What changed in this filing

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Item 1. Financial Statements

2024-05-15 compared with 2023-11-14 · 374 added, 287 removed, 97 unchanged (87% of the section changed)

2 unchanged sentences

UNAUDITED FINANCIAL STATEMENTS

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

Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023

Statements of Operations

3 unchanged sentences

ASSET ENTITIES INC.

Balance Sheets

September 30,

Condensed Balance Sheets

Current Assets

offering costs

Prepaid expenses

Total Current Assets

and equipment, net

AND STOCKHOLDERS' EQUITY

Non-Current Assets

Property and equipment, net

Intangible asset

Total Non-Current Assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

payable and credit card liability

Accounts payable and credit card liability

Contract liabilities

Total Current Liabilities

and contingencies

TOTAL LIABILITIES

Commitments and contingencies

Stockholders’ Equity

4 unchanged sentences

Class A Common Stock;

$ 0.0001 par value, 10,000,000 authorized 8,385,276 shares issued and outstanding

Class B Common Stock;

$ 0.0001 par value, 10,000,000 authorized 7,532,029 and 8,385,276 shares issued and outstanding, respectively

Class B Common Stock;

$ 0.0001 par value, 190,000,000 authorized 6,892,381 and 6,039,134 shares issued, respectively

Treasury Stock, at cost:

Class B Common Stock - 250,000 shares

Additional paid in capital

Accumulated deficit

( 6,945,219 )

STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS' EQUITY

( 5,558,315 )

TOTAL STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

of these unaudited condensed financial statements.

ASSET ENTITIES INC.

Statements of Operations

Condensed Statements of Operations

Three months ended

Nine months ended

September 30,

Operating expenses

8 unchanged sentences

$ ( 1,071,251 )

$ ( 412,992 )

Loss per share of common stock - basic and diluted

1 unchanged sentence

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

of these unaudited condensed financial statements.

ASSET ENTITIES INC.

Statement of Stockholders’

For the nine months ended September 30, 2023:

Condensed Statement of Stockholders’ Equity

For the three months ended March 31, 2024 and

Preferred Stock

Class A Common Stock

Class B Common Stock

Balance - December 31, 2023

$ ( 176,876 )

Class B common stock and warrant issued

Class B Common stock issued for restricted stock awards

$ ( 5,558,315 )

( 1,071,251 )

Balance - March 31, 2023

$ ( 1,698,369 )

Class B Common stock issued for restricted stock awards

( 1,321,057 )

Balance - June 30, 2023

Conversion from Class A to Class B common stock

Stock Based Compensation

( 1,386,904 )

Rounding adjustment

Class B Common stock issued for restricted stock awards

( 1,386,904 )

March 31, 2024

$ ( 176,876 )

Balance - September 30, 2023

$ ( 6,945,219 )

ASSET ENTITIES INC.

Statement of Stockholders’

For the nine months ended September 30, 2022:

Retained earnings

Preferred Stock

1 unchanged sentence

$ ( 627,118 )

Subscription received

Balance - March 31, 2022

Class B common stock and warrant issued

Class B common stock issued as restricted stock awards

( 1,071,251 )

Conversion from Class A to Class B common stock

Class B Common stock issued

Subscription received

Balance - June 30, 2022

( 1,071,251 )

Subscription received

Balance - September 30, 2022

Balance - March 31, 2023

$ ( 1,698,369 )

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

of these unaudited condensed financial statements.

ASSET ENTITIES INC.

Statements of Cash Flows

Condensed Statements of Cash Flows

Three months ended

CASH FLOWS FROM OPERATING ACTIVITIES

3 unchanged sentences

Stock based compensation

Depreciation and amortization

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses

7 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES

Class A common stock subscription proceeds received

Class B common stock subscription proceeds received, net

Deferred offering costs

Net cash provided by financing activities

Net change in cash

Net increase (decrease) in cash

( 1,054,537 )

Cash at beginning of period

Cash at end of period

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for income taxes

Cash paid for interest

NON CASH INVESTING AND FINANCING ACTIVITIES

1 unchanged sentence

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

of these unaudited condensed financial statements.

ENTITIES INC.

NOTES TO FINANCIAL

September 30, 2023

Organization, Description of Business and Liquidity

Asset Entities

(“Asset Entities”, “we”, “us” or the “Company”), began operations as a general partnership

in August 2020 and formed Assets Entities Limited Liability Company in the state of California on October 20, 2020.

The financial statements

reflect the operations of the Company from inception of the general partnership.

On March 15, 2022, the Company filed Articles of Merger

to register and incorporate with the state of Nevada and changed the company name to Asset Entities Inc.

9, 2022, the Company filed Articles of Incorporation with the state of Nevada to authorize the Company to issue 250,000,000 shares,

consisting of 10,000,000 shares of Class A Common Stock, $ 0.0001 par value per share (“Class A Common”), 190,000,000 shares

of Class B Common stock, $ 0.0001 par value per share (“Class B Common”), and 50,000,000 shares of Preferred

Stock, $ 0.0001 par value (the “Preferred Stock”).

28, 2022, all 51,250,000 units of the previously outstanding membership interests were exchanged for 9,756,000 shares

of Class A Common Stock and 244,000 shares of Class B Common Stock.

NOTES TO CONDENSED

FINANCIAL STATEMENTS

As of and for the three

months ended March 31, 2024

Organization, Description of Business

and Liquidity

Asset Entities Inc.

(“Asset Entities”,

is an Internet company providing social media marketing, content delivery, and development and design services across Discord, TikTok,

and other social media platforms.

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

categories of services.

First, we provide subscription upgrades to premium content on our investment education and entertainment servers

Second, we codevelop and execute influencer social media and marketing campaigns for clients.

Third, we design, develop and

manage Discord servers for clients under our “AE.360.DDM” brand.

Our AE.360.DDM service was just released in December 2021.

All of these services – our Discord investment education and entertainment, social media and marketing, and AE.360.DDM services

– are therefore based on our effective use of Discord in combination with ongoing social media outreach on TikTok, Facebook, Twitter,

Instagram, and YouTube.

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

September 30, 2023.

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

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

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

“we”, “us” or the “Company”), began operations as a general partnership in August 2020 and formed

Assets Entities Limited Liability Company in the state of California on October 20, 2020.

The interim financial statements reflect the

operations of the Company from inception of the general partnership.

On March 15, 2022, the Company filed Articles of Merger to register

and incorporate with the state of Nevada and changed the company name to Asset Entities Inc.

On March 9, 2022, the Company filed Articles of

Incorporation with the state of Nevada to authorize the Company to issue 250,000,000 shares, consisting of 10,000,000 shares

of Class A Common Stock, $ 0.0001 par value per share (“Class A Common”), 190,000,000 shares of Class B Common

stock, $ 0.0001 par value per share (“Class B Common”), and 50,000,000 shares of Preferred Stock, $ 0.0001 par

value (the “Preferred Stock”).

On March 28, 2022, all 51,250,000 units

of the previously outstanding membership interests were exchanged for 9,756,000 shares of Class A Common Stock and 244,000 shares

of Class B Common Stock.

Description of Business

Asset Entities is an Internet company providing

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

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

provide subscription upgrades to premium content on our investment education and entertainment servers on Discord.

Second, we codevelop

and execute influencer social media and marketing campaigns for clients.

Third, we design, develop and manage Discord servers for clients

under our “AE.360.DDM” brand.

Our AE.360.DDM service was released in December 2021.

All of these services – our Discord

investment education and entertainment, social media and marketing, and AE.360.DDM services – are therefore based on our effective

use of Discord in combination with ongoing social media outreach on TikTok, Facebook, Twitter, Instagram, and YouTube.

The Company had an accumulated deficit of $ 6,945,219 as of March 31,

2024, cash of $ 1,869,786 as of March 31, 2024, and a net loss of $ 1,386,904 for the three months ended March 31, 2024.

However, the Company

initiated a sale of 621,590 shares of common stock under its Amended and Restated Closing Agreement on March 29, 2024, and intended

to file a “shelf” registration statement and arranged 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, management believes that the Company will have sufficient funds to carry out the Company’s planned operations

for at least the next 12 months from the issuance date of the accompanying interim financial statements.

Summary of Significant Accounting Policies

of Presentation

prepares its financial statements in accordance with rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”)

and generally accepted accounting principles in the United States of America (“GAAP”).

The accompanying interim financial

statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X.

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the Company’s

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

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

While management

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

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

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

The preparation

of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts

of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported

amounts of expenses during the reporting period.

Some of these judgments can be subjective and complex, and, consequently, actual results

may differ from these estimates.

and Cash Equivalents

of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds

and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents.

The Company had no

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

Periodically,

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

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

The Company has not experienced

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

to these deposits is not significant.

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

and do not bear interest.

The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses

in its existing accounts receivable.

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

related to one specific transaction.

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

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

at the time of this report.

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

days past due.

Offering Costs

As of December

31, 2022, deferred offering costs represent legal fees for preparation of any securities purchase agreements or current registration statement.

The Company records these fees as a current asset that will be netted against gross proceeds received from any offering or placements.

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

Basis of Presentation

The Company prepares its financial statements

in accordance with rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”) and generally accepted accounting

principles in the United States of America (“GAAP”).

The accompanying interim financial statements have been prepared in accordance

with GAAP for interim financial information in accordance with Article 8 of Regulation S-X.

Accordingly, they do not include all of the

information and footnotes required by GAAP for complete financial statements.

In the Company’s opinion, all adjustments (consisting

of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the three months

ended March 31, 2024, are not necessarily indicative of the results for the full year.

While management of the Company believes that the

disclosures presented herein are adequate and not misleading, these interim financial statements should be read in conjunction with the

audited financial statements and the footnotes thereto for the year ended December 31, 2023, contained in the Company’s Form 10-K

filed on April 2, 2024.

Use of Estimates

The preparation of interim financial statements

in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of expenses

during the reporting period.

Some of these judgments can be subjective and complex, and, consequently, actual results may differ from

these estimates.

Cash and Cash Equivalents

For purposes of balance sheet presentation and

reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments

with an original maturity of less than 90 days to be cash and cash equivalents.

The Company had no cash equivalents at March 31, 2024

and December 31, 2023.

Periodically, the Company may carry cash balances

at financial institutions more than the federally insured limit of $ 250,000 per institution.

The amount in excess of the FDIC

insurance as of March 31, 2024, was approximately $ 1.38 million.

The Company has not experienced losses on account balances and management

believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

Property and equipment

and equipment are stated at cost.

Depreciation is computed on the straight-line method.

and repairs are charged to expense as incurred.

Property and equipment are stated at cost less

accumulated depreciation and impairment loss, if any.

Property and equipment are depreciated at rates sufficient to write off their costs

less impairment and residual value, if any, over their estimated useful lives on a straight-line basis.

Machinery and Equipment

Office Equipment and Fixtures

The Company did not have any Building, Machinery

and Equipment, and Vehicle as of March 31, 2024.

Maintenance and repairs are charged to expense

Improvements of a major nature are capitalized.

At the time of retirement or other disposition

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

The long-lived

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

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

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

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

cash flows expected to be generated by the assets.

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

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

Value Measurements

uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis,

as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement.

The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining

The three tiers are defined as follows:

At the time of retirement or other disposition of property and equipment,

the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in the income.

The long-lived assets of the Company are reviewed

for impairment in accordance with ASC No.

360, “Property, Plant and Equipment” (“ASC No.

360”), whenever events

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

The recoverability of assets to be held

and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated

by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying

amount of the assets exceeds the fair value of the assets.

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.

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

Management uses considerable judgment to determine key assumptions, including projected revenue, royalty rates and appropriate

discount rates.

During the three months ended March 31, 2024 and 2023, there were no intangible asset impairment charges.

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.

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

Intangible assets internally

developed are measured at cost.

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

the application development stage.

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

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.

Fair Value Measurements

The Company uses a three-tier fair value

hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities

measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement.

The hierarchy requires the Company

to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value.

The three tiers

are defined as follows:

● Level 1—Observable inputs

5 unchanged sentences

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

The Company’s

financial instruments, including cash, accounts receivable, prepaid expense, deferred offering costs and contract liabilities, other current

liabilities are carried at historical cost.

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

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

recognizes revenue utilizing the following steps:

The Company’s financial instruments, including

cash, prepaid expense and contract liabilities, other current liabilities are carried at historical cost.

At March 31, 2024 and December

31, 2023, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.

Advertising Expenses

The Company expenses advertising costs as they

Total advertising expenses were $ 143,915 and $ 19,697 for the three months ended March 31, 2024 and 2023, respectively, and have

been included as part of general and administrative expenses.

and Development

and development costs are charged to expense as incurred.

Accordingly, internal research and development costs are expensed as incurred.

Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been

achieved as defined under the applicable agreement.

incurred research and development expenses of $ 119,009 and $ 0 for the three months ended March 31, 2024 and 2023 ,

respectively , and have been included as part of contract labor .

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.

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

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

(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.

(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.

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 weeks.

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

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

As of September 30, 2023 and December

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

Contract liabilities are typically expected to be recognized

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

per Share of Common Stock

has adopted 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 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.

The Company would account for the potential dilution

from convertible securities using the as-if converted method.

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.

Contract Liabilities

Contract liabilities consist of quarterly and

annual subscription revenue that have not been recognized.

Revenue under these agreements is recognized over the related service period.

As of March 31, 2024 and December 31, 2023, total contract liabilities were $ 2,031 and $ 3,445 respectively.

Contract liabilities

are expected to be recognized as revenue over a period not to exceed twelve (12) months.

Earnings Per Share of Common Stock

The Company has adopted 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

In the accompanying interim 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.

The Company 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 September 30, 2023, dilutive potential common shares include outstanding warrants.

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

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.

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 and their

respective tax bases.

Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax

rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment

Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities.

components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion

or all of the deferred tax assets will not be realized.

follows ASC 850, “ Related Party Disclosures ”, for the identification of related parties and disclosure of related party

transactions and balances.

and Contingencies

follows ASC 450-20, “Loss Contingencies” , to report accounting for contingencies.

Liabilities for loss contingencies

arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability

has been incurred and the amount of the assessment can be reasonably estimated.

Accounting Pronouncements

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.

Early adoption is permitted.

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

its financial statements.

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.

As of March 31, 2024, dilutive potential

common shares include outstanding warrants.

Related Parties

The Company follows ASC 850, “Related Party Disclosures” , for

the identification of related parties and disclosure of related party transactions and balances.

There were no related party transactions

except management fees.

During the three months ended March 31, 2024 and 2023, the Company paid management fees to their controlling members

totaling $ 862,567 and $ 749,864 , respectively.

Recent Accounting Pronouncements

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 interim financial

Property and Equipment

Property and equipment consisted of the following:

Office equipment

Accumulated depreciation

During the three months ended March 31, 2024 and

2023, the Company recorded depreciation of $ 1,068 and $ 0 , respectively.

Intangible Assets

Intangible assets consist of the following:

Purchased software

Stockholders’ Equity

Capital Stock

9, 2022, the Company filed Articles of Incorporation with the state of Nevada to authorize the Company to issue 250,000,000 shares,

consisting of 10,000,000 shares of Class A Common Stock, $ 0.0001 par value per share (“Class A Common”), 190,000,000 shares

of Class B Common stock, $ 0.0001 par value per share (“Class B Common”), and 50,000,000 shares of Preferred

Stock, $ 0.0001 par value (the “Preferred Stock”).

28, 2022, all 51,250,000 units of the previously outstanding membership interests were exchanged for 9,756,000 shares

of Class A Common Stock and 244,000 shares of Class B Common Stock.

shall have the authority to issue the shares of Preferred Stock in one or more series with such rights, preferences and designations as

determined by the Board of Directors of the Company.

A Common Stock

of Class A Common Stock entitles the holder to ten (10) votes, in person or proxy, on any matter on which an action of the stockholders

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

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

B Common Stock

of Class B Common Stock entitles the holder to one (1) vote, in person or proxy, on any matter on which an action of the stockholders

of the Company is sought.

3, 2023, the Company closed an initial public offering of its class B common stock.

The Company raised total gross proceeds of $ 7,500,000 in

the offering, and after deducting $ 884,880 of underwriting discounts and commissions, the non-accountable expense allowance, and

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

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

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

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

31, 2022, respectively.

Authorized Capital Stock

On March 9, 2022, the Company filed Articles of

Incorporation with the state of Nevada to authorize the Company to issue 250,000,000 shares, consisting of 10,000,000 shares

of Class A Common Stock, $ 0.0001 par value per share (“Class A Common”), 190,000,000 shares of Class B Common

stock, $ 0.0001 par value per share (“Class B Common”), and 50,000,000 shares of Preferred Stock, $ 0.0001 par

value (the “Preferred Stock”).

On March 28, 2022, all 51,250,000 units

of the previously outstanding membership interests were exchanged for 9,756,000 shares of Class A Common Stock and 244,000 shares

of Class B Common Stock.

Preferred Stock

The Company shall have the authority to issue

the shares of Preferred Stock in one or more series with such rights, preferences and designations as determined by the Board of Directors

of the Company.

Class A Common Stock

Each share of Class A Common Stock entitles the

holder to ten (10) votes, in person or proxy, on any matter on which an action of the stockholders of the Company is sought and is convertible

by the holder into one (1) share of Class B Common Stock.

As part of a share conversion in March 2022, the

Company converted the 97.56 % membership interest to 9,756,000 shares of Class A Common Stock of the Company.

has reflected this conversion for all periods presented.

The Company had 7,532,029 and

8,385,276 shares of Class A Common Stock issued and outstanding as of March 31, 2024 and December 31, 2023, respectively.

Class B Common Stock

Each share of Class B Common Stock entitles the

holder to one (1) vote, in person or proxy, on any matter on which an action of the stockholders of the Company is sought.

The Company had 6,892,381 and 6,039,134 shares

of Class B Common Stock issued and outstanding as of March 31, 2024 and December 31, 2023, respectively.

Three months ended March 31, 2024

During the three months ended March 31, 2024,

853,247 shares of Class A common stock were converted into 853,247 shares of Class B common stock.

Treasury stock

During the year ended December 31, 2023, the Company

repurchased 250,000 shares of Class B Common stock at $ 176,876 and recorded as treasury stock as of March 31, 2024 and

December 31, 2023.

Triton Purchase Agreement

On June 30, 2023, the Company, entered into a

Closing Agreement (the “Closing Agreement”) with Triton.

Under the Closing Agreement, the Company agreed to sell to Triton

shares of class B common stock, $ 0.0001 par value per share, of the Company (the “Class B Common Stock”), having a total

value, as determined under the Amended and Restated Closing Agreement, of $ 1,000,000 .

On August 1, 2023, the Company and Triton entered

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

Subject to the terms of the

Amended and Restated Closing Agreement, the Company may deliver a closing notice (the “Closing Notice”) and issue certain

securities to Triton at any time on or before April 30, 2024, pursuant to which Triton will be obligated to purchase such securities of

the Company with an aggregate value of $ 1,000,000 in the following manner.

Upon delivery of the Closing Notice, Triton must purchase

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

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

and together with the Triton Shares, the “Triton Securities”) that may be exercised to purchase an amount of newly-issued

shares of Class B Common Stock (the “Triton Warrant Shares”), such that the aggregate price of the Triton Shares and the Triton

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

gross purchase price of $ 1,000,000 .

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

will be set at 85 % of the lowest daily volume-weighted average price of the Class B Common Stock during the five (5) business days

before and five business days after the date of the Closing Notice.

2022 Equity Incentive Plan

number of shares of Class B Common Stock that may be issued pursuant to awards granted under the 2022 Plan is 2,750,000 shares.

The maximum number of shares of Class B Common

Stock that may be issued pursuant to awards granted under the 2022 Plan is 2,750,000 shares.

Awards that may be granted include:

(a) Incentive Stock Options, or ISO (b) Non-statutory Stock Options, (c) Stock Appreciation Rights,

(d) Restricted Stock, (e) Restricted Stock Units, or RSUs, (f) Stock granted as a bonus or in lieu of another award, and (g) Performance

These awards offer us and our shareholders the possibility of future value, depending on the long-term price appreciation of our

Class B Common Stock and the award holder’s continuing service with us.

shares to directors vest quarterly for one year from the date of grantee’s appointment as a director.

The RSA shares to officers

vest annually over three years from the grant date.

RSA shares are measured at fair market value on the date of grant and stock-based

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

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

As of September 30, 2023, 127,000 RSA

shares have vested.

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

Stock which is equal to 7 % of the aggregate number of shares of Class B Common Stock sold in the above mentioned initial public offering.

These warrants carry an exercise price of $ 6.25 per share, which is equal to 125 % of the public offering price, subject to adjustment,

the warrants also include a cashless exercise provision;

these warrants may be exercised at any time for five years following

the date of issuance.

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

(a) Incentive Stock Options, or ISO (b) Non-statutory Stock Options, (c) Stock Appreciation Rights, (d) Restricted Stock, the Restricted

Stock Units, or RSUs, (f) Stock granted as a bonus or in lieu of another award, and (g) Performance Awards.

These awards offer us and

our shareholders the possibility of future value, depending on the long-term price appreciation of our Class B Common Stock and the award

holder’s continuing service with us.

The RSA shares to directors vest quarterly for one year from the date

of grantee’s appointment as a director.

The RSA shares to officers vest annually over three years from the grant date.

are measured at fair market value on the date of grant and stock-based compensation expense is recognized as the shares vest with a corresponding

offset credited to additional paid-in-capital.

For the three months ended March 31, 2024 and 2023, the Company recorded stock-based compensation

expense of $ 326,871 and $ 200,210 , respectively.

As of March 31, 2024, 674,330 RSA shares have vested.

As of March 31, 2024, there was $ 2,156,428 of

unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period

of 1.87 years.

A summary of activity during the three months

ended March 31, 2024, follows:

Exercise Price

Outstanding, December 31, 2023

Outstanding, September 30, 2023

outstanding warrants are exercisable as of September 30, 2023.

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

Outstanding, March 31, 2024

All the outstanding warrants are exercisable as

of March 31, 2024.

The intrinsic value of the warrants as of March 31, 2024, is $ 0 .

Subsequent Events

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

available to be issued.

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

In October 2023, following the delivery of a Closing

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

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

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

agreement was extended to December 30, 2023.

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

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

until December 30, 2023.

Management evaluated all events from the date

of the balance sheet, which was March 31, 2024 through May 15, 2024 which was the date these financial statements were available

Based on our evaluation no material events have occurred that require disclosure other than as disclosed below.

On March 27, 2024, the

Company delivered a Closing Notice to Triton (the “Second Closing Notice”) for the purchase of 621,590 shares of the

Company’s Class B Common Stock to Triton Funds LP, a Delaware limited partnership (“Triton”),.

The price of the shares

was required 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 shares (the “Triton Closing”), and the Triton Closing was required to occur within five

business days after the date that the Triton Shares were received by Triton, in accordance with the Amended and Restated Closing Agreement,

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

as of September 27, 2023, between the Company and Triton, the Second Amendment to Amended and Restated Closing Agreement, dated as of

December 30, 2023, between the Company and Triton, and the Third Amendment to Amended and Restated Closing Agreement, dated as of March

29, 2024, between the Company and Triton (as amended, the “Amended and Restated Closing Agreement”).

On April 10, 2024, the

date of the Triton Closing, the price of the Triton Shares was determined to be $ 0.34 per share based on the lowest daily volume-weighted

average price of the Class B Common Stock during the five business days prior to the Triton Closing.

On April 17, 2024, the Company received

gross proceeds of $ 211,341 .

In connection with the

Triton Closing, pursuant to the engagement letter agreement between the Company and Boustead Securities,

LLC (“Boustead”), dated November 29, 2021, and the underwriting agreement between

the Company and Boustead, as representative of the underwriters of the Company’s initial public offering, dated February 2, 2023 ,

the Company paid Boustead, as placement agent compensation, a total of $ 16,907 , equal to 7 % of the aggregate purchase price and a non-accountable

expense allowance equal to 1 % of the aggregate purchase price for the Triton Shares.

In addition, the Company issued a warrant to Boustead

for the purchase of 43,511 shares of Class B Common Stock, equal to 7 % of the number of the Triton Shares, with an exercise price of $ 0.34

per share, equal to the purchase price per share of the Triton Shares (the “Tail Warrant”).

Warrant is exercisable for a period of five years and contains cashless exercise provisions.

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

What changed 10-Q

Item 1. Financial Statements