What changed in this filing

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Item 1A. Risk Factors

2024-04-02 compared with 2023-03-31 · 498 added, 448 removed, 732 unchanged (56% of the section changed)

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You should carefully read and consider all of the risks described below,

together with all of the other information contained or referred to in this report, before making an investment decision with respect

to our securities.

If any of the following events occur, our financial condition, business and results of operations (including cash

flows) may be materially adversely affected.

In that event, the market price of our shares could decline, and you could lose all or part

of your investment.

together with all of the other information contained or referred to in this Annual Report, before making an investment decision with

respect to our securities.

If any of the following events occur, our financial condition, business and results of operations (including

cash flows) may be materially adversely affected.

In that event, the market price of our shares could decline, and you could lose all

or part of your investment.

Related to Our Business and Industry

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Company is an early, startup stage entity with little operating history.

The Company only has nominal cash as of the date of commencement

of this offering.

The revenue and income potential of the Company’s business and market are unproven.

The Company’s limited

operating history makes an evaluation of the Company and its prospects difficult and highly speculative.

The revenue and income potential of the Company’s business

and market are unproven.

The Company’s limited operating history makes an evaluation of the Company and its prospects difficult

and highly speculative.

There can be no assurances that:

(a) The Company will be able to develop products or services on a timely and cost effective basis;

(b) the Company will be able to generate

any increase in revenues;

services to customers;

(a) The Company will be able to develop products or services on a timely and

cost effective basis;

(b) the Company will be able to generate any increase in revenues;

or resources to continue operating its business and to provide services to customers;

(d) the Company will earn a profit;

(e) the Company can raise sufficient capital to support operations by attaining

profitability;

(e) the Company

can raise sufficient capital to support operations by attaining profitability;

or (f) the Company can satisfy future liabilities.

Company may experience negative cash flow.

We had a net loss for the year ended December

31, 2022, and minimal net income for the year ended December 31, 2021.

The Company intends to increase expenditures to develop its business

and, as a result, may continue to incur losses.

had a net loss for the years ended December 31, 2023 and 2022.

The Company intends to increase expenditures to develop its business and,

as a result, may continue to incur losses.

There can be no assurance that the Company will achieve significant revenues or profitability.

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Company may incur significant losses, and there can be no assurance that the Company will ever become a profitable business.

had a net loss for the year ended December 31, 2022 and minimal net income for the year ended December 31, 2021.

It is anticipated

that the Company may continue to sustain operating losses.

Its ability to become and/or remain profitable depends in material part

on success in growing and expanding the Company’s products and services.

had a net loss for the years ended December 31, 2023 and 2022.

It is anticipated that the Company may continue to sustain operating losses.

Its ability to become and/or remain profitable depends in material part on success in growing and expanding the Company’s products

and services.

There can be no assurance that this will occur.

Unanticipated problems and expenses often encountered in offering new and unique products or services may impact whether the Company

is successful.

Furthermore, the Company may encounter substantial delays and unexpected expenses related to development,

technological changes, marketing, insurance, legal or regulatory requirements and changes to such requirements or other unforeseen

difficulties.

Unanticipated problems and expenses often encountered in offering new and

unique products or services may impact whether the Company is successful.

Furthermore, the Company may encounter substantial delays and

unexpected expenses related to development, technological changes, marketing, insurance, legal or regulatory requirements and changes

to such requirements or other unforeseen difficulties.

There can be no assurance that the Company will remain profitable.

If the Company sustains losses over a period of

time, it may be unable to continue in business.

If the Company

sustains losses over a period of time, it may be unable to continue in business.

Company’s future revenue and operating results are unpredictable and may fluctuate significantly.

had a net loss for the year ended December 31, 2022, and minimal net income for the year ended December 31, 2021.

It is difficult to

accurately forecast the Company’s revenues and operating results, and they could continue to fluctuate in the future due to a number

had a net loss for the years ended December 31, 2023 and 2022.

It is difficult to accurately forecast the Company’s revenues and

operating results, and they could continue to fluctuate in the future due to a number of factors.

These factors may include:

Acceptance of the Company’s products and services;

the amount and timing of operating costs

and capital expenditures;

competition from other market venues or services that may reduce market share and create pricing pressure;

and adverse changes in general economic, industry and regulatory conditions and requirements.

The Company’s operating results may

fluctuate from year to year due to the factors listed above, others described in “Item 7.

Management’s Discussion and

Analysis of Financial Condition and Results of Operations ”, or not listed.

of the Company’s products and services;

the amount and timing of operating costs and capital expenditures;

competition from other

market venues or services that may reduce market share and create pricing pressure;

and adverse changes in general economic, industry

and regulatory conditions and requirements.

The Company’s operating results may fluctuate from year to year due to the factors

listed above, others described in “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of

Operations ”, or not listed.

At times, these fluctuations may be significant.

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Any deterioration in our relationship with these social media platforms would harm our business.

be subject to Discord’s, TikTok’s, Instagram’s, YouTube’s, Twitter’s, Apple’s and Google’s

standard terms and conditions, which govern the promotion, distribution and operation of the various aspects of the operations of the

be subject to Discord’s, TikTok’s, Instagram’s, YouTube’s, X’s, Apple’s and Google’s standard

terms and conditions, which govern the promotion, distribution and operation of the various aspects of the operations of the Company.

In particular, without being able to use TikTok and other dominant social media as platforms for our social influencers to disseminate

marketing and other content, we may not succeed.

In July 2021, our co-founder and Executive Vice-Chairman, Kyle Fairbanks, was temporarily

banned from TikTok for posting a comment that TikTok had determined had violated its terms of service.

comment was about the Robinhood/GameStop meme stock phenomenon and Mr.

Fairbanks believed that he was merely “looking out for the

little guy” when he posted the comment in support of the retail investors, TikTok imposed a temporary ban on Mr.

TikTok subsequently lifted its ban on Mr.

In July 2021, our co-founder, Executive Vice-Chairman and Chief Marketing Officer, Kyle

Fairbanks, was temporarily banned from TikTok for posting a comment that TikTok had determined had violated its terms of service.

Fairbanks’s comment was about the Robinhood/GameStop meme stock phenomenon and Mr.

Fairbanks believed that he was merely “looking

out for the little guy” when he posted the comment in support of the retail investors, TikTok imposed a temporary ban on Mr.

Although TikTok subsequently lifted its ban on Mr.

Fairbanks and Mr.

Fairbanks has not experienced similar issues since the incident, there is

no assurance that TikTok or any other service will permit our key influencers like Mr.

Fairbanks from using their services in the future.

Fairbanks has not experienced similar issues since the incident,

there is no assurance that TikTok or any other service will permit our key influencers like Mr.

Fairbanks from using their services in

business would also be harmed if:

TikTok, Instagram, YouTube, Twitter, Apple, Google, or other social media companies whose

services we use to market our services, establish terms or conditions which have the effect

of discontinuing or limiting our access to their platforms;

TikTok, Instagram, YouTube, X, Apple, Google, or other social media companies whose services

we use to market our services, establish terms or conditions which have the effect of discontinuing

or limiting our access to their platforms;

companies modify their terms of service or other policies, including fees charged to, or

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companies develop their own competitive offerings.

Discord, TikTok, Instagram, YouTube, Twitter, Apple or Google loses its market position or otherwise falls out of favor with users, we

would need to identify alternative channels for marketing, promoting and distributing our product and services which would consume substantial

Discord, TikTok, Instagram, YouTube, X, Apple or Google loses its market position or otherwise falls out of favor with users, we would

need to identify alternative channels for marketing, promoting and distributing our product and services which would consume substantial

resources and may not be effective.

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Kyle Fairbanks, our Executive

Vice-Chairman;

Jackson Fairbanks, our Chief Marketing Officer;

Arman Sarkhani, our Chief Operating Officer.

Without these key executives

and employees, we may not have the ability to execute on our business plans and to identify and pursue new opportunities and service

The loss of services of senior management or other key employees could significantly delay or prevent the achievement of

our development and strategic objectives.

The loss of the services of our senior management or other key employees for any reason could

adversely affect our business, financial condition and operating results.

We do not presently maintain any key man life insurance policies.

Vice-Chairman and Chief Marketing Officer;

Jackson Fairbanks, our Director of Socials;

and Arman Sarkhani, our Chief Operating Officer.

Without these key executives and employees, we may not have the ability to execute on our business plans and to identify and pursue new

opportunities and service innovations.

The loss of services of senior management or other key employees could significantly delay or

prevent the achievement of our development and strategic objectives.

The loss of the services of our senior management or other key employees

for any reason could adversely affect our business, financial condition and operating results.

We do not presently maintain any key man

life insurance policies.

our co-founders were to experience a loss to their social media followings, it could adversely affect our business, operating results

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If they were to experience a significant loss of followers on any of their social media

accounts, such as Discord, TikTok, Instagram, or Twitter, it could have a negative impact on our

accounts, such as Discord, TikTok, Instagram, or X, it could have a negative impact on our business.

on social media in general often fluctuate significantly due to external factors that are not predictable.

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and respond to changes in consumer preferences, including in the form of content creation or distribution, could result in reduced demand

for our services, or reduced social media followings, which could

adversely affect our business, financial condition and operating results.

for our services, or reduced social media followings, which could adversely affect our business, financial condition and operating results.

business depends on our ability to attract and retain talented qualified employees or key personnel.

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see “Item 1A.

Risk Factors—Risks Related to Ownership of Our Class B Common Stock—The structure

of our common stock has the effect of concentrating voting control with certain Asset Entities officers and directors;

this will limit

or preclude your ability to influence corporate matters.

It may also limit the price and liquidity of our common stock due to its ineligibility

for inclusion in certain stock market indices.

Risk Factors—Risks Related to Ownership of Our Class B Common Stock—The structure of our common stock

has the effect of concentrating voting control with certain Asset Entities officers and directors;

this will limit or preclude your ability

to influence corporate matters.

It may also limit the price and liquidity of our common stock due to its ineligibility for inclusion

in certain stock market indices.

market conditions and recessionary pressures in one or more of the Company’s markets could impact the Company’s ability to

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extent to which the COVID-19 pandemic may impact our results will depend on future developments, which are highly uncertain and cannot

be predicted as of the date of this report, including the effectiveness of vaccines and other treatments for COVID-19, and other new

information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact, among

Nevertheless, the pandemic and the current financial, economic and capital markets environment, and future developments in the

global supply chain and other areas present material uncertainty and risk with respect to our performance, financial condition, results

of operations and cash flows.

be predicted as of the date of this Annual Report, including the effectiveness of vaccines and other treatments for COVID-19, and other

new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact,

among others.

Nevertheless, the pandemic and the current financial, economic and capital markets environment, and future developments

in the global supply chain and other areas present material uncertainty and risk with respect to our performance, financial condition,

results of operations and cash flows.

the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many

of the other risks described in this section.

developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by

financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our

developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance

by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our

financial condition and results of operations.

events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions,

transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns

or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity

For example, on March 10, 2023, Silicon Valley Bank (“SVB”), was closed by the California Department of Financial

Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (the “FDIC”), as receiver.

on March 12, 2023, Signature Bank Corp.

events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional

counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors

about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.

For example, on March 10, 2023, Silicon Valley Bank (“SVB”), was closed by the California Department of Financial Protection

and Innovation, which appointed the Federal Deposit Insurance Corporation (the “FDIC”), as receiver.

Similarly, on March

12, 2023, Signature Bank Corp.

(“Signature”), and Silvergate Capital Corp.

were each swept into receivership.

a statement by the Department of the Treasury, the Federal Reserve and the FDIC indicated that all depositors of SVB would

have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts, borrowers

under credit agreements, letters of credit and certain other financial instruments with SVB, Signature or any other financial institution

that is placed into receivership by the FDIC may be unable to access undrawn amounts thereunder.

statement by the Department of the Treasury, the Federal Reserve and the FDIC indicated that all depositors of SVB would have

access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts, borrowers under

credit agreements, letters of credit and certain other financial instruments with SVB, Signature or any other financial institution that

is placed into receivership by the FDIC may be unable to access undrawn amounts thereunder.

Although we are not a borrower

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have and may incur again substantial net operating losses (“NOLs”) during our history.

Unused NOLs may carry forward to

offset future taxable income if we achieve profitability in the future, unless such NOLs expire under applicable tax laws.

under the rules of Sections 382 and 383 of the U.S.

Internal Revenue Code of 1986, as amended (the “Code”), if a

corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity

ownership over a three-year period, the corporation’s ability to use its NOLs and other pre-change tax attributes to offset

its post-change taxable income or taxes may be limited.

The applicable rules generally operate by focusing on changes in ownership

among stockholders considered by the rules as owning, directly or indirectly, 5% or more of the stock of a company, as well as

changes in ownership arising from new issuances of stock by the company.

As a result of these rules, in the event that we experience

one or more ownership changes as a result of any public or private offerings or future transactions in our stock, then we may be

limited in our ability to use our federal NOL carryforwards to offset our future taxable income, if any.

In addition, the Tax Cuts

and Jobs Act of 2017 imposes certain limitations on the deduction of NOLs generated in tax years that began on or after January 1,

2018, including a limitation on use of NOLs to offset only 80% of taxable income and the disallowance of NOL carrybacks.

As of December 31, 2022,

the Company had a NOL of $645,255.

Under current tax law, federal NOLs generated after December 31, 2017 are allowed to be carried forward

on an indefinite basis.

However, as discussed above, the Company’s NOL carryforwards may be subject to federal annual limitations,

such as in the event of an “ownership change” as described above, or to applicable state tax law annual limitations, either

of which could reduce or defer the utilization of the losses.

Unused NOLs may carry forward to offset

future taxable income if we achieve profitability in the future, unless such NOLs expire under applicable tax laws.

However, under the

rules of Sections 382 and 383 of the U.S.

Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes

an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year

period, the corporation’s ability to use its NOLs and other pre-change tax attributes to offset its post-change taxable income

or taxes may be limited.

The applicable rules generally operate by focusing on changes in ownership among stockholders considered by

the rules as owning, directly or indirectly, 5% or more of the stock of a company, as well as changes in ownership arising from new issuances

of stock by the company.

As a result of these rules, in the event that we experience one or more ownership changes as a result of any

public or private offerings or future transactions in our stock, then we may be limited in our ability to use our federal NOL carryforwards

to offset our future taxable income, if any.

In addition, the Tax Cuts and Jobs Act of 2017 imposes certain limitations on the deduction

of NOLs generated in tax years that began on or after January 1, 2018, including a limitation on use of NOLs to offset only 80% of taxable

income and the disallowance of NOL carrybacks.

of December 31, 2023, the Company had a NOL of $4,931,197.

Under current tax law, federal NOLs generated after December 31, 2017 are

allowed to be carried forward on an indefinite basis.

However, as discussed above, the Company’s NOL carryforwards may be subject

to federal annual limitations, such as in the event of an “ownership change” as described above, or to applicable state tax

law annual limitations, either of which could reduce or defer the utilization of the losses.

Related to Government Regulation and Being a Public Company

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addition, our products and services will be subject to new restrictions and requirements, and our compliance costs may significantly

increase, as a result of the Digital Services Act in the European Union, which may apply to our business as early

as June 2023, and potentially other content-related legislative developments such as proposed online safety

bills in Ireland and the United Kingdom.

In the United States, changes to the protections available under Section 230

or the First Amendment to the U.S.

Constitution or new state or federal content-related legislation may increase our costs

or require significant changes to our services, business practices, or operations, which could adversely affect user growth and engagement.

Any of the foregoing events could adversely affect our business and financial results.

increase, as a result of the Digital Services Act in the European Union, which may apply to our business as early as June 2023,

and potentially other content-related legislative developments such as proposed online safety bills in Ireland and the United Kingdom.

In the United States, changes to the protections available under Section 230 or the First Amendment to the U.S.

or new state or federal content-related legislation may increase our costs or require significant changes to our services, business practices,

or operations, which could adversely affect user growth and engagement.

Any of the foregoing events could adversely affect our business

and financial results.

are not currently registered as an investment adviser and if we should have registered as an investment adviser, our failure to do so

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Despite our security measures, it is impossible for us to eliminate this risk.

number of U.S.

states have enacted data privacy and security laws and regulations that govern the collection, use, disclosure, transfer,

storage, disposal, and protection of personal information, such as social security numbers, financial information and other sensitive

personal information.

For example, all 50 states and several U.S.

territories now have data breach laws that require timely notification

to affected individuals, and at times regulators, credit reporting agencies and other bodies, if a company has experienced the unauthorized

access or acquisition of certain personal information.

Other state laws, such as the California Consumer Privacy Act, as amended,

or the CCPA, among other things, contain disclosure obligations for businesses that collect personal information about residents in their

state and affords those individuals new rights relating to their personal information that may affect our ability to collect and/or use

personal information.

Effective January 1, 2023, we also became subject to the California Privacy Rights Act, which expands upon the

consumer data use restrictions, penalties and enforcement provisions under the California Consumer Privacy Act, and Virginia’s

Consumer Data Protection Act, another comprehensive data privacy law.

Effective July 1, 2023, we will also become subject to the Colorado

Privacy Act and Connecticut’s An Act Concerning Personal Data Privacy and Online Monitoring, which are also comprehensive consumer

privacy laws.

Effective December 31, 2023, we will also become subject to the Utah Consumer Privacy Act, regarding business handling

of consumers’ personal data.

Meanwhile, several other states and the federal government have considered or are considering privacy

laws like the CCPA.

We will continue to monitor and assess the impact of these laws, which may impose substantial penalties for violations,

impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability

for our business.

federal data privacy laws include the CAN-SPAM Act, which, among

other things, restricts data collection and use in connection with CAN-SPAM Act’s opt-out process requirements for senders of commercial

and COPPA, which regulates the collection of information by operators of websites and other electronic solutions that are directed

to children under 13 years of age, although our website and app user terms of service and privacy policy expressly prohibit children under

13 from submitting information to or on our website or app.

These laws and regulations promulgated under these laws restrict our collection,

processing, storage, use and disclosure of personal information, may require us to notify individuals of our privacy practices and provide

individuals with certain rights to prevent the use and disclosure of protected information, and mandate certain procedures with respect

to safeguarding and proper description of stored information.

certain laws and regulations of U.S states and the EU impose similar or greater data protection requirements and may also subject us

to scrutiny or attention from regulatory authorities.

For example, the EU and California have passed comprehensive data privacy laws,

the EU GDPR and the CCPA and regulations promulgated under the CCPA, respectively, which impose data protection obligations on enterprises,

including limitations on data uses and constraints on certain uses of sensitive data.

Of particular importance, the CCPA, which became

effective on January 1, 2020, limits how we may collect and use personal information, including by requiring companies that process information

relating to California residents to make disclosures to consumers about their data collection, use and sharing practices, provide consumers

with rights to know and delete personal information and allow consumers to opt out of certain data sharing with third parties.

also creates an expanded definition of personal information, imposes special rules on the collection of consumer data from minors,

and provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase

the likelihood and cost of data breach litigation.

The potential effects of this legislation are far-reaching and may require us to modify

our data processing practices and policies and incur substantial costs and expenses in compliance and potential ligation efforts.

Effective January 1, 2023, we also became subject to the CPRA in California, which expands upon the consumer data use restrictions, penalties

and enforcement provisions under the CCPA, and the VCDPA in Virginia, another comprehensive data privacy law, and regulations promulgated

under the CPRA and the VCDPA.

addition, effective July 1, 2023, we may also be subject to the Colorado Privacy Act in Colorado and the CDPA in Connecticut and regulations

promulgated under these laws, which are also comprehensive consumer privacy laws.

Effective December 31, 2023, we may also be subject

to the UCPA in Utah, regarding business handling of consumers’ personal data.

Effective January 1, 2025, we may also become subject

to the ICPA, a similar consumer data privacy law in Iowa.

Further, there are several legislative proposals in the United States, at both

the federal and state level, that could impose new privacy and security obligations.

We cannot yet determine the impact that these laws

and regulations may have on our business.

of the U.S., data protection laws, including the GDPR, also might apply to some of our operations or business collaborators.

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a material adverse effect on our business and operations.

state and local governments are beginning to respond to climate change issues.

This increased focus on sustainability may result in new

legislation or regulations and vendor and customer requirements that could negatively affect us as we may incur additional costs or be

required to make changes to our operations in order to comply with any new regulations.

Legislation or regulations that potentially impose

state and local governments are responding to climate change issues.

This increased focus on sustainability is resulting in new regulations

and legislation and vendor and customer requirements that could negatively affect us as we may incur additional costs or be required

to make changes to our operations in order to comply with any new regulations.

Legislation or regulations that impose disclosure requirements,

restrictions, caps, taxes, or other controls on emissions of greenhouse gases such as carbon dioxide, a by-product of burning fossil

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a material adverse effect on our business.

addition, on March 21, 2022, the SEC proposed new rules requiring a range of climate-related disclosure that

would be applicable to all companies that are required to file annual reports or that file registration statements with the SEC, including

The proposed climate-related disclosure framework is modeled in part on the Task Force on Climate Related Financial Disclosures’

recommendations, and also draws upon the Greenhouse Gas (“GHG”) Protocol (“GHG Protocol”).

In particular, the

proposed rules would require a registrant to disclose information about:

The oversight and governance of climate-related risks by the

registrant’s board and management;

how any climate-related risks identified by the registrant have had or are likely to have a

material impact on its business and consolidated financial statements, which may manifest over the short-, medium-, or long-term;

any identified climate-related risks have affected or are likely to affect the registrant’s strategy, business model, and outlook;

the registrant’s processes for identifying, assessing, and managing climate-related risks and whether any such processes are integrated

into the registrant’s overall risk management system or processes;

the impact of climate-related events (severe weather events

and other natural conditions as well as physical risks identified by the registrant) and transition activities (including transition

risks identified by the registrant) on the line items of a registrant’s consolidated financial statements and related expenditures,

and disclosure of financial estimates and assumptions impacted by such climate-related events and transition activities;

1” and “Scope 2” (as defined by the SEC’s proposed rule) GHG emissions metrics, separately disclosed, expressed

both by disaggregated constituent greenhouse gases and in the aggregate, and in absolute and intensity terms;

“Scope 3” (as

defined by the SEC’s proposed rule) GHG emissions and intensity, if material, or if the registrant has set a GHG emissions reduction

target or goal that includes its Scope 3 emissions;

and the registrant’s climate-related targets or goals, and transition plan,

The proposed rules would be subject to certain accommodations and phase-in periods.

For example, companies meeting the definition

of “smaller reporting company” in Rule 12b-2 of the Exchange Act, which currently includes the Company (see below, “— We

are a ’smaller reporting company’ within the meaning of the Exchange Act, and if we take advantage

of certain exemptions from disclosure requirements available to smaller reporting companies, this could make our securities less attractive

to investors and may make it more difficult to compare our performance with other public companies.

” and “ As a ’smaller

reporting company,’ we may at some time in the future choose to exempt our company from certain corporate governance requirements

that could have an adverse effect on our public stockholders.” ), would be exempt from the Scope 3 emissions disclosure requirement.

The proposed rules would also require an attestation report provided by a third-party attestation service provider that satisfies a minimum

level of attestation services for a company that meets the definition of “accelerated filer” or “large accelerated

filer” in Rule 12b-2 of the Exchange Act, including:

(1) limited assurance for Scopes 1 and 2 emissions disclosure that scales

up to reasonable assurance after a specified transition period;

(2) minimum qualifications and independence requirements for the attestation

service provider;

and (3) minimum requirements for the accompanying attestation report.

A company that is not an “accelerated filer”

or “large accelerated filer”, which currently includes the Company, would not be subject to this attestation requirement

(see also “ —As a non-accelerated filer, we are not required to comply with the auditor attestation requirements of the

Sarbanes-Oxley Act.

” and “— We are subject to ongoing public reporting requirements that are less rigorous than

Exchange Act rules for companies that are not emerging growth companies and our stockholders could receive less information than they

might expect to receive from more mature public companies.

we cannot predict the costs of implementation or any potential adverse impacts resulting from the proposed rule, the SEC estimated that

compliance costs for a “smaller reporting company” in the first year of compliance would be $490,000 ($140,000 for internal

costs and $350,000 for outside professional costs), while annual costs in the subsequent five years were estimated to be $420,000 ($120,000

for internal costs and $300,000 for outside professional costs).

For non-“smaller reporting company” registrants, the costs

in the first year of compliance were estimated to be $640,000 ($180,000 for internal costs and $460,000 for outside professional costs),

while annual costs in the subsequent five years were estimated to be $530,000 ($150,000 for internal costs and $380,000 for outside professional

To the extent that this rule is finalized as proposed, we could therefore incur significant increased costs relating to the assessment

and disclosure of climate-related matters.

potential additional costs, forced changes in operations, or loss of revenues may have a material adverse effect on our business and

particular, on March 6, 2024, the SEC adopted rules that will require us to disclose:

● Climate-related

risks that have had or are reasonably likely to have a material impact on our business strategy,

results of operations, or financial condition;

actual and potential material impacts of any identified climate-related risks on our strategy,

business model, and outlook;

as part of our strategy, we have undertaken activities to mitigate or adapt to a material

climate-related risk, a quantitative and qualitative description of material expenditures

incurred and material impacts on financial estimates and assumptions that directly result

from such mitigation or adaptation activities;

disclosures regarding our activities, if any, to mitigate or adapt to a material climate-related

risk including the use, if any, of transition plans, scenario analysis, or internal carbon

oversight by our board of directors of climate-related risks and any role by management in

assessing and managing our material climate-related risks;

processes we have for identifying, assessing, and managing material climate-related risks

and, if we are managing those risks, whether and how any such processes are integrated into

our overall risk management system or processes;

● Information

about our climate-related targets or goals, if any, that have materially affected or are

reasonably likely to materially affect our business, results of operations, or financial

required disclosures would include material expenditures and material impacts

on financial estimates and assumptions as a direct result of the target or goal or actions

taken to make progress toward meeting such target or goal;

capitalized costs, expenditures expensed, charges, and losses incurred as a result of severe

weather events and other natural conditions, such as hurricanes, tornadoes, flooding, drought,

wildfires, extreme temperatures, and sea level rise, subject to applicable one percent and

de minimis disclosure thresholds, disclosed in a note to the financial statements;

capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable

energy credits or certificates if used as a material component of our plans to achieve our

disclosed climate-related targets or goals, disclosed in a note to our financial statements;

the estimates and assumptions we use to produce our financial statements were materially

impacted by risks and uncertainties associated with severe weather events and other natural

conditions or any disclosed climate-related targets or transition plans, a qualitative description

of how the development of such estimates and assumptions was impacted, disclosed in a note

to our financial statements.

will be exempt from the SEC rules’ requirements to disclose certain information about our greenhouse gas emissions and comply with

related auditor assurance requirements as long as we remain a “smaller reporting company” (as described below under “— Risks

Related to Ownership of Our Class B Common Stock – We are a ’smaller reporting company’ within the meaning of the Exchange

Act, and if we take advantage of certain exemptions from disclosure requirements available to smaller reporting companies, this could

make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

or an “emerging growth company” (as described below under “— Risks Related to Ownership of Our Class B Common

Stock – We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that

are not emerging growth companies and our stockholders could receive less information than they might expect to receive from more mature

public companies.

In addition, these disclosure rules will not require compliance by us until our fiscal year beginning

in 2027, with certain requirements not becoming effective until our fiscal year beginning in 2028, if we remain a smaller reporting company

or emerging growth company.

number of petitions have been filed in federal courts seeking to challenge the SEC’s climate disclosure rules.

The outcome of this

litigation cannot be determined as of the date of this report.

that the SEC climate disclosure rules are ultimately upheld in their present form, and even in light of the exemptions and accommodations

made for smaller reporting companies and emerging growth companies described above, the costs to adopt the necessary disclosure controls

and procedures to disclose all required information, the potential costs to make changes in our operations to allow us to improve our

climate change-related disclosures, or the potential loss of revenues from these disclosure requirements due to investor, customer, or

vendor requirements to disclose and meet certain climate change-related targets pursuant to these disclosure rules, may still have a

material adverse effect on our business and operations.

we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce

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business, which could harm our business, financial condition and results of operations.

and other market data used in this report and in other periodic reports that we may in the future file with the SEC, including those

undertaken by us or our engaged consultants, may not prove to be representative of current and future market conditions or future results.

and other market data used in this Annual Report and in other periodic reports that we may in the future file with the SEC, including

those undertaken by us or our engaged consultants, may not prove to be representative of current and future market conditions or future

report includes or refers to, and periodic reports that we may in the future file with the SEC may include or refer to, statistical and

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and cause actual results and market viability to differ materially from those presented in any such report or other materials.

Risks Related to Ownership of Our Class B Common Stock

Related to Ownership of Our Class B Common Stock

structure of our common stock has the effect of concentrating voting control with certain Asset Entities officers and directors;

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Common Stock is entitled to one vote on any such matter.

the IPO, we offered and sold shares of Class B Common Stock to public investors (see “Item 1.

Business – Corporate Structure

and History – Initial Public Offering ”).

AEH owns all of the 8,385,276 shares of our outstanding Class A

Common Stock, which amounts to 83,852,760 votes.

The shares of Class A Common Stock held by AEH are controlled by its officers and board

of managers, all of whom are also some of our officers and directors.

Prior to the IPO, there were 8,385,276 shares of Class A Common

Stock outstanding representing voting power of 83,852,760 votes, 2,364,724 shares of Class B Common Stock outstanding representing voting

power of 2,364,724 votes, and no shares of preferred stock outstanding.

As a result, out of a total of 10,750,000 shares of outstanding

common stock representing total voting power of 86,217,484 votes, AEH controlled approximately 97.3% of the voting power before the IPO.

Following the IPO and as of the date of this report, there are 5,275,724 shares of Class B Common Stock issued and outstanding, 1,411,000

of which are held by officers and directors as a result of grants of restricted stock under the Plan that were made upon the closing

of the IPO pursuant to their employment or consulting agreements.

In our initial public offering, we offered and sold shares of Class

B Common Stock to public investors (see Item 1.

“ Business – Corporate Structure and History – Initial

Public Offering and Underwriting Agreement ”).

AEH owns all of the 7,532,029 shares of our outstanding Class A Common Stock,

which amounts to 75,320,290 votes.

The shares of Class A Common Stock held by AEH are controlled by its officers and board of managers,

all of whom are also some of our officers and directors.

Following the initial public offering and as of March 29, 2024, there are 6,892,381

shares of Class B Common Stock issued and outstanding, 1,547,565 of which are held by officers and directors as a result of (i) grants

of restricted stock under the Plan that were made pursuant to such officers and directors’ employment or consulting agreements and

(ii) the conversion of shares of Class A Common Stock into shares of Class B Common Stock upon transfer of such shares to such officers

and directors as the former indirect beneficial owners of such shares.

Stockholders that are not officers and directors therefore currently

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in the Company based on having approximately 93.5% of all voting rights.

This concentrated control may limit or preclude the ability

of others to influence corporate matters including significant business decisions for the foreseeable future.

addition, certain index providers have announced restrictions on including companies with multiple-class share structures in

certain of their indexes.

For example, in July 2017, FTSE Russell and Standard & Poor’s announced that they would cease to

allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices.

Under the announced

policies, our dual class capital structure would make us ineligible for inclusion in any of these indices.

Given the sustained flow

of investment funds into passive strategies that seek to track certain indexes, exclusion from stock indexes would likely preclude investment

by many of these funds and could make our Class B Common Stock less attractive to other investors.

As a result, fewer

investors may be willing to purchase our Class B Common Stock.

As a result, we are a “controlled company” under

Nasdaq’s rules.

addition, certain index providers have announced restrictions on including companies with multiple-class share structures in certain

of their indexes.

For example, in July 2017, FTSE Russell and Standard & Poor’s announced that they would cease to allow most

newly public companies utilizing dual or multi-class capital structures to be included in their indices.

Under the announced policies,

our dual class capital structure would make us ineligible for inclusion in any of these indices.

Given the sustained flow of investment

funds into passive strategies that seek to track certain indexes, exclusion from stock indexes would likely preclude investment by many

of these funds and could make our Class B Common Stock less attractive to other investors.

As a result, fewer investors

may be willing to purchase our Class B Common Stock.

In consequence, the market price and liquidity of our Class B Common

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other factors listed in this section.

Volatility in the market price of our Class B Common Stock may prevent investors from being able to sell their shares at or above the

price at which they purchased our Class B Common Stock.

in the market price of our Class B Common Stock may prevent investors from being able to sell their shares at or above the price at which

they purchased our Class B Common Stock.

As a result, you may suffer a loss on your investment.

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addition to the risks addressed above under “— Our Class B Common Stock may be volatile or may decline regardless of our

operating performance, and you may not be able to resell your shares at or above your purchase price ,” our Class B Common Stock may be

subject to rapid and substantial price volatility.

Recently, companies with comparably small public floats and initial public offering

sizes have experienced instances of extreme stock price run-ups followed by rapid price declines, and such stock

price volatility was seemingly unrelated to the respective company’s underlying performance.

Although the specific cause of such

volatility is unclear, our small public float may amplify the impact the actions taken by a few stockholders have on the price of our

stock, which may cause our stock price to deviate, potentially significantly, from a price that better reflects the underlying performance

of our business.

Our Class B Common Stock may experience run-ups and declines that are seemingly unrelated to our actual or expected

operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing

value of our Class B Common Stock.

In addition, investors of shares of our Class B Common Stock may experience losses, which may be material,

if the price of our Class B Common Stock experiences such declines after any investors purchase shares of our Class B Common Stock.

may not be able to maintain a listing of our Class B Common Stock on Nasdaq.

Class B Common Stock is currently listed on the Nasdaq Capital Market tier of Nasdaq.

We must meet certain financial and liquidity

criteria and corporate governance requirements to maintain the listing of our Class B Common Stock on Nasdaq.

If we fail to meet any

of Nasdaq’s continued listing standards or we violate Nasdaq listing requirements, our Class B Common Stock may be delisted.

In addition, our board of directors may determine that the cost of maintaining our listing on a national securities exchange

outweighs the benefits of such listing.

A delisting of our Class B Common Stock from Nasdaq may materially impair our

stockholders’ ability to buy and sell our Class B Common Stock and could have an adverse effect on the market price of, and

the efficiency of the trading market for, our Class B Common Stock.

The delisting of our Class B Common Stock could significantly

impair our ability to raise capital and the value of your investment.

securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market

price for the shares and trading volume could decline.

trading market for our Class B Common Stock will depend in part on the research and reports that securities or industry analysts publish

about us or our business.

If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts

who covers us downgrades our Class B Common Stock or publishes inaccurate or unfavorable research about our business, the market price

for our Class B Common Stock would likely decline.

If one or more of these analysts cease coverage of our company or fail to publish

reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume

for our Class B Common Stock to decline.

have never paid cash dividends on our stock and do not intend to pay dividends for the foreseeable future.

have paid no cash dividends on any class of our stock to date and we do not anticipate paying cash dividends in the near term.

foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate

paying any cash dividends on our Class B Common Stock.

Accordingly, investors must be prepared to rely on sales of their Class B Common

Stock after price appreciation to earn an investment return, which may never occur.

Investors seeking cash dividends should not purchase

our Class B Common Stock.

Any determination to pay dividends in the future will be made at the discretion of our board of directors and

will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other

factors our board deems relevant.

operating performance, and you may not be able to resell your shares at or above your purchase price ,” our Class B Common Stock

may be subject to rapid and substantial price volatility.

Recently, companies with comparably small public floats and initial public

offering sizes have experienced instances of extreme stock price run-ups followed by rapid price declines, and such stock price volatility

was seemingly unrelated to the respective company’s underlying performance.

Although the specific cause of such volatility is unclear,

our small public float may amplify the impact the actions taken by a few stockholders have on the price of our stock, which may cause

our stock price to deviate, potentially significantly, from a price that better reflects the underlying performance of our business.

Our Class B Common Stock may experience run-ups and declines that are seemingly unrelated to our actual or expected operating performance

and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Class

B Common Stock.

In addition, investors of shares of our Class B Common Stock may experience losses, which may be material, if the price

of our Class B Common Stock experiences such declines after any investors purchase shares of our Class B Common Stock.

We may not be able to maintain a listing

of our Class B Common Stock on Nasdaq.

Our Class B Common Stock is currently listed

on the Nasdaq Capital Market tier of Nasdaq.

We must meet certain financial and liquidity criteria and corporate governance requirements

to maintain the listing of our Class B Common Stock on Nasdaq.

If we fail to meet any of Nasdaq’s continued listing standards or

we violate Nasdaq listing requirements, our Class B Common Stock may be delisted.

In addition, our board of directors may determine that

the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing.

A delisting of our Class

B Common Stock from Nasdaq may materially impair our stockholders’ ability to buy and sell our Class B Common Stock and could have

an adverse effect on the market price of, and the efficiency of the trading market for, our Class B Common Stock.

The delisting of our

Class B Common Stock could significantly impair our ability to raise capital and the value of your investment.

On September 28, 2023, the Company received a

written notification (the “Notification Letter”) from Nasdaq notifying the Company that it is not in compliance with the

minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market tier of

Nasdaq Listing Rule 5550(a)(2) requires listed

securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet

the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days.

Based on the closing

bid price of the Class B Common Stock for the 30 consecutive business days from August 15, 2023 to September 27, 2023, the Company no

longer meets the minimum bid price requirement.

The Notification Letter does not impact the Company’s

listing of the Class B Common Stock on the Nasdaq Capital Market at this time.

However, the Notification Letter provides that the Company’s

name will be included on a list of all non-compliant companies which Nasdaq makes available to investors on its website at listingcenter.nasdaq.com,

beginning five business days from the date of the Notification Letter.

In accordance with Nasdaq Listing Rule 5810(c)(3)(A),

the Company has been provided 180 calendar days, or until March 26, 2024, to regain compliance with Nasdaq Listing Rule 5550(a)(2).

regain compliance, the Company’s common stock must have a closing bid price of at least $1.00 for a minimum of 10 consecutive business

If the Company does not regain compliance during such 180-day period, the Company may be eligible for an additional 180 calendar

days, provided that the Company meets the continued listing requirement for market value of publicly held shares of $1,000,000 under

Nasdaq Listing Rule 5550(a)(5) and all other initial listing standards for the Nasdaq Capital Market, except for Nasdaq Listing Rule

5550(a)(2), and the Company must provide a written notice of its intention to cure this deficiency during the second compliance period,

by effecting a reverse stock split, if necessary.

On March 27, 2024, the

Company received a written notification (the “Second Notification Letter”) from Nasdaq notifying the Company that it had

not regained compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) and is not eligible for a

second 180-day compliance period;

specifically, the Company did not comply with the $5,000,000 minimum stockholders’ equity initial

listing requirement for the Nasdaq Capital Market as of March 26, 2024.

The Second Notification Letter provides that the Company’s

Class B Common Stock will be scheduled for delisting from the Nasdaq Capital Market and will be suspended at the opening of business

of April 5, 2024, and a Form 25-NSE will be filed with the SEC, unless the Company requests an appeal of this determination no later

than 4:00 p.m.

Eastern Time on April 3, 2024.

The Company plans to appeal the delisting determination to the Nasdaq Hearings Panel (the

“Hearings Panel”).

The Company’s request will stay the suspension of the Company’s Class B Common Stock and the

filing of the Form 25-NSE pending the Hearings Panel’s decision.

In the event that we are unsuccessful in our appeal, we will be

delisted from Nasdaq, and the value of your shares may be materially adversely affected.

If securities or industry analysts do not

publish research or publish inaccurate or unfavorable research about our business, the market price for the shares and trading volume

could decline.

The trading market for our Class B Common Stock

will depend in part on the research and reports that securities or industry analysts publish about us or our business.

If research analysts

do not establish and maintain adequate research coverage or if one or more of the analysts who covers us downgrades our Class B Common

Stock or publishes inaccurate or unfavorable research about our business, the market price for our Class B Common Stock would likely

If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility

in the financial markets, which, in turn, could cause the market price or trading volume for our Class B Common Stock to decline.

We have never paid cash dividends on our

stock and do not intend to pay dividends for the foreseeable future.

We have paid no cash dividends on any class of

our stock to date and we do not anticipate paying cash dividends in the near term.

For the foreseeable future, we intend to retain any

earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our Class B

Common Stock.

Accordingly, investors must be prepared to rely on sales of their Class B Common Stock after price appreciation to earn

an investment return, which may never occur.

Investors seeking cash dividends should not purchase our Class B Common Stock.

Any determination

to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations,

financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board deems relevant.

We may issue additional debt and equity securities, which are senior to our Class B Common Stock as to distributions and in liquidation,

which could materially adversely affect the market price of our Class B Common Stock.

the future, we may attempt to increase our capital resources by entering into additional debt or debt-like financing that is secured

by all or up to all of our assets, or issuing debt or equity securities, which could include issuances of commercial paper, medium-term

notes, senior notes, subordinated notes or shares.

In the event of our liquidation, our lenders and holders of our debt securities would

receive a distribution of our available assets before distributions to our stockholders.

In addition, any additional preferred stock,

if issued by our company, may have a preference with respect to distributions and upon liquidation, which could further limit our ability

to make distributions to our stockholders.

Because our decision to incur debt and issue securities in our future offerings will depend

on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings

and debt financing.

market conditions could require us to accept less favorable terms for the issuance of our securities in the future.

Thus, you will bear

the risk of our future offerings reducing the value of your Class B Common Stock and diluting your interest in our company.

addition, in connection with the IPO, as of February 3, 2023, we are subject to a lock-up agreement that prevents, subject to certain

exceptions, selling or transferring any of our shares of capital stock of the Company for up to 12 months.

In addition, our officers,

directors and beneficial owners of approximately 78.0% of our common stock agreed to be locked up for a period of 12 months.

of approximately 7.2% of our outstanding common stock agreed to be locked up for a period of nine months, and a holder of approximately

2.3% of our outstanding Class B Common Stock prior to this offering has agreed to be locked up for a period of six months with respect

to approximately 0.9% of the outstanding common stock held by such holder, subject to certain exceptions.

The remaining shares are not

subject to lock-up provisions or such lock-up provisions have been waived.

When these lock-up provisions expire or if they are waived

by the underwriter, more of our securities will become available for resale, subject to applicable law, including without notice, which

could reduce the market price for our common stock.

are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging

growth companies and our stockholders could receive less information than they might expect to receive from more mature public companies.

are required to publicly report on an ongoing basis as an “emerging growth company” (as defined in the JOBS Act) under the

reporting rules set forth under the Exchange Act.

For so long as we remain an emerging growth company, we may take advantage of certain

exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not emerging growth

companies, including but not limited to:

being required to comply with the auditor attestation requirements of Section 404 of the

Sarbanes-Oxley Act;

permitted to comply with reduced disclosure obligations regarding executive compensation

in our periodic reports and proxy statements;

exempt from the requirement to hold a non-binding advisory vote on executive compensation

and stockholder approval of any golden parachute payments not previously approved.

In the future, we may attempt to increase our

capital resources by entering into additional debt or debt-like financing that is secured by all or up to all of our assets, or issuing

debt or equity securities, which could include issuances of commercial paper, medium-term notes, senior notes, subordinated notes or

In the event of our liquidation, our lenders and holders of our debt securities would receive a distribution of our available

assets before distributions to our stockholders.

In addition, any additional preferred stock, if issued by our company, may have a preference

with respect to distributions and upon liquidation, which could further limit our ability to make distributions to our stockholders.

Because our decision to incur debt and issue securities in our future offerings will depend on market conditions and other factors beyond

our control, we cannot predict or estimate the amount, timing or nature of our future offerings and debt financing.

Further, market conditions could require us to

accept less favorable terms for the issuance of our securities in the future.

Thus, you will bear the risk of our future offerings reducing

the value of your Class B Common Stock and diluting your interest in our company.

We are subject to ongoing public reporting

requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies and our stockholders

could receive less information than they might expect to receive from more mature public companies.

We are required to publicly report on an ongoing

basis as an “emerging growth company” (as defined in the JOBS Act) under the reporting rules set forth under the Exchange

For so long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements

that are applicable to other Exchange Act reporting companies that are not emerging growth companies, including but not limited to:

● not being required to comply with

the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

● being exempt from certain greenhouse

gas emissions disclosure and related third-party assurance requirements;

● being permitted to comply with reduced

disclosure obligations regarding executive compensation in our periodic reports and proxy

● being exempt from the requirement

to hold a non-binding advisory vote on executive compensation and stockholder approval of

any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition

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not be comparable to those of companies that comply with such new or revised accounting standards.

expect to take advantage of these reporting exemptions until we are no longer an emerging growth company.

We would remain an emerging

growth company for up to five years, although if the market value of our Class B Common Stock that is held by non-affiliates exceeds

$700 million as of any June 30 before that time, we would cease to be an emerging growth company as of the following December 31.

we will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not

emerging growth companies, our stockholders could receive less information than they might expect to receive from more mature public

We cannot predict if investors will find our Class B Common Stock less attractive if we elect to rely on these exemptions,

or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our Class B Common

a non-accelerated filer, we are not required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act.

are not an “accelerated filer” or a “large accelerated filer” under the Exchange Act.

Rule 12b-2 under the Exchange

Act defines an “accelerated filer” to mean any company that first meets the following conditions at the end of each fiscal

The company had a public float of $75 million or more, but less than $700 million, as of the last business day of the company’s

We expect to take advantage of these reporting

exemptions until we are no longer an emerging growth company.

We would remain an emerging growth company for up to five years, although

if the market value of our Class B Common Stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time,

we would cease to be an emerging growth company as of the following December 31.

Because we will be subject to ongoing public

reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies, our stockholders

could receive less information than they might expect to receive from more mature public companies.

We cannot predict if investors will

find our Class B Common Stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would

result in less active trading or more volatility in the price of our Class B Common Stock.

As a non-accelerated filer, we are not

required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act.

We are not an “accelerated filer”

or a “large accelerated filer” under the Exchange Act.

Rule 12b-2 under the Exchange Act defines an “accelerated filer”

to mean any company that first meets the following conditions at the end of each fiscal year:

The company had a public float of $75 million

or more, but less than $700 million, as of the last business day of the company’s most recently completed second fiscal quarter;

the company has been subject to the reporting requirements of the Exchange Act for at least twelve calendar months;

the company has filed

at least one annual report under the Exchange Act;

the company did not have annual revenues of less than $100 million and either no public

float or a public float of less than $700 million;

and, once the company determines that it does not qualify for “smaller reporting

company” status because it exceeded one or more of the current thresholds for such status, is not eligible to regain “smaller

reporting company” status under the test provided under paragraph (3)(iii)(B) of the “smaller reporting company” definition

in Rule 12b-2 of the Exchange Act.

Rule 12b-2 under the Exchange Act defines a “large accelerated filer” in the same way

except that the company meeting the definition must have a public float of $700 million or more as of the last business day of the company’s

most recently completed second fiscal quarter.

the company has been subject to the reporting requirements of the Exchange Act for at

least twelve calendar months;

the company has filed at least one annual report under the Exchange Act;

the company did not have annual

revenues of less than $100 million and either no public float or a public float of less than $700 million;

and, once the company determines

that it does not qualify for “smaller reporting company” status because it exceeded one or more of the current thresholds

for such status, is not eligible to regain “smaller reporting company” status under the test provided under paragraph (3)(iii)(B)

of the “smaller reporting company” definition in Rule 12b-2 of the Exchange Act.

Rule 12b-2 under the Exchange Act defines

a “large accelerated filer” in the same way except that the company meeting the definition must have a public float of $700

million or more as of the last business day of the company’s most recently completed second fiscal quarter.

non-accelerated filer is not required to file an auditor attestation report on internal control over financial reporting that is otherwise

required under Section 404(b) of the Sarbanes-Oxley Act.

our internal control over financial reporting will not receive the level of review provided by the process relating to the auditor attestation

included in annual reports of issuers that are subject to the auditor attestation requirements.

In addition, we cannot predict if investors

will find our common stock less attractive because we are not required to comply with the auditor attestation requirements.

A non-accelerated filer is not required to file

an auditor attestation report on internal control over financial reporting that is otherwise required under Section 404(b) of the Sarbanes-Oxley

Therefore, our internal

control over financial reporting will not receive the level of review provided by the process relating to the auditor attestation included

in annual reports of issuers that are subject to the auditor attestation requirements.

In addition, we cannot predict if investors will

find our common stock less attractive because we are not required to comply with the auditor attestation requirements.

If some investors

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less information than they might expect to receive from more mature public companies.

are a “smaller reporting company” within the meaning of the Exchange Act, and if we take advantage of certain exemptions

from disclosure requirements available to smaller reporting companies, this could make our securities less attractive to investors and

may make it more difficult to compare our performance with other public companies.

12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed

issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

a public float of less than $250 million as of the last business day of its most recently

completed second fiscal quarter, computed by multiplying the aggregate worldwide number of

shares of its voting and non-voting common equity held by non-affiliates by the price at

which the common equity was last sold, or the average of the bid and asked prices of common

equity, in the principal market for the common equity;

the case of an initial registration statement under the Securities Act or the Exchange Act

for shares of its common equity, had a public float of less than $250 million as of a date

within 30 days of the date of the filing of the registration statement, computed by multiplying

the aggregate worldwide number of such shares held by non-affiliates before the registration

plus, in the case of a Securities Act registration statement, the number of such shares included

in the registration statement by the estimated public offering price of the shares;

the case of an issuer whose public float as calculated under paragraph (1) or (2) of this

definition was zero or whose public float was less than $700 million, had annual revenues

of less than $100 million during the most recently completed fiscal year for which audited

financial statements are available.

We are a “smaller

reporting company” within the meaning of the Exchange Act, and if we take advantage of certain exemptions from disclosure requirements

available to smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult

to compare our performance with other public companies.

Rule 12b-2 of the Exchange Act defines a “smaller

reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a

parent that is not a smaller reporting company and that:

● had a public float of less than

$250 million as of the last business day of its most recently completed second fiscal quarter,

computed by multiplying the aggregate worldwide number of shares of its voting and non-voting

common equity held by non-affiliates by the price at which the common equity was last sold,

or the average of the bid and asked prices of common equity, in the principal market for

the common equity;

● in the case of an initial registration

statement under the Securities Act or the Exchange Act for shares of its common equity, had

a public float of less than $250 million as of a date within 30 days of the date of the filing

of the registration statement, computed by multiplying the aggregate worldwide number of

such shares held by non-affiliates before the registration plus, in the case of a Securities

Act registration statement, the number of such shares included in the registration statement

by the estimated public offering price of the shares;

● in the case of an issuer whose public

float as calculated under paragraph (1) or (2) of this definition was zero or whose public

float was less than $700 million, had annual revenues of less than $100 million during the

most recently completed fiscal year for which audited financial statements are available.

If a company determines that it does not qualify

for smaller reporting company status because it exceeded one or more of the above thresholds, it will remain unqualified unless when making

its annual determination it meets certain alternative threshold requirements which will be lower than the above thresholds if its prior

public float or prior annual revenues exceed certain thresholds.

a smaller reporting company, we are not required to and may not include a Compensation Discussion and Analysis section in our proxy statements;

for smaller reporting company status because it exceeded one or more of the above thresholds, it will remain unqualified unless when

making its annual determination it meets certain alternative threshold requirements which will be lower than the above thresholds if

its prior public float or prior annual revenues exceed certain thresholds.

As a smaller reporting company, we are not required

to include a Compensation Discussion and Analysis section in our proxy statements;

we will provide only two years of financial statements;

and we need not provide the table of selected financial data.

We also will have

other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies

which could make our Class B Common Stock less attractive to potential investors, which could make it more difficult for our stockholders

to sell their shares.

a “smaller reporting company,” we may choose to exempt our company from certain corporate governance requirements that could

have an adverse effect on our public stockholders .

Nasdaq rules, a “smaller reporting company,” as defined in Rule 12b-2 under the Exchange Act, is not subject to certain corporate

governance requirements otherwise applicable to companies listed on Nasdaq.

For example, a smaller reporting company is exempt from the

requirement of having a compensation committee composed solely of directors meeting certain enhanced independence standards, as long

as the compensation committee has at least two members who do meet such standards.

Although we have not yet determined to avail ourselves

of this or other exemptions from Nasdaq requirements that are or may be afforded to smaller reporting companies, while we will seek to

maintain our shares on Nasdaq in the future we may elect to rely on any or all of them.

By electing to utilize any such exemptions, our

company may be subject to greater risks of poor corporate governance, poorer management decision-making processes, and reduced results

of operations from problems in our corporate organization.

Consequently, our stock price may suffer, and there is no assurance that we

will be able to continue to meet all continuing listing requirements of Nasdaq from which we will not be exempt, including minimum stock

price requirements.

a “controlled company” under the rules of Nasdaq, we may choose to exempt our company from certain corporate governance requirements

that could have an adverse effect on our public stockholders.

Nasdaq’s rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled

company” and may elect not to comply with certain corporate governance requirements, including, without limitation, (i) the requirement

that a majority of the board of directors consist of independent directors, (ii) the requirement that the compensation of our officers

be determined or recommended to our board of directors by a compensation committee that is comprised solely of independent directors,

and (iii) the requirement that director nominees be selected or recommended to the board of directors by a majority of independent directors

or a nominating committee comprised solely of independent directors.