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Item 5. Market for Registrant’s Common Equity

2024-04-02 compared with 2023-03-31 · 252 added, 149 removed, 17 unchanged (96% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Class B Common Stock is listed and began trading on the Nasdaq Capital Market tier of Nasdaq on February 3, 2023, under the symbol “ASST”.

Prior to the listing, there was no public market for our common stock.

of Holders of Our Common Stock

Market Information

Our Class B Common Stock is listed and began

trading on the Nasdaq Capital Market tier of Nasdaq on February 3, 2023, under the symbol “ASST”.

Prior to the listing, there

was no public market for our common stock.

Number of Holders of Our Common Stock

As of March 29, 2024, there was one holder of

2 unchanged sentences

In computing the number

of holders of record of our common stock, each broker-dealer and clearing corporation holding shares on behalf of its customers is counted

as a single holder.

of Proceeds from Registered Securities

February 7, 2023, we completed the IPO.

Pursuant to an Underwriting Agreement, in exchange for Boustead’s firm commitment to purchase

the IPO Shares, we agreed to sell the IPO Shares to Boustead at the IPO Price of $4.65 (93% of the public offering price per share of

$5.00, after deducting underwriting discounts and commissions).

We also agreed to a non-accountable expense allowance of 0.75% of the

We also agreed to reimburse the underwriters for certain offering expenses.

In addition, we issued Boustead the Representative’s

The Representative’s Warrant will have an exercise price of $6.25 per share, which is equal to 125% of the IPO Price,

subject to adjustment, a cashless exercise provision, and may be exercised at any time for five years following the date of issuance.

We also granted the underwriters a 45-day option to purchase up to an additional 225,000 shares of Class B Common Stock at the IPO Price

less the underwriting discounts and commissions, non-accountable expense allowance, offering expenses and certain other underwriting

compensation, representing 15% of the IPO Shares.

The closing of the IPO took place on February 7, 2023.

At the closing, the Company sold the IPO Shares for total gross proceeds of $7,500,000.

After deducting underwriting discounts and commissions totaling $525,000, the non-accountable expense allowance totaling $56,250, and

other expenses from the IPO, the Company received net proceeds of approximately $6.6 million.

The Company also issued the Representative’s

Warrant to purchase 105,000 shares of Class B Common Stock.

Underwriting Agreement contains customary representations, warranties and covenants by the Company, customary conditions to closing,

indemnification obligations of the Company and the underwriters, 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.

IPO Shares were offered and sold and the Representative’s Warrant was issued pursuant to the Registration Statement, initially

filed with the SEC on September 2, 2022, and declared effective by the SEC on February 2, 2023, and the final prospectus, dated February

of holders of record of our common stock, holders whose shares are held in nominee or “street name” accounts through banks,

brokers or other financial institutions are not included.

Use of Proceeds from Registered Securities

The closing of our initial

public offering took place on February 7, 2023, pursuant to the Underwriting Agreement.

At the closing, the Company sold the IPO Shares

for total gross proceeds of $7,500,000.

After deducting the underwriting discounts, commissions, non-accountable expense allowance, and

other expenses from the initial public offering, the Company received net proceeds of approximately $6.6 million.

Other terms of and

agreements relating to the Underwriting Agreement and the underwriter are described under Item 1.

“ Business – Corporate

Structure and History – Initial Public Offering and Underwriting Agreement ” and Item 7.

“ Management’s

Discussion and Analysis of Financial Condition – Liquidity and Capital Resources – Engagement Letter with Boustead Securities,

The IPO Shares were

offered and sold, and the Representative’s Warrant was issued, pursuant to the IPO Registration Statement, initially filed with

the SEC on September 2, 2022, and declared effective by the SEC on February 2, 2023, and the IPO Public Offering Prospectus, dated February

2, 2023, filed with the SEC on February 6, 2023 pursuant to Rule 424(b)(4) of the Securities Act.

The IPO Shares, Representative’s

Warrant and the Class B Common Stock underlying the Representative’s Warrant were registered under the Registration Statement.

The Registration Statement disclosed that the Company intended to use the net proceeds from the IPO for investment in corporate infrastructure,

marketing and promotion of Discord communities, social campaigns, and the Company’s “AE.360.DDM” Discord design, development

and management service, expansion of “SiN”, the Company’s social influencer network, increasing staff and company personnel,

and general working capital, operating, and other corporate expenses.

addition, the Registration Statement registered for resale a total of 1,500,000 shares of Class B Common Stock by the selling stockholders

named in the Registration Statement.

Any sales of these shares occurred at a fixed price of $5.00 per share until the Class B Common

Stock was listed on Nasdaq on February 3, 2023.

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 will not receive any proceeds from

the sale of Class B Common Stock by the selling stockholders.

The Company has no knowledge of whether any of the shares of Class B Common

Stock that may be sold by the selling stockholders have been sold.

total, the Registration Statement registered for sale shares of Class B Common Stock with a maximum aggregate offering price of $8,625,000,

representing the right to sell up to 1,725,000 shares of Class B Common Stock at the IPO Price upon full exercise of the over-allotment

the Representative’s Warrant;

shares of Class B Common Stock underlying the Representative’s Warrant with a maximum

aggregate offering price of $754,687.50, representing rights to purchase up to 120,750 shares of Class B Common Stock at the exercise

price of $6.25 per share, upon full exercise of the over-allotment option;

and 1,500,000 shares of Class B Common Stock on

behalf of certain selling stockholders.

As of the date of this report, the IPO Shares were sold for aggregate gross proceeds of

$7,500,000 and the Representative’s Warrant was issued with the right to purchase up to 105,000 shares of Class B Common Stock

at $6.25 per share for gross proceeds of up to $656,250.

As of the date of this report, the securities issuable upon exercise of the

over-allotment and the securities issuable upon exercise of the Representative’s Warrant have not been sold.

Company’s officers, directors, and certain stockholders who, prior to the IPO, held shares of Class B Common Stock or the Class

A Common Stock, have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for

the sale of or otherwise dispose of any shares of Class A Common Stock or Class B Common Stock or other securities convertible into or

exercisable or exchangeable for shares of Class A Common Stock or Class B Common Stock for a period of 6 months, 9 months or 12 months,

as applicable, without the prior written consent of Boustead.

A copy of each of the

Underwriting Agreement and the Representative’s Warrant is filed as Exhibit 10.24 and Exhibit 4.5 to this Annual Report, respectively,

and the description above is qualified in its entirety by reference to each such exhibit.

of December 31, 2022, we had used none of the proceeds from the IPO because the proceeds from the IPO were not received until February

of the date of this report, none of the proceeds from the IPO were used to make direct or indirect payments to any of our directors or

officers, any of their associates, any persons owning 10% or more of any class of our equity securities, or any of our affiliates, or

direct or indirect payments to any others other than for the direct costs of the offering.

has not been, and we do not expect, any material change in the planned use of proceeds from the IPO as described in the Registration

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 the IPO 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 IPO 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 prices.

The Company will 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 price of $98,437.50 at the assumed exercise price of $6.25 per share assuming full exercise of the over-allotment

The underwriters’ over-allotment option expired unexercised, and as of the date of this Annual Report, the Representative’s

Warrant has not been exercised.

On April 4, 2023, the

IPO Post-Effective Amendment was filed with the SEC and became effective on April 14, 2023.

The IPO Post-Effective Amendment was required

to be filed to update the IPO Registration Statement’s prospectuses 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, and information

in certain subsequent reports and filings under the Exchange Act.

The IPO 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 stockholders.

Updates to the IPO Public Offering Prospectus and the

IPO Resale Prospectus were included with the IPO Post-Effective Amendment.

As stated in the IPO

Public Offering Prospectus, the Company intended to use the net proceeds from the initial public offering for investment in corporate

infrastructure, marketing and promotion of Discord communities, social campaigns, and the Company’s “AE.360.DDM” Discord

design, development and management service, expansion of “SiN”, the Company’s social influencer network, increasing

staff and company personnel, and general working capital, operating, and other corporate expenses.

The following is our

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 November 16, 2023 until December 31, 2023:

● None was used for construction

of plant, building and facilities;

● None was used for the purchase

and installation of machinery and equipment;

● None was used for purchases of

● None was used for the acquisition

of other businesses;

● None was used for the repayment

of indebtedness;

● $3.5 million was used for working

● None was used for temporary investments.

As of December 31, 2023,

none of the proceeds from the initial public offering were used to make direct or indirect payments to any of our directors or officers,

any of their associates, any persons owning 10% or more of any class of our equity securities, or any of our affiliates, or direct or

indirect payments to any others other than for the direct costs of the offering.

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 IPO Registration

Securities Authorized for Issuance Under Equity

Compensation Plans

See Item 12 “ Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters – Securities

Authorized for Issuance Under Equity Compensation Plans ”.

See Item 12 “ Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Dividend Policy

We have never declared or paid cash dividends

8 unchanged sentences

See also “Item 1A.

Risk Factors – Risks Related to Ownership

of Our Class B Common Stock – We have never paid cash dividends on our stock and do not intend to pay dividends for

the foreseeable future .”

Sales of Unregistered Securities

March 9, 2022, we issued 10 shares of Class A Common Stock for a total purchase price of $1.00 to Asset Entities Limited Liability Company,

a California limited liability company (“California LLC”).

March 28, 2022, we merged with California LLC.

Pursuant to the Agreement and Plan of Merger, the units of California LLC were automatically

converted into shares of Asset Entities Inc.

in the same proportion as the percentage interests of California LLC represented by such

As a result and as further provided in the Agreement and Plan of Merger, on March 28, 2022, AEH, which owned 97.56% of California

LLC’s units, became the holder of 9,756,000 shares of Class A Common Stock of Asset Entities Inc., or 97.56% of the total issued

and outstanding post-merger shares of common stock of Asset Entities Inc., and a holder of 2.44% of California LLC’s units became

the holder of 244,000 shares of Class B Common Stock of Asset Entities Inc., or 2.44% of the total issued and outstanding post-merger

shares of common stock of Asset Entities Inc.

April 21, 2022, we entered into a Cancellation and Exchange Agreement with each of AEH, the holder of 9,756,000 shares of Class A Common

Stock, GKDB, the holder of 200,000 units of membership interests in AEH representing 20.0% ownership of AEH, and the Former GKDB Holders

representing 39.5% ownership in GKDB.

In accordance with these agreements, we and AEH agreed to convert 770,724 shares of AEH’s

Class A Common Stock into 770,724 shares of Class B Common Stock and transfer such shares to GKDB, in exchange for GKDB’s agreement

to cancel and surrender 79,000 of GKDB’s 200,000 units of membership interests in AEH, representing the Former GKDB Holders’

39.5% share of GKDB’s total ownership interest in AEH.

GKDB in turn agreed to the cancellation of 79,000 of its AEH units and transfer

of the 770,724 shares of Class B Common Stock to the Former GKDB Holders in proportion to their former ownership interests in GKDB, in

exchange for the Former GKDB Holders’ agreement to cancel and surrender all of their units of membership interests in GKDB.

770,724 shares of Class B Common Stock transferred to the Former GKDB Holders were derived from the Former GKDB Holders’ 7.9% nominal

indirect interest in AEH’s 9,756,000 shares of Class A Common Stock, which in turn was derived from the Former GKDB Holders’

39.5% ownership of GKDB and, in turn, their nominal indirect interest in 79,000 of GKDB’s 200,000 units, or 20.0% ownership of

The Former GKDB Holders’ nominal indirect interest in AEH’s 9,756,000 shares of Class A Common Stock was therefore automatically

converted into ownership of 770,724 shares of Class B Common Stock upon the conversion and transfer of this number of Class A Common

Stock that were held by AEH to the Former GKDB Holders.

As a result of these transactions, AEH held 8,985,276 shares of Class A Common

Stock and the Former GKDB Holders held a total of 770,724 shares of Class B Common Stock.

June 9, 2022, October 7, 2022, and October 21, 2022, we conducted private placements of shares of Class B Common Stock and entered into

certain subscription agreements with a number of investors.

Pursuant to the agreements, we issued 750,000 shares of Class B Common Stock

at $1.00 per share for a total of $750,000.

The shares were subject to certain lockup provisions until 365 days after the commencement

of trading of our Class B Common Stock, subject to certain exceptions.

However, these lockup provisions have been fully waived.

Company’s common stock had not been listed on a national securities exchange on or before the first anniversary of the final closing

of the private placement, then all of the private placement investors would have been entitled to receive one additional share for each

share originally purchased.

Boustead, which was the representative of the underwriters in the IPO, acted as placement agent in each private

Pursuant to the Boustead Engagement Letter, in addition to payments of a success fee of $52,500, or 7% of the total purchase

price of the shares sold in the private placements, and a non-accountable expense allowance of $7,500, or 1% of the total purchase price

of the shares sold in the private placement, we agreed to issue Boustead five-year warrants to purchase up to 52,500 shares of Class

B Common Stock in aggregate, exercisable on a cashless basis, with an exercise price of $6.25 per share, subject to adjustment.

warrants also provide that if the Company declares or makes any dividend or other distribution of its assets (or rights to acquire its

assets) to holders of shares of common stock, by way of return of capital or otherwise (including, without limitation, any distribution

of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme

of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of the warrants, then, in

each such case, the holder shall be entitled to participate in such Distribution to the same extent that the holder would have participated

therein if the holder had held the number of shares of common stock acquirable upon a complete exercise of the warrant (without regard

to any limitations on exercise hereof) immediately before the date on which a record is taken for such Distribution, or, if no such record

is taken, the date as of which the record holders of shares of common stock are to be determined for the participation in such Distribution.

Notwithstanding the Boustead Engagement Letter, the warrants do not contain piggyback registration rights and do not contain anti-dilution

provisions for future stock issuances, etc., at a price or at prices below the exercise price per share, or provide for automatic exercise

immediately prior to expiration.

A copy of each warrant issued to Boustead, dated June 9, 2022, October 7, 2022 and October 21, 2022,

and of the Form of Private Placement Subscription Agreement, is attached hereto as Exhibit 4.2, Exhibit 4.3, Exhibit 4.4, and Exhibit

10.23 to this Annual Report, respectively, and the description above is qualified in its entirety by reference to each such exhibit.

Business – Corporate Structure and History – Initial Public Offering ” for a

description of related terms of the Boustead Engagement Letter.

otherwise stated above, the issuances of these securities were made in reliance upon exemptions provided by Section 4(a)(2) of the

Securities Act and/or Rule 506(b) of Regulation D thereunder for the offer and sale of securities not involving a public offering and

in reliance on similar exemptions under applicable state laws.

underwriter was engaged in connection with the foregoing sales of securities.

The Company has reason to believe that all of the foregoing

purchasers were familiar with or had access to information concerning the operations and financial conditions of the Company, and all

of those individuals or entities purchasing securities represented that they were accredited investors, acquiring the shares for investment

and without a view to the distribution thereof.

At the time of issuance, all of the foregoing securities were deemed to be restricted

securities for purposes of the Securities Act and the certificates or book entries representing such securities bear legends to that

Risk Factors – Risks Related to Ownership of Our Class B Common Stock – We

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

Recent Sales of Unregistered Securities

During 2023, the Company did not sell any equity

securities that were not registered under the Securities Act and that were not previously disclosed in a Quarterly Report on Form 10-Q

or Current Report on Form 8-K where required, except as disclosed below.

On June 30, 2023, the

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

Under the Closing Agreement, the Company agreed to sell to Triton, at its option, shares of Class B Common Stock

having an aggregate value of $1,000,000 (the “Triton Shares”), pursuant to a registration statement to be filed and made effective

for the resale of the Triton Shares.

Subject to the terms of the Triton Closing Agreement, the Company was provided a right to deliver

a closing notice (the “Triton Closing Notice”) and issue the Triton Shares to Triton at any time before September 30, 2023,

pursuant to which Triton had agreed to purchase the Triton Shares for $1,000,000 before deducting a $25,000 administrative fee.

of each of the Triton Shares was agreed to be 85% of the lowest daily volume-weighted average price of the Class B Common Stock during

the five business days prior to the closing of the purchase of the Triton Shares (the “Triton Closing”).

The Triton Closing

was required to occur within five business days after the delivery of the Triton Shares to Triton.

Triton’s obligation to purchase

the Triton Shares was conditioned on the effectiveness of the required registration statement and Triton’s ownership not exceeding

9.99% of the Class B Common Stock outstanding as of June 30, 2023.

The Triton Closing Agreement

contained additional requirements, including that the Company maintain the listing of the Class B Common Stock on the primary market

on which the Class B Common Stock is listed and provide notice to Triton of certain events affecting registration or that may suspend

its right to submit the Triton Closing Notice.

The Company also agreed to provide indemnification against liabilities relating to misrepresentations,

breaches of obligations, and third-party claims relating to the Triton Closing Agreement, with certain exceptions.

The Triton Closing

Agreement provided that it would expire either upon the Triton Closing or September 30, 2023.

On August 1, 2023, the

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

Subject to its terms, the Amended and Restated Closing Agreement provided that the Company may deliver a Closing Notice and issue certain

securities to Triton at any time on or before September 30, 2023, pursuant to which Triton agreed to be required to purchase such securities

of the Company with an aggregate gross purchase price of $1,000,000 in the following manner.

Upon delivery of a Closing Notice and the

issuance and delivery of securities as described below, Triton agreed to purchase 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 was required to 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 delivered to 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

The Amended and Restated

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

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

the Class B Common Stock was required to remain listed on the Nasdaq Capital Market tier of 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 the Boustead Engagement Letter, 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 Item 7.

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

Operations – 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) 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 Warrants.

The registration statement

was declared effective on September 6, 2023.

Under an Amendment to

Amended and Restated Closing Agreement (the “First Triton 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 First Triton 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 First Triton 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 to the sale.

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 delivered to 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.

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.

Under a Second Amendment

to Amended and Restated Closing Agreement (the “Second Triton Amendment”), dated as of December 30, 2023, the Company and

Triton agreed to amend the Amended A&R Closing Agreement to provide that the Amended A&R Closing Agreement will expire on March

31, 2024, instead of December 30, 2023.

The Second Triton Amendment did not amend any of the other provisions of the Amended A&R

Closing Agreement.

Copies of the Closing

Agreement, the Amended and Restated Closing Agreement, the First Triton Amendment, the Second Triton Amendment, the form of the Triton

Pre-Funded Warrants, and the form of the warrants issuable to Boustead in connection with the Amended and Restated Closing Agreement,

as amended, are each attached to the Annual Report as Exhibit 10.25, Exhibit 10.26, Exhibit 10.27, Exhibit 10.30, Exhibit 4.6, and the

description above is qualified in its entirety by reference to such exhibit.

Unless otherwise stated above, the issuances

of these securities were made in reliance upon exemptions provided by Section 4(a)(2) of the Securities Act and/or Rule 506(b) of

Regulation D thereunder for the offer and sale of securities not involving a public offering and in reliance on similar exemptions under

applicable state laws.

Purchases of Equity Securities

The following table provides information about

our repurchases of common stock during the three months ended December 31, 2023:

Total Number of Shares Purchased

Average Price

Paid per Share

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)

Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (1)

October 1, 2023 – October 31, 2023

November 1, 2023 – November 30, 2023

December 1, 2023 – December 31, 2023

(1) On November 27, 2023, the Company announced that its board of

directors has approved a stock repurchase program to purchase up to an aggregate of 1,250,000 shares of its outstanding Class B Common

Acquisitions pursuant to this stock repurchase program may be made through a combination of open market repurchases in compliance

with Rule 10b-18 (“Rule 10b-18”) promulgated under the Exchange Act, privately negotiated transactions, and/or other

transactions at the Company’s discretion.

The Company expects to finance any stock repurchases with existing cash balances.

stock repurchase program may be suspended or discontinued at any time and does not obligate the Company to acquire any amount of common

The stock repurchase program will expire on November 21, 2024, unless otherwise modified by the board of directors.

All shares of Class B Common Stock purchased during the three months ended December 31, 2023, were repurchased pursuant to this publicly-announced

repurchase program and were repurchased in compliance with Rule 10b-18.

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-K

Item 5. Market for Registrant’s Common Equity