Myseum.AI, Inc. 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included elsewhere in this Annual Report on Form 10-K. All amounts in this report are in U.S. dollars, unless otherwise noted. Overview We are a privacy and social media technology company focused on innovative and creative user platforms. Our flagship platform is “Picture Party by Myseum”, a next-generation social sharing platform that makes it easier to share your photos and videos both today, and for generations to come. Our innovative social media platform brings a fresh and needed approach to digital media and content management, allowing users to create a digital legacy that makes it easier to share both today, and with future generations. The platform is backed by both patented technology and proprietary software. We also operate the DatChat Messenger & Private Social Network, which presents technology that allows users to change how long their messages can be viewed before or after users send them, prevents screenshots, and hides encrypted photos in plain sight on camera rolls. The patented technology offers users a traditional texting experience while providing control and security for their messages. With the DatChat Messenger, a user can decide how long their messages last on a recipient’s device while feeling secure that at any time, and delete individual messages or entire message threads, making it like the conversation never happened. 24 DatChat Messenger & Private Social Network Our platform allows users to exercise control over their messages and posts, even after they are sent. Through our application, users can delete messages that they have sent, on their own device and the recipient’s device as well. There is no set time limit within which they must exercise this choice. A user can elect at any time to delete a message that they previously sent to a recipient’s device. The application also enables users to hide secret and encrypted messages behind a cover, which messages can only be unlocked by the recipient and which are automatically destroyed after a fixed number of views or fixed amount of time. Users can decide how long their messages last on the recipient’s device. The application also includes a screenshot protection system, which makes it virtually impossible for the recipient to screenshot a message or picture before it gets destroyed. In addition, users can delete entire conversations at any time, making it like the conversation never even happened. In addition to the foregoing, the application also provides users with the ability to connect via an encrypted live video chat that also is designed to prevent screenshots or screen grabs. The application integrates with iMessage, making private messages potentially available to hundreds of millions of users. Myseum Social Media Platform In March 2025, we launched our Myseum social media platform, an innovative social media platform that brings a fresh approach to digital media and content management, allowing users to create a digital legacy that can be easily shared today and with future generations. Backed by Proprietary technology, the multi-tiered social media ecosystem enables individuals, families, and other groups to store and share digital content such as messages, photos, videos, and documents within a highly secure and private family library. Myseum allows users to create amazing albums and galleries for everyone to see, create special private and secure galleries with limited access, personalize a user’s newsfeed with updates from other Myseums and leave time released video messages for both now and future generations. Picture Party Platform In December 2025, we launched Picture Party by Myseum , a new instant social networking and social sharing platform designed to address growing concerns around content control, security, and intentional digital connection. The platform was developed to capitalize on the widespread need for a more controlled and purposeful way to share photos and videos-one that solves persistent privacy and ownership challenges not adequately addressed by existing social media offerings. Picture Party by Myseum introduces a new way to make sharing photos and videos easier, a lot more fun and private. Picture party is much more than a shared album; it’s a complete personal and private social network with a live feed that updates instantly as all guests’ posts. A user can share a post with dozens of pictures, comment and react. It even organizes the photos in an album, or the user can relive the Picture Party with all the comments and posts as they happened. Unlike group chats that are unorganized, no matter when a user joins the Picture Party, they can see everything from the beginning. Picture Party by Myseum makes it easier and more fun to share with the people right next to the user, or anywhere in the world. Picture Party by Myseum solves everyday sharing frustrations by eliminating the common headaches of modern photo sharing: ● No more passing around a phone for others to view photos and videos. ● No more crowds gathering over a user’s shoulder to see a clip. ● No more debating whether to text, drop, email, or tag group photos. ● No more struggling with social media privacy, data exposure, or AI training risks. RPM Interactive, Inc. In October 2024, our majority owned subsidiary, Dragon Interact, Inc. (“Dragon”), entered into a Share Exchange Agreement with RPM Interactive, Inc., a Florida corporation (“RPM”), pursuant to which Dragon acquired 100% of the equity interests of RPM, including all assets of RPM in consideration for the issuance of 3,500,000 restricted shares of Dragon’s common stock. RPM’s assets included an artificial intelligence (“AI”) tool used for publishing AI-generated consumer gaming and podcasting/vodcasting applications and certain intellectual property. As part of the acquisition, Dragon has changed its corporate name to RPM Interactive, Inc. and shifted its focus to developing AI-driven podcast and gaming technologies. Following the acquisition, in January 2025, we returned 3,500,000 shares of the RPM common stock held by us to RPM, which shares were cancelled and are no longer outstanding on RPM’s stock ledger. Following these transactions, we held 12,500,000 shares of the RPM’s common stock, or approximately 34% of its outstanding shares. 25 On December 12, 2025, RPM entered into an Agreement and Plan of Merger with Avalon GloboCare Corp., a Delaware corporation (“Avalon”), and certain other parties, pursuant to which the Company sold its minority interest in RPM to Avalon. Upon the closing of the transaction, the Company received 6,561.71 shares of Series E Preferred Stock of Avalon as consideration. As a result of the closing, the Company is no longer a primary beneficiary of RPM and as of December 12, 2025, has deconsolidated RPM. In accordance with ASC 205-20, the results of operations and the assets and liabilities of RPM have been classified as discontinued operations for all periods presented in the accompanying consolidated financial statements. The Habytat Prior to the acquisition of RPM, we developed and launched, in November 2022, the Habytat, a virtual space that blends real world and virtual realities into one, in real time, using emerging technology like virtual and augmented reality, to create a highly immersive 3D environment. We had further contemplated spinning-off our Habytat platform business into a new standalone public company pursuant to a distribution of the shares. As discussed above, following our acquisition of RPM in October 2024, we ceased our development of the Habytat platform and are evaluating ways to utilize the technology that had been developed by our subsidiary. Recent Events Name and Symbol Changes On August 7, 2025, we filed a Certificate of Amendment to our Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada to change the name of the Company to “Myseum, Inc.” In connection with the name change, the trading symbols for our common stock and Series A warrants began trading on the Nasdaq Capital Market on August 11, 2025 as “MYSE” and “MYSEW”, respectively. Basis of Presentation The financial statements contained herein have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) and the requirements of the Securities and Exchange Commission. Critical Estimates This management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with U.S. GAAP, we base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Actual results may differ from these estimates if conditions differ from our assumptions. While our significant accounting policies and significant estimates are more fully described in Note 2 in the “Notes to Financial Statements”, we believe the following estimates are critical to the process of making significant judgments and estimates in preparation of our consolidated financial statements. 26 Capitalized internal-use software costs The Company capitalizes costs to develop or purchase internal-use software in accordance with ASC section 350-40, Intangibles — Goodwill and Other — Internal-Use Software . Costs incurred to develop internal-use software are expensed as incurred during the preliminary project stage. Internal-use software development costs are capitalized upon purchase and during the application development stage, which is after: (i) the preliminary project stage is completed; and (ii) management authorizes and commits to funding the project and it is probable the project will be completed and used to perform the intended function. Capitalization ceases at the point where the software project is substantially complete and ready for its intended use, and after all substantial testing is completed. Upgrades and enhancements are capitalized if it is probable that those expenditures will result in additional functionality. Amortization is provided for on a straight-line basis over the expected useful life of the internal-use software development costs and related upgrades and enhancements. When the existing software is replaced with new software, the unamortized costs of the old software are expensed when the new software is ready for its intended use. Noncontrolling interests The Company follows ASC Topic 810, “Consolidation,” governing the accounting for and reporting of noncontrolling interests (“NCI”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. In accordance with ASC Topic 810-10-45, the Company presented noncontrolling interests as a separate component of total shareholders’ equity on the consolidated balance sheets. Certain provisions of this standard indicate, among other things, that that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially-owned consolidated subsidiary be allocated to noncontrolling interests even when such allocation might result in a deficit balance. For the years ended December 31, 2025 and 2024, the net loss attributed to NCI was included in the accompanying consolidated statements of operations and comprehensive loss as part of discontinued operations. Losses attributable to NCI in a subsidiary may exceed a NCI’s interests in the subsidiary’s equity. The excess attributable to NCI is attributed to those interests. NCI shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. The Company allocated certain corporate common expenses to its subsidiaries based on the ratio of direct subsidiary expenses to total consolidated expenses. Management believes that this allocation method is reasonable. Through January 10, 2024, the date that VR Interactive purchased 8,000,000 shares of RPM from Metabizz LLC, any noncontrolling interest was eliminated in consolidation. Subsequent to January 10, 2024, the Company ceased eliminating the noncontrolling interest in consolidation and recorded an initial negative noncontrolling interest in total equity for the portion of equity ownership not attributable to Myseum based on the minority interest holders’ ownership interest in the carrying value of RPM’s equity. Due to the issuance of common shares by RPM, during the year ended December 31, 2024, the Company recorded aggregate initial negative noncontrolling interest of $1,351,942 in total equity for the portion of additional equity ownership not attributable to the Company based on the minority interest holders’ ownership interest in the carrying value of RPM’s equity. During the year ended December 31, 2024, the Company also allocated $785,847 of the net loss of the subsidiary to noncontrolling interest resulting in a total noncontrolling interest deficit of $2,137,789 as of December 31, 2024. Due to the cancellation of common shares by RPM, during the year ended December 31, 2025, the Company recorded aggregate initial negative noncontrolling interest of $188,810 in total equity for the portion of additional equity ownership not attributable to the Company based on the minority interest holders’ ownership interest in the carrying value of RPM’s equity. The Company also allocated $432,847 of the net loss of the subsidiary to noncontrolling interest during the year ended December 31, 2025. Immediately prior to the sale and deconsolidation of RPM on December 12, 2025, aggregate accumulated noncontrolling interest deficit amounted to $2,759,446. Upon deconsolidation, this balance was eliminated and included in the calculation of the gain on deconsolidation (see Note 3). As of December 31, 2025, there is no noncontrolling interest balance remaining on the consolidated balance sheet. 27 Variable interest entities Pursuant to ASC 810-10-25-22 , an entity is defined as a VIE if it either lacks sufficient equity to finance its activities without additional subordinated financial support, or it is structured such that the holders of the voting rights do not substantively participate in the gains and losses of the entity. When determining whether an entity that meets the definition of a business qualifies for a scope exception from applying VIE guidance, the Company considers whether: (i) it has participated significantly in the design of the entity, (ii) it has provided more than half of the total financial support to the entity, and (iii) substantially all of the activities of the VIE are conducted on its behalf. A VIE is consolidated by its primary beneficiary, the party that has the power to direct the activities that most significantly impact the VIE’s economic performance and has the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. The primary beneficiary assessment must be re-evaluated on an ongoing basis. Based on the Company’s analysis, on February 14, 2023, Metabizz, LLC, a Florida corporation, and Metabizz SAS, a company incorporated under the laws of Columbia (collectively “Metabizz”), were determined to be VIE entities in accordance with ASC 810-10-25-22 because the equity owners in Metabizz did not have the characteristics of a controlling financial interest and the initial equity investments in these entities may be or are insufficient to meet or sustain its operations without additional subordinated financial support from Myseum. The equity owners of Metabizz had only a nominal equity investment at risk, and the Company absorbed or received a majority of the entity’s expected losses or benefits. The Company participated significantly in the design of Metabizz. The Company previously provided working capital advances to Metabizz to allow Metabizz to fund its day-to-day obligations. Substantially all of the activities of Metabizz were conducted for the Company’s benefit, as evidenced by the fact that the operations of Metabizz consisted of development of software and technologies to be used by RPM and the Company provided working capital to Metabizz to pay employees and independent contractors to perform the development services on behalf of the Company. Repayment of the working capital advances is not guaranteed by the equity owner of Metabizz and creditors of Metabizz do not have recourse against the Company. Accordingly, the Company was required to consolidate the assets, liabilities, revenues and expenses of Metabizz using the fair value method. Additionally, the managing partner of Metabizz was also the Chief Innovation Officer of RPM. Since Metabizz, LLC and Metabizz SAS were considered VIE’s, any noncontrolling interest eliminated in consolidation. On March 31, 2024, based on the Company’s analysis, the Company deconsolidated Metabizz, LLC and Metabizz SAS. During the three months ended March 31, 2024, the Company ceased doing business with Metabizz, LLC and Metabizz SAS and began paying technology professionals directly. In connection with the deconsolidation of Metabizz, LLC and Metabizz SAS, during the year ended December 31, 2024, the Company recorded a gain on deconsolidation of $107. Immediately following the August 27, 2024 Asset Purchase Agreement with the Seller (See Note 1), the Company owned 46.7% of RPM. Based on the Company’s analysis, on August 27, 2024, the Company determined that RPM met the definition of a VIE under the VIE model, which provides for situations in which control may be demonstrated other than by the possession of voting rights in RPM. Until the date of sale on December 12, 2025, the Company continued to have the power to direct the activities of RPM that most significantly impact RPM’s economic performance and the obligation to absorb losses of RPM that could potentially be significant to RPM or the right to receive benefits from RPM that could potentially be significant to RPM. Immediately prior to the sale and deconsolidation, the Company retained approximately 33.7% ownership of RPM. As of December 31, 2024, the Company retained approximately 39.7%. As a result of the sale and deconsolidation on December 12, 2025, the Company no longer consolidates RPM and does not hold a variable interest in any entity. 28 Stock-based compensation Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation–Stock Compensation ”, which requires recognition in the consolidated financial statements of the cost of employee, non-employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. The Company has elected to account for forfeitures as they occur. Recently Issued Accounting Pronouncements Refer to the notes to the audited financial statements. Results of Operations Revenue During the years ended December 31, 2025 and 2024, we generated revenues of $550 and $436, respectively, which consisted of subscription revenues. Operating expenses For the year ended December 31, 2025, operating expenses amounted to $5,490,608 as compared to $3,217,603 for the year ended December 31 2024, an increase of $2,273,005, or 70.6%. For the years ended December 31 2025 and 2024, operating expenses consisted of the following: Year Ended December 31, 2025 2024 Compensation and related expenses $ 3,108,633 $ 1,794,611 Marketing and advertising expenses 238,992 84,163 Professional and consulting expenses 1,412,792 582,267 Research and development - 166,667 General and administrative expenses 730,191 589,895 Total $ 5,490,608 $ 3,217,603 Compensation and related expenses Compensation and related expenses include salaries, stock-based compensation, health insurance and other benefits. During the year ended December 31, 2025 and 2024, compensation and related expenses amounted to $3,108,633 and $1,794,611, respectively, an increase of $1,314,022, or 73.2%. The increase was attributable to an increase in stock-based compensation of $723,890 due to the issuance of new stock options in 2025, an increase in bonus of $50,000, and an overall increase in compensation and other related expenses of $540,132 as a result of a decrease in the allocation of compensation and related expenses to RPM, which is included in loss from discontinued operations. 29 Marketing and advertising expenses During the years ended December 31, 2025 and 2024, marketing and advertising expenses amounted to $238,992 and $84,163, respectively, an increase of $154,829, or 184.0%, primarily due to an overall increase in promotions, branding and digital marketing strategies and social media advertisements. Professional and consulting expenses During the years ended December 31, 2025 and 2024, we reported professional and consulting expenses of $1,412,792 and $582,267, respectively, an increase of $830,525, or 142.6%. The increase was attributable to an increase in legal fees of $400,931, an increase in investor relations fees of $217,850, an increase in accounting fees of $24,776, an increase in stock-based consulting fees of $19,135, an increase in other consulting fees of $9,908, and an increase in other professional fees of $157,925, primarily due to a decrease in the allocation of professional and consulting expenses to RPM, which is included in loss from discontinued operations. Research and development expenses During the years ended December 31, 2025 and 2024, we incurred $0 and $166,667 in research and development expenses, a decrease of $166,667, or 100.0%. Research and development expenses in 2024 were incurred in connection with an Asset Purchase Agreement dated August 27, 2024 pursuant to which we acquired certain software and recorded research and development expense. General and administrative expenses During the years ended December 31, 2025 and 2024, general and administrative expenses amounted to $730,191 and $589,895, respectively, an increase of $140,296, or 23.8%. The increase was primarily attributable to an increase in travel expenses of $57,566, an increase in internet and computer expenses of $52,892, and an increase in other general and administrative expenses of $96,449. These increases were offset by a decrease in settlement expense of $66,611 recorded in connection with the Ambassador Settlement discussed elsewhere. Loss from Operations During the year ended December 31, 2025, loss from operations amounted to $5,490,058 as compared to $3,217,167 during the year ended December 31, 2024, an increase of $2,272,891, or 70.6%. Other Income (Expense) Other income (expenses) primarily consisted of interest income, gain on extinguishment of liabilities. During the years ended December 31, 2025 and 2024, we reported other income, net of $235,412 and $268,752, respectively, a decrease of $33,340, or 12.4%. During the year ended December 31, 2025, other income, net primarily consisted of interest income, net of $172,754 and gain on extinguishment of liabilities of $62,658. During the year ended December 31, 2024, other income, net solely consisted of interest income of $268,752. Loss from Continuing Operations During the year ended December 31, 2025, loss from continuing operations amounted to $5,254,646 as compared to $2,948,415 during the year ended December 31, 2024, an increase of $2,306,231, or 78.2%. Gain (Loss) from Discontinued Operations For the year ended December 31, 2025, gain from discontinued operations amounted to $2,214,527 as compared to a loss from discontinued operations of $2,076,592 for the year ended December 31 2024, a positive increase of $4,291,119, or 206.6%. The following table summarizes the results of the discontinued operations for the years ended December 31, 2025 and 2024: December 31, 2025 December 31, 2024 Operating expenses $ 488,066 $ 2,063,736 Other expenses 173,299 12,963 Loss from discontinued operations, net of tax (661,365 ) (2,076,699 ) Gain on sale and deconsolidation of variable interest entities 2,875,892 107 Total gain (loss) from discontinued operations, net $ 2,214,527 $ (2,076,592 ) 30 Net Loss and Net Loss Attributable Common Shareholders Due to the foregoing reasons, during the years ended December 31, 2025 and 2024, our net loss was $3,040,119 and $5,025,007, respectively, a decrease of $1,984,888, or 39.5%. During the years ended December 31, 2025 and 2024, our net loss attributable to Myseum, Inc. shareholders was $2,607,272 and $4,239,160, respectively, a decrease of $1,631,888, or 38.5%. During the year ended December 31, 2025, our total basic and diluted net loss per common share attributable to Myseum, Inc. shareholders was $(0.62). During the year ended December 31, 2024, our total basic and diluted net loss per common share attributable to Myseum, Inc. shareholders was $(1.43). Liquidity, Capital Resources and Plan of Operations Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. On December 31, 2025, we had a cash balance of $749,030, short-term investments of $2,981,909, and working capital of $3,045,399. Short-term investments include U.S. Treasury zero coupon bills that are all highly rated and have initial maturities between one and five months. During the year ended December 31, 2025, we incurred a net loss of $3,040,119 and used net cash in operations of $4,267,074. Additionally, the Company had nominal revenues in 2025. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital to fund its research and development (“R&D”) activities and meet its obligations on a timely basis. There can be no assurance that sufficient funding will be available to allow the Company to successfully continue its R&D activities and meet its obligations. If the Company is unable to obtain the necessary funds, significant reductions in spending and the delay or cancellation of planned activities may be necessary. These actions would have a material adverse effect on the Company’s business, results of operations, and prospects. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these consolidated financial statements are issued. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. As of December 31, 2025, Our primary uses of cash has been for research and development, compensation and related expenses, fees paid to third parties for professional services, marketing and advertising expenses, and general and administrative expenses. All funds received have been expended in the furtherance of growing the business. We received funds from the sale of our common stock, sale of common stock of RPM, and the exercise of warrants. The following trends are reasonably likely to result in changes in our liquidity over the near to long term: ● An increase in working capital requirements to finance our current business, ● Cost of research and development, ● Addition of administrative, technical and sales personnel as the business grows, and ● The cost of being a public company. Cash Flows from Operating Activities Net cash used in operating activities totaled $4,267,074 and $4,811,145 for the years ended December 31, 2025 and 2024, respectively, an increase of $544,071. Net cash flow used in operating activities for the year ended December 31, 2025 primarily reflected a net loss of $3,040,119 adjusted for the add-back (reduction) of non-cash items consisting of depreciation and amortization of $41,430, amortization of right of use assets of $33,590, accretion of stock-based stock option and common stock expense of $866,325, gain on deconsolidation of variable interest entities of $(2,875,892), and gain on extinguishment of liabilities of $(62,658), offset by changes in operating assets and liabilities primarily consisting of a decrease in accounts receivable of $124, an increase in prepaid expenses of $117,519, a decrease in assets of discontinued operations of $446,670, an increase in accounts payable and accrued expenses of $493,667, a decrease in contract liabilities of $29, a decrease in liabilities of discontinued operations of $26,845, and a decrease in operating lease liabilities of $25,818. Net cash flow used in operating activities for the year ended December 31, 2024 primarily reflected a net loss of $5,025,007, adjusted for the add-back (reduction) of non-cash items consisting of depreciation and amortization of $23,129, amortization of right of use assets of $73,977, accretion of stock-based stock option and common stock expense of $123,300, common stock expense of RPM of $22,500, a non-cash gain from deconsolidation of variable interest entities of $(107), foreign currency exchange loss of $12,965, and non-cash research and development expense of $166,667, offset by changes in operating assets and liabilities primarily consisting of an increase in prepaid expenses of $4,639, an increase in assets of discontinued operations of $437,048, an increase in accounts payable and accrued expenses of $282,697, an increase in liabilities of discontinued operations of $24,871, and a decrease in operating lease liabilities of $83,674. 31 Cash Flows from Investing Activities Net cash provided (used in) by investing activities amounted to $(244,236) and $2,236,751 for the years ended December 31, 2025 and 2024, respectively, a decrease of $2,480,987. During the year ended December 31, 2025, cash flows used in investing activities comprised of gross proceeds from the sale of short-term investments of $6,385,797, purchase of short-term investments of $6,415,194, purchase of property and equipment of $4,475, a decrease of in cash from sale of RPM of $14,026, and an increase in the capitalization of internal-use software of $196,338. During the year ended December 31, 2024, we purchased short-term investments of $10,767,288 and received gross proceeds from the sale of short-term investments of $13,004,039. Cash Flows from Financing Activities Net cash provided by financing activities totaled $4,493,355 and $2,394,971 for the years ended December 31, 2025 and 2024, respectively, an increase of $2,098,384. During the year ended December 31, 2025, we received $4,532,000 from the sale of common stock, net, received proceeds from notes payable of $40,000, and paid deferred offering costs of $78,645. During the year ended December 31, 2024, we received $559,251 from the sale of common stock, net, received $974,198 from the sale of subsidiary common stock, net, and received $861,522 from the sale of pre-funded warrants. Off-Balance Sheet Arrangements We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, we are not required to provide the information required by this item. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Our financial statements are contained in pages F-1 through F-30, which appear at the end of this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 32