What changed in this filing

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Item 1. Financial Statements

2025-08-13 compared with 2025-05-15 · 363 added, 354 removed, 159 unchanged (82% of the section changed)

1 unchanged sentence

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

Consolidated Balance Sheets (Unaudited)

Current assets

Cash and cash equivalents

Other receivable

Prepaid expenses and other current assets

Total current assets

Equipment, net

Property, equipment and software, net

Operating lease right-of-use assets, net

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Intangible assets

Deferred offering costs

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities

Accounts payable

Other payables and accrued expenses

Contract liabilities

Other payables

Accrued expenses and other current liabilities

Convertible note payable to related party

Current maturities of operating lease liabilities

Due to related party

Total current liabilities

Operating lease liabilities, less current maturities

Total liabilities

Commitments and Contingencies (Note 6)

Stockholders’ deficit

Stockholders’ equity (deficit)

Preferred Stock, authorized:

shares at $ 0.001

issued and outstanding:

shares at March 31, 2025 and December 31, 2024

10,000,000 shares at $ 0.001 par value, including 3,000,000 shares designated as Series A Convertible Preferred Stock at $ 0.001 par value;

2,305,357 Series A shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively.

Common Stock, authorized:

shares at $ 0.01

shares at $ 0.01 par value;

issued and outstanding:

shares at March 31, 2025 and December 31, 2024 respectively

6,224,389 shares at June 30, 2025 and 3,713,792 shares at December 31, 2024

Additional paid-in capital

Accumulated deficit

Total stockholders’deficit

Total liabilities and stockholders’ deficit

Accumulated other comprehensive income

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

See accompanying notes to the unaudited condensed consolidated financial statements.

2 unchanged sentences

Three Months Ended

Cost of goods sold

Six Months Ended

Cost of sales

Operating expenses:

5 unchanged sentences

Operating loss

Other expense:

Interest (expense), net

Total other (expense)

Other income (expense):

Interest income (expense), net

Foreign currency exchange loss

Total other income (expense)

Loss before income taxes

Income tax benefit

Basic and diluted net loss per share

Weighted average common and common equivalent shares:

Net loss per share:

Basic and diluted

See accompanying notes to the unaudited condensed consolidated financial statements.

Basic and diluted weighted average common and common equivalent shares

See accompanying notes to unaudited condensed consolidated financial statements.

AND SUBSIDIARIES

Condensed Consolidated Statements of

Stockholders’ (Deficit) Equity

For the three months ended March 31, 2025

Condensed Consolidated Statements of Stockholders’ Equity (deficit)

For the six months ended June 30, 2025

Preferred Stock

Stockholders’

Comprehensive

Balance at December 31, 2024

Common stock issued

Stock-based compensation

Balance at March 31, 2025

For the three months ended March 31, 2024

Foreign currency translation

Common Stock Issuance

Balance at June 30, 2025

For the six months ended June 30, 2024

Preferred Stock

Stockholders’

Comprehensive

Balance at December 31, 2023

3 unchanged sentences

Balance at March 31, 2024

See accompanying notes to the unaudited condensed consolidated financial statements.

Balance at June 30, 2024

See accompanying notes to unaudited condensed consolidated financial statements.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

Cash flows used in operating activities:

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Accounts receivable

Other receivable

Prepaid expenses and other current assets

Accounts payable

Accrued expenses

Due to related party

Contract liabilities

Other payables

Accrued expenses and other current liabilities

Operating lease liabilities

Net cash used in operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

2 unchanged sentences

Proceeds from preferred stock issuance

Proceeds from debt

Proceeds from the issuance of common stock

Proceeds from the issuance of convertible note

Net cash provided by financing activities

Effect of foreign exchange rate changes on cash

Net increase (decrease) in cash and cash equivalents

3 unchanged sentences

Cash paid during the period for:

Cash is reported on the condensed consolidated statements of cash flows as follows:

Cash and cash equivalents

Total cash, cash equivalents and restricted cash

Supplemental disclosures of non-cash investing and financing activities:

Non-cash common stocks issued and to be issued that were recognized in deferred offering costs

Obtaining right-of-use assets in exchange for operating lease liability

Purchase of property and equipment, and intangible assets through increase in other payables

See accompanying notes to the unaudited condensed consolidated financial statements.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial

Notes to Condensed Consolidated Financial Statements

(1) NATURE OF OPERATIONS AND BASIS OF PRESENTATION

(formerly, Minim,

Inc.) was founded in 1977 as a networking company and pivoted into delivering intelligent software to protect and improve the WiFi connections

we depend on to work, learn, and live.

FiEE held the exclusive global license to design, manufacture, and sell consumer networking products

under the Motorola brand until 2023.

Our cable and WiFi products, with an intelligent operating system and bundled mobile app, were sold

in leading retailers and e-commerce channels in the United States (“U.S.”).

Our AI-driven cloud software platform and applications

make network management and security simple for home and business users, as well as the service providers that assist them— leading

to higher customer satisfaction and decreased support burden.

(formerly, Minim,

Inc.) and its wholly owned subsidiaries, FiEE (HK) Limited, which was incorporated in March 2025, MTRLC LLC, and Minim Asia Private Limited,

are herein collectively referred to as “FiEE” or the “Company”.

The Company delivered

intelligent networking products that reliably and securely connected homes and offices around the world.

We were the exclusive global

license holder to the Motorola brand for home networking hardware until 2023.

The Company designed and manufactured products including

cable modems, cable modem/routers, mobile broadband modems, wireless routers, Multimedia over Coax (“MoCA”) adapters and mesh

home networking devices.

Our AI-driven cloud software platform and applications made network management and security simple for

home and business users, as well as the service providers that assisted them.

We continue to grow and

expand our operations a digital service provider focused on integrating artificial intelligence and data analytics into content

creation and brand management.

We offer a range of SaaS solutions designed to support our clients in

developing, managing, and optimizing their digital presence across global platforms, including customized graphic and posts, short

videos, and editorial calendars aligned with brand goals.

We provide digital content management

solutions and brand growth strategies primarily through three service verticals:

(1) digital account management, (2) content operations

and growth analytics, and (3) community engagement and creator partnerships.

These services are structured to support clients at varying

stages of digital development, from initial account setup to multi-platform brand promotion.

On February 27, 2025,

the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Amended and Restated Certificate

of Incorporation (the “Certificate of Amendment”) to change the name of the Company from Minim, Inc.

to FiEE, Inc., effective

as of February 27, 2025.

(formerly, Minim, Inc.) was founded in 1977 as a networking company and pivoted into delivering intelligent software to protect and improve the WiFi connections we depend on to work, learn, and live.

FiEE held the exclusive global license to design, manufacture, and sell consumer networking products under the Motorola brand until 2023.

Our cable and WiFi products, with an intelligent operating system and bundled mobile app, were sold in leading retailers and e-commerce channels in the United States (“U.S.”).

Our AI-driven cloud software platform and applications make network management and security simple for home and business users, as well as the service providers that assist them— leading to higher customer satisfaction and decreased support burden.

and its wholly owned subsidiaries, FiEE (HK) Limited, which was incorporated in March 2025, MTRLC LLC, and Minim Asia Private Limited, are herein collectively referred to as “FiEE” or the “Company”.

The Company delivered intelligent networking products that reliably and securely connected homes and offices around the world.

We were the exclusive global license holder to the Motorola brand for home networking hardware until 2023.

The Company designed and manufactured products including cable modems, cable modem/routers, mobile broadband modems, wireless routers, Multimedia over Coax (“MoCA”) adapters and mesh home networking devices.

Our AI-driven cloud software platform and applications made network management and security simple for home and business users, as well as the service providers that assisted them.

We continue to grow and expand our operations as a digital service provider focused on integrating artificial intelligence and data analytics into content creation and brand management.

We offer a range of SaaS solutions designed to support our clients in developing, managing, and optimizing their digital presence across global platforms, including customized graphic and posts, short videos, and editorial calendars aligned with brand goals.

We provide digital content management solutions and brand growth strategies primarily through three service verticals:

(1) digital account management, (2) content operations and growth analytics, and (3) community engagement and creator partnerships.

These services are structured to support clients at varying stages of digital development, from initial account setup to multi-platform brand promotion.

On February 27, 2025, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the “Certificate of Amendment”) to change the name of the Company from Minim, Inc.

to FiEE, Inc., effective as of February 27, 2025.

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with the requirements of the U.S.

The accompanying unaudited

condensed consolidated financial statements of the Company have been prepared in accordance with the requirements of the U.S.

Securities and Exchange Commission (“SEC”) for interim reporting.

As permitted under those rules, certain footnotes or other financial information that are normally required by U.S.

generally accepted accounting principles (“GAAP”) can be condensed or omitted.

In the opinion of management, the financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s financial position and operating results.

All intercompany balances and transactions have been eliminated in consolidation.

The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The results of the Company’s

operations can vary during each quarter of the year.

Therefore, the results and trends in these interim financial statements may not be

the same as those for the full year or any future periods.

As permitted under those rules, certain footnotes or

other financial information that are normally required by U.S.

generally accepted accounting principles (“GAAP”) can be

condensed or omitted.

In the opinion of management, the financial statements include all normal and recurring adjustments that are

considered necessary for the fair presentation of the Company’s financial position and operating results.

All intercompany

balances and transactions have been eliminated in consolidation.

The information included in this Quarterly Report on Form 10-Q

should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for

the year ended December 31, 2024.

The results of the Company’s operations can vary during each quarter of the year.

Therefore, the results and trends in these interim financial statements may not be the same as those for the full year or any future periods.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S.

GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting period.

These judgments, estimates and assumptions made by the Company include, but are not limited to revenue recognition, expected credit losses;

contract liabilities (sales returns);

valuation allowance for deferred income tax assets;

write-downs of inventory for slow-moving and obsolete items and stock-based compensation.

The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate.

Actual results may differ from those estimates under different assumptions or conditions and the differences may be material.

The Company’s

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has incurred significant losses and negative cash flows from operations.

During the three months ended March 31, 2025, the

Company incurred a net loss of $374 ( 373,910 )

thousand, and used cash from operations of $371 ( 371,058 )

thousand, which was offset by $350 350,000

thousand in cash provided from financing activities.

As of March 31, 2025, the Company had an accumulated deficit of $97 97,066,966

million and cash and cash equivalents of $9 9,104 thousand.

The Company will continue to monitor its costs in relation to its sales

and adjust its cost structure accordingly.

During the six months ended June 30, 2025, the Company

incurred a net loss of $1 ( 1,013,590 ) million, and used cash from operations of $172 171,955

thousand, which was offset by $4.3 4,300,000 million in cash provided from financing activities.

As of June 30, 2025, the Company had an accumulated deficit of $98 ( 97,707,603 )

million and cash and cash equivalents of $4.5 4,504,079 million.

These conditions raise substantial doubt about the Company’s

ability to continue as a going concern one year from the date the condensed consolidated financial statements were issued.

Company will continue to monitor its costs in relation to its sales and adjust its cost structure accordingly.

The Company’s condensed consolidated financial statements as of June 30, 2025, do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

If the Company is unable to raise additional capital and is therefore unable to continue as a going concern, it may have to liquidate its assets and may receive less than the value at which those assets are carried on its consolidated financial statements, and it is likely that investors will lose all or part of their investment.

Non-Binding Letter of Intent

On March 25, 2025,

the Company entered into a non-binding letter of intent (“LOI”) with Hongyan Sun and Lin Lin (collectively, the

“Sellers”), pursuant to the terms of which the Sellers will transfer 100% of their equity interests in Suzhou Yixuntong

Network Technology Co., Ltd.

(the “Target Company”) to the Company (the “Potential Transaction”) for a

purchase price not to exceed $2,000,000.

The Company shall make a prepayment of $300,000 to the Sellers upon the signing of the LOI

and the prepayment had not been paid as of March 31, 2025.

Upon the signing of this LOI,

the Target Company and the Sellers (i) have granted the access of the Target Company’s service ports to the Company;

(ii) have connected

the Company to the Target Company’s Software as a Service platform;

(iii) and is working with the Company to ensure it can carry

out the Multi-Channel Network business in the second quarter of 2025.

The Potential Transaction

is subject to the Company’s satisfactory completion of legal, tax, financial, operation, human resources and administration, and

environmental due diligence of Target Company and such other due diligence as the Company may deem necessary.

The Company and the Sellers

expect to complete the Potential Transaction as soon as reasonably practicable, but in no event later than six (6) months after signing

of the LOI (the “Long-Stop Date”).

The Sellers have agreed that that, from the date of the LOI through the Long-stop Date,

or the date when the Company informs the Sellers that the exclusivity expires, whichever occurs earlier, the Sellers shall refrain, directly

or indirectly from (i) soliciting offers from third parties to acquire Target Company and/or its business, and from offering Target Company

or its business to any person, firm, group or corporation other than the Company;

and (ii) entering into any agreement aimed at selling

or otherwise transferring Target Company or the business or that may otherwise prevent the parties from consummating the Potential Transaction.

The Company expects to announce

additional details regarding the Potential Transaction if and when a definitive agreement is executed.

No assurances can be made that

the Company will successfully negotiate and enter into a definitive agreement with respect to the Potential Transaction, or that the Potential

Transaction will be consummated on the terms or timeframe currently contemplated, or at all.

Any transaction is subject to board and shareholder

holder approval of the Company, regulatory approvals and other customary conditions.

On March 25, 2025, the Company entered into a non-binding letter of intent (“LOI”) with Hongyan Sun and Lin Lin (collectively, the “Sellers”), pursuant to the terms of which the Sellers will transfer 100% of their equity interests in Suzhou Yixuntong Network Technology Co., Ltd.

(the “Target Company”) to the Company (the “Potential Transaction”) for a purchase price not to exceed $2,000,000.

The Company shall make a prepayment of $300,000 to the Sellers upon the signing of the LOI and the prepayment had not been paid as of March 31, 2025.

Upon the signing of this LOI, the Target Company and the Sellers (i) have granted the access of the Target Company’s service ports to the Company;

(ii) have connected the Company to the Target Company’s Software as a Service platform;

(iii) and are working with the Company to ensure it can carry out the Multi-Channel Network business in the second quarter of 2025.

The Potential Transaction is subject to the Company’s satisfactory completion of legal, tax, financial, operation, human resources and administration, and environmental due diligence of Target Company and such other due diligence as the Company may deem necessary.

The Company and the Sellers expect to complete the Potential Transaction as soon as reasonably practicable, but in no event later than six (6) months after signing of the LOI (the “Long-Stop Date”).

The Sellers have agreed that that, from the date of the LOI through the Long-stop Date, or the date when the Company informs the Sellers that the exclusivity expires, whichever occurs earlier, the Sellers shall refrain, directly or indirectly from (i) soliciting offers from third parties to acquire Target Company and/or its business, and from offering Target Company or its business to any person, firm, group or corporation other than the Company;

and (ii) entering into any agreement aimed at selling or otherwise transferring Target Company or the business or that may otherwise prevent the parties from consummating the Potential Transaction.

On June 27, 2025, the Company and the Sellers entered into an amendment to the LOI (the “Amended LOI”).

The Amended LOI extended the completion date for the Potential Transaction to March 25, 2026.

Additionally, the Amended LOI outlined the transfer of certain fixed assets and intellectual property, including patents and copyrights, from the Target Company to the Company.

The purchase price for these assets was $ 1.4 million and the Amended LOI was executed as part of a simultaneous sign and close transaction on June 30, 2025, as discussed in the following section.

The Potential Transaction is subject to the Company’s satisfactory completion of legal, tax, financial, operational, human resources, administrative, and environmental due diligence, as well as any other due diligence deemed necessary by the Company.

The Company and the Sellers anticipate completing the Potential Transaction by March 25, 2026, subject to regulatory approvals, board and stockholder approvals, and other customary conditions.

The Company expects to announce additional details regarding the Potential Transaction if and when a definitive agreement is executed.

No assurances can be made that the Company will successfully negotiate and enter into a definitive agreement with respect to the Potential Transaction, or that the Potential Transaction will be consummated on the terms or timeframe currently contemplated, or at all.

Any transaction is subject to board and stockholder approval of the Company, regulatory approvals and other customary conditions.

Asset Purchase Agreement

On June 30, 2025, FiEE (HK) Limited, a wholly owned subsidiary of the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Hongyan Sun, Lin Lin and the Target Company, to purchase certain fixed assets and intellectual property, including patents and copyrights, of the Target Company for a total purchase price of $ 1.4 million (the “Asset Acquisition”).

The Asset Acquisition was structured as a simultaneous sign and close transaction which closed on June 30, 2025.

The purchase price was partly paid in the subsequent period.

The transaction was accounted for as an asset acquisition under ASC 805-50 and SEC Regulation S-X Rule 11-01(d).

As part of the assessment, the Company applied the initial screen test, which considers whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

In this case, substantially all of the fair value was concentrated in the software codes and related patents, by using market approach method and Excess earning approach method prepared by a third party valuation specialist.

Accordingly, the transaction did not meet the definition of a business and was accounted for as an acquisition of assets, with the total purchase consideration allocated on a relative fair value basis.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant

accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024.

The Company’s significant

accounting policies did not change during the three months ended March 31, 2025.

The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024.

The Company’s significant accounting policies have no material changes during the six months ended June 30, 2025, except for the following updates resulting from transactions that occurred and the establishment of a new operating subsidiary during the current period.

Functional Currency

The functional currency of FiEE HK is the Hong Kong dollar (HKD).

Foreign currency transactions are translated into HKD using exchange rates at the transaction dates, while monetary assets and liabilities denominated in foreign currencies are remeasured at period-end rates.

The functional currency of all other entities of the Company is US Dollar (USD), the same as the reporting currency.

Assets and liabilities of the Company denominated in functional currency other than USD are translated into USD at fiscal year-end exchange rates.

Equity accounts other than earnings generated in the current period are translated into USD at the appropriate historical rates.

The results of operations and the statements of cash flows denominated in functional currency other than USD are translated into USD at the average exchange rates during the reporting period.

Translation adjustments arising from these are reported as cumulative translation adjustments and are shown as a separate component of accumulated other comprehensive loss in the consolidated statements of changes in shareholders’ equity.

Deferred Offering Costs

Offering costs directly attributable to a potential private offering of equity securities are accounted for in accordance with ASC 340 10 S99 1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5.A – Expenses of Offering.

The Company’s offering costs primarily consist of commitment fees incurred through the balance sheet date, which have been deferred and recorded as a non-current asset, as the offering had not been completed as of the reporting date.

Upon successful completion of the private offering, such costs will be charged against the proceeds and recorded as a reduction to stockholders’ equity.

If the offering is ultimately unsuccessful or abandoned, the deferred offering costs will be expensed in the period in which the offering is terminated.

Property, Equipment and Software

Property, equipment and software primarily consisted of equipment, vehicles, and internal-use software customized by a third-party vendor, which are stated at cost, and are depreciated or amortized on a straight-line basis over their estimated useful lives, which is generally three to five years.

Maintenance and repairs are charged to expense as incurred.

Significant improvements that substantially enhance the useful life of an asset are capitalized and depreciated.

When assets are retired or disposed of, the cost together with related accumulated depreciation is removed from the balance sheet and any resulting gain or loss is reflected in the Company’s statements of operations in the period realized.

Costs incurred to develop internal-use software are capitalized only during the application development stage.

Schedule of property, equipment and software useful life

Estimated useful life

Internal use software

Intangible Assets

Intangible assets primarily

consisted of acquired group of proprietary software, which are stated at cost and are amortized on a straight-line basis over their

estimated useful lives.

The estimated useful life of the Company’s intangible assets is 3

The amortization started in July 2025.

Fair Market Value

The Company complies with FASB ASC 820, “Fair Value Measurements and Disclosures,” for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date.

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

These tiers include:

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.

In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

Entity incorporated in Hong Kong is subject to Hong Kong Profits Tax rate at 16.5 % , and foreign-derived income is exempted from income tax.

There are no withholding taxes upon payment of dividends by the entities incorporated in Hong Kong to its shareholders.

For the three and six months ended June 30 2025, no provision of Hong Kong Profit Tax was made, as the Company had no assessable profit subject to Hong Kong Profits Tax.

Segment reporting

The Company operates as a single operating segment.

The Company’s chief operating decision maker, its Chief Executive Officer, reviews financial information on an aggregate basis for the purposes of allocating resources and evaluating financial performance.

The Company’s primary operations were historically in the United States, and prior to the end of 2024, it derived substantially all of its revenue from sales to customers in the U.S.

Beginning in March 2025, following the expansion of its operations in Hong Kong, the Company has derived all its revenues from Hong Kong.

As of December 31, 2024, the Company had no significant long-lived assets.

As of June 30, 2025, the Company’s long-lived assets are mainly located in Hong Kong.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires that an entity disclose significant segment expenses impacting profit and loss that are regularly provided to the chief operating decision maker.

The update is required to be applied retrospectively to prior periods presented, based on the significant segment expense categories identified and disclosed in the period of adoption.

The amendments in ASU 2023-07 are required to be adopted for fiscal years beginning after December 15, 2023 for public entities.

The Company adopted ASU 2023-07 for the year ended December 31, 2024.

For the three and six months ended June 30, 2025, significant segment expenses that are regularly provided to the CODM and included in this measure consist of cost of revenues, selling, general, and administrative expenses, specifically, professional expenses for the relisting.

The amounts of these expenses are presented in the condensed consolidated statements of operations.

Recently Issued Accounting Standards

There have been no other new

accounting pronouncements that have significance, or potential significance, to the Company’s financial position, results of operations

and cash flows .

There have been no other new accounting pronouncements that have significance, or potential significance, to the Company’s financial position, results of operations and cash flows .

(3) REVENUE AND OTHER CONTRACTS WITH CUSTOMERS

Revenue recognized for each distinct

performance obligation as control is transferred to the customer.

Revenue attributable to hardware products bundled with Software-as-a-Service

(“SaaS”) offerings are recognized at the time control of the product transfers to the customer.

The transaction price allocated

to the SaaS offering is recognized ratably beginning when the customer is expected to activate their account and over a period of one

to three years that the Company has estimated based on the expected replacement of the hardware.

Revenues from SaaS service before the end of 2024

Revenue recognized for each distinct performance obligation as control is transferred to the customer.

Revenue attributable to hardware products bundled with Software-as-a-Service (“SaaS”) offerings are recognized at the time control of the product transfers to the customer.

The transaction price allocated to the SaaS offering was recognized ratably beginning when the customer was expected to activate their account and over a three-year period that the Company estimated based on the expected replacement of the hardware.

Revenues from SaaS service- MCN Digital Service in 2025

The Company expands SaaS operations as a digital service provider, delivering full-cycle services to brand clients through legally binding agreements since March 2025.

The Company offers full-service account management, content production, and targeted promotion to grow followers across key platforms.

Service packages customizable via the SaaS portal.

Customers may purchase value-added services with or after their purchases of basic package.

Services provided under the basic services and the value-added services are considered two performance obligations, each with a standalone transaction price.

The Company recognizes revenues from basic services ratably over the contract term beginning on the commencement date of each contract.

The revenues from value-added services are recognized at a point in time when customers approve or accept the value-added services or system automatically approves whichever is later.

The Company requires an upfront payment for the services, which is non-refundable upon execution of the contract.

Customers retain the right to terminate the contract prior to its expiration date, subject to the early termination fees, including information transfer fee and fan development fee.

No value-added revenues were recognized at a point in time as of June 30, 2025.

Transaction Price Allocated to the Remaining Performance Obligations

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Non-cancellable backlog includes goods for which customer purchase orders have been accepted, that are scheduled or in the process of being scheduled for shipment, and that are not yet invoiced.

Prior years’ performance obligations were all satisfied and recognized as revenue in the periods before the end of 2024.

As of June 30, 2025, the remaining performance obligation relates to MCN digital services purchased and paid for in advance by customers for basic and value-added packages, which was amounted to $1,468,346, equals the balance of contract liabilities.

Contract Costs

1 unchanged sentence

The Company has determined that certain sales commissions meet the requirements to be capitalized, and the Company amortizes these costs on a consistent basis with the pattern of transfer of the goods and services in the contract.

Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our condensed consolidated balance sheets.

Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our condensed consolidated balance sheets if any.

The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period is one year or less.

2 unchanged sentences

The Company records accounts receivable when it has an unconditional right to the consideration.

The Company did no t have contract liabilities at March 31, 2025 and December 31, 2024.

Contract liabilities are recorded when customers remit payment prior to revenue recognition, representing the Company’s obligation to transfer services in the future.

Liabilities arise upon customer order placement.

The Company did not have contract liabilities at December 31, 2024, while the ending balance at June 30, 2025 was $ 1,468,346 .

Disaggregation of Revenue

The following table sets forth our revenues by distribution channel:

Schedule of disaggregation of revenue by distribution channel

Schedule of disaggregation of revenue

Three Months Ended

Six Months Ended

Other online and offline channels

1 unchanged sentence

Three Months Ended

Six Months Ended

Cable modems & gateways

Other networking products

SaaS – MCN digital services

(4) BALANCE SHEET COMPONENTS

Other payables and accrued expenses

Other payables and accrued

expenses consist of the following:

Property, equipment and software, net

Property, equipment and software, net consists of the following:

Schedule of equipment

Internal use software

Total property, equity and software

Accumulated depreciation and amortization

Total property, equipment and software, net

For the three months ended

June 30, 2025 and 2024, depreciation and amortization was $ 22

thousand and $ 83

thousand, respectively.

Depreciation and amortization expense was $ 72 thousand

thousand for the years ended June 30, 2025 and 2024, respectively.

Intangible assets

As part of the asset

acquisition completed on June 30, 2025, a substantial portion of the total purchase consideration was allocated to intangible

assets, primarily consisting of acquired proprietary software, which represent a group of software code and associated patents that

are expected to provide future economic benefits to the Company.

The allocation of the purchase price was performed on a relative

fair value basis in accordance with ASC 805-50.

The acquired group of proprietary software is being amortized over 3

years, its estimated useful life.

Intangible assets consisted of the following at June 30, 2025 and December 31, 2024:

Schedule of intangible assets

As of June 30, 2025

As of December 31, 2024

Gross Carrying

group of proprietary software

Amortization expense was $ 0 thousand and $ 29 thousand in the three months ended June 30, 2025 and 2024, respectively.

Amortization expense was $ 0 thousand and $ 33 thousand in the six months ended June 30, 2025 and 2024, respectively.

Estimated amortization expenses for the future years are as follows:

Schedule of Amortization

Years ending December 31,

Prepaid and other current assets

Prepaid and other current assets consist of the following:

Schedule of inventories

Insurance fees

Cloud hosting fee

Total prepaid and other current assets

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following:

Schedule of accrued expenses

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Professional fees

Board of director fees

Value of shares to be issued

Sales allowances

Sales and use tax

Vendor contingent payments (Note 6)

Rental Fee and Security Deposit

Contract liabilities

Total other payables and accrued expenses

The Company previously had entered into agreements to lease certain office space as well as its former warehouses and distribution centers under operating leases, which have been expired.

Following the expiration, the Company’s newly established Hong

Kong subsidiary in February 2025 executed new office lease agreements.The Company recognizes lease expense for these leases

on a straight-line basis over the lease term.

Right-of-use (“ROU”) assets and lease liabilities are recorded on the balance

sheet for all leases, except leases with an initial term of 12 months or less.

The components of lease liabilities

were as follows:

accrued expenses and other current liabilities

There was a balance of $7,232 due to a stockholder of the Company, Cao Yu, which represents the amount paid by Cao Yu to support the company’s normal operating activities.

Other payables

As of June 30, 2025, other payables included $ 1.4 million for the assets acquisition, $ 90 thousand for a software development, $ 20 thousand for advanced hosting fee, and $ 18 thousand for software maintenance, all payable to a single third-party vendor.

The Company previously had entered into agreements to lease certain office space as well as its former warehouses and distribution centers under operating leases, which have expired.

Following the expiration, the Company’s newly established Hong Kong subsidiary executed new office lease agreements in March 2025.

The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Right-of-use (“ROU”) assets and lease liabilities are recorded on the balance sheet for all leases, except leases with an initial term of 12 months or less.

The components of lease expenses were as follows:

Schedule of components of lease costs

Three Months Ended

Current operating lease liabilities

Long-term operating lease liabilities

Total lease liabilities

Six Months Ended

Operating lease costs

Short-term lease costs

Total lease costs

Cash paid for amounts included in the measurement of lease liabilities

The weighted-average remaining lease term and discount rate were as follows:

Schedule of weighted average remaining lease term and discount rate

Three Months Ended

Operating leases:

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Weighted average discount rate

Supplemental cash flow information and non-cash activity related to our operating leases are as follows:

Schedule of supplemental cash flow information related to operating leases

Three Months Ended

Operating cash flow information:

Amounts included in measurement of lease liabilities

Non-cash activities:

ROU asset obtained in exchange for lease liability

The Company leased office space from an affiliate entity owned by the Company’s former Chairman of the Board.

The lease expired and was not renewed in the first quarter of 2024.

(6 ) COMMITMENTS AND CONTINGENCIES

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Additionally, the Company was required to make quarterly royalty payments equal to a certain percentage of the preceding quarter’s net sales with minimum annual royalty payments.

Following the Company’s agreement with Motorola Mobility LLC on January 22, 2024, the Company’s quarterly royalty payments, in addition to current and future obligations, were satisfied in exchange for certain assets of the Company.

The Company did not incur

royalty expenses under the License Agreement for the three months ended March 31, 2025 and 2024.

Following the Company’s agreement with Motorola Mobility LLC on January 22, 2024, as mentioned below.

The Company’s quarterly royalty payments, in addition to current and future obligations, were satisfied in exchange for certain assets of the Company.

The Company did not incur royalty expenses under the License Agreement for the three and six months ended June 30, 2025 and 2024.

On January 22, 2024, the Company, entered into a Letter Agreement re Product Purchase (the “Letter Agreement”) and a Debt Settlement Agreement (the “Settlement Agreement,” and the Letter Agreement, the “Agreements”) with Motorola Mobility, LLC (“Motorola”).

2 unchanged sentences

The Company believes that the Agreements, together with arrangements it has finalized with other major vendors, will allow the Company to streamline its operations while reducing its current liabilities.

On March 2025, the Company entered into a software development service contract with a third-party vendor to customize and develop an internal-use software.

The total contract price is $300 thousand, of which $90 thousand was due and included in the balance of other payables.

The remaining $180 thousand is expected to be due before the end of 2025, and $30 thousand will be due in 2026.

(b) Vendor Obligation Releases

In its efforts to manage its

liquidity and cash-flow position, the Company negotiated and executed liability release agreements with certain vendors in Q4 2023 who

comprised $ 5.0 million of outstanding accounts payable as of December 31, 2023.

In aggregate, the executed release agreements resulted

in a reduction of outstanding accounts payable obligations by $3.6 million from $5.0 million to $1.4 million.

The executed release agreements

became effective and are contingent upon payment of the $ 1.4 million negotiated amounts received during the period of Q1 2024.

the Company agreed to pay certain vendors an additional adjusted $ 0.3 million contingent upon successful collection of customer receivables.

As of March 31, 2024, the contingent amount had not been paid and is accounted in accrued expenses on the accompanying condensed

consolidated balance sheets.

In July 2024, the Company paid the contingent amount

of $ 0.3 million to its vendors.

In its efforts to manage its liquidity and cash-flow position, the Company negotiated and executed liability release agreements with certain vendors in Q4 2023 who comprised $ 5.0 million of outstanding accounts payable as of December 31, 2023.

In aggregate, the executed release agreements resulted in a reduction of outstanding accounts payable obligations by $3.6 million from $5.0 million to $1.4 million.

The executed release agreements became effective and are contingent upon payment of the $ 1.4 million negotiated amounts received during the period of Q1 2024.

In addition, the Company agreed to pay certain vendors an additional $0.4 million contingent upon successful collection of customer receivables.

After the collection of customer receivables, the contingent amount was amended to $ 0.3 million during the period ended June 30, 2024.

As of June 30, 2024, the contingent amount has not been paid and is accounted in accrued expenses on the accompanying condensed consolidated balance sheets.

In July 2024, the Company paid the contingent amount of $ 0.3 million to its vendors.

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If there is a reasonable possibility that a loss may be incurred, the Company discloses the estimate of the amount of the loss or range of losses - that the amount is not material, or that an estimate of the loss cannot be made.

At March 31, 2025, the Company is not currently a party to any legal proceedings that, if determined adversely to the Company, in management’s opinion, are currently expected to individually or in the aggregate have a material adverse effect on the Company’s business, operating results or financial condition taken as a whole.

At June 30, 2025, the Company is not currently a party to any legal proceedings that, if determined adversely to the Company, in management’s opinion, are currently expected to individually or in the aggregate have a material adverse effect on the Company’s business, operating results or financial condition taken as a whole.

The Company expenses its legal fees as incurred.

4 unchanged sentences

However, the Company is unable to predict the outcome of these matters.

(7) SIGNIFICANT CUSTOMERS AND DEPENDENCY ON KEY SUPPLIERS

During the three months ended

March 31, 2025, the Company had 1 new customer upon launching our SAAS product on March 28, 2025.

As of April 30, 2025, the number

of our customers was 39 .

As of April 30, 2025, prepaid subscription fees received from customers for our SaaS service amounted to $ 203

During the three months ended

March 31, 2024, two companies, including a marketplace facilitator, accounted for 10% or greater individually and 100 % in the aggregate

of the Company’s total net sales.

As of March 31, 2024, one company with an accounts receivable balance of 10% or greater

individually accounted for 100 % of the Company’s accounts receivable.

During the three months ended

March 31, 2025 and 2024, the Company did not have any concentration of suppliers.

(8) RELATED PARTY TRANSACTIONS

Rent expense charged by related

party and amount due to related party:

The Company leased office space

located at 848 Elm Street, Manchester, NH.

The landlord was an affiliate entity owned by Mr.

Jeremy Hitchcock, who was the Company’s

former Chairman of the Board.

On July 18, 2022, the lease agreement, which originated in August 2019, was amended to a month-to-month

lease arrangement.

The lease was not renewed in September 2024.

The facility lease agreement provided for 2,656 square feet.

three-months period ended March 31, 2025 and 2024, the rent expense was $ 0 and $ 14 thousand, respectively.

Amount due to Shareholder and related party:

Schedule of due to shareholder and related party

Three Months Ended

Due to the shareholder Cao Yu

Due to the shareholder David Lazar

$50,000 of the $53,000 due to Cao Yu for the period ended March 31,

2025 was made by Cao Yu on behalf of the Company to Beckles & Co for auditor services.

The Company and David Lazar (“Noteholder”) entered into

an unsecured promissory note (the “Convertible Note”), under which, effective as of February 18, 2025 (the “Effective

Date”), the Company agreed to pay to the Noteholder a principal amount of $ 300,000 , together with interest on the balance

of the principal from time to time outstanding, at the rates and at the times described therein.

The outstanding principal balance of

the Convertible Note shall be paid in full on or prior to December 31, 2025.

(9) EARNINGS (LOSS) PER SHARE

Net loss per share for the three months ended March 31, 2025 and 2024, respectively, are as follows:

(7) SIGNIFICANT CUSTOMER AND DEPENDENCY ON KEY SUPPLIERS

During the three months ended March 31, 2025, the Company had one new customer upon launching its SAAS services on March 28, 2025.

As of June 30, 2025, the number of our customers increased to 245 .

As of June 30, 2025, prepaid subscription fees received from customers for our SaaS service amounted to approximately $ 1.5 million.

During the three and six months ended June 30, 2024, the Company did not have sales or outstanding accounts receivable balance that accounted for 10% of greater individually of the Company’s total net sales and accounts receivable, respectively.

(8) CONVERTIBLE NOTE PAYABLE TO RELATED PARTY

The Company entered into an unsecured promissory note (the “Convertible Note”) effective February, 18, 2025,with David Lazar, a stockholder holding more than 10% of the Company’s outstanding shares and a former officer and director.

Under the terms of the Convertible Note, the Company agreed to pay Mr.

Lazar a principal amount of $ 300,000 , bearing interest at an annual rate of approximately 4.34 % , with the full principal and interest balance due on or before December 31, 2025.

Upon stockholders’ approval, the Convertible Note will automatically convert into shares of the Company’s common stock at a conversion price of $ 0.25 per share.

The Convertible Note to related party is accounted for as a single liability in accordance with Accounting Standards Update (ASU) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

As of June 30, 2025, the Convertible Note was recorded at an aggregate amount of $ 305,425 , which includes $ 5,425 of accrued interest.

(9) RELATED PARTY TRANSACTION

The Company had the following related party transactions during the three and six months ended June 30, 2025 and 2024:

Lease from the Company’s former officer, see Note 5 for details.

Amount paid by a shareholder for operating activities and the balance due as of June 30, 2025.

See Note 4 for details.

Convertible note issued to a related party.

See Note 8 for details.

Equity transactions with shareholders.

See Note 11 for details.

(10) LOSS PER SHARE

Net loss per share for the three and six months ended June 30, 2025 and 2024, respectively, were as follows:

Schedule of net income (loss) per share

Three Months Ended

Six Months Ended

Weighted average common shares - basic

1 unchanged sentence

Weighted average common shares - dilutive

Basic and diluted net loss per share

Diluted loss per common share

for the three months ended March 31, 2025 and 2024 excludes the effects of 0 and 5,230,769 common share equivalents, respectively,

since such inclusion would be anti-dilutive.

The common share equivalents consist of shares of common stock issuable upon exercise of

outstanding preferred stock, warrants, restricted stock units, and stock options.

Basic and diluted

Diluted loss per common share for the three and six months ended June 30, 2025 and 2024 excludes the effects of 7,242,339 and 5,230,769 common share equivalents, respectively, since such inclusion would be anti-dilutive.

The common share equivalents consist of shares of common stock issuable upon the exercise or conversion of outstanding convertible preferred stock, warrants, restricted stock units, stock options and convertible note (including certain securities requiring stockholder approval prior to exercise or conversion).

Preferred Stock and Warrants

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Based on the fair value model to allocate the Series A Preferred Stock proceeds, the Series A Preferred Stock was valued at $ 1.4 million at January 23, 2024 and was included in Series A Preferred Stock on our condensed consolidated balance sheet.

On February 26, 2024, the Company held a special meeting of stockholders, who voted and approved (i) the issuance of shares of our common stock, par value $0.01 per share (“Common Stock”) upon conversion of Series A Preferred Stock or exercise of the Warrants to be issued at Closing of the Purchase Agreement, which conversions or exercise would result in a “change of control” of the Company under the applicable rules of Nasdaq and (ii) an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect the increase in authorized shares of Preferred Stock to 10,000,000 .

On February 18, 2025, the

Company entered into an Amended and Restated Securities Purchase Agreement (the “February 18, 2025 SPA”) with David Lazar

(“Seller”) on the one hand, and Cao Yu, Hu Bin, and Youxin Consulting Limited (collectively, “Purchasers”), on

the other hand, whereby Seller, a director and former officer of the Company, sold to the Purchasers (i) 2,219,447 shares (the “Seller

Preferred Stock”) of Series A Convertible Preferred Stock, $0.001 par value per share (the “Preferred Stock”) of the

Company, (ii) a warrant to purchase up to an additional 2,800,000 shares of Common Stock, with an exercise price equal to $1.00 per share,

subject to adjustment therein (the “Warrant”), and (iii) certain amounts owed by the Company to Seller (the “Lazar Receivables”).

On April 10, 2025, Seller transferred 31,258 additional shares of Preferred Stock (the “Additional Shares” and collectively

with the Seller Preferred Stock and the Warrant, the “Securities”) to Purchasers.

The aggregate purchase price for the Securities

and the Lazar Receivables paid to Seller was $500,000 (the “Purchase Price”), of which $300,000 was directed by Seller to

be contributed to the Company in exchange for 1,200,000 newly issued shares of Common Stock to be issued to Seller (the “Lazar Common

Pursuant to the February 18, 2025 SPA, in the event certain milestones were achieved, Seller was to be issued newly issued shares of Common

Stock (the “Earnout Shares”).

February 26, 2024, the Company held a special meeting of stockholders, who voted and approved (i) the issuance of shares of our

Common Stock upon conversion

of Series A Preferred Stock or exercise of the Warrants to be issued at Closing of the Purchase Agreement, which conversions or exercise

would result in a “change of control” of the Company under the applicable rules of Nasdaq and (ii) an amendment to the Company’s

Amended and Restated Certificate of Incorporation (the “Existing Charter”) to effect the increase in authorized shares of

Preferred Stock to 10,000,000 .

Except for stock dividends or distributions for which adjustments are to be made pursuant to the Existing Charter, Holders of Series

A Preferred Stock shall be entitled to receive, and the Company shall pay, dividends on shares of Series A Preferred Stock equal (on

an as-if-converted-to-Common-Stock basis, without regard to conversion limitations herein) to and in the same form as dividends actually

paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.

No other dividends shall be

paid on shares of Series A Preferred Stock.

On February 18, 2025, the Company entered into a Securities Purchase Agreement (the “February 18, 2025 SPA”) with David Lazar (“Seller”), and Cao Yu, Hu Bin, and Youxin Consulting Limited (collectively, the “Purchasers”), which was subsequently amended on May 9, 2025.

Pursuant to the February 18, 2025 SPA and its amendment, Seller, a former director and officer of the Company, sold to the Purchasers (i) 2,219,447 shares of Series A Preferred Stock, (ii) a warrant to purchase up to 2,800,000 shares of Common Stock at an exercise price of $1.00 per share, subject to adjustment (the “Warrant”), and (iii) certain receivables owed by the Company to Seller associated with the transaction (the “Lazar Receivables”).

On April 10, 2025, Seller transferred an additional 31,258 shares of Series A Preferred Stock to the Purchasers (together with the previously transferred shares and the Warrant, the “Securities”).

The aggregate purchase price for the Securities and the Lazar Receivables was $500,000, of which $300,000 was directed by Seller to be paid to the Company in exchange for a convertible note (see Note 8).

The Purchasers also paid a $3.4 million earn-out payment to Seller for his efforts related to the Company’s successful relisting on Nasdaq as of June 30, 2025.

As of June 30, 2025, the Lazar Receivables were forgiven for the benefit of the Company, and the Warrant was amended and restated to eliminate the beneficial ownership limitations previously contained therein.

On May 9, 2025, the Company entered into, and simultaneously closed the transactions under, Securities Purchase Agreements with Cao Yu and Hu Bin, pursuant to which the Company sold an aggregate of 2,439,025 shares of its common stock— 1,585,366 shares to Cao Yu for a purchase price of $ 2,600,000 and 853,659 shares to Hu Bin for a purchase price of $ 1,400,000 .

On May 9, 2025, the Company

entered into a Second Amended and Restated Securities Purchase Agreement with Seller and Purchasers to remove references to the issuance

of the Lazar Common Stock, which issuance was rescinded and replaced with the Convertible Note described below, and remove references

to the Earnout Shares.

Pursuant to such Second Amended and Restated Purchase Agreement, Seller sells and delivers to Purchasers, and

Purchasers purchases and accepts all of Seller’s right, title and interest in and to the Lazar Receivables and the Securities for

the Purchase Price, which Seller acknowledges and agrees had been previously paid by Purchasers.

Purchasers agree that they will surrender

the Warrant to the Company for cancellation and irrevocably waive and forgive the Lazar Receivables for the benefit of the Company.

entered into a Purchase Agreement (the “Helena Purchase Agreement”) with Helena Global Investment Opportunities I Ltd.

whereby the Company shall have the right to issue and sell to Helena, from time to time, and Helena shall purchase from the Company,

up to $15,000,000 of Common Stock, during the period commencing on May 9, 2025 and ending on the first day of the month immediately

following the 36-month anniversary of May 9, 2025.

The closing of each Advance and each sale and purchase of Common Stock related to each Advance (each, a “Closing”) shall take place on the applicable Settlement Date (as defined in the Helena Purchase Agreement), at a Purchase Price (as defined in the Helena Purchase Agreement) based on 95% of the lowest VWAP for the Common Stock, in respect of any Advance, during the three (3) Trading Days commencing on the date of Helena’s receipt of the shares of Common Stock relating to such Advance.

In consideration for Helena’s execution and delivery of the Helena Purchase Agreement, the Company issued to Helena, as a commitment fee, shares of Common Stock (the “Commitment Fee Shares”), having an aggregate value of $150,000, of which (i) 71,572 shares were issued on May 14, 2025, and (ii) 71,572 shares were issued on August 11, 2025, the value of which was included in the balance of accrued expenses and other current liabilities as of June 30, 2025.

The Commitment Fee Shares were fully earned as of the agreement date, and the issuance of the Commitment Fee Shares was not contingent upon any other event or condition.

The number of the Commitment Fee Shares issued in each tranche was determined by dividing $75,000 by the lowest Volume Weighted Average Price (VWAP) of the Company’s common stock during the five trading days immediately preceding the agreement date.

SUBSEQUENT EVENTS

Director Appointments

Effective as of April 24, 2025, which is the expiration

of the 10-day period after the filing and mailing of the Company’s Schedule 14F-1 filed and mailed on April 14, 2025, Hu Bin and

Cao Yu were appointed to the Company’s board of directors.

Effective as of April 30, 2025, David Natan and Chan Oi Fat were appointed

to the Company’s board of directors.

Effective as of April 30, 2025, Hu Bin, David Natan and Chan Oi Fat were appointed to the audit

committee, compensation committee and the nominating committee of the Company’s board of directors.

Non-binding Letter of Intent

On March 25, 2025, the

Company entered into a non-binding letter of intent (“LOI”) with Hongyan Sun and Lin Lin (collectively, the “Sellers”),

pursuant to the terms of which the Sellers will transfer 100% of their equity interests in Suzhou Yixuntong Network Technology Co., Ltd.

(the “Target Company”) to the Company (the “Potential Transaction”) for a purchase price not to exceed $2,000,000.

The Company shall make a prepayment of $300,000 to the Sellers, as soon as practicable, upon the signing of the LOI.

Upon the signing of this

LOI, the Target Company and the Sellers (i) have granted the access of the Target Company’s service ports to the Company;

have connected the Company to the Target Company’s Software as a Service platform;

(iii) and is working with the Company to ensure

it can carry out the Multi-Channel Network business in the second quarter of 2025.

The Potential Transaction

is subject to the Company’s satisfactory completion of legal, tax, financial, operation, human resources and administration, and

environmental due diligence of Target Company and such other due diligence as the Company may deem necessary.

The Company and the Sellers

expect to complete the Potential Transaction as soon as reasonably practicable, but in no event later than six (6) months after signing

of the LOI (the “Long-Stop Date”).

The Sellers have agreed that that, from the date of the LOI through the Long-stop Date,

or the date when the Company informs the Sellers that the exclusivity expires, whichever occurs earlier, the Sellers shall refrain, directly

or indirectly from (i) soliciting offers from third parties to acquire Target Company and/or its business, and from offering Target Company

or its business to any person, firm, group or corporation other than the Company;

and (ii) entering into any agreement aimed at selling

or otherwise transferring Target Company or the business or that may otherwise prevent the parties from consummating the Potential Transaction.

The Company expects to announce

additional details regarding the Potential Transaction if and when a definitive agreement is executed.

No assurances can be made that

the Company will successfully negotiate and enter into a definitive agreement with respect to the Potential Transaction, or that the

Potential Transaction will be consummated on the terms or timeframe currently contemplated, or at all.

Any transaction is subject to

board and shareholder holder approval of the Company, regulatory approvals and other customary conditions.

Nasdaq Developments

As previously disclosed, on June 26, 2024, the Company received

a letter (the “June 26, 2024 Letter”) from the staff at the Listing Qualifications Department (the “Staff”) of

the Nasdaq Stock Market LLC (the “Nasdaq”) notifying the Company that the Staff had determined that it did not meet the terms

of the minimum stockholders’ equity requirement of at least $2,500,000 (the “Stockholders’ Equity Requirement”)

for continued listing on the Nasdaq Capital Market pursuant to the Nasdaq Listing Rule 5550(b)(1).

On April 7, 2025, the Company received a second letter from the Staff

(the “April 7, 2025 Letter”) stating that in addition to the failure to meet the Stockholders’ Equity Requirement, the

Staff made additional determinations (the “Additional Deficiencies”) that the Company (1) failed to comply with the Nasdaq’s

shareholder approval requirements pursuant to the Nasdaq Listing Rule 5635 (b), (c) and (d), in connection with the closing of transactions

under that certain Amended and Restated Securities Purchase Agreement, dated February 18, 2025, attached as Exhibit 10.1 to the Company’s

Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2025, and (2) does

not currently comply with the Nasdaq’s majority independent board, independent audit committee, compensation committee and nomination

committee requirements as set forth in the Nasdaq Listing Rule 5605(b)(1), 5605(c)(2), 5605(d)(2) and 5605(e), respectively.

In connection with the issuance of the April 7, 2025 Letter, on April

7, 2025, the Company and the Nasdaq also entered into a Confidential Settlement and Mutual Release Agreement, pursuant to which the Nasdaq

has agreed not to delist the Company’s securities at this time.

The Company will have the opportunity to present its views and challenge

in writing (1) the Additional Deficiencies, (2) the previously noticed Stockholders’ Equity Requirement in the June 26, 2024 Letter,

and (3) the Form 25 filed by the Nasdaq on April 9, 2025 with the SEC, to the Nasdaq Hearings Panel (the “Panel”), in advance

of a hearing in front of the Panel.

Consistent with the Nasdaq Listing Rule 5815(a)(4)-(5), the Panel will set the applicable deadlines

for written submissions from the Company, and the hearing shall take place, to the extent practicable, within 45 days of the April 7,

In addition to the Additional Deficiencies, the April 7, 2025 Letter

also included a bid price notification that based upon the closing price of the Company’s common stock on the OTC Pink Sheets for

the last 30 consecutive business days, the Company no longer meets the requirement to maintain a minimum bid price of $1 per share.

Company has 180 calendar days, or by October 6, 2025, to regain compliance with the minimum bid price requirement under the Nasdaq Listing

Rule 5550(a)(2) but could be eligible for an additional 180-day compliance period.

On May 9, 2025, the Company entered into, and

simultaneously closed the transactions under, a Securities Purchase Agreement with Cao Yu (“Cao SPA”), whereby the Company

sold 1,585,366 shares of the Company’s common stock, par value $ 0.01 per share (“Common Stock”) to Cao Yu, for an aggregate

purchase price of $ 2,600,000 .

On May 9, 2025, the Company entered into, and

simultaneously closed the transactions under, a Securities Purchase Agreement with Hu Bin (“Hu SPA”), whereby the Company

sold 853,659 shares of Common Stock to Hu Bin, for an aggregate purchase price of $ 1,400,000 .

On May 9, 2025, the Company entered into a Second

Amended and Restated Securities Purchase Agreement with Seller and Purchasers to remove references to the issuance of the Lazar Common

Stock, which issuance was rescinded and replaced with the Convertible Note described below, and remove references to the Earnout Shares.

Pursuant to such Second Amended and Restated Purchase Agreement, Seller sells and delivers to Purchasers, and Purchasers purchases and

accepts all of Seller’s right, title and interest in and to the Lazar Receivables and the Securities for the Purchase Price, which

Seller acknowledges and agrees had been previously paid by Purchasers.

Purchasers agree that they will surrender the Warrant to the Company

for cancellation and irrevocably waive and forgive the Lazar Receivables for the benefit of the Company.

On May 9, 2025, the Company and David Lazar (“Noteholder”)

entered into an unsecured promissory note (the “Convertible Note”), under which, effective as of February 18, 2025 (the “Effective

Date”), the Company agreed to pay to the Noteholder a principal amount of $ 300,000 , together with interest on the balance

of the principal from time to time outstanding, at the rates and at the times described therein.

The outstanding principal balance of

the Convertible Note shall be paid in full on or prior to December 31, 2025.

On May 9, 2025, the Company entered into a services agreement with

David Lazar (“Service Provider”), pursuant to which the Company engages Service Provider as an independent contractor, to

(i) use best efforts to obtain a decision from the Securities and Exchange Commission that Nasdaq Stock Market (the “Nasdaq”)

must hold a hearing to consider the merits of the Company’s appeal from being delisted from Nasdaq, (ii) use best efforts to achieve

a Nasdaq Listing for the Company on or before December 31, 2025 (such date of achievement being the “Listing Date”) and (iii)

continue to provide additional services to the Company in furtherance of achieving a Nasdaq Listing through the earlier of December 31,

2025, or the Listing Date.

Change in Independent Registered

Public Accounting Firm

On July 11, 2025, the Company’s Board of

Directors approved the dismissal of Beckles & Co., Inc.

(“Beckles”) and engaged UHY LLP (“UHY”) as the Company’s

independent registered public accounting firm.

There were no disagreements with Beckles on any matter of accounting principles or practices,

financial statement disclosure or auditing scope or procedures during the periods they audited or reviewed.

Amendment to Certificate

of Incorporation

On August 1, 2025, the Company

filed a certificate of amendment (the “Charter Amendment”) to the Existing Charter, with the Delaware Secretary of State

to, among other things, (i) correct a scrivener’s error with respect to the number of authorized shares and par value of preferred

stock, which was incorrectly stated as 3,000,000 shares, par value $ 0.01 per share, rather than the correct amount of 10,000,000 shares,

par value $0.001 per share, (ii) modify the voting rights of the Series A Preferred Stock, which had previously voted on an as-converted

basis to shares of the Common Stock, without regard to conversion limitations in the Existing Charter, and would under the amended terms

vote, on an as-converted basis if it was converted at a conversion ratio equal to the Stated Value (as defined therein and currently

$1.40) divided by the “Minimum Price” (as of the original issue date of the Series A Preferred Stock) as defined in Nasdaq

Listing Rule 5635(d), without regard to conversion limitations in the Existing Charter, (iii) limit the “full ratchet”

anti-dilution protection in the Existing Charter so that any adjustment to the Stated Value of the Series A Preferred Stock thereunder

would not require stockholder approval under Nasdaq Listing Rule 5635(d), and (iv) allow a majority of the voting power of all then

outstanding shares of Series A Preferred Stock to waive the “full-ratchet” anti-dilution protection, which Charter Amendment

had been previously approved by the Company’s board of directors and the Company’s stockholders on May 9, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements