Alpha Architect ETF Trust

06/05/2025 | Press release | Distributed by Public on 06/05/2025 08:42

Annual Report by Investment Company (Form N-CSR)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22961
EA Series Trust
(Exact name of registrant as specified in charter)
19 E. Eagle Road
Havertown, PA 19083
(Address of principal executive offices) (Zip code)
19 E. Eagle Road
Havertown, PA 19083
(Name and address of agent for service)
(215) 330-4476
Registrant's telephone number, including area code
Date of fiscal year end: March 31, 2025
Date of reporting period: March 31, 2025
Item 1. Report to Stockholders.
(a)
Euclidean Fundamental Value ETF
Ticker: ECML
Listed on: NYSE Arca, Inc.
March 31, 2025
Annual Shareholder Report
https://euclideanetf.com
This annual shareholder report contains important information about the Euclidean Fundamental Value ETF (the "Fund") for the period of April 1, 2024 to March31, 2025(the "Period"). You can find additional information about the Fund at https://euclideanetf.com. You can also request this information by contacting us at (215) 330-4476.
WHAT WERE THE FUND COSTS FOR THE PERIOD?
(based on a hypothetical $10,000 investment)
COST OF $10,000 INVESTMENT COST PAID AS A PERCENTAGE OF $10,000 INVESTMENT
$90 0.95%
HOW DID THE FUND PERFORM FOR THE PERIOD?
AVERAGE ANNUAL TOTAL RETURNS
One Year
Since Inception (5/17/2023)
Euclidean Fundamental Value ETF - NAV -10.12% 12.48%
S&P 500 Index 8.25% 19.05%
The Fund's past performance is not a good predictor of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund shares. Visit https://euclideanetf.com for more recent performance information.
WHAT FACTORS INFLUENCED PERFORMANCE FOR THE PERIOD?
For the Period, the Fund significantly underperformed its broad-based benchmark, the S&P 500 Index. The Fund's underperformance relative to its benchmark over the Period was primarily driven by the Fund's sector exposure.
During the Period, the Fund had meaningful exposure to companies in the energy and homebuilding sectors. Both sectors were adversely affected by shifting expectations around inflation and interest rates, particularly towards the latter part of 2024.
Furthermore, much of the gains in the S&P 500 Index were driven by high exposure to a handful of holdings in the Information Technology sector where the Fund had little exposure during the Period. These names - which include Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms and Tesla - strongly outperformed the broader markets during the Period, mostly due to enthusiasm about AI.
During the Period, the Fund continued to execute its strategy of systematically investing-based on its quantitative models-in companies believed to be of high-quality and attractively valued. This approach creates high active share which can result in large deviations from the benchmark and contributed to the performance difference during the Period.
Annual Shareholder Report: March 31, 2025
Euclidean Fundamental Value ETF
Ticker: ECML
Listed on: NYSE Arca, Inc.
March 31, 2025
Annual Shareholder Report
https://euclideanetf.com
KEY FUND STATISTICS (as of Period End)
Net Assets $157,510,658 Portfolio Turnover Rate* 30%
# of Portfolio Holdings 63 Advisory Fees Paid $1,680,610
*Portfolio turnover is not annualized and is calculated without regard to short-term securities having a maturity of less than one year. Excludes impact of in-kind transactions.
SECTOR WEIGHTING
(as a % of Net Assets)
Consumer Discretionary 23.2%
Energy 18.3%
Industrials 14.9%
Consumer Staples 14.1%
Materials 10.0%
Health Care 8.6%
Communication Services 6.0%
Information Technology 3.4%
Real Estate 1.1%
Cash and Cash Equivalents 0.4%
TOP 10 HOLDINGS
(as a % of Net Assets)
Fox Corp. - Class A 2.6%
Cal-Maine Foods, Inc. 2.4%
Pilgrim's Pride Corp. 2.4%
Heidrick & Struggles International, Inc. 2.3%
Mueller Industries, Inc. 2.2%
Gilead Sciences, Inc. 2.1%
Altria Group, Inc. 2.1%
Allison Transmission Holdings, Inc. 2.1%
Coca-Cola Consolidated, Inc. 2.1%
Group 1 Automotive, Inc. 2.0%
Availability of Additional Information
For additional information about the Fund, including its prospectus, financial information, holdings, and proxy information, visit https://euclideanetf.com. You can also request information by calling (215) 330-4476.
Householding
Householding is an option available to certain investors of the Fund. Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder documents can be delivered to investors who share the same address, even if their accounts are registered under different names. Householding for the Fund is available through certain broker-dealers. If you are interested in enrolling in householding and receiving a single copy of prospectuses and other shareholder documents or you are currently enrolled in householding and wish to change your householding status, please contact your broker-dealer.
Annual Shareholder Report: March 31, 2025
(b) Not applicable.
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant's principal executive officer and principal financial officer. The registrant has not made any amendments to its code of ethics during the year covered by this report. The registrant has not granted any waivers from any provisions of the code of ethics during the year covered by this report.
A copy of the registrant's Code of Ethics is incorporated by reference.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Trustees of the Trust has determined that there is at least one audit committee financial expert serving on its audit committee. Dr. Michael Pagano is an "audit committee financial expert" and is considered to be "independent" as each term is defined in Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past fiscal year. "Audit services" refer to performing an audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. "Audit-related services" refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. "Tax services" refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning, including review of the registrant's tax returns and calculations of required income, capital gain and excise distributions. There were no "Other services" provided by the principal accountant. The following table details the aggregate fees billed or expected to be billed for the last fiscal year for audit fees, audit-related fees, tax fees and other fees by the principal accountant.
FYE
3/31/2025
FYE
3/31/2024
(a) Audit Fees $8,750 $7,250
(b) Audit-Related Fees N/A N/A
(c) Tax Fees $2,250 $1,750
(d) All Other Fees N/A N/A
(e)(1) The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre-approve all audit and non-audit services of the registrant, including services provided to any entity affiliated with the registrant.
(e)(2) None of the fees billed by any Fund's principal accountant were applicable to non-audit services pursuant to a waiver of the pre-approval requirement.
(f) All of the principal accountant's hours spent on auditing the registrant's financial statements were attributed to work performed by full-time permanent employees of the principal accountant.
(g) None of the fees billed by any Fund's principal accountant were applicable to non-audit services billed or expected to be billed to any Fund's investment adviser.
(h) The audit committee of the board of trustees/directors has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser is compatible with maintaining the principal accountant's independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant's independence.
(i) The registrant has not been identified by the U.S. Securities and Exchange Commission as having filed an annual report issued by a registered public accounting firm branch or office that is located in a foreign jurisdiction where the Public Company Accounting Oversight Board is unable to inspect or completely investigate because of a position taken by an authority in that jurisdiction..
(j) The registrant is not a foreign issuer.
Item 5. Audit Committee of Listed Registrants.
(a) The registrant is an issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934, (the "Act") and has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Act. The independent members of the committee are as follows: Daniel Dorn, Chukwuemeka (Emeka) Oguh, and Michael Pagano.
(b) Not applicable.
Item 6. Investments.
(a)
EUCLIDEAN FUNDAMENTAL VALUE ETF
SCHEDULE OF INVESTMENTS
March 31, 2025
COMMON STOCKS - 99.5%
Shares
Value
Agricultural Products & Services - 2.0%
Ingredion, Inc.
22,848
$ 3,089,278
Apparel, Accessories & Luxury Goods - 1.7%
G-III Apparel Group Ltd. (a)
100,396
2,745,831
Automotive Retail - 3.5%
AutoNation, Inc. (a)
14,428
2,336,182
Group 1 Automotive, Inc.
8,355
3,191,192
5,527,374
Biotechnology - 3.5%
Gilead Sciences, Inc.
29,969
3,358,027
United Therapeutics Corp. (a)
7,208
2,222,010
5,580,037
Broadcasting - 4.3%
Fox Corp. - Class A
72,347
4,094,840
TEGNA, Inc.
151,063
2,752,368
6,847,208
Broadline Retail - 1.6%
Dillard's, Inc. - Class A
7,217
2,584,624
Building Products - 1.4%
Owens Corning
15,677
2,238,989
Cable & Satellite - 1.7%
Sirius XM Holdings, Inc.
116,386
2,623,922
Coal & Consumable Fuels - 1.4%
Core Natural Resources, Inc.
28,136
2,169,286
Construction Machinery & Heavy Transportation Equipment - 6.6%
Allison Transmission Holdings, Inc.
34,435
3,294,397
Oshkosh Corp.
28,153
2,648,634
PACCAR, Inc.
25,533
2,486,148
The accompanying notes are an integral part of these financial statements.
1
EUCLIDEAN FUNDAMENTAL VALUE ETF
SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2025
COMMON STOCKS - 99.5% (CONTINUED)
Shares
Value
Construction Machinery & Heavy Transportation Equipment - 6.6% - (Continued)
Terex Corp.
52,124
$ 1,969,245
10,398,424
Copper - 1.6%
Freeport-McMoRan, Inc.
66,139
2,504,022
Education Services - 2.0%
Perdoceo Education Corp.
123,983
3,121,892
Electrical Components & Equipment - 1.2%
Atkore, Inc.
31,904
1,913,921
Electronic Manufacturing Services - 1.9%
Sanmina Corp. (a)
38,691
2,947,480
Fertilizers & Agricultural Chemicals - 1.6%
CF Industries Holdings, Inc.
31,907
2,493,532
Food Distributors - 1.5%
Andersons, Inc.
54,898
2,356,771
Food Retail - 1.5%
Ingles Markets, Inc. - Class A
36,986
2,408,898
Health Care Facilities - 1.7%
Tenet Healthcare Corp. (a)
20,174
2,713,403
Homebuilding - 14.4%
DR Horton, Inc.
15,957
2,028,613
Green Brick Partners, Inc. (a)
46,098
2,687,974
KB Home
39,121
2,273,713
Lennar Corp. - Class A
17,339
1,990,170
M/I Homes, Inc. (a)
18,508
2,113,243
Meritage Homes Corp.
28,854
2,045,172
PulteGroup, Inc.
23,579
2,423,921
Taylor Morrison Home Corp. (a)
46,337
2,782,074
Toll Brothers, Inc.
19,801
2,090,788
Tri Pointe Homes, Inc. (a)
69,657
2,223,451
22,659,119
The accompanying notes are an integral part of these financial statements.
2
EUCLIDEAN FUNDAMENTAL VALUE ETF
SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2025
COMMON STOCKS - 99.5% (CONTINUED)
Shares
Value
Human Resource & Employment Services - 2.3%
Heidrick & Struggles International, Inc.
84,994
$ 3,640,293
Industrial Machinery & Supplies & Components - 2.2%
Mueller Industries, Inc.
45,464
3,461,629
Managed Health Care - 1.9%
Molina Healthcare, Inc. (a)
9,324
3,071,232
Oil & Gas Equipment & Services - 1.2%
Liberty Energy, Inc.
123,007
1,947,201
Oil & Gas Exploration & Production - 6.5%
ConocoPhillips
26,100
2,741,022
Devon Energy Corp.
72,262
2,702,599
EOG Resources, Inc.
19,366
2,483,496
Viper Energy, Inc.
52,387
2,365,273
10,292,390
Oil & Gas Refining & Marketing - 1.7%
Valero Energy Corp.
20,087
2,652,890
Oil & Gas Storage & Transportation - 7.5%
Cheniere Energy Partners LP
44,889
2,964,470
Cheniere Energy, Inc.
10,611
2,455,385
Dorian LPG Ltd.
80,428
1,796,762
Hess Midstream LP - Class A
65,977
2,790,167
International Seaways, Inc.
52,707
1,749,872
11,756,656
Packaged Foods & Meats - 4.9%
Cal-Maine Foods, Inc.
42,416
3,855,614
Pilgrim's Pride Corp. (a)
70,254
3,829,546
7,685,160
Pharmaceuticals - 1.5%
Harmony Biosciences Holdings, Inc. (a)
70,188
2,329,540
Real Estate Development - 1.0%
Forestar Group, Inc. (a)
71,387
1,509,121
Semiconductor Materials & Equipment - 1.5%
Photronics, Inc. (a)
110,843
2,301,101
The accompanying notes are an integral part of these financial statements.
3
EUCLIDEAN FUNDAMENTAL VALUE ETF
SCHEDULE OF INVESTMENTS (CONTINUED)
March 31, 2025
COMMON STOCKS - 99.5% (CONTINUED)
Shares
Value
Soft Drinks & Non-alcoholic Beverages - 2.1%
Coca-Cola Consolidated, Inc.
2,410
$ 3,253,500
Steel - 6.8%
Alpha Metallurgical Resources, Inc. (a)
11,399
1,427,725
Commercial Metals Co.
49,661
2,284,903
Nucor Corp.
18,200
2,190,188
Steel Dynamics, Inc.
21,767
2,722,616
Warrior Met Coal, Inc.
42,529
2,029,484
10,654,916
Tobacco - 2.1%
Altria Group, Inc.
55,177
3,311,723
Trading Companies & Distributors - 1.2%
Boise Cascade Co.
19,311
1,894,216
TOTAL COMMON STOCKS(Cost $144,896,226)
156,685,579
REAL ESTATE INVESTMENT TRUSTS - 0.1%
Other Specialized REITs - 0.1%
Millrose Properties, Inc. (a)
8,298
219,980
TOTAL REAL ESTATE INVESTMENT TRUSTS(Cost $178,365)
219,980
SHORT-TERM INVESTMENTS - 0.4%
Money Market Funds - 0.4%
First American Government Obligations Fund - Class X, 4.27% (b)
607,886
607,886
TOTAL SHORT-TERM INVESTMENTS(Cost $607,886)
607,886
TOTAL INVESTMENTS - 100.0% (Cost $145,682,477)
$ 157,513,445
Liabilities in Excess of Other Assets - (0.0)% (c)
(2,787)
TOTAL NET ASSETS - 100.0%
$ 157,510,658
Percentages are stated as a percent of net assets.

LP - Limited Partnership
REIT - Real Estate Investment Trust
(a)
Non-income producing security.
(b)
The rate shown represents the 7-day annualized effective yield as of March 31, 2025.
(c)
Represents less than 0.05% of net assets.
The Global Industry Classification Standard ("GICS®") was developed by and/or is the exclusive property of MSCI, Inc. ("MSCI") and Standard & Poor's Financial Services LLC ("S&P"). GICS® is a service mark of MSCI and S&P and has been licensed for use by U.S. Bank Global Fund Services.
(b) Not applicable
The accompanying notes are an integral part of these financial statements.
4
EUCLIDEAN FUNDAMENTAL VALUE ETF
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment
Companies.
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2025
ASSETS:
Investments, at value (See Note 2) $ 157,513,445
Dividends receivable 123,183
Interest receivable 1,852
Total assets 157,638,480
LIABILITIES:
Payable to adviser (See Note 3) 127,822
Total liabilities 127,822
NET ASSETS $ 157,510,658
NET ASSETS CONSIST OF:
Paid-in capital $ 151,898,376
Total distributable earnings (accumulated deficit)
5,612,282
Total net assets $ 157,510,658
Net Assets $ 157,510,658
Shares issues and outstanding(a)
5,144,000
Net asset value per share $ 30.62
COST:
Investments, at cost $ 145,682,477
(a) Unlimited shares authorized without par value.
The accompanying notes are an integral part of these financial statements.
1
EUCLIDEAN FUNDAMENTAL VALUE ETF
STATEMENT OF OPERATIONS
For the Period Ended March 31, 2025
INVESTMENT INCOME:
Dividend income $ 3,630,434
Interest income 27,049
Securities lending income (See Note 4) 83
Total investment income 3,657,566
EXPENSES:
Investment advisory fee (See Note 3) 1,680,610
Total expenses 1,680,610
NET INVESTMENT INCOME (LOSS) 1,976,956
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments (3,286,524)
In-kind redemptions 13,374,424
Net realized gain (loss) 10,087,900
Net change in unrealized appreciation (depreciation) on:
Investments (30,467,953)
Net change in unrealized appreciation (depreciation) (30,467,953)
Net realized and unrealized gain (loss) (20,380,053)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (18,403,097)
The accompanying notes are an integral part of these financial statements.
2
EUCLIDEAN FUNDAMENTAL VALUE ETF
STATEMENT OF CHANGES IN NET ASSETS
Year ended March 31, 2025
Period ended March 31, 2024(a)
OPERATIONS:
Net investment income (loss) $ 1,976,956 $ 1,528,691
Net realized gain (loss) 10,087,900 10,122,135
Net change in unrealized appreciation (depreciation) (30,467,953) 42,298,921
Net increase (decrease) in net assets from operations (18,403,097) 53,949,747
DISTRIBUTIONS TO SHAREHOLDERS:
Distributable earnings (1,659,977) (1,304,128)
Total distributions to shareholders (1,659,977) (1,304,128)
CAPITAL TRANSACTIONS:
Subscriptions 41,501,013 189,955,336
Redemptions (51,222,877) (55,305,359)
Net increase (decrease) in net assets from capital transactions (9,721,864) 134,649,977
NET INCREASE (DECREASE) IN NET ASSETS (29,784,938) 187,295,596
Net Assets:
Beginning of the period 187,295,596 -
End of the period $ 157,510,658 $ 187,295,596
SHARES TRANSACTIONS:
Subscriptions 1,270,000 7,344,000
Redemptions (1,570,000) (1,900,000)
Total increase (decrease) in shares outstanding (300,000) 5,444,000
(a) Inception date of the Fund was May 17, 2023.
The accompanying notes are an integral part of these financial statements.
3
EUCLIDEAN FUNDAMENTAL VALUE ETF
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS: LESS DISTRIBUTIONS FROM: SUPPLEMENTAL DATA AND RATIOS:
For the period ended Net Asset Value, Beginning of Period
Net investment income (loss)(a)
Net realized and unrealized gain (loss) on investments(b)
Total from investment operations Net investment income Total distributions Net asset value, end of period
Total Return(c)
Net assets, end of period (in thousands)
Ratio of expense to average net assets(d)
Ratio of net investment income (loss) to average net assets(d)
Portfolio Turnover Rate(c)(e)
3/31/2025 $34.40 0.37 (3.84) (3.47) (0.31) (0.31) $30.62 (10.12)% $157,511 0.95% 1.12% 30%
3/31/2024(f)
$25.00 0.28 9.36 9.64 (0.24) (0.24) $34.40 38.69% $187,296 0.95% 1.12% 23%
(a)
Net investment income per share has been calculated based on average shares outstanding during the period.
(b)
Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the periods, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the period.
(c)
Not annualized for periods less than one year.
(d)
Annualized for periods less than one year.
(e)
Portfolio turnover rate excludes in-kind transactions.
(f)
Inception date of the Fund was May 17, 2023.
The accompanying notes are an integral part of these financial statements.
4
EUCLIDEAN FUNDAMENTAL VALUE ETF
NOTES TO THE FINANCIAL STATEMENTS
March 31, 2025
NOTE 1 - ORGANIZATION
Euclidean Fundamental Value ETF (the "Fund") is a series of the EA Series Trust (the "Trust"), which was organized as a Delaware statutory trust on October 11, 2013. The Trust is registered with the Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company and the offering of the Fund's shares ("Shares") is registered under the Securities Act of 1933, as amended (the "Securities Act"). The Fund is considered diversified under the 1940 Act. The Fund commenced operations on May 17, 2023. The Fund qualifies as an investment company as defined in the Financial Accounting Standards Codification Topic 946-Financial Services- Investment Companies. The Fund's investment objective is to seek long-term capital appreciation. See the Fund's Prospectus and Statement of Additional Information regarding the risks of investing in shares of the Fund.
As part of the Fund's commencement of operations on May 17, 2023, the Fund received an in-kind contribution from accounts managed by the Sub-Adviser, which consisted of $134,833,211 of securities which were recorded at their current value to align the Fund's performance with ongoing financial reporting. However, as the transaction was determined to be a non-taxable transaction by management, the Fund elected to retain the securities' original cost basis for tax purposes. The cost of the contributed securities as of May 17, 2023, was $132,978,105, resulting in net unrealized appreciation on investments of $1,855,106 as of that date. As a result of the in-kind contribution, the Fund issued 5,394,000 shares at a $25.00 per share net asset value.
Shares of the Fund are listed and traded on NYSE Arca, Inc. ("NYSE") (the "Exchange"). Market prices for the shares may be different from their net asset value ("NAV"). The Fund issues and redeems shares on a continuous basis at NAV only in blocks of 10,000 shares, called "Creation Units." Creation Units are issued and redeemed principally in-kind for securities included in a specified universe. Once created, shares generally trade in the secondary market at market prices that change throughout the day in share amounts less than a Creation Unit. Except when aggregated in Creation Units, shares are not redeemable securities of the Fund. Shares of the Fund may only be purchased or redeemed by certain financial institutions ("Authorized Participants"). An Authorized Participant is a participant of a clearing agency registered with the SEC, which has a written agreement with the Trust or one of its service providers that allows the authorized participant to place orders for the purchase and redemption of creation units. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem the shares directly from a Fund. Rather, most retail investors may purchase Shares in the secondary market with the assistance of a broker and are subject to customary brokerage commissions or fees.
Authorized Participants may be required to pay a transaction fee to compensate the Trust or its custodian for costs incurred in connection with creation and redemption transactions. Certain transactions consisting all or partially of cash may also be subject to a variable charge, which is payable to the relevant Fund, of up to 2.00% of the value of the order in addition to the transaction fee. A Fund may determine to waive the variable charge on certain orders when such waiver is determined to be in the best interests of Fund shareholders. Transaction fees received by a Fund, if any, are displayed in the Capital Share Transactions sections of the Statements of Changes in Net Assets.
The end of the reporting period for the Fund is March 31, 2025, and the period covered by these Notes to Financial Statements is from April 1, 2024 to March 31, 2025 (the "current fiscal period").
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP").
A.Security Valuation.Equity securities that are traded on a national securities exchange, except those listed on the NASDAQ Global Market® ("NASDAQ") are valued at the last reported sale price on the exchange on which the security is principally traded. Securities traded on NASDAQ will be valued at the NASDAQ Official Closing Price ("NOCP"). If, on a particular day, an exchange-traded or NASDAQ security does not trade, then the most recent quoted bid for exchange-traded or the mean between the most recent quoted bid and ask price for NASDAQ securities will be used. Equity securities that are not traded on a listed exchange are generally valued at the last sale
5
EUCLIDEAN FUNDAMENTAL VALUE ETF
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
March 31, 2025
price in the over-the-counter market. If a non-exchange traded security does not trade on a particular day, then the mean between the last quoted closing bid and asked price will be used. Prices denominated in foreign currencies are converted to U.S. dollar equivalents at the current exchange rate, which approximates fair value. Redeemable securities issued by open-end investment companies are valued at the investment company's applicable net asset value, with the exception of exchange-traded open-end investment companies which are priced as equity securities.
Subject to its oversight, the Trust's Board of Trustees (the "Board") has delegated primary responsibility for determining or causing to be determined the value of the Fund's investments to Empowered Funds, LLC dba EA Advisers (the "Adviser"), pursuant to the Trust's valuation policy and procedures, which have been adopted by the Trust and approved by the Board. In accordance with Rule 2a-5 under the 1940 Act, the Board designated the Adviser as the "valuation designee" of the Fund. If the Adviser, as valuation designee, determines that reliable market quotations are not readily available for an investment, the investment is valued at fair value as determined in good faith by the Adviser in accordance with the Trust's fair valuation policy and procedures. The Adviser will provide the Board with periodic reports, no less frequently than quarterly, that discuss the functioning of the valuation process, if applicable, and that identify issues and valuation problems that have arisen, if any. As appropriate, the Adviser and the Board will review any securities valued by the Adviser in accordance with the Trust's valuation policies during these periodic reports. The use of fair value pricing by the Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without regard to such considerations. As of current fiscal period, the Fund did not hold any securities that required fair valuation due to unobservable inputs.
As described above, the Fund may use various methods to measure the fair value of their investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund's own assumptions about the assumptions a market participant would use in valuing the asset or liability and would be based on the best information available.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
6
EUCLIDEAN FUNDAMENTAL VALUE ETF
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
March 31, 2025
The following is a summary of the fair value classification of the Fund's investments as of current fiscal period:
DESCRIPTION LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
Investments
Common Stocks $ 156,685,579 $ - $ - $ 156,685,579
Real Estate Investment Trusts
219,980 - - 219,980
Money Market Funds 607,886 - - 607,886
Total Investments $ 157,513,445 $ - $ - $ 157,513,445
Refer to the Schedule of Investments for further disaggregation of investment categories.
During the current fiscal period, the Fund did not invest in any Level 3 investments and recognized no transfers to/from Level 3. Transfers between levels are recognized at the end of the reporting period.
B.Foreign Currency. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts using the spot rate of exchange at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund isolates the portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. That portion of gains (losses) attributable to the changes in market prices and the portion of gains (losses) attributable to changes in foreign exchange rates are included on the "Statement of Operations" under "Net realized gain (loss) - Foreign currency" and "Change in Net Unrealized Appreciation (Depreciation) - Foreign Currency," respectively.
The Fund reports net realized foreign exchange gains or losses that arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
C.Federal Income Taxes.The Fund's policy is to comply with the provisions of Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all of their net investment income and net capital gains to shareholders. Therefore, no federal income tax provision is required. Each Fund plans to file U.S. Federal and various state and local tax returns.
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund's uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months. Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits on uncertain tax positions as income tax expenses in the Statements of Operations. During the current fiscal period, the Fund did not incur any interest or penalties.
D.Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Dividend income is recorded on the ex-dividend date, net of any foreign taxes withheld at source. Interest income is recorded on an accrual basis. Withholding taxes on foreign dividends have been provided for in accordance with the Fund's understanding of the applicable tax rules and regulations.
7
EUCLIDEAN FUNDAMENTAL VALUE ETF
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
March 31, 2025
Distributions received from the Fund's investments in REITs and MLPs may be characterized as ordinary income, net capital gain, or return of capital. The proper characterization of such distributions is generally not known until after the end of each calendar year. As such, the Fund must use estimates in reporting the character of their income and distributions for financial statement purposes. Such estimates are based on historical information available from each MLP and other industry sources. The actual character of distributions to the Fund's shareholders will be reflected on the Form 1099 received by shareholders after the end of the calendar year. Due to the nature of such investments, a portion of the distributions received by the Fund's shareholders may represent a return of capital.
Distributions to shareholders from net investment income for the Fund are declared and paid on an annual basis and distributions to shareholders from net realized gains on securities normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. The Fund may distribute more frequently, if necessary, for tax purposes.
E.Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of increases and decreases in net assets from operations during the period. Actual results could differ from those estimates.
F.Share Valuation. The NAV per share of the Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Fund, rounded to the nearest cent. The Fund's shares will not be priced on the days on which the New York Stock Exchange ("NYSE") is closed for regular trading. The offering and redemption price per share for the Fund is equal to the Fund's net asset value per share.
G.Guarantees and Indemnifications. In the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. Additionally, as is customary, the Trust's organizational documents permit the Trust to indemnify its officers and trustees against certain liabilities under certain circumstances. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be against the Fund that have not yet occurred. As of the date of this report, no claim has been made for indemnification pursuant to any such agreement of the Fund.
H.Segment Reporting: The Fund adopted Financial Accounting Standards Board Update 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures ("ASU 2023-07") during the period. The Fund's adoption of the new standard impacted financial statement disclosures only and did not affect the Fund's financial position or results of operations.
The Treasurer (principal financial officer) acts as the Fund's Chief Operating Decision Maker ("CODM") and is responsible for assessing performance and allocating resources with respect to the Fund. The CODM has concluded that the Fund operates as a single operating segment since the Fund has a single investment strategy as disclosed in its prospectus, against which the CODM assesses performance. The financial information provided to and reviewed by the CODM is presented within the Fund's financial statements.
I.Reclassification of Capital Accounts. GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. The Fund's realized net capital gains resulting from in-kind redemptions, in which shareholders exchanged Fund shares for securities held by the Fund rather than for cash, are not taxable to the Fund and are not distributed to shareholders. As such, they have been reclassified from distributable earnings to paid-in capital. For the current fiscal period, the following table shows the reclassifications made:
Distributable
Earnings 		Paid-in
Capital
$ (13,165,138) $ 13,165,138
8
EUCLIDEAN FUNDAMENTAL VALUE ETF
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
March 31, 2025
NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
Empowered Funds, LLC dba EA Advisers (the "Adviser") serves as the investment adviser to the Fund. Pursuant to an investment advisory agreement (the "Advisory Agreement") between the Trust, on behalf of the Fund, and the Adviser, the Adviser provides investment advice to the Fund and oversees the day-to-day operations of the Fund, subject to the direction and control of the Board and the officers of the Trust. Under the Advisory Agreement, the Adviser is also responsible for arranging transfer agency, custody, fund administration and accounting, and other non-distribution related services necessary for the Fund to operate. The Adviser administers the Fund's business affairs, provides office facilities and equipment and certain clerical, bookkeeping and administrative services. The Adviser agrees to pay all expenses incurred by the Fund except for the fee paid to the Adviser pursuant to the Advisory Agreement, payments under any distribution plan adopted pursuant to Rule 12b-1, brokerage expenses, acquired fund fees and expenses, taxes (including tax-related services), interest (including borrowing costs), litigation expense (including class action-related services) and other non-routine or extraordinary expenses. Per the Advisory Agreement, the Fund pays an annual rate of 0.95% to the Adviser monthly based on average daily net assets.
Euclidean Technologies Management, LLC (the "Sub-Adviser") serves as a discretionary investment sub-adviser to the Fund. Pursuant to an investment sub-advisory agreement (the "Sub-Advisory Agreement") among the Trust, the Adviser and the Sub-Adviser, the Sub-Adviser is responsible for determining the investment exposures for the Fund, subject to the overall supervision and oversight of the Adviser and the Board.
U.S. Bancorp Fund Services, LLC ("Fund Services" or "Administrator"), doing business as U.S. Bank Global Fund Services, acts as the Fund's Administrator and, in that capacity, performs various administrative and accounting services for the Fund. The Administrator prepares various federal and state regulatory filings, reports and returns for the Fund, including regulatory compliance monitoring and financial reporting; prepares reports and materials to be supplied to the trustees; monitors the activities of the Fund's Custodian, transfer agent and fund accountant. Fund Services also serves as the transfer agent and fund accountant to the Fund. U.S. Bank N.A. (the "Custodian"), an affiliate of the Administrator, serves as the Fund's Custodian.
The Custodian acts as the securities lending agent (the "Securities Lending Agent") for the Fund.
NOTE 4 - SECURITIES LENDING
The Fund may lend up to 331/3% of the value of the securities in its portfolio to brokers, dealers and financial institutions (but not individuals) under terms of participation in a securities lending program administered by the Securities Lending Agent. The securities lending agreement requires that loans are collateralized at all times in an amount equal to at least 102% of the value of any domestic loaned securities at the time of the loan, plus accrued interest. The use of loans of foreign securities, which are denominated and payable in U.S. dollars, shall be collateralized in an amount equal to 105% of the value of any loaned securities at the time of the loan plus accrued interest. The Fund receives compensation in the form of fees and earns interest on the cash collateral. The amount of fees depends on a number of factors including the type of security and length of the loan. The Fund continues to receive interest payments or dividends on the securities loaned during the borrowing period. Gain or loss on the value of securities loaned that may occur during the term of the loan will be for the account of the Fund. The Fund has the right under the terms of the securities lending agreement to recall the securities from the borrower on demand.
The securities lending agreement provides that, in the event of a borrower's material default, the Securities Lending Agent shall take all actions the Securities Lending Agent deems appropriate to liquidate the collateral, purchase replacement securities at the Securities Lending Agent's expense or pay the Fund an amount equal to the market value of the loaned securities, subject to certain limitations which are set forth in detail in the securities lending agreement between the Fund and the Securities Lending Agent.
During the current fiscal period, the Fund had loaned securities and received cash collateral for the loans. The cash collateral has been invested by the Securities Lending Agent in accordance with the Trust approved investment guidelines. Those guidelines require the cash collateral to be invested in readily marketable, high quality, short-term obligations; however, such
9
EUCLIDEAN FUNDAMENTAL VALUE ETF
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
March 31, 2025
investments are subject to risk of payment delays or default on the part of the issuer or counterparty or otherwise may not generate sufficient interest to support the costs associated with securities lending. The Fund could also experience delays in recovering its securities and possible loss of income or value if the borrower fails to return the borrowed securities, although the Fund is indemnified from this risk by contract with the Securities Lending Agent. As of the end of the current fiscal period, the Fund did not have any securities on loan.
The interest income earned by the Fund on the investment of cash collateral received from borrowers for the securities loaned to them ("Securities Lending Income, Net") would have been reflected in the Fund's Statement of Operations. Net securities lending income earned on collateral investments and recognized by the Fund during the current fiscal period was $83.
Due to the absence of a master netting agreement related to the Fund's participation in securities lending, no additional offsetting disclosures have been made on behalf of the Fund for the total borrowings listed above.
NOTE 5 - PURCHASES AND SALES OF SECURITIES
For the current fiscal period, purchases and sales of securities for the Fund, excluding short-term securities and in-kind transactions, were as follows:
Purchases Sales
$ 86,561,687 $ 52,483,934
For the current fiscal period, in-kind transactions associated with creations and redemptions were as follows:
Purchases Sales
$ 8,211,121 $ 50,746,290
There were no purchases or sales of U.S. Government securities during the current fiscal period.
NOTE 6 - TAX INFORMATION
The components of tax basis cost of investments and net unrealized appreciation (depreciation) for federal income tax purposes at the current fiscal period were as follows:
Tax cost of Investments $ 145,834,657
Gross tax unrealized appreciation 24,488,254
Gross tax unrealized depreciation (12,809,466)
Net tax unrealized appreciation (depreciation) $ 11,678,788
Undistributed ordinary income 541,542
Undistributed long-term gain -
Total distributable earnings 541,542
Other accumulated gain (loss) (6,608,048)
Total accumulated gain (loss) $ 5,612,282
Under tax law, certain capital and foreign currency losses realized after October 31st and within the taxable year are deemed to arise on the first business day of the Fund's next taxable year.
For the current fiscal period, the Fund did not defer any post-October capital losses.
10
EUCLIDEAN FUNDAMENTAL VALUE ETF
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
March 31, 2025
At the current fiscal period end, the Fund had the following capital loss carryforwards that do not expire:
Unlimited
Short-Term 		Unlimited
Long-Term
$ (5,532,384) $ (1,075,664)
NOTE 7 - DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid by the Fund during the current fiscal period and fiscal period ended March 31, 2024 were as follows:
Ordinary Income
Current Fiscal Period
Fiscal Period Ended
March 31, 2024(a)
$ 1,659,977 $ 1,304,128
(a)Inception date of the Fund was May 17, 2023.
NOTE 8 - SUBSEQUENT EVENTS
In preparing these financial statements, management of the Fund has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. There were no transactions that occurred during the period subsequent to current fiscal period, that materially impacted the amounts or disclosures in the Fund's financial statements.
11
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders of
Euclidean Fundamental Value ETF and
The Board of Trustees of
EA Series Trust
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Euclidean Fundamental Value ETF (the "Fund"), a series of EA Series Trust (the "Trust"), including the schedule of investments, as of March 31, 2025, the related statement of operations for the year ended March 31, 2025, the statement of changes in net assets and the financial highlights for the year ended March 31, 2025 and for the period May 17, 2023 (commencement of operations) to March 31, 2024 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of March 31, 2025, and the results of its operations, the changes in its net assets and the financial highlights for the periods stated above, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We have served as the auditor of one or more of the funds in the Trust since 2023.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2025, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
May 29, 2025
12
EUCLIDEAN FUNDAMENTAL VALUE ETF
FEDERAL TAX INFORMATION (UNAUDITED)
For the current fiscal period, certain dividends paid by the Fund may be subject to a maximum tax rate of 23.8%, as provided for by the Tax Cuts and Jobs Act of 2017. The percentage of dividends declared from ordinary income designated as qualified dividend income for the Fund was100.00%.
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the current fiscal period, for the Fund was 100.00%.
The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under the Internal Revenue Section 871(k)(2)(C) for the Fund was 0.00%.
13
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment
Companies.
There were no matters concerning changes in and disagreements with Accountants on accounting and financial disclosures required by Item 304 of Regulation S-K.
Item 9. Proxy Disclosures for Open-End Management Investment Companies.
There were no matters submitted during the period covered by the report to a vote of shareholders.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management
Investment Companies
Not applicable. The Independent Trustees are paid by the Adviser out of the advisory fee. See Note 3 to the Financial Statements under Item 7.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contracts.
The Board (the members of which are referred to as "Trustees") of the EA Series Trust (the "Trust") met in-person on March 6-7, 2025 to consider the approval of the continuation of the Advisory Agreement between the Trust, on behalf of the Euclidean Fundamental Value ETF (the "Fund"), and Empowered Funds, LLC dba EA Advisers (the "Adviser"), as well as to consider the approval of the continuation of the Sub-Advisory Agreement between the Adviser and Euclidean Technologies Management, LLC (the "Sub-Adviser"), each for an additional annual term. In accordance with Section 15(c) of the 1940 Act, the Board requested, reviewed and considered materials furnished by the Adviser and Sub-Adviser relevant to the Board's consideration of whether to approve the continuation of the Advisory Agreement and Sub-Advisory Agreement. In connection with considering the approval of both the Advisory Agreement and Sub-Advisory Agreement, the Trustees who are not "interested persons" of the Trust, as that term is defined in the 1940 Act (the "Independent Trustees"), met in executive session with counsel to the Trust, who provided assistance and advice. In reaching the decision to approve both the Advisory Agreement and Sub-Advisory Agreement, the Board considered and reviewed information provided by the Adviser and Sub-Adviser at this meeting and throughout the year, including among other things information about their respective personnel, operations, financial condition, and compliance and risk management. The Board also reviewed the Advisory Agreement and Sub-Advisory Agreement. During its review and consideration, the Board focused on and reviewed the factors it deemed relevant, including:
Nature, Quality, and Extent of Services. The Board was presented with and considered information concerning the nature, quality, and extent of the overall services provided by the Adviser to the Fund.In this connection, the Board considered the responsibilities of the Adviser, recognizing that the Adviser had invested significant time and effort in structuring the Trust and the Fund, and arranging service providers for the Fund. In addition, the Board considered that the Adviser is responsible for providing investment advisory oversight services to the Fund, executing all Fund transactions, monitoring compliance with the Fund's objectives, policies and restrictions, and carrying out directives of the Board. The Board also considered the services provided by the Adviser in the oversight of the Trust's administrator, transfer agent and custodian. In addition, the Board evaluated the integrity of each of the Adviser's and Sub-Adviser'spersonnel, the experience of the portfolio manager in managing assets and the adequacy of each of the Adviser's and the Sub-Adviser'sresources to perform the services provided under the Advisory Agreement and Sub-Advisory Agreement. The Board also considered the Adviser's ongoing oversight responsibilities vis-à-vis the Sub-Adviser.
Performance.The Board considered the third-party peer group analysis comparing the Fund's performance to the performance of other ETFs that the third-party deemed to be comparable to the Fund. It was determined that the Adviser and the Sub-Adviser have consistently managed the Fund's portfolio in accordance with its stated investment objective and strategies. The Board noted that, for the 1-year period ended December 31, 2024, the Fund returned below-average results relative to its peer group, and for the since-inception period, the Fund performed roughly in-line with the average of its peer group. The Board further noted that, because the Fund had been operational for fewer than three years, its since inception returns cover a relatively short period which may not reflect a sufficient variety of market conditions or market cycles by which to effectively judge longer-term performance.
Comparative Fees and Expenses. In considering the advisory fees and sub-advisory fees, the Board reviewed and considered the fees in light of the nature, quality, and extent of the services being provided by the Adviser and the Sub-Adviser, respectively. With respect to the advisory fees and expense ratio for the Fund, the Board also considered the third-party peer group analysis that included a comparison of the Fund's advisory fee and expense ratio versus the fees and expenses charged to other comparable ETFs. The Board also considered the allocation of fees between the Adviser and the Sub-Adviser.
The Board compared the Fund's gross total expense ratio, net total expense ratio, and management fee to those of its peer group, as shown in the third-party report. The Board noted that the Fund's management fee and net expense ratio were significantly above the average for its peer group. The Board also considered that the peer group is comprised primarily of U.S. Value-Focused Equity ETFs, rather than ETFs focused on utilizing machine learning models to select stocks. The Board further considered that the Adviser believes that the high fee is justified given the high costs associated with sub-advisory services that maintain and develop machine learning models. It was noted by the Board that they will monitor performance over the coming years to determine whether the Fund's returns merit the premium in fees. The Board considered the Fund's fee arrangement in which the Adviser is responsible for paying most of the Fund's operating expenses out of its resources, noting that comparisons with the Fund's overall expense ratio may be more relevant than comparisons to management fees only. The Board also considered the significant amount of expense for the development and maintenance of the machine learning models utilized to manage the Fund.
With respect to the sub-advisory fee, the Board noted that it was payable solely by the Adviser. The Board considered the representations from the Adviser that it does not manage any other accounts that follow a similar strategy. As it relates to the Sub-Adviser, the Board noted that the Sub-Adviser does not have any other clients.
Costs and Profitability. The Board further considered information regarding the potential profits, if any, that may be realized by each of the Adviser and the Sub-Adviser in connection with providing their respective services to the Fund. The Board reviewed the profit and loss information provided by the Adviser with respect to the Fund and considered the Adviser's profitability with respect to providing investment advisory services as well as non-advisory services. The Board also reviewed the same type of information provided by the Sub-Adviser. The Board discussed the financial condition of the Sub-Adviser, noting that the Sub-Adviser has sufficient capital to maintain its commitment to the Fund for an additional annual period. The Board also reviewed the costs associated with the personnel, systems and equipment necessary to manage the Fund and to meet the regulatory and compliance requirements adopted by the SEC and other regulatory bodies. The Board also considered other expenses of the Fund the Adviser would pay in accordance with the Advisory Agreement. The Board took into consideration that, pursuant to the Advisory Agreement, the Adviser agreed to pay all expenses incurred by the Fund except for the fees paid to the Adviser pursuant to the Advisory Agreement, payments under any distribution plan adopted pursuant to Rule 12b-1, brokerage expenses, acquired fund fees and expenses, taxes, interest (including borrowing costs), the fees and expenses associated with the Fund's securities lending program, litigation expenses and other non-routine or extraordinary expenses. The Board also considered the respective financial obligations of the Adviser, as well as the Sub-Adviser, who serves as the sponsor of the Fund.
Other Benefits. The Board further considered the extent to which the Adviser or the Sub-Adviser might derive ancillary benefits from the Fund's operations. In addition, the Adviser may benefit from continued growth in the Trust by potentially negotiating better fee arrangements with key vendors serving the Fund and other series in the Trust.
Economies of Scale. The Board also considered whether economies of scale would be realized by the Fund as its assets grow larger, including the extent to which this is reflected in the level of fees to be charged. The Board also noted that the advisory and sub-advisory fees do not include breakpoints but concluded that it was premature to meaningfully evaluate potential economies of scale given the Fund's current assets.
Conclusion. No single factor was determinative of the Board's decision to approve the continuation of the Advisory Agreement and Sub-Advisory Agreement for an additional annual term; rather, the Board based its determination on the total mix of information available to it. Based on a consideration of all the factors in their totality, the Board, including the Independent Trustees, unanimously determined that the Advisory Agreement and Sub-Advisory Agreement, including the compensation payable under each Agreement, were fair and reasonable to the Fund. The Board, including the Independent Trustees, unanimously determined that the approval of the continuation of each of the Advisory Agreement and the Sub-Advisory Agreement was in the best interests of the Fund and its shareholders.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 13. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 15. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of trustees.
Item 16. Controls and Procedures.
(a) The Registrant's President (principal executive officer) and Treasurer (principal financial officer) have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant's service provider.
(b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable to open-end investment companies.
Item 18. Recovery of Erroneously Awarded Compensation.
(a) Not applicable.
(b) Not applicable.
Item 19. Exhibits.
(a)
(1)
Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Filed herewith.
(2)
Any policy required by the listing standards adopted pursuant to Rule 10D-1 under the Exchange Act (17 CFR 240.10D-1) by the registered national securities exchange or registered national securities association upon which the registrant's securities are listed. Not Applicable.
(3)
A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)).Filed herewith.
(4)
Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not Applicable.
(5)
Change in the registrant's independent public accountant. Not Applicable.
(b)
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) EA Series Trust
By (Signature and Title) /s/ Wesley R. Gray, PhD.
Wesley R. Gray, PhD., President (principal executive officer)
Date: June 4, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) /s/ Wesley R. Gray, PhD.
Wesley R. Gray, PhD., President (principal executive officer)
Date: June 4, 2025
By (Signature and Title) /s/ Sean R. Hegarty
Sean R. Hegarty, CPA, Treasurer (principal financial officer)
Date: June 4, 2025
Alpha Architect ETF Trust published this content on June 05, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on June 05, 2025 at 14:42 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at support@pubt.io