What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-05-15 compared with 2023-11-14 · 429 added, 493 removed, 220 unchanged (81% of the section changed)

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and understanding of our plans and financial condition .

The following financial information is derived from our condensed consolidated

financial statements and should be read in conjunction with such condensed consolidated financial statements and notes thereto set forth

The following financial information is derived from our condensed

financial statements and should be read in conjunction with such condensed financial statements and notes thereto set forth

elsewhere herein.

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This report contains forward-looking statements

that are based on our management’s beliefs and assumptions and on information currently available to us.

All statements other than

statements of historical facts are forward-looking statements.

These statements relate to future events or to our future financial performance

and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance

or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied

by these forward-looking statements.

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

impact of the COVID-19 pandemic on our operations and

financial condition;

that are based on our management’s beliefs and assumptions and on information currently av ailable

All statements other than statements of historical facts are forward-looking statements.

These statements relate to future events

or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual

results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance

or achievements expressed or implied by these forward-looking statements.

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

statements about:

ability to introduce new products and services;

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government policies and regulations relating to our industry.

In some cases, you can identify forward-looking

statements by terms such as “may,” “could,” “will,” “should,” “would,” “expect,”

“plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,”

“potential,” “project” or “continue” or the negative of these terms or other comparable terminology.

some cases, you can identify forward-looking statements by terms such as “may,” “could,” “will,”

“should,” “would,” “expect,” “plan,” “intend,” “anticipate,”

“believe,” “estimate,” “predict,” “potential,” “project” or “continue”

or the negative of these terms or other comparable terminology.

These statements are only predictions.

You should not place undue reliance on forward-looking statements because they involve known and

unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results.

Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Item

Risk Factors ” and elsewhere in this report.

If one or more of these risks or uncertainties occur, or if our underlying

assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking

You should not place undue reliance

on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases,

beyond our control and which could materially affect results.

Factors that may cause actual results to differ materially from cu rrent

expectations include, among other things, those listed under “Item 1A.

Risk Factors ” in our Annual Report on Form

10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on April

2, 2024 (the “2023 Annual Report”).

If one or more of these risks or uncertainties occur, or if our underlying assumptions

prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements.

No forward-looking statement is a guarantee of future performance.

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relate only to events or information as of the date on which the statements are made in this report.

Except as expressly required by the

federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new

information, future events, changed circumstances or any other reason.

Except as expressly required by

the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result

of new information, future events, changed circumstances or any other reason.

Asset Entities is a technology company providing

social media marketing and content delivery services across Discord 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.

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 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” brand services.

We also offer Ternary v2, a cloud-based subscription management and payment processing

solution for Discord communities, which includes a suite of customer relations management tools and Stripe-verified payment processing.

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

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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 combined server user member base was approximately 225,000 as

of September 30, 2023.

our primary market, our 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 209,417 as of May

Our social media and marketing services utilize

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

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

as well as increase membership in our own servers.

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

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in the growing market for Discord servers.

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

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

We believe that we are a leading provider of all

of these services, 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 in part on the number of

paying subscribers to our Discord servers.

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

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

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

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

Impact of COVID-19 Pandemic

The global pandemic of a novel strain of coronavirus,

or COVID-19, prompted public health authorities and governments at local, national and international levels to announce various measures

to counter the pandemic.

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

and workplace closures, 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.

Conversely, we believe we have experienced a substantial

decrease in subscriptions and related revenues compared to those generated during 2021 largely as a result of the reversal of COVID-19-pandemic

countermeasures.

We believe that the general full reopening of schools, workplaces, social settings, and travel services in most of the

United States as of the first quarter of 2022 has reduced demand for online services like ours.

The rapid growth of our revenues from

2020 to 2021 as disclosed in previous filings with the SEC is therefore not believed to be indicative of our performance for subsequent

In addition, were the COVID-19 pandemic to resurge

in severity, there is no assurance that it would contribute favorably to our results of operations.

Pandemic-related effects have included

and may in the future include adverse impacts on global economic activity and significant volatility and negative pressure in financial

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

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

Therefore, the manner and extent to which

future pandemic-related measures may impact our results will depend on future developments, which are highly uncertain and cannot

be predicted as of the date of this report.

The pandemic and the current financial, economic and capital markets environment, and future

developments in these 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.

Risk Factors – Risks Related to Our Business and Industry – The

COVID-19 pandemic may cause a material adverse effect on our business ” in our Annual Report on Form 10-K for the fiscal year

ended December 31, 2022.

Emerging Growth Company

We qualify as an “emerging growth company”

under the Jumpstart Our Business Startups Act of 2012 (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:

Through Ternary v2, our subscription management

and payment processing solution for Discord communities, subscribers can monetize and manage their Discord users.

Ternary v2 simplifies

the process for our subscribers to sell memberships to their Discord servers on their websites and collect payments through Stripe with

daily payouts;

add digital products and services and designate purchase options to their Discord servers;

customize their user Discord permissions

and roles and other Discord settings;

and utilize our Discord bot to automatically apply their Discord user settings to authenticate

new users, apply customizable permission sets to users, and remove users when their subscription expire.

As a Stripe-verified partner

through Ternary v2, we can also assist subscribers with integrating other platforms into their Discord servers with open application

programming interfaces, further extending our platform’s capabilities.

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 three months ended March 31, 2024 and 2023, we received revenue from 438 and 382 Asset Entities Discord

server paying subscribers, respectively.

Our Historical Performance

The Company had an accumulated deficit of $6,945,219, and $1,869,786

During the three months ended March 31, 2024 and 2023, we had a net loss of $1,386,904 and $1,071,251, respectively.

the Company has financed its operations primarily through capital raises and sales of its services.

In April 2024, the Company filed a

“shelf” registration statement, which the Company intends to use in connection with one or more new financings.

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 March 31, 2025 and for at least 12 months beyond that

For further discussion, see Item 7.

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

of Operations – Liquidity and Capital Resources ”.

Principal Factors Affectin g

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 and Smaller Reporting Company

qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (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;

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;

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

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and analysis);

with certain greenhouse gas emissions disclosure and related third-party assurance requirements;

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

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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 of 1933, as amended (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

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.

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 of 1933, as amended (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

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

We will remain an emerging growth company until

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debt during the preceding three year period.

Principal Factors Affecting Our Financial Performance

Our 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.

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 August 1, 2023, the

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Any proceeds under the Amended and Restated Closing Agreement

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

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

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

The Amended and Restated

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

These conditions

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

In addition, the Class B Common

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

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

Triton’s purchase requirement was also subject

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

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

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

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

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

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

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

For each of the Triton Shares that

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

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

We were also required to provide

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

and Restated Closing Agreement, with certain exceptions.

On March 27, 2024, the Company delivered a closing

notice (the “Second Closing Notice”) to Triton Funds LP, a Delaware limited partnership (“Triton”), to notify

Triton that it was electing to exercise its right to sell Triton 621,590 shares of Class B Common Stock (the “Second Triton Shares”),

pursuant to the Amended and Restated Closing Agreement, dated as of August 1, 2023, between the Company and Triton (the “Amended

and Restated Closing Agreement”), as amended by the Amendment to Amended and Restated Closing Agreement, dated as of September

27, 2023 (the “First Triton Amendment”), 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 (the “Second Triton Amendment”), and the Third Amendment

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

and Triton (as amended, the “Amended A&R Closing Agreement”).

On April 3, 2024,

the Company issued the Second Triton Shares to Triton.

The amount of the Second Triton Shares was equal

to the amount that remained unsold by the Company to Triton pursuant to the Registration Statement on Form S-1 (File No.

333-274079) initially

filed on August 18, 2023, and declared effective by the SEC on September 6, 2023, to register the offer and resale of up to 885,000 shares

of Class B Common Stock issuable to Triton pursuant to the Amended A&R Closing Agreement (the “Triton Registration Statement”).

The Company’s first sale pursuant to the Triton Registration Statement was of 263,410 shares

of Class B Common Stock in October 2023.

Under the Amended A&R Closing Agreement, the

price of each of the Second 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 prior to the closing of Triton’s purchase of the Second Triton Shares (the “Second

Triton Closing”).

The Second Triton Closing was required to occur within five business days after the delivery of the Second Triton

Shares to Triton.

On April 10, 2024, the date of the Second Triton

Closing, the price of the Second 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 Second

Triton Closing, which was $0.40 per share.

On April 17, 2024, the Company received gross proceeds

In connection with the

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

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

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

Securities, LLC (“Boustead”), dated November 29, 2021 (the “Boustead Engagement Letter”), and the underwriting

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

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

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

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

The Company must also issue Boustead a warrant with respect

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

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

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

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

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

cashless exercise provisions.

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

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

and Restated Closing Agreement occurred.

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

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

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

On August 18, 2023, the

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

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

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

Warrant Shares.

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

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

Under an Amendment to

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

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

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

to provide that up to an aggregate value

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

a Closing Notice;

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

the Amended A&R Closing Agreement.

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

As an incentive to Triton

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

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

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

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

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

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

on that date.

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

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

On the Closing Date, Triton was required

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

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

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

On October 4, 2023, the

First Triton Shares were received by Triton.

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

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

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

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

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

Pursuant to the terms

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

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

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

In connection with the

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

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

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

In addition, the

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

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

February 2, 2023 (the “Underwriting Agreement”) , 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 Second 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 Second Triton Shares, with an exercise price of $0.34 per share, equal to the purchase

price per share of the Second Triton Shares (the “Second Tail Warrant”).

The Second Tail

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

For further discussion

of the Amended A&R Closing Agreement, see “— Liquidity and Capital Resources – Amended and Restated Closing Agreement ”.

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 ”.

Results of Operations

Comparison of Three Months Ended September

Comparison of Three Months Ended March 31,

2024 and 2023

Operations Data

Three Months Ended

Consolidated Operations Data

September 30,

Operating expenses

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Loss from operations

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

for the three months ended September 30, 2022.

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

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

There was no material

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

Operating Expenses .

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

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

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

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

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

the three months ended September 30, 2022.

Loss From Operations .

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

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

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

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

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

the three months ended September 30, 2022.

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

million for the three months ended September 30, 2023.

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

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

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

ended September 30, 2022.

Comparison of Nine Months Ended September

30, 2023 and 2022

Nine Months Ended

Consolidated Operations Data

September 30,

Operating expenses

Contract labor

General and administrative

Management compensation

Total operating expenses

Loss from operations

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

for the nine months ended September 30, 2022.

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

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

There was no material

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

Our revenues increased 104% to approximately $0.12 million for the three months ended March 31, 2024 from approximately $0.06 million

for the three months ended March 31, 2023.

This increase was primarily due to an increase in revenues from the increased number of our

Discord server paying subscribers during the three months ended March 31, 2024, including subscribers to our OptionsSwing server in November

2023, compared to such revenues for the three months ended March 31, 2023, which preceded the acquisition of our OptionsSwing server.

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

Operating Expenses .

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

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

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

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

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

the nine months ended September 30, 2022.

Our total operating expenses increased 34% to approximately $1.5 million for the three months ended March 31, 2024 from approximately

$1.1 million for the three months ended March 31, 2023.

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

and other administrative expenses and administrative cost of public filings of approximately $0.3 million and an increase in management

compensation costs of approximately $0.1 million for the three months ended March 31, 2024 compared to such costs for the three months

ended March 31, 2023.

Loss From Operations .

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

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

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

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

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

the nine months ended September 30, 2022.

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

for the nine months ended September 30, 2023.

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

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

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

ended September 30, 2022.

Our loss from operations increased 29% to approximately $1.39 million for the three months ended March 31, 2024 from approximately $1.1

million for the three months ended March 31, 2023.

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

other administrative expenses and administrative cost of public filings of approximately $0.3 million and an increase in management compensation

costs of approximately $0.1 for the three months ended March 31, 2024 compared to such costs for the three months ended March 31, 2023.

Liquidity and Capital Resources

As of September 30, 2023,

we had cash consisting of approximately $4.0 million.

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

sales of our services.

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

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

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

a public reporting company.

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

of our strategy to expand our business, or other investments or acquisitions we may decide to pursue.

If our own financial resources are

insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit

As of March 31, 2024, we had an accumulated deficit of $6,945,219,

and $1,869,786 in cash.

During the three months ended March 31, 2024 and 2023, we had a net loss of $1,386,904 and $1,071,251, respectively.

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

In April 2024, we filed a “shelf”

registration statement, which the Company intends to use in connection with one or more new financings.

Based on our existing cash resources

and the cash expected to be received from these financings, it is expected that we will have sufficient funds to carry out our planned

operations through March 31, 2025 and for at least 12 months beyond that period, including our costs associated with being a public reporting

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

to expand our business, or other investments or acquisitions we may decide to pursue.

If our own financial resources are insufficient

to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities.

The sale of additional equity securities could result in dilution to our stockholders.

The incurrence of indebtedness would

result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our

The incurrence of indebtedness would result in

increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations.

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

Any failure by us to raise additional funds

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

Any failure by us to raise additional funds on terms

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

Summary of Cash Flow

The following table provides detailed information

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

Nine Months Ended

September 30,

about our net cash flow for the three months ended March 31, 2024 and 2023.

Three Months Ended

Net cash provided by (used in) operating activities

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Net cash used in operating activities was approximately

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

million for the nine months ended September 30, 2022.

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

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

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

ended September 30, 2022.

$1.04 million for the three months ended March 31, 2024, as compared to net cash used in operating activities of approximately $0.82 million

for the three months ended March 31, 2023.

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

administrative expenses and administrative cost of public filings of approximately $0.3 million and an increase in management compensation

costs of approximately $0.1 for the three months ended March 31, 2024 compared to such costs for the three months ended March 31, 2023.

Net cash provided by financing activities was

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

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

The change was primarily due to an increase in financing activities

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

months ended September 30, 2022.

$0 million for the three months ended March 31, 2024, as compared to approximately $6.62 million for the three months ended March 31,

The change was primarily due to the non-recurrence of proceeds from the Company’s

February 2023 initial public offering.

Initial Public

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On February 2, 2023,

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

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

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

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

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

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

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

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

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

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

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

$5.00, after deducting underwriting discounts and commissions and before deducting a 0.75% non-accountable expense allowance), and one

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

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

On February 3, 2023,

13 unchanged sentences

333-267258), as

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

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

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

In addition, a total

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

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

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

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

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

Thereafter, these sales will

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

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

amended, initially filed with the SEC on September 2, 2022, and declared effective by the SEC on February 2, 2023 (the “IPO Registration

Statement”), and the final prospectus, dated February 2, 2023 (the “Final IPO Prospectus”), filed with the SEC on February

6, 2023 pursuant to Rule 424(b)(4) of the Securities Act.

In addition, a total of 1,500,000 shares of Class B Common Stock were registered

for resale by the selling stockholders named in the IPO Registration Statement, and a final prospectus relating to these shares, dated

February 2, 2023 (the “Final Resale Prospectus”), was filed with the SEC on February 6, 2023 pursuant to Rule 424(b)(3) of

the Securities Act.

As stated in the Final Resale Prospectus, any resales of these shares occurred at a fixed price of $5.00 per share

until the Class B Common Stock was listed on Nasdaq.

Thereafter, these sales will occur at fixed prices, at market prices prevailing at

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

The Company would not receive any proceeds from

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

The IPO Registration Statement also registered

3 unchanged sentences

price of $98,437.50 at the assumed exercise price of $6.25 per share assuming full exercise of the over-allotment option .

As of the date of this report, the underwriters’ over-allotment option had expired unexercised and we have not received any

proceeds from the exercise of the Representative’s Warrant because it has not been exercised.

T he underwriters’ over-allotment option expired unexercised.

The Company has not received any proceeds from the exercise

of the Representative’s Warrant because it has not been exercised.

On April 4, 2023, Post-Effective

3 unchanged sentences

The Post-Effective Amendment was

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

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

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

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

stockholders.

required to be filed to update the IPO Registration Statement to include, among other things, the information contained in our Annual

Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on March 31, 2023.

The Post-Effective

Amendment maintained the effectiveness of the IPO Registration Statement with respect to the sale of shares of common stock issuable

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

Updated prospectuses were included with the Post-Effective Amendment.

As stated in the Final

IPO 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” service, expansion

of the Company’s “SiN” service, 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 February 7, 2023 through September 30, 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 real estate;

● None was used for the acquisition

of other businesses;

● None was used for the repayment

of indebtedness;

As stated in the IPO

Registration Statement and the Final IPO 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”

service, expansion of the Company’s “SiN” service, increasing staff and company personnel, and general working capital,

operating, and other corporate expenses.

As stated in the Post-Effective Amendment, the Company intended to use any proceeds from the

exercise of the Representative’s Warrant for working capital and general corporate purposes.

The following is the

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

on February 7, 2023 through March 31, 2024:

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 real estate;

$0 was used for the acquisition of other businesses;

None was used for the repayment of indebtedness;

$4.3 million was used for working capital;

● None was used for temporary

None was used for temporary investments.

As of the date of this report, 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 Statement, the Final

IPO Prospectus, and the Post-Effective Amendment.

any of the Company’s directors or officers, any of their associates, any persons owning 10% or more of any class of the Company’s

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 the Company does not expect,

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

the Final IPO Prospectus or any exercise of the Representative’s Warrant, as described in the Post-Effective Amendment.

Pursuant to the Underwriting Agreement, as of

February 3, 2023, we are subject to a lock-up agreement that provides that we may not, for 12 months, subject to certain exceptions, (i)

offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, change the terms

of, or grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of

capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company;

(ii) file or cause to be filed any registration statement with the SEC relating to the offering of any shares of capital stock of the

Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company (other than pursuant

to a registration statement on Form S-8 for employee benefit plans);

or (iii) enter into any swap or other arrangement that transfers

to another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company, whether any such transaction

described in clause (i), (ii) or (iii) above is to be settled by delivery of shares of capital stock of the Company or such other securities,

in cash or otherwise.

February 3, 2023, we were subject to a lock-up agreement that provided that we may not, without the prior written consent of Boustead,

for 12 months, subject to certain exceptions, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase

any option or contract to sell, change the terms of, or grant any option, right or warrant to purchase, lend, or otherwise transfer or

dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable

for shares of capital stock of the Company;

(ii) file or cause to be filed any registration statement with the SEC relating to the offering

of any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital

stock of the Company (other than pursuant to a registration statement on Form S-8 for employee benefit plans);

or (iii) enter into any

swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock

of the Company, whether any such transaction described in clause (i), (ii) or (iii) above is to be settled by delivery of shares of capital

stock of the Company or such other securities, in cash or otherwise.

The Underwriting Agreement contains other customary

5 unchanged sentences

Engagement Letter with Boustead Securities,

Under the Boustead Engagement Letter, following

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

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

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

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

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

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

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

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

The Boustead Engagement Letter will expire

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

of the Company and Boustead.

We also agreed to provide Boustead a right of

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

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

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

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

In the event that we engage Boustead to provide

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

The Boustead Engagement Letter expired on February

Following the expiration of the Boustead Engagement Letter, we must compensate Boustead with a cash fee equal to 7% and non-accountable

expense allowance equal to 1% of the gross proceeds received by the Company from the sale of securities in an investment transaction,

or up to 10% 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 expiration of the Boustead Engagement

Letter, as described further below (the “Tail Rights”).

The Boustead Engagement Letter also provided Boustead

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

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

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

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

In the event that we engage Boustead

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

agree 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:

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

Rights, Boustead shall receive compensation as follows:

than normal course of business activities, as to any sale, merger, acquisition, joint venture, strategic alliance, license, research

and development, or other similar agreements, Boustead will accrue compensation under a percentage fee of the Aggregate Consideration

(as defined in the Boustead Engagement Letter) calculated as follows:

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

4 unchanged sentences

for Aggregate Consideration above $100,000,000;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The warrant exercise price

will be the lower of:

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

stock as of each such financing closing date;

(ii) the price per share paid by investors

in each respective financing;

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

the financing, the conversion price of such securities;

any investment transaction including any common stock, preferred stock, ordinary shares, convertible stock, limited liability company

or limited partnership memberships, debt, convertible debentures, convertible debt, debt with warrants, stock warrants, stock options

(excluding issuances to Company employees), stock purchase rights, or any other securities convertible into common stock, any form of

debt instrument involving any form of equity participation, and including the conversion or exercise of any securities sold in any transaction,

Boustead shall receive upon each investment transaction closing a success fee, payable in (i) cash, equal to 7% of the gross amount to

be disbursed to the Company from each such investment transaction closing, plus (ii) a non-accountable expense allowance equal to 1%

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

the gross amount to be disbursed to the Company from each such investment transaction closing, including shares issuable upon conversion

or exercise of the securities sold in any transaction, and in the event that warrants or other rights are issued in the investment transaction,

7% of the shares issuable upon exercise of the warrants or other rights, and in the event of a debt or convertible debt financing, warrants

to purchase an amount of Company stock equal to the 7% of the gross amount or facility received by the Company in a debt financing divided

by the warrant exercise share.

The warrant exercise price will be the lower of:

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

common stock as of each such financing closing date;

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

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

or (iv) in the event that warrants

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

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 rules of the Financial Industry Regulatory

8 unchanged sentences

whether a transaction occurs.

The Boustead Engagement Letter contains other

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

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

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

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

by the contracting parties.

Closing Agreement

On August 1, 2023, the

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

Boustead Engagement Letter contains other customary representations, warranties and covenants by the Company, customary conditions to

closing, indemnification obligations of the Company and Boustead, including for liabilities under the Securities Act, other obligations

of the parties, and termination provisions.

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

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

and may be subject to limitations agreed upon by the contracting parties.

and Restated Closing Agreement

to its terms, the Amended A&R Closing Agreement provided that the Company may deliver a closing notice ( “Closing Notice”)

and issue shares of Class B Common Stock and/or certain other securities to Triton at any time on or before April 30, 2024, pursuant

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

The price of any shares of Class B Common Stock sold pursuant to the Amended A&R Closing Agreement 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 prior to the closing of the purchase of the shares, and such closing was required to occur within five business days after the date

that such shares were received by Triton.

On September 29, 2023,

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

the Company delivered the first Closing Notice (the “First Closing Notice”) for the purchase by Triton of 263,410 shares of

Class B Common Stock (the “First Triton Shares”).

On October 4, 2023, the First Triton Shares were received by Triton.

October 11, 2023, 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 a $25,000 administrative fee pursuant to the Amended and Restated Closing Agreement, as amended.

The Company received payment of

this amount on October 13, 2023, less the $25,000 administrative fee.

In connection with the

closing pursuant to the First Closing Notice 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 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 (the “First Tail Warrant”).

The First Tail

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

Copies of the Amended

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

the First Tail Warrant and Second Tail Warrant are each attached to the Annual Report as Exhibit 10.26, Exhibit 10.27, Exhibit 10.30,

Exhibit 10.32, and Exhibit 4.7, respectively, and the description above is qualified in its entirety by reference to the full text of

such exhibits.

See “— Recent

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

occurred subsequent to September 30, 2023.

Developments ” for a description of related developments which occurred subsequent to March 31, 2024.

Contractual Obligations

During the nine months ended September 30, 2023

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

During the three months ended March 31, 2024 and

2023, we had no significant cash requirements for capital expenditures or other cash needs under any contractual or other obligations.

Off-Balance Sheet Arrangements

15 unchanged sentences

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.

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.

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

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.

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

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annual basis.

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

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

Revenue related to marketing campaign contracts

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

Earnings per Share of Common Stock

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

in more detail above (see “ Part 1.

Financial Information – Item 1.

Financial Statements – Note 1 .

Organization,

Description of Business and Liquidity – Organization ” ), 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.

Company adopted Financial Accounting Standards Board (“FASB”) ASC Topic 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.

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.

The effect on deferred tax assets and

liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Deferred income tax expense

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

The 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.

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 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

2022, the FASB issued Accounting Standards Update 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.

Company is currently assessing the impact of the adoption of this standard on its financial statements.

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 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

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis