What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-12 compared with 2025-05-14 · 387 added, 358 removed, 349 unchanged (68% of the section changed)

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis

of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the

perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect

our future results.

perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our

future results.

The following discussion and analysis should be read in conjunction with:

(i) the accompanying unaudited condensed

consolidated financial statements and notes thereto for the three months ended March 31, 2025 and 2024, (ii) the consolidated financial

statements and notes thereto for the year ended December 31, 2024 included in our Annual Report on Form 10-K (the “Form 10-K”)

filed with the Securities and Exchange Commission (the “SEC”) on March 24, 2025 and (iii) the discussion under the caption

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Form 10-K.

certain information as of December 31, 2024, all amounts herein are unaudited.

(i) the accompanying unaudited condensed consolidated

financial statements and notes thereto for the three and six months ended June 30, 2025 and 2024, (ii) the consolidated financial statements

and notes thereto for the year ended December 31, 2024 included in our Annual Report on Form 10-K (the “Form 10-K”) filed

with the Securities and Exchange Commission (the “SEC”) on March 24, 2025 and (iii) the discussion under the caption “Management’s

Discussion and Analysis of Financial Condition and Results of Operations” of the Form 10-K.

Aside from certain information as of

December 31, 2024, all amounts herein are unaudited.

Forward-Looking Statements

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Our managed IT security

services include proactive monitoring, regular system maintenance, comprehensive cybersecurity management, data backup, and disaster

recovery, as well as help desk support for users.

services include proactive monitoring, regular system maintenance, comprehensive cybersecurity management, data backup, and disaster recovery,

as well as help desk support for users.

Professional Services

Our professional services include the design

and implementation of a wide range of IT products and services, such as cybersecurity, software planning, IT infrastructure, data center

design and configuration, designing and implementing on-premises, hybrid or cloud computing solutions, website development, developing

or integrating systems and software and IT cost management.

Our professional services include the design and

implementation of a wide range of IT products and services, such as cybersecurity, software planning, IT infrastructure, data center design

and configuration, designing and implementing on-premise, hybrid or cloud computing solutions, website development, developing or integrating

systems and software and IT cost management.

Procurement Services

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(i) obtain software and hardware products on behalf of our customers, in which case our vendors drop ship

the products to our end customer, or (ii) obtain hardware or software on behalf of our customers and perform additional configuration

the products to our end customer, or (ii) obtain hardware or software on behalf of our end customers and perform additional configuration

and/or add additional inputs to the products before the products are shipped to our customer.

In the instance where we sell hardware

and software products as a solution bundled with services, we typically obtain the products or software from our vendors, add the additional

In the instance where we sell hardware and

software products as a solution bundled with services, we typically obtain the products or software from our vendors, add the additional

inputs/configuration as detailed in the customer contract, and then ship the products to the end customer.

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Our secure private cloud hosting offerings include

a digital infrastructure which consists of dedicated and fully isolated cloud environments designed to deliver security, control and

compliance for the business-critical applications and client data.

We operate a secure private cloud from private suites in completely

isolated areas that are leased within two Tier 3 data center facilities located in Phoenix, Arizona, and Edison, New Jersey (the “Data

Centers”), pursuant to license agreements that extend until 2027 and 2026, respectively.

Although we do not own or operate the

Data Centers, we aim to use the high-level operations and standards provided by the Data Centers through our license agreements to provide

our customers with secure and flexible cloud services.

a digital infrastructure which consists of dedicated and fully isolated cloud environments designed to deliver security, control and compliance

for the business-critical applications and client data.

We operate a secure private cloud from private suites in completely isolated areas

that are leased within two Tier 3 data center facilities located in Phoenix, Arizona, and Edison, New Jersey (the “Data Centers”),

pursuant to license agreements that extend until 2027 and 2026, respectively.

Although we do not own or operate the Data Centers, we aim

to use the high-level operations and standards provided by the Data Centers through our license agreements to provide our customers with

secure and flexible cloud services.

We leverage state-of-the-art security measures,

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data integrity and reliable performance, while meeting stringent compliance requirements.

Our secure private cloud hosting solutions

are backed by 24/7 support from our expert team, with the goal of delivering secure, flexible and resilient infrastructure tailored to

each client’s unique business needs.

In the future, we plan to make arrangements with third parties to incorporate AI features

into our secure private cloud offerings.

Our secure private cloud hosting solutions are

backed by 24/7 support from our expert team, with the goal of delivering secure, flexible and resilient infrastructure tailored to each

client’s unique business needs.

In the future, we plan to make arrangements with third parties to incorporate AI features into our

secure private cloud offerings.

Managed Backup and Disaster Recovery

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at the Acquisition Closing consisted of (i) $4,000,000 in cash (as adjusted pursuant to the Acquisition Agreement, the “Acquisition

Closing Cash Consideration”) and (ii) 4,000,000 shares of our Series A Non-Voting Common Equivalent Stock (the “Series A

Preferred Stock” and such shares issued at the Acquisition Closing, the “Acquisition Closing Stock Consideration” and

together with the Acquisition Closing Cash Consideration, the “Acquisition Closing Consideration”).

The Series A Preferred

Stock will automatically convert into one share of our common stock, par value $0.001 per share (subject to certain customary anti-dilution

adjustments), upon the occurrence of certain qualifying transfers by Newtek to third parties.

In addition to the Acquisition Closing

Consideration, Newtek is entitled to earn-out payments under certain circumstances.

For more information, see the “ Liquidity

and Capital Resources ” section below.

Closing Cash Consideration”) and (ii) 4,000,000 shares of our Series A Non-Voting Common Equivalent Stock (the “Series A Preferred

Stock” and such shares issued at the Acquisition Closing, the “Acquisition Closing Stock Consideration” and together

with the Acquisition Closing Cash Consideration, the “Acquisition Closing Consideration”).

The Series A Preferred Stock will

automatically convert into one share of our common stock, par value $0.001 per share (subject to certain customary anti-dilution adjustments),

upon the occurrence of certain qualifying transfers by Newtek to third parties.

In addition to the Acquisition Closing Consideration,

Newtek is entitled to earn-out payments under certain circumstances.

For more information, see the “ Liquidity and Capital Resources ”

section below.

The Divestiture

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Software, Inc., and Vumber, LLC (collectively, the “Sellers”), and Meteor Mobile.

As a result of the Divestiture, we are no longer engaged in the business of providing video-based, live streaming, virtual camera and

telecommunications software to consumers, as and to the extent such businesses were previously conducted by us pursuant to the “Vumber,”

“Paltalk” and “Camfrog” applications (the “Business”).

In addition, prior to the Acquisition Closing,

we ceased all operations of our “Tinychat” service and application.

The consideration delivered by Meteor Mobile

to us at the closing of the Divestiture consisted of (i) $1,350,000 in cash and (ii) the assumption of all of the liabilities of the

Sellers arising out of, or relating to, the Business or the Transferred Assets, other than certain excluded liabilities (the “Divestiture

a result of the Divestiture, we are no longer engaged in the business of providing video-based, live streaming, virtual camera and telecommunications

software to consumers, as and to the extent such businesses were previously conducted by us pursuant to the “Vumber,” “Paltalk”

and “Camfrog” applications (the “Business”).

In addition, prior to the Acquisition Closing, we ceased all operations

of our “Tinychat” service and application.

The consideration delivered by Meteor Mobile to

us at the closing of the Divestiture consisted of (i) $1,350,000 in cash and (ii) the assumption of all of the liabilities of the Sellers

arising out of, or relating to, the Business or the Transferred Assets, other than certain excluded liabilities (the “Divestiture

Closing Consideration”).

In connection with the Divestiture, we are entitled to earn-out payments under certain circumstances.

For more information, see the “ Liquidity and Capital Resources ” section below.

Board Appointments

Pursuant to the Acquisition Agreement, we agreed

to cause one representative nominated by Newtek (the “Newtek Representative”) to be appointed to our Board of Directors (the

“Board”) promptly following the closing of the Acquisition.

Newtek designated Barry Sloane, who is currently Newtek’s

Chairman, Chief Executive Officer and President, as the Newtek Representative.

Effective as of January 7, 2025, the Board increased

the size of the Board from five (5) directors to seven (7) directors and appointed Mr.

Sloane to the Board.

Sloane was not appointed

to any committee of the Board.

In order for the majority of the Board to be comprised

of independent directors in accordance with Rule 5605(b) of the listing rules of The Nasdaq Stock Market, LLC and as a result of his expertise

in cloud infrastructure and applications and artificial intelligence, the Board also appointed Sidney Rabsatt to the Board, effective

as of January 7, 2025.

Rabsatt was also appointed to serve on the Strategic Transactions Committee of the Board.

more information, see the “ Liquidity and Capital Resources ” section below.

Business Loan Agreement and Credit Agreement

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Stock Repurchase Plan

On May 8, 2025, the Board approved a stock repurchase plan for up to

$400,000 of our outstanding common stock (the “Stock Repurchase Plan”), which expires on the one-year anniversary of such

Shares may be repurchased from time-to-time in open market transactions at prevailing market prices, in privately negotiated transactions

or by other means in accordance with federal securities laws, including Rule 10b5-1 programs, and the Stock Repurchase Plan may be suspended

or discontinued at any time.

The actual timing, number and value of shares repurchased will be determined by a committee of the Board

at its discretion and will depend on a number of factors, including the market price of our common stock, general market and economic

conditions, alternative investment opportunities and other corporate considerations.

As of the date of this report, no shares of common

stock had been repurchased pursuant to the Stock Repurchase Plan.

First Quarter 2025 Operational Highlights

Operational highlights during the three months

ended March 31, 2025:

completed the Transactions and, as a result, focused our business on

technology service offerings in the cloud infrastructure and cybersecurity sectors;

expanded our Board to align with our business following the Transactions;

for the three months ended March 31, 2025 revenue totaled $5.5 million compared to $0.3 million for the prior year period, as the prior year revenue represented subscriptions sales from ManyCam software, our continuing operations and did not include revenue from discontinued operations.

Revenue from subscription sales increased by approximately 4% from the prior year period;

loss from continuing operations for the three months ended March 31, 2025 was $1.3 million and included $0.9 million of non-cash expense, consisting of amortization and depreciation of $0.7 million, (of which $0.4 million represents amortization on newly acquired intangible assets) as well as $0.2 million of non-cash share based compensation, compared to a net loss from continuing operations of $1.0 million for the three months ended March 31, 2024, which included subscriptions sales from ManyCam software as well as all of our general and administrative expenses, which included all professional fees and public company expenses;

net income for the three months ended March 31, 2025 totaled $0.8 million

compared to a net loss of $0.5 million for the three months ended March 31, 2024.

Net income was attributed to us recording an income

tax benefit during the quarter of approximately $2.1 million in connection with the Transactions;

Adjusted EBITDA for the three months ended March 31, 2025 remained

relatively unchanged at negative $0.5 million;

we had cash provided by operations of $1.7 million;

at March 31, 2025 we had $9.7 million of cash and cash equivalents

on our balance sheet and no long-term debt.

2025 Business Objectives

On May 8, 2025, our Board of Directors (the “Board”)

approved a stock repurchase plan for up to $400,000 of our outstanding common stock (the “Stock Repurchase Plan”), which expires

on the one-year anniversary of such date.

Shares may be repurchased from time-to-time in open market transactions at prevailing market

prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b5-1 programs,

and the Stock Repurchase Plan may be suspended or discontinued at any time.

The actual timing, number and value of shares repurchased

will be determined by a committee of the Board at its discretion and will depend on a number of factors, including the market price of

our common stock, general market and economic conditions, alternative investment opportunities and other corporate considerations.

Second Quarter 2025 Operational Highlights

Operational highlights during the three and six

months ended June 30, 2025:

selected by Hewlett Packard Enterprise to be an accredited partner for its HPE Private Cloud AI solution.

announced the initiation of a collaboration with IT Ally, a trusted business and technology services provider focused on lower middle-market private equity firms and their portfolio companies;

began offering Aura to our customers, a leading AI-powered online safety solution for individuals and families, to help minimize the impact of data breaches, scams, and other online threats on consumers;

for the three months ended June 30, 2025 revenue totaled $5.7 million compared to $0.3 million for the prior year period, as the prior year revenue represented subscriptions sales from ManyCam software, our continuing operations and did not include revenue from discontinued operations.

Revenue from subscription sales decreased by approximately 0.9% from the prior quarter;

for the six months ended June 30, 2025 revenue

totaled $11.2 million compared to $0.6 million for the prior year period;

operating loss from continuing operations for the three months ended June 30, 2025 was $1.1 million and included $0.8 million of non-cash expense, consisting of amortization and depreciation of $0.7 million ($0.4 million of which represented amortization on newly acquired intangible assets), as well as $0.1 million of non-cash share based compensation, compared to a operating loss from continuing operations of $1.1 million for the three months ended June 30, 2024, which included subscriptions sales from ManyCam software as well as all of our general and administrative expenses, which included all professional fees and public company expenses;

operating loss from continuing operations for the six months ended June 30, 2025 was $2.5 million and included $1.6 million of non-cash expense, consisting of amortization and depreciation of $1.4 million ($0.8 million of which represented amortization on newly acquired intangible assets), as well as $0.3 million of non-cash share based compensation, compared to a net loss from continuing operations of $2.1 million for the three months ended June 30, 2024, which included subscriptions sales from ManyCam software as well as all of our general and administrative expenses, which included all professional fees and public company expenses;

net loss for the three months ended June 30, 2025 totaled $1.1 million compared to a net loss of $0.9 million for the three months ended June 30, 2024.

Net loss for the six months ended June 30, 2025 totaled $0.2 million compared to a net loss of $1.4 million for the six months ended June 30, 2024;

the reduction in net loss was attributed to us recording an income tax benefit during the first quarter of 2025 of approximately $2.1 million in connection with the Transactions;

Adjusted EBITDA for the three months ended June 30, 2025 was negative $0.4 million compared to negative $0.9 million for the three months ended June 30, 2024;

while Adjusted EBITDA for the six months ended June 30, 2025 was negative $0.9 million compared to negative $1.4 million for the six months ended June 30, 2024;

we had cash provided by operations of $0.9 million for the six months ended June 30, 2025;

at June 30, 2025 we had

$8.3 million of cash and cash equivalents including $1.0 million of restricted cash, on our balance sheet and no long-term

Second Half 2025 Business Objectives

For the near term, our business objectives include:

continuing the integration of our comprehensive range of IT-related

incorporating ManyCam as an offering for our new customers and seek

to optimize our cross-selling efforts with our other technology solutions;

continuing to explore strategic opportunities, including, but not limited

to, potential mergers or acquisitions of other assets or entities that are synergistic to our businesses;

continuing the integration of our comprehensive range of IT-related solutions as well as introducing new partners;

incorporating ManyCam as an offering for our new customers and seeking to optimize our cross-selling efforts with our other technology solutions;

continuing to explore strategic opportunities, including, but not limited to, potential mergers or acquisitions of other assets or entities that are synergistic to our businesses;

continuing to defend our intellectual property.

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Our main sources of revenue are described below.

As a result of the variability of contract and service type, some of the revenue we report in each period is deferred revenue from contracts

we entered into during previous periods.

This may make it difficult for us to quickly increase revenue through the entry into new contracts

in any period, and a decline in new or renewed contracts in any one quarter will negatively affect our revenue in future quarters.

a result, revenue generated in prior quarters may not provide a reliable indication of future results.

Managed IT Security Services

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that define the specific services and performance metrics.

The unearned portion of managed IT security services revenue is presented

as deferred revenue in our consolidated balance sheets.

Professional Services

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either based on a time and materials basis or on a straight-line basis for all fixed fee arrangements.

We are the principal in these

transactions as we control the specified good or service before it is transferred to the customer.

Additionally, we are primarily responsible

for fulfillment of the order and have pricing discretion.

As a result, we recognize revenue from our professional services revenue on

a gross basis.

The unearned portion of professional

services revenue is presented as deferred revenue in our consolidated balance sheets.

We are the principal in these transactions, as we

control the specified good or service before it is transferred to the customer.

Additionally, we are primarily responsible for fulfillment

of the order and have pricing discretion.

As a result, we recognize revenue from our professional services revenue on a gross basis.

Procurement Services

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for the hardware purchased to operate effectively.

Customers are invoiced, and revenue is recognized, when the hardware purchased is

shipped, as control transfers to the customer free on board (“FOB”) shipping point.

We are an agent in these transactions

because we (i) do not obtain control over the product as products are drop shipped from their vendors directly to the customer;

have no inventory risk and (iii) have general pricing discretion in our transactions with customers.

Our pricing discretion is limited

by the going market rate of our services offered by other providers.

Based on this assessment, we recognize revenue from procurement

services on a net basis.

Customers are invoiced, and revenue is recognized, when the purchased hardware is shipped,

as control transfers to the customer free on board (“FOB”) shipping point.

We are an agent in these transactions because we

(i) do not obtain control over the product as products are drop shipped from their vendors directly to the customer;

(ii) have no inventory

risk and (iii) have general pricing discretion in our transactions with customers.

Our pricing discretion is limited by the going market

rate of our services offered by other providers.

Based on this assessment, we recognize revenue from procurement services on a net basis.

Additionally, certain procurement contracts with

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Secure Private Cloud Hosting

When a cloud-based service includes both on-premises

software licenses and cloud services, judgment is required to determine whether the software license is considered distinct and accounted

for separately, or not distinct and accounted for together with the cloud service and recognized over time.

Certain cloud services depend

on a significant level of integration, interdependency, and interrelation between the desktop applications and cloud services, and are

accounted for together as one performance obligation.

Revenue from such cloud services is recognized ratably over the period in which

the cloud services are provided.

Our secure private cloud offerings include a

digital infrastructure which consists of servers which are dedicated to a single customer.

We offer secure private cloud offerings through

our Data Centers as well as off premise.

Our secure private cloud offerings typically are one performance obligation where we are providing

the cloud storage to the customer and customers pay a monthly fixed fee for the service.

digital infrastructure which consists of servers that are dedicated to a single customer.

We offer secure private cloud offerings

on-premise through our Data Centers as well as off-premise.

Our secure private cloud offerings typically are one performance

obligation where we are providing the cloud storage to the customer and customers pay a monthly fixed fee for the service.

When a cloud-based service includes both on-premise

software licenses and cloud services, judgment is required to determine whether the software license is considered distinct and, therefore,

accounted for separately, or not distinct and, therefore, accounted for together with the cloud service and recognized over time.

cloud services depend on a significant level of integration, interdependency, and interrelation between the desktop applications and cloud

services, and are accounted for together as one performance obligation.

Revenue from such cloud services is recognized ratably over the

period in which the cloud services are provided.

The unearned portion of revenue from cloud services is presented as deferred revenue

in our consolidated balance sheets.

Managed Backup and Disaster Recovery

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Customers are invoiced and revenue is recognized on a monthly basis.

Revenue Recognition

Our revenue is measured based on the consideration

specified in a contract with a customer.

Our contracts with customers often include promises to transfer multiple products and services.

Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus

together may require significant judgment.

When a cloud-based service includes both on-premises software licenses and cloud services,

judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and

accounted for together with the cloud service and recognized over time.

Certain cloud services depend on a significant level of integration,

interdependency, and interrelation between the desktop applications and cloud services, and are accounted for together as one performance

Revenue from cloud services is recognized ratably over the period in which the cloud services are provided.

recognize revenue when it satisfies a performance obligation by transferring control of a product or service or by arranging for the

sale of a vendor’s products or service to a customer.

We recognize revenue from sale of services as

they perform the underlying services, typically based on time and materials basis based upon hours incurred for the performance completed

to date for which we have the right to consideration.

We recognize revenue on sales of goods at a point in time when customer takes control

of goods, which typically occurs when title and risk of loss have passed to the customer.

We recognize revenue on a gross basis for each

of its services and product offerings principally because it is primarily responsible for fulfilling the promise to provide specified

goods or service and it has discretion in establishing the price of specified good or service.

We classify our right to consideration in exchange

for deliverables as either a receivable or a contract asset (unbilled receivable).

A receivable is a right to consideration that is unconditional

, only the passage of time is required before payment is due).

For example, we recognize a receivable for revenue related

to our transaction or volume-based contracts when earned regardless of whether amounts have been billed.

Such receivables will be presented

in accounts receivable, net in our consolidated balance sheets.

We maintain an allowance for credit losses to provide for the estimated

amount of receivables that may not be collected.

The allowance is based upon an assessment of customer creditworthiness, historical payment

experience, the age of outstanding receivables, judgment, and other applicable factors.

A contract asset is a right to consideration

that is conditional upon factors other than the passage of time.

Contract assets will be presented in “current and other assets”

in our consolidated balance sheets and primarily relate to unbilled amounts on fixed-price contracts utilizing the output method of revenue

Our contract assets and liabilities are reported at the end of each reporting period.

The difference between the opening

and closing balances of the contract assets and deferred revenue primarily results from the timing difference between performance obligations

and the customer’s payment.

We receive payments from customers based on the terms established in their contracts, which may vary

generally by contract type.

Our contract assets and liabilities are reported

in a net position on a contract-by-contract basis at the end of each reporting period.

The difference between the opening and closing

balances of the contract assets and deferred revenue primarily results from the timing difference between performance obligations and

the customer’s payment.

We receive payments from customers based on the terms established in their contracts, which may vary generally

by contract type.

We sell hardware and software products on both

a stand-alone basis without any services and as a solution bundled with services.

When we provide a combination of hardware and software

products with the provision of services, we separately identify our performance obligations under the contract and the hardware and/or

software products or services that will be provided.

The total transaction price for an arrangement with multiple performance obligations

is allocated at contract inception to each performance obligation in proportion to the stand-alone selling price of the hardware or software.

The selling price is the price at which we would sell a promised good or service separately to a customer.

We estimate the price based

on observable inputs, including direct labor hours and allocatable costs, or use observable stand-alone prices when they are available.

Our professional services include the design and implementation of a wide range of IT products and services.

Such services are typically

provided by us or third-party subcontractor vendors on a stand-alone basis.

Subscription Revenue

We also generate subscription revenue from monthly

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credit card chargebacks.

During the three months ended March 31, 2025 and 2024, subscriptions were offered in durations of twelve-month

During the three and six months ended June 30, 2025 and 2024, subscriptions were offered in durations of twelve-month

and twenty four-month terms.

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the service is offered to the customer, indicated by length of the subscription term purchased.

The unearned portion of subscription

revenue is presented as deferred revenue in the accompanying condensed consolidated balance sheets.

We believe that the scale of our user base presents

a competitive advantage in the video social networking industry and provides growth opportunities to advance our existing products with

up-sell opportunities and build future brands with cross-sell offers.

We also believe that our proprietary consumer app technology platform

can scalably support large communities of users in activities such as video, voice and text chat, online card games and board games and

provide robust user monetization tools.

Our continued growth depends on attracting new

consumer application users through the introduction of new applications, features and partnerships and further penetration of our existing

Our principal growth strategy is to invest in the development of proprietary software, expand our sales and marketing efforts

with respect to such software, and increase our consumer application user base through potential platform partnerships and new and existing

advertising campaigns that we run through internet and mobile advertising networks, all while balancing the capital needs of the business.

Our strategy also includes the acquisition of, or investment in, technologies, solutions or businesses that complement our business and

cross-selling them to additional synergistic businesses.

The unearned portion of subscription revenue

is presented as deferred revenue in the accompanying condensed consolidated balance sheets.

Our strategic vision is to be the premier provider

of secure, reliable, and customer-focused IT solutions.

We are committed to delivering scalable and compliant infrastructure through advanced

cloud hosting, managed services, cybersecurity, and disaster recovery offerings.

By prioritizing security at every layer of our technology

stack, we safeguard our clients’ data and operations against evolving threats.

Our emphasis on reliability ensures consistent performance

and uptime, enabling businesses to operate with confidence and continuity.

Above all, we strive to exceed expectations through exceptional

customer service, building lasting partnerships and delivering strategic value that empowers our clients to thrive in a dynamic digital

Customer acquisition remains a key focus to growth,

and we are actively investing in sales and marketing to expand our footprint across strategic verticals.

In addition, we are exploring

targeted M&A opportunities that complement our core capabilities and accelerate our market reach.

As part of our innovation roadmap,

we are also evaluating ways to integrate artificial intelligence into our service offerings to help clients improve operational efficiency,

enhance security, and unlock new value from their data.

Our strategy is to approach these opportunities

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Cost of revenue consists primarily of compensation

(including stock-based compensation) and other employee-related costs for personnel engaged in data center and customer care functions,

credit card processing fees, hosting fees, data center rent, bandwidth costs and, in the case of procurement, revenue the cost of the

hardware and/or subscriptions.

Cost of revenue also includes compensation and other employee-related costs for technical personnel, consultants

and subcontracting costs relating to technology service revenue.

and other employee-related costs for personnel engaged in data center and customer care functions, credit card processing fees, hosting

fees, data center rent, bandwidth costs and, in the case of procurement, revenue the cost of the hardware and/or subscriptions.

revenue also includes compensation and other employee-related costs for technical personnel, consultants and subcontracting costs relating

to technology service revenue.

Sales marketing and product development

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finance, legal, tax and human resources and facilities costs and fees for other professional services and cost of insurance.

and administrative expense also includes amortization of intangible assets.

Depreciation and amortization expense

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As described above in the “ Recent Developments ”

section, during the three months ended March 31, 2025, we completed the Transactions.

As a result, our historical financial condition

and results of operations for the periods presented may not be comparable, either from period to period or going forward.

For more information

on the Transactions, see Note 3, Acquisition and Note 6, Discontinued Operations, in Part I, Item 1, Financial Statements, of this Form

section, we completed the Transactions in January 2025.

As a result, our historical financial condition and results of operations for

the periods presented may not be comparable, either from period to period or going forward.

For more information on the Transactions,

see Note 3, Acquisition and Note 6, Discontinued Operations , in Part I, Item 1, Financial Statements, of this Form 10-Q.

Our management relies on certain non-GAAP financial

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budgets, measure the effectiveness of our advertising and marketing efforts and assess operational efficiencies.

We also discuss net

cash provided by operating activities under the “ Liquidity and Capital Resources ” section below.

Adjusted EBITDA is

discussed below.

Adjusted EBITDA is discussed

We also discuss net cash provided by operating activities under the “ Liquidity and Capital Resources ” section

Three Months Ended

Net cash provided by (used in) operating activities – continuing operations

Six Months Ended

Net cash (used in) provided by operating activities – continuing operations

Loss from continuing operations

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$ (1,051,051 )

$ (2,463,626 )

$ (2,056,060 )

Loss from continuing operations as a percentage of total revenues

Net income (loss) from continuing operations

Net income (loss) from continuing operations as a percentage of total revenues

Net income (loss)

Net income (loss) as a percentage of total revenue

Net loss from continuing operations

$ (1,050,028 )

$ (1,293,053 )

$ (1,547,368 )

Net loss from continuing operations as a percentage of total revenues

$ (1,050,028 )

Net loss as a percentage of total revenue

Adjusted EBITDA

Adjusted EBITDA as percentage of total revenues

$ (1,433,524 )

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure.

Adjusted EBITDA is

defined as net income (loss) adjusted to exclude interest (income) expense, net, other (income) expense, net, income tax (benefit) expense,

depreciation and amortization expense, stock-based compensation expense and net loss from discontinued operations.

Adjusted EBITDA is defined as net income (loss) adjusted to exclude interest (income) expense, net, other (income) expense, net, income

tax (benefit) expense, depreciation and amortization expense, stock-based compensation expense and net loss from discontinued operations.

We present Adjusted EBITDA because it is a key

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Limitations of Adjusted EBITDA

Our use of Adjusted EBITDA has limitations as an analytical tool, and

you should not consider this performance measure in isolation from or as a substitute for analysis of our results as reported under GAAP.

Our use of Adjusted EBITDA has limitations as

an analytical tool, and you should not consider this performance measure in isolation from or as a substitute for analysis of our results

as reported under GAAP.

Some of these limitations are that Adjusted EBITDA does not reflect, among other things:

cash capital expenditures for assets underlying

depreciation and amortization expense that may need to be replaced or for new capital expenditures;

interest income, net;

other expense,

cash capital expenditures

for assets underlying depreciation and amortization expense that may need to be replaced or for new capital expenditures;

interest income,

other expense, net;

the potentially dilutive impact of stock-based compensation;

the provision for income taxes;

and net loss from discontinued operations.

Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative

and net loss from

discontinued operations.

Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces

its usefulness as a comparative measure.

Because of these limitations, you should consider

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Three Months Ended

March 31, (unaudited)

Reconciliation of net income (loss) to Adjusted EBITDA:

Net income (loss)

Net loss from discontinued operations

Six Months Ended

Reconciliation of net loss to Adjusted EBITDA:

$ (1,050,028 )

$ (1,293,053 )

$ (1,547,368 )

Net income from discontinued operations

Interest income, net

Income tax expense, discontinued operations

Income tax benefit

Income tax expense (benefit)

Other income, net

Depreciation and amortization expense

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Adjusted EBITDA

$ (1,433,524 )

Results of Operations

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Three Months Ended

Six Months Ended

Total revenue

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Loss from continuing operations

Interest income, net

Other income, net

Loss from continuing operations before income tax benefit

Income tax benefit

Income tax expense (benefit)

Net income (loss) from continuing operations

Loss from discontinued operations, net of income tax expense of $480,810

Net income (loss)

Three Months Ended March 31, 2025 Compared to Three Months Ended

March 31, 2024

Income from discontinued operations, net of income tax expense

Three Months Ended June 30, 2025 Compared to Three Months Ended

June 30, 2024

Total revenue increased by 2008.5% to $5,722,599

for the three months ended March 31, 2025 from $271,572 for the three months ended March 31, 2024.

for the three months ended June 30, 2025 from $271,409 for the three months ended June 30, 2024.

This increase was driven by new revenue

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The following table sets forth our total revenue

for the three months ended March 31, 2025 and the three months ended March 31, 2024, the increase between those periods, the percentage

for the three months ended June 30, 2025 and the three months ended June 30, 2024, the increase between those periods, the percentage

increase between those periods, and the percentage of total revenue that each represented for those periods:

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Our subscription revenue for the three months

ended March 31, 2025 relates to the sales from our ManyCam software, which increased by $9,647, or 3.6%, as compared to the three months

ended March 31, 2024.

ended June 30, 2025 relates to the sales from our ManyCam software, which increased by $7,220, or 2.7%, as compared to the three months

ended June 30, 2024.

The increase in subscription revenue was primarily driven by an increase in new subscribers to our ManyCam software.

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Total costs and expenses for the three months

ended March 31, 2025 increased by $5,575,384, or 436.7%, as compared to the three months ended March 31, 2024.

ended June 30, 2025 increased by $5,529,838, or 418.1%, as compared to the three months ended June 30, 2024.

The following table presents

our costs and expenses for the three months ended March 31, 2025 and 2024, the increase between those periods and the percentage increase

our costs and expenses for the three months ended June 30, 2025 and 2024, the increase between those periods and the percentage increase

between those periods and the percentage of total revenue that each represented for those periods:

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Cost of revenue

Our cost of revenue for the three months ended March 31, 2025 increased

by $2,403,027, or 3898.7%, as compared to the three months ended March 31, 2024.

This increase was primarily due to an increase in the

expenses related to the new revenue streams, including but not limited to, costs associated with procurement equipment and related costs

of $796,895, managed services expenses of $468,047, subscriptions and licensing of $480,278, professional and consulting costs of $363,764,

web hosting expense of $154,751 and rent related to our Data Centers of $122,935.

Our cost of revenue for the three months ended

June 30, 2025 increased by $2,784,412, or 3812.3%, as compared to the three months ended June 30, 2024.

This increase was primarily due

to an increase in the expenses related to the new revenue streams, including but not limited to, costs associated with procurement equipment

and related costs of $945,925, managed services expenses of $518,970, subscriptions and licensing of $698,846, professional and consulting

costs of $278,498, web hosting expense of $123,455 and rent related to our Data Centers of $82,692.

Sales marketing and product development expense

Our sales marketing and product development expense

for the three months ended March 31, 2025 increased by $499,575, or 188.0%, as compared to the three months ended March 31, 2024.

increase in sales marketing and product development expense for the three months ended March 31, 2024 was primarily due to an increase

in salary-related expenses of approximately $512,897 and commissions of $132,915 earned by the Company’s sales team to service and

grow its customer base.

for the three months ended June 30, 2025 increased by $581,999 or 226.1%, as compared to the three months ended June 30, 2024.

in sales marketing and product development expense for the three months ended June 30, 2025 was primarily due to an increase in salary-related

expenses of approximately $510,333 and commissions of $134,844 earned by the Company’s sales team to service and grow its customer

In addition, consulting expenses totaled $134,542 related to marketing activities.

As a result of the Transactions,

headcount increased from zero in the prior year period to approximately 15 people in the current period, and with their associated salary

and salary-related costs are included in sales marketing and product development expense for the three months ended March 31, 2025.

As a result of the Transactions, headcount on

our sales team increased from zero in the prior year period to approximately 15 people in the current period, and their associated

salaries are included in sales marketing and product development expense for the three months ended June 30, 2025.

General and administrative expense

Our general and administrative expense for the

three months ended March 31, 2025 increased by $2,194,324, or 295.1%, as compared to the three months ended March 31, 2025.

in general and administrative expenses for the three months ended March 31, 2025 was primarily due to legal and accounting expenses of

three months ended June 30, 2025 increased by $1,695,359, or 215.6%, as compared to the three months ended June 30, 2024.

in general and administrative expenses for the three months ended June 30, 2025 was primarily due to legal and accounting expenses of

$148,486 and $73,327, respectively.

In addition, the Company incurred public company expenses of $115,586, rent expense of $95,187 in

connection with our office and Data Centers, insurance costs of $200,185.

Salary and salary related expenses totaled $1,530,551 for the

three months ended March 31, 2025, plus $167,631 of non-cash share-based compensation.

connection with our office and Data Centers and insurance costs of $205,411.

Salary and salary related expenses totaled $1,534,583 for

the three months ended June 30, 2025, plus $77,760 of non-cash share-based compensation.

As a result of the Transactions, headcount increased

from four individuals in the prior year period to approximately 41 individuals in the current period, and their associated salary and

salary related costs are included in general and administrative expenses for the three months ended March 31, 2025.

Of the total expenses

described above, approximately $334,970 were one-time expenses related to the Transactions.

salary related costs are included in general and administrative expenses for the three months ended June 30, 2025.

Non-Operating Income

The following table presents the components of

non-operating income for the three months ended March 31, 2025 and the three months ended March 31, 2024, the decrease between those

periods and the percentage decrease between those periods and the percentage of total revenue that each represented for those periods:

non-operating income for the three months ended June 30, 2025 and the three months ended June 30, 2024, the decrease between those periods

and the percentage decrease between those periods and the percentage of total revenue that each represented for those periods:

Three Months Ended

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Interest income, net

Other income, net

Total non-operating income

Non-operating income for the three months ended

March 30, 2025 was $82,392, a decrease of $69,592, or 45.8%, as compared to non-operating income of $151,984 for the three months ended

March 31, 2024.

The decrease was primarily a result of a decrease in the amount of principal the Company invested and at varying interest

Our provision for income taxes consists of federal, foreign and state

taxes, as applicable, in amounts necessary to align the Company’s year-to-date tax provision with the effective rate that it expects

to achieve for the full year.

For the three months ended March 31, 2025, the Company recorded an income tax benefit of $2,060,065 primarily

related to a partial release of its valuation allowance as the Acquisition of NTS created a source of future taxable income allowing for

the recognition of certain deferred tax assets.

For the three months ended March 31, 2024, the Company recorded an income tax benefit

June 30, 2025 was $151,678, a decrease of $138,822, or 47.8%, as compared to non-operating income of $290,500 for the three months ended

June 30, 2024.

The decrease in interest income was primarily a result of a decrease in the amount of principal the Company invested and

at varying interest rates.

Other income for the three months ended June 30, 2025 related to the sale of a domain name that the Company

is not using.

During the three months ended June 30, 2024 other income included proceeds from a class action lawsuit against a service

Our provision for income taxes consists of federal,

foreign and state taxes, as applicable, in amounts necessary to align the Company’s year-to-date tax provision with the effective

rate that it expects to achieve for the full year.

For the three months ended June 30, 2025, the Company recorded an income tax provision

of $72,007 consisting primarily of federal, foreign, state and local taxes.

For the three months ended June 30, 2024, the Company recorded

an income tax provision of $532,502, consisting primarily of federal, foreign, state and local taxes.

On July 4, 2025, President Trump signed H.R.

the “One Big Beautiful Bill Act”, into law.

In accordance with U.S.

GAAP, we will account for the tax effects of changes

in tax law in the period of enactment which is in the third quarter of 2025.

We are currently in the process of analyzing the tax impacts

of the law change but we do not expect a material impact on our effective tax rate.

Six Months Ended June 30, 2025 Compared to Six Months Ended June

Total revenue increased by 1970.2% to $11,240,637

for the six months ended June 30, 2025 from $542,981 for the six months ended June 30, 2024.

This increase was driven by new revenue streams

acquired in connection with the Acquisition and the fact that revenue for the prior year period did not include revenue from discontinued

The following table sets forth our total revenue

for the six months ended June 30, 2025 and the six months ended June 30, 2024, the increase between those periods, the percentage increase

between those periods, and the percentage of total revenue that each represented for those periods:

Six Months Ended

Managed information technology

Procurement revenue

Professional services revenue

Subscription revenue

Total revenues

Our subscription revenue for the six months ended

June 30, 2025 relates to the sales from our ManyCam software, which increased by $16,867, or 3.1%, as compared to the six months ended

June 30, 2024.

The increase in subscription revenue was primarily driven by an increase in new subscribers to our ManyCam software.

Costs and Expenses

Total costs and expenses for the six months ended

June 30, 2025 increased by $11,105,222, or 427.3%, as compared to the six months ended June 30, 2024.

The following table presents our

costs and expenses for the six months ended June 30, 2025 and 2024, the increase between those periods, the percentage increase between

those periods and the percentage of total revenue that each represented for those periods:

Six Months Ended

Cost of revenue

Sales marketing and product development expense

General and administrative expense

Depreciation and amortization

Total costs and expenses

Cost of revenue

Our cost of revenue for the six months ended June

30, 2025 increased by $5,187,439, or 3,851.9%, as compared to the six months ended June 30, 2024.

This increase was primarily due to an

increase in the expenses related to the new revenue streams, including but not limited to, costs associated with procurement equipment

and related costs of $1,723,423, managed services expenses of $987,017, subscriptions and licensing of $1,179,124, professional and consulting

costs of $642,242, web hosting expense of $278,206 and rent related to our Data Centers of $165,384.

Sales marketing and product development expense

Our sales marketing and product development expense

for the six months ended June 30, 2025 increased by $1,081,574, or 206.7%, as compared to the six months ended June 30, 2024.

in sales marketing and product development expense for the six months ended June 30, 2025 was primarily due to an increase in salary-related

expenses of approximately $1,020,875 and commissions of $267,759 earned by the Company’s sales team to service and grow its customer

In addition, consulting expenses totaled $247,459 related to marketing activities.

As a result of the Transactions, headcount on

our sales team increased from zero in the prior year period to approximately 15 people in the current period, and their associated

salary costs are included in sales marketing and product development expense for the six months ended June 30, 2025.

General and administrative expense

Our general and administrative expense for the

six months ended June 30, 2025 increased by $3,889,683, or 254.2%, as compared to the six months ended June 30, 2024.

The increase in

general and administrative expenses for the three months ended June 30, 2025 was primarily due to legal and accounting expenses of $417,901

and $342,724, respectively.

In addition, the Company incurred public company expenses of $203,285, rent expense of $198,647 in connection

with our office and Data Centers and insurance costs of $405,596.

Salary and salary related expenses totaled $3,065,134 for the six months

ended June 30, 2025, plus $245,391 of non-cash share-based compensation.

As a result of the Transactions, headcount increased from four

individuals in the prior year period to approximately 41 individuals in the current period, and their associated salary and salary related

costs are included in general and administrative expenses for the six months ended June 30, 2025.

Of the total expenses described above,

approximately $334,970 were one-time expenses related to the Transactions.

Non-Operating Income

The following table presents the components of

non-operating income for the six months ended June 30, 2025 and the six months ended June 30, 2024, the decrease between those periods,

the percentage decrease between those periods and the percentage of total revenue that each represented for those periods:

Six Months Ended

Interest income, net

Other income, net

Total non-operating income

Non-operating income for the six months ended

June 30, 2025 was $234,070, a decrease of $208,414, or 47.1%, as compared to non-operating income of $442,484 for the six months ended

June 30, 2024.

The decrease was primarily a result of a decrease in the amount of principal the Company invested and at varying interest

Other income for the six months ended June 30, 2025 related to the sale of a domain name that the Company is not using.

the six months ended June 30, 2024 other income included proceeds from a class action lawsuit against a service provider.

Our provision for income taxes consists of federal,

foreign and state taxes, as applicable, in amounts necessary to align the Company’s year-to-date tax provision with the effective

rate that it expects to achieve for the full year.

For the six months ended June 30, 2025, the Company recorded an income tax benefit

of $1,988,058 primarily related to a partial release of its valuation allowance as the Acquisition created a source of future taxable

income allowing for the recognition of certain deferred tax assets.

For the six months ended June 30, 2024, the Company recorded an income

tax benefit of $66,208, consisting primarily of federal, foreign, state and local taxes.

Liquidity and Capital Resources

Three Months Ended

Six Months Ended

Condensed Consolidated Statements of Cash Flows Data:

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Net cash provided by financing activities

Net decrease in cash and cash equivalents

Net decrease in cash, cash equivalents and restricted cash

$ (2,286,842 )

Currently, our primary source of liquidity is

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obligations for one year from the date these financial statements are issued.

As of March 31, 2025, we had $9,683,317 of cash and cash

As of June 30, 2025, we had $8,301,692 of cash and cash

equivalents, which included $1,014,714 of restricted cash.

Our primary use of working capital is related

to product development resources and investment in marketing initiatives to grow the business in order to maintain and create new services

and features in applications for our clients and users.

In the future, we may seek to grow our business by expending our capital resources

to fund strategic acquisitions, investments and partnership opportunities.

to investment in marketing initiatives to grow the business in order to maintain and create new services and features in applications

for our clients and users.

In the future, we may seek to grow our business by expending our capital resources to fund strategic acquisitions,

investments and partnership opportunities.

Stock Repurchase Plan

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and economic conditions, alternative investment opportunities and other corporate considerations.

As of the date of this report, no shares

of common stock had been repurchased pursuant to the Stock Repurchase Plan.

As of June 30, 2025, 104,600 shares of common stock had been repurchased pursuant to the Stock Repurchase Plan.

NTS Acquisition

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The Divestiture

On January 2, 2025, we completed the sale to

Meteor Mobile of the Transferred Assets.

The consideration delivered by Meteor Mobile to us at the closing of the Divestiture consisted

of (i) $1,350,000 in cash and (ii) the assumption of all of the liabilities of the Sellers arising out of, or relating to, the Business

or the Transferred Assets, other than certain excluded liabilities.

In addition to the Divestiture Closing Consideration, we are entitled

to receive, with respect to each Earn-Out Period, as defined and described below, certain payments in cash based on the cash revenue,

net of any refunds, received by Meteor Mobile that is attributable to the Business (such cash revenue, the “Legacy Business Revenue”),

the six-month period beginning on July 1, 2025 and ending on December 31, 2025 (“Earn-Out

Period 1”), an amount equal to (i) for any Legacy Business Revenue greater than or

equal to $3,500,000 and less than $4,250,000, the amount of such Legacy Business Revenue

multiplied by 0.30 plus (ii) for any Legacy Business Revenue greater than or equal to $4,250,000,

the amount of such Legacy Business Revenue in excess of $4,250,000 multiplied by 0.40;

each of the twelve-month period beginning on January 1, 2026 and ending on December 31, 2026

(“Earn-Out Period 2”), the twelve-month period beginning on January 1, 2027 and

ending on December 31, 2027 (“Earn-Out Period 3”), and the twelve-month period

beginning on January 1, 2028 and ending on December 31, 2028 (“Earn-Out Period 4”

and collectively with Earn-Out Period 1, Earn-Out Period 2 and Earn-Out Period 3, the “Earn-Out

Periods”), an amount equal to (i) for any Legacy Business Revenue greater than or equal

to $7,000,000 and less than $8,500,000, the amount of such Legacy Business Revenue multiplied

by 0.30 plus (ii) for any Legacy Business Revenue greater than or equal to $8,500,000, the

amount of such Legacy Business Revenue in excess of $8,500,000 multiplied by 0.40 (the aggregate

amount, if any, earned during the Earn-Out Periods, the “Divestiture Earn-Out Amount”).

On January 2, 2025, we completed the sale to Meteor

Mobile of the Transferred Assets.

The consideration delivered by Meteor Mobile to us at the closing of the Divestiture consisted of (i)

$1,350,000 in cash and (ii) the assumption of all of the liabilities of the Sellers arising out of, or relating to, the Business or the

Transferred Assets, other than certain excluded liabilities.

In addition to the Divestiture Closing Consideration, we are entitled to

receive, with respect to each Earn-Out Period, as defined and described below, certain payments in cash based on the cash revenue, net

of any refunds, received by Meteor Mobile that is attributable to the Business (such cash revenue, the “Legacy Business Revenue”),

from the six-month period beginning on July 1, 2025 and ending on December 31, 2025 (“Earn-Out Period 1”), an amount equal to (i) for any Legacy Business Revenue greater than or equal to $3,500,000 and less than $4,250,000, the amount of such Legacy Business Revenue multiplied by 0.30 plus (ii) for any Legacy Business Revenue greater than or equal to $4,250,000, the amount of such Legacy Business Revenue in excess of $4,250,000 multiplied by 0.40;

from each of the twelve-month period beginning on January 1, 2026 and ending on December 31, 2026 (“Earn-Out Period 2”), the twelve-month period beginning on January 1, 2027 and ending on December 31, 2027 (“Earn-Out Period 3”), and the twelve-month period beginning on January 1, 2028 and ending on December 31, 2028 (“Earn-Out Period 4” and collectively with Earn-Out Period 1, Earn-Out Period 2 and Earn-Out Period 3, the “Earn-Out Periods”), an amount equal to (i) for any Legacy Business Revenue greater than or equal to $7,000,000 and less than $8,500,000, the amount of such Legacy Business Revenue multiplied by 0.30 plus (ii) for any Legacy Business Revenue greater than or equal to $8,500,000, the amount of such Legacy Business Revenue in excess of $8,500,000 multiplied by 0.40 (the aggregate amount, if any, earned during the Earn-Out Periods, the “Divestiture Earn-Out Amount”).

In the event of a change of control (as defined

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by the date of the change of control, minus (iii) the aggregate amount of any Acceleration Payments previously paid through such date.

If any of the Transferred Assets are sold contemporaneously with other assets of Meteor Mobile, we are entitled to (x) the aggregate

consideration paid to Meteor Mobile for the Transferred Assets multiplied by the ratio of the trailing 12-month EBITDA of the Transferred

Assets sold and the EBITDA of all assets sold minus (y) the aggregate amount of any Divestiture Earn-Out Amounts received by the Sellers

by the date of the change of control, minus (z) the aggregate amount of any Acceleration Payments previously paid through such date.

The minimum Acceleration Payment for the sale of “Paltalk,” “Camfrog” and “Vumber” is $1,650,000,

$450,000 and $300,000, respectively, and the Acceleration Payments payable to us are capped at $5,000,000 in the aggregate.

If any of the Transferred Assets are sold contemporaneously with other assets of Meteor Mobile, we are entitled to (x) the aggregate consideration

paid to Meteor Mobile for the Transferred Assets multiplied by the ratio of the trailing 12-month EBITDA of the Transferred Assets sold

and the EBITDA of all assets sold minus (y) the aggregate amount of any Divestiture Earn-Out Amounts received by the Sellers by the date

of the change of control, minus (z) the aggregate amount of any Acceleration Payments previously paid through such date.

The minimum Acceleration

Payment for the sale of “Paltalk,” “Camfrog” and “Vumber” is $1,650,000, $450,000 and $300,000, respectively,

and the Acceleration Payments payable to us are capped at $5,000,000 in the aggregate.

Operating Activities

Net cash provided by operating activities was

$1,744,783 for the three months ended March 31, 2025, as compared to net cash used in operating activities of $335,786 for the three months

ended March 31, 2024.

The improvement in the amount of cash used in operations for the three months ended March 31, 2024 was primarily

attributed to the change in the business activities of the Company following the Transactions compared to the three months ended March

31, 2024, specifically, the collection of accounts receivable (favorable by $0.2 million), the timing of payment of payables favorable

by $0.7 million, as well as amounts collected by the Company during the first quarter following the Divestiture due to Meteor Mobile and

paid subsequent to quarter end of $0.4 million.

$856,105 for the six months ended June 30, 2025, as compared to net cash used in operating activities of $103,210 for the six months ended

June 30, 2024.

The increase in the amount of cash provided by operations for the six months ended June 30, 2024 was primarily attributed

to the change in the business activities of the Company following the Transactions compared to the six months ended June 30, 2024, specifically,

the collection of accounts receivable (favorable by $0.3 million), and the timing of payment of payables (favorable by $1.5 million),

netted against amounts collected by the Company during the second quarter following the Divestiture due to Meteor Mobile and paid subsequent

to quarter end of $0.4 million.

Investing Activities

Net cash used in investing activities for the three months ended March

31, 2025 was $4,000,000 and related to the cash consideration paid by the Company to Newtek in connection with the Acquisition.

was no cash used in or provided by investing activities for the three months ended March 31, 2024.

Net cash used in investing activities for the

six months ended June 30, 2025 was $4,280,149 and related to the cash consideration paid by the Company to Newtek in connection with the

Acquisition as well as the acquisition of fixed assets.

There was no cash used in or provided by investing activities for the six months

ended June 30, 2024.

Financing Activities

Net cash provided by financing activities was $1,350,000 for the three

months ended March 31, 2025.

There was no cash used in or provided by financing activities for the three months ended March 31, 2024.

This is attributed to the $1,350,000 received in connection with the Divestiture.

Net cash provided by financing activities was

$1,137,202 for the six months ended June 30, 2025, which was attributed to the $1,350,000 received in connection with the Divestiture

netted against the $212,798 used in connection with the Stock Repurchase Plan.

There was no cash used in or provided by financing activities

for the six months ended June 30, 2024.

Contractual Obligations and Commitments

There have been no other material changes to

our contractual obligations and commitments disclosed in the contractual obligations and commitments section of Management’s Discussion

There have been no other material changes to our

contractual obligations and commitments disclosed in the contractual obligations and commitments section of Management’s Discussion

and Analysis of Financial Condition and Results of Operations in the Form 10-K.

Off-Balance Sheet Arrangements

As of March 31, 2025, we did not have any off-balance

As of June 30, 2025, we did not have any off-balance

sheet arrangements.

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of estimates requires the exercise of judgment.

Actual results inevitably will differ from those estimates, and such differences may

be material to the financial statements.

We believe the following critical accounting

policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Actual results inevitably will differ from those estimates, and such differences may be

material to the financial statements.

We believe the following critical accounting policies

affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Business Combinations

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for business combinations.

Under the acquisition method, the acquiring entity recognizes all of the identifiable assets acquired and

liabilities assumed at their acquisition date fair values.

We use our best estimates and assumptions to estimate the fair values of these

tangible and intangible assets.

Under the acquisition method, the acquiring entity recognizes all of the identifiable assets acquired and liabilities

assumed at their acquisition date fair values.

We use our best estimates and assumptions to estimate the fair values of these tangible

and intangible assets.

Any excess of the purchase price over amounts allocated to the assets acquired is recorded as goodwill.

The acquired intangible assets are amortized using the straight-line method over the estimated useful lives of the respective assets.

Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying

amount of goodwill may be impaired.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

intangible assets are amortized using the straight-line method over the estimated useful lives of the respective assets.

Goodwill is reviewed

for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill

may be impaired.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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 2. Management’s Discussion and Analysis