DALLAS, Aug. 25, 2025 /PRNewswire/ -- Asset Entities Inc. ("Asset Entities" or the "Company") (Nasdaq: ASST), a provider of digital marketing and content delivery services, today announced that the Company's registration statement on Form S-4 (the "Registration Statement"), related to the previously announced proposed merger (the "Merger") of a wholly-owned subsidiary of Asset Entities and Strive Enterprises, Inc. ("Strive"), has been declared effective by the U.S. Securities and Exchange Commission (the "S ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to _____________ Commission File Number: 001-41612 ASSET ENTITIES INC. (Exact name of registrant as specified in its charter) Nevada 88-1293236 ( ...

Company Overview - Asset Entities (NASDAQ: ASST) is experiencing significant stock volatility, trading at less than $8 last week, reaching $12 recently, and currently around $8.10 per share [1] Market Context - The stock is characterized by a lot of positive news, indicating potential momentum in the market [1] - The author has extensive experience in the market, particularly in the technology sector, and emphasizes the importance of momentum in investment strategies [1]

Core Viewpoint - Strive Asset Management and Asset Entities have announced a $750 million private investment in public equity (PIPE), with potential total proceeds of $1.5 billion, aimed at establishing Strive as a leading Bitcoin treasury company focused on long-term outperformance through innovative strategies [1][7]. Financing Details - The PIPE transaction is priced at $1.35 per share, representing a 121% premium to Asset Entities' closing price before the merger announcement [4]. - The financing is expected to close concurrently with the merger agreement between Strive Asset Management and Asset Entities, involving participation from leading institutional investors and Strive's management team [2][5]. Strategic Focus - Strive's approach contrasts with traditional Bitcoin treasury companies by focusing on alpha-generating strategies rather than solely on leveraged beta strategies tied to Bitcoin holdings [3][11]. - The first wave of alpha-generating strategies includes acquiring discounted biotech companies and distressed Bitcoin claims, positioning Strive to capitalize on significant market opportunities [8]. Market Positioning - The combined company will maintain no outstanding debt after the financing, enhancing its leverage capacity for future growth [7]. - Strive aims to become a market leader in purchasing structured Bitcoin credit vehicles at discounted prices, further solidifying its competitive advantage [8].

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited Q1 2025 financial statements report a **$1.62 million net loss** and **$13.67 million accumulated deficit**, noting a subsequent merger Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $4,208,912 | $2,660,624 | | Total Current Assets | $4,475,352 | $2,697,852 | | TOTAL ASSETS | $4,994,288 | $3,217,466 | | **Liabilities & Equity** | | | | TOTAL LIABILITIES | $460,543 | $430,895 | | Accumulated deficit | $(13,665,770) | $(12,006,357) | | TOTAL STOCKHOLDERS' EQUITY | $4,533,745 | $2,786,571 | Statement of Operations Highlights (Unaudited) | Account | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $170,749 | $124,841 | | Total operating expenses | $1,827,845 | $1,511,745 | | Loss from operations | $(1,657,096) | $(1,386,904) | | Net loss | $(1,624,218) | $(1,386,904) | | Net loss attributable to common stockholders | $(1,659,413) | $(1,386,904) | | Loss per share - basic and diluted | $(0.13) | $(0.49) | Statement of Cash Flows Highlights (Unaudited) | Activity | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,570,582) | $(1,042,635) | | Net cash used in investing activities | $0 | $(11,902) | | Net cash provided by financing activities | $3,118,870 | $0 | | Net change in cash and cash equivalents | $1,548,288 | $(1,054,537) | - The company provides social media marketing, content delivery, and server design/development services across platforms like Discord and TikTok, under brands including "AE.360.DDM"[28](index=28&type=chunk) - Despite a **net loss of $1.62 million** for the quarter and an **accumulated deficit of $13.67 million**, management believes existing cash resources are sufficient to fund operations for at least the next 12 months, partly due to a commitment of up to **$3 million** from Ionic Ventures, LLC[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - Subsequent Event: On May 6, 2025, the company entered into an Agreement and Plan of Merger with Strive Enterprises, Inc., where Strive's subsidiary, Strive Asset Management, LLC, will merge with a subsidiary of the company[92](index=92&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, liquidity, and strategic initiatives, highlighting revenue growth, increased net loss, and a definitive merger [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Q1 2025 revenue increased **36.8%** due to subscriber growth, but rising operating expenses led to a **$1.66 million loss from operations** Comparison of Operations: Q1 2025 vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $170,749 | $124,841 | +36.8% | | Total Operating Expenses | $1,827,845 | $1,511,745 | +20.9% | | Loss from Operations | $(1,657,096) | $(1,386,904) | +19.5% | | Net Loss | $(1,624,218) | $(1,386,904) | +17.1% | - The increase in revenue was primarily due to a higher number of Discord server paying subscribers, which grew from **438 in Q1 2024 to 1,254 in Q1 2025**[118](index=118&type=chunk)[138](index=138&type=chunk) - The rise in operating expenses was mainly driven by increased advertising, marketing, payroll, and other administrative costs associated with being a public company[139](index=139&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company had **$4.2 million** cash, funded by **$3.12 million** from financing, asserting sufficient capital for the next year - The company had cash and cash equivalents of **$4,208,912** as of March 31, 2025, compared to **$2,660,624** at the end of 2024[141](index=141&type=chunk) - Net cash used in operating activities increased to **$1.57 million** in Q1 2025 from **$1.04 million** in Q1 2024, primarily due to a higher net loss and changes in working capital[143](index=143&type=chunk) - Financing activities provided **$3.12 million** in cash during Q1 2025, mainly from the issuance of Class B Common Stock through an "at the market" (ATM) offering[145](index=145&type=chunk)[177](index=177&type=chunk) - The company completed a two-part private placement of Series A Preferred Stock with Ionic Ventures, LLC, raising a total of **$3.0 million** in gross proceeds in May and July 2024[152](index=152&type=chunk)[153](index=153&type=chunk) [Recent Developments](index=26&type=section&id=Recent%20Developments) A definitive Merger Agreement was signed on May 6, 2025, with Strive Enterprises, Inc., granting Strive approximately **94.2%** of the combined entity - On May 6, 2025, the company entered into a Merger Agreement with Strive Enterprises, Inc. and its subsidiary, Strive Asset Management, LLC[125](index=125&type=chunk) - Post-merger, Strive will receive a number of shares resulting in it holding **94.2%** of the then-outstanding common stock of the company on a fully-diluted basis[127](index=127&type=chunk) - The merger closing is contingent upon several conditions, including approvals from both companies' stockholders and the listing of the new Class A common stock on Nasdaq[128](index=128&type=chunk) - A Voting and Support Agreement was executed with stockholders holding approximately **42.7%** of the company's voting power, who agreed to vote in favor of the merger[135](index=135&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable to the company for this reporting period - The company has indicated that this disclosure is not applicable[212](index=212&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period[213](index=213&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[214](index=214&type=chunk) [PART II OTHER INFORMATION](index=43&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to materially affect its business or financial condition - The company is not currently aware of any legal proceedings or claims that are expected to have a material adverse effect on its business[217](index=217&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section is not applicable for this quarterly report - The company has indicated that this disclosure is not applicable[218](index=218&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, the company did not sell any previously undisclosed unregistered equity securities or repurchase equity - The company did not sell any equity securities that were not registered under the Securities Act and not previously disclosed in a Form 8-K during the three months ended March 31, 2025[219](index=219&type=chunk) - No repurchases of common stock were made during the first quarter of 2025[220](index=220&type=chunk) [Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon its senior securities - None[221](index=221&type=chunk) [Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[222](index=222&type=chunk) [Other Information](index=43&type=section&id=Item%205.%20Other%20Information) The company confirms no unreported Form 8-K information and no Rule 10b5-1 trading plan adoptions or terminations - No information required to be disclosed on a Form 8-K during the quarter was unreported[223](index=223&type=chunk) - No directors or officers adopted or terminated a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement during the fiscal quarter[223](index=223&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the Merger Agreement and executive agreements - Key exhibits filed include the Agreement and Plan of Merger with Strive Enterprises, Inc., the Voting and Support Agreement, and various executive compensation agreements[225](index=225&type=chunk)

Company Overview - Strive Asset Management, LLC ("SAM") has entered into a definitive merger agreement with Asset Entities Inc. (NASDAQ: ASST) [3] - The combined entity will operate under the Strive brand and will be listed on NASDAQ as a public Bitcoin Treasury Company [4] Strategic Goals - The company aims to maximize Bitcoin exposure per share over the long term through innovative financial strategies not previously utilized by other Bitcoin treasury companies [1][4] - Strive Asset Management plans to build a Bitcoin war chest in a minimally dilutive manner for common shareholders, using Bitcoin as the hurdle rate for capital deployment [4][5] Innovative Strategies - SAM will implement proprietary strategies to fuel Bitcoin accumulation, including a first-of-its-kind offer of combined company equity in exchange for Bitcoin, intended to be tax-free under Section 351 of the U.S. tax code [5][8] - The company plans to acquire cash at a discount through mergers with overcapitalized companies, creating opportunities to accumulate Bitcoin in an accretive manner [5][6] Financial Structure - The reverse merger structure will provide immediate access to an effective shelf registration statement, allowing the company to raise primary capital post-transaction, with plans to expand to $1 billion [6][7] - The flexibility to raise capital under this effective shelf registration statement is seen as a competitive advantage over other newly formed Bitcoin treasury companies [7] Leadership and Management - Matt Cole will serve as CEO and Chairman of the Board, bringing extensive institutional experience as a former $70 billion fixed income portfolio manager [10] - The management team includes Ben Pham as CFO, Arshia Sarkhani as CMO, and Logan Beirne as CLO, with plans to add respected Bitcoin leaders as independent board directors [11] Company Background - Strive Asset Management has quickly grown to manage approximately $2 billion in assets since its founding in 2022, advocating for capitalism and innovation [12][16] - The merger with Asset Entities is a strategic step to advance the corporate adoption of Bitcoin treasuries, aiming to maximize long-term shareholder value [13]

Company Overview - Asset Entities Inc. has entered into a definitive merger agreement with Strive Asset Management, resulting in a combined company that will operate under the Strive brand and become a public Bitcoin Treasury Company [2][12] - The merger aims to maximize Bitcoin exposure per share and outperform Bitcoin over the long term, focusing on maximizing value for common equity shareholders [1][3] Strategic Goals - Strive Asset Management plans to build a Bitcoin war chest in a minimally dilutive manner to common shareholders, using Bitcoin as the hurdle rate for capital deployment [3][4] - The combined company will implement proprietary strategies to fuel Bitcoin accumulation, including a unique offer of combined company equity in exchange for Bitcoin, intended to be tax-free for investors under Section 351 of the U.S. tax code [4][6] Financial Structure - The reverse merger structure will provide immediate access to an effective shelf registration statement, allowing the company to raise up to $1 billion in primary capital post-transaction to accumulate Bitcoin through equity and debt offerings [5][12] - The anticipated Bitcoin-for-stock exchange will be open only to certain accredited investors prior to the transaction's closing, with no markup expected on the deal transaction price for participants [7][12] Leadership and Management - Matt Cole will serve as CEO and Chairman of the Board, bringing extensive institutional experience as a former $70 billion fixed income portfolio manager [8][9] - The management team will include key figures from both companies, with plans to add respected Bitcoin leaders as independent board directors [9][10] Company Background - Strive Asset Management has quickly amassed approximately $2 billion in assets under management since its founding in 2022, advocating for corporate adoption of Bitcoin treasuries to maximize long-term shareholder value [11][12] - Asset Entities is recognized for its digital marketing and content delivery services, particularly within the Discord platform, and aims to leverage its strengths in community engagement to drive Bitcoin-centric financial models [10][14]

Part I [Business](index=8&type=section&id=Item%201.%20Business.) The company specializes in social media marketing and content delivery for Gen Z on platforms like Discord and TikTok [Overview and Background](index=8&type=section&id=Overview) The company provides social media marketing and content services, focusing on investment education for Gen Z on Discord - The company offers three primary services: Discord investment education, social media/marketing services, and AE.360.DDM brand services for Discord server management[24](index=24&type=chunk) - Founded in 2020, the company's vision was to bring investment education to Gen Z through social media, leading to the creation of educational Discord servers for stocks, crypto, NFTs, and real estate[25](index=25&type=chunk)[26](index=26&type=chunk) - The company's social media presence grew from under 50,000 followers in August 2020 to **over 2 million by December 31, 2024**, with over 1 billion interactions across all platforms[28](index=28&type=chunk) [Our Current Business and Fiscal Year 2024 Highlights](index=8&type=section&id=Our%20Current%20Business%20and%20Fiscal%20Year%202024%20Highlights) Key 2024 initiatives included new media launches, significant financing, strategic acquisitions, and celebrity partnerships - Launched "The Lounge" YouTube channel featuring interviews with celebrities and business professionals[33](index=33&type=chunk) - Completed a **$3.0 million financing transaction** through the sale of Series A Preferred Stock in two closings (May and July 2024)[33](index=33&type=chunk)[35](index=35&type=chunk) - Commenced an "at the market offering" (ATM Financing) in September 2024, raising net proceeds of **$4,830,648 as of March 31, 2025**[35](index=35&type=chunk) - Acquired the assets of TommyBoyTV in June 2024 and the TikTok Money Machine in November 2024 to expand its Discord community market share and enter the TikTok Shop space[35](index=35&type=chunk) - Became an approved TikTok Shop Partner in December 2024[35](index=35&type=chunk) [Our Historical Performance](index=10&type=section&id=Our%20Historical%20Performance) The company has a history of net losses and relies on capital raises to fund its operations Financial Position as of Dec 31, 2024 | Metric | Value (USD) | | :--- | :--- | | Accumulated Deficit | $12,006,357 | | Cash Balance | $2,660,624 | Net Loss Comparison | Year Ended Dec 31 | Net Loss (USD) | | :--- | :--- | | 2024 | $6,393,932 | | 2023 | $4,931,197 | - The company has financed operations through capital raises, including a Shelf Registration Statement for up to **$100 million**, a **$3.0 million Series A Preferred Stock placement**, and an ATM Financing program[34](index=34&type=chunk) [Industry Overview](index=11&type=section&id=Industry%20Overview) The market for social media financial education is expanding, driven by Gen Z demand on platforms like TikTok and Discord - There is a growing demand for financial information among young, inexperienced investors (Gen Z) due to a lack of formal personal-finance education in the U.S[37](index=37&type=chunk)[38](index=38&type=chunk) - The social media influencer market **exceeded $13 billion globally**, with Gen Z influencers gaining significant sway over consumer spending and financial interests[39](index=39&type=chunk) - Discord has grown rapidly, reaching **over 259 million monthly active users**, up from 56 million in 2019[42](index=42&type=chunk)[43](index=43&type=chunk) [Our Services](index=12&type=section&id=Our%20Services) The company offers Discord community management, social media marketing, and a SaaS payment processing platform - **Discord Communities:** Operates ten servers with **~206,899 members** as of Dec 31, 2024, with subscription fees from $4.99 to $120.00 for premium content[46](index=46&type=chunk) - **Social Media and Marketing:** Provides marketing and content creation services for clients, with fees from $2,000 to $50,000 per campaign, utilizing its 'Social Influencer Network' (SiN)[49](index=49&type=chunk)[50](index=50&type=chunk) - **AE.360.DDM (Design Develop Manage):** A suite of services for creating and managing Discord servers for individuals and companies, with project fees from $497 to $5,000+, or based on a revenue-share model[53](index=53&type=chunk) - **Ternary v2:** A cloud-based subscription management and payment processing solution with CRM tools for Discord communities, partnered with Stripe[32](index=32&type=chunk)[56](index=56&type=chunk) [Competition](index=15&type=section&id=Competition) The company competes with other large Discord servers and social media influencers in the investment education space Competitor Analysis (as of March 2025) | Competitor | Service | Members/Users | Pricing | | :--- | :--- | :--- | :--- | | Xtrades Discord Server | Stock/Options Trading | ~110,000 | $38/month | | WallStreetBets | High-Risk Investing | ~484,305 (Discord) | Generally Free | | Eagle Investors | Investment Education | ~156,000 (Discord) | $67-$140/month (premium) | | @Fourtoeight (Wiseguyinvesting) | Investment Education | Similar to Asset Entities | $25/week to $800/year | | @moneylinemark (StockVIP) | Investment Education | ~254,000 (Discord) | Subscription-based | - The company states it is not aware of any direct competitors for its AE.360.DDM suite of services[75](index=75&type=chunk) [Corporate History and Structure](index=21&type=section&id=Corporate%20History%20and%20Structure) The company utilizes a dual-class stock structure that concentrates significant voting power with its officers and directors - The company has a dual-class stock structure: Class A (10 votes/share) and Class B (1 vote/share)[96](index=96&type=chunk) - As of March 25, 2025, all 1,000,000 outstanding shares of Class A Common Stock are held by Asset Entities Holdings, LLC (AEH)[98](index=98&type=chunk) - Company officers and directors collectively control approximately **43.6% of the total voting power** through their holdings and control of AEH[98](index=98&type=chunk) [Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors.) The company faces significant risks related to its operating history, industry reliance, regulatory compliance, and concentrated ownership - **Business Risks:** The company has a limited operating history, experiences negative cash flow, and may need to raise additional capital, with high dependency on social media platforms like TikTok which faces a potential U.S. ban[103](index=103&type=chunk)[104](index=104&type=chunk)[108](index=108&type=chunk)[110](index=110&type=chunk) - **Regulatory Risks:** The company may be subject to the Investment Advisers Act of 1940 and faces costly compliance with numerous data privacy laws like GDPR and CCPA[147](index=147&type=chunk)[148](index=148&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - **Operational Risks:** The business depends on the continued performance and social media following of its senior management and co-founders, and faces risks from cyberattacks and infrastructure challenges[124](index=124&type=chunk)[125](index=125&type=chunk)[138](index=138&type=chunk) - **Ownership & Market Risks:** Voting control is concentrated with officers and directors through a dual-class stock structure, and the company has received Nasdaq non-compliance notifications[174](index=174&type=chunk)[180](index=180&type=chunk)[184](index=184&type=chunk) [Unresolved Staff Comments](index=41&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments.) This item is not applicable as the company has no unresolved staff comments - Not applicable[205](index=205&type=chunk) [Cybersecurity](index=41&type=section&id=Item%201C.%20Cybersecurity.) The company manages cybersecurity risk through an integrated strategy overseen by the Board and key technology officers - The company has implemented security measures including two-factor authentication (2FA) for eData access and a unique four-factor authentication (4FA) process for banking and application systems[208](index=208&type=chunk) - Cybersecurity risk management is overseen by the Board of Directors, with day-to-day management handled by the Chief Technology Officer, Chief Operating Officer, and a Technology Consultant[213](index=213&type=chunk)[214](index=214&type=chunk) - The company has not encountered any cybersecurity challenges that have materially affected or are reasonably likely to materially affect its business, operations, or financial condition[212](index=212&type=chunk) [Properties](index=43&type=section&id=Item%202.%20Properties.) The company operates as a remote-first business but maintains a central office in Dallas, Texas under lease agreements - The company is remote-first but leases its headquarters at 100 Crescent Court, 7th Floor, Dallas, Texas[217](index=217&type=chunk) - Multiple lease agreements are in place with Regus Management, with monthly payments ranging from $1,228 to $5,329 for different office spaces, with terms extending into 2025[217](index=217&type=chunk) [Legal Proceedings](index=43&type=section&id=Item%203.%20Legal%20Proceedings.) The company is not currently involved in any material legal proceedings or claims - The company is not currently involved in any material legal proceedings[219](index=219&type=chunk) [Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company - Not applicable[220](index=220&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=44&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) The company's Class B Common Stock trades on Nasdaq, and proceeds from its IPO have been used for working capital - Class B Common Stock is listed on Nasdaq under the symbol "ASST" since February 3, 2023[222](index=222&type=chunk) Use of IPO Proceeds (as of Dec 31, 2024) | Use of Proceeds | Amount (USD) | | :--- | :--- | | Acquisition of assets of other businesses | ~$0.3 million | | Working capital | ~$6.3 million | | Other uses | None | - The company has never paid cash dividends and does not anticipate paying them in the near future, with prohibitions related to its Series A Preferred Stock[234](index=234&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Revenue grew significantly in FY2024, but rising operating expenses led to a larger net loss, with operations funded by recent financing [Results of Operations](index=49&type=section&id=Results%20of%20Operations) Revenue grew 128.7% in FY2024, but a 35.1% increase in operating expenses widened the company's net loss Consolidated Operations Data (Fiscal Year Ended Dec 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | $633,489 | $277,038 | | Total operating expenses | $7,037,517 | $5,208,235 | | Loss from operations | ($6,404,028) | ($4,931,197) | | Net loss | ($6,393,932) | ($4,931,197) | - The **128.7% increase in revenue** was primarily due to a higher number of Discord server paying subscribers, including those from recent acquisitions[253](index=253&type=chunk) - The **35.1% increase in operating expenses** was mainly due to a ~$1.1 million rise in advertising, marketing, and payroll, and a ~$0.7 million increase in management compensation[254](index=254&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company has financed its negative operating cash flow through significant capital raises, ensuring liquidity for the next year Summary of Cash Flow (Fiscal Year Ended Dec 31) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($4,900,057) | ($3,807,623) | | Net cash used in investing activities | ($400,000) | ($113,559) | | Net cash provided by financing activities | $5,036,358 | $6,708,328 | | **Net change in cash** | **($263,699)** | **$2,787,146** | | **Cash at end of year** | **$2,660,624** | **$2,924,323** | - The company completed a two-part private placement of Series A Preferred Stock in May and July 2024, raising gross proceeds of **$3.0 million**[256](index=256&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk) - An "at the market" (ATM) financing program commenced in September 2024 has raised net proceeds of **$4,830,648 as of March 31, 2025**[256](index=256&type=chunk) [Critical Accounting Estimates](index=61&type=section&id=Critical%20Accounting%20Estimates) Key accounting estimates involve significant judgment in valuing intangible assets, recognizing revenue, and expensing stock-based compensation - **Intangible Assets:** Acquired intangible assets are recorded at fair value and tested for impairment, with **no impairment charges recorded in 2023 or 2024**[320](index=320&type=chunk) - **Revenue Recognition:** Subscription revenue is recognized over the service period, while marketing and AE.360.DDM revenues are recognized upon completion of short-duration contracts[330](index=330&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk)[333](index=333&type=chunk) - **Stock-Based Compensation:** Awards are measured at grant-date fair value and expensed on a straight-line basis over the requisite service period[327](index=327&type=chunk) Key Expense Policies | Expense Type | 2024 Expense | 2023 Expense | Accounting Policy | | :--- | :--- | :--- | :--- | | Advertising | $944,635 | $436,066 | Expensed as incurred | | Research & Development | $423,299 | $18,935 | Expensed as incurred | [Financial Statements and Supplementary Data](index=64&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data.) This section contains the company's audited consolidated financial statements and accompanying notes for fiscal years 2024 and 2023 [Financial Statements](index=94&type=section&id=Financial%20Statements) Audited statements show total assets of $3.22 million, a net loss of $6.39 million, and a net loss per share of ($1.70) for 2024 Consolidated Balance Sheet Highlights (as of Dec 31, 2024) | Metric | Value (USD) | | :--- | :--- | | Total Assets | $3,217,466 | | Total Liabilities | $430,895 | | Total Stockholders' Equity | $2,786,571 | Consolidated Statement of Operations Highlights (Year Ended Dec 31, 2024) | Metric | Value (USD) | | :--- | :--- | | Revenue | $633,489 | | Loss from operations | ($6,404,028) | | Net loss | ($6,393,932) | | Net loss attributable to common stockholders | ($6,448,042) | | Loss per share (basic and diluted) | ($1.70) | Consolidated Statement of Cash Flows Highlights (Year Ended Dec 31, 2024) | Metric | Value (USD) | | :--- | :--- | | Net cash used in operating activities | ($4,900,057) | | Net cash provided by financing activities | $5,036,358 | | Net change in cash | ($263,699) | [Controls and Procedures](index=65&type=section&id=Item%209A.%20Controls%20and%20Procedures.) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of year-end 2024 - Management concluded that as of December 31, 2024, the company's **disclosure controls and procedures were effective**[347](index=347&type=chunk) - Based on the COSO framework, management concluded that the company's **internal control over financial reporting was effective** as of December 31, 2024[349](index=349&type=chunk)[350](index=350&type=chunk) - An attestation report on internal control from the independent auditor is not included, as the company is not an "accelerated filer" or "large accelerated filer"[351](index=351&type=chunk) [Other Information](index=66&type=section&id=Item%209B.%20Other%20Information.) The company entered into new two-year employment and consulting agreements with its key executives in March 2025 - On March 27, 2025, new two-year employment agreements were executed for CEO Arshia Sarkhani (annual salary $240,000), CFO Matthew Krueger ($180,000), and CMO Kyle Fairbanks ($240,000)[356](index=356&type=chunk)[357](index=357&type=chunk)[358](index=358&type=chunk) - A new two-year consulting agreement was executed for Executive Chairman Michael Gaubert with a monthly fee of $20,000 (annualized to $240,000)[359](index=359&type=chunk) - The agreements include immediate cash bonuses and eligibility for future restricted stock awards, which are subject to shareholder approval of an increase to the 2022 Equity Incentive Plan[356](index=356&type=chunk)[357](index=357&type=chunk)[358](index=358&type=chunk)[359](index=359&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=68&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance.) The company details its board and executive team, committee structures, and governance policies, noting one late insider filing - The company's board consists of seven directors, and the executive team includes key co-founders Arshia Sarkhani (CEO) and Kyle Fairbanks (CMO)[363](index=363&type=chunk) - The Board has established Audit, Compensation, and Nominating and Corporate Governance Committees, with charters available on the company website[377](index=377&type=chunk) - A Code of Ethics and Business Conduct has been adopted and applies to all directors, officers, and employees[381](index=381&type=chunk) - There was one instance of delinquent Section 16(a) filings by AEH and several officers and directors, who filed a late Form 4 on September 16, 2024[385](index=385&type=chunk) [Executive Compensation](index=72&type=section&id=Item%2011.%20Executive%20Compensation.) Executive and director compensation for 2024 consisted of base salaries, cash fees, and stock awards from its equity plan 2024 Summary Compensation Table (Named Executive Officers) | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | All Other Comp. ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Arshia Sarkhani, CEO & President | 2024 | 240,000 | 75,000 | 6,174 | 12,864 | 334,038 | | Michael Gaubert, Executive Chairman | 2024 | 240,000 | 75,000 | 9,549 | 12,864 | 334,038 | | Kyle Fairbanks, Exec. Vice-Chairman & CMO | 2024 | 240,000 | - | 4,658 | 12,864 | 334,038 | 2024 Director Compensation | Name | Fees Earned in Cash ($) | Stock Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | | Richard A. Burton | 49,000 | 6,544 | 55,544 | | John A. Jack II | 44,500 | 6,544 | 51,044 | | Scott K. McDonald | 49,000 | 6,544 | 55,544 | | David Reynolds | 20,000 | 5,231 | 25,231 | - The 2022 Equity Incentive Plan has a maximum of 550,000 shares of Class B Common Stock available for issuance, and **as of March 31, 2025, all 550,000 shares have been granted** as awards[407](index=407&type=chunk)[408](index=408&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=81&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters.) Company insiders collectively control approximately 43.6% of the total voting power through their ownership of Class A and B stock Beneficial Ownership as of March 25, 2025 | Name / Group | Class A Stock (%) | Class B Stock (%) | Total Voting Power (%) | | :--- | :--- | :--- | :--- | | Arshia Sarkhani (CEO) | 100.0% (via AEH) | 2.2% | 42.7% | | Kyle Fairbanks (CMO) | 100.0% (via AEH) | 2.1% | 42.7% | | Michael Gaubert (Exec. Chairman) | 100.0% (via AEH) | 2.2% | 42.8% | | All directors and executive officers as a group (10 persons) | 100.0% | 3.8% | 43.6% | | Asset Entities Holdings, LLC | 100.0% | 1.9% | 41.5% | - The company's 2022 Equity Incentive Plan has 550,000 shares authorized for issuance, and as of December 31, 2024, **all 550,000 shares had been granted** and were outstanding[443](index=443&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=83&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence.) The company discloses several related-party transactions, including an asset purchase and a complex share exchange involving insiders - In November 2023, the company acquired assets from Ternary Inc. and OptionsSwing Inc. for $100,000 cash and 60,000 shares of Class B Common Stock, appointing the seller's principal as CTO[445](index=445&type=chunk) - In February 2024, the company facilitated a series of Cancellation and Exchange Agreements involving Asset Entities Holdings, LLC (AEH) and its members, converting Class A Common Stock into Class B Common Stock[446](index=446&type=chunk) - Executive officers, who are also significant shareholders, received substantial compensation in 2023 and 2024, including salaries, bonuses, and stock awards[446](index=446&type=chunk) - The board has **four independent directors out of seven**, and its key committees are composed entirely of independent directors[449](index=449&type=chunk)[450](index=450&type=chunk)[452](index=452&type=chunk)[453](index=453&type=chunk) [Principal Accountant Fees and Services](index=88&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services.) The principal accountant billed $65,500 in 2024 and $44,500 in 2023, exclusively for audit services pre-approved by the Audit Committee Independent Auditor Fees | Fee Type | 2024 | 2023 | | :--- | :--- | :--- | | Audit Fees | $65,500 | $44,500 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | | **Total** | **$65,500** | **$44,500** | - All fees paid to the principal accountant in 2024 and 2023 were for audit services, with no other services provided[454](index=454&type=chunk) - The Audit Committee has pre-approval policies and procedures in place and approved all services and fees provided by the principal accountant[459](index=459&type=chunk)[461](index=461&type=chunk) Part IV [Exhibit and Financial Statement Schedules](index=90&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules.) This section lists the financial statements and all exhibits filed with the Annual Report, including key corporate documents - This section provides an index to the company's financial statements (pages F-2 to F-7) and a list of all exhibits filed with the 10-K[465](index=465&type=chunk)[467](index=467&type=chunk) - Key exhibits filed include the Articles of Incorporation, Bylaws, various warrant agreements, executive employment agreements, the 2022 Equity Incentive Plan, and the Code of Ethics[469](index=469&type=chunk)[470](index=470&type=chunk)[471](index=471&type=chunk)[472](index=472&type=chunk) [Form 10-K Summary](index=93&type=section&id=Item%2016.%20Form%2010-K%20Summary.) This item is not applicable as the company has not provided a Form 10-K summary - None[473](index=473&type=chunk)

Core Points - Asset Entities Inc. has regained compliance with Nasdaq Listing Rule 5550(b)(1), which requires a minimum stockholders' equity of $2.5 million [1][2] - The company was previously notified on August 21, 2024, that it did not meet the minimum stockholders' equity requirement, prompting immediate actions to improve financial strength [3] - CEO Arshia Sarkhani expressed satisfaction with the company's compliance efforts and ongoing plans for expansion in social media services, particularly on Discord and TikTok [4] Financial Compliance - Nasdaq's Listing Qualifications department confirmed compliance based on the company's Current Report filed on February 14, 2025 [2] - The company expects to maintain stockholders' equity of at least $2.5 million as of March 31, 2025, to avoid potential delisting [2] Company Overview - Asset Entities Inc. specializes in digital marketing and content delivery across various social media platforms, including Discord and TikTok [5] - The company is recognized as the first publicly traded entity based on the Discord platform, hosting significant community-based servers [5] - The AE.360.DDM suite of services is designed for the design, development, and management of Discord community servers, catering to businesses and celebrities [5]

Core Insights - Asset Entities Inc. has surpassed 9,000 members in its TikTok Shop Creator Discord community, enhancing its position in digital marketing and content delivery services [1][2][3] Group 1: Company Achievements - The company became an official TikTok Shop partner on December 11, 2024, which has significantly boosted its creator sign-ups and brand collaborations [2] - The growth of the TikTok Shop creator community is directly linked to increased Gross Merchandise Value (GMV) for brands, leading to higher potential revenue for Asset Entities [2][4] - A notable member, Kimberly, generated over $195,000 in GMV for brands, earning a commission of over $35,000, showcasing the success of the creator community [3] Group 2: Business Model and Strategy - As a TikTok Affiliate Partner (TAP), Asset Entities earns a fixed commission on sales made by creators, which aligns the company's interests with those of the brands [2] - The company is focused on expanding its marketing efforts to attract more brands, leveraging the growing importance of User-Generated Content (UGC) [4] - Asset Entities offers a suite of services for social media marketing, including the AE.360.DDM platform, which is designed for managing Discord community servers [7]