What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-11-14 compared with 2023-08-14 · 352 added, 303 removed, 361 unchanged (64% of the section changed)

31 unchanged sentences

Forward-looking statements include, but are not limited to, statements about:

● the potential

impact of the COVID-19 pandemic on our operations and financial condition;

● our ability to introduce new products and services;

● our ability to obtain additional funding to develop additional

services and offerings;

● anticipated compliance with obligations under intellectual

property licenses with third parties;

● market acceptance of our new offerings;

● competition from existing online offerings or new offerings

that may emerge;

● our ability to establish or maintain collaborations, licensing

or other arrangements;

● our ability and third parties’ abilities to protect

intellectual property rights;

● our ability to adequately support future growth;

● our goals and strategies;

● our future business development, financial condition and

results of operations;

● expected changes in our revenue, costs or expenditures;

● growth of and competition trends in our industry;

● the accuracy and completeness of the data underlying our

or third-party sources’ industry and market analyses and projections;

● our expectations regarding demand for, and market acceptance of, our services;

● our expectations regarding our relationships with investors, institutional funding partners and other

parties with whom we collaborate;

● fluctuations in general economic and business conditions in the markets in which we operate;

● relevant government policies and regulations relating to our industry.

impact of the COVID-19 pandemic on our operations and

financial condition;

ability to introduce new products and services;

ability to obtain additional funding to develop additional services and offerings;

● anticipated

compliance with obligations under intellectual property licenses with third parties;

acceptance of our new offerings;

● competition

from existing online offerings or new offerings that may emerge;

ability to establish or maintain collaborations, licensing or other arrangements;

ability and third parties’ abilities to protect intellectual property rights;

ability to adequately support future growth;

goals and strategies;

future business development, financial condition and results of operations;

changes in our revenue, costs or expenditures;

of and competition trends in our industry;

accuracy and completeness of the data underlying our or third-party sources’ industry

and market analyses and projections;

expectations regarding demand for, and market acceptance of, our services;

expectations regarding our relationships with investors, institutional funding partners and

other parties with whom we collaborate;

● fluctuations

in general economic and business conditions in the markets in which we operate;

government policies and regulations relating to our industry.

In some cases, you can identify forward-looking

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which is expected to appeal strongly to older generations as well.

Our combined server user member base was approximately 260,000 as of

June 30, 2023.

During the quarter ended June 30, 2023, we introduced a line of limited-supply avatars and related merchandise for sale

to users of this service.

Our combined server user member base was approximately 225,000 as

of September 30, 2023.

Our social media and marketing services utilize

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perform social media and marketing campaign services to expand our clients’ Discord server bases and drive traffic to their businesses,

as well as increase the number members of our own servers.

as well as increase the number of members of our own servers.

Our “AE.360.DDM, Design Develop Manage”

4 unchanged sentences

in the growing market for Discord servers.

During the quarter ended June 30, 2023, we launched a new AE.360.DDM website;

engaged music

producer Jeff Blue as Head of Entertainment to lead the development of the AE.360.DDM Music and Entertainment Artist and Repertoire (A&R)

hired a Senior Project Manager for all Discord servers under the AE.360.DDM suite of services;

introduced a ChatGPT AI bot as

an AE.360.DDM Discord server customer service feature;

engaged professional golfers Bryson DeChambeau and Scott Verplank to promote the

AE.360.DDM service;

and engaged Michael Irvin, American sports commentator and former professional football player, to provide marketing

services for the AE.360.DDM service.

During the quarter ended September 30, 2023, we signed AE.360.DDM contracts with apparel brand

Kappa USA, rock band Matchbox Twenty, and former professional football player Michael Irvin.

We believe that we are a leading provider of all

1 unchanged sentence

in each aspect of our business.

depends in part on the number of paying subscribers to our Discord servers.

During the three months ended June 30, 2023 and

2022, we received revenue from 348 and 723 Asset Entities Discord server paying subscribers, respectively.

define “members” as all Discord users who join any of our Discord servers, regardless of whether they subscribe to our

premium content, and “paying subscribers” as members who pay a fee to subscribe to our premium Discord content.

As discussed above, we have recently announced

a number of initiatives to expand our revenue base, but the extent and timing of any favorable impacts that they may have upon our revenues,

income from operations, or other results of operations, are subject to, and may be offset by unfavorable impacts on our results of operations

due to, many other factors and uncertainties that are discussed in this report, including under “— Special Note Regarding

Forward-Looking Statements ” and “— Impact of COVID-19 Pandemic ”, and “ —Principal Factors

Affecting Our Financial Performance ”, and “Item 1A.

Risk Factors ” of our Annual Report on Form 10-K for the

fiscal year ended December 31, 2022.

Our revenue depends in part on the number of

paying subscribers to our Discord servers.

During the three months ended September 30, 2023 and 2022, we received revenue

from 298 and 685 Asset Entities Discord server paying subscribers, respectively.

define “members” as all Discord users who join any of our Discord servers, regardless of whether they subscribe to

our premium content, and “paying subscribers” as members who pay a fee to subscribe to our premium Discord

Impact of COVID-19 Pandemic

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For so long as we are an emerging growth company, we will not be required to:

● have an auditor report on our internal controls over financial

reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

● comply with any requirement that may be adopted by the Public

Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional

information about the audit and the financial statements (i.e., an auditor discussion and analysis);

● submit certain executive compensation matters to stockholder

advisory votes, such as “say-on-pay” and “say-on-frequency;” and

● disclose certain executive compensation related items such

as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation

to median employee compensation.

an auditor report on our internal controls over financial reporting pursuant to Section 404(b)

of the Sarbanes-Oxley Act;

with any requirement that may be adopted by the Public Company Accounting Oversight Board

regarding mandatory audit firm rotation or a supplement to the auditor’s report providing

additional information about the audit and the financial statements (i.e., an auditor discussion

and analysis);

certain executive compensation matters to stockholder advisory votes, such as “say-on-pay”

and “say-on-frequency;” and

certain executive compensation related items such as the correlation between executive compensation

and performance and comparisons of the chief executive officer’s compensation to median

employee compensation.

In addition, Section 107 of the JOBS Act also

16 unchanged sentences

the following factors:

● our ability to acquire new customers and users or retain

existing customers and users;

● our ability to offer competitive pricing;

● our ability to broaden product or service offerings;

● industry demand and competition;

● our ability to leverage technology and use and develop efficient processes;

● our ability to attract and retain talented employees and contractors;

● market conditions and our market position.

ability to acquire new customers and users or retain existing customers and users;

ability to offer competitive pricing;

ability to broaden product or service offerings;

demand and competition;

ability to leverage technology and use and develop efficient processes;

ability to attract and retain talented employees and contractors;

conditions and our market position.

Recent Developments

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 in the following manner.

Upon delivery of the Closing Notice, Triton must purchase newly-issued

shares of Class B Common Stock of the Company (the “Triton Shares”) in an amount equal to up to 9.99% of the outstanding shares

of Class B Common Stock following such purchase, plus pre-funded warrants (the “Triton Pre-Funded Warrants” and together with

the Triton Shares, the “Triton Securities”) that may be exercised to purchase an amount of newly-issued shares of Class B

Common Stock (the “Triton Warrant Shares”), such that the aggregate price of the Triton Shares and the Triton Pre-Funded Warrants

together with the exercise price to be paid upon full exercise of the Triton Pre-Funded Warrants will equal a total gross purchase price

of $1,000,000.

Upon the Company’s election to deliver the Closing Notice, the price of each of the Triton Shares will be set at

85% of the lowest daily volume-weighted average price of the Class B Common Stock during the five business days before and five business

days after the date of the Closing Notice.

The anticipated Triton Shares, Triton Pre-Funded Warrant, if required or elected by Triton,

or both, will be issued on the date of such notice based on the price per share that is 85% of the lowest daily volume-weighted average

price of the Class B Common Stock during the five business days before the date of such notice.

If the lowest volume-weighted average

price up to five of the trading days following the date of the notice is lower than the lowest volume-weighted average price during the

five-trading-day before the date of such notice, then the Company will issue the required additional Triton Shares, a Triton Pre-Funded

Warrant, if required or elected by Triton, or both, based on that price.

Triton will pay the purchase price no later than five business

days after the date of the Closing Notice.

The Triton Pre-Funded

Warrants will have an exercise price of $0.01 per share and no expiration date.

The Triton Pre-Funded Warrants will also contain cashless

exercise provisions.

For each of the Triton Warrant Shares that is required to or is elected to be issuable pursuant to the issuance

of the Triton Pre-Funded Warrants instead of as Triton Shares, the number of Triton Shares that the Company will issue to Triton at the

time of any sale of the Triton Securities will be decreased on a one-for-one basis.

The proceeds from a sale under the Amended

and Restated Closing Agreement will be reduced by a $25,000 administrative fee.

Triton’s obligation

to purchase the Triton Securities under the Amended and Restated Closing Agreement is subject to certain conditions.

These conditions

include the filing and effectiveness of a registration statement for the resale of the Triton Shares and Triton Warrant Shares.

the Class B Common Stock must remain listed on the Nasdaq Capital Market tier of The Nasdaq Stock Market LLC (“Nasdaq”), and

the issuance of the Triton Shares, the Triton Pre-Funded Warrants, or the Triton Warrant Shares must not violate any requirements of Nasdaq.

Company entered into an Amended and Restated Closing Agreement (the “Amended and Restated Closing Agreement”) with Triton

Funds LP, a Delaware limited partnership (“Triton”).

Subject to its terms, the Amended and Restated Closing Agreement provided

that the Company may deliver a closing notice (“Closing Notice”) to Triton at any time on or before September 30, 2023, pursuant

to which Triton was required to purchase securities of the Company with an aggregate gross purchase price of $1,000,000 in the following

Upon delivery of a Closing Notice and the issuance and delivery of securities as described below, Triton was required to purchase

newly-issued shares of Class B Common Stock (“Triton Shares”) in an amount equal to up to 9.99% of the outstanding shares

of Class B Common Stock following such purchase, pre-funded warrants (“Triton Pre-Funded Warrants” and together with Triton

Shares, “Triton Securities”) that may be exercised to purchase an amount of newly-issued shares of Class B Common Stock (“Triton

Warrant Shares”), or both Triton Shares and Triton Pre-Funded Warrants, such that the aggregate price of the Triton Shares and the

Triton Pre-Funded Warrants together with the exercise price to be paid upon full exercise of the Triton Pre-Funded Warrants was required

to equal a total gross purchase price of $1,000,000.

Upon the Company’s election to deliver a Closing Notice, the price of each

of the Triton Shares must be set at 85% of the lowest daily volume-weighted average price of the Class B Common Stock during the five

business days after the date that the Triton Securities were received by Triton.

Any proceeds under the Amended and Restated Closing Agreement

must be reduced by a $25,000 administrative fee.

The Amended and Restated Closing Agreement also provided that it would expire either

upon the date that Triton paid the required purchase price after receiving a Closing Notice, or September 30, 2023.

The Amended and Restated

Closing Agreement contains additional requirements, including that, except as disclosed in the Company’s filings with the Securities

and Exchange Commission, the Company must maintain the listing of the Class B Common Stock on the Nasdaq Capital Market tier of Nasdaq

and provide notice to Triton of certain events affecting the effectiveness of the registration statement filed to register the resale

of the Triton Shares and Triton Warrant Shares or the availability of the respective prospectus.

The Amended and Restated Closing Agreement

also provides for indemnification of Triton against liabilities relating to misrepresentations, breaches of obligations, and third-party

claims relating to the Amended and Restated Closing Agreement, with certain exceptions.

The Amended and Restated Closing Agreement will

expire either upon the date that Triton pays the required purchase price after receiving the Closing Notice, or September 30, 2023.

There is no relationship

between the Company or its affiliates and Triton, other than in respect of the Amended and Restated Closing Agreement.

Closing Agreement provided that Triton’s obligation to purchase the Triton Securities was subject to certain conditions.

These conditions

included the filing and effectiveness of a registration statement for the resale of the Triton Securities.

In addition, the Class B Common

Stock was required to remain listed on the Nasdaq Capital Market tier of The Nasdaq Stock Market LLC (“Nasdaq”), and the issuance

of the Triton Securities was required to not violate any requirements of Nasdaq.

Triton’s purchase requirement was also subject

to provisions that prevented Triton from acquiring shares of Class B Common Stock at the time of any sale of the Triton Securities or

exercise of the Triton Pre-Funded Warrants that would result in the number of shares beneficially owned by Triton and its affiliates exceeding

9.99% of the total number of shares of Class B Common Stock outstanding immediately after giving effect to the issuance of the shares

under the Amended and Restated Closing Agreement or the Triton Pre-Funded Warrants (the “Beneficial Ownership Limitation”).

The Amended and Restated Closing Agreement provided for the issuance of the Triton Pre-Funded Warrants in lieu of issuance of some or

all the Triton Shares, with an exercise price of $0.01 per share and with no expiration date, if, in Triton’s sole discretion, it

would otherwise exceed the Beneficial Ownership Limitation, or otherwise upon Triton’s election.

For each of the Triton Shares that

Triton instead elected to be issuable as Triton Warrant Shares, the number of Triton Shares that we were required to issue to Triton at

the time of any sale of the Triton Securities was required to be decreased on a one-for-one basis.

We were also required to provide

indemnification against liabilities relating to misrepresentations, breaches of obligations, and third-party claims relating to the Amended

and Restated Closing Agreement, with certain exceptions.

In connection with the

Amended and Restated Closing Agreement, pursuant to an engagement letter agreement between the Company and Boustead Securities, LLC, a

registered broker-dealer (“Boustead”), dated November 29, 2021 and the underwriting agreement between the Company and Boustead,

as representative of the underwriters of the Company’s initial public offering, dated February 2, 2023, upon a closing under the

Amended and Restated Closing Agreement, if any, the Company will be required to pay Boustead a cash fee equal to 7% of the gross proceeds

to be received from such closing, i.e., $70,000;

pay Boustead a non-accountable expense allowance equal to 1% of the gross proceeds to

be received from such closing, i.e., $10,000;

issue Boustead a warrant with respect to the Triton Shares exercisable for a number of shares

of Class B Common Stock equal to 7% of the number of the Triton Shares at an exercise price equal to the price per share for the Triton

and issue Boustead a warrant with respect to the issuance of the Triton Pre-Funded Warrants exercisable for a number of shares

of Class B Common Stock equal to 7% of the Triton Warrant Shares at an exercise price equal to $0.01 per share (collectively, the “Tail

The Tail Warrants will be exercisable for a period of five years and contain cashless exercise provisions.

is also required to reimburse Boustead for all reasonable invoiced out-of-pocket expenses in connection with its performance of any services

relating to the Amended and Restated Closing Agreement, regardless of whether a sale under the Amended and Restated Closing Agreement

registered broker-dealer (“Boustead”), dated November 29, 2021 (the “Boustead Engagement Letter”), and the underwriting

agreement between the Company and Boustead, as representative of the underwriters of the Company’s initial public offering, dated

February 2, 2023 (the “Underwriting Agreement”), upon a closing under the Amended and Restated Closing Agreement, the Company

must pay Boustead a cash fee equal to 7% of the gross proceeds to be received from such closing and pay Boustead a non-accountable expense

allowance equal to 1% of the gross proceeds to be received from such closing.

The Company must also issue Boustead a warrant with respect

to any Triton Shares exercisable for a number of shares of Class B Common Stock equal to 7% of the number of the Triton Shares at an exercise

price equal to the price per share for the Triton Shares, and a warrant with respect to the issuance of any Triton Pre-Funded Warrants

exercisable for a number of shares of Class B Common Stock equal to 7% of the Triton Warrant Shares at an exercise price equal to $0.01

per share (any such warrant, a “Tail Warrant”).

Each Tail Warrant must be exercisable for a period of five years and contain

cashless exercise provisions.

The Company also must reimburse Boustead for all reasonable invoiced out-of-pocket expenses in connection

with its performance of any services relating to the Amended and Restated Closing Agreement, regardless of whether a sale under the Amended

and Restated Closing Agreement occurred.

For further discussion of the Underwriting Agreement and the Boustead Engagement Letter, see

“— Liquidity and Capital Resources – Initial Public Offering and Underwriting Agreement ” and “— Liquidity

and Capital Resources – Engagement Letter with Boustead Securities, LLC ”.

On August 18, 2023, the

Company filed a Registration Statement on Form S-1 (File No.

333-274079) (the “Registration Statement”) to register the offer

and sale of the Triton Securities in an amount of up to 885,000 shares of Class B Common Stock consisting of Triton Shares and Triton

Warrant Shares.

The Registration Statement also registered the offer and sale of up to 61,950 shares of Class B Common Stock under Tail

The Registration Statement was declared effective on September 6, 2023.

Under an Amendment to

Amended and Restated Closing Agreement (the “Amendment”), dated as of September 27, 2023, the Company and Triton agreed to

amend the Amended and Restated Closing Agreement (as amended, the “Amended A&R Closing Agreement”) to provide that the

Amended A&R Closing Agreement will expire on December 30, 2023 instead of September 30, 2023;

to provide that up to an aggregate value

of $1,000,000 of the Class B Common Stock, based on the purchase price formula described above, may be sold and purchased pursuant to

a Closing Notice;

and to amend the form of Closing Notice to provide for a specific number of shares that may be sold to Triton under

the Amended A&R Closing Agreement.

The Amendment did not amend any of the other provisions of the Amended and Restated Closing Agreement.

As an incentive to Triton

to enter into the Amendment and agree to the extension of the term of the $1,000,000 equity line under the Amended A&R Closing Agreement

to December 30, 2023, the Company indicated to Triton that it would deliver a Closing Notice under the Amended A&R Closing Agreement

to sell a number of shares of Class B Common Stock equal to approximately 4.9% of the outstanding shares of Class B Common Stock prior

Therefore, on September 29, 2023, under the Amended A&R Closing Agreement, the Company delivered a Closing Notice to

Triton (the “First Closing Notice”) for the purchase of 263,410 Triton Shares (the “First Triton Shares”), which

was the amount of shares of Class B Common Stock equal to approximately 4.9% of the 5,375,724 shares of Class B Common Stock outstanding

on that date.

Pursuant to the Amended A&R Closing Agreement, the closing date for this purchase was required to take place within

five business days after the Triton Shares were received by Triton (the “Closing Date”).

On the Closing Date, Triton was required

to pay the Company a purchase price per share equal to 85% of the lowest daily volume-weighted average price of the Class B Common Stock

during the period between the date that the shares were delivered to Triton and the Closing Date, the proceeds of which would be reduced

by the $25,000 administrative fee, in accordance with the terms of the Amended A&R Closing Agreement.

On October 4, 2023, the

First Triton Shares were received by Triton.

Pursuant to the Amended A&R Closing Agreement, on the fifth business day following the

day that the First Triton Shares were received, Triton was required to pay the Company $46,083.53, based on a price per share of $0.26894,

equal to 85% of $0.3164, the lowest daily volume-weighted average price of the Class B Common Stock during the five-business-day period

ending October 11, 2023, less the $25,000 administrative fee.

The Company received payment of this amount on October 13, 2023.

Pursuant to the terms

of the Amended A&R Closing Agreement, the Company may sell additional shares of Class B Common Stock having an aggregate value of

up to $953,916.47 to Triton until December 30, 2023, equal to $1,000,000 less the aggregate value of the First Triton Shares, based on

the purchase price formula described above, and subject to the other terms and conditions of the Amended A&R Closing Agreement.

In connection with the

closing pursuant to the First Closing Notice under the Amended A&R Closing Agreement described above, pursuant to the Boustead Engagement

Letter and the Underwriting Agreement, the Company paid Boustead a fee of $4,975.85, equal to 7% of the aggregate purchase price, and

non-accountable expense allowance of $710.84, equal to 1% of the aggregate purchase price for the First Triton Shares.

In addition, the

Company issued a Tail Warrant to Boustead for the purchase of 18,439 shares of Class B Common Stock, equal to 7% of the number of the

First Triton Shares, with an exercise price of $0.26894 per share, equal to the purchase price per share of the First Triton Shares.

Results of Operations

Comparison of Three Months Ended June 30,

Comparison of Three Months Ended September

30, 2023 and 2022

1 unchanged sentence

Consolidated Operations Data

September 30,

Operating expenses

4 unchanged sentences

Loss from operations

Our revenues increased 3.1% to approximately $0.075 million for the three months ended June 30, 2023 from approximately $0.073 million

for the three months ended June 30, 2022.

This increase was primarily due to an increase in contract revenue of approximately $0.037 for

the three months ended June 30, 2023, offset by a decrease in revenue from Discord paying subscribers of approximately $0.035 million

for the three months ended June 30, 2023, compared to such revenues for the three months ended June 30, 2022.

There was no material difference

in the Company’s subscription pricing structure between these periods.

Our revenues decreased 26.1% to approximately $0.06 million for the three months ended September 30, 2023 from approximately $0.08 million

for the three months ended September 30, 2022.

This decrease was primarily due to a decrease in revenues from Discord paying subscribers

for the three months ended September 30, 2023, compared to such revenues for the three months ended September 30, 2022.

There was no material

difference in the Company’s subscription pricing structure between these periods.

Operating Expenses .

Our total operating expenses increased 339.3% to approximately $1.4 million for the three months ended June 30, 2023 from approximately

$0.3 million for the three months ended June 30, 2022.

This increase was primarily due to an increase in costs associated with the Company’s

initial public offering and administrative cost of public filings of approximately $0.4 million and an increase in management compensation

costs of approximately $0.8 million for the three months ended June 30, 2023 compared to such costs for the three months ended June 30,

Our total operating expenses increased 657.6% to approximately $1.25 million for the three months ended September 30, 2023 from approximately

$0.17 million for the three months ended September 30, 2022.

This increase was primarily due to an increase in costs associated with the

Company’s February 2023 initial public offering and administrative cost of public filings of approximately $0.4 million and an increase

in management compensation costs of approximately $0.6 million for the three months ended September 30, 2023 compared to such costs for

the three months ended September 30, 2022.

Loss From Operations .

Our loss from operations increased 438.9% to approximately $1.3 million for the three months ended June 30, 2023 from approximately $0.2

million for the three months ended June 30, 2022.

Our loss from operations increased 1,323.1% to approximately $1.19 million for the three months ended September 30, 2023 from approximately

$0.08 million for the three months ended September 30, 2022.

This increase was primarily due to an increase in costs associated with the

Company’s February 2023 initial public offering and administrative cost of public filings of approximately $0.4 million and an increase

in management compensation costs of approximately $0.6 million for the three months ended September 30, 2023 compared to such costs for

the three months ended September 30, 2022.

Our net loss increased 1,323.1% to approximately $1.19 million for the three months ended September 30, 2023 from approximately $0.08

million for the three months ended September 30, 2023.

This increase was primarily due to an increase in costs associated with the Company’s

initial public offering and administrative cost of public filings of approximately $0.4 million and an increase in management compensation

costs of approximately $0.8 million for the three months ended June 30, 2023 compared to such costs for the three months ended June 30,

Our net loss increased 438.9% to approximately $1.3 million for the three months ended June 30, 2023 from approximately $0.2 million for

the three months ended June 30, 2023.

This increase was primarily due to an increase in costs associated with the Company’s initial

public offering and administrative cost of public filings of approximately $0.4 million and an increase in management compensation costs

of approximately $0.8 million for the three months ended June 30, 2023 compared to such costs for the three months ended June 30, 2022.

Comparison of Six Months Ended June 30,

February 2023 initial public offering and administrative cost of public filings of approximately $0.4 million and an increase in management

compensation costs of approximately $0.6 million for the three months ended September 30, 2023 compared to such costs for the three months

ended September 30, 2022.

Comparison of Nine Months Ended September

30, 2023 and 2022

Six Months Ended

Nine Months Ended

Consolidated Operations Data

September 30,

Operating expenses

4 unchanged sentences

Loss from operations

Our revenues decreased 31.5% to approximately $0.1 million for the six months ended June 30, 2023 from approximately $0.2 million for

the six months ended June 30, 2022.

This decrease was primarily due to a decrease in subscription revenue of approximately $0.073 million,

offset by an increase in contract revenue of approximately $0.011 million for the six months ended June 30, 2023, compared to such revenues

for the six months ended June 30, 2022.

There was no material difference in the Company’s subscription pricing structure between

these periods.

Our revenues decreased 30.0% to approximately $0.2 million for the nine months ended September 30, 2023 from approximately $0.3 million

for the nine months ended September 30, 2022.

This decrease was primarily due to a decrease in revenues from Discord paying subscribers

for the nine months ended September 30, 2023, compared to such revenues for the nine months ended September 30, 2022.

There was no material

difference in the Company’s subscription pricing structure between these periods.

Operating Expenses .

Our total operating expenses increased 378.8% to approximately $2.5 million for the six months ended June 30, 2023 from approximately

$0.5 million for the six months ended June 30, 2022.

This increase was primarily due to an increase in costs associated with the Company’s

initial public offering and administrative cost of public filings of approximately $0.6 million and an increase in management compensation

costs of approximately $1.4 million for the six months ended June 30, 2023 compared to such costs for the six months ended June 30, 2022.

Our total operating expenses increased 445.2% to approximately $3.8 million for the nine months ended September 30, 2023 from approximately

$0.7 million for the nine months ended September 30, 2022.

This increase was primarily due to an increase in costs associated with the

Company’s February 2023 initial public offering and administrative cost of public filings of approximately $1.0 million and an increase

in management compensation costs of approximately $2.0 million for the nine months ended September 30, 2023 compared to such costs for

the nine months ended September 30, 2022.

Loss From Operations .

Our loss from operations increased 626.4% to approximately $2.4 million for the six months ended June 30, 2023 from approximately $0.3

million for the six months ended June 30, 2022.

This increase was primarily due to a decrease in subscription revenue of approximately

$0.073, offset by an increase in contract revenue of approximately $0.011 million;

an increase in costs associated with the Company’s

initial public offering and administrative cost of public filings of approximately $0.6 million;

and an increase in management compensation

costs of approximately $1.4 million for the six months ended June 30, 2023, compared to such revenue and costs for the six months ended

June 30, 2022.

Our net loss increased 626.4% to approximately $2.4 million for the six months ended June 30, 2023 from approximately $0.3 million for

the six months ended June 30, 2023.

This increase was primarily due to a decrease in subscription revenue of approximately $0.073, offset

by an increase in contract revenue of approximately $0.011 million;

an increase in costs associated with the Company’s initial public

offering and administrative cost of public filings of approximately $0.6 million;

and an increase in management compensation costs of

approximately $1.4 million for the six months ended June 30, 2023, compared to such revenue and costs for the six months ended June 30,

Our loss from operations increased 767.5% to approximately $3.6 million for the nine months ended September 30, 2023 from approximately

$0.4 million for the nine months ended September 30, 2022.

This increase was primarily due to an increase in costs associated with the

Company’s February 2023 initial public offering and administrative cost of public filings of approximately $1.0 million and an increase

in management compensation costs of approximately $2.0 million for the nine months ended September 30, 2023 compared to such costs for

the nine months ended September 30, 2022.

Our net loss increased 767.5% to approximately $3.6 million for the nine months ended September 30, 2023 from approximately $0.4 million

for the nine months ended September 30, 2023.

This increase was primarily due to an increase in costs associated with the Company’s

February 2023 initial public offering and administrative cost of public filings of approximately $1.0 million and an increase in management

compensation costs of approximately $2.0 million for the nine months ended September 30, 2023 compared to such costs for the nine months

ended September 30, 2022.

Liquidity and Capital Resources

As of June 30, 2023,

As of September 30, 2023,

we had cash consisting of approximately $4.0 million.

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We believe that our current levels of cash will be sufficient to meet our anticipated cash needs for our operations and cash payment obligations

for the 12 months ended June 30, 2024 and in the long-term beyond this period, including our anticipated costs associated with being a

public reporting company.

for the 12 months ended September 30, 2024 and in the long-term beyond this period, including our anticipated costs associated with being

a public reporting company.

We may, however, in the future require additional cash resources due to changing business conditions, implementation

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The following table provides detailed information

about our net cash flow for the six months ended June 30, 2023 and 2022.

Six Months Ended

about our net cash flow for the nine months ended September 30, 2023 and 2022.

Nine Months Ended

September 30,

Net cash provided by (used in) operating activities

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Net cash used in operating activities was approximately

$2.0 million for the six months ended June 30, 2023, as compared to net cash used in operating activities of approximately $0.3 million

for the six months ended June 30, 2022.

The increase was primarily due to an increase in costs associated with the Company’s February

2023 initial public offering and administrative cost of public filings of approximately $0.6 million and an increase in management compensation

costs of approximately $1.4 million compared to such costs for the six months ended June 30, 2022.

$3.0 million for the nine months ended September 30, 2023, as compared to net cash used in operating activities of approximately $0.4

million for the nine months ended September 30, 2022.

The increase was primarily due to an increase in costs associated with the Company’s

February 2023 initial public offering and administrative cost of public filings of approximately $1.0 million and an increase in management

compensation costs of approximately $2.0 million for the nine months ended September 30, 2023 compared to such costs for the nine months

ended September 30, 2022.

Net cash provided by financing activities was

approximately $6.8 million for the six months ended June 30, 2023, as compared to approximately $0.4 million net cash provided by financing

activities for the six months ended June 30, 2022.

The change was primarily due to an increase in financing activities from the Company’s

February 2023 initial public offering compared to financing from a private placement conducted during the six months ended June 30, 2022.

approximately $6.8 million for the nine months ended September 30, 2023, as compared to approximately $0.4 million net cash provided by

financing activities for the nine months ended September 30, 2022.

The change was primarily due to an increase in financing activities

from the Company’s February 2023 initial public offering compared to financing from private placements conducted during the nine

months ended September 30, 2022.

Initial Public

Offering and Underwriting Agreement

On February 2, 2023,

we entered into an underwriting agreement (the “Underwriting Agreement”) with Boustead Securities, LLC (“Boustead”),

as representative of the underwriters named on Schedule 1 thereto, relating to the Company’s initial public offering of 1,500,000

shares of Class B Common Stock (the “IPO Shares”).

Pursuant to the Underwriting Agreement, in exchange for Boustead’s

firm commitment to purchase the IPO Shares, the Company agreed to sell the IPO Shares to Boustead at a purchase price (the “IPO

Price”) of $4.65 (93% of the public offering price per share of $5.00, after deducting underwriting discounts and commissions and

before deducting a 0.75% non-accountable expense allowance), and one or more warrants to purchase 7% of the aggregate number of shares

of Class B Common Stock sold in the initial public offering, at an exercise price equal to 125% of the public offering price, subject

to adjustment (the “Representative’s Warrant”).

we entered into the Underwriting Agreement with Boustead, as representative of the underwriters named on Schedule 1 thereto, relating

to the Company’s initial public offering of 1,500,000 shares of Class B Common Stock (the “IPO Shares”).

the Underwriting Agreement, in exchange for Boustead’s firm commitment to purchase the IPO Shares, the Company agreed to sell the

IPO Shares to Boustead at a purchase price (the “IPO Price”) of $4.65 (93% of the public offering price per share of $5.00,

after deducting underwriting discounts and commissions and before deducting a 0.75% non-accountable expense allowance), and one or more

warrants to purchase 7% of the aggregate number of shares of Class B Common Stock sold in the initial public offering, at an exercise

price equal to 125% of the public offering price, subject to adjustment (the “Representative’s Warrant”).

On February 3, 2023,

the IPO Shares and 1,500,000 outstanding shares of Class B Common Stock that were registered for resale as described below were listed

and commenced trading on the Nasdaq Capital Market tier of The Nasdaq Stock Market LLC (“Nasdaq”).

and commenced trading on the Nasdaq Capital Market tier of Nasdaq.

The closing of the initial

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amended, initially filed with the Securities and Exchange Commission (the “SEC”) on September 2, 2022, and declared effective

by the SEC on February 2, 2023 (the “Registration Statement”), and the final prospectus, dated February 2, 2023 (the “Final

IPO Prospectus”), filed with the SEC on February 6, 2023 pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended (the

“Securities Act”).

In addition, a total of 1,500,000 shares of Class B Common Stock were registered for resale by the selling

stockholders named in the Registration Statement, and a final prospectus relating to these shares, dated February 2, 2023 (the “Final

Resale Prospectus”), was filed with the SEC on February 6, 2023 pursuant to Rule 424(b)(3) of the Securities Act.

As stated in the

Final Resale Prospectus, any resales of these shares occurred at a fixed price of $5.00 per share until the Class B Common Stock was listed

Thereafter, these sales will occur at fixed prices, at market prices prevailing at the time of sale, at prices related to prevailing

market prices, or at negotiated prices.

The Company would not receive any proceeds from the resale of Class B Common Stock by the selling

stockholders.

The Registration Statement also registered for

sale shares of Class B Common Stock with a maximum aggregate offering price of $1,125,000 for an additional 225,000 shares of Class B

Common Stock at the assumed public offering price of $5.00 per share upon full exercise of the underwriters’ over-allotment option;

by the SEC on February 2, 2023 (the “IPO Registration Statement”), and the final prospectus, dated February 2, 2023 (the “Final

IPO Prospectus”), filed with the SEC on February 6, 2023 pursuant to Rule 424(b)(4) of the Securities Act.

In addition, a total

of 1,500,000 shares of Class B Common Stock were registered for resale by the selling stockholders named in the IPO Registration Statement,

and a final prospectus relating to these shares, dated February 2, 2023 (the “Final Resale Prospectus”), was filed with the

SEC on February 6, 2023 pursuant to Rule 424(b)(3) of the Securities Act.

As stated in the Final Resale Prospectus, any resales of these

shares occurred at a fixed price of $5.00 per share until the Class B Common Stock was listed on Nasdaq.

Thereafter, these sales will

occur at fixed prices, at market prices prevailing at the time of sale, at prices related to prevailing market prices, or at negotiated

The Company would not receive any proceeds from the resale of Class B Common Stock by the selling stockholders.

The IPO Registration Statement also registered

for sale shares of Class B Common Stock with a maximum aggregate offering price of $1,125,000 for an additional 225,000 shares of Class

B Common Stock at the assumed public offering price of $5.00 per share upon full exercise of the underwriters’ over-allotment option;

and up to an additional 15,750 shares of Class B Common Stock underlying the Representative’s Warrant with a maximum aggregate offering

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Amendment No.

1 to the Registration Statement (the “Post-Effective Amendment”) was filed with the SEC and became

1 to the IPO Registration Statement (the “Post-Effective Amendment”) was filed with the SEC and became

effective on April 14, 2023 .

The Post-Effective Amendment was

required to be filed to update the Registration Statement’s prospectus to include, among other things, the information contained

required to be filed to update the IPO Registration Statement’s prospectus to include, among other things, the information contained

in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on June 30, 2023.

Post-Effective Amendment maintained the effectiveness of the Registration Statement with respect to the sale of shares of common

Post-Effective Amendment maintained the effectiveness of the IPO Registration Statement with respect to the sale of shares of common

stock issuable upon exercise of the Representative’s Warrant and the resale of the shares of common stock held by the selling

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reasonable estimate of the uses of the proceeds from the Company’s initial public offering from the date of the closing of the offering

on February 7, 2023 until June 30, 2023:

on February 7, 2023 through September 30, 2023:

● None was used for construction

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of indebtedness;

● $1.3 million was used for working

million was used for working capital;

● None was used for temporary

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There has not been, and we do not expect, any

material change in the planned use of proceeds from the initial public offering as described in the Registration Statement, the Final

material change in the planned use of proceeds from the initial public offering as described in the IPO Registration Statement, the Final

IPO Prospectus, and the Post-Effective Amendment.

Under our engagement letter agreement with Boustead,

dated November 29, 2021 (the “Boustead Engagement Letter”), during the 12-month period following the termination or expiration

of the Boustead Engagement Letter, which will occur no earlier than February 7, 2024, we must compensate Boustead for any transaction

with “any party,” including any investor in a private placement in which Boustead served as placement agent or in the initial

public offering, who became aware of the Company or who became known to the Company prior to the termination or expiration of the Boustead

Engagement Letter, or any Company officers, directors, employees, consultants, advisors, stockholders, members, or partners (the “Tail

The Boustead Engagement Letter will expire upon the later to occur of February 7, 2024 (12 months from the completion

date of the initial public offering), or mutual written agreement of the Company and Boustead.

We also agreed to provide Boustead a right of

first refusal (the “Right of First Refusal”) for two years following the expiration of the Boustead Engagement Letter to act

as financial advisor, lead managing underwriter, book runner, placement agent, or to act as joint advisor, managing underwriter, book

runner, or placement agent on at least equal economic terms, on any public or private financing (debt or equity), merger, business combination,

recapitalization or sale of some or all of the equity or assets of the Company.

In the event that we engage Boustead to provide

such services, Boustead will be compensated consistent with the Boustead Engagement Letter, as described below, unless we mutually agree

Under the Boustead Engagement Letter, in connection

with a transaction as to which Boustead duly exercises the Right of First Refusal or is entitled to the Tail Rights, Boustead shall receive

compensation as follows:

● other than normal course of business activities, as to any

sale, merger, acquisition, joint venture, strategic alliance, license, research and development, or other similar agreements, Boustead

will accrue compensation under a percentage fee of the Aggregate Consideration (as defined in the Boustead Engagement Letter) calculated

o 10.0% for Aggregate Consideration of less than $10,000,000;

o 8.0% for Aggregate Consideration between $10,000,000 - $25,000,000;

o 6.0% for Aggregate Consideration between $25,000,001 - $50,000,000;

o 4.0% for Aggregate Consideration between $50,000,001 - $75,000,000;

o 2.0% for Aggregate Consideration between $75,000,001 - $100,000,000;

o 1.0% for Aggregate Consideration above $100,000,000;

● for any investment transaction including any common stock,

preferred stock, ordinary shares, convertible stock, limited liability company or limited partnership memberships, debt, convertible

debentures, convertible debt, debt with warrants, stock warrants, stock options (excluding issuances to Company employees), stock purchase

rights, or any other securities convertible into common stock, any form of debt instrument involving any form of equity participation,

and including the conversion or exercise of any securities sold in any transaction, Boustead shall receive upon each investment transaction

closing a success fee, payable in (i) cash, equal to 7% of the gross amount to be disbursed to the Company from each such investment

transaction closing, plus (ii) a non-accountable expense allowance equal to 1% of the gross amount to be disbursed to the Company from

each such investment transaction closing, plus (iii) warrants equal to 7% of the gross amount to be disbursed to the Company from each

such investment transaction closing, including shares issuable upon conversion or exercise of the securities sold in any transaction,

and in the event that warrants or other rights are issued in the investment transaction, 7% of the shares issuable upon exercise of the

warrants or other rights, and in the event of a debt or convertible debt financing, warrants to purchase an amount of Company stock equal

to the 7% of the gross amount or facility received by the Company in a debt financing divided by the warrant exercise share.

exercise price will be the lower of:

(i) the fair market value price per share of the Company’s common stock as of each such financing

closing date;

(ii) the price per share paid by investors in each respective financing;

(iii) in the event that convertible securities

are sold in the financing, the conversion price of such securities;

or (iv) in the event that warrants or other rights are issued in

the financing, the exercise price of such warrants or other rights;

● any such warrants will be transferable in accordance with

rules of the Financial Industry Regulatory Authority, Inc.

(“FINRA”) and SEC regulations, exercisable from the date of issuance

and for a term of five years, contain cashless exercise provisions, be non-callable and non-cancelable with immediate piggy-back registration

rights, have customary anti-dilution provisions and any future stock issuances, etc., at a price(s) below the exercise price per share,

at terms no less favorable than the terms of any warrants issued to participants in the related transaction, and provide for automatic

exercise immediately prior to expiration;

● reasonable out-of-pocket expenses in connection with the

performance of its services, regardless of whether a transaction occurs.

Pursuant to the Underwriting Agreement, as of

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in cash or otherwise.

The Underwriting Agreement and Boustead Engagement

Letter contain other customary representations, warranties and covenants by the Company, customary conditions to closing, indemnification

obligations of the Company and Boustead, including for liabilities under the Securities Act, other obligations of the parties, and termination

The representations, warranties and covenants contained in the Underwriting Agreement and Boustead Engagement Letter were

made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may

be subject to limitations agreed upon by the contracting parties.

The Underwriting Agreement contains other customary

representations, warranties and covenants by the Company, customary conditions to closing, indemnification obligations of the Company

and Boustead, including for liabilities under the Securities Act, other obligations of the parties, and termination provisions.

The representations,

warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates,

were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.

Engagement Letter with Boustead Securities,

Under the Boustead Engagement Letter, following

the termination or expiration of the Boustead Engagement Letter, we must compensate Boustead with a cash fee equal to seven percent (7.0%)

and non-accountable expense allowance equal to one percent (1.0%) of the gross proceeds received by the Company from the sale of securities

in an investment transaction, or up to ten percent (10.0%) of the gross proceeds from certain other merger, acquisition, or joint venture,

strategic alliance, license, research and development, or other similar transactions, with a party, including any investor in a private

placement in which Boustead served as placement agent or in the initial public offering, or who became aware of the Company or who became

known to the Company prior to the termination or expiration of the Boustead Engagement Letter, including any Company officers, directors,

employees, consultants, advisors, stockholders, members, or partners, for such transactions that occur during the 12-month period following

the termination or expiration of the Boustead Engagement Letter (the “Tail Rights”).

The Boustead Engagement Letter will expire

upon the later to occur of February 7, 2024 (12 months from the completion date of the initial public offering), or mutual written agreement

of the Company and Boustead.

We also agreed to provide Boustead a right of

first refusal (the “Right of First Refusal”) for two years following the expiration of the Boustead Engagement Letter to act

as financial advisor, lead managing underwriter, book runner, placement agent, or to act as joint advisor, managing underwriter, book

runner, or placement agent on at least equal economic terms, on any public or private financing (debt or equity), merger, business combination,

recapitalization or sale of some or all of the equity or assets of the Company.

In the event that we engage Boustead to provide

such services, Boustead will be compensated consistent with the Boustead Engagement Letter, as described below, unless we mutually agree

Under the Boustead Engagement Letter, in connection

with a transaction as to which Boustead duly exercises the Right of First Refusal or is entitled to the Tail Rights, Boustead shall receive

compensation as follows:

than normal course of business activities, as to any sale, merger, acquisition, joint venture,

strategic alliance, license, research and development, or other similar agreements, Boustead

will accrue compensation under a percentage fee of the Aggregate Consideration (as defined

in the Boustead Engagement Letter) calculated as follows:

for Aggregate Consideration of less than $10,000,000;

for Aggregate Consideration between $10,000,000 - $25,000,000;

for Aggregate Consideration between $25,000,001 - $50,000,000;

for Aggregate Consideration between $50,000,001 - $75,000,000;

for Aggregate Consideration between $75,000,001 - $100,000,000;

for Aggregate Consideration above $100,000,000;

any investment transaction including any common stock, preferred stock, ordinary shares,

convertible stock, limited liability company or limited partnership memberships, debt, convertible

debentures, convertible debt, debt with warrants, stock warrants, stock options (excluding

issuances to Company employees), stock purchase rights, or any other securities convertible

into common stock, any form of debt instrument involving any form of equity participation,

and including the conversion or exercise of any securities sold in any transaction, Boustead

shall receive upon each investment transaction closing a success fee, payable in (i) cash,

equal to 7% of the gross amount to be disbursed to the Company from each such investment

transaction closing, plus (ii) a non-accountable expense allowance equal to 1% of the gross

amount to be disbursed to the Company from each such investment transaction closing, plus

(iii) warrants equal to 7% of the gross amount to be disbursed to the Company from each such

investment transaction closing, including shares issuable upon conversion or exercise of

the securities sold in any transaction, and in the event that warrants or other rights are

issued in the investment transaction, 7% of the shares issuable upon exercise of the warrants

or other rights, and in the event of a debt or convertible debt financing, warrants to purchase

an amount of Company stock equal to the 7% of the gross amount or facility received by the

Company in a debt financing divided by the warrant exercise share.

The warrant exercise price

will be the lower of:

(i) the fair market value price per share of the Company’s common

stock as of each such financing closing date;

(ii) the price per share paid by investors

in each respective financing;

(iii) in the event that convertible securities are sold in

the financing, the conversion price of such securities;

or (iv) in the event that warrants

or other rights are issued in the financing, the exercise price of such warrants or other

such warrants will be transferable in accordance with rules of the Financial Industry Regulatory

Authority, Inc.

(“FINRA”) and SEC regulations, exercisable from the date of issuance

and for a term of five years, contain cashless exercise provisions, be non-callable and non-cancelable

with immediate piggy-back registration rights, have customary anti-dilution provisions and

any future stock issuances, etc., at a price(s) below the exercise price per share, at terms

no less favorable than the terms of any warrants issued to participants in the related transaction,

and provide for automatic exercise immediately prior to expiration;

out-of-pocket expenses in connection with the performance of its services, regardless of

whether a transaction occurs.

The Boustead Engagement Letter contains other

customary representations, warranties and covenants by the Company, customary conditions to closing, indemnification obligations of the

Company and Boustead, including for liabilities under the Securities Act, other obligations of the parties, and termination provisions.

The representations, warranties and covenants contained in the Boustead Engagement Letter were made only for purposes of such agreement

and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon

by the contracting parties.

Closing Agreement

On August 1, 2023, the

Company and Triton entered into the Amended and Restated Closing Agreement.

On September 27, 2023,

the Company and Triton entered into the Amendment, which amended the Amended and Restated Closing Agreement.

See “— Recent

Developments ” for a description of the Amended and Restated Closing Agreement, the Amendment, and related developments which

occurred subsequent to September 30, 2023.

Contractual Obligations

During the six months ended June 30, 2023 and 2022, we had no significant

cash requirements for capital expenditures or other cash needs under any contractual or other obligations.

During the nine months ended September 30, 2023

and 2022, we had no significant cash requirements for capital expenditures or other cash needs under any contractual or other obligations.

Off-Balance Sheet Arrangements

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and options using the treasury stock method.

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

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

in more detail above (see “ Part 1.

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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