What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-04-02 compared with 2023-03-31 · 633 added, 484 removed, 48 unchanged (96% of the section changed)

3 unchanged sentences

The following discussion and analysis should be read in conjunction with our

financial statements and the related notes thereto included elsewhere in this report.

The discussion contains forward-looking statements

that are based on the beliefs of management, as well as assumptions made by, and information currently available to, management.

results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including

those discussed below and elsewhere in this report, particularly in the sections titled ” Item 1.

Risk Factors” and

“Special Note Regarding Forward-Looking Statements.”

Entities is a technology company providing social media marketing and content delivery services across Discord, TikTok, and other social

media platforms.

We also design, develop and manage servers for communities on Discord.

Based on the rapid growth of our Discord servers

and social media following, we have developed three categories of services:

(1) our Discord investment education and entertainment services,

(2) social media and marketing services, and (3) our AE.360.DDM services.

All of our services are based on our effective use of Discord

as well as other social media including TikTok, Twitter, Instagram, and YouTube.

Discord investment education and entertainment service is designed primarily by and for enthusiastic Generation Z, or Gen Z, retail investors,

creators and influencers.

Gen Z is commonly considered to be people born between 1997 and 2012.

Our investment education and entertainment

service focuses on stock, real estate, cryptocurrency, and NFT community learning programs designed for the next generation.

believe that Gen Z will continue to be our primary market, our recently-expanded Discord server offering features education and entertainment

content covering real estate investments, which is expected to appeal strongly to older generations as well.

Our current combined server

user membership is approximately 260,000 as of March 2023.

social media and marketing services utilize our management’s social influencer backgrounds by offering social media and marketing

campaign services to business clients.

Our team of social influencer independent contractors, which we call our “SiN” or

“Social Influencer Network”, can perform social media and marketing campaign services to expand our clients’ Discord

server bases and drive traffic to their businesses, as well as increase membership in our own servers.

“AE.360.DDM, Design Develop Manage” service, or “AE.360.DDM”, is a suite of services to individuals and companies

seeking to create a server on Discord.

We believe we are the first company to provide “Design, Develop and Manage,” or DDM,

services for any individual, company, or organization that wishes to join Discord and create their own community.

With our AE.360.DDM

rollout, we are uniquely positioned to offer DDM services in the growing market for Discord servers.

believe that we are a leading provider of all of these services, and that demand for all of our services will continue to grow.

expect to experience rapid revenue growth from our services.

We believe that we have built a scalable and sustainable business

model and that our competitive strengths position us favorably in each aspect of our business.

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

During the years ended December 31, 2022 and 2021, we received

revenue from 622 and 8,694 Asset Entities Discord server paying subscribers, respectively.

Historical Performance

The Company had an accumulated deficit of $627,118

at December 31, 2022 and a net loss of $645,255 during the year ended December 31, 2022.

However, in February 2023, the Company

completed an equity offering which generated net proceeds of $6.6 million.

Consequently, the Company’s existing cash resources

and the cash received from the equity offering are expected to provide sufficient funds to carry out the Company’s planned operations

through the next 12 months.

financial statements and the related notes thereto included elsewhere in this Annual Report.

The discussion contains forward-looking

statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, management.

Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors,

including those discussed below and elsewhere in this Annual Report, particularly in the sections titled “ Item 1A.

Factors” and “ Special Note Regarding Forward-Looking Statements.

Asset Entities is a technology company providing

social media marketing and content delivery services across Discord, TikTok, and other social media platforms.

We also design, develop

and manage servers for communities on Discord.

Based on the rapid growth of our Discord servers and social media following, we have developed

three categories of services:

(1) our Discord investment education and entertainment services, (2) social media and marketing services,

and (3) our AE.360.DDM services.

All of our services are based on our effective use of Discord as well as other social media including

TikTok, X, Instagram, and YouTube.

Our Discord investment education and entertainment service is designed

primarily by and for enthusiastic Generation Z, or Gen Z, retail investors, creators and influencers.

Gen Z is commonly considered to

be people born between 1997 and 2012.

Our investment education and entertainment service focuses on stock, real estate, cryptocurrency,

and NFT community learning programs designed for the next generation.

While we believe that Gen Z will continue to be our primary market,

our recently-expanded Discord server offering features education and entertainment content covering real estate investments, which is

expected to appeal strongly to older generations as well.

Our current combined server user membership is approximately 210,000 as of March

Our social media and marketing services utilize

our management’s social influencer backgrounds by offering social media and marketing campaign services to business clients.

team of social influencer independent contractors, which we call our “SiN” or “Social Influencer Network”, can

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

as well as increase membership in our own servers.

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

service, or “AE.360.DDM”, is a suite of services to individuals and companies seeking to create a server on Discord.

we are the first company to provide “Design, Develop and Manage,” or DDM, services for any individual, company, or organization

that wishes to join Discord and create their own community.

With our AE.360.DDM rollout, we are uniquely positioned to offer DDM services

in the growing market for Discord servers.

We believe that we are a leading provider of

all of these services, and that demand for all of our services will continue to grow.

We expect to experience rapid revenue growth from

our services.

We believe that we have built a scalable and sustainable business model and that our competitive strengths position us

favorably in each aspect of our business.

Our revenue depends on the number of paying subscribers

to our Discord servers.

During the years ended December 31, 2023 and 2022, we received revenue from 298 and 8,694 Asset Entities Discord

server paying subscribers, respectively.

Our Historical Performance

The Company had an accumulated deficit of $5,558,315 at December 31,

2023, $2,924,323 in cash at December 31, 2023, and a net loss of $4,931,197 during the year ended December 31, 2023.

The Company initiated

a sale of 621,590 shares of common stock under its Amended and Restated Closing Agreement on March 27, 2024, and the Company intends to

file a “shelf” registration statement and arrange for one or more financings to commence pursuant to such shelf registration

statement shortly after it becomes effective.

Based on the Company’s existing cash resources and the cash expected to be received

from these financings, it is expected that the Company will have sufficient funds to carry out the Company’s planned operations

through December 31, 2024.

For further discussion, see Item 7.

“ Management’s Discussion and Analysis of Financial

Condition and Results of Operations – Liquidity and Capital Resources ”.

Impact of COVID-19 Pandemic

current global pandemic of a novel strain of coronavirus, or COVID-19, and the global measures taken to combat it, may have an adverse

effect on our business.

Public health authorities and governments at local, national and international levels have announced various

measures to respond to the pandemic.

Some measures that directly or indirectly impact our business include voluntary or mandatory quarantines,

restrictions on travel and limiting gatherings of people in public places.

believe that we have fully complied with all federal, state and local requirements relating to COVID-19.

We have undertaken various measures

in an effort to mitigate the spread of COVID-19.

From our founding, we have been a highly efficient remote-first company, which has been

able to continue to function as normal even with pandemic-related stay at home orders and other regulations.

We have also exploited certain

trends related to the COVID-19 pandemic, including its acceleration of global growth in virtual services.

However, the COVID-19 pandemic

has adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets.

The resulting global deterioration in economic conditions and financial volatility may have an adverse impact on discretionary consumer

spending or investing, could also impact our business and demand for our services.

events are rapidly changing, we cannot predict how long the effects of the COVID-19 pandemic and the efforts to contain it could disrupt

our operations or the full extent of that disruption.

Governments could take additional restrictive measures to combat the pandemic

that could further impact our business or the economy in the geographies in which we operate.

It is also possible that the impact of

the pandemic and response on our customers, users, and markets will persist for some time after governments ease their restrictions.

extent to which the 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 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 current global pandemic of a novel strain

of coronavirus, or COVID-19, and the global measures taken to combat it, may have an adverse effect on our business.

Public health authorities

and governments at local, national and international levels have announced various measures to respond to the pandemic.

Some measures

that directly or indirectly impact our business include voluntary or mandatory quarantines, restrictions on travel and limiting gatherings

of people in public places.

We believe that we have fully complied with all

federal, state and local requirements relating to COVID-19.

We have undertaken various measures in an effort to mitigate the spread of

From our founding, we have been a highly efficient remote-first company, which has been able to continue to function as normal

even with pandemic-related stay at home orders and other regulations.

We have also exploited certain trends related to the COVID-19 pandemic,

including its acceleration of global growth in virtual services.

However, the COVID-19 pandemic has adversely impacted global economic

activity and has contributed to significant volatility and negative pressure in financial markets.

The resulting global deterioration

in economic conditions and financial volatility may have an adverse impact on discretionary consumer spending or investing, could also

impact our business and demand for our services.

As events are rapidly changing, we cannot predict

how long the effects of the COVID-19 pandemic and the efforts to contain it could disrupt our operations or the full extent of that disruption.

Governments could take additional restrictive measures to combat the pandemic that could further impact our business or the economy in

the geographies in which we operate.

It is also possible that the impact of the pandemic and response on our customers, users, and markets

will persist for some time after governments ease their restrictions.

The extent to which the pandemic may

impact our results will depend on future developments, which are highly uncertain and cannot be predicted as of the date of this Annual

Report, including 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.

See also “Item 1A.

Factors – Risks Related to Our Business and Industry – The COVID-19 pandemic may cause a material adverse effect on our business ”

Factors Affecting Our Financial Performance

operating results are primarily affected by the following factors:

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

ability to offer competitive pricing;

ability to broaden product or service offerings;

demand and competition;

ability to leverage technology and use and develop efficient processes;

ability to attract and retain talented employees and contractors;

conditions and our market position.

Growth Company

qualify as an “emerging growth company” under the JOBS Act.

As a result, we are permitted to, and intend to, rely on exemptions

from certain disclosure requirements.

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

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

of the Sarbanes-Oxley Act;

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

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

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

and analysis);

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

and “say-on-frequency;” and

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

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

employee compensation.

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

provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

In other words, an emerging

growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We have elected to take advantage of the benefits of this extended transition period.

Our financial statements may therefore not be comparable

to those of companies that comply with such new or revised accounting standards.

will remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which

our total annual gross revenues exceed $1,235,000,000, (ii) the date that we become a “large accelerated filer” as defined

in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds

$700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued

more than $1 billion in non-convertible debt during the preceding three year period.

Public Offering

February 2, 2023, we entered into the Underwriting Agreement with Boustead, as representative of the underwriters named on Schedule 1

thereto, relating to the IPO of the IPO Shares.

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

to purchase the IPO Shares, the Company agreed to sell the IPO Shares to Boustead at the IPO Price of $4.65 (93% of the public offering

price per share of $5.00, after deducting underwriting discounts and commissions and before deducting a 0.75% non-accountable expense

The Company also granted Boustead a 45-day over-allotment option to purchase up to an additional 225,000 shares of Class

B Common Stock at the IPO Price, less the non-accountable expense allowance, from the Company, representing 15% of the IPO Shares.

to the Underwriting Agreement, on February 7, 2023, the Company issued Boustead the Representative’s Warrant.

The Representative’s

Warrant will have an exercise price of $6.25 per share, which is equal to 125% of the public offering price, subject to adjustment, a

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

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, the non-accountable expense allowance, 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 Boustead for the purchase

of 105,000 shares of Class B Common Stock.

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

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

The Company intends 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.

also agreed to provide Boustead the Right of First Refusal for two years following the consummation of the IPO to act as financial advisor,

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

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

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

In the event that we engage Boustead to provide such services, Boustead

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

the Boustead Engagement Letter, during the 12-month period following the termination or expiration of the Boustead Engagement letter,

which will occur no earlier than February 7, 2024 (see below), we must also compensate Boustead for any transaction with a party, including

any investor in a private placement in which Boustead served as placement agent or in the IPO, or any party who became aware of the Company

or who became known to the Company prior to the termination or expiration of the Boustead Engagement Letter.

Such party will include,

but not be limited to, Company officers, directors, employees, consultants, advisors, shareholders, members, and partners.

Engagement Letter will expire upon the later to occur of February 7, 2024 (12 months from the completion date of the IPO) or mutual written

agreement of the Company and Boustead.

the Boustead Engagement Letter, in connection with a transaction as to which Boustead duly exercises the Right of First Refusal or is

entitled to the Tail Rights, Boustead shall receive compensation as follows:

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

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

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

in the Boustead Engagement Letter) calculated as follows:

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

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

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

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

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

for Aggregate Consideration above $100,000,000;

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

convertible stock, LLC or LP memberships, debt, convertible debentures, convertible debt,

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

stock purchase rights, or any other securities convertible into common stock, any form of

debt instrument involving any form of equity participation, and including the conversion

or exercise of any securities sold in any transaction, Boustead shall receive upon each investment

transaction closing a success fee, payable in (i) cash, equal to 7% of the gross amount to

be disbursed to the Company from each such investment transaction closing, plus (ii) a non-accountable

expense allowance equal to 1% of the gross amount to be disbursed to the Company from each

such investment transaction closing, plus (iii) warrants equal to 7% of the gross amount

to be disbursed to the Company from each such investment transaction closing, including shares

issuable upon conversion or exercise of the securities sold in any transaction, and in the

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

issuable upon exercise of the warrants or other rights, and in the event of a debt or convertible

debt financing, warrants to purchase an amount of Company stock equal to the 7% of the gross

amount or facility received by the Company in a debt financing divided by the warrant exercise

The warrant exercise price will be the lower of:

1.) the fair market value price per

share of the Company’s common stock as of each such financing closing date;

price per share paid by investors in each respective financing;

3.) in the event that convertible

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

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

such warrants or other rights;

such warrants will be transferable in accordance with FINRA rules and SEC regulations, exercisable

from the date of issuance and for a term of five years, contain cashless exercise provisions,

be non-callable and non-cancelable with immediate piggy-back registration rights, have customary

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

price per share, at terms no less favorable than the terms of any warrants issued to participants

in the related transaction, and provide for automatic exercise immediately prior to expiration;

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

whether a transaction occurs.

to the Underwriting Agreement, 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.

Holders 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.

Underwriting Agreement and Boustead Engagement Letter contain other customary representations, warranties and covenants by the Company,

customary conditions to closing, indemnification obligations of the Company and Boustead, including for liabilities under the Securities

Act, other obligations of the parties, and termination provisions.

The representations, warranties and covenants contained in the Underwriting

Agreement and Boustead Engagement Letter were made only for purposes of such agreement and as of specific dates, were solely for the

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

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 underwriter’s over-allotment option

has not been exercised 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.

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

the employment letter agreement between the Company and the Company’s Chief Executive Officer and President, Arshia Sarkhani, dated

as of April 21, 2022, the term of the agreement commenced as of the closing of the IPO on February 7, 2023, and will continue for two

years unless terminated earlier in accordance with its terms.

During the term of the agreement, the Company will pay Mr.

annual salary of $240,000 and an initial cash bonus of $10,000.

Sarkhani will be eligible to receive an annual cash bonus as determined

by the board of directors of the Company.

Pursuant to the employment letter agreement, following the closing of the IPO, on February

7, 2023, the Company entered into its standard form of restricted stock award agreement with Mr.

Sarkhani granting restricted stock under

the Plan in the amount of 200,000 shares of Class B Common Stock to vest equally over three years on each anniversary of the agreement.

Upon a change of control of the Company, all of the shares will vest immediately.

Under the employment letter agreement, Mr.

will be eligible to participate in standard benefits plans offered to similarly-situated employees by the Company from time to time,

subject to plan terms and generally applicable Company policies.

The employment letter agreement also has certain confidentiality and

non-competition provisions.

The Company previously entered into its standard form of directors and officers indemnification agreement

Sarkhani, and provided standard directors and officers liability insurance, in accordance with the employment letter agreement.

the employment letter agreement between the Company and the Company’s Chief Experience Officer, Derek Dunlop, dated as of April

21, 2022, the term of the agreement commenced as of the closing of the IPO on February 7, 2023, and will continue for two years unless

terminated earlier in accordance with its terms.

During the term of the agreement, the Company will pay Mr.

Dunlop an annual salary of

$220,000 and an initial cash bonus of $10,000.

Dunlop will be eligible to receive an annual cash bonus as determined by the Company’s

board of directors.

Pursuant to the employment letter agreement, following the closing of the IPO, on February 7, 2023, the Company entered

into its standard form of restricted stock award agreement with Mr.

Dunlop granting restricted stock under the Plan in the amount of

225,500 shares of Class B Common Stock to vest equally over three years on each anniversary of the agreement.

Upon a change of control

of the Company, all of the shares will vest immediately.

Under the employment letter agreement, Mr.

Dunlop will be eligible to participate

in standard benefits plans offered to similarly-situated employees by the Company from time to time, subject to plan terms and generally

applicable Company policies.

The employment letter agreement also has certain confidentiality and non-competition provisions.

previously entered into its standard form of directors and officers indemnification agreement with Mr.

Dunlop, and provided standard

directors and officers liability insurance, in accordance with the employment letter agreement.

the employment letter agreement between the Company and the Company’s Chief Financial Officer, Treasurer and Secretary, Matthew

Krueger, dated as of April 21, 2022, the term of the agreement commenced as of the closing of the IPO on February 7, 2023, and will continue

for two years unless terminated earlier in accordance with its terms.

During the term of the agreement, the Company will pay Mr.

an annual salary of $180,000 and an initial cash bonus of $25,000.

Krueger will be eligible to receive an annual cash bonus

as determined by the Company’s board of directors.

Pursuant to the employment letter agreement, following the closing of the IPO,

on February 7, 2023, the Company entered into its standard form of restricted stock award agreement with Mr.

Krueger granting restricted

stock under the Plan in the amount of 198,000 shares of Class B Common Stock to vest equally over three years on each anniversary of

the agreement.

Upon a change of control of the Company, all of the shares will vest immediately.

Under the employment letter agreement,

Krueger will be eligible to participate in standard benefits plans offered to similarly-situated employees by the Company from time

to time, subject to plan terms and generally applicable Company policies.

The employment letter agreement also has certain confidentiality

and non-competition provisions.

The Company previously entered into its standard form of directors and officers indemnification agreement

Krueger, and provided standard directors and officers liability insurance, in accordance with the employment letter agreement.

of the above employment letter agreements may be terminated by the Company only for “cause”.

“Cause” is defined

as (a) conviction of or plea of guilty or nolo contendere to a felony under the laws of the United States or any state thereof;

(b) commission

of fraud or embezzlement on the Company or any of its subsidiaries;

or criminal penalty against the Company or any of its subsidiaries that causes material financial or reputational harm to the Company

or any of its subsidiaries;

(d) any intentional act of dishonesty resulting or intending to result in personal gain or enrichment at

the expense of the Company or any of its subsidiaries;

(e) a violation by of law (whether statutory, regulatory or common law), causing

a material financial harm or material reputational harm to the Company or any of its subsidiaries;

(f) a material violation of the Company’s

(or any of its subsidiaries’) bona fide, written equal employment opportunity, antidiscrimination, anti-harassment, or anti-retaliation

(g) material breach of this agreement;

(h) the consistent abuse of alcohol, prescription drugs or controlled substances, which

interferes with the performance of the officer’s duties to the Company;

(i) failure to execute the duties and responsibilities

of the officer position which the officer holds;

(j) a breach or default of the officer’s obligations to the Company or under the

or (k) excessive absenteeism other than for reasons of illness.

Each officer may terminate such officer’s employment

letter agreement at will.

addition, the term of, and compensation provided under, each of the employment letter agreements with the Company’s Chief Marketing

Officer, Jackson Fairbanks, Executive Vice-Chairman, Kyle Fairbanks, Chief Operating Officer, and Arman Sarkhani, and the consulting

agreement with the Company’s Executive Chairman, Michael Gaubert, commenced upon the closing of the IPO.

Executive Compensation – Executive Employment and Consulting Agreements ” and “Item 11.

Compensation – 2022 Equity Incentive Plan ” for important related disclosures.

of Operations

following table summarizes our results of operations for the fiscal years ended December 31, 2022 and 2021.

Risk Factors – Risks Related to Our Business and Industry

– The COVID-19 pandemic may cause a material adverse effect on our business ” above.

Principal Factors Affecting Our Financial

Our operating results are primarily affected

by the following factors:

● our ability to acquire new customers

and users or retain existing customers and users;

● our ability to offer competitive

● our ability to broaden product or

service offerings;

● industry demand and competition;

● our ability to leverage technology

and use and develop efficient processes;

● our ability to attract and retain

talented employees and contractors;

● market conditions and our market

Emerging Growth Company and Smaller Reporting

We qualify as an “emerging growth company”

under the JOBS Act.

As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.

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

● have an auditor report on our internal

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

● present three years, instead of two years, of audited financial

statements, with correspondingly reduced “Management’s Discussion and Analysis

of Financial Condition and Results of Operations” disclosure in this Annual Report;

● comply with any requirement that

may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit

firm rotation or a supplement to the auditor’s report providing additional information

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

● comply with certain greenhouse gas

emissions disclosure and related third-party assurance requirements;

● submit certain executive compensation

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

● disclose certain executive compensation

related items such as the correlation between executive compensation and performance and

comparisons of the chief executive officer’s compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also

provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities

Act for complying with new or revised accounting standards.

In other words, an emerging growth company can delay the adoption of certain

accounting standards until those standards would otherwise apply to private companies.

We have elected to take advantage of the benefits

of this extended transition period.

Our financial statements may therefore not be comparable to those of companies that comply with such

new or revised accounting standards.

We will remain an emerging growth company for

up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed

$1,235,000,000, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act,

which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business

day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible

debt during the preceding three year period.

To the extent that we continue to qualify as

a “smaller reporting company,” as such term is defined in Rule 12b-2 under the Exchange Act, after we cease to qualify as

an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us

as a smaller reporting company, including as to:

(i) the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act;

(ii) scaled executive compensation disclosures;

(iii) presenting two years of audited financial statements, instead of three years;

(iv) compliance with certain greenhouse gas emissions disclosure and related third-party assurance requirements.

Recent Developments

On March 27, 2024, the Company delivered a Closing

Notice to Triton (the “Second Closing Notice”) for the purchase of 621,590 shares of Class B Common Stock (the “Second

Triton Shares”), which was the amount of shares of Class B Common Stock remaining under the registration statement.

each of the Second Triton Shares is 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 prior to the closing of the purchase of the Second Triton Shares (the “Second Triton Closing”).

The Second Triton Closing is required to occur within five business days after the delivery of the Second Triton Shares to Triton.

connection with the Second Triton Closing, pursuant to the Boustead Engagement Letter and the Underwriting Agreement, the Company will

pay Boustead a fee equal to 7% of the aggregate purchase price and a non-accountable expense allowance equal to 1% of the aggregate purchase

price for the Second Triton Shares.

In addition, the Company will issue a Tail Warrant to Boustead for the purchase of 43,511 shares

of Class B Common Stock, equal to 7% of the number of the Second Triton Shares, with an exercise price equal to the purchase price per

share of the Second Triton Shares.

Under a Third Amendment

to Amended and Restated Closing Agreement (the “Third Triton Amendment”), dated as of March 29, 2024, 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 April 30, 2024,

instead of March 31, 2024.

The Third Triton Amendment did not amend any of the other provisions of the Amended A&R Closing Agreement.

A copy of the Third Triton Amendment is attached to the Annual Report as Exhibit 10.32, and the description above is qualified in its

entirety by reference to such exhibit.

Results of Operations

The following table summarizes our results of

operations for the fiscal years ended December 31, 2023 and 2022.

Consolidated Operations Data

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Total operating expenses

Income (loss) from operations

Net income (loss)

Loss from operations

Our revenues decreased 19% to approximately $0.27 million for the fiscal year ended December 31, 2023 from approximately $0.34 million

for the fiscal year ended December 31, 2022.

This decrease was primarily due to a decrease in subscription revenue as a result of a decrease

in the number of paying subscribers to 622 for the fiscal year ended December 31, 2022 from 8,694 for the fiscal year ended December

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

During the fiscal

year ended December 31, 2021, COVID-19-related social and economic restrictions, the relative unavailability of vaccines and vaccine

hesitancy, particularly for members of Generation Z, and the emergence of interest in meme stocks and other market developments resulted

in more use of online services like Discord in general, and increased interest from members of Generation Z in services like ours in

Conversely, during the nine months ended fiscal year ended December 31, 2022, the relaxation of COVID-19-related restrictions

on social and work life and the wide availability of COVID-19 vaccines for most individuals reduced interest in online use of Discord

and services like ours.

As a result, we experienced a decrease in subscriptions and related revenues.

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

for the fiscal year ended December 31, 2023, compared to such revenues for the fiscal year ended December 31, 2022.

There was no material

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

Operating Expenses .

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$1.0 million for the fiscal year ended December 31, 2022.

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

Income (Loss) From

Our loss from operations of approximately $0.6 million for the fiscal year ended December 31, 2022 was a change from

income from operations of $14,871 for the fiscal year ended December 31, 2021.

This decrease was primarily due to a decrease in subscription

revenue and an increase in costs associated with the IPO.

Net Income (Loss) .

of approximately $0.6 million for the fiscal year ended December 31, 2022 was a change from net income of $14,871 for the fiscal year

ended December 31, 2021.

This change was primarily due to a decrease in subscription revenue and an increase in costs associated with

This increase was primarily due to an increase in advertising, marketing, payroll

and other administrative expenses associated with the Company’s February 2023 initial public offering and administrative cost of

public filings of approximately $1.7 million and an increase in management compensation costs of approximately $2.5 million for the fiscal

year ended December 31, 2023 compared to such costs for the fiscal year ended December 31, 2022.

Loss From Operations .

Our loss from operations increased 664% to approximately $5.0 million for the fiscal year ended December 31, 2023 from approximately $0.6

million for the fiscal year ended December 31, 2022.

This increase was primarily due to an increase in advertising, marketing, payroll

and other administrative expenses associated with the Company’s February 2023 initial public offering and administrative cost of

public filings of approximately $1.7 million and an increase in management compensation costs of approximately $2.5 million for the fiscal

year ended December 31, 2023 compared to such costs for the fiscal year ended December 31, 2022.

Our net loss increased 664% to approximately $5.0 million for the fiscal year ended December 31, 2023 from approximately $0.6 million

for the fiscal year ended December 31, 2022.

This change was primarily due to an increase in advertising, marketing, payroll and other

administrative expenses associated with the Company’s February 2023 initial public offering and administrative cost of public filings

of approximately $1.7 million and an increase in management compensation costs of approximately $2.5 million for the fiscal year ended

December 31, 2023 compared to such costs for the fiscal year ended December 31, 2022.

Liquidity and Capital Resources

As of December 31, 2022 and December 31, 2021, we had cash consisting

of $137,177 and $33,731, respectively.

To date, we have financed our operations primarily through contributed capital and sales of our

In June 2022 and October 2022 we raised a total of $750,000 in gross proceeds from private placements of shares of common stock,

before fees and expenses, and in February 2023 we raised approximately $6.6 million in net proceeds from the IPO.

We believe that our

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

the fiscal year ended December 31, 2023 and in the long-term beyond this period, including our anticipated costs associated with being

a public reporting company.

We had an accumulated

deficit of $5,558,315 at December 31, 2023, $2,924,323 in cash at December 31, 2023, and a net loss of $4,931,197 during the year

ended December 31, 2023.

To date, we have financed our operations primarily through contributed capital and sales of our services.

February 2023 we raised approximately $6.6 million in net proceeds from the Company’s initial public offering.

The Company initiated

a sale of 621,590 shares of common stock under its Amended and Restated Closing Agreement on March 27, 2024, and the Company intends to

file a “shelf” registration statement and arrange for one or more financings to commence pursuant to such shelf registration

statement shortly after it becomes effective.

Based on the Company’s existing cash resources and the cash expected to be received

from these financings, it is expected that the Company will have sufficient funds to carry out the Company’s planned operations

through December 31, 2024.

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

8 unchanged sentences

on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern.

The Company had an accumulated deficit of $627,118 at

December 31, 2022 and a net loss of $645,255 during the year ended December 31, 2022.

However, in February 2023, the Company completed

an equity offering which generated net proceeds of $6.6 million.

Consequently, the Company’s existing cash resources and the cash

received from the equity offering are expected to provide sufficient funds to carry out the Company’s planned operations through

the next 12 months.

Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future

and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when

they come due.

Management has plans to seek additional capital through public offerings, private equity offerings, debt financings, and

government or other third-party funding.

These plans, if successful, will mitigate the factors which raise substantial doubt about the

Company’s ability to continue as a going concern.

the sale of additional equity securities could result in dilution to the Company’s stockholders.

The incurrence of indebtedness

would result in increased debt service obligations and could require the Company to agree to operating and financial covenants that would

restrict the Company’s operations.

Financing may not be available in amounts or on terms acceptable to the Company, if at all.

Any failure by the Company to raise additional funds on terms favorable to the Company, or at all, could limit the Company’s ability

to expand the Company’s business operations and could harm the Company’s overall business prospects.

following table provides detailed information about our net cash flow for the periods presented:

Net cash provided by (used in) operating activities

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

Summary of Cash Flow

The following table provides detailed information

about our net cash flow for the periods presented:

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Net change in cash

Cash at beginning of period

Cash at end of period

Net cash provided by operating activities was $23,370 for the year

ended December 31, 2021, as compared to net cash used in operating activities of $602,829 for the year ended December 31, 2022.

was primarily due to an increase in costs associated with the IPO.

had no net cash provided by or used in investing activities for the years ended December 31, 2022 and 2021.

Net cash provided by financing activities was $706,275 for the year

ended December 31, 2022, as compared to no net cash provided by or used in financing activities for the year ended December 31, 2021.

The change was primarily due to the issuance of Class B Common Stock to unaffiliated investors.

the fiscal years ended December 31, 2022 and 2021, we had no significant cash requirements for capital expenditures or other cash needs

under any contractual or other obligations.

Sheet Arrangements

have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,

changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Accounting Policies

discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared

in accordance with generally accepted accounting principles in the United States (“GAAP”).

The preparation of these financial

statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure

of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting

Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances,

the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent

from other sources.

Cash at beginning of year

Cash at end of year

Net cash used in operating activities was approximately

$3.8 million for the fiscal year ended December 31, 2023, as compared to net cash used in operating activities of approximately $0.6 million

for the fiscal year ended December 31, 2022.

The increase was primarily due to an increase in advertising, marketing, payroll and other

administrative expenses associated with the Company’s February 2023 initial public offering and administrative cost of public filings

of approximately $1.7 million and an increase in management compensation costs of approximately $2.5 million for the fiscal year ended

December 31, 2023 compared to such costs for the year ended December 31, 2022.

Net cash used in investing activities was approximately

$0.1 million for the fiscal year ended December 31, 2023, as compared to net cash used in operating activities of $0 for the fiscal year

ended December 31, 2022.

The change was primarily due to the purchase of the Ternary and OptionsSwing software platforms as well as minor

capital expenditures of equipment and fixtures.

Net cash provided by financing activities was approximately $6.7 million

for the fiscal year ended December 31, 2023, as compared to net cash provided by financing activities of approximately $0.7 million for

the fiscal year ended December 31, 2022.

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

February 2023 initial public offering compared to financing from private placements conducted during the year ended December 31, 2022.

Initial Public

Offering and Underwriting Agreement

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.

The Company also issued the Representative’s Warrant.

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.

Pursuant to the Underwriting Agreement, as of

February 3, 2023, we were subject to a lock-up agreement that prevented us, subject to certain exceptions, from 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.

Holders 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 the initial public offering 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 were not subject to lock-up provisions

or such lock-up provisions were waived.

This lock-up period expired on February 2, 2024.

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, LLC ”.

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.

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

Engagement Letter

with Boustead Securities, LLC

Under the Boustead Engagement Letter, during

the term that began on November 29, 2021 and ending 12 months following the termination or expiration of the Boustead Engagement letter,

which occurred on February 7, 2024 (see below), we must compensate Boustead with a cash fee equal to seven percent (7.0%) and non-accountable

expense allowance equal to one percent (1.0%) of the gross proceeds received by the Company from the sale of securities in an investment

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

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

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

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

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

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

The Boustead Engagement Letter expired on February 7, 2024.

We also agreed to provide Boustead the right

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

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

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

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

In the event that we engage Boustead

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

mutually agree otherwise.

Under the Boustead Engagement Letter, in connection

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

compensation as follows:

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

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

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

in the Boustead Engagement Letter) calculated as follows:

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

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

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

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

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

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

● for any investment transaction including

any common stock, preferred stock, ordinary shares, convertible stock, LLC or LP memberships,

debt, convertible debentures, convertible debt, debt with warrants, stock warrants, stock

options (excluding issuances to Company employees), stock purchase rights, or any other securities

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

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

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

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

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

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

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

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

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

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

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

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

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

The warrant exercise price

will be the lower of:

1.) the fair market value price per share of the Company’s common

stock as of each such financing closing date;

2.) the price per share paid by investors in

each respective financing;

3.) in the event that convertible securities are sold in the financing,

the conversion price of such securities;

or 4.) in the event that warrants or other rights

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

● any such warrants will be transferable in accordance with FINRA

rules and SEC regulations, exercisable from the date of issuance and for a term of five years,

contain cashless exercise provisions, be non-callable and non-cancelable with immediate piggy-back

registration rights, have customary anti-dilution provisions and any future stock issuances,

etc., at a price(s) below the exercise price per share, at terms no less favorable than the

terms of any warrants issued to participants in the related transaction, and provide for

automatic exercise immediately prior to expiration;

● reasonable out-of-pocket expenses

in connection with the performance of its services, regardless of whether a transaction occurs.

The Boustead Engagement

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

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

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

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

agreed upon by the contracting parties.

Amended and Restated

Closing Agreement

On August 1, 2023, the Company entered into 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 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, Triton Pre-Funded Warrants that may be

exercised to purchase an amount of newly-issued 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 received by Triton.

Any proceeds under the Amended and Restated Closing Agreement must be reduced by a $25,000 administrative fee.

The Amended and Restated

Closing Agreement also provided that it would expire either upon the date that Triton paid the required purchase price after receiving

a Closing Notice, or September 30, 2023.

The Amended and Restated

Closing Agreement 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 the Beneficial Ownership

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 Tail 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.

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

exercise provisions.

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

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

Restated Closing Agreement occurred.

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

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

Resources – Engagement Letter with Boustead Securities, LLC ”.

On August 18, 2023,

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

333-274079) 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 the First Triton

Amendment, the Company and Triton agreed to amend the Amended and Restated 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;

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

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

the First Closing Notice for the purchase of the 263,410 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 was required to take place within five business days after the Triton Shares were received by Triton.

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

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 the Second Triton

Amendment, 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, and Exhibit 4.6, respectively,

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

Contractual Obligations

During the fiscal years ended December 31, 2023

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

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that

have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues

or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

This discussion and analysis of our financial

condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted

accounting principles in the United States (“GAAP”).

The preparation of these financial statements requires us to make estimates

and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at

the date of the financial statements, as well as the reported expenses incurred during the reporting periods.

Our estimates are based

on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which

form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting

policies are described in more detail in the notes to our financial statements included with this report, we believe that the following

accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant

areas involving management’s judgments and estimates.

We believe our most critical accounting policies and estimates relate to

the following:

Company recognizes revenue utilizing the following steps:

While our significant accounting policies are

described in more detail in the notes to our financial statements included with this Annual Report, we believe that the following accounting

policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas

involving management’s judgments and estimates.

We believe our most critical accounting policies and estimates relate to the following:

Intangible Assets

Intangible assets acquired are recorded at fair

We test our finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying

value of the assets may not be recoverable.

We test our indefinite-lived intangible assets for impairment annually or whenever events

or changes in circumstances indicate that the carrying value of the assets may not be recoverable.

If the carrying value exceeds the

fair value, we recognize an impairment in an amount equal to the excess, not to exceed the carrying value.

Management uses considerable

judgment to determine key assumptions, including projected revenue, royalty rates and appropriate discount rates.

There were no intangible

asset impairment charges in 2023 or 2022.

Finite-lived intangible assets are amortized

using the straight-line method over their estimated useful lives, which ranges from 5 to 15 years.

Our finite-lived intangible assets

include acquired franchise agreements, acquired customer relationships, acquired customer lists, and internally developed software.

indefinite-lived intangible assets include acquired domain names, trade names, and purchased software.

Intangible assets internally developed are measured

We capitalize costs to develop or purchase computer software for internal use which are incurred during the application development

These costs include fees paid to third parties for development services and payroll costs for employees’ time spent developing

the software.

We expense costs incurred during the preliminary project stage and the post-implementation stage.

Capitalized development

costs are amortized on a straight-line basis over the estimated useful life of the software.

The capitalization and ongoing assessment

of recoverability of development costs requires considerable judgment by management with respect to certain external factors, including,

but not limited to, technological and economic feasibility, and estimated economic life.

Impairment of Long-lived Assets Other Than

Long-lived assets with finite lives, primarily

property and equipment, intangible assets, and operating lease right-of-use assets are reviewed for impairment whenever events or changes

in circumstances indicate that the carrying amount of an asset may not be recoverable.

If the estimated cash flows from the use of the

asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down

to its fair value.

Stock Based Compensation

Service-Based Awards

The Company records stock-based compensation

for awards granted to employees, non-employees, and to members of the board for their services on the board based on the grant date fair

value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period, which is generally one

to three years.

For restricted stock awards (“RSAs”)

issued under the Company’s stock-based compensation plans, the fair value of each grant is calculated based on the Company’s

stock price on the date of grant.

Share Repurchase

Share repurchases are open market purchases.

Share repurchases are generally recorded on the settlement date, as treasury stock.

When shares are cancelled, the value of repurchased

shares is deducted from stockholders’ equity through common stock with the excess over par value recorded to accumulated deficit.

Revenue Recognition

The Company recognizes revenue utilizing the

following steps:

(i) Identify the contract, or contracts, with a customer;

(ii) Identify the

performance obligations in the contract;

(ii) Identify the performance obligations in the contract;

(iii) Determine the transaction price;

(iv) Allocate the transaction price to the performance

obligations in the contract;

(v) Recognize revenue when the Company satisfies a performance obligation.

(iv) Allocate the transaction price to the performance obligations in the contract;

(v) Recognize

revenue when the Company satisfies a performance obligation.

Subscriptions

revenue is related to a single performance obligation that is recognized over time when earned.

Subscriptions are paid in advance and

can be purchased on a monthly, quarterly, or annual basis.

Any quarterly or annual subscription revenue is recognized as a contract liability

expensed over the contracted service period.

related to marketing campaign contracts with customers are normally of a short duration, typically less than two (2) weeks.

related to AE.360.DDM contracts with customers are normally of a short duration, typically less than one (1) week.

described in more detail in “Item 1.

Business – Corporate Structure and History – Formation and Merger into Asset

Entities Inc.

”, the business now conducted by the Company was operated as a partnership from August 1, 2020 until October 19,

2020, when it was reorganized as a limited liability company, or LLC, and that LLC was merged into the Company on March 28, 2022.

to that date, the partnership and the subsequent LLC were not subject to federal income tax and all income, deductions, gains and losses

were attributed to the partners or members.

Consequently, no provision was made for federal income taxes payable in respect of the year

ended December 31, 2021.

Company adopted FASB ASC 740, Income Taxes, at its inception.

Under FASB ASC 740, deferred tax assets and liabilities are recognized

for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities

Subscription revenue is related to a single performance

obligation that is recognized over time when earned.

Subscriptions are paid in advance and can be purchased on a monthly, quarterly, or

annual basis.

Any quarterly or annual subscription revenue is recognized as a contract liability recorded over the contracted service

Revenue related to marketing campaign contracts

with customers are normally of a short duration, typically less than two (2) weeks.

AE.360.DDM Contracts

Revenue related to AE.360.DDM contracts with

customers are normally of a short duration, typically less than one (1) week.

Earnings per Share

of Common Stock

The Company has adopted Financial Accounting Standards

Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, “ Earnings per Share ” which

requires presentation of basic earnings per share on the face of the statements of operations for all entities with complex capital structures

and requires a reconciliation of the numerator and denominator of the basic earnings per share computation.

In the accompanying consolidated

financial statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding

during the year.

Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock

and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from

common stock issuable through contingent share arrangements, stock options and warrants unless the result would be antidilutive.

would account for the potential dilution from convertible securities using the as-if converted method.

The Company accounts for warrants

and options using the treasury stock method.

As of December 31, 2023, dilutive potential shares of common stock include outstanding warrants.

As described in more detail above (see Item 1.

“ Business – Corporate Structure and History – Formation and Merger into Asset Entities Inc.

”), the business

now conducted by the Company was operated as a partnership from August 1, 2020 until October 19, 2020, when it was reorganized as a limited

liability company, or LLC, and that LLC was merged into the Company on March 28, 2022.

Prior to that date, the partnership and the subsequent

LLC were not subject to federal income tax and all income, deductions, gains and losses were attributed to the partners or members.

The Company adopted FASB Topic ASC 740, “Income

Taxes” (“FASB ASC 740”), at its inception.

Under FASB ASC 740, deferred tax assets and liabilities are recognized for

the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities

and their respective tax bases.

9 unchanged sentences

or December 31, 2022.

Accounting Pronouncements

June 2022, the FASB issued ASU 2022-03, ASC Subtopic “Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities

Subject to Contractual Sale Restrictions”.

These amendments clarify that a contractual restriction on the sale of an equity security

is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

The amendments

in this update are effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning

after December 15, 2023.

Recent Accounting Pronouncements

In June 2022, the FASB issued Accounting Standards Update (“ASU”)

2022-03, ASC Subtopic “Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale

Restrictions”.

These amendments clarify that a contractual restriction on the sale of an equity security is not considered part

of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

The amendments in this update

are effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December

Early adoption is permitted.

The Company is currently assessing the impact of the adoption of this standard

on its consolidated financial statements.

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.

The amendments

in this Update affect loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive

The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets.

For public entities,

the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.

For the Company which is a smaller reporting company, ASU No.

2019-10 extends the effective dates for two years.

The Company will adopt

this standard beginning January 1, 2023.

The Company is currently evaluating the effect of the adoption of this standard on the consolidated

financial statements and related disclosures.

Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will

have a material impact on its financial statements.

The Company is currently assessing the impact of the adoption of this standard on its consolidated

financial statements.

The Company has considered

all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact

on its financial statements.

Recently Adopted Accounting Standards

In June 2016, the FASB

issued ASU No.

2016-13, Financial Instruments — Credit Losses (Topic 326) — Measurement of Credit Losses on Financial

Instruments , which has been subsequently amended by ASU No.

2018-19, ASU No.

2019-04, ASU No.

2019-05, ASU No.

2019-10, ASU No.

2020-03 (“ASU 2016-13”).

The provisions of ASU 2016-13 modify the impairment model to utilize an expected loss

methodology in place of the currently used incurred loss methodology and require a consideration of a broader range of reasonable and

supportable information to inform credit loss estimates.

The Company adopted ASU 2016-13 on January 1, 2023, using the modified retrospective

The Company’s consolidated financial statements for prior-year periods have not been revised and are reflective of the

credit loss requirements which were in effect for that period.

The adoption of ASU 2016-13 did not have a material impact on the Company’s

consolidated financial statements and related disclosures.

In January 2017, the

FASB issued ASU No.

2017-04, Intangibles-Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment, which simplifies

the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test.

Instead of determining a hypothetical

purchase price allocation to measure goodwill impairment, the Company will compare the fair value of a reporting unit with its carrying

The update also includes a new requirement to disclose the amount of goodwill allocated to reporting units with zero or negative

carrying amounts.

The Company adopted ASU 2017-04 on January 1, 2023.

The adoption of ASU 2017-04 did not have a material impact on the

Company’s consolidated financial statements and related disclosures.

The Company has considered all other recently

issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

full text of our audited consolidated financial statements begins on page F-1 of this Annual Report.

The full text of our audited consolidated financial

statements begins on page F-1 of this Annual Report.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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 7. Management’s Discussion and Analysis