What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-04-02 · 846 added, 507 removed, 174 unchanged (89% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity

and cash flows as of and for the periods presented below.

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

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

The discussion contains forward-looking

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

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

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

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

following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and

cash flows as of and for the periods presented below.

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

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

The discussion contains forward-looking statements

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

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

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

“ Risk Factors”

and “ Cautionary Note Regarding Forward-Looking Statements.

Asset Entities is a technology company providing

2 unchanged sentences

and manage servers for communities on Discord.

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

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

three categories of services:

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

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

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

TikTok, X, Instagram, and YouTube.

Our Discord investment education and entertainment service is designed

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

Gen Z is commonly considered to

be people born between 1997 and 2012.

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

and NFT community learning programs designed for the next generation.

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

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

and (3) our “AE.360.DDM” brand services.

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

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

All of our services are based on our effective use of Discord as well as other social media including TikTok, X, Instagram, and YouTube.

Our Discord investment education and entertainment

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

Gen Z is commonly

considered to be people born between 1997 and 2012.

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

cryptocurrency, and NFT community learning programs designed for the next generation.

While we believe that Gen Z will continue to be

our primary market, our Discord server offering features education and entertainment content covering real estate investments, which is

expected to appeal strongly to older generations as well.

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

Our combined server user membership was approximately 206,899 as of December

Our social media and marketing services utilize

9 unchanged sentences

in the growing market for Discord servers.

We believe that we are a leading provider of

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

We expect to experience rapid revenue growth from

our services.

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

favorably in each aspect of our business.

Through Ternary v2, our subscription management

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

Ternary v2 simplifies

the process for our subscribers to:

(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 all

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

We expect to experience rapid revenue growth from our

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

in each aspect of our business.

Our revenue depends on the number of paying subscribers

3 unchanged sentences

Our Historical Performance

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

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

The Company initiated

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

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

statement shortly after it becomes effective.

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

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

through December 31, 2024.

For further discussion, see Item 7.

“ Management’s Discussion and Analysis of Financial

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

Impact of COVID-19 Pandemic

The current global pandemic of a novel strain

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

Public health authorities

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

Some measures

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

of people in public places.

We believe that we have fully complied with all

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

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

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

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

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

including its acceleration of global growth in virtual services.

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

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

The resulting global deterioration

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

impact our business and demand for our services.

As events are rapidly changing, we cannot predict

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

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

the geographies in which we operate.

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

will persist for some time after governments ease their restrictions.

The extent to which the pandemic may

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

Report, including new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or

treat its impact, among others.

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

developments in the global supply chain and other areas present material uncertainty and risk with respect to our performance, financial

condition, results of operations and cash flows.

See also “Item 1A.

Risk Factors – Risks Related to Our Business and Industry

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

Principal Factors Affecting Our Financial

Our operating results are primarily affected

by the following factors:

● our ability to acquire new customers

and users or retain existing customers and users;

● our ability to offer competitive

● our ability to broaden product or

service offerings;

of December 31, 2024, the Company had an accumulated deficit of $12,006,357 and a cash balance of $2,660,624.

During the years ended

December 31, 2024 and 2023, we had a net loss of $6,393,932 and $4,931,197, respectively.

To date, the Company has financed its

operations primarily through capital raises and sales of its services.

In April 2024, the Company filed the Shelf Registration

Statement, which was declared effective by the SEC on April 26, 2024, for potential offerings of up to $100,000,000 in aggregate,

subject to the requirement that in no event may we sell shares having a value exceeding more than one-third of our public float in

any 12-month period under the Shelf Registration Statement so long as our public float remains below $75,000,000.

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.

September 2024, the Company entered into the ATM Sales Agreement, and filed a prospectus supplement to the Shelf Registration

Statement for the ATM Financing for gross proceeds of up to $1,791,704.

As of March 31, 2025, the Company had filed additional

prospectus supplements to the Shelf Registration Statement to increase the maximum gross proceeds to $5,489,399.

commencement of the ATM Financing, a total of 5,417,700 shares has been sold, for net proceeds to the Company of $4,830,647.56,

after paying $329,362 in compensation to the Sales Agent and the same amount to Boustead under the Boustead ATM Waiver.

Company has received confirmation from the investor in its Series A Preferred Stock that it will invest up to an additional $3

million upon request by the Company.

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

received from the ATM Financing and other planned financings, it is expected that the Company will have sufficient funds to carry

out the Company’s planned operations through December 31, 2025 and for at least 12 months beyond that period.

discussion, see Item 7.

“ —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 pricing;

● 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

● 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 position.

Emerging Growth Company and Smaller Reporting

2 unchanged sentences

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

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

● have an auditor report on our internal

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

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

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

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

● comply with any requirement that

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

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

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

● comply with certain greenhouse gas

emissions disclosure and related third-party assurance requirements;

● submit certain executive compensation

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

● disclose certain executive compensation

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

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

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

● have an auditor report on our internal control over financial reporting pursuant to Section 404(b) of

the Sarbanes-Oxley Act;

● present three years, instead of two years, of audited financial statements, with correspondingly reduced

“ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” disclosure in this Annual

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

mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial

statements (i.e., an auditor discussion and analysis);

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

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

and “say-on-frequency;” and

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

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

In addition, Section 107 of the JOBS Act also

9 unchanged sentences

up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1,235,000,000,

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

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

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

debt during the preceding three year period.

To the extent that we continue to qualify as

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

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

as a smaller reporting company, including as to:

(ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur

if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently

completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding

three year period.

To the extent that we continue to qualify as a

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

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

a smaller reporting company, including as to:

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

(ii) scaled executive compensation disclosures;

scaled executive compensation disclosures;

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

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

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

Recent Developments

On March 27, 2024, the Company delivered a Closing

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

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

each of the Second Triton Shares is required to be set at 85% of the lowest daily volume-weighted average price of the Class B Common

Stock during the five business days prior to the closing of the purchase of the Second Triton Shares (the “Second Triton Closing”).

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

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

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

price for the Second Triton Shares.

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

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

share of the Second Triton Shares.

Under a Third Amendment

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

agreed to amend the Amended A&R Closing Agreement to provide that the Amended A&R Closing Agreement will expire on April 30, 2024,

instead of March 31, 2024.

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

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

entirety by reference to such exhibit.

Amended and Restated Waiver and Consent

On March 20, 2025, the Company entered into an

Amended and Restated Waiver and Consent, dated as of March 20, 2025 (the “A&R Ionic ATM Waiver”), between the Company

and Ionic Ventures, LLC, a California limited liability company (“Ionic”), the sole holder of the Series A Preferred Stock.

Pursuant to the A&R Ionic ATM Waiver, Ionic waived any prohibition, restriction or adverse adjustment that would otherwise apply to

any action of the Company relating to an “at the market offering” (as defined in Rule 415(a)(4) under the Securities Act),

under a sales agreement between the Company and A.G.P.

under which the Company may offer and sell through A.G.P., as sales agent, the

Company’s shares of Class B Common Stock (“Waived A.G.P.

ATM”), under the Securities Purchase Agreement, dated as of

May 24, 2024, between the Company and Ionic, as amended by the First Amendment to Securities Purchase Agreement, dated as of June 13,

2024, between the Company and Ionic (as amended, the “Ionic Purchase Agreement”), or Series A Certificate of Designation.

Pursuant to the A&R Ionic ATM Waiver, regardless of the terms and conditions of the Ionic Purchase Agreement and the Series A Certificate

of Designation, the Company may at any time enter into or consummate the transactions contemplated by any agreement relating to a Waived

ATM, the filing of a prospectus supplement to a prospectus contained in an effective registration statement that was filed under

the Securities Act relating to a Waived A.G.P.

ATM, the announcement of a Waived A.G.P.

ATM, the issuance, offer, sale, or grant of any

shares of the Class B Common Stock relating to a Waived A.G.P.

ATM, or the issuance, offer, sale, or grant of any securities in connection

with either the provision of goods or services or settlement of any obligations that may otherwise arise with respect to a Waived A.G.P.

In addition, pursuant to the A&R Ionic ATM Waiver, Ionic waived any adjustment to the applicable Conversion Price (as defined

in the Series A Certificate of Designation), which partly determines the number of shares of Class B Common Stock issuable upon conversion

of a share of Series A Preferred Stock, that would otherwise occur as a result of any Waived A.G.P.

ATM under the terms of the Series

A Certificate of Designation.

Results of Operations

8 unchanged sentences

Loss from operations

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

Interest income

Total other income

Our revenue increased 128.7% to approximately $0.6 million for the fiscal year ended December 31, 2024 from approximately $0.3 million

for the fiscal year ended December 31, 2023.

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

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

There was no material

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

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

our Discord server paying subscribers during the fiscal year ended December 31, 2024, including subscribers to the OptionsSwing and Pure

Profits Discord servers that the Company acquired in November 2023 and June 2024, respectively, compared to such revenues for the fiscal

year ended December 31, 2023, the majority of which preceded the acquisitions of the OptionsSwing and Pure Profits Discord servers.

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

Operating Expenses .

Our total operating expenses increased 427% to approximately $5.2 million for the fiscal year ended December 31, 2023 from approximately

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

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

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

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

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

Loss From Operations .

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

million for the fiscal year ended December 31, 2022.

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

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

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

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

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

for the fiscal year ended December 31, 2022.

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

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

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

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

Our total operating

expenses increased 35.1% to approximately $7.0 million for the fiscal year ended December 31, 2024 from approximately $5.2 million for

the fiscal year ended December 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 $1.1 million and an increase in management compensation

costs of approximately $0.7 million for the fiscal year ended December 31, 2024, compared to such costs for the fiscal year ended December

From Operations .

Our loss from operations increased 29.9% to approximately $6.4 million for the fiscal year ended December 31,

2024 from approximately $4.9 million for the fiscal year ended December 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 $1.1 million and an

increase in management compensation costs of approximately $0.7 million for the fiscal year ended December 31, 2024, compared to such

costs for the fiscal year ended December 31, 2023.

Liquidity and Capital Resources

We had an accumulated

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

ended December 31, 2023.

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

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

The Company initiated

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

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

statement shortly after it becomes effective.

of December 31, 2024, the Company had an accumulated deficit of $12,006,357 and cash balance of $2,660,624.

During the years ended

December 31, 2024 and 2023, we had a net loss of $6,393,932 and $4,931,197, respectively.

To date, the Company has financed its operations

primarily through capital raises and sales of its services.

In April 2024, the Company filed the Shelf Registration Statement, which

was declared effective by the SEC on April 26, 2024, for potential offerings of up to $100,000,000 in aggregate, subject to the requirement

that in no event may we sell shares having a value exceeding more than one-third of our public float in any 12-month period under the

Shelf Registration Statement so long as our public float remains below $75,000,000.

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.

In September 2024, the Company entered into

the ATM Sales Agreement, and filed a prospectus supplement to the Shelf Registration Statement for the ATM Financing for gross proceeds

of up to $1,791,704.

As of March 31, 2025, the Company has filed additional prospectus supplements to the Shelf Registration Statement

to increase the maximum gross proceeds to $5,489,399.

Since the commencement of the ATM Financing, a total of 5,417,700 shares has been

sold, for net proceeds to the Company of $4,830,647.56, after paying $329,362 in compensation to the Sales Agent and the same amount

to Boustead under the Boustead ATM Waiver.

The Company has received confirmation

from the investor in its Series A Preferred Stock that it will invest up to an additional $3 million upon request by the Company.

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

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

through December 31, 2024.

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

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

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

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.

from the ATM Financing and other planned financings, it is expected that the Company will have sufficient funds to carry out the Company’s

planned operations through December 31, 2025 and for at least 12 months beyond that period.

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.

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.

Summary of Cash Flow

1 unchanged sentence

about our net cash flow for the periods presented:

Years Ended December 31,

Net cash used in operating activities

$ (4,900,057 )

$ (3,807,623 )

Net cash used in investing activities

4 unchanged sentences

Net cash used in operating activities was approximately

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

for the fiscal year ended December 31, 2022.

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

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

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

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

Net cash used in investing activities was approximately

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

ended December 31, 2022.

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

capital expenditures of equipment and fixtures.

Net cash provided by financing activities was approximately $6.7 million

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

the fiscal year ended December 31, 2022.

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

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

$ 4.9 million for the fiscal year ended December 31, 2024, as compared to net cash used

in operating activities of approximately $3.8 million for the fiscal year ended December 31, 2023.

This increase was primarily due to

an increase in net loss.

Net cash used in investing activities was $ 0.4

million for the fiscal year ended December 31, 2024, as compared to net cash used in operating activities of approximately $0.1 for the

fiscal year ended December 31, 2023.

The change was primarily due to the purchase of intangible

assets during the fiscal year ended December 31, 2024 compared to a lesser amount of such

purchases during the fiscal year ended December 31, 2023.

Net cash provided by financing activities was

approximately $5.0 million for the fiscal year ended December 31, 2024, as compared to net cash provided by financing activities of

approximately $6.7 million for the fiscal year ended December 31, 2023.

The change was primarily due to the reduced amount of proceeds

from the Company’s private placements during the fiscal year ended December 31, 2024 compared to the proceeds received from its

February 2023 initial public offering.

Initial Public

2 unchanged sentences

place on February 7, 2023 pursuant to the Underwriting Agreement.

At the closing, the Company sold the IPO Shares for total gross proceeds

of $7,500,000.

At the closing, the Company sold 300,000 shares of Class B Common Stock

for total gross proceeds of $7,500,000.

The Company also issued the Representative’s Warrant.

After deducting the underwriting discounts, commissions, non-accountable

expense allowance, and other expenses from the initial public offering, the Company received net proceeds of approximately $6.6 million.

deducting the underwriting discounts, commissions, non-accountable expense allowance, and other expenses from the initial public offering,

the Company received net proceeds of approximately $6.6

Pursuant to the Underwriting Agreement, as of

1 unchanged sentence

any of our shares of capital stock of the Company for up to 12 months.

In addition, our officers, directors and beneficial owners of

approximately 78.0% of our common stock agreed to be locked up for a period of 12 months.

Holders of approximately 7.2% of our outstanding

common stock agreed to be locked up for a period of nine months, and a holder of approximately 2.3% of our outstanding Class B Common

Stock prior to the initial public offering agreed to be locked up for a period of six months with respect to approximately 0.9% of the

outstanding common stock held by such holder, subject to certain exceptions.

The remaining shares were not subject to lock-up provisions

or such lock-up provisions were waived.

In addition, our officers, directors and beneficial owners of approximately

78.0% of our common stock agreed to be locked up for a period of 12 months.

Holders of approximately 7.2% of our outstanding common stock

agreed to be locked up for a period of nine months, and a holder of approximately 2.3% of our outstanding Class B Common Stock prior to

the initial public offering agreed to be locked up for a period of six months with respect to approximately 0.9% of the outstanding common

stock held by such holder, subject to certain exceptions.

The remaining shares were not subject to lock-up provisions or such lock-up

provisions were waived.

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

Other terms of and agreements relating to the

Underwriting Agreement and the underwriter are described under Item 1.

“ Business – Corporate Structure and History –

Initial Public Offering and Underwriting Agreement ” and Item 7.

“ Management’s Discussion and Analysis of Financial

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

A copy of each

of the Underwriting Agreement and the Representative’s Warrant is filed as Exhibit 10.24 and Exhibit 4.5 to this Annual Report,

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

As stated in the IPO Public Offering Prospectus,

the Company intended to use the net proceeds from the initial public offering for investment in corporate infrastructure, marketing and

promotion of Discord communities, social campaigns, and the Company’s “AE.360.DDM” Discord design, development and

management service, expansion of “SiN”, the Company’s social influencer network, increasing staff and company personnel,

and general working capital, operating, and other corporate expenses.

promotion of Discord communities, social campaigns, and the Company’s “AE.360.DDM” Discord design, development and management

service, expansion of “SiN”, the Company’s social influencer network, increasing staff and company personnel, and general

working capital, operating, and other corporate expenses.

The following is our

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

offering on November 16, 2023 until December 31, 2023:

● None was used for construction

of plant, building and facilities;

● None was used for the purchase

and installation of machinery and equipment;

● None was used for purchases of

● None was used for the acquisition

of other businesses;

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

on November 16, 2023 until December 31, 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;

● Approximately $0.3 million was used for the acquisition of assets of other businesses;

● None was used for the repayment of indebtedness;

● $3.5 million was used for working

● Approximately $6.3 million was used for working capital;

● None was used for temporary investments.

3 unchanged sentences

indirect payments to any others other than for the direct costs of the offering.

There has not been,

and we do not expect, any material change in the planned use of proceeds from the initial public offering as described in the IPO Registration

There has not been, and

we do not expect, any material change in the planned use of proceeds from the initial public offering as described in the IPO Registration

Engagement Letter

with Boustead Securities, LLC

Under the Boustead Engagement Letter, during

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

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

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

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

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

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

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

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

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

The Boustead Engagement Letter expired on February 7, 2024.

We also agreed to provide Boustead the right

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

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

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

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

In the event that we engage Boustead

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

mutually agree otherwise.

Under the Boustead Engagement Letter, in connection

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

compensation as follows:

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

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

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

in the Boustead Engagement Letter) calculated as follows:

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

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

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

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

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

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

● for any investment transaction including

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The warrant exercise price

will be the lower of:

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

stock as of each such financing closing date;

2.) the price per share paid by investors in

each respective financing;

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

the conversion price of such securities;

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

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

● any such warrants will be transferable in accordance with FINRA

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

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

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

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

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

automatic exercise immediately prior to expiration;

● reasonable out-of-pocket expenses

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

The Boustead Engagement

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

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

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

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

agreed upon by the contracting parties.

Amended and Restated

Closing Agreement

On August 1, 2023, the Company entered into the Amended and Restated

Closing Agreement with Triton.

Subject to its terms, the Amended and Restated Closing Agreement provided that the Company may deliver

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

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

Upon delivery of

a Closing Notice and the issuance and delivery of securities as described below, Triton agreed to purchase Triton Shares in an amount

equal to up to 9.99% of the outstanding shares of Class B Common Stock following such purchase, Triton Pre-Funded Warrants that may be

exercised to purchase an amount of newly-issued Triton Warrant Shares, or both Triton Shares and Triton Pre-Funded Warrants, such that

the aggregate price of the Triton Shares and the Triton Pre-Funded Warrants together with the exercise price to be paid upon full exercise

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

Upon the Company’s election

to deliver a Closing Notice, the price of each of the Triton Shares was required to be set at 85% of the lowest daily volume-weighted

average price of the Class B Common Stock during the five business days after the date that the Triton Securities were received by Triton.

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

The Amended and Restated

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

a Closing Notice, or September 30, 2023.

The Amended and Restated

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

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

the Class B Common Stock was required to remain listed on the Nasdaq Capital Market tier of Nasdaq, and the issuance of the Triton Securities

was required to not violate any requirements of Nasdaq.

Triton’s purchase requirement was also subject to provisions that prevented

Triton from acquiring shares of Class B Common Stock at the time of any sale of the Triton Securities or exercise of the Triton Pre-Funded

Warrants that would result in the number of shares beneficially owned by Triton and its affiliates exceeding the Beneficial Ownership

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

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

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

For each of the Triton Shares

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

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

We were also required to provide

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

and Restated Closing Agreement, with certain exceptions.

In connection with the

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

Agreement, the Company must pay Boustead a cash fee equal to 7% of the gross proceeds to be received from such closing and pay Boustead

a non-accountable expense allowance equal to 1% of the gross proceeds to be received from such closing.

The Company must also issue Boustead

a Tail Warrant with respect to any Triton Shares exercisable for a number of shares of Class B Common Stock equal to 7% of the number

of the Triton Shares at an exercise price equal to the price per share for the Triton Shares, and a warrant with respect to the issuance

of any Triton Pre-Funded Warrants exercisable for a number of shares of Class B Common Stock equal to 7% of the Triton Warrant Shares

at an exercise price equal to $0.01 per share.

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

exercise provisions.

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

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

Restated Closing Agreement occurred.

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

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

Resources – Engagement Letter with Boustead Securities, LLC ”.

On August 18, 2023,

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

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

in an amount of up to 885,000 shares of Class B Common Stock consisting of Triton Shares and Triton Warrant Shares.

The registration

statement also registered the offer and sale of up to 61,950 shares of Class B Common Stock under Tail Warrants.

The registration statement

was declared effective on September 6, 2023.

Under the First Triton

Amendment, the Company and Triton agreed to amend the Amended and Restated Closing Agreement to provide that the Amended A&R Closing

Agreement will expire on December 30, 2023 instead of September 30, 2023;

to provide that up to an aggregate value of $1,000,000 of the

Class B Common Stock, based on the purchase price formula described above, may be sold and purchased pursuant to a Closing Notice;

to amend the form of Closing Notice to provide for a specific number of shares that may be sold to Triton under the Amended A&R Closing

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

and Underwriting Agreement with Boustead Securities, LLC

Under the engagement letter agreement, dated November

29, 2021, between the Company and Boustead (the “Boustead Engagement Letter”), during the term that began on November 29,

2021 and ending 12 months following the termination or expiration of the Boustead Engagement letter, which occurred on February 7, 2024

(see below), we were required to compensate Boustead with a cash fee equal to seven percent (7.0%)

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

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

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

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

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

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

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

The Boustead Engagement Letter

expired on February 7, 2024.

The Tail Rights therefore expired on February 7, 2025.

Pursuant to the Underwriting

Agreement, the Company granted Boustead an irrevocable right of first refusal until February 2, 2025, to act as financial advisor, lead

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

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

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

This right of first refusal expired on February 7, 2025.

October 2023 and April 2024 Private Placements

with Triton Funds LP

Sales to Triton Funds

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.

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, as well as other securities.

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 of the $1,000,000 equity line under the Amended A&R

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

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

Common Stock prior to the sale.

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

the First Closing Notice for the purchase of the 263,410 First Triton Shares, which was the amount of shares of Class B Common Stock

equal to approximately 4.9% of the 5,375,724 shares of Class B Common Stock outstanding on that date.

Pursuant to the Amended A&R

Closing Agreement, the Closing Date was required to take place within five business days after the Triton Shares were received by Triton.

On the Closing Date, Triton was required to pay the Company a purchase price per share equal to 85% of the lowest daily volume-weighted

average price of the Class B Common Stock during the period between the date that the shares were delivered to Triton and the Closing

Date, the proceeds of which would be reduced by the $25,000 administrative fee, in accordance with the terms of the Amended A&R Closing

On October 4, 2023,

the First Triton Shares were received by Triton.

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

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

$0.26894, equal to 85% of $0.3164, the lowest daily volume-weighted average price of the Class B Common Stock during the five-business-day

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

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.

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 Agreement.

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.

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

Compensation to Boustead

Securities, LLC

In connection with the

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

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

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

In addition, the

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

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

Under the Second Triton

Amendment, the Company and Triton agreed to amend the Amended A&R Closing Agreement to provide that the Amended A&R Closing Agreement

will expire on March 31, 2024, instead of December 30, 2023.

The Second Triton Amendment did not amend any of the other provisions of

the Amended A&R Closing Agreement.

Copies of the Closing

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

Pre-Funded Warrants, and the form of the warrants issuable to Boustead in connection with the Amended and Restated Closing Agreement,

as amended, are each attached to the Annual Report as Exhibit 10.25, Exhibit 10.26, Exhibit 10.27, Exhibit 10.30, and Exhibit 4.6, respectively,

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

Contractual Obligations

During the fiscal years ended December 31, 2023

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

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that

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

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

Critical Accounting Policies

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 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, subject to adjustment, a five-year

term, and cashless exercise and registration rights.

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 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, subject to adjustment,

a five-year term, and cashless exercise and registration rights.

June 2024 TommyBoyTV

Asset Purchase Agreement

Under an Asset Purchase

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

Seller”), and Tomas Cvercko, the owner of all of the membership interests of the TBTV Seller (the “TBTV Member”), the

Company agreed to purchase all of the TBTV Seller’s right, title, and interest in and to substantially all of the assets and properties

owned by the TBTV 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 “TBTV Cash Consideration”) and the issuance of 5,000 shares of Class

B Common Stock (the “TBTV Stock Consideration”).

Pursuant to the TBTV

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

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

The TBTV Stock Consideration

vested immediately upon issuance.

Pursuant to the TBTV

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 TBTV 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 TBTV Seller’s

breach or default before June 21, 2024.

The TBTV 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 TBTV Seller and the TBTV 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 TBTV Seller or the TBTV 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 TBTV Cash Consideration.

Private Placements of Series A Preferred

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 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

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 Ionic 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.

closing (the “Second Ionic 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 Ionic 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).

On July 29, 2024, the conditions to the occurrence of the

Second Ionic Closing were met.

As a result, on July 29, 2024, the Company issued and sold 165 shares of Series A Preferred Stock to Ionic

for gross proceeds of $1,500,000.

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”).

Within the later of 15 calendar

days of the First Ionic 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 Ionic 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, and as amended,

was filed to register the offer and resale of 385,894 shares of Class B Common Stock, which was considered 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.

Following the Second Ionic Closing, which occurred on July 29, 2024, for the issuance

and sale of an additional 165 shares of Series A Preferred Stock for gross proceeds of $1,500,000, the Company was required to file a

registration statement (the “Second Registration Statement”) within 45 days of the Second Ionic Closing 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 Second Registration Statement was required to be declared effective within 45 days of the Second Ionic Closing,

or 90 days if the Second Registration Statement received a review.

Pursuant to these requirements, a Registration Statement on Form S-1

333-281438), was originally filed by the Company with the SEC on August 9, 2024, and as amended, was filed to register the offer

and resale of 482,120 shares of Class B Common Stock, which was considered 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 September

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.

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

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.

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 “First Designation Amendment”) filed with the Secretary of State of the State of Nevada on

June 14, 2024, as amended by the Certificate of Amendment to Designation (the “Second Designation Amendment”) filed with the

Secretary of State of the State of Nevada on September 4, 2024 at 9:58 AM Pacific Daylight Time, as amended by the Certificate of Amendment

to Designation (the “Third Designation Amendment”) filed with the Secretary of State of the State of Nevada on September 4,

2024 at 11:38 AM Pacific Daylight Time (as amended, the “Series A Certificate of Designation”), designating 660 shares of

the Company’s preferred stock as “Series A Convertible Preferred Stock,” $0.0001 par value per share, and setting forth

the voting and other powers, preferences and relative, participating, optional or other rights of the Series A Preferred Stock.

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 Stock.

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 Series A 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 of the lowest daily

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

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”).

Any conversion of shares of Series A Preferred Stock that would result in the holder beneficially owning

in excess of 4.99% of the shares of Class B Common Stock will not be effected, and the shares of Class B Common Stock that would cause

such excess will be held in abeyance and not issued to the holder until the date the Company is notified by the holder that its ownership

is less than 4.99%, at the applicable Conversion Price, and subject to the holder’s compliance with other applicable procedural

requirements for conversion.

Holders of Series A Preferred Stock are not prohibited from delivering a Conversion Notice (as defined by

the Series A Certificate of Designation) while another Conversion Notice remains outstanding.

The Series A Certificate

of Designation provides that the Conversion Price may not be lower than a floor price (the “Floor Price”) of $0.4275 per share,

subject to adjustment for stock splits and similar transactions.

If the Conversion Price would be less than the Floor Price, then, subject

to the terms and conditions of the Series A Certificate of Designation, the Stated Value will automatically increase in the manner provided

pursuant to the Series A Certificate of Designation, as described in the following paragraph.

The Series 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.

If a conversion of Series

A Preferred Stock would have resulted in the issuance of an amount of shares of Class B Common Stock exceeding 19.99% of the Company’s

common stock outstanding as of the date of the signing of the related binding agreement, 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 Series A Certificate of Designation under applicable rules of Nasdaq,

including Nasdaq Listing Rule 5635(d) (such amount, the “Exchange Limitation”), the Conversion Price would have been 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

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”).

In the event that the Conversion Price on a Conversion Date (as defined

in the Series A Certificate of Designation) would have been less than the applicable Minimum Price or the Floor Price if not for the immediately

preceding sentence, 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 shares of Series A Preferred Stock from (II) the quotient obtained by dividing (x) the Stated

Value (plus any accrued but unpaid dividends and other amounts due on such shares) of the Series A Preferred Stock being converted that

the holder has elected to be the subject of the applicable conversion, by (y) the applicable Conversion Price.

The Ionic Purchase Agreement

required that the Company obtain the Stockholder Approval, by the prior written consent of the requisite stockholders 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 Ionic Purchase Agreement and the Series A Certificate of Designation further required that the Company file

a Preliminary Information Statement on Schedule 14C with the SEC within 10 days of the date of the First Ionic 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 Ionic Closing, or within

45 days of the date of the First Ionic Closing if delayed due to a court or regulatory agency, including but not limited to the SEC, which

was required to disclose the Stockholder Approval.

In accordance with the rules of the SEC, the Stockholder Approval was required to become

effective 20 days after the Definitive Information Statement was sent or given in accordance with SEC rules.

In accordance with the

requirements and provisions described above, on May 24, 2024, the Company obtained the 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 Series A Certificate

of Designation may be issued pursuant to the Series A Certificate of Designation at a price that may be less than the Minimum Price.

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 such written consent.

As of the 20 th day following

actions meeting these and other applicable requirements, the Company is 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.

Under the Ionic Purchase

Agreement, the Company generally may not sell securities in a financing transaction while Ionic beneficially owns any shares of Series

A Preferred Stock or common stock until the end of the 30-day period following the initial date of the effectiveness of each 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 (solely to the extent necessary to keep such registration

statements effective and available and not with respect to any Subsequent Placement (as defined by the Ionic Purchase Agreement)), unless

each of the First Registration Statement and the Second Registration Statement is effective and the respective prospectuses are available

for use, or the outstanding shares of Series A Preferred Stock and underlying shares of Class B Common Stock may be resold without limitation

under Rule 144.

Additionally, the Company may not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution

on, any securities of the Company without the prior express written consent of Ionic (other than as required by the Series A Certificate

of Designation).

Compensation to Boustead

Securities, LLC

In connection with each

of the First Ionic Closing and the Second Ionic 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 a non-accountable expense allowance equal to

1% of the aggregate purchase price for the Series A Preferred Stock.

On the date of the First Ionic 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 Ionic Closing at the initial Conversion Price of $3.75 per share (the “May 2024 Boustead

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

In addition, on the date of the

Second Ionic 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 Ionic Closing at the initial Conversion Price of $3.75 per share (the “July 2024 Boustead Warrant”).

Pursuant to an Assignment

and Assumption Agreement, dated as of July 30, 2024, among Boustead, Sutter Securities, Inc., a registered broker-dealer and an affiliate

of Boustead (“Sutter”), and the Company (the “First July 2024 Boustead Warrant Assignment Agreement”), all of

the rights to the July 2024 Boustead Warrant were assigned by Boustead to Sutter.

Pursuant to an Assignment and Assumption Agreement,

dated as of July 30, 2024, among Sutter, Michael R.

Jacks (the “Warrant Assignee”), Boustead, and the Company (the “Second

July 2024 Boustead Warrant Assignment Agreement”), all of the rights to the July 2024 Boustead Warrant were assigned by Sutter to

the Warrant Assignee, a registered representative of Sutter.

Pursuant to the First July 2024 Boustead Warrant Assignment Agreement and

the Second July 2024 Boustead Warrant Assignment Agreement, the July 2024 Boustead Warrant was cancelled, and a warrant (the “July

2024 Assignee Warrant”) was issued to the Warrant Assignee.

The terms of the July 2024 Assignee Warrant are identical to those of

the July 2024 Boustead Warrant.

The May 2024 Boustead

Warrant and the July 2024 Assignee Warrant have an exercise price of $3.75 per share, subject to adjustment, five-year terms, and cashless

exercise and piggyback registration rights.

ATM Financing

ATM Sales Agreement

On September 27, 2024,

the Company entered into the ATM Sales Agreement with the Sales Agent.

Under the terms of the ATM Sales Agreement, the Company may, from

time to time, in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities

Act, issue and sell through or to the Sales Agent, initially up to a maximum aggregate amount of $2,271,487 of shares of the Company’s

Class B Common Stock (the “ATM Shares”).

The issuance and sale of the ATM Shares to or through the Sales Agent from time to

time will be effected pursuant to the Shelf Registration Statement and the prospectus supplements filed by the Company with the SEC on

September 30, 2024 and November 18, 2024 relating to the offering of the ATM Shares and the accompanying base prospectus.

Pursuant to the ATM Sales

Agreement, the Company may issue and sell the ATM Shares from time to time through or to the Sales Agent, acting as sales agent or principal,

subject to the terms and conditions of the ATM Sales Agreement.

The Company may instruct the Sales Agent to make such sales, and the Sales

Agent, as agent, will use its commercially reasonable efforts to sell the ATM Shares within the parameters set forth in the Company’s

notice to sell, and subject to the satisfaction of the Company’s obligations as set forth in the ATM Sales Agreement.

will designate the parameters within which the ATM Shares must be sold, including at a minimum the number to be sold, the time period

during which sales are requested to be made, any limitation on the number of the ATM Shares that may be sold in any one trading day, and

any minimum price below which sales may not be made.

The Company has no obligation to sell, and the Sales Agent is not obligated to buy

or sell, any of the ATM Shares under the ATM Sales Agreement and may at any time suspend offers under the ATM Sales Agreement or terminate

the ATM Sales Agreement as provided for in the ATM Sales Agreement.

The offering of the ATM Shares pursuant to the related prospectus

supplements to the Shelf Registration Statement and the accompanying base prospectus will terminate upon the earlier of (i) the sale of

all of the ATM Shares pursuant to such prospectus supplements and accompanying base prospectus having an aggregate sales price of $2,271,487,

and (ii) the termination by the Company or the Sales Agent of the ATM Sales Agreement pursuant to its terms.

Notwithstanding anything

to the contrary in the ATM Sales Agreement, the Sales Agent may only sell the ATM Shares directly into the market at prevailing market

prices in ordinary brokerage transactions that are open to all market participants, and will not sell shares in privately negotiated transactions,

whether acting solely as an agent on behalf of the Company or on a principal basis if agreed by the Sales Agent and the Company.

Unless otherwise agreed

between the Company and the Sales Agent, settlement for sales of the ATM Shares will occur on the first trading day following the date

on which any sales are made.

Sales of the ATM Shares will be settled through the facilities of The Depository Trust Company or by such

other means as the Company and the Sales Agent may agree.

There is no arrangement for funds to be received in an escrow, trust or similar

The Company will pay

the Sales Agent a cash commission of 3.0% of the gross sales price of the ATM Shares sold by the Sales Agent pursuant to the ATM Sales

Pursuant to the terms of the ATM Sales Agreement, the Company also agreed to reimburse the Sales Agent for reasonable fees

and expenses, not to exceed $60,000 (including but not limited to the reasonable and documented fees and disbursements of its legal counsel),

and additional amounts for annual maintenance of the ATM Sales Agreement (including but not limited to the reasonable and documented fees

and disbursements of its legal counsel) on a quarterly basis, not to exceed $5,000 per quarter.

Each of the Company and

the Sales Agent has the right, by giving written notice as specified in the ATM Sales Agreement, to terminate the ATM Sales Agreement

in its sole discretion at any time upon five (5) days’ prior written notice.

The Sales Agent also has the right to terminate the

ATM Sales Agreement at any time in certain circumstances, including in the event of the occurrence of a material adverse change with respect

to the Company, the failure of the Company to perform its obligations under the ATM Sales Agreement, any failure to fulfill any condition

to the obligations of the Sales Agent under the ATM Sales Agreement, or any suspension or limitation of trading of the ATM Shares.

The ATM Sales Agreement

contains certain covenants, representations and warranties customary for an agreement of this type.

The Company agreed to provide indemnification

and contribution to the Sales Agent against certain liabilities, including liabilities under the Securities Act.

Waivers and Consents to ATM Financing

On September 20, 2024,

the Company entered into a Waiver and Consent, dated as of September 20, 2024 (the “Ionic ATM Waiver”), between the Company

and Ionic, pursuant to which Ionic waived any prohibition, restriction or adverse adjustment that would otherwise apply to any action

of the Company relating to an “at the market offering” (as defined in Rule 415(a)(4) under the Securities Act), of equity

securities of up to $5 million (“Waived ATM Financing”) under the Ionic Purchase Agreement or the Series A Certificate of

Pursuant to the Ionic ATM Waiver, regardless of the terms and conditions of the Ionic Purchase Agreement and the Series A

Certificate of Designation, the Company may at any time enter into any agreement relating to a Waived ATM Financing, the filing of a prospectus

supplement to a prospectus contained in an effective registration statement that was filed under the Securities Act relating to a Waived

ATM Financing, the announcement of a Waived ATM Financing, the issuance, offer, sale, or grant of any shares of Class B Common Stock relating

to a Waived ATM Financing, or the issuance, offer, sale, or grant of any securities in connection with either the provision of goods or

services or settlement of any obligations that may otherwise arise with respect to a Waived ATM Financing.

In addition, pursuant to the

Ionic ATM Waiver, Ionic waived any adjustment to the applicable Conversion Price, which partly determines the number of shares of Class

B Common Stock issuable upon conversion of a share of Series A Preferred Stock, that would otherwise occur as a result of any Waived ATM

Financing under the terms of the Series A Certificate of Designation.

On September 26, 2024,

the Company entered into a Limited Waiver and Consent, dated as of September 26, 2024 (the “Boustead ATM Waiver”), between

the Company and Boustead.

Pursuant to the Boustead ATM Waiver, Boustead waived any condition on, restriction on, compensation rights,

or rights of first refusal that would be applicable under the Boustead Engagement Letter and the Underwriting Agreement in relation to

a Waived ATM Financing.

Pursuant to the Boustead ATM Waiver, the Company may at any time enter into any agreement relating to a Waived

ATM Financing, the filing of a prospectus supplement to a prospectus contained in an effective registration statement that was filed under

the Securities Act relating to a Waived ATM Financing, the announcement of a Waived ATM Financing, the issuance, offer, sale, or grant

of any shares of the Class B Common Stock relating to a Waived ATM Financing, or the issuance, offer, sale, or grant of any securities

in connection with either the provision of goods or services or settlement of any obligations that may otherwise arise with respect to

a Waived ATM Financing.

As consideration, the Boustead ATM Waiver provides that the Company will promptly pay Boustead 3.0% of the gross

sales price of all shares of Class B Common Stock sold in connection with any Waived ATM Financing until the end of the applicability

of the provisions of the right of first refusal provisions of the Boustead Engagement Letter.

Critical Accounting Estimates

This discussion and analysis of our financial

10 unchanged sentences

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

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

involving management’s judgments and estimates.

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

management’s judgments and estimates.

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

5 unchanged sentences

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

If the carrying value exceeds the

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

Management uses considerable

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

There were no intangible

asset impairment charges in 2023 or 2022.

Finite-lived intangible assets are amortized

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

Our finite-lived intangible assets

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

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

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 year ended December

31, 2024 and 2023, there were no intangible asset impairment charges.

Finite-lived intangible assets are amortized using

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

Our finite-lived intangible assets include

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

Our indefinite-lived

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

Intangible assets internally developed are measured

15 unchanged sentences

to its fair value.

Advertising Expenses

The Company expenses advertising costs as they

Total advertising expenses were $944,635 and $436,066 for the year ended December 31, 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

The Company incurred research and development

expenses of $423,299 and $18,935 for the year ended December 31, 2024 and 2023, respectively, and have been included as

part of contract labor.

Stock Based Compensation

Service-Based Awards

The Company records stock-based compensation

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

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

to three years.

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

For restricted stock awards (“RSAs”)

3 unchanged sentences

Share repurchases are open market purchases.

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

When shares are cancelled, the value of repurchased

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

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

When shares are cancelled, the value of repurchased shares

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

Revenue Recognition

The Company recognizes revenue utilizing the

following steps:

The Company recognizes revenue utilizing the following

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

(ii) Identify the performance obligations in the contract;

(iii) Determine the transaction price;

(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

7 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

Contract liabilities consist of quarterly and

annual subscription revenue that have not been recognized.

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

As of December 31, 2024 and 2023, total contract liabilities were $369 and $3,445 respectively.

Contract liabilities are expected

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

Changes in contract liabilities for the year ended

December 31, 2024 are as follows:

Balance, January 1

Deferral of revenue

Recognition of revenue

Balance, December 31

Earnings per Share

4 unchanged sentences

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

In the accompanying consolidated

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

In the accompanying financial

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

during the year.

2 unchanged sentences

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

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

The Company accounts for warrants

and options using the treasury stock method.

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

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 December

31, 2024, warrants representing 105,490 shares of common stock equivalents were excluded from the computation from diluted net loss per

share as the result was anti-dilutive.

As described in more detail above (see Item 1.

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

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

”), the business

3 unchanged sentences

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

The Company adopted FASB Topic ASC 740, “Income

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

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

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

and their respective tax bases.

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

enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered

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

the enactment date.

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

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

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

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

No deferred tax assets or liabilities were recognized as of December 31, 2023

or December 31, 2022.

The Company adopted FASB ASC 740, Income Taxes,

at its inception.

Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable

to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable

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

The effect on deferred tax assets and

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

Deferred income tax expense

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

The components of the deferred tax assets

and liabilities are individually classified as current and non-current based on their characteristics.

Deferred tax assets are reduced

by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets

will not be realized.

No deferred tax assets or liabilities were recognized as of December 31, 2024 or December 31, 2023.

Segment Reporting

The Company operates as one operating

The Company's chief operating decision maker ("CODM") is its chief executive officer, who reviews the operating results

for the Company as a whole to make decisions about allocating resources and assessing financial performance.

The CODM uses operating margin

and net income to assess financial performance and allocate resources.

These financial metrics are used by the CODM to make key operating

decisions, such as the determination of the rate at which the Company seeks to grow operating margin, the allocation of budget between

operating expenses and the management and forecasting of cash to ensure enough capital is available.

Accordingly, we determined we operate

in a single reporting segment.

Our CEO assesses performance and decides how to

allocate resources primarily based on consolidated net income, which is reported on our Consolidated Statements of Operations.

on the Consolidated Balance Sheets represent our segment assets.

Recent Accounting Pronouncements

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

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

Fair Value Measurement of Equity Securities Subject to Contractual Sale

Restrictions”.

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

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

The amendments in this update

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

Early adoption is permitted.

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

financial statements.

November 2024, the FASB issued ASU 2024-03 final standard on Income Statement:

Disaggregation of Income Statement Expenses, which requires

disaggregated disclosure of income statement expenses for public business entities.

The ASU does not change the expense captions an entity

presents on the face of the income statement;

rather, it requires disaggregation of certain expense captions into specified categories

in disclosures within the footnotes to the financial statements.

This guidance will be effective for us on January 1, 2027.

The Company has considered

2 unchanged sentences

Recently Adopted Accounting Standards

In June 2016, the FASB

issued ASU No.

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

Instruments , which has been subsequently amended by ASU No.

2018-19, ASU No.

2019-04, ASU No.

2019-05, ASU No.

2019-10, ASU No.

2020-03 (“ASU 2016-13”).

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

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

supportable information to inform credit loss estimates.

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

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

credit loss requirements which were in effect for that period.

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

consolidated financial statements and related disclosures.

In January 2017, the

FASB issued ASU No.

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

Simplifying the Test for Goodwill Impairment, which simplifies

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

Instead of determining a hypothetical

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

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

carrying amounts.

In November 2023, the FASB issued ASU 2023-07,

which improves reportable segment disclosure requirements.

Primarily through enhanced disclosures about significant segment expenses among

other disclosure requirements.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within

fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company adopted ASU 2023-07 on January 1, 2024.

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

Company’s consolidated financial statements and related disclosures.

The Company has considered all other recently

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

The amendments

will be applied retrospectively to all prior periods presented in the accompanying financial statements.

The adoption of ASU 2023-07 has

not had a material effect on the Company’s statements and disclosures.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

5 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis