What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-14 compared with 2024-05-15 · 852 added, 364 removed, 285 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

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

elsewhere herein.

Except as otherwise indicated by the context and

for the purposes of this report only, references in this report to “we,” “us,” “our,” the “Company,”

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.

Except as otherwise indicated by the context

and for the purposes of this report only, references in this report to “we,” “us,” “our,” the “Company,”

“Asset Entities,” and “our company” are to Asset Entities Inc., a Nevada corporation.

“Class A Common Stock”

refers to the Company’s Class A Common Stock, $0.0001 par value per share.

“Class B Common Stock” refers to the Company’s

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

“Common stock”

refers to the Company’s Common Stock, $0.0001 par value per share.

“Class A Common Stock” refers to the Company’s

Class A Common Stock, $0.0001 par value per share.

“Class B Common Stock” refers to the Company’s Class B Common Stock,

$0.0001 par value per share.

“Preferred stock” refers to the Company’s Preferred Stock, $0.0001 par value per share.

“Series A Preferred Stock” refers to the Company’s Series A Convertible Preferred Stock, $0.0001 par value per share.

Reverse Stock Split

Unless otherwise noted,

the share and per share information in this report have been adjusted to give effect to the one-for-five (1-for-5) reverse stock split

of each of the Company’s authorized and issued and outstanding Class A Common Stock and the Company’s authorized and issued

and outstanding Class B Common Stock, which became effective as of 5:00 p.m.

Eastern Time on July 1, 2024 (the “Reverse Stock Split”).

Note Regarding Trademarks,

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We use various trademarks, trade names and service

marks in our business, including “AE 360 DDM”, “Asset Entities Where Assets Are Created”, “SiN”, “Social

Influencer Network”, and associated marks.

marks in our business, including “AE 360 DDM”, “Asset Entities Where Assets Are Created”, “SiN”,

“Social Influencer Network”, and associated marks.

For convenience, we may not include the ℠, ® or ™

symbols, but such omission is not meant to indicate that we would not protect our intellectual property rights to the fullest extent allowed

symbols, but such omission is not meant to indicate that we would not protect our intellectual property rights to the fullest extent

allowed by law.

Any other trademarks, trade names or service marks referred to in this report are the property of their respective owners.

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This report contains forward-looking statements

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;

ability to obtain additional funding to develop additional services and offerings;

● anticipated

compliance with obligations under intellectual property licenses with third parties;

acceptance of our new offerings;

● competition

from existing online offerings or new offerings that may emerge;

ability to establish or maintain collaborations, licensing or other arrangements;

ability and third parties’ abilities to protect intellectual property rights;

ability to adequately support future growth;

goals and strategies;

future business development, financial condition and results of operations;

changes in our revenue, costs or expenditures;

of and competition trends in our industry;

accuracy and completeness of the data underlying our or third-party sources’ industry

and market analyses and projections;

expectations regarding demand for, and market acceptance of, our services;

expectations regarding our relationships with investors, institutional funding partners and

other parties with whom we collaborate;

● fluctuations

in general economic and business conditions in the markets in which we operate;

government policies and regulations relating to our industry.

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.

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:

● our ability to introduce new products

and services;

● our ability to obtain additional

funding to develop additional services and offerings;

● anticipated compliance with obligations

under intellectual property licenses with third parties;

● market acceptance of our new offerings;

● competition from existing online

offerings or new offerings that may emerge;

● our ability to establish or maintain

collaborations, licensing or other arrangements;

● our ability and third parties’

abilities to protect intellectual property rights;

● our ability to adequately support

future growth;

● our goals and strategies;

● our future business development,

financial condition and results of operations;

● expected changes in our revenue,

costs or expenditures;

● growth of and competition trends

in our industry;

● the accuracy and completeness of

the data underlying our or third-party sources’ industry and market analyses and projections;

● our expectations regarding demand

for, and market acceptance of, our services;

● our expectations regarding our relationships

with investors, institutional funding partners and other parties with whom we collaborate;

● fluctuations in general economic

and business conditions in the markets in which we operate;

● relevant 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.

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 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.

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

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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review of, all potentially available relevant information.

These statements are inherently uncertain and investors are cautioned not to

unduly rely upon these statements.

These statements are inherently uncertain and investors are cautioned not

to unduly rely upon these statements.

The forward-looking statements made in this report

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While we believe that Gen Z will continue to be

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 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 212,000 as

of August 2024.

Our social media and marketing services utilize

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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.

the process for our subscribers to:

(i) sell memberships to their Discord servers on their websites and collect payments through Stripe

with daily payouts;

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

(iii) customize their

user Discord permissions and roles and other Discord settings;

and (iv) 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 subscriptions

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

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to our Discord servers.

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

During the three months ended June 30, 2024 and 2023, we received revenue from 1,238 and 348 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

As of June 30, 2024, the Company had an accumulated deficit of $8,671,756

and cash balance of $1,926,888.

During the three months ended June 30, 2024 and 2023, we had a net loss of $1,726,537 and

$1,321,057, respectively.

To date, 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.

In May 2024, the Company completed the first of a two-part private placement of its Series A Preferred Stock for

gross proceeds of $1.5 million, and in July 2024, the Company completed the second part of the private placement for an additional $1.5

million in gross proceeds.

Based on the Company’s existing cash resources and the cash expected to be received from new financings,

it is expected that the Company will have sufficient funds to carry out the Company’s planned operations through June 30, 2025 and

for at least 12 months beyond that period.

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)

“ Management’s Discussion and Analysis

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

Principal Factors Affecting Our Financial Performance

Our operating results are primarily affected

by the following factors:

● our ability to acquire new customers

and users or retain existing customers and users;

● our ability to offer competitive

● our ability to broaden product or

service offerings;

● industry demand and competition;

● our ability to leverage technology

and use and develop efficient processes;

● our ability to attract and retain

talented employees and contractors;

● market conditions and our market

Emerging Growth Company and Smaller Reporting

We qualify as an “emerging growth company”

under the 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 control over financial reporting pursuant to Section 404(b)

of the Sarbanes-Oxley Act;

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employee compensation.

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

provided in Section 7(a)(2)(B) of the Securities Act 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

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.

We will remain an emerging growth company until

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Recent Developments

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

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”) , 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 ”.

Second Closing of Private Placement with

Ionic Ventures, LLC

Under a Securities Purchase

Agreement, dated as of May 24, 2024, as amended by a First Amendment to Securities Purchase Agreement, dated as of June 13, 2024 (as

amended, the “Ionic Purchase Agreement”), between the Company and Ionic Ventures, LLC, a California limited liability company

(“Ionic”), the Company agreed to 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, for maximum gross proceeds of $3,000,000.

The shares of the Series A Preferred

Stock are convertible into shares of Class B Common Stock.

Pursuant to the Ionic 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 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, occurred on July 29, 2024, which was the first business day on which the conditions specified in the Ionic

Purchase Agreement for the Second Closing were satisfied or waived.

In connection with each

closing under the Ionic Purchase Agreement, pursuant to the Boustead Engagement Letter (as defined in “ —Liquidity and

Capital Resources – Initial Public Offering and Underwriting Agreement ”) and the Underwriting Agreement (as defined in

“ —Liquidity and Capital Resources – Initial Public Offering and Underwriting Agreement ” ) , the Company

was required to pay Boustead Securities, LLC, a registered broker-dealer (“Boustead”), a fee equal to 7% of the aggregate

purchase price and a non-accountable expense allowance equal to 1% of the aggregate purchase price for the Series A Preferred Stock.

On the date of the Second Closing, we therefore paid Boustead a total amount of $120,000.

In addition, on the date of the Second Closing,

the Company was required to issue a warrant to Boustead 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 (the “Fourth Tail Warrant”).

The Fourth Tail Warrant has an exercise

price of $3.75 per share.

Notwithstanding certain provisions in the Boustead Engagement Letter, the Fourth Tail Warrant will not contain

piggyback registration rights and will not contain anti-dilution provisions for future stock issuances, etc., at a price or at prices

below the exercise price per share, or provide for automatic exercise immediately prior to expiration.

The Fourth Tail Warrant may be

deemed to be compensation by the Financial Industry Regulatory Authority, Inc.

(“FINRA”), and may be subject to limits on

exercise under FINRA rules.

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

(the “Assigned Fourth Tail Warrant”) was issued to the assignee.

The Assigned Fourth

Tail Warrant is filed as Exhibit 4.1 to this report, and the description above is qualified in its entirety by reference to the full

text of such exhibit.

See “—Liquidity

and Capital Resources – First Closing of Private Placement with Ionic Ventures, LLC ”.

Results of Operations

Comparison of Three Months Ended March 31,

Comparison of Three Months Ended June 30,

2024 and 2023

Operations Data

Three Months Ended

Operations Data

Operating expenses

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Loss from operations

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.

Our revenues increased 24.1% to approximately $0.09 million for the three months ended June 30, 2024 from approximately $0.07 million

for the three months ended June 30, 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.

Discord server paying subscribers during the three months ended June 30, 2024, including subscribers to our OptionsSwing server in November

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

Our total operating

expenses increased 30.3% to approximately $1.8 million for the three months ended June 30, 2024 from approximately $1.4 million

for the three months ended June 30, 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 June 30, 2024, compared to such costs for the three months ended June

Loss From Operations .

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.

from operations increased 30.7% to approximately $1.7 million for the three months ended June 30, 2024 from approximately $1.3

million for the three months ended June 30, 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.

costs of approximately $0.1 for the three months ended June 30, 2024, compared to such costs for the three months ended June 30, 2023.

Comparison of Six Months Ended June 30,

2024 and 2023

Six Months Ended

Operations Data

Operating expenses

Contract labor

General and administrative

Management compensation

Total operating expenses

Loss from operations

Our revenues increased 60.1% to approximately $0.2 million for the six months ended June 30, 2024 from approximately $0.1

million for the six months ended June 30, 2023.

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

of our Discord server paying subscribers during the six months ended June 30, 2024, including subscribers to our OptionsSwing server

in November 2023, compared to such revenues for the six months ended June 30, 2023, which preceded the acquisition of our

OptionsSwing server.

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

Operating Expenses .

Our total operating expenses increased 31.8% to approximately $3.3 million for the six months ended June 30, 2024 from approximately

$2.5 million for the six months ended June 30, 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 $0.5 million and an increase in management

compensation costs of approximately $0.2 million for the six months ended June 30, 2024, compared to such costs for the six months ended

June 30, 2023.

Loss From Operations .

Our loss from operations increased

30.1% to approximately $3.1 million for the six months ended June 30, 2024 from approximately $2.4 million for the six months ended

June 30, 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 $0.5 million and an increase in management compensation costs of approximately

$0.2 for the six months ended June 30, 2024, compared to such costs for the six months ended June 30, 2023.

Liquidity and Capital Resources

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.

As of June 30, 2024,

we had an accumulated deficit of $8,671,756.

During the six months ended June 30, 2024 and 2023, we had a net loss of $3,113,441 and

$2,392,308, 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.

2024, we filed a “shelf” registration statement, which the Company intends to use in connection with one or more new financings.

In May 2024, the Company completed the first of a two-part private placement of its Series A Preferred Stock for gross proceeds of $1.5

million, and in July 2024, the Company completed the second part of the private placement for an additional $1.5 million in gross proceeds.

Based on our existing cash resources and the cash expected to be received from new financings, it is expected that we will have sufficient

funds to carry out our planned operations through June 30, 2025 and for at least 12 months beyond that period, including our 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 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 operations.

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

Summary of Cash Flow

The following table provides detailed information

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

Three Months Ended

about our net cash flow for the six months ended June 30, 2024 and 2023.

Net cash provided by (used in) operating activities

$ (2,322,108 )

$ (1,966,045 )

Net cash provided by (used in) investing activities

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Cash at end of period

Net cash used in operating activities was approximately

$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 used in operating activities was approximately $2.3 million

for the six months ended June 30, 2024, as compared to net cash used in operating activities of approximately $2.0 million for the six

months ended June 30, 2023.

This increase was primarily due to an increase in net loss of approximately $0.7 million, offset

by an increase in stock grants to certain recipients under the Asset Entities Inc.

2022 Equity Incentive Plan valued at approximately

$0.7 million and an increase in accounts payable and accrued expenses for outstanding legal services fees and credit card payments to

contractors of approximately $0.3 million compared to such costs for the six months ended June 30, 2023.

Net cash provided used in investing activities

was approximately $0.2 million for the six months ended June 30, 2024, as compared to none for the six months ended June 30, 2023.

change was primarily due to the purchases of an intangible asset and property and equipment totaling

approximately $0.2 million during the six months ended June 30, 2024 compared to no such

purchases for the six months ended June 30, 2023.

Net cash provided by financing activities was

$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.

approximately $1.5 million for the six months ended June 30, 2024, as compared to approximately $6.8 million net cash provided by financing

activities for the six months ended June 30, 2023.

This change was primarily due to the reduced amount of proceeds from the Company’s

private placements during the six months ended June 30, 2024 compared to the proceeds received from its February 2023 initial public

Initial Public

1 unchanged sentence

On February 2, 2023,

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”).

the Company entered into the Underwriting Agreement between the Company and Boustead Securities, LLC, as representative of the underwriters

named on Schedule 1 thereto (the “Underwriting Agreement”), relating to the Company’s initial public offering of 1,500,000

shares of Class B Common Stock (the “IPO Shares”).

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

firm commitment to purchase the IPO Shares, the Company agreed to sell the IPO Shares to Boustead at a purchase price (the “IPO

Price”) of $23.25 (93% of the public offering price per share of $25.00, 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,

12 unchanged sentences

Representative’s Warrant was issued, pursuant to the Company’s Registration Statement on Form S-1 (File No.

333-267258), as

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.

as 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 300,000 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.

Any resales of these shares occurred at a fixed price of $25.00 per share until the Class B

Common Stock was listed on Nasdaq.

Thereafter, these sales will occur at fixed prices, at market prices prevailing at the time of sale,

at prices related to prevailing market prices, or at negotiated prices.

The Company will not receive any proceeds from the resale of

Class B Common Stock by the selling stockholders.

The IPO Registration Statement also registered

for sale shares of Class B Common Stock with a maximum aggregate offering price of $1,125,000 for an additional 45,000 shares of Class

B Common Stock at the assumed public offering price of $5.00 per share upon full exercise of the underwriters’ over-allotment option;

and up to an additional 15,750 shares of Class B Common Stock underlying the Representative’s Warrant with a maximum aggregate offering

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

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.

B Common Stock at the assumed public offering price of $25.00 per share upon full exercise of the underwriters’ over-allotment

and up to an additional 3,150 shares of Class B Common Stock underlying the Representative’s Warrant with a maximum aggregate

offering price of $98,437.50 at the assumed exercise price of $31.25 per share assuming full exercise of the over-allotment option.

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

Amendment No.

1 to the IPO Registration Statement (the “Post-Effective Amendment”) was filed with the SEC and became

effective on April 14, 2023 .

The Post-Effective Amendment was

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.

1 to the IPO Registration Statement (the “Post-Effective Amendment”) was filed with the SEC and became effective

on April 14, 2023.

The Post-Effective Amendment was 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.

The Post-Effective

Amendment also incorporates by reference all documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d)

of the Exchange Act, prior to the termination of the offering described in the prospectuses included with the Post-Effective Amendment.

As stated in the IPO

6 unchanged sentences

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;

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 June 30, 2024:

was used for construction of plant, building and facilities;

was used for the purchase and installation of machinery and equipment;

was used for purchases of real estate;

was used for the acquisition of other businesses;

None was used for the repayment of indebtedness;

was used for the repayment of indebtedness;

● Approximately

$5.1 million was used for working capital;

None was used for temporary investments.

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

1 unchanged sentence

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.

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

17 unchanged sentences

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

The Underwriting Agreement also provided that the engagement letter agreement between the Company and Boustead, dated November 29, 2021

(the “Boustead Engagement Letter”), will remain in full force and effect.

Engagement Letter with Boustead Securities,

8 unchanged sentences

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

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,

2 unchanged sentences

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.

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;

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;

(iii) in 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 rights;

such warrants will be transferable in accordance with rules of the Financial Industry Regulatory

Authority, Inc.

(“FINRA”) and SEC regulations, exercisable from the date of issuance

and for a term of five years, contain cashless exercise provisions, be non-callable and non-cancelable

with immediate piggy-back registration rights, have customary anti-dilution provisions and

any future stock issuances, etc., at a price(s) below the exercise price per share, at terms

no less favorable than the terms of any warrants issued to participants in the related transaction,

and provide for automatic exercise immediately prior to expiration;

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

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

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

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

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

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

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

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

whether a transaction occurs.

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 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.

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.

Private Placements with Triton Funds LP

Under a Closing Agreement,

dated as of June 30, 2023 (the “Triton Closing Agreement”), between the Company and Triton Funds LP, a Delaware limited partnership

(“Triton”), the Company agreed to sell to Triton, at its option, shares of Class B Common Stock having an aggregate value

of $1,000,000 (“Triton Shares”), pursuant to a registration statement to be filed and made effective for the resale of the

Triton Shares.

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

“Triton Closing Notice”) and issue the Triton Shares to Triton at any time before September 30, 2023, pursuant to which Triton

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

The price of each of the Triton

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

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

The Triton Closing was required to occur

within five business days after the Triton Shares were received by Triton.

Triton’s obligation to purchase the Triton Shares was

conditioned on the effectiveness of a registration statement covering the resale of the Triton Shares and Triton’s ownership not

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

The Triton Closing Agreement

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

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

its right to submit the Triton Closing Notice.

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

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

The Triton Closing

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

Under an Amended and

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

Agreement”), the Closing Agreement was amended and restated to provide that, subject to its terms and conditions, the Company may

deliver a Triton Closing Notice and issue certain securities to Triton at any time on or before September 30, 2023, pursuant to which

Triton would be required to purchase such securities of the Company with an aggregate gross purchase price of $1,000,000 in the following

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

Triton Shares in an amount equal to up to 9.99% of the outstanding shares of Class B Common Stock following such purchase, pre-funded

warrants (“Triton Pre-Funded Warrants” and together with Triton Shares, “Triton Securities”) that may be exercised

to purchase an amount of newly-issued shares of Class B Common Stock (“Triton Warrant Shares”), or both Triton Shares and

Triton Pre-Funded Warrants, such that the aggregate price of the Triton Shares and the Triton Pre-Funded Warrants together with the exercise

price to be paid upon full exercise of the Triton Pre-Funded Warrants was required to equal a total gross purchase price of $1,000,000.

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

The Triton 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 Triton Closing Notice, or September 30, 2023.

The terms of the price of the Triton Securities and the required date of the

Triton Closing were not amended, except that if Triton elected to purchase Triton Pre-Funded Warrants in lieu of Triton Shares, then

the purchase price per Triton Pre-Funded Warrant acquired would be reduced by $0.01 with such $0.01 being the exercise price of the Triton

Pre-Funded Warrant.

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

The Triton 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 Triton 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 Triton Amended and Restated Closing Agreement, with certain exceptions.

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

Triton Amended and Restated Closing Agreement, pursuant to the Boustead Engagement Letter, upon a closing under the Triton 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.

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 Triton Amended and

Restated Closing Agreement, regardless of whether a sale under the Triton Amended and Restated Closing Agreement occurred.

discussion of the Boustead Engagement Letter, see “— Engagement Letter with Boustead Securities, LLC ”.

On August 18, 2023,

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

333-274079) to register the offer and sale of the Triton Securities

in an amount of up to 177,000 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 12,390 shares of Class B Common Stock under Tail Warrants.

The registration statement

was declared effective by the SEC on September 6, 2023.

Under an Amendment to

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

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

to provide that the Amended A&R Closing Agreement would 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 Triton Closing Notice;

and to amend the form of Triton Closing Notice to provide for a specific number of

shares that may be sold to Triton under the Amended A&R Closing Agreement.

The First Triton Amendment did not amend any of the other

provisions of the Triton Amended and Restated Closing Agreement.

As an incentive to Triton

to enter into the First Triton Amendment and agree to the extension of the term under the Amended A&R Closing Agreement to December

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

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

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

to Triton (the “First Triton Closing Notice”) for the purchase of 52,682 Triton Shares (the “First Triton Shares”),

which was the amount of shares of Class B Common Stock equal to approximately 4.9% of the shares of Class B Common Stock outstanding

on that date.

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

five business days after the Triton Shares were delivered to Triton.

On the date of this Triton Closing (the “First Triton Closing”),

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 five business days prior to the date of the First Triton Closing, 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 approximately $45,841, based on a price per

share of $1.3447, equal to 85% of $1.582, the lowest daily volume-weighted average price of the Class B Common Stock during the five-business-day

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

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

In connection with the

First Triton Closing, pursuant to the Boustead Engagement Letter and the Underwriting Agreement, the Company was required to pay Boustead

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

for the First Triton Shares.

In addition, the Company issued a Tail Warrant (the “First Tail Warrant”) to Boustead for the

purchase of 3,688 shares of Class B Common Stock, equal to 7% of the number of the First Triton Shares, with an exercise price of $1.3447

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.

per share, equal to the purchase price per share of the First Triton Shares.

The First Tail Warrant is exercisable for a period

of five years and contains cashless exercise provisions.

Under a Second Amendment

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

and Triton agreed to amend the Amended A&R Closing Agreement to provide that the Amended A&R Closing Agreement would expire on

March 31, 2024, instead of December 30, 2023.

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

Closing Agreement.

Under a Third Amendment

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

agreed to amend the Amended A&R Closing Agreement to provide that the Amended A&R Closing Agreement would expire on April 30,

2024, instead of March 31, 2024.

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

Pursuant to the Amended

A&R Closing Agreement, as amended by each of the Second Triton Amendment and the Third Triton Amendment, on March 27, 2024, the Company

delivered a Triton Closing Notice to Triton informing Triton that the Company had elected to exercise its right to sell Triton 124,318

Triton Shares (the “Second Triton Shares”).

The price of each of the Second Triton 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 Triton Closing for the sale

of the Second Triton Shares (the “Second Triton Closing”), and the Second Triton Closing was required to occur within five

business days after the date that the Second Triton Shares were received by Triton.

On April 10, 2024, the

date of the Second Triton Closing, the price of the Second 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 Second Triton Closing.

17, 2024, the Company received gross proceeds of $211,341.

In connection with the

Second Triton Closing, pursuant to the Boustead Engagement Letter and the Underwriting Agreement, the Company paid Boustead, as placement

agent compensation, a fee equal to 7% of the aggregate purchase price and a non-accountable expense allowance equal to 1% of the aggregate

purchase price for the Second Triton Shares.

In addition, the Company issued a Tail Warrant (the “Second Tail Warrant”) to

Boustead for the purchase of 8,702 shares of Class B Common Stock, equal to 7% of the number of the Second Triton Shares, with an exercise

price of $1.70 per share, equal to the purchase price per share of the Second Triton Shares.

The Second Tail Warrant is exercisable

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

The Triton Closing Agreement,

the Triton Amended and Restated Closing Agreement, the First Triton Amendment, the Second Triton Amendment, the Third Triton Amendment,

the form of the Triton Pre-Funded Warrant, and the form of the First Tail Warrant and Second Tail Warrant are filed as Exhibit 10.25,

Exhibit 10.26, Exhibit 10.27, Exhibit 10.30, Exhibit 10.32, Exhibit 4.6, and Exhibit 4.7 to the 2023 Annual Report, respectively, and

the description above is qualified in its entirety by reference to the full text of such exhibits.

TommyBoyTV Asset

Purchase Agreement

Under an Asset Purchase

Agreement (the “Asset Purchase Agreement”), dated as of June 21, 2024, among the Company, TommyBoyTV, LLC (the “Seller”),

and Tomas Cvercko, the owner of all of the membership interests of Seller (the “Member”), the Company agreed to purchase

all of the Seller’s right, title, and interest in and to substantially all of the assets and properties owned by the Seller and

used in connection with its business of Discord development, social media, online community management, marketing, and analytics for

the payment of $200,000 in cash (the “Cash Consideration”), the issuance of 5,000 shares of Class B Common Stock (the “Stock

Consideration”), and other good and valuable consideration as described herein.

Pursuant to the Asset

Purchase Agreement, on June 21, 2024, the Company paid the Seller $200,000 and issued the Stock Consideration to the Member, and the

Seller and the Member delivered title to all of the assets of the Seller.

The Stock Consideration vested immediately upon issuance.

Pursuant to the Asset

Purchase Agreement, the Company agreed to assume certain liabilities including the obligations, duties and liabilities with respect to

the contracts used in conducting or relating to the business of the Seller and other specified assets, in each case only to the extent

arising from and after June 21, 2024.

These assumed liabilities also exclude any obligations arising from the Seller’s breach or

default before June 21, 2024.

The Asset Purchase Agreement

also contains mutual indemnification provisions with respect to breaches of representations and warranties as well as to certain third-party

claims, and indemnification by the Company of the Seller and the Member with respect to certain damages with respect to the assumed liabilities

and certain other liabilities asserted by a third party arising after June 21, 2024.

In the case of indemnification provided with respect

to breaches of certain non-fundamental representations and warranties, the indemnifying party will only become liable for indemnified

losses to the extent that the amount exceeds an aggregate threshold of $25,000.

However, this threshold limitation does not apply to

claims by the Company for breaches by the Seller or the Member of certain fundamental representations and warranties.

In addition, the

Company’s aggregate remedy with respect to any and all indemnifiable losses may in no event exceed the purchase price, consisting

of the Cash Consideration.

First Closing of Private Placement with

Ionic Ventures, LLC

Under the Ionic Purchase

Agreement, the Company agreed to 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 (the “Series A Preferred Stock”), for maximum gross proceeds of $3,000,000.

The shares of the Series A Preferred Stock are convertible into shares of Class B Common Stock.

Pursuant to the Ionic 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 closing.

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, was required to occur on the first

business day on which the conditions specified in the Ionic Purchase Agreement for the Second Closing were satisfied or waived, including

the filing and effectiveness of the First Registration Statement (as defined below) and the effectiveness of the Stockholder Approval

(as defined below).

Registration Rights

In connection with the

Ionic Purchase Agreement, the Company agreed to provide certain registration rights to Ionic, pursuant to the Registration Rights Agreement,

dated as of May 24, 2024, between the Company and Ionic (the “Ionic Registration Rights Agreement”).

The Ionic Registration

Rights Agreement provides for the registration for resale of any and all shares of Class B Common Stock issuable to Ionic with respect

to the shares of Series A Preferred Stock under the Ionic Purchase Agreement (the “Registrable Conversion Shares”).

the later of 15 calendar days of the First Closing or May 24, 2024, the Company was required to file a registration statement (the “First

Registration Statement”) for the offer and resale of the maximum number of Registrable Conversion Shares permitted to be covered

in accordance with applicable SEC rules, regulations and interpretations.

The First Registration Statement was required to be declared

effective within 45 days of the First Closing, or 90 days if the First Registration Statement received a review.

Pursuant to these requirements,

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

333-280020) was originally filed by the Company with the SEC on June 7, 2024 to register

the offer and resale of the maximum number of Registrable Conversion Shares permitted to be covered in accordance with applicable SEC

rules, regulations and interpretations, and was declared effective by the SEC on July 24, 2024.

If an additional registration

statement must be filed to cover the resale of Registrable Conversion Shares that were not permitted to be included in the First Registration

Statement in accordance with applicable SEC rules, regulations and interpretations, the Company must file an additional registration

statement (the “Second Registration Statement”) within 15 days of the Second Closing for the maximum number of Registrable

Conversion Shares permitted to be covered in accordance with applicable SEC rules, regulations and interpretations.

The Second Registration

Statement must be declared effective within 45 days of the Second Closing, or 90 days if the Second Registration Statement receives a

In the event the number

of shares of Class B Common Stock available under the First Registration Statement and the Second Registration Statement is insufficient

to cover all of the Registrable Conversion Shares, the Company will be required to file at least one additional registration statement

(each of such additional registration statement, the First Registration Statement, and the Second Registration Statement, and collectively,

the “Registration Statement”) within 14 days of the date that the necessity arises and that such additional Registration

Statement may be filed under SEC rules to cover such Registrable Conversion Shares up to the maximum permitted to be covered under SEC

rules, which must be made effective within 45 days of such date, or 90 days if such additional Registration Statement receives a review.

Any failure to meet the filing deadline for either the First Registration Statement or the Second Registration Statement (“Filing

Failure”) would have resulted in liquidated damages of 20,000 shares of Class B Common Stock.

Any failure to meet the effectiveness

deadline for any Registration Statement (“Effectiveness Failure”) will result in liquidated damages of 20,000 shares of Class

B Common Stock.

Each of the shares issuable upon a Filing Failure or an Effectiveness Failure must also be covered by a Registration

Statement to the same extent as the Registrable Conversion Shares.

The Company will be required to use its best efforts to keep each

Registration Statement effective until all such shares of Class B Common Stock are sold or may be sold without restriction pursuant to

Rule 144 under the Securities Act (“Rule 144”), and without the requirement for us to be in compliance with the current public

information requirement under Rule 144.

The form of the Registration

Rights Agreement is filed as Exhibit 10.4 to this report, and the description above is qualified in its entirety by reference to the

full text of such exhibit.

Terms of Series A

Convertible Preferred Stock under Certificate of Designation and Securities Purchase Agreement

Pursuant to the Ionic

Purchase Agreement, on May 24, 2024, the Company filed a Certificate of Designation of Series A Convertible Preferred Stock of the Company

with the Secretary of State of the State of Nevada (the “Initial Certificate of Designation”), as amended by the Certificate

of Amendment to Designation (the “Designation Amendment”) filed with the Secretary of State of the State of Nevada on June

14, 2024 (as amended, the “Certificate of Designation”), designating 660 shares of the Company’s preferred stock 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 ranks senior to all other capital stock of the Company with respect to the payment of dividends, distributions and payments upon

the liquidation, dissolution and winding up 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

Holders of Series A

Preferred Stock will be entitled to receive cumulative dividends, in shares of Class B Common Stock (or cash at the Company’s option)

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 until such Triggering Event, if curable, is cured).

Dividends will be payable upon conversion or redemption of the Series A Preferred

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 of such shares (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

$3.75, 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).

A holder of Series A

Preferred Stock may not convert the Series A Preferred Stock into Class B Common Stock to the extent that such conversion would cause

such holder’s beneficial ownership of Class B Common Stock to exceed 4.99% of the outstanding Class B Common Stock immediately

after conversion, which may be increased by the holder to up to 9.99% upon no fewer than 61 days’ prior notice (the “Series

A Beneficial Ownership Limitation”).

In addition, if a conversion would result in the issuance of an amount of shares of Class

B Common Stock exceeding 19.99% of the Company’s outstanding common stock, which number of shares would be reduced, on a share-for-share

basis, by the number of shares of common stock issued or issuable pursuant to any transaction or series of transactions that may be aggregated

with the transactions contemplated by the Certificate of Designation under applicable rules of Nasdaq, including Nasdaq Listing Rule

5635(d) (such amount, the “Exchange Limitation”), the Conversion Price would be required to be at least equal to the price

(the “Minimum Price”) that would be the lower of the last closing price of the stock immediately preceding the signing of

the related binding agreement and the average closing price for the five Trading Days (as defined below) immediately preceding the signing

of the related binding agreement, before the effectiveness of the approval of such number of the holders of the outstanding shares of

the Company’s voting securities as required by the Bylaws of the Company (the “Bylaws”) and the Nevada Revised Statutes

(“NRS”), to ratify and approve all of the transactions contemplated by the Transaction Documents (as defined in the Ionic

Purchase Agreement), including the issuance of all of the shares of Series A Preferred Stock and shares of Class B Common Stock upon

conversion of the shares of Series A Preferred Stock, all as may be required by the applicable rules and regulations of The Nasdaq Capital

Market tier of Nasdaq (or any successor entity) (the “Stockholder Approval”).

The Ionic Purchase Agreement requires that

the Company obtain the Stockholder Approval by the prior written consent of the requisite stockholders to obtain the approval of such

number of the holders of the outstanding shares of the Company’s voting securities as required by the Bylaws and the NRS, to ratify

and approve all of the transactions contemplated by the Transaction Documents, including the issuance of all of the shares of Series

A Preferred Stock and shares of Class B Common Stock issuable upon conversion of such shares pursuant to the Ionic Purchase Agreement,

all as may be required by the applicable rules and regulations of The Nasdaq Capital Market tier of Nasdaq (or any successor entity).

The Conversion Price also may not be lower than a separate floor price (the “Floor Price”) of $0.4275 per share.

A Preferred Stock also may not be converted except to the extent that the shares of Class B Common Stock issuable upon such conversion

may be resold pursuant to Rule 144 or an effective and available registration statement.

The Ionic Purchase Agreement

and the Certificate of Designation require that the Company file a Preliminary Information Statement on Schedule 14C with the SEC within

10 days of the date of the First Closing followed by the filing of a Definitive Information Statement on Schedule 14C with the SEC within

20 days of the date of the First Closing, or within 45 days of the date of the First Closing if delayed due to a court or regulatory

agency, including but not limited to the SEC, which shall disclose the Stockholder Approval.

In accordance with the rules of the SEC,

the Stockholder Approval will become effective 20 days after the Definitive Information Statement is sent or given in accordance with

Prior to such date of effectiveness, if the number of shares of Class B Common Stock subject to a conversion would exceed

the Exchange Limitation prior to the date of the effectiveness of the Stockholder Approval, and the Conversion Price for such conversion

would otherwise be lower than the Minimum Price or the Floor Price, then, upon any conversion of shares of Series A Preferred Stock,

the Stated Value will automatically be increased by an amount equal to the product obtained by multiplying (A) the higher of (I) the

highest price that the Class B Common Stock trades at on the Trading Day immediately preceding the conversion date and (II) the applicable

Conversion Price and (B) the difference obtained by subtracting (I) the number of shares of Class B Common Stock delivered (or to be

delivered) to the holder on the applicable conversion date with respect to such conversion of Series A Preferred Stock from (II) the

quotient obtained by dividing (x) the applicable value of the Series A Preferred Stock being converted that the holder has elected to

be the subject of the applicable conversion of Series A Preferred Stock, by (y) the applicable Conversion Price.

In accordance with the

requirements and provisions described above, on May 24, 2024, the Company obtained the Stockholder Approval by execution of a written

consent in lieu of a special meeting of a majority of the voting power of the stockholders of the Company approving a resolution approving

the issuance of Class B Common Stock in aggregate in excess of the limitations provided by Nasdaq Listing Rule 5635(d), including that

an amount of shares of Class B Common Stock equal to or greater than 20% of the total common stock or voting power outstanding on the

date of the Certificate of Designation may be issued pursuant to the Certificate of Designation at a price that may be less than the

Minimum Price.

On May 31, 2024, the Company filed a Preliminary Information Statement on Schedule 14C with the SEC.

On June 13, 2024,

the Company filed a Definitive Information Statement on Schedule 14C with the SEC disclosing the Stockholder Approval.

As of the 20 th

day following actions meeting these and other applicable requirements, the Company will be permitted to issue more than the limited

number of shares as defined by the Exchange Limitation, at a Conversion Price that may be below the Minimum Price.

Under the Ionic Purchase

Agreement, if the closing price of the Class B Common Stock falls below $3.75 per share, the holder’s total sales of Class B Common

Stock will be restricted.

The holder may only sell either the greater of $25,000 per Trading Day or 15% of the daily trading volume of

the Class B Common Stock reported by Bloomberg, LP, until the closing price exceeds $3.75.

“Trading Day” is defined as a

day on which the principal trading market for the Class B Common Stock is open for trading for at least six hours.

In addition, while any

of the shares of Series A Preferred Stock are outstanding, if the closing price of the Class B Common Stock is equal to or less than

$0.4275 per share for a period of ten consecutive Trading Days, then the Company will promptly take all corporate action necessary to

authorize a reverse stock split of the Class B Common Stock by a ratio equal to or greater than 300% of the quotient obtained by dividing

$0.4275 by the lowest closing price of the Class B Common Stock during such ten-Trading Day period, including calling a special meeting

of stockholders to authorize such reverse stock split or obtaining written consent for such reverse stock split, and voting the management

shares of the Company in favor of such reverse stock split.

The Series A Preferred

Stock will automatically convert to Class B Common Stock upon the 24-month anniversary of the initial issuance date of the Series A Preferred

The Company will have

the right at any time to redeem all or any portion of the Series A Preferred Stock then outstanding at a price equal to 110% of the Stated

Value plus any accrued but unpaid dividends and other amounts due.

Holders of the Series

A Preferred Stock will generally have the right to vote on an as-converted basis with the Class B Common Stock, subject to the Series

A Beneficial Ownership Limitation.

The Company may not

sell securities in a financing transaction while Ionic beneficially owns any of the Series A Preferred Stock or the common stock until

the end of the 30-day period following the initial date of the effectiveness of the First Registration Statement or during any Alternate

Conversion Measuring Period.

In addition, the Company may not file any other registration statement or any offering statement under the

Securities Act, other than a registration statement on Form S-8 or supplements or amendments to registration statements that were filed

and effective as of the date of the Ionic Purchase Agreement, unless each Registration Statement is effective and the respective prospectus

is available for use, or the shares of Series A Preferred Stock and underlying shares of Class B Common Stock that must be included in

each Registration Statement under the Ionic Registration Rights Agreement may be resold without limitation under Rule 144.

The Initial Certificate

of Designation, the Designation Amendment, and the form of the Ionic Purchase Agreement are filed as Exhibit 3.3, Exhibit 3.4, and Exhibit

10.3 to this report, 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 related developments which occurred subsequent to March 31, 2024.

Developments – Second Closing of Private Placement with Ionic Ventures, LLC ” for related recent developments.

Compensation to Boustead

Securities, LLC

In connection with each

closing under the Ionic Purchase Agreement, pursuant to the Boustead Engagement Letter (as defined in “ —Liquidity and

Capital Resources – Initial Public Offering and Underwriting Agreement ”) and the Underwriting Agreement (as defined in

“ —Liquidity and Capital Resources – Initial Public Offering and Underwriting Agreement ” ) , the Company

was required to pay Boustead Securities, LLC, a registered broker-dealer (“Boustead”), a fee equal to 7% of the aggregate

purchase price and a non-accountable expense allowance equal to 1% of the aggregate purchase price for the Series A Preferred Stock.

On the date of each of the First Closing, we therefore paid Boustead a total amount of $120,000.

In addition, the Company was required

to issue a warrant to Boustead 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 First Closing at the initial

Conversion Price of $3.75 per share (the “Third Tail Warrant”).

The Third Tail Warrant has an exercise price of $3.75 per

In addition, we are required to issue 1,400 shares of Class B Common Stock to Boustead upon the occurrence of each Effectiveness

Notwithstanding certain provisions in the Boustead Engagement Letter, the Third Tail Warrant will not contain piggyback registration

rights and will not contain anti-dilution provisions for future stock issuances, etc., at a price or at prices below the exercise price

per share, or provide for automatic exercise immediately prior to expiration.

The Third Tail Warrant may be deemed to be compensation

by FINRA, and may be subject to limits on exercise under FINRA rules.

The Third Tail Warrant

is filed as Exhibit 4.2 to this report, and the description above is qualified in its entirety by reference to the full text of such

Contractual 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.

During the six months ended June 30, 2024 and 2023, we had no significant cash requirements for capital expenditures or other cash needs

under any contractual or other obligations, except as follows.

Lease Agreements

Under an Office Agreement, dated as of January

25, 2022, between the Company and Regus Management Group, LLC (“Regus Management”), the Company leased an office located

at 100 Crescent Court, 7 th Floor, Dallas, Texas 75201, for a daily payment of $32.82.

The term of the lease was from February

1, 2022 to January 31, 2023.

Under an Office Agreement, dated as of May 4,

2022, between the Company and Regus Management, the Company leased an office located at 100 Crescent Court, 7 th Floor, Dallas,

Texas 75201, for a daily payment of $44.63.

The term of the lease was from June 1, 2022 to May 31, 2023.

Under a Renewal Agreement, dated as of October

10, 2022, between the Company and Regus Management, the Company leased an office located at 100 Crescent Court, 7 th Floor,

Dallas, Texas 75201, for a monthly payment of $1,085.

The term of the lease was from February 1, 2023 to January 31, 2024.

Under an Office Move Agreement, dated as of March

3, 2023, between the Company and Regus Management, the Company transferred an office lease to a different office located at 100 Crescent

Court, 7 th Floor, Dallas, Texas 75201, for a monthly payment of $4,989.

The term of the agreement was from March 7, 2023 to

May 31, 2023.

Under a Renewal Agreement, dated as of March

6, 2023, between the Company and Regus Management, the Company leased an office located at 100 Crescent Court, 7 th Floor,

Dallas, Texas 75201, for a monthly payment of $5,104.

The term of the lease was from June 1, 2023 to February 29, 2024.

Under a Renewal Service Agreement, dated as of

October 10, 2023, between the Company and Regus Management, the Company leased an office located at 100 Crescent Court, 7 th

Floor, Dallas, Texas 75201, for a total monthly payment of $1,228.

The term of the lease is from February 1, 2024 to January 31, 2025.

Under a Renewal Service Agreement, dated as of

November 9, 2023, between the Company and Regus Management, the Company leased an office located at 100 Crescent Court, 7 th

Floor, Dallas, Texas 75201, for a total monthly payment of $5,329.

The term of the lease is from March 1, 2024 to November 30, 2024.

Off-Balance Sheet Arrangements

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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

4 unchanged sentences

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.

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.

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

7 unchanged sentences

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

5 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.

As of June 30, 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.

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 three months ended March 31, 2024 and 2023, the Company paid

management fees to their controlling members totaling $862,567 and $749,864, respectively.

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

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

financial statements.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

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 2. Management’s Discussion and Analysis