assetentities(ASST) - 2025 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Financial Statements 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] - 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][30][31] - 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] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial performance, liquidity, and strategic initiatives, highlighting revenue growth, increased net loss, and a definitive merger Results of Operations 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][138] - The rise in operating expenses was mainly driven by increased advertising, marketing, payroll, and other administrative costs associated with being a public company[139] Liquidity and Capital Resources 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] - 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] - 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][177] - 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][153] Recent Developments 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] - 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] - 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] - 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] Quantitative and Qualitative Disclosures About Market Risk This section is not applicable to the company for this reporting period - The company has indicated that this disclosure is not applicable[212] Controls and Procedures 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] - 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] PART II OTHER INFORMATION Legal Proceedings 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] Risk Factors This section is not applicable for this quarterly report - The company has indicated that this disclosure is not applicable[218] Unregistered Sales of Equity Securities and Use of Proceeds 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] - No repurchases of common stock were made during the first quarter of 2025[220] Defaults Upon Senior Securities The company reports no defaults upon its senior securities - None[221] Mine Safety Disclosures This section is not applicable to the company - Not applicable[222] Other Information 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] - 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] Exhibits 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]