comparable subsequent to the promotional campaign held in October 2023.
Revenue
Our revenue is generated from providing online subscription services. Revenue is generally recognized ratably over the contract term, starting from the commencement date of each contract, which is the date our cloud-based software is made available to customers and collection is reasonably assured.
Revenue decreased by $34,084, or 4.7%, from $730,633 for the six months ended March 31, 2024, to $696,549 for the six months ended March 31, 2025. This decrease was primarily due to a decrease in Paid Subscribers. In October 2023, we conducted a promotional campaign that resulted in the sale of 1-month subscription packages to approximately 4,450 new subscribers. Excluding the impact of this promotion, the normalized Paid Subscribers for the six months ended March 31, 2024, was approximately 2,520, compared to 2,357 for the six months ended March 31, 2025.
Total revenue decreased by $23,314, or 6.4%, from $365,220 in the three months ended March 31, 2024 to $341,906 in the three months ended March 31, 2025. The decrease in revenue was principally due to the decrease in the average number of paid subscribers from 2,497 for the three months ended March 31, 2024 to 2,331 for the three months ended March 31, 2025.
Results of Operations
For the Three and Six Months Ended March 31, 2025 and 2024
The following table summarizes the results of unaudited condensed consolidated statements of operations and comprehensive loss for the three and six months ended March 31, 2025 and 2024 in U.S. dollars, and provides information regarding the dollar and percentage increase or (decrease) during such periods. The operating results in any historical period are not necessarily indicative of the results that may be expected for any future period.
| Three Months Ended March 31, 2025 | 2024 | Six Months Ended March 31, 2025 | 2024 | |
|---|---|---|---|---|
| Revenues | $341,906 | $365,220 | $696,549 | $730,633 |
| Cost of sales | 109,616 | 109,585 | 217,174 | 222,884 |
| Gross profit | 232,290 | 255,635 | 479,375 | 507,749 |
| Operating expenses: | ||||
| Selling and marketing expenses | 56,622 | 28,341 | 78,667 | 80,339 |
| General and administrative expenses | 560,551 | 409,569 | 1,107,790 | 703,624 |
| Total operating expenses | 617,173 | 437,910 | 1,186,457 | 783,963 |
| Loss before income taxes | (384,883) | (182,275) | (707,082) | (276,214) |
| Provision for income taxes | (5,298) | - | (5,298) | - |
| Net loss and comprehensive loss | $(390,181) | $(182,275) | $(712,380) | $(276,214) |
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Six months ended March 31, 2025 Compared to Six Months Ended March 31, 2024
| For the six months ended March 31, 2025 Amount | As % of Sales | 2024 Amount | As % of Sales | Amount Increase (Decrease) | Percentage Increase (Decrease) | |
|---|---|---|---|---|---|---|
| Sales | $696,549 | 100.0% | $730,633 | 100.0% | $(34,084) | (4.7)% |
| Cost of sales | 217,174 | 31.2% | 222,884 | 30.5% | (5,710) | (2.6)% |
| Gross profit | 479,375 | 68.8% | 507,749 | 69.5% | (28,374) | (5.6)% |
| Operating expenses | ||||||
| Selling expenses | 78,667 | 11.3% | 80,339 | 11.0% | (1,672) | (2.1)% |
| General and administrative expenses | 1,107,790 | 159.0% | 703,624 | 96.3% | 404,166 | 57.4% |
| Total operating expenses | 1,186,457 | 170.3% | 783,963 | 107.3% | 402,494 | 51.3% |
| Loss before income taxes | (707,082) | (101.5)% | (276,214) | (37.8)% | 430,868 | 156.0% |
| Provision for income taxes | (5,298) | (0.8)% | - | - | 5,298 | 100.0% |
| Net loss and comprehensive loss | $(712,380) | (102.3)% | $(276,214) | (37.8)% | $436,166 | 157.9% |
Revenue
Our revenue decreased by $34,084, or 4.7%, from $730,633 for the six months ended March 31, 2024 to $696,549 in the six months ended March 31, 2025. This decrease was primarily due to a decrease in normalized Paid Subscribers. In October 2023, we conducted a promotional campaign that resulted in the sale of 1-month subscription packages to approximately 4,450 new subscribers. Excluding the impact of this promotion, the normalized Paid Subscribers for the six months ended March 31, 2024, was approximately 2,520, compared to 2,357 for the six months ended March 31, 2025.
We are actively incorporating new features and improvements into SentimenTrader to enhance User experience and increase conversion rates. This includes introducing advanced analytical tools, expanding data sources, and refining our platform’s design to improve accessibility and ease of use. Additionally, we are exploring targeted marketing strategies to attract new Paid Subscribers while retaining existing ones. Through these efforts, we are confident in our ability to enhance User engagement and improve both subscriber growth and conversion rates in the coming periods.
Gross profit and Costs of Sales
Cost of sales mainly include the hosting costs for the Sentiment Trader platform, Bloomberg access for the analysts to research tools, and analyst salaries. Cost of sales decreased by $5,710, or 2.6%, from $222,884 in the six months ended March 31, 2024 to $ 217,174 in the six months ended March 31, 2025. The decrease was mainly driven by the decrease in the number of our user subscriptions for Bloomberg access.
Gross profit decreased by $28,374, or 5.6%, from $507,749 in the six months ended March 31, 2024 to $ 479,375 in the six months ended March 31, 2025. The decrease in gross profit was mainly due to the decrease in the number of our user subscriptions for Bloomberg access, as discussed above.
Our gross profit margin was 68.8% in the six months ended March 31, 2025, as compared with 69.5% in the six months ended March 31, 2024. The decrease in gross profit margin was primarily attributable to the combined impact of the decrease in subscription revenue and decrease in cost of sales.
Our cost and gross profit are as follows:
| Category | For the six months ended March 31, 2025 Cost of sales | Gross profit | Gross profit % | For the six months ended March 31, 2024 Cost of sales | Gross profit | Gross profit % | Variance in Cost of sales | Variance in gross profit | Variance in gross profit % |
|---|---|---|---|---|---|---|---|---|---|
| Subscription service | $217,174 | $479,375 | 68.8% | $222,884 | $507,749 | 69.5% | $(5,710) | $(28,374) | (0.7)% |
| Total | $217,174 | $479,375 | 68.8% | $222,884 | $507,749 | 69.5% | $(5,710) | $(28,374) | (0.7)% |
Selling and marketing expenses
Our selling and marketing costs primarily consist of expenses related to advertising and marketing consultants. It only decreased by $1,672 or 2.1%, from $80,339 for the six months ended March 31, 2024 to $78,667 for the six months ended March 31, 2025, representing 11.3% and 11.0% of our total revenue for the six months ended March 31, 2025 and 2024, respectively. The expenses incurred for marketing campaigns was comparable between the six months ended March 31, 2025 and 2024.
General and administrative expenses
Our general and administrative expenses primarily include salaries and benefits, professional fees, office expenses, software development expenses, travel and entertainment expenses and amortization expenses. Our general and administrative expenses represented 159.0% and 96.3% of our total revenue for the six months ended March 31, 2025 and 2024, respectively. General and administrative expenses increased by $404,166, or 57.4%, from $703,624 for the six months ended March 31, 2024 to $ 1,107,790 for the six months ended March 31, 2025. The increase was mainly due to the increase in professional fees and executive and director compensation.
Our professional fees increased by $100,242 or 19.2%, from $521,871 for the six months ended March 31, 2024 to $622,113 for the six months ended March 31, 2025, representing 56.2% and 74.2% of our total general and administrative expenses for the six months ended March 31, 2025 and 2024, respectively. The increase was mainly due to the increase in accounting and consulting fees for the initial public offering.
Our salaries and benefits, including executive officers and directors’ compensation, increased by $264,272 or 292.3%, from $90,413 for the six months ended March 31, 2024 to $354,685 for the six months ended March 31, 2025, representing 32.0% and 12.8% of our total general and administrative expenses for the six months ended March 31, 2025 and 2024, respectively. The increase was mainly due to the appointment of several executive officers from April to August 2024.
We entered into employment agreements with several executive officers and non-independent director agreements with Mr. Lin and Ms. Wu between April and August 2024. The general and administrative expenses for the six months ended March 31, 2024 would increase by $246,005 if the employment agreements with the executive officers and directors commenced on October 1, 2022.
Loss before income tax
We had a loss before income taxes of $707,082 for the six months ended March 31, 2025 and loss before income taxes of $276,214 for the six months ended March 31, 2024. The loss was primarily attributable to the net impact of the increase in operating expenses and the decrease in gross profit.
Provision for income taxes
We had provision for income tax of $5,298 for the six months ended March 31, 2025 related to the franchise tax.
We had no provision for income taxes for the six months ended March 31, 2024 as we had no assessable profits for both periods.
Net loss and comprehensive loss
We had a net loss and comprehensive loss of $712,380 for the six months ended March 31, 2025 and net loss and comprehensive loss of $276,214 for the six months ended March 31, 2024, respectively. The loss was primarily attributable to the increase in general and administrative expenses and the decrease in gross profit. The discussion regarding the increase in general and administrative expenses and the decrease in gross profit are covered in the sections above.
Three Months ended March 31, 2025 Compared to Three Months ended March 31, 2024
The following table summarizes the results of unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025 and 2024 in U.S. dollars, and provides information regarding the dollar and percentage increase or (decrease) during such periods. The operating results in any historical period are not necessarily indicative of the results that may be expected for any future period.
| For the three months ended March 31, 2025 Amount | As % of Sales | 2024 Amount | As % of Sales | Amount Increase (Decrease) | Percentage Increase (Decrease) | |
|---|---|---|---|---|---|---|
| Sales | $341,906 | 100.0% | $365,220 | 100.0% | $(23,314) | (6.4)% |
| Cost of sales | 109,616 | 32.1% | 109,585 | 30.0% | 31 | 0.1% |
| Gross profit | 232,290 | 67.9% | 255,635 | 70.0% | (23,345) | (9.1)% |
| Operating expenses | ||||||
| Selling expenses | 56,622 | 16.6% | 28,341 | 7.8% | 28,281 | 99.8% |
| General and administrative expenses | 560,551 | 163.9% | 409,569 | 112.1% | 150,982 | 36.9% |
| Total operating expenses | 617,173 | 180.5% | 437,910 | 119.9% | 179,263 | 40.9% |
| Loss before income taxes | (384,883) | (112.6)% | (182,275) | (49.9)% | 202,608 | 111.2% |
| Provision for income taxes | (5,298) | (1.5)% | - | - | 5,298 | 100.0% |
| Net loss and comprehensive loss | $(390,181) | (114.1)% | $(182,275) | (49.9)% | $207,906 | 114.1% |
Revenue
Our revenue decreased by $23,314, or 6.4%, from $365,220 in the three months ended March 31, 2024, to $341,906 in the three months ended March 31, 2025. The decrease in revenue was principally due to the decrease in the average number of Paid Subscribers from 2,497 for the three months ended March 31, 2024, to 2,331 for the three months ended March 31, 2025.
We are actively incorporating new features and improvements into SentimenTrader to enhance User experience and increase conversion rates. This includes introducing advanced analytical tools, expanding data sources, and refining our platform’s design to improve accessibility and ease of use. Additionally, we are exploring targeted marketing strategies to attract new paid subscribers while retaining existing ones. Through these efforts, we are confident in our ability to enhance User engagement and improve both subscriber growth and conversion rates in the coming periods.
Gross profit and Costs of Sales
Cost of sales mainly includes the hosting costs for the Sentiment Trader platform, Bloomberg access for the analysts to research tools, and the analyst salaries. Cost of sales increased by $31, or 0.1%, from $109,585 in the three months ended March 31, 2024, to $109,616 in the three months ended March 31, 2025. The cost of sales remains unchanged compared with the corresponding period.
Gross profit decreased by $23,345, or 9.1%, from $255,635 in the three months ended March 31, 2024, to $232,290 in the three months ended March 31, 2025. The decrease in gross profit was mainly due to the decrease in subscription revenue as discussed above.
Gross profit margin was 67.9% in the three months ended March 31, 2025, as compared with 70.0% in the three months ended March 31, 2024. The decrease in gross profit margin was primarily attributable to the decrease in subscription revenue.
Our cost and gross profit are as follows:
| Category | For the three months ended March 31, 2025 Cost of sales | Gross profit | Gross profit % | For the three months ended March 31, 2024 Cost of sales | Gross profit | Gross profit % | Variance in Cost of sales | Variance in gross profit | Variance in gross profit % |
|---|---|---|---|---|---|---|---|---|---|
| Subscription service | $109,616 | $232,290 | 67.9% | $109,585 | $255,635 | 70.0% | $31 | $(23,345) | (2.1)% |
| Total | $109,616 | $232,290 | 67.9% | $109,585 | $255,635 | 70.0% | $31 | $(23,345) | (2.1)% |
Selling and marketing expenses
Our selling and marketing costs primarily consist of expenses related to advertising and marketing consultants. It increased by $28,281 or 99.8%, from $28,341 for the three months ended March 31, 2024, to $56,622 for the three months ended March 31, 2025, representing 16.6% and 7.8% of our total revenue for the three months ended March 31, 2025 and 2024, respectively. The increase in selling and marketing expenses is mainly due to expenses incurred for the recent advertising and marketing campaigns during the three months ended March 31, 2025.
General and administrative expenses
Our general and administrative expenses primarily include salaries and benefits, professional fees, office expenses, software development expenses, travel and entertainment expenses and amortization expenses. Our general and administrative expenses represented 163.9% and 112.1% of our total revenue for the three months ended March 31, 2025, and 2024, respectively. General and administrative expenses increased by $150,982, or 36.9%, from $409,569 for the three months ended March 31, 2024, to $560,551 for the three months ended March 31, 2025. The increase was mainly due to the increase in executive and director compensation.
Our professional fees increased by $6,978 or 2.4%, from $294,700 for the three months ended March 31, 2024, to $301,667 for the three months ended March 31, 2025, representing 53.8% and 72.0% of our total general and administrative expenses for the three months ended March 31, 2025, and 2024, respectively. The increase was mainly due to the increase in accounting and consulting fees for the initial public offering.
Our salaries and benefits, including executive officers and directors’ compensation, increased by $106,894, or 162.9% from $65,599 for the three months ended March 31, 2024, to $172,493 for the three months ended March 31, 2025, representing 30.8% and 16.0% of our total general and administrative expenses for the three months ended March 31, 2025, and 2024, respectively. The increase was mainly due to the appointment of several executive officers from April to August 2024.
We entered into employment agreements with several executive officers and non-independent director agreements with Mr. Lin and Ms. Wu between April and August 2024. The general and administrative expenses for the three months ended March 31, 2024 would increase by $123,003 if the employment agreements with the executive officers and directors commenced on October 1, 2022.
Loss before income tax
We had a loss before income taxes of $384,883 and $182,275 for the three months ended March 31, 2025 and 2024, respectively. The increase in loss was primarily attributable to the decrease in gross profit and the increase in general and administrative expenses. The discussion regarding the decrease in gross profit and the increase in general and administrative expenses are covered in the sections above.
Provision for income taxes
We had provision for income tax of $5,298 for the three months ended March 31, 2025 related to the franchise tax.
We had no provision for income taxes for the three months ended March 31, 2024 as we had no assessable profits for both periods.
Net loss or comprehensive loss
We had a net loss and comprehensive loss of $390,181 and $182,275 for the three months ended March 31, 2025 and 2024, respectively. The increase in net loss was primarily attributable to the decrease in gross profit and the increase in general and administrative expenses. The discussion regarding the decrease in gross profit and the increase in general and administrative expenses is covered in the sections above.
Cash Flow
For the six months ended March 31, 2025 and 2024
The following table sets forth summary of our cash flows for the periods indicated:
| Six Months Ended March 31, 2025 | 2024 | |
|---|---|---|
| Net cash used in operating activities | $(361,771) | $(157,093) |
| Net cash used in investing activities | - | - |
| Net cash (used in) provided by financing activities | (2,789) | 843,840 |
| Net increase (decrease) in cash | (364,560) | 686,747 |
| Cash, beginning of the period | 557,823 | 98,106 |
| Cash, end of the period | $193,263 | $784,853 |
Operating Activities
Net cash used in operating activities was $361,771 and $157,093 for the six months ended March 31, 2025 and 2024, respectively. The increase in net cash used in operating activities was mainly attributable to the following factors:
- Net loss of $712,380 for the six months ended March 31, 2025, compared to net loss of $276,214 for the six months ended March 31, 2024;
- Services in exchange for shares incurred $0 for the six months ended March 31, 2025, compared to $156,252 for the six months ended March 31, 2024;
- Prepaid expenses decreased by $8,862 for the six months ended March 31, 2025, compared to an increase by $12,358 for the six months ended March 31, 2024;
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- Accounts payable and accrued liabilities increased by $120,241 for the six months ended March 31, 2025, compared to a decrease of $85,020 for the six months ended March 31, 2024;
- Tax payable increased by $5,298 for the six months ended March 31, 2025, compared to $0 for the six months ended March 31, 2024;
- Deferred revenue increased by $15,000 for the six months ended March 31, 2025, compared to the increase of $30,190 for the six months ended March 31, 2024; and
- The amounts due to related party increased by $199,645 for the six months ended March 31, 2025, compared to $29,010 for the six months ended March 31, 2024
Investing Activities
We had no net cash provided by or used in investing activities for the six months ended March 31, 2025 and 2024.
Financing Activities
Net cash used in financing activities was $2,789 for the six months ended March 31, 2025. Net cash provided by financing activities was $843,840 for the six months ended March 31, 2024. The net cash used in financing activities for the six months ended March 31, 2025, was mainly attributable to the advances from short-term loan of 20,000, and the increase in deferred offering costs of $22,789. The net cash provided by financing activities for the six months ended March 31, 2025, was mainly attributable to the repurchase of common stock of $169,957, increase in deferred offering costs of $75,000 and net proceeds from share issuance of $1,088,797.
Liquidity and Capital Resources
Overview
Our primary capital management strategy is to preserve sufficient capital to continue providing benefits to our stakeholders and adequate investment returns to our shareholders by selling our products at prices commensurate with our operating risks.
We determine the total amount of capital required to be consistent with risk levels. This capital structure is adjusted on a timely basis depending on changes in the economic environment and risks of the underlying assets. We are not subject to any externally imposed capital requirements.
Working Capital
As of March 31, 2025, our current assets were $365,493 which includes cash of $193,263, prepaid expenses of $10,424 and deferred offering costs of $161,806. Our current liabilities were $964,061 which includes trade payables and accrued liabilities of $151,573, tax payable of $5,298, amounts due to related parties of $391,597, loan payable of $20,516, and deferred revenue of $395,077. The resulting negative working capital was $598,568. No dividends were declared and paid to the shareholders for the six months period ended March 31, 2025.
As of September 30, 2024, our current assets totaled $716,126, which included cash of $557,823, prepaid expenses of $19,286, and deferred offering costs of $139,017. Our current liabilities amounted to $603,361, which consisted of trade payables and accrued liabilities of $31,332, amounts due to related parties of $191,952, and deferred revenue of $380,077. This resulted in positive working capital of $112,765. No dividends were declared or paid to shareholders for the year ended September 30, 2024. We entered into employment agreements with several executive officers and appointed directors between April and August 2024. If these agreements had commenced on October 1, 2023, the working capital would have been reduced by $275,599.
Our primary source of cash is currently generated from our business. We estimate that we will be able to conduct our planned operations using currently available capital resources for at least the next 12 months. However, in order to meet our growth expectations, we will need to raise funds beyond our current working capital balance in order to finance future development of services and meet any debt obligations until such time as future profitable revenues are achieved. We completed our initial public offering on April 11, 2025 and closed the over-allotment option on April 16, 2025, which generated gross proceeds of $8,901,000. We believe that the successful completion of the IPO has significantly improved the Company’s liquidity and financial position. We will seek to fund our operations for the next 12 months with the proceeds raised in our IPO, and if needed, through additional public and private offerings of securities.
Capital Expenditures
There were no capital expenditures for the period ended March 31, 2025 and the year ended September 30, 2024.
Contractual Obligations
As of March 31, 2025, our contractual obligations consist of the following:
| Contractual Obligations | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years |
|---|---|---|---|---|---|
| Loan payable | $20,516 | 20,516 | – | – | $– |
| Total | $20,516 | 20,516 | – | – | $– |
As of September 30, 2024, we don’t have any contractual obligations.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources for the three and six months ended March 31, 2025 and 2024.
Critical Accounting Policies and Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, contingent assets and liabilities, each as of the date of the financial statements, and revenues and expenses during the periods presented. On an ongoing basis, management evaluates their estimates and assumptions, and the effects of any such revisions are reflected in the financial statements in the period in which they are determined to be necessary. Management bases their estimates on historical experience and on various other factors that they believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual outcomes could differ materially from those estimates in a manner that could have a material effect on our consolidated financial statements.
While our significant accounting policies are more fully described in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements, we believe that there were no critical accounting policies and estimates that affect the preparation of financial statements.
Market risk
As filed, 139 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
Controls and procedures
As filed, 2,921 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this Report, our disclosure controls and procedures were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter covered by this Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Risk factors
As filed, 374 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item. For our current risk factors relating to our operations, see the section entitled “Risk Factors” contained in our Registration Statement on Form S-1 (File No. 333-284081), as amended and declared effective by the SEC on April 9, 2025.
Figures reported in this filing
Standardized line items from the XBRL in this filing, for the period ended 2025-03-31. Comparative periods it repeats are left out.
| Line item | Period | Value | XBRL concept |
|---|---|---|---|
| Revenue | 3 months2025-01-01 to 2025-03-31 | $341.9k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months2024-10-01 to 2025-03-31 | $696.5k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months2025-01-01 to 2025-03-31 | $109.6k | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months2024-10-01 to 2025-03-31 | $217.2k | us-gaap:CostOfRevenue |
| Gross profit | 3 months2025-01-01 to 2025-03-31 | $232.3k | us-gaap:GrossProfit |
| Gross profit | 6 months2024-10-01 to 2025-03-31 | $479.4k | us-gaap:GrossProfit |
| Interest expense | 6 months2024-10-01 to 2025-03-31 | $516 | us-gaap:InterestExpense |
| Income tax | 3 months2025-01-01 to 2025-03-31 | $5.3k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months2024-10-01 to 2025-03-31 | $5.3k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months2025-01-01 to 2025-03-31 | −$390.2k | us-gaap:NetIncomeLoss |
| Net income | 6 months2024-10-01 to 2025-03-31 | −$712.4k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months2025-01-01 to 2025-03-31 | −$0.04 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months2024-10-01 to 2025-03-31 | −$0.07 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months2025-01-01 to 2025-03-31 | −$0.04 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months2024-10-01 to 2025-03-31 | −$0.07 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months2025-01-01 to 2025-03-31 | 10,031,273 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months2024-10-01 to 2025-03-31 | 10,031,273 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months2024-10-01 to 2025-03-31 | −$361.8k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | At period end2025-03-31 | $179.2k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | At period end2025-03-31 | $365.5k | us-gaap:AssetsCurrent |
| Total assets | At period end2025-03-31 | $367.8k | us-gaap:Assets |
| Current liabilities | At period end2025-03-31 | $964.1k | us-gaap:LiabilitiesCurrent |
| Total liabilities | At period end2025-03-31 | $964.1k | us-gaap:Liabilities |
| Shareholders' equity | At period end2025-03-31 | −$596.3k | us-gaap:StockholdersEquity |
Source: SEC EDGAR, the filing index for accession 0001641172-25-011279. Last ingested by Listed: Oct 24, 2026, 15:06 ET. Listed shows no prices and gives no investment advice.