What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-14 compared with 2024-05-15 · 309 added, 191 removed, 280 unchanged (64% of the section changed)

2 unchanged sentences

UNAUDITED FINANCIAL STATEMENTS

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

Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023

Statements of Operations

21 unchanged sentences

$ 0.0001 par value, 50,000,000 authorized

Series A Convertible Preferred Stock;

$ 0.0001 par value, $ 10,000 stated value, 660 designated, 165 and 0 shares issued and outstanding

Common Stock;

10 unchanged sentences

( 5,558,315 )

TOTAL STOCKHOLDERS’ EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

TOTAL STOCKHOLDERS’

TOTAL LIABILITIES AND

STOCKHOLDERS’ EQUITY

The accompanying notes are an integral part

1 unchanged sentence

ASSET ENTITIES INC.

Condensed Statements of Operations

Condensed Statements

of Operations

Three Months Ended

Six months ended

Operating expenses

8 unchanged sentences

( 2,392,308 )

$ ( 1,726,537 )

$ ( 1,321,057 )

$ ( 3,113,441 )

$ ( 2,392,308 )

Loss per share of common stock - basic and diluted

2 unchanged sentences

of these unaudited condensed financial statements.

ASSET ENTITIES INC.

Condensed Statement of Stockholders’ Equity

For the three months ended March 31, 2024 and

ENTITIES INC.

Condensed Statement

of Stockholders’ Equity

For the three and six months ended June 30,

2024 and 2023

A Convertible

Preferred Stock

Balance - December 31, 2023

- December 31, 2023

$ ( 176,876 )

$ ( 5,558,315 )

Conversion from Class A to Class B common stock

Stock Based Compensation

from Class A to Class B common stock

Based Compensation

( 1,386,904 )

3 unchanged sentences

$ ( 6,945,219 )

A Convertible Preferred stock issued

B common stock subscription proceeds received, net

B Common stock issued for restricted stock awards

B Common stock issued for purchase of intangible asset

( 1,726,537 )

- June 30, 2024

$ ( 176,876 )

$ ( 8,671,756 )

ASSET ENTITIES INC.

Condensed Statement

of Stockholders’ Equity

For the three and six months ended June 30,

2024 and 2023

A Convertible

Preferred Stock

Balance - December 31, 2022

- December 31, 2022

$ ( 627,118 )

Class B common stock and warrant issued

Class B common stock issued as restricted stock awards

B common stock and warrant issued

B Common stock issued for restricted stock awards

( 1,071,251 )

Balance - March 31, 2023

- March 31, 2023

$ ( 1,698,369 )

B Common stock issued for restricted stock awards

( 1,321,057 )

- June 30, 2023

$ ( 3,019,426 )

The accompanying notes are an integral part

2 unchanged sentences

Condensed Statements of Cash Flows

Three months ended

Six 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

3 unchanged sentences

( 2,322,108 )

( 1,966,045 )

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment

Purchase of intangible asset

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Series A Convertible Preferred stock issued

Class B common stock subscription proceeds received, net

Net cash provided by financing activities

Net increase (decrease) in cash

( 1,054,537 )

Net change in cash

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

Conversion from Class A to Class B common stock

Class B Common stock issued for purchase of intangible asset

The accompanying notes are an integral part

3 unchanged sentences

FINANCIAL STATEMENTS

As of and for the three

months ended March 31, 2024

Organization, Description of Business

and Liquidity

As of and for the

six months ended June 30, 2024

Organization, Description of

Business and Liquidity

Asset Entities Inc.

6 unchanged sentences

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.

Reverse Stock Split

On June 27, 2024, the

Company filed a Certificate of Change pursuant to Section 78.209 of the Nevada Revised Statutes with the Secretary of State of the State

of Nevada authorizing a 1-for-5 reverse stock split of the Company’s issued and outstanding shares of Class A Common Stock, $ 0.0001

par value per share, and Class B Common Stock, $ 0.0001 par value per share.

The reverse stock split became effective on July 1, 2024.

Prior to the reverse

stock split, the Company was authorized to issue 200,000,000 shares of common stock, consisting of 10,000,000 shares of Class A Common

Stock and 190,000,000 shares of Class B Common Stock.

As a result of the reverse stock split, the Company will be authorized to issue

40,000,000 shares of common stock, consisting of 2,000,000 shares of Class A Common Stock and 38,000,000 shares of Class B Common Stock.

All share and per share

information in these financial statements retroactively reflect this reverse stock split.

Description of Business

11 unchanged sentences

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

The Company had an accumulated deficit of $ 8,671,756 as

of June 30, 2024, cash of $ 1,926,888 as of June 30, 2024, and a net loss of $ 3,113,441 for the six months ended June 30, 2024

On May 24, 2024, the Company entered into a securities purchase agreement with an investor for the issuance and sale of up to 330 shares

of the Company’s newly designated Series A Convertible Preferred Stock for maximum gross proceeds of $ 3,000,000 .

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

Basis of Presentation

3 unchanged sentences

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.

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

six months ended June 30, 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

9 unchanged sentences

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

The Company had no cash equivalents at June 30, 2024

and December 31, 2023.

2 unchanged sentences

The amount in excess of the FDIC

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

insurance as of June 30, 2024, was approximately $ 1.64 million.

The Company has not experienced losses on account balances and management

3 unchanged sentences

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.

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

1 unchanged sentence

The Company did not have any Building, Machinery

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

and Equipment, and Vehicle as of June 30, 2024.

Maintenance and repairs are charged to expense

7 unchanged sentences

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

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.

7 unchanged sentences

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.

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

carrying value.

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

appropriate discount rates.

During the six months ended June 30, 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

2 unchanged sentences

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.

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.

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

13 unchanged sentences

are defined as follows:

● Level 1—Observable inputs

that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets;

● Level 2—Observable inputs

other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar

assets and liabilities;

● Level 3—Unobservable

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

1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets

or liabilities in active markets;

2—Observable inputs other than quoted prices in active markets that are observable

either directly or indirectly in the marketplace for identical or similar assets and liabilities;

3—Unobservable 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, prepaid expense and contract liabilities, other current liabilities are carried at historical cost.

At March 31, 2024 and December

At June 30, 2024 and December

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

1 unchanged sentence

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.

Total advertising expenses were $ 284,886 and 170,371 for the six months ended June 30, 2024 and 2023, respectively,

and have been included as part of general and administrative expenses.

Research and Development

Research 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 .

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

The Company incurred research and development

expenses of $ 238,739 and $ 0 for the six months ended June 30, 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.

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.

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

When shares are cancelled, the value of repurchased

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

Revenue Recognition

The Company recognizes revenue utilizing the following

The Company recognizes revenue utilizing the

following steps:

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

(ii) Identify the performance obligations in the contract;

(iii) Determine

the transaction price;

(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.

(v) Recognize

revenue when the Company satisfies a performance obligation.

Subscriptions

1 unchanged sentence

obligation that is recognized over time when earned.

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

annual basis.

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

2 unchanged sentences

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.

Revenue related to AE.360.DDM contracts with

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

Contract Liabilities

2 unchanged sentences

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.

As of June 30, 2024 and December 31, 2023, total contract liabilities were $ 1,686 and $ 3,445 respectively.

Contract liabilities

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

Changes in contract liabilities for the six months

ended June 30, 2024 are as follows:

Balance, December 31, 2023

Deferral of revenue

Recognition of revenue

Balance, June 30, 2024

Earnings Per Share of Common Stock

2 unchanged sentences

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.

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.

For the three months ended June 30, 2024, warrants

representing 71,002 shares of common stock equivalents were excluded from the computation from diluted net loss per share as the result

was anti-dilutive.

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.

The Company follows ASC 850, “Related

Party Disclosures” , for the identification of related parties and disclosure of related party transactions and

There were no related party transactions except management fees.

During the six months ended June 30, 2024 and 2023, the Company

paid management fees to their controlling members totaling $ 1,805,377 and $ 1,600,037 , 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

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

financial statements.

Property and Equipment

2 unchanged sentences

Accumulated depreciation

During the three months ended March 31, 2024 and

During the six months ended June 30, 2024 and

2023, the Company recorded depreciation of $ 2,341 and $0 , respectively.

4 unchanged sentences

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

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

1 unchanged sentence

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.

On June 27, 2024, the

Company filed a Certificate of Change pursuant to Section 78.209 of the Nevada Revised Statutes with the Secretary of State of the State

of Nevada authorizing a 1-for-5 reverse stock split of the Company’s issued and outstanding shares of class A common stock and

class B common stock.

As a result of the Reverse Stock Split, the Company will be authorized to issue 40,000,000 shares of common stock,

consisting of 2,000,000 shares of Class A Common Stock and 38,000,000 shares of Class B Common Stock.

Preferred Stock

2 unchanged sentences

of the Company.

Series A Convertible Preferred Stock

On May 24, 2024, the

Company filed a Certificate of Designation of Series A Convertible Preferred Stock (the “Certificate of Designation”) with

the Secretary of State of the State of Nevada designating 660 shares of the Company’s Preferred Stock, $ 0.0001 par value per

share, as “Series A Convertible Preferred Stock,” and setting forth the voting and other powers, preferences and relative,

participating, optional or other rights of the Series A Preferred Stock.

Each share of Series A Preferred Stock has an initial stated

value (“Stated Value”) of $ 10,000 per share.

The Series A Preferred

Stock, with respect to the payment of dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company,

ranks senior to all capital stock of the Company unless the holders of the majority of the outstanding shares of Series A Preferred Stock

consent to the creation of other capital stock of the Company that is senior or equal in rank to the Series A Preferred Stock.

Holders of Series A

Preferred Stock will be entitled to receive cumulative dividends, in shares of Class B Common Stock or cash on the Stated Value at an

annual rate of 6 % (which will increase to 12 % if a Triggering Event (as defined in the Certificate of Designation) occurs.

will be payable upon conversion of the Series A Preferred Stock or upon any redemption.

Holders of Series A

Preferred Stock will be entitled to convert shares of Series A Preferred Stock into a number of shares of Class B Common Stock determined

by dividing the Stated Value (plus any accrued but unpaid dividends and other amounts due, unless paid by the Company in cash) by the

conversion price of the Series A Preferred Stock (the “Conversion Price”).

The initial Conversion Price is $ 0.75 , subject

to adjustment including adjustments due to full-ratchet anti-dilution provisions.

Holders may elect to convert shares of Series A Preferred

Stock to Class B Common Stock at an alternate Conversion Price equal to 85 % (or 70 % if the Company’s Class B Common Stock is suspended

from trading on or delisted from a principal trading market or upon occurrence of a Triggering Event) of the average lowest daily volume

weighed average price of the Class B Common Stock during the Alternate Conversion Measuring Period (as defined in the Certificate of

Designation).

Securities Purchase Agreement

On May 24, 2024, the Company entered into a securities

purchase agreement (the “Purchase Agreement”) with an investor (the “Investor”) for the issuance and sale of

up to 330 shares of the Company’s newly designated Series A Convertible Preferred Stock, $ 0.0001 par value per share (“Series

A Preferred Stock”), for maximum gross proceeds of $ 3,000,000 .

Pursuant to the Purchase Agreement, the Company is required to issue

and sell 165 shares of Series A Preferred Stock at each of two closings subject to the satisfaction of the terms and conditions for each

The first closing (the “First Closing”) occurred on May 24, 2024 for the issuance and sale of 165 shares of Series

A Preferred Stock for gross proceeds of $ 1,500,000 .

The second closing (the “Second Closing”), for the issuance and sale

of 165 shares of Series A Preferred Stock for gross proceeds of $ 1,500,000 , will occur on the first business day on which the conditions

specified in the Purchase Agreement for the Second Closing are satisfied or waived, including the filing and effectiveness of the Registration

Statement and the effectiveness of the Stockholder Consent.

In addition, the Company issued a warrant to Boustead for the purchase of

30,800 shares of Class B Common Stock with an exercise price of $ 3.75 per share.

The warrant is exercisable for a period of five

years and contains cashless exercise provisions.

The Company received $ 1,345,000 , net of offering cost of $ 155,000 .

Class A Common Stock

2 unchanged sentences

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.

As part of a share conversion in March 2022,

the Company converted the 97.56 % membership interest to 1,951,200 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.

The Company had 1,506,406 and 1,677,056 shares

of Class A Common Stock issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.

Class B Common Stock

2 unchanged sentences

The Company had 1,559,595 and 1,207,827 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,

of Class B Common Stock issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.

Six months ended June 30, 2024

During the six months ended June 30, 2024, the

Company issued Class B common stock as follows:

● 170,650 shares of Class A common stock were converted into 170,650 shares of Class B common stock.

● 124,318 shares of Class B common stock for cash of $ 194,433 , net (Triton Purchase agreement).

● 51,800 shares of Class B common stock for restricted stock awards valued at $ 95,342 .

● 5,000 shares of Class B common stock for purchase of intangible asset valued at $ 9,500

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.

During the year ended December 31, 2023, the

Company repurchased 50,000 shares of Class B Common stock at $ 176,876 and recorded as treasury stock as of June 30, 2024

and December 31, 2023.

Triton Purchase Agreement

3 unchanged sentences

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 .

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

On August 1, 2023, the Company and Triton entered

2 unchanged sentences

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.

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

2 unchanged sentences

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.

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.

On March 27, 2024, the Company delivered a Closing

Notice to Triton (the “Second Closing Notice”) for the purchase of 124,318 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 $ 1.70 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.

In connection with the Triton Closing, pursuant

to the Boustead Engagement Letter and 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 Triton Shares.

In addition, the Company issued a warrant to Boustead for the purchase of 8,702 shares of Class B Common

Stock, equal to 7 % of the number of the Triton Shares, with an exercise price of $ 1.70 per share, equal to the purchase price per share

of the Triton Shares (the “Tail Warrant”).

The Tail Warrant is exercisable for a period of five years and contains cashless

exercise provisions.

2022 Equity Incentive Plan

12 unchanged sentences

offset credited to additional paid-in-capital.

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

For the six months ended June 30, 2024 and 2023, the Company recorded stock-based compensation

expense of $ 739,309 and $ 603,925 , respectively.

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

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

As of June 30, 2024, 204,316 RSA shares have vested.

As of June 30, 2024, there was $ 1,839,331 of

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

of 1.64 years.

A summary of activity during the three months

ended March 31, 2024, follows:

Exercise Price

A summary of activity during the six months ended

June 30, 2024, follows:

shares Weighted

Price Weighted

Outstanding, December 31, 2023 31,500 $ 31.25 3.97

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 .

Granted 39,502 3.30 5.00

Expired - - -

Exercised - - -

Outstanding, June 30, 2024 71,002 $ 15.70 4.11

All the outstanding warrants are exercisable

as of June 30, 2024.

The intrinsic value of the warrants as of June 30, 2024, is $ 1,566 .

Subsequent Events

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.

Management evaluated

all events from the date of the balance sheet, which was June 30, 2024 through August 14, 2024 which was the date these financial statements

were available to be issue.

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

The Second Closing,

for the issuance and sale of 165 shares of Series A Preferred Stock for gross proceeds of $ 1,500,000 , occurred on July 29, 2024, which

was the first business day on which the conditions specified in the Purchase Agreement for the Second Closing were satisfied or waived.

On the date of the Second

Closing, the Company was required to issue a warrant to Boustead Securities, LLC for the purchase of 30,800 shares of Class B Common

Stock, equal to 7 % of the number of shares of Class B Common Stock that may be issued upon conversion of the shares of Series A Preferred

Stock sold at the Second Closing at the initial Conversion Price of $ 3.75 per share, subject to the Exchange Limitation before the effectiveness

of the Stockholder Approval (the “Fourth Tail Warrant”).

The Fourth Tail Warrant has an exercise price of $ 3.75 per share.

On July 30, 2024, Boustead’s

rights to the Fourth Tail Warrant were assigned to an assignee.

The Fourth Tail Warrant was consequently cancelled and a new warrant

was issued to the assignee.

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