Research from Water Tower Research, Water Tower Research

Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Research from Water Tower Research

Equity Research Firm

Equity Bottom-Up

<ul><li>Key takeaways from 3Q25 earnings release. Lu highlighted Ainos’ strong revenue momentum, up more than 4x Y/Y, driven almost entirely by the deployment of AI Nose in senior care programs.</li><li>Lu noted that the reported revenue has yet to include any of the $2.1-million, three-year AI Nose subscription order from a semiconductor customer, signaling additional upside in the SmellTech platform’s revenue, the turnaround in gross margin to 82% YTD from negative last year, and Ainos’ cost management with cash operating expenses reduced by 15% YTD versus the previous year.</li><li>Lu also highlighted the company’s enhanced visibility through major tech exhibitions resulting in multiple leads, inclusion in a leading tech consultant’s annual tech report, and a GICS code change for the company to technology.</li></ul>

Key takeaways from 3Q25 earnings release. Lu highlighted Ainos’ strong revenue momentum, up more than 4x Y/Y, driven almost entirely by the deployment of AI Nose in senior care programs.Lu noted that the reported revenue has yet to include any of the $2.1-million, three-year AI Nose subscription order from a semiconductor customer, signaling additional upside in the SmellTech platform’s revenue, the turnaround in gross margin to 82% YTD from negative last year, and Ainos’ cost management with cash operating expenses reduced by 15% YTD versus the previous year.Lu also highlighted the company’s enhanced visibility through major tech exhibitions resulting in multiple leads, inclusion in a leading tech consultant’s annual tech report, and a GICS code change for the company to technology.

WTR Small-Cap Spotlight Recap: AI Nose's Continuing Momentum in 2025 and What to Expect in 2026