What changed in this filing

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Item 1. Financial Statements

2023-11-14 compared with 2023-08-14 · 117 added, 82 removed, 267 unchanged (43% of the section changed)

2 unchanged sentences

UNAUDITED FINANCIAL STATEMENTS

Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022

Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022

Statements of Operations

4 unchanged sentences

Balance Sheets

September 30,

Current Assets

Prepaid expenses

Deferred offering costs

offering costs

Total Current Assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

and equipment, net

AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts payable and credit card liability

Contract liabilities

payable and credit card liability

Total Current Liabilities

TOTAL LIABILITIES

Commitments and contingencies

and contingencies

Stockholders' Equity

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Additional paid in capital

Subscription receivable

Accumulated deficit

( 4,209,917 )

Total Stockholders’ Equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS' EQUITY

The accompanying notes are an integral part

3 unchanged sentences

Three Months Ended

Six months ended

Nine months ended

September 30,

Operating expenses

9 unchanged sentences

$ ( 412,992 )

$ ( 329,339 )

Loss per share of common stock - basic and diluted

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Statement of Stockholders’

For the six months ended June 30, 2023:

A Common Stock

B Common Stock

For the nine months ended September 30, 2023:

Preferred Stock

Class A Common Stock

Class B Common Stock

Balance - December 31, 2022

$ ( 627,118 )

Class B common stock and warrant

Class B Common stock issued

for restricted stock awards

Class B common stock and warrant issued

Class B Common stock issued for restricted stock awards

( 1,071,251 )

2 unchanged sentences

$ ( 1,698,369 )

Class B Common stock issued

for restricted stock awards

Class B Common stock issued for restricted stock awards

( 1,321,057 )

- June 30, 2023

Balance - June 30, 2023

$ ( 3,019,426 )

For the six months ended June 30, 2022:

– December 31, 2021

Rounding adjustment

Class B Common stock issued for restricted stock awards

( 1,190,491 )

– March 31, 2022

( 1,190,491 )

from Class A Common Stock to Class B Common Stock

B Common Stock issued

- June 30, 2022

Balance - September 30, 2023

$ ( 4,209,917 )

ASSET ENTITIES INC.

Statement of Stockholders’

For the nine months ended September 30, 2022:

Retained earnings

Preferred Stock

Balance - December 31, 2021

$ ( 225,976 )

Subscription received

Balance - March 31, 2022

$ ( 150,976 )

Conversion from Class A to Class B common stock

Class B Common stock issued

Subscription received

Balance - June 30, 2022

$ ( 311,202 )

Subscription received

Balance - September 30, 2022

$ ( 394,855 )

The accompanying notes are an integral part

2 unchanged sentences

Statements of Cash Flows

Six months ended

CASH FLOWS FROM OPERATING ACTIVITIES

3 unchanged sentences

Stock based compensation

Depreciation and amortization

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses

3 unchanged sentences

( 2,953,523 )

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment

Net cash used in Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES

Class A common stock subscription proceeds received

Class B common stock subscription proceeds received, net

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NOTES TO FINANCIAL

June 30, 2023

September 30, 2023

Organization, Description of Business and Liquidity

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Instagram, and YouTube.

had an accumulated deficit of $ 3,019,426 as of June 30, 2023 and a net loss of $ 2,392,308

during the six months ended June 30, 2023.

However, in February 2023, the Company completed an equity offering which generated net proceeds

of $ 6.6 million.

Consequently, the Company’s existing cash resources and the cash received from the equity offering are expected

to provide sufficient funds to carry out the Company’s planned operations through the next twelve (12) months.

had an accumulated deficit of $ 4,209,917 as of September 30, 2023 and a net loss of $ 3,582,799 during the nine months ended

September 30, 2023.

However, in February 2023, the Company completed an equity offering which generated net proceeds of $ 6.6 million.

Consequently, the Company’s existing cash resources and the cash received from the equity offering are expected to provide sufficient

funds to carry out the Company’s planned operations through the next twelve (12) months.

Summary of Significant Accounting Policies

8 unchanged sentences

opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

results for the six months ended June 30, 2023, are not necessarily indicative of the results for the full year.

While management of the

Company believes that the disclosures presented herein are adequate and not misleading, these interim financial statements should be read

in conjunction with the audited financial statements and the footnotes thereto for the year ended December 31, 2022, contained in the

Company’s Form 10-K filed on June 30, 2023.

results for the nine months ended September 30, 2023, are not necessarily indicative of the results for the full year.

While management

of the Company believes that the disclosures presented herein are adequate and not misleading, these interim financial statements should

be read in conjunction with the audited financial statements and the footnotes thereto for the year ended December 31, 2022, contained

in the Company’s Form 10-K filed on September 30, 2023.

The preparation

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The Company had no

cash equivalents at June 30, 2023 and December 31, 2022.

cash equivalents at September 30, 2023 and December 31, 2022.

Periodically,

the Company may carry cash balances at financial institutions more than the federally insured limit of $ 250,000 per institution.

The amount in excess of the FDIC insurance as of June 30, 2023, was approximately $ 4.8 million.

The Company has not experienced losses

on account balances and management believes, based upon the quality of the financial institutions, that the credit risk with regard to

these deposits is not significant.

The amount in excess of the FDIC insurance as of September 30, 2023, was approximately $ 3.7 million.

The Company has not experienced

losses on account balances and management believes, based upon the quality of the financial institutions, that the credit risk with regard

to these deposits is not significant.

receivable are recorded in accordance with ASC 310, “Receivables.” Accounts receivable are recorded at the invoiced amount

2 unchanged sentences

in its existing accounts receivable.

The Company had no accounts receivable of as of June 30, 2023 to account for the delinquency related

to one specific transaction.

Based on management’s estimate under the expected credit loss model and based on all other accounts

being current and settled, the Company has not deemed it necessary to make any additional general provision for doubtful accounts at the

time of this report.

To measure expected credit losses, accounts receivable are grouped based on shared risk characteristics and days

The Company had no accounts receivable of as of September 30, 2023 to account for the delinquency

related to one specific transaction.

Based on management’s estimate under the expected credit loss model and based on all other

accounts being current and settled, the Company has not deemed it necessary to make any additional general provision for doubtful accounts

at the time of this report.

To measure expected credit losses, accounts receivable are grouped based on shared risk characteristics and

days past due.

Offering Costs

3 unchanged sentences

In February 2023, the Company issued common stock as initial public offering and recorded offering cost as additional paid in capital.

Property and equipment

and equipment are stated at cost.

Depreciation is computed on the straight-line method.

and repairs are charged to expense as incurred.

Improvements of a major nature are capitalized.

At the time of retirement or other disposition

of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in

The long-lived

assets of the Company are reviewed for impairment in accordance with ASC No.

360, “Property, Plant and Equipment” (“ASC

360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted

cash flows expected to be generated by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured

by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Value Measurements

3 unchanged sentences

The three tiers are defined as follows:

1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets;

2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace

for identical or similar assets and liabilities;

3—Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions.

● Level 1—Observable inputs

that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets;

● Level 2—Observable inputs

other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar

assets and liabilities;

● Level 3—Unobservable

inputs that are supported by little or no market data, which require the Company to develop its own assumptions.

The Company’s

1 unchanged sentence

liabilities are carried at historical cost.

At June 30, 2023 and December 31, 2022, the carrying amounts of these instruments approximated

At September 30, 2023 and December 31, 2022, the carrying amounts of these instruments approximated

their fair values because of the short-term nature of these instruments.

16 unchanged sentences

liabilities consist of quarterly and annual subscription revenue that have not been recognized.

As of June 30, 2023 and December 31, 2022,

As of September 30, 2023 and December

31, 2022, total contract liabilities were $ 23,556 and $ 4,648 , respectively.

Contract liabilities are typically expected to be recognized to

revenue over a period not to exceed twelve (12) months.

Contract liabilities are typically expected to be recognized

to revenue over a period not to exceed twelve (12) months.

per Share of Common Stock

11 unchanged sentences

The Company accounts for warrants and options using the treasury stock method.

As of June 30, 2023, dilutive potential common shares include outstanding warrants.

As of September 30, 2023, dilutive potential common shares include outstanding warrants.

in more detail above, the business now conducted by the Company was operated as a partnership from August 1, 2020 until October 19, 2020,

48 unchanged sentences

of the Company is sought and is convertible by the holder into one (1) share of Class B Common Stock.

had 8,385,276 shares of Class A Common Stock issued and outstanding as of June 30, 2023 and December 31, 2022.

had 8,385,276 shares of Class A Common Stock issued and outstanding as of September 30, 2023 and December 31, 2022.

B Common Stock

5 unchanged sentences

other expenses from the offering, the Company received net proceeds of $ 6,615,120 .

six months ended June 30, 2023, the Company granted 1,511,000 shares of class B restricted stock awards (“RSA”)

nine months ended September 30, 2023, the Company granted 1,511,000 shares of class B restricted stock awards (“RSA”)

under the 2022 Equity Incentive Plan (“2022 Plan”) to directors and executive officers, valued at $ 3,532,130 .

had 5,375,724 and 2,364,724 shares of Class B Common Stock issued and outstanding as of June 30, 2023 and December

had 5,375,724 and 2,364,724 shares of Class B Common Stock issued and outstanding as of September 30, 2023 and December

31, 2022, respectively.

11 unchanged sentences

compensation expense is recognized as the shares vest with a corresponding offset credited to additional paid-in-capital.

months ended June 30, 2023, the Company recorded stock-based compensation expense of $ 603,925 .

As of June 30, 2023, 118,000 RSA shares

months ended September 30, 2023, the Company recorded stock-based compensation expense of $ 904,241 .

As of September 30, 2023, 127,000 RSA

shares have vested.

7, 2023, the Company issued 105,000 warrants exercisable into 105,000 shares of the Company’s Class B Common

4 unchanged sentences

the date of issuance.

of activity for six months ended June 30, 2023, follows:

of activity for nine months ended September 30, 2023, follows:

Exercise Price

Outstanding, December 31, 2022

Outstanding, June 30, 2023

outstanding warrants are exercisable as of June 30, 2023.

The intrinsic value of the warrants as of June 30, 2023, is $ 0 .

Outstanding, September 30, 2023

outstanding warrants are exercisable as of September 30, 2023.

The intrinsic value of the warrants as of September 30, 2023, is $ 0 .

Subsequent Events

On June 30, 2023, the

Company entered into a Closing Agreement (the “Closing Agreement”) with Triton Funds LP, a Delaware limited partnership (“Triton”).

Subject to the terms of the Closing Agreement, the Company had an option to deliver a closing notice (the “Closing Notice”)

to Triton at any time on or before September 30, 2023, pursuant to which Triton would have been obligated to purchase shares of Class

B Common Stock of the Company with an aggregate value of $ 1,000,000 .

On August 1, 2023, the Company and Triton entered

into an Amended and Restated Closing Agreement (the “Amended and Restated Closing Agreement”).

Subject to the terms of the

Amended and Restated Closing Agreement, the Company has an option to deliver the Closing Notice to Triton at any time on or before September

30, 2023, pursuant to which Triton will be obligated to purchase certain securities of the Company with an aggregate value of $ 1,000,000 .

evaluated all events from the date of the balance sheet, which was September 30, 2023 through the date these financial statements were

available to be issued.

Based on our evaluation no material events have occurred that require disclosure.

In October 2023, following the delivery of a Closing

Notice by the Company to Triton Funds LP (“Triton”) on September 29, 2023 under the Amended and Restated Closing Agreement,

dated as of August 1, 2023, as amended by the Amendment to Amended and Restated Closing Agreement, dated as of September 27, 2023, between

the Company and Triton, the Company issued 263,410 shares of Class B Common Stock to Triton and received $ 46,084 , net of discount.

agreement was extended to December 30, 2023.

As of the date these financial statements were available to be issued, the Company may elect

to require Triton to purchase up to an additional $ 928,916 in shares of Class B Common Stock under the Amended A&R Closing Agreement

until December 30, 2023.

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

What changed 10-Q

Item 1. Financial Statements