ATHR 10-Q
Aether Holdings, Inc. (ATHR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the quarterly period ended
or
For the transition period from ________ to _________
Commission
file number:
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or other jurisdiction of incorporation or organization) |
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Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
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As of August 13, 2026, there were shares of common stock outstanding.
AETHER HOLDINGS, INC.
TABLE OF CONTENTS
| -i- |
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the “Report”) contains “forward-looking statements” (as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that reflect our current expectation and views of future events. The forward-looking statements are contained principally in the section of this Report entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Readers are cautioned that significant known and unknown risks, uncertainties and other important factors (including those over which we may have no control and others listed in this Report and in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, filed with the SEC on December 17, 2025 (the “Annual Report”) under the heading “Risk Factors”) may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.
You can identify some of these forward looking statements by words such as “may,” “will,” “aim,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “is/are likely to,” “potential,” “continue,” and other similar expressions or variations. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual performance or results to differ materially and adversely from those expressed in or suggested by the forward-looking statements include:
| ● | our inability to meet our core objectives, namely, to expand the number and content of our online newsletters and create advanced investor tools for our users and generate revenues as a result of these efforts; |
| ● | ineffectively competing in our industry; |
| ● | the impact of governmental laws and regulation; |
| ● | failure to maintain and protect our reputation for trustworthiness and independence; |
| ● | our ability to adequately market our products and services, and to develop additional products and product offerings; |
| ● | our ability to manage growth effectively, including through acquisitions; |
| ● | our ability to continue to evolve and adapt our technology, including further adoption of artificial intelligence and machine learning technologies; |
| ● | our ability to attract new users of our products and to persuade existing users of our products to convert their free subscriptions to paid subscriptions, renew their subscription agreements, and purchase higher subscription tiers from us; |
| ● | our ability to successfully expand the coverage of our products to include foreign markets and alternative asset classes; |
| ● | assumptions related to the size of the market for our publications and analysis tools; |
| ● | our opportunistic use of cash resources on hand, which would impact our capital needs; |
| ● | our ability to expand our revenue streams beyond a subscriber model; |
| ● | difficulties with certain data providers, technology providers, and third-party services we rely on or will rely on; |
| -ii- |
| ● | failure to establish and maintain our corporate culture as we grow and encounter challenges regarding consumer recognition of our brand; |
| ● | our inability to attract, develop, and retain capable management, analysts, and other key personnel; |
| ● | labor shortages, unionization activities, labor disputes or increased labor costs; |
| ● | our ability to realize the anticipated benefits of our bitcoin treasury strategy, which we have yet to implement; |
| ● | our inability to address and mitigate damage to our reputation and brand arising from negative “short reports” and adverse litigation or other proceedings against us or our management; |
| ● | inadequately protecting our intellectual property or breaches of security of confidential consumer information; and |
| ● | other factors detailed under the section entitled “Risk Factors” in our Annual Report. |
The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with. Forward-looking statements necessarily involve significant risks and uncertainties, and our actual results could differ materially from those anticipated in the forward-looking statements due to a number of factors, including those set forth in our Annual Report under the heading “Risk Factors” and elsewhere in the Annual Report. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above. Prior to investing in our common stock, you should read this Report and our other SEC filings completely and with the understanding that our actual future results may be materially different from what we currently expect. We qualify all of our forward-looking statements by these cautionary statements.
We file reports with the SEC. The SEC maintains a website (https://www.sec.gov/search-filings) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.
The forward-looking statements made in this Report related only to events or information as of the date of this Report. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
DEFINED TERMS RELATED TO THE COMPANY
Unless specifically set forth to the contrary, “Company,” “we,” “us,” “our,” “our company,” “Aether,” “the Company,” and similar terms refer to Aether Holdings, Inc. and its subsidiaries, unless the context indicates otherwise.
| -iii- |
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
AETHER HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2026 | September 30, 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Intangible assets, net | ||||||||
| Internally developed software WIP | ||||||||
| Property acquisition deposit | ||||||||
| Property and equipment, net | ||||||||
Deferred offering costs | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payables | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Due to related parties | ||||||||
| Contract liabilities | ||||||||
| Total current liabilities | ||||||||
| Note payable, net | ||||||||
| Accrued interest payable | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Equity | ||||||||
| Common stock, $ par value, and shares authorized, and shares issued and outstanding at June 30, 2026 and September 30, 2025, respectively* | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-1 |
AETHER HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2026 AND 2025
(UNAUDITED)
| For the three months ended | For the nine months ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of sales (excluding depreciation and amortization) | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Sales and marketing expenses | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Research and development expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Other income (expense), net | ||||||||||||||||
| Interest income (expense), net | ( | ) | ( | ) | ||||||||||||
| Other income, net | ||||||||||||||||
| Total Other Income (expense) | ( | ) | ||||||||||||||
| Loss before provision for income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax benefit (expense), net | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share – Basic and Diluted* | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of shares outstanding – Basic and Diluted * | ||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-2 |
AETHER HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
For the Three and Nine Months Ended June 30, 2026
| *Common Shares | Additional Paid In Capital | Accumulated deficit | Total equity | |||||||||||||||||
| Number | Amount | Amount | Amount | Amount | ||||||||||||||||
| Balance – October 1, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||
| Cashless exercise of warrants | ( | ) | ||||||||||||||||||
| Stock issued for services | ||||||||||||||||||||
| Balance – December 31, 2025 | ( | ) | ||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||
| Balance – March 31, 2026 | ( | ) | ||||||||||||||||||
| Proceeds from issuance of shares, net | ||||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||
| Balance – June 30, 2026 | $ | $ | $ | ( | ) | $ | ||||||||||||||
For the Three and Nine Months Ended June 30, 2025
| *Common Shares | Additional Paid In Capital | Accumulated deficit | Total equity | |||||||||||||||||
| Number | Amount | Amount | Amount | Amount | ||||||||||||||||
| Balance – October 1, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||
| Balance – December 31, 2024 | ( | ) | ( | ) | ||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||
| Balance – March 31, 2025 | ( | ) | ( | ) | ||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||
| Net Issuance Proceeds | ||||||||||||||||||||
| Deferred IPO cost charge | - | ( | ) | ( | ) | |||||||||||||||
| Balance – June 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-3 |
AETHER HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR NINE MONTHS ENDED
(UNAUDITED)
| For the nine months ended | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments: | ||||||||
| Depreciation and amortization | ||||||||
| Stock-based compensation expense | ||||||||
| Amortization of debt discount and issuance costs | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Payables and accrued liabilities | ||||||||
| Amounts due to related parties | ( | ) | ( | ) | ||||
| Contract liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of intangible assets | ( | ) | ||||||
| Cash paid for internally developed software WIP | ( | ) | ||||||
| Advance payment | ( | ) | ||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Deferred offering costs paid | ( | ) | ( | ) | ||||
| Proceeds from issuance of shares, net | ||||||||
| Proceeds from note payable, net | ||||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash, beginning of the period | ||||||||
| Cash, end of the period | $ | $ | ||||||
| Supplemental Disclosures of Cash Flow Information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Supplemental Schedule of Non-Cash Financing Activities | ||||||||
| Common stock issued for services | ||||||||
| Cashless exercise of warrants | ||||||||
| Unpaid Deferred Offering Costs | ||||||||
| Unpaid Note Issuance Costs | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-4 |
AETHER HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 — DESCRIPTION OF BUSINESS AND ORGANIZATION
Aether Holdings, Inc. (“we,” “us,” “our,” the “Company,” or “Aether”) was incorporated pursuant to the Delaware General Corporation Law (“DGCL”) on August 15, 2023. The Company, acting through its primary operating subsidiary, Sundial Capital Research Inc. (“Sundial”), is principally engaged in providing proprietary research analytics, data, and tools for equity traders through its flagship platform, SentimenTrader.com (“SentimenTrader”).
The
registration statement for the Company’s initial underwritten public offering (“IPO”) was declared effective on April
9, 2025. We consummated our IPO on April 11, 2025, with the issuance of shares of the Company’s common stock, par value
$ per share (the “Common Stock”) at a public offering price of $ per share, generating gross proceeds of $
On April 30, 2025, the Company incorporated a new subsidiary, Alpha Edge Media, Inc. (“AEM”), under the laws of the State of Delaware to support its expanding newsletter business. The newsletters published or acquired and thereafter published by AEM will target both institutional and retail investors, focusing on topics such as macroeconomic trends, market insights, and market psychology, while broadening the Company’s overall coverage of securities, commodities, markets and exchanges.
On May 22, 2025, the Company incorporated a new subsidiary, Aether Grid Inc. (“Aether Grid”), under the laws of the State of Delaware to house and support the growth of its suite of financial tools.
On June 6, 2025, the Company formed a new subsidiary, Aether Labs, Inc. (“Aether Labs”), under the laws of the State of Delaware to act as the arm of the Company that focuses on innovation and research and development of its fintech ecosystem, with a focus on proprietary analytics and models driven by artificial intelligence (“AI”).
On October 14, 2025, the Company formed a new wholly owned subsidiary, 537 Greenwich LLC (“537 Greenwich”), under the laws of the State of Delaware. The subsidiary was established for the purpose of acquiring and holding office space in New York, which was purchased and is owned by 537 Greenwich.
| F-5 |
On March 25, 2026, Aether Labs and OorTech Inc. (“Oort”) formed Aether DataHub, LLC (“AetherHub”), a Delaware limited liability company, as a joint venture to develop and commercialize the “AetherHub Platform,” a white-labeled deployment of Oort’s proprietary DataHub technology, for use exclusively in the field of financial media and financial education data labeling and annotation services. AetherHub had no transactions during the three months ended June 30, 2026, and AetherHub did not have a material impact on the Company’s consolidated financial position or results of operations for the period then ended.
In March 2026, the Company also entered into a Technology License and Services Agreement with Oort, pursuant to which Oort granted the Company a worldwide, royalty-free, exclusive license, to host, operate, and commercialize Oort’s DataHub technology as a white-labelled platform. Oort is also obligated to provide software development, customization, maintenance, and support services necessary for the deployment and operation of the AetherHub platform. Intellectual property developed specifically for the AetherHub Platform is assigned to AetherHub, while Oort retains ownership of its underlying platform technology and general-purpose enhancements. No license fees or service fees are payable under the agreement, as Oort’s equity ownership interest constitutes its sole consideration. No amounts were recognized in the accompanying condensed consolidated financial statements related to this agreement for the three and nine month period ended June 30, 2026, as the Company had not commenced operations.
The Company has also entered into an intellectual property option agreement (the “IP Option Agreement”) with Oort pursuant to which it may acquire certain underlying intellectual property, as described in Note 14.
On May 29, 2026, the Company incorporated Alpha Edge Media (Hong Kong) Limited, a wholly owned subsidiary of Alpha Edge Media, Inc, under the laws of Hong Kong, to support the Company’s expanding newsletter business. As of the reporting date, the subsidiary had not commenced material operations and its incorporation did not have a material impact on the Company’s consolidated financial statements.
On June 15, 2026, the Company incorporated a new subsidiary, Aether Compute LLC. (“Aether Compute”), under the laws of the State of Delaware to resell modular compute-and-energy pods.
Subsequent
to the period ended June 30, 2026, on August 4, 2026, Aether Compute acquired sixty percent (
The following table sets forth information concerning the Company and its wholly-owned subsidiaries and AetherHub as of June 30, 2026:
| Name of Entity | Date of Organization |
Place of Organization |
Percentage of Ownership |
Principal Activities | ||||
| Aether Holdings, Inc. | ||||||||
| Sundial Capital Research Inc. | ||||||||
| Alpha Edge Media, Inc. | ||||||||
| Aether Grid Inc. | ||||||||
| Aether Labs, Inc. | ||||||||
| 537 Greenwich LLC | ||||||||
| Aether Datahub LLC | ||||||||
| Alpha Edge Media (Hong Kong) Limited | ||||||||
| Aether Compute LLC |
| F-6 |
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the unaudited condensed consolidated financial statements) considered necessary to present fairly the Company’s unaudited condensed consolidated balance sheet as of June 30, 2026, its unaudited condensed consolidated statements of operations and comprehensive loss, stockholders’ equity for the three and nine months ended June 30, 2026 and June 30, 2025 and unaudited condensed consolidated statements of cashflows for nine months ended June 30, 2026 and June 30, 2025. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this report should be read in conjunction with the audited consolidated financial statements and notes thereto of Aether Holdings, Inc. for the year ended September 30, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on December 17, 2025, (the “Form 10-K”), which provides a more complete discussion of the Company’s accounting policies and certain other information. The accompanying condensed consolidated balance sheet as of September 30, 2025, has been derived from the audited consolidated balance sheet as of September 30, 2025, contained in the above referenced Form 10-K.
The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances have been eliminated upon consolidation. Interim results are not necessarily indicative of results for a full year or any future periods.
Prior Period Reclassifications
Certain amounts in prior periods have been reclassified to conform with current period presentation.
Foreign Currency
These unaudited condensed consolidated financial statements are presented in United States dollars which are the parent and subsidiaries’ functional currency. The functional currency for each entity consolidated with the Company is determined by the currency of the primary economic environment in which it operates, US dollars (“USD”).
Monetary assets and liabilities denominated in foreign currencies are re-measured to USD using the exchange rates prevailing at the consolidated balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are measured in USD using historical exchange rates. Revenues and expenses are measured using the actual exchange rates prevailing on the dates of the transactions. Gains and losses resulting from re-measurement are recorded in the Company’s consolidated statement of operations and comprehensive loss as foreign exchange (loss) gain under general and administrative expenses.
Use of Estimates and Assumptions
The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. There were no significant estimates or assumptions that materially impacted the unaudited condensed consolidated financial statements for the three and nine months ended June 30, 2026 and 2025.
| F-7 |
Segment Information
The Company follows Accounting Standards Codification (“ASC”) 280, “Segment Reporting” (adopted by the Financial Accounting Standards Board (“FASB”)), which requires disclosures based on how management organizes the Company to make operating decisions and assess performance. The Company has determined that it operates as a single reportable segment.
The Chief Executive Officer functions as the Company’s Chief Operating Decision Maker (“CODM”) and is responsible for key operating decisions, resource allocation, and performance assessment. In executing these responsibilities, the CODM regularly reviews consolidated financial information, including total revenue, gross profit, key operational metrics, and cash flow, on a Company-wide basis. The CODM does not review or receive discrete financial information by business function, product category, or geographic region. Consequently, decisions about resource allocation and performance evaluation are made based solely on consolidated results. Accordingly, management has concluded that the Company has one operating segment: the online subscription service, which consists of one reporting unit based on the financial information available and which operating results are regularly reviewed by CODM. All the Company’s business activities for the three and nine months ended June 30, 2026 and 2025 were conducted in United States. Segment profit and loss is determined on a basis that is consistent with how the Company reports operating profit and loss in its unaudited condensed consolidated statements of operations and comprehensive loss. Because the Company operates only one segment, there are no intersegment transactions.
Cash
Cash consists of cash on hand, the balances with banks and the liquid investments with maturities of three months or less.
Property and Equipment, Net
Property and equipment are recorded at cost less accumulated depreciation and impairment losses at the following depreciation rates:
| Computer hardware & IT | Double
declining balance method – |
| Office Building | Straight
line method – Useful Life |
Equipment that is withdrawn from use or has no reasonable prospect of recovered through use or sale, is regularly identified, and written off. The assets’ residual values, depreciation methods and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Subsequent expenditures relating to items of property and equipment are capitalized when it is probable that future economic benefits from the use of the assets will be increased. All other subsequent expenditures are recognized as repairs and maintenance.
The
office building is depreciated on a straight-line basis over an estimated useful life of
Intangible Asset, Net
The Company’s intangible assets consist of (i) the Company’s corporate tradenames, (ii) internally developed software and (iii) intangible assets acquired in connection with the purchase transactions to date involving the following online financial newsletters: Whale Tales, Altcoin Investing, 21Bitcoin.xyz, Coinstack and Publicview.ai (collectively, the “Acquisitions”). The intangible assets acquired pursuant to the Acquisitions include domains, tradenames, subscriber lists, newsletter archives, content libraries, a sponsorship and/or advertising pipeline and associated materials, vendor and platform rights, writer relationships, billing system and set up, cloud infrastructure configurations, developed technology and non-competition agreements.
| F-8 |
Indefinite-lived intangible assets
The Company’s tradenames and domains (including the Company’s corporate tradename and the domain name and tradenames acquired in the Acquisitions, other than the brand name associated with the acquisition of the Coinstack) are considered indefinite-lived, as they are expected to contribute to future cash flows indefinitely and the costs to maintain/renew the associated legal rights are not significant. Accordingly, tradenames and domain names are not amortized.
Indefinite-lived tradenames and domains are tested for impairment at least annually, and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired, in accordance with ASC 350-30-35-18.
Finite-lived intangible assets
The remaining intangible assets acquired in the Acquisitions (including the Coinstack brand name) are finite-lived and are amortized on a straight-line basis over their estimated useful lives, which reflect the periods over which the assets are expected to contribute to future cash flows. Finite-lived intangible assets are evaluated for amortization. The Coinstack brand name is considered finite-lived based on management deliberation, expected subscriber attrition and it falling within the low to lower quartile range observed in comparable transactions.
Amortization method and estimated useful lives of finite-lived intangible assets
| Category | Amortization Method | Estimated useful life | ||
| Brand name/Domain names /Tradenames/social media (except for Coinstack) | ||||
| Brand name (Coinstack) | ||||
| Subscriber list | ||||
| Content library | ||||
| Vendor/platform rights | ||||
| Writer relationship | ||||
| Non-competition agreement | ||||
| Advertiser / sponsor relationships | ||||
| Proprietary codebase & technical IP | ||||
| Cloud infrastructure configurations (AWS) | ||||
| Internally developed software |
Offering costs
Deferred offering costs consist of specific expenses directly attributable to the company’s equity offerings, including legal, accounting, printing, underwriter fees and filing fees. These costs are capitalized as incurred in accordance with the guidance under ASC 340-10-S99-1.
Impairment of Long-lived assets
Long-lived
assets, including property and equipment, intangible assets and property acquisition deposit are evaluated for impairment whenever events
or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets)
indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Company had originally estimated.
When these events occur, the Company evaluates the impairment by comparing the carrying value of the assets to an estimate of future
undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected
future undiscounted cash flows is less than the carrying value of the assets, the Company recognizes an impairment loss based on the
excess of the carrying value of the assets over the fair value of the assets.
| F-9 |
Internally developed software and research and development (“R&D”) expenses
Intangible assets consist of internally developed capitalized software which is separately presented than other intangible assets as they are significant.
Internal use software
The Company capitalizes certain costs related to internal use software acquired, modified, or developed related to the Company’s services in accordance with ASC 350, Internal use software. These capitalized costs are primarily related to salaries, IT consultants and other personnel costs. Costs incurred in the preliminary stages of development and the post implementation phase are expensed as incurred. The company adopted agile method of software development which is generally characterized as an iterative and more dynamic process where the planning, design and coding are less distinct and performed in short sprints. The Company analyses the nature of the development and implementation activities – i.e. whether Subtopic 350-40 characterizes them as capitalizable application development stage activities – when deciding whether the costs of those activities should be capitalized or expensed as incurred. Maintenance and training costs are expensed as incurred. The amortization expense is recorded in “General and administrative expenses” on the consolidated statements of operations and comprehensive loss.
Software developed for sale
The costs incurred for the development of computer software to be sold, leased or otherwise marketed are capitalized in accordance with ASC 985, Costs of Software to be sold, leased or marketed, when technological feasibility has been established. Technological feasibility generally occurs when all planning, designing, coding and testing activities are completed and is necessary to establish that the product can be produced to meet its design specifications, including functions, features, and technical performance requirements. These capitalized costs are primarily related to salaries, IT consultants and other personnel costs.
Software costs that are expensed are recorded in “Research and Development” on the condensed consolidated statements of operations and comprehensive loss. Research and development expenses represent costs directly attributable to the development of the Company’s XYZ Terminal, SentimenTracker (“SentimenTracker”) and other products, including data integration, Large Language Model (LLM) tools, predictive analytics, interface upgrades, and supporting systems, with spending driven by personnel, software, data, and cloud resources. R&D expenses are expensed as incurred in accordance with ASC 730.
Internally
developed software comprises of software development cost-in-progress as of June 30, 2026 and September 30, 2025 amounting to $
Revenue Recognition
The Company adopted ASC Topic 606 Revenue from Contracts with Customers (“ASC 606”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the Company applies the following steps:
| Step 1: | Identification of the contract with a customer; | |
| Step 2: | Identification of the performance obligations in the contract; | |
| Step 3: | Determination of the transaction price; | |
| Step 4: | Allocation of the transaction price to the performance obligations in the contract (where revenue is allocated on a relative standalone selling price basis by maximizing the use of observable inputs to determine the standalone selling price for each performance obligation); and | |
| Step 5: | Recognition of revenue when, or as, the Company satisfies a performance obligation. |
| F-10 |
Revenue from online subscription services
Revenue from online subscription services consists of subscriptions to the Company’s SentimenTrader and SentimenTracker platforms. These cloud-based platforms provide customers with access to trading intelligence, analytics, and tailored stock research reports without transferring possession of the underlying software.
Revenue is generally recognized ratably over the applicable subscription term beginning on the commencement date of each arrangement, which is the date the platform is made available to customers, provided collection is reasonably assured. Subscription agreements generally range from one month to one year. Amounts invoiced are recorded either as contract liabilities or as revenue in the unaudited condensed consolidated financial statements, depending on whether the related performance obligations have been satisfied.
Contract Liabilities
Contract liabilities consist deferred revenue in relation to payments that are received in advance of the Company’s performance. The Company’s contract liabilities are reported on a contract-by-contract basis at the end of each reporting year. The Company classifies contract liabilities as current when the term of the applicable subscription period or expected completion of the performance obligation is one year or less.
Cost of Revenue
Cost of revenue primarily consist of expenses related to hosting the Company’s service and analyst salaries that directly benefit sales. These expenses are comprised of hosted data center global costs, fees paid to third-party data providers and personnel-related costs directly associated with research reports, including salaries and benefits.
These costs are incurred to support the production and delivery of the Company’s research reports, data platforms, and other customer-facing services.
Operating expenses consist primarily of research and development, general and administrative, and sales and marketing expenses. Operating expenses are recognized as incurred in accordance with U.S. GAAP.
General and Administrative Expenses
General and administrative (“G&A”) expenses consist primarily of personnel-related costs, including salaries, bonuses, payroll taxes, and stock-based compensation for executive, finance, legal, and administrative personnel. G&A expenses also include professional fees (legal, audit, tax, consulting, and regulatory compliance), insurance, investor relations costs, public company compliance costs, office and administrative expenses, information technology and software subscriptions, and other corporate overhead costs. These expenses are expensed as incurred.
Sales and Marketing Expenses
Sales and marketing (“S&M”) expenses consist primarily of advertising, promotional campaigns, branding initiatives, sponsorships, customer acquisition costs, website hosting related to marketing activities, travel, trade shows, and other marketing-related expenditures. Advertising costs are expensed as incurred.
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for professional research services, expenditures related to the development and enhancement of the Company’s acquired assets 21 Bitcoin.xyz (acquired October 2025) and Publicview.ai (acquired January 2026) and costs associated with the development of the Company’s internally developed software platform, SentimenTracker, Alphid AI, OpenTicker and XYZ terminal. The Company expenses all research & development costs in the periods in which they are incurred.
| F-11 |
Defined contribution plan
Contributions to defined contribution plans are expensed in the period in which services are rendered by the covered employees. The Company recognizes its liabilities for compensated absences dependent on whether the obligation is attributable to employee services already rendered, relates to rights that vest or accumulate and payment is probable and estimable.
Warrants
The Company performs an assessment of warrants upon issuance to determine their proper classification in the financial statements based on the warrant’s specific terms, in accordance with the authoritative guidance provided in ASC 480 Distinguishing Liabilities from Equity, and ASC 815 Derivatives and Hedging. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480 and whether they meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Common Stock and whether the warrant holders could potentially require cash settlement of the warrants.
For issued warrants that meet all the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital. For issued warrants that do not meet all the criteria for equity classification, the warrants are required to be liability-classified and recorded at their initial fair value on the date of issuance and remeasured at fair value at each balance sheet date thereafter. The Company has performed an assessment of all warrants issued and determined that the Company’s warrants are equity-classified.
As
of June 30, 2026, the Company had underwriter warrants outstanding (out of an original
Stock Based Compensation
We account for our stock-based compensation under ASC 718, “Compensation – Stock Compensation” using the fair value-based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for accounting for transactions in which an entity exchanges equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. Forfeitures are accounted when they occur.
We use the grant date fair value method for equity instruments granted to non-employees and use Black-Scholes Method for grant date fair value of underwriters’ warrants. The stock based fair value compensation is determined as of the date of the grant (measurement date) and is recognized over the vesting periods.
Related parties
The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Fair Value Measurement
Fair value is the price that would be received by selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
| F-12 |
The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value are as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities.
Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments include cash, accounts receivable and other receivables, payable and accrued liabilities, contract liabilities and due to related parties. The carrying amounts of these accounts approximate their fair values due to the short-term nature of these instruments.
Income taxes
Current tax
Current tax consists of current tax payable based on the Company’s taxable income for the year. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
The Company records income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. The Company nets the deferred tax assets and deferred tax liabilities from temporary differences arising from a particular tax-paying component of the Company within the same tax jurisdiction and presents the net asset or liability as long term. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized.
The Company recognizes tax benefits from uncertain tax positions if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Although the Company believes that it has adequately reserved for uncertain tax positions, the Company can provide no assurance that the final tax outcome of these matters will not be materially different. The Company makes adjustment to these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and results of operations.
The Company presents basic and diluted net loss per share data for its common shares. Basic net loss per share is calculated by dividing the net loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year, adjusted for own shares held. Diluted net loss per share is determined by dividing the net loss attributable to common shareholders by the weighted average number of common shares outstanding, adjusted for own shares held and for the effects of all potential dilutive common shares related to outstanding stock options and warrants issued by the Company for the periods presented, except if their inclusion is anti-dilutive.
| F-13 |
Recently Adopted Accounting Pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments are intended to improve the transparency and decision usefulness of segment information by requiring enhanced disclosures about significant segment expenses and more consistent information in interim periods. The amendments are effective for the Company for fiscal year beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU 2023-07 on October 1, 2024 on a retrospective basis. The adoption did not have an impact on the unaudited condensed consolidated financial statement but resulted in expanded segment disclosures.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). This ASU requires that public business entities must annually “(1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate).” This ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this standard but does not expect it to have a material impact on unaudited condensed consolidated financial statements. The Company expects the ASU to result in expanded disclosures regarding income taxes.
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This pronouncement introduces new disclosure requirements aimed at enhancing transparency in financial reporting by requiring disaggregation of specific income statement expense captions. Under the new guidance, entities are required to disclose a breakdown of certain expense categories, such as employee compensation; depreciation; amortization, and other material components. The disaggregated information can be presented either on the face of the income statement or in the notes to the financial statements, often using a tabular format. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating these new disclosure requirements.
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 amends the guidance in ASC 350-40, Intangibles—Goodwill and Other—Internal-Use Software. The amendments modernize the recognition and disclosure framework for internal-use software costs, removing the previous “development stage” model and introducing a more judgment-based approach. Under the new guidance, certain costs are capitalized when management authorizes and commits to funding a software project and it is probable that the project will be completed and the software will be used as intended. The amendments are intended to better align accounting with modern software development practices, including agile methodologies. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which establishes authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants. Under ASU 2025-10, government grants are recognized when it is probable that the entity will both comply with the conditions of the grant and the grant will be received. The ASU provides specific accounting models for grants related to assets and grants related to income, including options to recognize government grants as deferred income or as a reduction of the asset’s cost basis. The ASU also requires enhanced disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the financial statements. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-10.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have had a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.
| F-14 |
ASU 2024-04 Debt - Debt with Conversion and Other Options - Induced Conversions of Convertible Debt Instruments. In November 2024, the FASB issued this ASU which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions or extinguishments. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in Update 2020-06. We are currently evaluating the impact this guidance will have on our unaudited condensed consolidated interim financial statements.
In May 2025, the FASB issued Accounting Standards Update No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“ASU 2025-03”). ASU 2025-03 changes how companies determine the accounting acquirer in certain business combinations involving variable interest entities. The new guidance requires considering the factors used for other acquisition transactions to assess which party is the accounting acquirer. ASU 2025-03 is effective for the Company’s annual reporting periods beginning on January 1, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new accounting guidance on its financial statements and related disclosures.
In May 2025, the FASB issued Accounting Standards Update No. 2025-04, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer (“ASU 2025-04”). ASU 2025-04 revises the definition of a performance condition, eliminates the forfeiture policy election for service conditions, and clarifies that the variable consideration constraint in Topic 606 does not apply to share-based consideration payable to customers. The new guidance requires entities to consistently account for share-based awards granted to customers by clarifying the treatment of vesting conditions and ensuring alignment with Topic 606 and Topic 718. ASU 2025-04 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new accounting guidance on its financial statements and related disclosures.
In April 2026, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock. The amendments clarify the initial measurement of paid-in-kind (“PIK”) dividends on equity-classified preferred stock by requiring issuers to use the PIK dividend rate stated in the applicable preferred stock agreement. The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact of adopting this guidance on its condensed consolidated financial statements but does not expect the adoption to have material impact.
The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, statements of operations and comprehensive loss and statements of cash flows.
From time to time, new accounting pronouncements are issued by the FASB or other standard-setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the accompanying financial statements and disclosures.
NOTE 3 – NOTE PAYABLE
On
May 13, 2026, the Company entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Streeterville Capital,
LLC, a Utah limited liability company (the “Investor”), pursuant to which the Company issued a Secured Promissory Note (the
“Note”) in the original principal amount of $
| F-15 |
Beginning
six months after issuance, the Investor may redeem up to $
The
Note includes customary affirmative and negative covenants and events of default, including payment defaults, covenant breaches, and
insolvency events. No redemptions, trigger events, covenant breaches, or defaults occurred through June 30, 2026. Upon the
occurrence of an event of default, the Holder may, by written notice, declare all unpaid principal, plus all accrued interest and
other amounts due under the Note to be immediately due and payable. Further, interest shall accrue on the outstanding balance
beginning on the date the event of default occurred at an interest rate equal to fifteen percent (
The Note contains stock-price linked features, including (i) a limited redemption feature that may accelerate principal repayment upon the Company’s stock meeting specified price thresholds and (ii) a monitoring fee forgiveness feature that may reduce amounts otherwise payable upon sustained low stock price or trading volume conditions. Management determined these features are embedded derivatives that are not clearly and closely related to the debt host and therefore require bifurcation under ASC 815.
At issuance, the embedded derivatives were recorded at fair value, with a corresponding reduction to the carrying amount of the Note. However, the Company determined the fair value of these embedded derivatives was immaterial as of May 13, 2026, and June 30, 2026. The embedded derivative liabilities are remeasured at fair value each reporting period, with changes in fair value recognized in earnings. As of June 30, 2026, the embedded derivatives remained outstanding.
As
of June 30, 2026, the principal amount outstanding under the Note was $
For
the three months and nine months ended June 30, 2026, the Company recognized $
NOTE 4 — CONTRACT LIABILITIES
Contract liabilities consist of the unearned portion of customer billings, which is recognized as revenue in accordance with our revenue recognition policy. The Company classifies contract liabilities as a current liability on the consolidated balance sheets because the longest subscription plan is for twelve months. The movement of contract liabilities for the three and nine months ended June 30, 2026 and June 30, 2025 are as follows:
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Opening balance | $ | $ | $ | $ | ||||||||||||
| Additional contract liabilities accrual | ||||||||||||||||
| Revenue recognized from opening contract liabilities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Revenue recognized from current year billings | ( | ) | ( | ) | $ | ( | ) | ( | ) | |||||||
| Ending balance | $ | $ | $ | $ | ||||||||||||
| F-16 |
Remaining Performance Obligations
The Company applies the practical expedient in ASC 606-10-50-14, which allows an entity not to disclose the value of remaining performance obligations for contracts with an original expected term of one year or less. Because all of the Company’s customer contracts have original expected durations of one year or less, the Company has elected this practical expedient and, accordingly, does not disclose information about remaining performance obligations.
NOTE 5 — PREPAID EXPENSES
The prepaid expenses as of June 30, 2026 and September 30, 2025 were as follows:
| June 30, 2026 | September 30, 2025 | |||||||
| Software license | $ | $ | ||||||
| SEC filing fees | ||||||||
| Insurance | ||||||||
| Consulting fees | ||||||||
| Sales & Marketing | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
NOTE 6 —ACCRUED LIABILITIES
The accrued liabilities as of June 30, 2026 and September 30, 2025 were as follows:
| June 30, 2026 | September 30, 2025 | |||||||
| Accrued expenses | $ | $ | ||||||
| Accrued wages | ||||||||
| Total | $ | $ | ||||||
NOTE 7 — EQUITY
A) Shares Issued for Service Agreements
On
December 22, 2025, the Company issued shares of Common Stock to certain non-employees, specifically the sellers of the Coinstack
assets, in consideration for services to be provided under a transition services agreement entered in connection with the asset acquisition.
The shares were issued at a fair value of $ per share, resulting in an aggregate fair value of $
shares were issued for Service Agreement for the year ended September 30, 2025.
The Company did not conduct any private placements during the three and nine months ended June 30, 2026.
| F-17 |
B) Reverse Stock Split
On
January 15, 2025, the Company’s board of directors approved a share consolidation of the Company’s common shares at a ratio
of
All
share and per-share information included in the unaudited condensed consolidated financial statements and notes thereto have been retroactively
adjusted for the
As of June 30, 2026, and September 30, 2025, the Company had and shares of Common Stock issued and outstanding, respectively.
C) IPO
The
registration statement for the Company’s IPO was declared effective on April 9, 2025. The Company consummated its IPO on April
11, 2025, with the issuance of shares of Common Stock at a public offering price of $ per share, generating gross proceeds
of $
D) ATM Facility
On
June 25, 2026, the Company entered into an At-The-Market Issuance Sales Agreement (“Sales Agreement”) with Rodman & Renshaw
LLC (“Rodman” or the “Sales Agent”) pursuant to which, the Company may offer and sell, from time to time at its
sole discretion, shares of its common stock, $
par value per share,
up to $
Under
the Sales Agreement, Rodman may sell shares by any method permitted by law deemed to be an “at the market offering” as defined
in Rule 415(a)(4) under the Securities Act. Rodman will use commercially reasonable efforts to sell the shares from time to time, based
upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company
may impose). The Company agreed to pay Rodman a commission upto
The Company has evaluated the Sales Agreement and the shares issued thereunder in accordance with applicable accounting guidance. The Company determined that the Sales Agreement is not within the scope of ASC 480, Distinguishing Liabilities from Equity, as it does not embody an unconditional obligation to repurchase the Company’s equity shares, an obligation to settle by transferring assets, or an obligation to issue a variable number of shares for a fixed monetary amount. The Sales Agreement was further evaluated under ASC 815, Derivatives and Hedging, and ASC 815-40, Contracts in an Entity’s Own Equity. The Company concluded that the Sales Agreement is not a derivative instrument and does not contain any features that require bifurcation as embedded derivatives. The Sales Agreement is indexed to the Company’s own equity and satisfies all conditions for equity classification under ASC 815-40. Accordingly, the shares issued under the Sales Agreement are classified as permanent equity in the accompanying condensed consolidated balance sheets, and no derivative liability has been recognized in connection with the Sales Agreement.
For
the three and nine months ended June 30, 2026, the amount of proceeds generated from the sale of common
stock under the Sales Agreement was $
| F-18 |
E) Underwriters’ Warrants
In
connection with the Company’s IPO and the IPO Over-Allotment Option, the Company issued to the representatives of the underwriters,
or their permitted designees, warrants (the “Underwriters’ Warrants”) to purchase
The Company performs an assessment of Underwriters’ Warrants upon issuance to determine their proper classification in the financial statements based on the warrant’s specific terms, in accordance with the authoritative guidance provided in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480 Distinguishing Liabilities from Equity, and ASC 815 Derivatives and Hedging. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480 and whether they meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require cash settlement of the warrants.
The company has concluded that the Underwriters’ Warrants are equity classified.
Accordingly, the Underwriter Warrants were recorded within stockholders’ equity in additional paid-in capital (“APIC”). However, as the warrants are incremental and directly attributable to the IPO, the Company recorded the fair value of the Underwriter Warrants as an equity issuance cost as a reduction of APIC. As the result, no net impact to total APIC.
The
Underwriters’ Warrants were valued at $
A
summary of the warrants’ movement schedule is as follows:
| Warrant Outstanding | ||||||||||||
Number of Warrants | Weighted average exercise price | Weighted average remaining life | ||||||||||
| Balance – October 1, 2025 | $ | |||||||||||
| Granted | - | |||||||||||
| Exercised | ( | ) | - | |||||||||
| Outstanding - June 30, 2026 | $ | |||||||||||
The
Company issued underwriter warrants with an exercise price of $
| F-19 |
| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted weighted-average common shares outstanding | ||||||||
| Basic and diluted | $ | ) | $ | ) | ||||
| Nine months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted weighted-average common shares outstanding | ||||||||
| Basic and diluted | $ | ) | $ | ) | ||||
There were no preferred or other dividends declared for the three and nine months ended June 30, 2026. The below table includes the total securities potentially dilutive for the three and nine months ended June 30, 2026 and 2025, which have been excluded from the computation of diluted (loss) per share.
| Three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Warrants Outstanding | ||||||||
| Nine months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Warrants Outstanding | ||||||||
Although the Underwriters’ Warrants contain cashless exercise provisions, the impact of such provisions was not considered in diluted net loss per share as the Company incurred a net loss during the period and all potential shares of Common Stock were anti-dilutive.
NOTE 9 — PROPERTY AND EQUIPMENT, NET
On July 21, 2025, the Company entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with 537 Greenwich Owner, LLC (the “Seller”), pursuant to which the Company agreed to purchase from the Seller the retail level office space located at 110 Charlton Street, Unit RET B, New York, NY 10014 (the “Property”).
On October 14, 2025, the Company assigned the Purchase Agreement to its newly formed, wholly owned subsidiary, 537 Greenwich LLC, an entity formed for the purpose of holding the Property.
The
contractual purchase price of the Property was $
| F-20 |
The Property comprises approximately 1,600 square feet within Greenwich West, a mixed-use development in the Hudson Square neighborhood of New York City and will serve as the Company’s corporate headquarters.
There are no material relationships between the Company (or its affiliates) and the Seller.
Property and equipment, net consisted of the following:
| June 30, 2026 | September 30, 2025 | |||||||
| Buildings | $ | $ | ||||||
| Computer & equipment | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation
expenses totaled $
Depreciation
expenses totaled $
NOTE 10 — INTANGIBLES
21 Bitcoin.xyz Asset Acquisition
On October 15, 2025, the Company acquired substantially all of the assets of 21Bitcoin.xyz, a digital platform that autonomously generates and distributes real-time market intelligence through an advanced AI-powered publishing engine. 21Bitcoin provides extensive coverage of the digital asset landscape, including market trends, blockchain innovation, industry developments, regulatory policy, decentralized finance (DeFi), non-fungible tokens (NFTs), the metaverse, Web3 infrastructure, cybersecurity, privacy, and global adoption trends.
The Company evaluated the transaction under ASC 805 and concluded that the acquired set did not meet the definition of a business. Substantially all of the fair value of the gross assets acquired was concentrated in identifiable intangible assets, and the acquired set did not include substantive processes capable of producing outputs independently. Accordingly, the transaction was accounted for as an asset acquisition under ASC 805-50 and as such, the transaction was considered to be insignificant.
In
accordance with ASC 805-50-30-3, the total acquisition cost of $
The 21 Bitcoin.xyz asset acquisition did not have a material impact on the Company’s condensed consolidated financial statements for the period ended June 30, 2026 and as such detailed disclosures regarding acquired intangible assets were considered to be insignificant.
Coinstack Asset Acquisition
On December 22, 2025, the Company acquired substantially all the assets of Coinstack (the “Coinstack Acquisition”). The acquired assets primarily consist of subscriber lists and related data, trade name and trademarks (including associated domain names), content library and archives, advertiser and sponsor relationships, and social media and community presence.
The Company evaluated the transaction under ASC 805 and concluded that the acquired set did not meet the definition of a business. Substantially all of the fair value of the gross assets acquired was concentrated in identifiable intangible assets, and the acquired set did not include substantive processes capable of producing outputs independently. Accordingly, the transaction was accounted for as an asset acquisition under ASC 805-50.
Total consideration consisted of cash paid at closing and directly attributable transaction costs. In accordance with ASC 805-50-30-1, transaction costs were capitalized as part of the cost of the acquired assets.
| F-21 |
In
connection with the acquisition, the Company issued shares of Common Stock to the sellers pursuant to a Transition Services Agreement
for post-closing services. These shares were issued at a fair value of $ per share (aggregate fair value of approximately $
Publicview Asset Acquisition
On January 15, 2026, the Company acquired substantially all of the assets of Publicview.ai (“PublicView”), an AI-powered stock market research platform that provides real-time filing analysis. The acquired assets included, among other things, proprietary source code, databases, cloud infrastructure, domain names, payment and billing systems, intellectual property and customer relationships.
The Company evaluated the transaction under Accounting Standards Codification (“ASC”) 805 and concluded that the acquired set did not meet the definition of a business. Substantially all of the fair value of the gross assets acquired was concentrated in identifiable intangible assets, and the acquired set did not include substantive processes capable of producing outputs independently. Accordingly, the transaction was accounted for as an asset acquisition under ASC 805-50.
In
accordance with ASC 805-50-30-3, the total acquisition cost of $
The PublicView asset acquisition did not have a material impact on the Company’s condensed consolidated financial statements for the period ended June 30, 2026, and as such, detailed disclosures regarding the acquired assets were considered to be insignificant.
SentimenTracker -Internally Developed Software
The
Company accounts for costs incurred to develop internal-use software in accordance with Accounting Standards Codification (“ASC”)
350-40, Intangibles—Goodwill and Other—Internal-Use Software. The Company capitalized $
Amortization
expense was $
No impairment indicators were identified as of June 30, 2026.
| F-22 |
NOTE 11 — RELATED PARTY TRANSACTIONS
Related parties include key management personnel, their close family members and entities under their control or joint control. Key management personnel are those who have authority and responsibility for the planning directing and controlling the activities of the entity, directly or indirectly. The Company defines key management personnel as the Company’s C-level executives and Board of Directors. The Company’s relationship with related parties who had transactions with the Company are summarized as follows:
| Related Party | Relationship with the Company | |
| Qian Zhang | ||
| Hao Hu | ||
| Nicolas Kuan Liang Lin | ||
| David Chi Ching Ho | ||
| Siu Hang (Henry) Wong | ||
| Elixir Technology Inc. | ||
| Jaclyn Wu | ||
| Monic Wealth Solutions Ltd. | ||
| Ledger Pros LLC | ||
| Suresh R. Iyer | ||
| Monic Financial Group | ||
| WUYAO Safety Technology (Hang Zhou) Co., LTD | ||
| Timothy William Murphy |
Related Party balances
The Company’s balances due to related parties as of June 30, 2026 and September 30, 2025 were as follows:
| Name | June 30, 2026 | September 30, 2025 | ||||||
| Qian Zhang | $ | $ | ||||||
| Elixir Technology Inc. | ||||||||
| Hao Hu | ||||||||
| WUYAO Safety Technology (Hang Zhou) Co., LTD | ||||||||
| Total due to related parties | $ | $ | ||||||
The amounts due to related parties as of June 30, 2026 and September 30, 2025 are unsecured, interest-free, and due on demand.
Related Party transactions
The Company had the following related party transactions:
A) Services rendered from related parties
During
the three and nine months ended June 30, 2026, the Company did not incur any expenses for accounting services provided by Ledger Pros
LLC. During the three and nine months ended June 30, 2025, the Company incurred $
| F-23 |
B) Director fees and consulting fees for services rendered by directors and consultants
| Three months ended June 30, | ||||||||||
| Name | Nature of Service | 2026 | 2025 | |||||||
| Jaclyn Wu | Consulting | $ | ||||||||
| Siu Hang (Henry) Wong | Consulting | |||||||||
| Wayne Huo | Director | |||||||||
| Total | $ | $ | ||||||||
| Nine months ended June 30, | ||||||||||
| Name | Nature of Service | 2026 | 2025 | |||||||
| Jaclyn Wu | Director/ Consulting | $ | ||||||||
| Siu Hang (Henry) Wong | Consulting | |||||||||
| Wayne Huo | Director | |||||||||
| Total | $ | $ | ||||||||
NOTE 12 - INCOME TAXES
For the three and nine months ended June 30, 2026 and 2025, the Company recorded income tax expense (benefit) of $, as they were insignificant.
The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which primarily consist of net operating loss carry forwards. The Company has considered its history of cumulative net losses, estimated future taxable income and prudent and feasible tax planning strategies and has concluded that it is more likely than not that the Company will not realize the benefits of its deferred tax assets. As a result, as of June 30, 2026 and September 30, 2025, the Company has maintained a full valuation allowance against its net deferred tax assets.
NOTE 13 — RISKS AND CONCENTRATIONS
The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below:
Credit risk
Credit risk is the risk of loss associated with a counterparty’s inability to fulfil its payment obligations. The Company’s credit risk is primarily attributable to cash. As of June 30, 2026, and September 30, 2025, substantially all of the Company’s cash was held in major financial institutions located in the U.S., which are FDIC-insured and management considers to be of high credit quality.
The
maximum exposure of such assets to credit risk is their carrying amounts at the balance sheet dates. The Company maintains its bank accounts
at financial institutions in the United States, where there is $
Liquidity risk
Liquidity risk arises through the excess of financial obligations over available financial assets due at any point in time. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when they come due. All of the Company’s financial liabilities are subject to normal trade terms. The Company has historically funded the working capital needs primarily from operations, as well as advances from related parties.
Going concern
The Company’s unaudited condensed consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
Since
inception, the Company has incurred recurring losses and negative cash flows from operations, resulting in an accumulated deficit of
$
Management intends to fund operating costs over the next twelve months primarily through the use of remaining IPO proceeds and, if necessary, through additional financing from public or private offerings of equity or debt securities. However, there can be no assurance that such financing will be available on acceptable terms, or at all. Accordingly, management has concluded that substantial doubt about the Company’s ability to continue as a going concern has not been alleviated. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
| F-24 |
Market risk
Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices. These market factors are not expected to pose significant risks to the Company.
Concentration risk
For
purposes of assessing the concentration of credit risk and significant customers, a group of customers under common control or customers
that are affiliates of each other are regarded as single customers. Additionally, there were no customers that represented
NOTE 14 — COMMITMENTS AND CONTINGENCIES
The Company may, from time to time, be party to legal proceedings arising in the ordinary course of its business operations. As of the date of this report, there is one pending lawsuit against the Company and its CEO. Management does not believe that the outcome of this matter will reasonably be expected to have a material adverse effect on the Company’s financial condition or results of operations. There are no other proceedings in which any current director, officer, affiliate, registered stockholder, or beneficial stockholder of the Company is an adverse party or holds a material interest adverse to the interests of the Company.
As of June 30, 2026, the Company did not have any lease agreements or material lease commitments. Accordingly, no right-of-use assets or lease liabilities have been recognized in the accompanying unaudited condensed consolidated financial statements.
As mentioned in Note 1 above, in March 2026, AetherHub entered into the IP Option Agreement, pursuant to which AetherHub was granted an exclusive option to acquire certain intellectual property rights underlying Oort’s DataHub platform. The option may be exercised at AetherHub’s discretion within twelve months following its formation, subject to a determination of commercial success by AetherHub’s board of managers. No option premium or other consideration is payable by AetherHub unless the option is exercised.
As of June 30, 2026, the option had not been exercised, no consideration had been paid, and no assets or liabilities related to the IP Option Agreement were recognized in the accompanying condensed consolidated financial statements.
NOTE 15 - SUBSEQUENT EVENTS
In accordance with ASC 855-10, “Subsequent Events,” the Company evaluated subsequent events after June 30, 2026, through the date the consolidated financial statements were issued. Except as disclosed below, the Company did not identify any other subsequent events requiring recognition or disclosure in the consolidated financial statements.
On July 2, 2026, the Company established AEM Consulting (Shenzhen) Co., Ltd., a limited liability company in Shenzhen, China, wholly owned by Alpha Edge Media (Hong Kong) Limited. As of the date of these financial statements, there have been no transactions or other activities involving AEM Shenzhen that have affected the Company’s condensed consolidated financial statements.
On July 10, 2026, the Board of Directors of the Company approved, by unanimous written consent, the grant of stock options to purchase an aggregate of shares of the Company’s common stock under the Aether Holdings, Inc. 2024 Equity Incentive Plan, at an exercise price of $ per share, to the Company’s executive officers, directors, employees and certain consultants, including incentive stock options and nonqualified stock options as applicable. The Board also ratified the filing and effectiveness of the Company’s Registration Statement on Form S-8 (File No. 333-296549), filed with the SEC on June 5, 2026, registering shares issuable under the Plan, including shares underlying the Option Grants. The Company is evaluating the resulting stock-based compensation expense and does not expect this event to require adjustment to the financial statements for the period covered by this Quarterly Report.
On
July 17, 2026, the Company and its subsidiary, Aether Compute LLC, entered into definitive agreements with Virtual Grid Inc. (“Virtual
Grid”), a related party establishing a strategic partnership and equity investment. Under an Exclusive White Label Supply and Distribution Agreement
and a related FOMA license agreement, Aether Compute became Virtual Grid’s exclusive reseller for the AetherPod™ VG100 across
ten Southeast Asian countries for an initial 10-year term (with a 10-year renewal option), with certain non-exclusive U.S. rights, subject
to royalties of
On
August 4, 2026, Aether Compute LLC, a wholly owned subsidiary of the Company, entered into a Stock Purchase Agreement with Noviant Inc.,
a New York corporation, and its four selling stockholders, pursuant to which Aether Compute LLC acquired
The initial accounting for the acquisition is incomplete as of the date these condensed consolidated financial statements were available to be issued because the Company has not yet completed the valuation of the assets acquired, the liabilities assumed, the non-controlling interest, and the resulting goodwill. Accordingly, the Company is unable to present the provisional amounts of consideration transferred and of the identifiable assets and liabilities recognized at the acquisition date. The amounts recognized are provisional and may be adjusted during the measurement period, which will not exceed one year from the acquisition date, as the Company obtains the information necessary to identify and measure the acquisition-date fair values of the assets acquired and liabilities assumed.
On
August 5, 2026, the Company entered into a Note Purchase Agreement with Streeterville Capital, LLC pursuant to which the Company
issued a Secured Promissory Note in the original principal amount of $
| F-25 |
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and the related notes appearing elsewhere in this Report. In addition to unaudited condensed consolidated 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 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 and optimize their trading strategies in the markets.
Our platform is powered by an advanced data collection system that operates utilizing application programming interface (known as API) calls and web scraping, and fetching raw data (i.e., unprocessed, and non-personalized 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.
Starting with this continuous collection of data, our algorithms categorize and refine information into proprietary indicators which our Users can choose to use to develop or enhance their trading strategies. Additionally, our analysts apply their expertise to this data across various financial instruments, generating detailed reports for our Users’ consumption.
The integration of our technology, especially in stock index analysis, leverages advanced machine learning to refine and enhance signal detection continually. This synergy culminates in delivering User-centric tools and solutions, providing our Users with access to analytics and insights, and a foundation for all our AI-driven tools and services. This approach not only offers timely and accurate data directly to our Users but also fosters trust and transparency, minimizing User reliance on third-party sources in their development of trading strategies.
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 analyze the market and facilitate our Users’ creation of trade ideas, strategies, and models. 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.
Beginning in April 2025, we began a new initiative to expand our newsletter business through the incorporation of our wholly-owned subsidiary, Alpha Edge Media, Inc. (“AEM”). The newsletters published by AEM 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 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 acquisition and 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. Furthermore, in 2025 and 2026, we made acquisitions of online financial newsletters and related intellectual property (including subscriber lists) to add to our portfolio of titles.
Dispute with Former Director
As previously reported in our Annual Report, since July 18, 2025, our management has been engaged in a dispute with Mr. David Mandel, a former member of our board of directors. On March 19, 2026, Mr. Mandel filed a lawsuit against the Company and Mr. Nicolas Lin, our Chief Executive Officer and Chairman. See “Part II – Other Information - Item 1 – Legal Proceedings” below for more information and the section entitled “Risk Factors - Our management is currently in a dispute with one of our former directors. If he were to bring legal action against us, and we were to receive an adverse ruling, it could materially and adversely affect our reputation, dilute our stockholders’ equity interests in the Company, and adversely affect our stock price” contained in our Annual Report for a discussion of the risks associated with the dispute.
| 1 |
Formation of AetherHub Joint Venture
On March 25, 2026, our subsidiary Aether Labs, Inc. (“Aether Labs”) and OorTech Inc. (“Oort”) formed Aether DataHub, LLC, a Delaware limited liability company (“AetherHub”), as a joint venture to develop and commercialize the “AetherHub Platform,” a white-labeled deployment of Oort’s proprietary DataHub technology, for use exclusively in the field of financial media and financial education data labeling and annotation services (the “Field”). AetherHub was established pursuant to three executed agreements: (i) a Limited Liability Company Operating Agreement, (ii) a Technology License and Services Agreement (the “Technology Agreement”), and (iii) an IP Option Agreement, each dated March 25, 2026 (or March 23, 2026 in the case of the Technology Agreement). AetherHub’s business model is based on third-party customers providing their own datasets for labeling and processing. Our company has no obligation to contribute any of our proprietary datasets to AetherHub.
Membership interests in AetherHub are held 70% by Aether and 30% by Oort. Aether’s contribution consists of commercialization leadership, go-to-market strategy, the “AetherHub” brand and related resources, and initial working capital as approved by the AetherHub’s board of managers. Oort’s contribution consists of the DataHub technology and related documentation, at least two dedicated software developers, and ongoing support and maintenance services. No cash license or development fees are payable to Oort; Oort’s equity interest constitutes its sole consideration. AetherHub is governed by a three-manager board, with Aether designating two managers (including the Chair) and Oort designating one, giving Aether effective operational and strategic control of AetherHub. Profits, losses, and distributions are allocated pro rata in accordance with each member’s percentage interest.
Pursuant to the Technology Agreement, Oort granted AetherHub a worldwide, royalty-free, exclusive license (within the Field) to use and operate the DataHub Platform. Oort is prohibited during the term from providing its DataHub platform or any substantially similar technology to third parties for use in the Field and must refer any Field-related commercial opportunities to AetherHub. Oort has committed to deliver an initial launch-ready version of the AetherHub Platform within 120 days of March 23, 2026. Intellectual property developed specifically for the AetherHub Platform is assigned to AetherHub; general-purpose platform enhancements remain owned by Oort subject to a perpetual royalty-free license to AetherHub within the Field. Each party’s aggregate liability under the Technology Agreement is capped at $5,000,000, subject to customary exceptions.
AetherHub had no transactions during the three months ended June 30, 2026, and AetherHub did not have a material impact on the Company’s consolidated financial position or results of operations for the period then ended. However, the related accounting implications were insignificant to the Company’s condensed unaudited consolidated financial statements for the period ended June 30, 2026.
SentimenTracker
The Company has developed an internally generated software platform, SentimenTracker, an analytics tool designed to process and analyze financial and market data to generate actionable insights. In February 2026, SentimenTracker completed the application development stage and was placed into service for its intended use. The platform was commercially launched and deployed within the Company’s production environment.
The software’s core functionality, system architecture, data ingestion pipelines, sentiment analysis models, integrations, and infrastructure were fully developed and tested. Accordingly, capitalization of development costs ceased upon completion of the application development stage, and subsequent costs are expensed as incurred.
Acquisition of PublicView.ai
On January 15, 2026, we closed the acquisition of PublicView.ai (“Public View”), an AI-driven market intelligence platform designed to simplify and accelerate equity research. Public View serves a diverse user base of retail and professional investors, financial analysts and researchers, fintech platforms, and data-driven investment teams. Its core capabilities include AI-powered parsing and summarization of SEC filings, insight extraction from earnings releases, natural-language research workflows that reduce manual document review, and tools to ease access to public market data. While relatively small, by integrating Public View into the toolset of Aether Grid, we intend to deliver a more complete research experience that connects technical signals and sentiment indicators with fundamental equity research. Aether Grid acquired the source code, repositories, databases, intellectual property, and other assets for a cash purchase price of $9,000.
| 2 |
Board of Directors
On June 1, 2026, the Board of Directors increased the size of the Board from four to five directors and appointed Hon Nam Lee (Alvars) as an independent director to fill the newly created directorship. Mr. Lee was also appointed Chair of the Nominating and Corporate Governance Committee. On the same date, the Board approved the transition of Timothy William Murphy from an independent director to a director who also serves as the Company’s General Counsel. Mr. Murphy will continue to serve on the Board but will no longer be considered an independent director under the applicable Nasdaq listing standards, SEC rules, the Company’s committee charters, and corporate governance guidelines.
Formation of Subsidiaries
On May 29, 2026, the Company incorporated Alpha Edge Media (Hong Kong) Limited, a wholly owned subsidiary of Alpha Edge Media, Inc., under the laws of Hong Kong to support the Company’s expanding newsletter business. As of the reporting date, the subsidiary had not commenced material operations and its incorporation did not have a material impact on the Company’s condensed consolidated financial statements.
On June 15, 2026, the Company incorporated Aether Compute LLC, a wholly owned subsidiary organized under the laws of the State of Delaware. As of the reporting date, Aether Compute LLC had not commenced material operations and its incorporation did not have a material impact on the Company’s condensed consolidated financial statements.
At-the-Market Offering Program
On June 25, 2026, the Company entered into an At-The-Market Issuance Sales Agreement with Rodman & Renshaw LLC (“Rodman” or the “Sales Agent”) pursuant to which, the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, $0.001 par value per share, up to $10,998,532 through the Sales Agent. The offer and sale of the shares will be made pursuant to a previously filed shelf registration statement on Form S-3 (File No. 333-296182), originally filed with the SEC on May 22, 2026 and declared effective by the SEC on June 2, 2026, and the related prospectus supplement dated June 2, 2026 and filed with the SEC on such date pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”).
Under the Sales Agreement, Rodman may sell shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act. Rodman will use commercially reasonable efforts to sell the shares from time to time, based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company agreed to pay Rodman a commission of upto 3.0% of the gross proceeds from the sales of shares sold under the Sales Agreement and has provided the Sales Agent with customary indemnification and contribution rights. The Company also agreed to reimburse Rodman for certain expenses incurred in connection with the Sales Agreement. The Company and Rodman may each terminate the Sales Agreement at any time upon specified prior written notice.
For the three and nine months ended June 30, 2026, the amount of proceeds generated from the sale of common stock under the Sales Agreement was $10,674 from the sale of 2,500 shares.
Recent Developments
Grant of Stock Options
On July 10, 2026, the Board of Directors of the Company approved, by unanimous written consent, the grant of stock options to purchase an aggregate of 920,000 shares of the Company’s common stock under the Aether Holdings, Inc. 2024 Equity Incentive Plan, at an exercise price of $4.24 per share, to the Company’s executive officers, directors, employees and certain consultants, including incentive stock options and nonqualified stock options as applicable. The Board also ratified the filing and effectiveness of the Company’s Registration Statement on Form S-8 (File No. 333-296549), filed with the SEC on June 5, 2026, registering shares issuable under the Plan, including shares underlying the Option Grants. The Company is evaluating the resulting stock-based compensation expense and does not expect this event to require adjustment to the financial statements for the period covered by this Quarterly Report.
| 3 |
Definitive Agreement (Virtual Grid)
On July 17, 2026, the Company and its subsidiary, Aether Compute LLC, entered into definitive agreements with Virtual Grid Inc. (“Virtual Grid”), a related party establishing a strategic partnership and equity investment. Under an Exclusive White Label Supply and Distribution Agreement and a related FOMA license agreement, Aether Compute became Virtual Grid’s exclusive reseller for the AetherPod™ VG100 across ten Southeast Asian countries for an initial 10-year term (with a 10-year renewal option), with certain non-exclusive U.S. rights, subject to royalties of 6% (direct deployments) or an effective 3% (operator deployments) of gross compute revenue. Separately, the Company invested $360,000 in Virtual Grid via issuance of 82,606 shares of Company common stock, in exchange for 176,412 Virtual Grid Class A shares and a warrant for 176,412 additional shares (exercise price C$2.864692, expiring July 17, 2031), subject to a 12-month lock-up and down-round protection. The Company is evaluating the accounting treatment of this transaction and does not expect it to require adjustment to the financial statements for the period covered by this Quarterly Report.
Acquisition of Noviant Inc.
On August 4, 2026, Aether Compute LLC, a wholly owned subsidiary of the Company, entered into a Stock Purchase Agreement with Noviant Inc., a New York corporation, and its four selling stockholders, pursuant to which Aether Compute LLC acquired 60% of the fully diluted equity interests of Noviant for an aggregate purchase price of $3,600,000, consisting of $900,000 in cash and $2,700,000 in restricted shares of the Company’s common stock (based on the 20-day VWAP preceding closing). Of the cash consideration, $50,000 was placed into a working capital support account and $540,000 of the stock consideration was placed into an 18-month indemnity holdback, in each case pursuant to related escrow arrangements. Following the closing, the Company has the right to designate a majority of Noviant’s board of directors and retains various governance and transfer-restriction rights over the Sellers’ retained 40% interest.
The initial accounting for the business combination is incomplete as of the date these condensed consolidated financial statements were available to be issued because the Company has not yet completed the valuation of the assets acquired, the liabilities assumed, the non-controlling interest, and the resulting goodwill. Accordingly, the Company is unable to present the provisional amounts of consideration transferred and of the identifiable assets and liabilities recognized at the acquisition date. The amounts recognized are provisional and may be adjusted during the measurement period, which will not exceed one year from the acquisition date, as the Company obtains the information necessary to identify and measure the acquisition-date fair values of the assets acquired and liabilities assumed.
Note Purchase Agreement with Streeterville Capital, LLC
On August 5, 2026, the Company entered into a Note Purchase Agreement with Streeterville Capital, LLC pursuant to which the Company issued a Secured Promissory Note in the original principal amount of $1,620,000, reflecting a purchase price of $1,500,000 after a $120,000 original issue discount. The note bears interest at 8% per annum, matures 18 months from the purchase price date, and is secured by substantially all of the Company’s assets, its intellectual property, and guaranties from the Company’s subsidiaries. This note is in addition to a prior secured note issued to the same investor on May 13, 2026 in the original principal amount of $3,240,000, and contains customary redemption rights, trigger/default provisions, and restrictive covenants (including limitations on additional liens and variable-rate financings) in favor of the investor. Accounting treatment for same is under evaluation and will be finalized and reflected in our Annual Report on Form 10-K for the fiscal year ending September 30, 2026.
| 4 |
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 nine months ended June 30, 2026 and 2025.
| Nine months ended June 30, | ||||||||||||
| 2026 | 2025 | % Change | ||||||||||
| Revenue | $ | 1,003,550 | $ | 1,038,960 | (3.41 | )% | ||||||
| Cost of sales | $ | 195,672 | $ | 320,360 | (38.92 | )% | ||||||
| Gross profit margin | 80.50 | % | 69.17 | % | 16.39 | % | ||||||
| Net cash used in operating activities | $ | (3,115,850 | ) | $ | (1,998,095 | ) | 55.94 | % | ||||
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. This 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 on our sales and support teams to prevent user churn by ensuring that our products and services can 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 customer 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 Userbase 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 optimize our self-service revenue funnel and help users expand their usage. We are also acquiring online newsletters (including, since our IPO, Whale Tales, Altcoin Investing, 21Bitcoin.xyz, Coinstack and Publicview.ai) as a means of growing our subscriber base.
Investing in Our Platform and Product Offerings
We have a history of and will continue to invest significantly in delivering innovative products, features and functionality targeted at our core Userbase. 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 are making targeted investments to expand this revenue. Beyond the SentimenTrader and SentimenTracker platforms, 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, including through acquisitions in 2025 and 2026. In addition, we may pursue both strategic collaborations such as AetherHub and additional 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 market opportunity.
| 5 |
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 we believe can drive the adoption of our equity research platform. We believe our market opportunity is large and that these factors will continue to drive our growth.
Research and Development
During the quarter, the Company’s research and development activities were primarily focused on building and testing the core components of the XYZ Terminal platform. Key efforts included:
| ● | Platform Architecture and Data Integration: Development of the system framework and integration of real-time market data feeds, automated aggregation of regulatory and corporate disclosures, and the implementation of third-party financial data services. |
| ● | AI and Quantitative Modeling: Design and prototyping of large language model (LLM)–based tools for conversational financial queries, as well as predictive analytics modules to assist users in identifying market opportunities. |
| ● | User Interface Development: Enhancement of the web-based dashboard for speed, navigation, and customization, with parallel design work for mobile platforms. |
| ● | Administrative and Monetization Systems: Integration of subscription billing capabilities, role-based access controls, and administrative analytics dashboards. |
Research and development expenditures for the period primarily consisted of fees charged by third-party service providers. Management expects research and development work on XYZ Terminal and SentimenTracker to continue in subsequent periods, with commercialization targeted following the completion of the initial feature set.
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.
SentimenTrader
| Three months ended June 30, | Nine months ended June 30, | |||||||||||||||||||||||
| 2026 | 2025 | % change | 2026 | 2025 | % change | |||||||||||||||||||
| Gross New Free Subscribers | 244 | 695 | (64.89 | ) | 896 | 1,288 | (30.43 | ) | ||||||||||||||||
| Average conversion rate from free to Paid Subscribers | 32.32 | % | 11.68 | % | 176.73 | 34.27 | % | 19.26 | % | 77.95 | ||||||||||||||
| Paid Subscribers | 2,076 | 2,352 | (11.73 | ) | 2,142 | 2,356 | (9.08 | ) | ||||||||||||||||
| Average Revenue Per User (“ARPU”) | $ | 157 | $ | 146 | 7.53 | $ | 464 | $ | 441 | 5.22 | ||||||||||||||
| Revenue Sundial | $ | 325,529 | $ | 342,411 | (4.93 | ) | $ | 994,427 | $ | 1,038,960 | (4.29 | ) | ||||||||||||
| 6 |
Alpha Edge Media (AEM)
| Publication | Free Subscribers as of June 30, 2026 | |||
| Coinstack | 329,298 | |||
| WhaleTales | 42,575 | |||
| Altcoin Investing | 8,041 | |||
| Alpha Edge Digest | 11,402 | |||
| StockCastr | 5,210 | |||
| IPO Stream | 2,625 | |||
| AlphaBean | 28 | |||
| Sentiment Tracker | 2,805 | |||
| Alphid AI | 102 | |||
| Total | 402,086 | |||
As of June 30, 2026, Alpha Edge Media had a negligible number of paid subscribers. Subscriber activity commenced on August 14, 2025. Accordingly, there were no subscribers for the nine months ended June 30, 2025.
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 (as defined below) 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 new Free Subscribers for SentimenTrader decreased by 392, or 30.43%, from 1,288 for the nine months ended June 30, 2025 to 896 for the nine months ended June 30, 2026. The number of new Free Subscribers decreased by 451, or 64.89 %, from 695 for the three months ended June 30, 2025, to 244 for the three months ended June 30, 2026. The decrease in Free Subscribers reflects reduced customer acquisition and increased attrition.
The number of free subscribers for Alpha Edge Media as of June 30, 2026, was 402,086. Alpha Edge Media did not have operations as of June 30, 2025.
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.
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 intend to 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.
| 7 |
Paid Subscribers for SentimenTrader decreased by 214, or 9.08%, from 2,356 for the nine months ended June 30, 2025 to 2,142 for the nine months ended June 30, 2026. The number of Paid Subscribers decreased by 276, or 11.73 %, from 2,352 for the three months ended June 30, 2025, to 2,076 for the three months ended June 30, 2026.
Paid Subscribers for AEM were negligible as of June 30, 2026. AEM did not have operations as of June 30, 2025.
The average conversion rate from Free Subscribers to Paid Subscribers on our SentimenTrader platform was approximately 34.27% and 19.26% for the nine months ended June 30, 2026 and 2025, respectively. The average conversion rate from Free Subscribers to Paid Subscribers on our SentimenTrader platform was approximately 32.32% and 11.68% for the three months ended June 30, 2026 and 2025, respectively. The higher conversion rates for the nine months ended June 30, 2026, was attributable to a promotional campaign.
The average conversion rate from Free Subscribers to Paid Subscribers of AEM was negligible for the nine months ended June 30, 2026. AEM did not have operations as of June 30, 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. We intend to focus on growing our Free Subscriber count with AEM to drive traffic to our subscription-based platforms. 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 for SentimenTrader increased by $23, or 5.22%, to $464 for the nine months ended June 30, 2026, as compared to $441 for the nine months ended June 30, 2025.
ARPU for SentimenTrader increased by $11, or 7.53%, to $157 for the three months ended June 30, 2026, as compared to $146 for the three months ended June 30, 2025.
ARPU for SentimenTracker was not significant for the three and nine months ended June 30, 2026. No comparable ARPU existed for the three and nine months ended June 30, 2025, as the platform was not yet operational during that period.
Revenue
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.
Total revenue decreased marginally by $35,410, or 3.41%, from $1,038,960 for the nine months ended June 30, 2025, to $1,003,550 for the nine months ended June 30, 2026.
Total revenue decreased by $13,706, or 4%, from $342,411 for the three months ended June 30, 2025 to $328,705 for the three months ended June 30, 2026.
| 8 |
Results of Operations
For Nine Months Ended June 30, 2026 and 2025
The following table summarizes the results of unaudited condensed consolidated statements of operations and comprehensive loss for the nine months ended June 30, 2026 and 2025 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.
| Nine months ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||
| Amount | Percentage | |||||||||||||||||||||||
| As % of | As % of | Increase | Increase | |||||||||||||||||||||
| Amount | Sales | Amount | Sales | (Decrease) | (Decrease) | |||||||||||||||||||
| Sales | $ | 1,003,550 | 100.00 | % | $ | 1,038,960 | 100.00 | % | $ | (35,410 | ) | (3.41 | )% | |||||||||||
| Cost of sales | 195,672 | 19.50 | % | 320,360 | 30.83 | % | (124,688 | ) | (38.92 | )% | ||||||||||||||
| Gross profit | 807,878 | 80.50 | % | 718,600 | 69.17 | % | 89,278 | 12.42 | % | |||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
| Sales and marketing expenses | 535,955 | 53.41 | % | 221,848 | 21.35 | % | 314,107 | 141.59 | % | |||||||||||||||
| General and administrative expenses | 3,710,795 | 369.77 | % | 2,262,801 | 217.79 | % | 1,447,994 | 63.99 | % | |||||||||||||||
| Research and development expenses | 231,773 | 23.10 | % | - | - | % | 231,773 | - | ||||||||||||||||
| Total operating expenses | 4,478,523 | 446.27 | % | 2,484,649 | 239.15 | % | 1,993,874 | 80.25 | % | |||||||||||||||
| Other income (expense), net | ||||||||||||||||||||||||
| Interest income (expense), net | (29,100 | ) | (2.90 | )% | 47,845 | 4.61 | % | (76,945 | ) | (160.82 | )% | |||||||||||||
| Other Income, net | 30,804 | 3.07 | % | - | - | % | 30,804 | - | ||||||||||||||||
| Total Other Income | 1,704 | 0.17 | % | 47,845 | 4.61 | % | (46,141 | ) | (96.44 | )% | ||||||||||||||
| Loss before income taxes | (3,668,941 | ) | (365.60 | )% | (1,718,204 | ) | (165.38 | )% | (1,950,737 | ) | 113.53 | % | ||||||||||||
| Net loss and comprehensive loss | $ | (3,668,941 | ) | (365.60 | )% | (1,718,204 | ) | (165.38 | )% | (1,950,737 | ) | 113.53 | % | |||||||||||
Revenue
Our revenue decreased by $35,410, or 3.41%, from $1,038,960 for the nine months ended June 30, 2025, to $1,003,550 for the nine months ended June 30, 2026 due to a decrease in the number of Paid Subscribers.
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.
| 9 |
Gross profit and Costs of Sales
Cost of sales mainly include the hosting costs for the Sentiment Trader platform, Bloomberg access for the analysts’ use in research, and the analyst salaries. Cost of sales decreased by $124,688, or 38.92%, from $320,360 for the nine months ended June 30, 2025, to $195,672 for the nine months ended June 30, 2026 due to decrease in analyst salaries.
Gross profit increased by $89,278, or 12.42%, from $718,600 for the nine months ended June 30, 2025 to $807,878 for the nine months ended June 30, 2026. The increase in gross profit was mainly due to the decrease in cost of sales, as discussed above.
Gross profit margin increased from 69.17% for the nine months ended June 30, 2025, to 80.50% for the nine months ended June 30, 2026. The increase 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:
| Nine months ended June 30, | ||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||
Gross | Gross | Variance | Variance | Variance | ||||||||||||||||||||||||||||||||
| Category | Cost of sales | Gross profit | profit % | Cost of sales | Gross profit | profit % | in Cost of sales | in gross profit | in gross profit % | |||||||||||||||||||||||||||
| Subscription service | $ | 195,672 | $ | 807,878 | 80.50 | $ | 320,360 | $ | 718,600 | 69.17 | $ | (124,688 | ) | $ | 89,278 | 12.42 | % | |||||||||||||||||||
| Total | $ | 195,672 | $ | 807,878 | 80.50 | $ | 320,360 | $ | 718,600 | 69.17 | $ | (124,688 | ) | $ | 89,278 | 12.42 | % | |||||||||||||||||||
Selling and marketing expenses
Our selling and marketing costs primarily consist of expenses related to advertising and marketing consultants. These costs increased by $314,107 or 141.59%, from $221,848 for the nine months ended June 30, 2025, to $535,955 for the nine months ended June 30, 2026, representing 53.41% and 21.35% of our total revenue for the nine months ended June 30, 2026 and 2025, respectively. The increase was mainly driven by higher advertising and marketing expenses incurred in the current period compared to the nine months ended June 30, 2025.
General and administrative expenses
Our general and administrative expenses primarily include salaries and benefits, legal and professional fees, insurance expenses, office expenses, travel and entertainment expenses, utility expenses, depreciation expenses and amortization expenses. Our general and administrative expenses represented 369.77% and 217.79% of our revenue for the nine months ended June 30, 2026 and 2025, respectively. General and administrative expenses increased by $1,447,994, or 63.99%, from $2,262,801 for the nine months ended June 30, 2025, to $3,710,795 for the nine months ended June 30, 2026. The increase was mainly due to the increase in legal fees, consulting fees, insurance expense, amortization expense, depreciation expense and membership and subscription charges.
| 10 |
Research and development expenses
Our research and development expenses primarily consist of costs incurred in the development of artificial intelligence and machine learning tools for our platform. The expenses incurred amounted to $231,773 for the nine months ended June 30, 2026, and there were no expenses for the nine months ended June 30, 2025. Research and development expenses represented approximately 23.10% and 0% of our revenue for the respective periods.
The increase in research and development expenses was driven by continued investment in enhancing our AI-driven capabilities and platform functionality. We expect research and development expenses to increase in future periods as we remain committed to expanding our AI-related features to deliver enhanced functionality and value to our users.
Interest income (expense), net
Interest expense was $69,968 for the nine months ended June 30, 2026, compared to $0 for the same period in 2025, while interest income was $40,868 and $47,845, respectively. The increase in interest expense was primarily due to the issuance of the Company’s secured note payable in May 2026. Interest expense for the nine months ended June 30, 2026 included contractual interest at the stated rate and non-cash amortization of the original issue discount, debt issuance costs and brokerage costs.
Loss before income tax
We had a loss before income taxes of $3,668,941 and $1,718,204 for the nine months ended June 30, 2026 and 2025, respectively. The loss was primarily attributable to the increase in selling expenses, research and development expenses and general and administrative expenses.
Provision for income taxes
We had no provision for income taxes for the nine months ended June 30, 2026, as we had no assessable profits for the period.
Net loss and comprehensive loss
We had a net comprehensive loss of $3,668,941 and $1,718,204 for the nine months ended June 30, 2026 and 2025, respectively. The loss was primarily attributable to the increase in selling expenses, research and development expenses and general and administrative expenses. The discussion regarding the increase in selling expenses, research and development expenses and general and administrative expenses are discussed in the sections above.
For The Three Months ended June 30, 2026 and 2025
The following table summarizes the results of unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended June 30, 2026 and 2025 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 June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||
| Amount | Percentage | |||||||||||||||||||||||
| As % of | As % of | Increase | Increase | |||||||||||||||||||||
| Amount | Sales | Amount | Sales | (Decrease) | (Decrease) | |||||||||||||||||||
| Sales | $ | 328,705 | 100.00 | % | $ | 342,411 | 100.00 | % | $ | (13,706 | ) | (4.00 | )% | |||||||||||
| Cost of sales | 64,468 | 19.61 | % | 103,186 | 30.14 | % | (38,718 | ) | (37.52 | )% | ||||||||||||||
| Gross profit | 264,237 | 80.39 | % | 239,225 | 69.86 | % | 25,012 | 10.46 | % | |||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
| Sales and marketing expenses | 150,397 | 45.75 | % | 143,181 | 41.82 | % | 7,216 | 5.04 | % | |||||||||||||||
| General and administrative expenses | 1,306,839 | 397.57 | % | 1,149,713 | 335.77 | % | 157,126 | 13.67 | % | |||||||||||||||
| Research and development expenses | 100,654 | 30.62 | % | - | - | % | 100,654 | - | ||||||||||||||||
| Total operating expenses | 1,557,890 | 473.95 | % | 1,292,894 | 377.59 | % | 264,996 | 20.50 | % | |||||||||||||||
| Other income (expense), net | ||||||||||||||||||||||||
| Interest income (expense), net | (60,854 | ) | (18.51 | )% | 47,845 | 13.97 | % | (108,699 | ) | (227.19 | )% | |||||||||||||
| Other Income, net | 11,767 | 3.58 | % | - | - | % | 11,767 | - | ||||||||||||||||
| Total Other Income | (49,087 | ) | (14.93 | )% | 47,845 | 13.97 | % | (96,932 | ) | (202.60 | )% | |||||||||||||
| Loss before income taxes | (1,342,740 | ) | (408.49 | )% | (1,005,824 | ) | (293.75 | )% | (336,916 | ) | 33.50 | % | ||||||||||||
| Net loss and comprehensive loss | $ | (1,342,740 | ) | (408.49 | )% | (1,005,824 | ) | (293.75 | )% | (336,916 | ) | 33.50 | % | |||||||||||
| 11 |
Revenue
Our revenue decreased by $13,706, or 4%, from $342,411 for the three months ended June 30, 2025, to $328,705 for the three months ended June 30, 2026 due to a decrease in the number of Paid Subscribers.
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 decreased by $38,718, or 37.52%, from $103,186 for the three months ended June 30, 2025, to $64,468 for the three months ended June 30, 2026, attributable to the decrease in analyst salaries.
Gross profit increased by $25,012, or 10.46%, from $239,225 for the three months ended June 30, 2025, to $264,237 for the three months ended June 30, 2026. The increase in gross profit was mainly due to the decrease in cost of sales, as discussed above.
Gross profit margin increased from 69.86% for the three months ended June 30, 2025, to 80.39% for the three months ended June 30, 2026. The increase in gross profit margin was primarily due to decrease in cost of sales.
Our cost and gross profit are as follows:
| Three months ended June 30, | ||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||
| Cost of | Gross | Gross | Cost of | Gross | Gross | Variance in Cost | Variance in gross | Variance in gross | ||||||||||||||||||||||||||||
| Category | sales | profit | profit % | sales | profit | profit % | of sales | profit | profit % | |||||||||||||||||||||||||||
| Subscription service | $ | 64,468 | $ | 264,237 | 80.39 | $ | 103,186 | $ | 239,225 | 69.86 | $ | (38,718 | ) | $ | 25,012 | 10.46 | % | |||||||||||||||||||
| Total | $ | 64,468 | $ | 264,237 | 80.39 | $ | 103,186 | $ | 239,225 | 69.86 | $ | (38,718 | ) | $ | 25,012 | 10.46 | % | |||||||||||||||||||
Selling and marketing expenses
Our selling and marketing costs primarily consist of expenses related to advertising and marketing consultants. These costs increased by $7,216 or 5.04%, from $143,181 for the three months ended June 30, 2025, to $150,397 for the three months ended June 30, 2026, representing 45.75% and 41.82% of our revenue for the three months ended June 30, 2026 and 2025, respectively. The increase was mainly driven by higher advertising and marketing expenses incurred in the current period compared to three months ended June 30, 2025.
General and administrative expenses
Our general and administrative expenses primarily include salaries and benefits, legal and professional fees, insurance expenses, office expenses, travel and entertainment expenses, utility expenses, depreciation expenses and amortization expenses. Our general and administrative expenses represented 397.57% and 335.77% of our revenue for the three months ended June 30, 2026 and 2025, respectively. General and administrative expenses increased by $157,126, or 13.67%, from $1,149,713 for the three months ended June 30, 2025, to $1,306,839 for the three months ended June 30, 2026. The increase was mainly due to the increase in legal fees, consulting fees, insurance expense, amortization expense, depreciation expense and membership and subscription charges.
Research and development expenses
Our research and development expenses primarily consist of costs incurred in the development of artificial intelligence and machine learning tools for our platform. These expenses incurred amounted to $100,654 for the three months ended June 30, 2026 and there were no expenses for the three months ended June 30, 2025. Research and development expenses represented approximately 30.62% and 0% of our revenue for the respective periods.
The increase in research and development expenses was driven by continued investment in enhancing our AI-driven capabilities and platform functionality. We expect research and development expenses to increase in future periods as we remain committed to expanding our AI-related features to deliver enhanced functionality and value to our users.
Interest income (expense), net
Interest expense was $69,968 for the three months ended June 30, 2026, compared to $0 for the same period in 2025, while interest income was $9,114 and $47,845, respectively. The increase in interest expense was primarily due to the issuance of the Company’s secured note payable in May 2026. Interest expense for the three months ended June 30, 2026 included contractual interest at the stated rate and non-cash amortization of the original issue discount, debt issuance costs and brokerage costs.
| 12 |
Loss before income tax
We had a loss before income taxes of $1,342,740 and $1,005,824 for the three months ended June 30, 2026 and 2025, respectively. The loss was primarily attributable to the increase in selling expenses, research and development expenses and general and administrative expenses.
Provision for income taxes
We had no provision for income taxes for the three months ended June 30, 2026 as we had no assessable profits for the period.
Net loss or comprehensive loss
We had a net comprehensive loss of $1,342,740 and $1,005,824 for the three months ended June 30, 2026 and 2025, respectively. The loss was primarily attributable to the increase in selling expenses, research and development expenses and general and administrative expenses. The discussion regarding the increase in selling expenses, research and development expenses and general and administrative expenses are discussed in the sections above.
Cash Flows
For the Nine months ended June 30, 2026 and 2025
The following table sets forth summary of our cash flows for the periods indicated:
| Nine months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | (3,115,850 | ) | $ | (1,998,095 | ) | ||
| Net cash used in investing activities | (1,670,412 | ) | (9,575 | ) | ||||
| Net cash provided by financing activities | 2,778,174 | 7,681,331 | ||||||
| Net decrease in cash | (2,008,088 | ) | 5,673,661 | |||||
| Cash, beginning of the year | 4,418,169 | 557,823 | ||||||
| Cash, end of the year | $ | 2,410,081 | $ | 6,231,484 | ||||
Operating Activities
Net cash used in operating activities was $3,115,850 for the nine months ended June 30, 2026, as compared to net cash used in operating activities of $1,998,095 for the nine months ended June 30, 2025. The increase in net cash used in operating activities was mainly attributable to the following factors:
| ● | Net loss of $3,668,941 for the nine months ended June 30, 2026, compared to a net loss of $1,718,204 for the nine months ended June 30, 2025; |
| ● | Non-cash service expense for stock issuances incurred $103,297 for the nine months ended June 30, 2026, compared to $0 for the nine months ended June 30, 2025; |
| ● | Amortization of debt discount and issuance costs for note payable incurred $69,968 for the nine months ended June 30, 2026, compared to $0, for the nine months ended June 30, 2025; |
| 13 |
| ● | Prepaid expenses decreased by $153,560 for the nine months ended June 30, 2026, compared to an increase of $260,880 for the nine months ended June 30, 2025; |
| ● | Payables and accrued liabilities increased by $161,697 for the nine months ended June 30, 2026, compared to an increase of $150,332 for the nine months ended June 30, 2025; |
| ● | The amounts due to related party decreased by $32,019 for the nine months ended June 30, 2026, compared to a decrease of $186,786 for the nine months ended June 30, 2025; |
| ● | Contract liabilities increased by $22,541 for the nine months ended June 30, 2026, compared to the increase of $15,786 for the nine months ended June 30, 2025. |
Investing Activities
Net cash used in investing activities was $1,670,412 for the nine months ended June 30, 2026 and $9,575 for June 30, 2025.
The increase in net cash used in investing activities for the nine months ended June 30, 2026 was primarily due to purchase of property and equipment of $1,175,098, payment for intangible assets for $417,166, and advances for development XYZ Terminal and Tradrithm of 78,148 which are capitalized as Internally developed software WIP for the nine months ended June 30, 2026, compared to no such amount for the nine months ended June 30, 2025.
Financing Activities
Net cash provided by financing activities was $2,778,174 for the nine months ended June 30, 2026 as compared to $7,681,331 for the nine months ended June 30, 2025.
The increase in net cash provided by financing activities for the nine months ended June 30, 2026 was primarily due to the issuance of note payable of $2,790,000 and proceeds from issuance of shares (under ATM offering) of $ 10,674 which is offset by offering cost paid of $22,500 compared to no such amount for the nine months ended June 30, 2025.
Liquidity, Capital Resources and Going Concern
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 June 30, 2026, our current assets were $2,668,297 which includes cash of $2,410,081 and prepaid expenses of $258,216. Our current liabilities were $791,606 which includes accounts payables and accrued liabilities of $405,263, amounts due to related parties of $5,174, and contract liabilities of $381,169. The resulting positive working capital was $1,876,691. No dividends were declared and paid to the shareholders for the nine months period ended June 30, 2026.
As of September 30, 2025, our current assets totaled $4,783,242, which included cash of 4,418,169 and prepaid expenses of $365,073. Our current liabilities amounted to $519,078, which consisted of accounts payables and accrued liabilities of 123,257, amounts due to related parties of $37,193, and contract liabilities of $358,628. This resulted in positive working capital of $4,264,164. No dividends were declared or paid to shareholders for the nine months ended June 30, 2025.
| 14 |
Our available cash resources currently consist of the net proceeds from our April 2025 IPO, Note Payable in May 2026, ATM offering in June 2026 and cash generated from our business. We completed our IPO on April 11, 2025 and the closing of the underwriters’ over-allotment option on April 16, 2025, which collectively generated aggregate gross proceeds of approximately $8,901,000 (before underwriting discounts and offering expenses). We continue to incur operating losses and expect to require additional capital in the near term to fund operations and execute our business plan. These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date these condensed consolidated financial statements are issued.
Management intends to fund operating costs over the next twelve months primarily through the use of remaining IPO proceeds and, most likely, through additional financing from public or private offerings of equity or debt securities. However, there can be no assurance that such financing will be available on acceptable terms, or at all. Accordingly, management has concluded that substantial doubt about our ability to continue as a going concern has not been alleviated. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Capital Expenditures
During the nine months ended June 30, 2026 we paid $1,175,098 towards purchase of property and $417,166 towards acquisition of intangible assets.
SentimenTracker
In February 2026, the Company launched its internally developed software platform, SentimenTracker, upon completion of the application development stage and readiness for intended use. As of that date, the Company had capitalized $118,016 of development costs related to the platform.
Note Purchase Agreement with Streeterville Capital, LLC
On May 13, 2026, the Company entered into a Note Purchase Agreement with Streeterville Capital, LLC (the “Investor”), pursuant to which the Company issued a Secured Promissory Note in the original principal amount of $3,240,000, including an original issue discount of $240,000. The purchase price for the Note was $3,000,000 and, after deducting a $30,000 transaction expense amount payable to the Investor and other debt issuance costs of $204,070, net proceeds to the Company were $2,765,930., which the Company intends to use for working capital and general corporate purposes. The Note bears interest at 8% per annum, compounding daily based on a 360-day year of twelve 30-day months and matures 18 months from issuance (November 13, 2027). The Note is secured by a first-position lien on substantially all of the Company’s assets and intellectual property, subject to permitted liens, and is guaranteed by the Company’s subsidiaries that are party to the related guaranty. No warrants were issued in connection with this transaction.
Beginning on the six-month anniversary of the Purchase Price Date, the Investor has the right, exercisable in its sole discretion, to redeem up to $250,000 per calendar month in cash, and may redeem additional amounts based on the trading price and volume of the Company’s common stock upon the occurrence of a Limited Redemption Event, each payable within three (3) business days of notice. These redemption rights may result in recurring cash payment obligations if and to the extent the Investor delivers redemption notices beginning on the six-month anniversary of the Purchase Price Date, which would be November 13, 2026 if the Purchase Price Date is May 13, 2026, and the Company must maintain sufficient liquidity to satisfy such notices as they arise. If the Note remains outstanding on the six-month anniversary of the Purchase Price Date, a one-time monitoring fee will be automatically added to the outstanding balance, calculated as the outstanding balance on that date divided by 0.85 less such outstanding balance. If calculated based solely on the initial principal amount of $3,240,000 and assuming no payments, accrued unpaid interest or other adjustments to the outstanding balance, the fee would be approximately $571,765. The Company may prepay the Note in full at any time at 110% of the then-outstanding balance.
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The Note and Note Purchase Agreement impose material restrictions on the Company’s financing flexibility, including, subject to specified exceptions, restrictions on additional indebtedness, liens, and subsidiary equity transfers and issuances, subsidiary indebtedness, and variable-price or resettable securities issuances without the Investor’s prior written consent. The Note also contains trigger event provisions pursuant to which the Investor may increase the outstanding balance by up to 15% per major trigger event or 5% per minor trigger event (capped at three occurrences each), with most uncured trigger events becoming events of default after a five-trading-day cure period, and certain insolvency, bankruptcy, receivership and similar trigger events becoming automatic events of default, in each case subject to acceleration of the outstanding balance and default interest of 15% per annum. The occurrence of any such event could have a material adverse effect on the Company’s liquidity and financial condition.
Contractual Obligations
As of June 30, 2026, other than obligations under the Secured Promissory Note described above and ordinary-course operating obligations, we did not have any material contractual obligations. As of September 30, 2025, we did not 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 nine months ended June 30, 2026 and 2025.
Critical Accounting Policies and Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“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.
Our significant accounting policies are discussed in Note 2 of the consolidated financial statements that are included elsewhere in this filing. We believe that the following accounting estimates are the most critical to aid in fully understanding and evaluating our reported financial results, and they require our most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. There have been no changes to estimates during the periods presented in the filing. Historically changes in management estimates have not been material.
Item 3: Quantitative and Qualitative Disclosure About Market Risk.
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.
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Item 4: Controls and Procedures.
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.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may be subject to legal proceedings, investigations and claims incidental to the conduct of our business. Other than the below, we are currently not involved in any legal proceedings which, in the opinion of our management, are likely to have a material adverse effect on our business, financial condition or results of operations.
Mandel v. Aether Holdings, Inc., et. al.
On March 19, 2026, Mr. David Mandel, a former member of the Company’s board of directors, filed a complaint against the Company, Nicolas Lin, the Company’s Chief Executive Officer and Chairman, and certain Doe defendants in the Superior Court of the State of California, County of Los Angeles, Case No. 26STCV08877. On April 24, 2026, the Company removed the action to the United States District Court for the Central District of California, Case No. 2:26-cv-04423. On June 3, 2026, the District Court remanded the action back to the Superior Court of Los Angeles County. The complaint alleges breach of oral contract and promissory fraud based on allegations that the Company and Mr. Lin offered Mr. Mandel the position of Chief Executive Officer of the Company for a three-year term at an annual salary of $220,000 and an equity interest equal to 7.5% of the Company’s equity, vesting in tranches over a three-year period. Mr. Mandel seeks damages in excess of $11.46 million, punitive damages and such other relief as the court may deem appropriate. The Company believes the claims are without merit and intends to defend the action vigorously. The action is in the discovery phase.
Item 1A. Risk Factors
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. However, we are voluntarily providing risk factor updates as described in this Item 1A.
For our current risk factors relating to our operations, other than as set forth below, see the section entitled “Risk Factors” contained in our Annual Report.
Our management is currently involved in litigation proceedings with one of our former directors who has brought claims against us for breach of contract and promissory fraud. If we were to receive an adverse ruling, it could materially and adversely affect our reputation, cause us to incur significant judgment or settlement costs in cash or equity securities, and adversely affect our stock price.
On March 19, 2026, Mr. David Mandel, a former member of our board of directors, filed a complaint against us, Nicolas Lin, our Chief Executive Officer and Chairman, and certain Doe defendants in the Superior Court of the State of California, County of Los Angeles, Case No. 26STCV08877. On April 24, 2026, we removed the action to the United States District Court for the Central District of California, Case No. 2:26-cv-04423. On June 3, 2026, the District Court remanded the action back to the Superior Court of Los Angeles County. The complaint alleges breach of oral contract and promissory fraud based on allegations that we and Mr. Lin offered Mr. Mandel the position of our Chief Executive Officer for a three-year term at an annual salary of $220,000 and an equity interest equal to 7.5% of our equity, vesting in tranches over a three-year period. Mr. Mandel seeks damages in excess of $11.46 million, punitive damages and such other relief as the court may deem appropriate. We believe the claims are without merit and intend to defend the action vigorously. The action is in the discovery phase.
Defending against Mr. Mandel’s legal action could cause us to incur significant expenses and consume large amounts of our management’s time and attention. If Mr. Mandel were to prevail, an adverse ruling on such a claim could materially and adversely affect our reputation, cause us to incur significant judgment or settlement costs in cash or equity securities and could adversely affect our stock price. See the section above entitled “Item 1. Legal Proceedings – Mandel v. Aether Holdings, Inc., et. al.” and the sections in our Annual Report on Form 10-K filed with the SEC on December 17, 2025, entitled “Business - Recent Developments - Dispute with Former Director” and “Business – Recent Developments – Removal of Director” for additional information regarding the legal action, dispute and Mr. Mandel’s removal.
Our secured indebtedness to Streeterville Capital, LLC, and the restrictive covenants, redemption provisions and default remedies contained in the related transaction documents, may restrict our business and operations, adversely affect our liquidity and permit Streeterville to foreclose on substantially all of our assets.
On May 13, 2026, we entered into a Note Purchase Agreement with Streeterville Capital, LLC, or Streeterville, pursuant to which we issued to Streeterville a secured promissory note in the original principal amount of $3.24 million, including a $240,000 original issue discount, for a purchase price of $3.0 million, which we refer to as the May Note. On August 5, 2026, we entered into a Note Purchase Agreement with Streeterville, pursuant to which we issued to Streeterville a secured promissory note in the original principal amount of $1.62 million, including a $120,000 original issue discount, for a purchase price of $1.5 million, which we refer to as the August Note and, together with the May Note, the Streeterville Notes. The aggregate original principal amount of the Streeterville Notes is $4.86 million, compared with aggregate purchase prices of $4.5 million, before giving effect to payments, accrued interest, monitoring fees, trigger-event balance increases, default interest and other amounts that may become payable under the Streeterville Notes and the related transaction documents. Certain of our subsidiaries have guaranteed our obligations under both Streeterville Notes.
Each Streeterville Note bears interest at 8% per annum, compounded daily, and matures 18 months after its applicable purchase price date. We may prepay either Streeterville Note in full only by paying 110% of its then-outstanding balance. In addition, if either Streeterville Note remains outstanding on the six-month anniversary of its applicable purchase price date, a one-time monitoring fee will be added to the outstanding balance of that Note, subject to specified forgiveness provisions. Accordingly, the stated interest rates do not reflect the full potential economic cost of the Streeterville Notes, which also includes the original issue discounts, prepayment premiums, potential monitoring fees and any balance increases or default interest that may become payable.
Beginning six months after the applicable purchase price date, Streeterville may require us to redeem up to $250,000 of the outstanding balance of the May Note and up to $125,000 of the outstanding balance of the August Note per calendar month. Once the redemption periods for both Streeterville Notes have commenced, Streeterville may therefore require scheduled redemptions of up to $375,000 in the aggregate per calendar month. Each Streeterville Note also permits additional limited redemptions if our common stock trades at or above the price threshold specified in the applicable Note, with the maximum limited-redemption amount determined by reference to trading volume. Under each Streeterville Note, limited redemptions do not reduce the otherwise applicable monthly redemption limit. Redemption amounts under each Streeterville Note, including limited redemptions, are payable in cash within three Trading Days following Streeterville’s delivery of the applicable redemption notice. Any redemption paid in cash would reduce the cash available for working capital, acquisitions, product development and other corporate purposes. Our operations may not generate sufficient cash to make required redemptions, pay monitoring fees or other amounts that may be added to the outstanding balances, repay the Streeterville Notes at maturity or satisfy accelerated payment obligations following an event of default. We may also be unable to refinance the Streeterville Notes on acceptable terms or at all. The payment obligations under the two Streeterville Notes may overlap, and additional limited redemptions or other balance adjustments could materially increase the amounts payable during a particular period.
Our obligations under the May Note are secured by a first-position lien, subject to permitted liens, on substantially all of our assets, including our intellectual property. The August Note is also secured by substantially all of our assets and intellectual property under the applicable security documents. Certain of our subsidiaries have guaranteed our obligations under both Streeterville Notes. If an event of default occurs, Streeterville may seek to foreclose on all or a portion of the collateral or pursue one or more guarantors. Any such action could result in the loss of assets necessary to operate our business and could adversely affect the liquidity and operations of our subsidiaries and force us to curtail or cease some or all of our operations.
In a bankruptcy, insolvency, liquidation or reorganization, Streeterville would generally have secured claims against the collateral, subject to applicable bankruptcy law, the validity and perfection of its liens, permitted liens and claims entitled to priority under applicable law. The value of our assets may not be sufficient to satisfy the amounts owing to Streeterville and our other creditors. As a result, holders of our common stock could receive little or no value in such a proceeding.
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Each Note Purchase Agreement contains substantially similar affirmative and negative covenants that may restrict our business and financing activities. Subject to specified exceptions, these provisions restrict or require Streeterville’s prior consent with respect to our ability, and the ability of our subsidiaries, to, among other things:
| · | incur, issue or guarantee certain additional indebtedness or make certain restricted issuances, including issuances of variable-price or resettable securities; | |
| · | create liens, security interests, guarantees, pledges or other encumbrances; | |
| · | sell, transfer or issue equity interests or voting rights in our subsidiaries; | |
| · | permit our subsidiaries to incur indebtedness other than in the ordinary course of business; | |
| · | enter into or consummate certain mergers, asset sales, changes of control or other fundamental transactions without repaying the applicable Streeterville Note or obtaining Streeterville’s consent; | |
| · | enter into agreements that restrict our ability to engage in variable-rate transactions with Streeterville or issue securities to Streeterville or its affiliates; and | |
| · | terminate our Exchange Act reporting status or fail to maintain the listing or quotation and continued trading of our common stock on an eligible securities exchange. |
Some of these covenants, including those relating to the continued listing and trading of our common stock, may be affected by market, regulatory or other circumstances that are not entirely within our control. The covenants may also limit our ability to obtain additional financing, negotiate favorable financing terms, conduct acquisitions or other strategic transactions, capitalize our subsidiaries, dispose of assets or respond to changes in our business and market conditions. A failure to comply with a covenant could result in a trigger event or event of default even if we are otherwise able to make scheduled payments under the Streeterville Notes.
Each Note Purchase Agreement also contains a most-favored-nation provision. If, while the applicable Streeterville Note remains outstanding, we issue a debt security containing an economic term or condition more favorable to the holder, or another holder-favorable term that was not similarly provided to Streeterville, Streeterville may elect to incorporate that term into the applicable Streeterville financing documents. If we fail to provide the required notice and Streeterville subsequently becomes aware of the more favorable term, the incorporation may be retroactive to the date on which the term was granted. This provision could increase our obligations to Streeterville, make future debt financing more costly or difficult to negotiate, or discourage potential financing sources from providing capital on terms that would trigger the provision.
Each Streeterville Note contains broad trigger-event provisions. Following a trigger event, Streeterville may increase the outstanding balance of the affected Streeterville Note by applying a 15% adjustment for each major trigger event or a 5% adjustment for each minor trigger event, subject to the limits set forth in the applicable Note. Trigger events under each Streeterville Note include, among other matters, payment defaults, breaches of covenants or other material obligations, materially false or misleading representations, certain insolvency events, and the entry into or consummation of certain fundamental transactions without repayment of the applicable Streeterville Note or Streeterville’s consent. Each Streeterville Note also includes trigger events relating to certain reverse stock splits, certain judgments exceeding $500,000 and material breaches by us or our subsidiaries of certain other agreements. Because the definition of other agreements is broad, a breach of an agreement that is not itself a Streeterville financing document could result in an increase in the outstanding balance of the applicable Streeterville Note or the exercise of other remedies by Streeterville.
If a trigger event is not cured within the applicable cure period, it may become an event of default. Specified insolvency-related trigger events may result in an automatic event of default and acceleration. Following an event of default, the outstanding balance of the affected Streeterville Note and other amounts payable under the applicable financing documents may become immediately due and payable, and default interest may accrue at 15% per annum. Under each Note Purchase Agreement, Streeterville may also seek injunctive relief or specific performance. Following an event of default under the applicable Streeterville Note, Streeterville may seek an injunction prohibiting us from issuing common or preferred stock unless 50% of the gross proceeds from the issuance are simultaneously applied to that Note. Streeterville may also seek to prevent the consummation of certain fundamental transactions unless the applicable Streeterville Note is repaid in full at closing or Streeterville provides its written consent. The availability or exercise of these remedies could prevent or delay financings or strategic transactions that our board of directors otherwise believes would be in the best interests of our company and stockholders.
If we are unable to comply with the applicable covenants, make required redemptions or other payments, or repay accelerated amounts, Streeterville could exercise its contractual and secured-creditor remedies, including foreclosure on all or a portion of the collateral and enforcement of the subsidiary guarantees. Any such actions could materially impair our liquidity, restrict or prevent us from obtaining additional financing, disrupt our business and force us to curtail or cease some or all of our operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
a) Unregistered Sales of Equity Securities
During the nine months ended June 30, 2026, we did not conduct any unregistered sales of equity securities.
b) Use of Proceeds
On April 9, 2025, our Registration Statement on Form S-1 (File No. 333-284081) (the “IPO Registration Statement”) was declared effective by the SEC for our initial public offering (“IPO”). On April 11, 2025, we consummated our IPO of 1,800,000 shares of our common stock, par value $0.001 per share, at a price to the public of $4.30 per share, generating gross proceeds of $7,740,000. In connection with the IPO, we granted The Benchmark Company, LLC and Axiom Capital Management, Inc., the representatives of the underwriters, an option, exercisable for 30 days, to purchase up to an additional 270,000 shares of common stock at the public offering price of $4.30 (the “IPO Over-Allotment Option”).
On April 16, 2025, we closed on the fully exercised IPO Over-Allotment Option resulting in additional gross proceeds to us of $1,161,000, before deducting underwriting discounts, commissions and offering expenses. After giving effect to the full exercise of the IPO Over-Allotment Option, a total of 2,070,000 shares of our common stock have been issued and sold in the IPO, and the gross proceeds from the IPO, including the full exercise of the IPO Over-Allotment Option, before deducting underwriting discounts, commissions and offering expenses, was $8,901,000. The net proceeds to us from the IPO and IPO Over-Allotment Option were $7,725,350, after deducting underwriting commission of $623,070, non-accountable expenses of $89,010, underwriting fees of $182,500, refund of $25,000 retainer and legal fees of $256,070. No payments for such expenses were made directly or indirectly to (i) any of our officers or directors or their associates, (ii) any person owning 10% or more of any class of our equity securities or (iii) any of our affiliates.
Other than as previously reported, there has been no material change in the planned use of proceeds from the IPO as described in the IPO Registration Statement.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
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Item 5. Other Information.
No
director or Section 16 officer
Item 6. Exhibits.
The following is a complete list of exhibits filed or furnished, as applicable, as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: August 13, 2026 | AETHER HOLDINGS, INC. | |
| By: | /s/ Nicolas Lin | |
| Nicolas Lin | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| By: | /s/ Suresh Iyer | |
| Suresh Iyer | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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