What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-14 compared with 2025-05-20 · 389 added, 265 removed, 65 unchanged (91% of the section changed)

Management’s Discussion

and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be

read in conjunction with the consolidated financial statements and the related notes included elsewhere in this quarterly report on Form

Forward-Looking Statements

This quarterly report on Form 10-Q contains “forward-looking

statements.” All statements other than statements of historical fact are “forward-looking statements” for purposes of

federal and state securities laws, including, but not limited to:

any projections of earnings, revenue, or other financial items;

statements regarding the adequacy, availability, and sources of capital, any statements of the plans, strategies, and objectives of management

for future operations;

any statements concerning proposed new products, services, or developments;

any statements regarding future economic

conditions or performance;

any statements of belief;

and any statements of assumptions underlying any of the foregoing.

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

following discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes included

elsewhere in this quarterly report on Form 10-Q.

Forward-Looking

statements may include the words “may,” “will,” “estimate,” “intend,” “continue,”

“believe,” “expect,” “plan,” “project,” or “anticipate,” and other similar

In addition to any assumptions and other factors and matters referred to specifically in connection with such forward-looking statements,

factors that could cause actual results or outcomes to differ materially from those contained in the forward-looking statements include

those factors set forth in the “Risk Factors” section included in our registration statement on Form S-1 (File No.

as amended, which was initially filed with the SEC on October 11, 2024 and declared effective by the SEC on February 7, 2025.

Although we believe that the expectations reflected

in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed.

Our future financial

condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties,

such as those disclosed in this quarterly report.

We do not intend, and undertake no obligation, to update any forward-looking statement,

except as required by law.

The information included in this Management’s

Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated

financial statements and the notes included in this quarterly report on Form 10-Q, and the audited consolidated financial statements and

notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our annual report on

Form 10-K for the year ended December 31, 2024, filed with the SEC on March 28, 2025 (the “Annual Report”).

Business Overview

We are a provider of event planning, production, and

broadcasting services headquartered in Pennsylvania.

We mainly produce virtual and hybrid events and physical events.

Virtual and hybrid

events involve virtual and hybrid event planning, production and broadcasting services, and continuing education services, all of which

are supported by our proprietary Xyvid Pro Platform.

Physical events were added to our revenue streams, due to our corporate restructuring

completed in fiscal year 2023, and mainly involve live streaming and video recording of physical events.

quarterly report on Form 10-Q contains “forward-looking statements.” All statements other than statements of historical fact

are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to:

any projections

of earnings, revenue, or other financial items;

any statements regarding the adequacy, availability, and sources of capital, any statements

of the plans, strategies, and objectives of management for future operations;

any statements concerning proposed new products, services,

or developments;

any statements regarding future economic conditions or performance;

any statements of belief;

and any statements of

assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “will,”

“estimate,” “intend,” “continue,” “believe,” “expect,” “plan,”

“project,” or “anticipate,” and other similar words.

In addition to any assumptions and other factors and matters

referred to specifically in connection with such forward-looking statements, factors that could cause actual results or outcomes to differ

materially from those contained in the forward-looking statements include those factors set forth in the “Risk Factors” section

included in our registration statement on Form S-1 (File No.

333-282621), as amended, which was initially filed with the SEC on October

11, 2024 and declared effective by the SEC on February 7, 2025, and in our registration statement on Form S-1 (File No.

333-288741), as

amended, which was initially filed with the SEC on July 17, 2025 and declared effective by the SEC on August 12, 2025.

we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from

those projected or assumed.

Our future financial condition and results of operations, as well as any forward-looking statements, are

subject to change and to inherent risks and uncertainties, such as those disclosed in this quarterly report.

We do not intend, and undertake

no obligation, to update any forward-looking statement, except as required by law.

information included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read

in conjunction with our unaudited condensed consolidated financial statements and the notes included in this quarterly report on Form

10-Q, and the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition

and Results of Operations contained in our annual report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March

28, 2025 (the “Annual Report”).

are a provider of event planning, production, and broadcasting services headquartered in Pennsylvania.

We mainly produce virtual and

hybrid events and physical events.

Virtual and hybrid events involve virtual and hybrid event planning, production and broadcasting services,

and continuing education services, all of which are supported by our proprietary Xyvid Pro Platform.

Physical events were added to our

revenue streams, due to our corporate restructuring completed in fiscal year 2023, and mainly involve live streaming and video recording

of physical events.

of the date of this quarterly report, we primarily generate revenue from virtual and hybrid events delivered to corporate customers.

We experienced a decrease in our total revenue and net income in the first quarter of fiscal year 2025, mainly due to an event

series with our biggest customer that took place in the first quarter of fiscal year 2024 that did not repeat in the first quarter

of fiscal year 2025.

For the three months ended March 31, 2025 and 2024, we had total revenue of approximately $739 thousand and

$1,128 thousand, respectively, and net loss of approximately $4,841 thousand and $405 thousand, respectively.

For the three months

ended March 31, 2025 and 2024, the revenue generated from virtual and hybrid events was approximately $713 thousand and $1,081

thousand, respectively, accounting for approximately 96.5% and 95.8% of our total revenue, respectively;

and the revenue generated

from physical events was approximately $26 thousand and $47 thousand, respectively, accounting for approximately 3.5% and 4.2% of

our total revenue, respectively.

Our mission is to deliver top-tier planning, production,

and broadcasting services for virtual, hybrid and physical events.

Our goal is to become a global leader in innovative virtual events

that enhance engagement and connectivity, making impactful and memorable experiences accessible to all.

Key Financial Performance Indicators

Our revenue is derived from the provision of virtual

and hybrid events and physical events on our Xyvid Pro Platform.

Cost of revenue

Our cost of revenue is primarily driven by the costs

paid to our employees for producing events and the costs of renting equipment and our studio.

We experienced an increase in our total revenue in the second quarter of fiscal year 2025, mainly due to an increase in revenue from

our physical events, which were provided to a new customer.

For the six months ended June 30, 2025 and 2024, we had total revenue of

approximately $1,855,000 and $2,151,000, respectively, and net loss of approximately $7,620,000 and $826,000, respectively.

months ended June 30, 2025 and 2024, the revenue generated from virtual and hybrid events was approximately $1,587,000 and $1,972,000,

respectively, accounting for approximately 85.6% and 91.7% of our total revenue, respectively;

and the revenue generated from physical

events was approximately $268,000 and $179,000, respectively, accounting for approximately 14.4% and 8.3% of our total revenue, respectively.

mission is to deliver top-tier planning, production, and broadcasting services for virtual, hybrid and physical events.

Our goal is to

become a global leader in innovative virtual events that enhance engagement and connectivity, making impactful and memorable experiences

accessible to all.

Agreement and Stipulation with Sunpeak Holdings Corporation (“SHC”)

April 23, 2025, we entered into a Settlement Agreement and Stipulation (the “Settlement Agreement”) with SHC, which became

effective on April 30, 2025, to settle certain outstanding obligations owed by us.

Pursuant to the Settlement Agreement, SHC agreed to

purchase certain outstanding payables owed by us to our designated creditors totaling approximately $4.91 million (the “Claims”)

and agreed to exchange the Claims for a settlement amount payable in shares of our common stock (the “Settlement Shares”).

The Settlement Shares were priced at the closing price of our common stock on April 23, 2025, subject to adjustment pursuant to the terms

of the Settlement Agreement.

other things, in the event that our common stock’s market price decreases to or below $0.25 per share or if at any time the thirty-day

average volume of the trading of our common stock drops to at or below 100,000 shares per day, then we will be deemed to be in default

under the Settlement Agreement.

SHC has agreed that it will not become the beneficial owner of more than 4.99% of common stock of us

at any point in time.

The Settlement Agreement and the issuance of the Settlement Shares were approved by the Circuit Court of the Twelfth

Judicial Circuit in and for Manatee County, Florida, Civil Division (the “Court”), on April 30, 2025 (Case No.

2025 CA 000858).

The Court entered an order confirming the fairness of the terms and conditions of the Settlement Agreement and the issuance of the Settlement

accordance with the terms of the Settlement Agreement, the Company issued the following amounts of freely tradable shares of common stock

(i) 175,000 shares on May 9, 2025 (the “Settlement Fee Shares”), (ii) 1,372,000 shares on May 14, 2025, (iii) 1,458,000

shares on May 15, 2025, (iv) 690,000 shares on June 4, 2025, (v) 707,000 shares on June 11, 2025, and (vi) 1,158,000 shares on June 25,

2025 (such shares in clauses (ii) through (vi) being, collectively, the “Issued Settlement Shares, ” and together with the

Settlement Fee Shares, the “SHC Shares”).

issuance of the SHC Shares were made in reliance upon the exemption from registration provided by Section 3(a)(10) of the Securities

Act of 1933, as amended, which exempts from registration any securities issued in exchange for one or more outstanding securities, claims,

or property interests where the terms and conditions of such issuance and exchange are approved by a court of competent jurisdiction

after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such

exchange have the right to appear.

foregoing description of the Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the

full text of the Agreement, which was filed as Exhibit 10.1 to our Current Report on Form 8-K dated May 2, 2025 and is incorporated by

reference herein.

Stock Purchase Agreement (“Purchase Agreement”) and Registration Right Agreement with Lincoln Park Capital Fund, LLC (“Lincoln

June 23, 2025, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park, pursuant to which Lincoln

Park committed to purchase from us, from time to time and subject to certain limitations and conditions, up to an aggregate of $20,000,000

of shares of our common stock over the term of the Purchase Agreement.

On the same date, we issued 882,145 shares of our common stock

to Lincoln Park.

In connection with the Purchase Agreement, we also entered into a registration rights agreement, dated June 23, 2025

(the “Registration Rights Agreement”), with Lincoln Park, pursuant to which we agreed to file a registration statement on

Form S-1 with the SEC to register under the Securities Act of 1933 the resale of the shares of our common stock that have been and may

be issued to Lincoln Park under the Purchase Agreement.

foregoing description of the Purchase Agreement and Registration Rights Agreement (collectively, the LPC Transaction Documents”)

does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement and Registration

Rights Agreement, which was filed as Exhibit 10.2 and Exhibit 10.3 to our Current Report on Form 8-K dated June 24, 2025, and is incorporated

by reference herein.

Issuance to Bancroft Capital, LLC (“Bancroft”)

connection with our initial public offering in February 2025, we entered into an underwriting agreement with Bancroft, under which Bancroft

was granted a right of first refusal to act as the sole placement agent for any private equity offerings we undertake.

As compensation

for the services Bancroft provided in connection with our entry into the LPC Transaction Documents, Bancroft invoiced us for a fee of

61,750 shares of our common stock.

Accordingly, on July 31, 2025, we issued 61,750 shares of our common stock to Bancroft as payment

for its services with respect to such transaction.

Issuance to MicroCap Advisory, LLC

July 18, 2025, the Company entered into a market awareness agreement, dated as of June 27, 2025 (the “MCA Agreement”), with

MicroCap Advisory, LLC (the “MC Advisor”), pursuant to which the MC Advisor will provide investor communications and market

awareness services to the Company for a six-month term.

The MC Advisor will develop and implement a multi-step investor outreach strategy,

including positioning, media planning, and campaign execution.

As compensation, the MC Advisor will receive a $15,000 setup fee and $100,000

per month, beginning one week after execution of the MCA Agreement.

Additionally, the Company will issue 500,000 fully earned warrants

to the MC Advisor, exercisable at $0.40 per share for two years, with anti-dilution adjustments in the event of a reverse stock split

and cashless exercise rights if unregistered.

Either party may terminate the MCA Agreement after 60 days upon 30 days’ written

As of the date of this quarterly report, the Company has not issued any warrants to the MC Advisor.

The Company expects to issue

the foregoing warrants to the MC Advisor by the end of 2025.

Financial Performance Indicators

revenue is derived from the provision of virtual and hybrid events and physical events on our Xyvid Pro Platform.

cost of revenue is primarily driven by the costs paid to our employees for producing events and the costs of renting equipment and our

general and administrative expenses

general and administrative expenses are primarily composed of personnel costs for sales and marketing staff and general corporate functions,

computer and software costs, and advertising and marketing expenses.

profit and operating profit margin

profit is the difference between our revenue and cost of revenue and selling, general and administrative expenses.

Operating profit margin

is the profit margin as a percentage of revenue.

income (expenses)

time to time, we have non-recurring, non-operating gains and losses which are reflected through other income (expense).

expenses consist of interest expenses arising from borrowings.

of Operations

of Results of Operations for the three months ended June 30, 2025 and 2024

following table sets forth our statements of operations for the three months ended June 30, 2025 and 2024:

(in thousands, except change % data)

Three Months Ended June 30,

Delivered events - Virtual and Hybrid

Delivered events - Physical

Total Revenues

Cost of revenues

Operating expenses:

Selling, General and Administrative Expenses

Selling, general and administrative expenses are primarily

composed of personnel costs for sales and marketing staff and general corporate functions, computer and software costs, and advertising

and marketing expenses.

Operating profit and operating profit margin

Operating profit is the difference between our revenue

and cost of revenue and selling, general and administrative expenses.

Operating profit margin is the profit margin as a percentage of

Other income (expenses)

From time to time, we have non-recurring, non-operating

gains and losses which are reflected through other income (expense).

Depreciation expenses

Total operating expenses

Loss from operations

Other income (expenses), net

Interest expenses

Interest expenses consist of interest expenses arising

from borrowings.

Results of Operations

Comparison of Results of Operations for the

three months ended March 31, 2025 and 2024

The following table sets forth our statements of operations

for the three months ended March 31, 2025 and 2024:

thousands, except change % data)

Months Ended March 31,

events - Virtual and Hybrid

events - Physical

General and Administrative Expenses

Loss before income taxes

Provision for income taxes

for the three months ended June 30, 2025 was $1,116,000 compared to $1,023,000 for the three months ended June 30, 2024.

Revenue increased

by $93,000, or 9.1%, compared to the three months ended June 30, 2024.

The increase was primarily driven by the following factors:

delivered events – virtual and hybrid events for the three months ended June 30, 2025 decreased by $36,000, or 4.0%, compared

to the three months ended June 30, 2024, mainly due to opportunities shifting to the third quarter of 2025, as clients shifted event

dates outside of the quarter.

Revenue from delivered

events – physical events for the three months ended June 30, 2025 increased by $129,000, or 97.7%, compared to the three months

ended June 30, 2024, mainly due to approximately $100,000 in revenue from additional events delivered to a new customer.

of revenue for the three months ended June 30, 2025 was $175,000 compared to $141,000 for the three months ended June 30, 2024.

of revenue increased by $34,000, or 24.1%, compared to the three months ended Jun 30, 2024.

The increase was primarily due to an increase

in physical events for such period causing the cost of revenue to increase by a proportionate amount.

General and Administrative Expenses (“SG&A expenses”)

expenses for the three months ended June 30, 2025 was $2,153,000 compared to $1,243,000 for the three months ended June 30, 2024.

expenses increased by $910,000, or 73.2%, compared to the three months ended Jun 30, 2024.

The increase was primarily due to the Company

now being a publicly traded organization, for additional legal, auditor, and SEC fees.

Income (Expense), net and Interest Expenses

expense for the three months ended June 30, 2025 was $1,344,000 and was primarily comprised of expenses in connection with entry into

the Settlement Agreement during the three months ended June 30, 2025 .

expenses for the three months ended June 30, 2025 was $80,000 compared to $48,000 for the three months ended June 30, 2024.

expenses increased by $32,000, or by 66.7%, primarily due to the increase in borrowing.

a result of the foregoing, the net loss was $2,784,000 during the three months ended June 30, 2025 compared to the net loss of $420,000

during the three months ended June 30, 2024.

Financial Measures

Net Loss and Non-GAAP Net Loss per Share

define non-GAAP net loss as GAAP net loss excluding the impact of stock-based compensation expense.

Non-GAAP net loss per share is calculated

by dividing non-GAAP net loss by the diluted weighted average shares of common stock outstanding.

We believe the presentation of these

adjusted operating results provides useful supplemental information to investors and facilitates the analysis and comparison of our operating

results across reporting periods.

Three Months Ended June 30,

(in thousands)

Stock-based compensation expense

Non-GAAP net loss

Weighted-average number of shares of common stock outstanding used to compute net loss per share, basic and diluted

Net loss per share - basic and diluted

Non-GAAP net loss per share - basic and diluted

EBITDA is a key measure used by our management to help us analyze our financial results, establish budgets and operating goals for managing

our business, evaluate our performance and make strategic decision.

define Adjusted EBITDA as our net loss excluding:

(i) depreciation and amortization, (ii) other expense (income), and (iii) stock-based

compensation expense.

following table provides a reconciliation of net loss to Adjusted EBITDA:

Three Months Ended June 30,

(in thousands)

Depreciation and amortization

Other income (expenses), net

Stock-based compensation expenses

Adjusted EBITDA

of Results of Operations for the six months ended June 30, 2025 and 2024

following table sets forth our statements of operations for the six months ended June 30, 2025 and 2024:

(in thousands, except change % data)

Six Months Ended June 30,

Delivered events - Virtual and Hybrid

Delivered events - Physical

Total Revenues

Cost of revenues

Operating expenses:

from operations

income (expenses), net

before income taxes

for income taxes

Revenue decreased by $389 thousand, or 34.5%, to $739

The decrease was primarily driven by following factors:

Selling, General and Administrative Expenses

Depreciation expenses

Total operating expenses

Loss from operations

Other income (expenses), net

Interest expenses

Loss before income taxes

Provision for income taxes

for the six months ended June 30, 2025 was $1,855,000 compared to $2,151,000 for the six months ended June 30, 2024.

Revenue decreased

by $296,000, or 13.8%, compared to the six months ended June 30, 2024.

The decrease was primarily driven by the following factors:

from delivered events – virtual and hybrid events for the six months ended June 30, 2025 decreased by $385,000, or 19.5%, compared

to the six months ended June 30, 2024, mainly due to one of our major customers that usually hosts a bi-annual event which took place

in 2024 and did not occur again as of the date of this quarterly report.

Revenue from delivered

events – Virtual and Hybrid decreased by $368 thousand mainly due to an event series with our biggest customer that took place

in the three months ended March 31, 2024 but did not repeat in the three months ended March 31, 2025.

This event series is held by

our biggest customer every other year.

Revenue from delivered events – physical events decreased by $21 thousand, mainly due to two customers’ events from the three months ended March 31, 2024 that did not repeat for the three months ended March 31, 2025.

events – physical events for the six months ended June 30, 2025 increased by $89,000, or 49.7%, compared to the six months

ended June 30, 2024, mainly due to approximately $100,000 in revenue from additional events delivered to a new customer.

of revenue for the six months ended June 30, 2025 was $361,000 compared to $425,000 for the six months ended June 30, 2024.

Cost of revenue

Cost of revenue decreased by $97 thousand, or 34.3%,

to $186 thousand, reflecting the lower direct costs associated with the lower corresponding revenue.

Selling, General and Administrative Expenses (“SG&A

SG&A expenses increased by

$3,960 thousand, or 328.4%, to $5,166 thousand, due to the recognition of stock compensation expense of $3,513 thousand in

connection with the vesting of employee stock options from the IPO, marketing expenses from brand and performance-related spend and

increased payroll expenses due to the addition of key members of the management team.

Other Income (Expense), net and Interest Expenses

The total of other expenses and

interest expenses increased by $43 thousand, or 138.7%, to $74 thousand, primarily due to the increase in borrowing.

As a result of the foregoing, the

net loss was $4,836 thousand during the three months ended March 31, 2025 compared to the net loss of $405 thousand during the three

months ended March 31, 2024.

Non-GAAP Financial Measures

Non-GAAP Net Loss and Non-GAAP Net Loss per Share

We define non-GAAP net loss as GAAP net loss excluding

the impact of stock-based compensation expense.

Non-GAAP net loss per share is calculated by dividing non-GAAP net loss by the diluted

weighted average shares of common stock outstanding.

We believe the presentation of these adjusted operating results provides useful supplemental

information to investors and facilitates the analysis and comparison of our operating results across reporting periods.

Three Months Ended March 31,

decreased by $64,000, or 15.1%, compared to the six months ended Jun 30, 2024.

The decrease was primarily due to a reduction in the amount

of equipment rentals needed for physical events and utilizing contractors, rather than fulltime staff.

General and Administrative Expenses (“SG&A expenses”)

expenses for the six months ended June 30, 2025 was $7,319,000 compared to $2,448,000 for the six months ended June 30, 2024.

expenses increased by $4,871,000, or 199.0%, compared to the six months ended Jun 30, 2024.

The increase was primarily due to accounting

for $3.5m of stock compensation expenses along with additional expenses of being a public company.

Income (Expense), net and Interest Expenses

expense for the six months ended June 30, 2025 was $1,350,000 and was primarily comprised of expenses in connection with entry into the

Settlement Agreement during the six months ended June 30, 2024.

expenses for the six months ended June 30, 2025 was $149,000 compared to $74,000 for the six months ended June 30, 2024.

Interest expenses

increased by $75,000, or by 101.4%, primarily due to the increase in borrowing.

a result of the foregoing, the net loss was $7,620,000 during the six months ended June 30, 2025 compared to the net loss of $826,000

during the six months ended June 30, 2024.

Financial Measures

Net Loss and Non-GAAP Net Loss per Share

define non-GAAP net loss as GAAP net loss excluding the impact of stock-based compensation expense.

Non-GAAP net loss per share is calculated

by dividing non-GAAP net loss by the diluted weighted average shares of common stock outstanding.

We believe the presentation of these

adjusted operating results provides useful supplemental information to investors and facilitates the analysis and comparison of our operating

results across reporting periods.

Six Months Ended June 30,

(in thousands)

4 unchanged sentences

Non-GAAP net loss per share - basic and diluted

Adjusted EBITDA

Adjusted EBITDA is a key measure used by our management

to help us analyze our financial results, establish budgets and operating goals for managing our business, evaluate our performance and

make strategic decision.

We define Adjusted EBITDA as our net loss excluding:

(i) depreciation and amortization, (ii) other expense (income), and (iii) stock-based compensation expense.

The following table provides a reconciliation of net

loss to Adjusted EBITDA:

Three Months Ended March 31,

EBITDA is a key measure used by our management to help us analyze our financial results, establish budgets and operating goals for managing

our business, evaluate our performance and make strategic decision.

define Adjusted EBITDA as our net loss excluding:

(i) depreciation and amortization, (ii) other expense (income), and (iii) stock-based

compensation expense.

following table provides a reconciliation of net loss to Adjusted EBITDA:

Six Months Ended June 30,

(in thousands)

3 unchanged sentences

Adjusted EBITDA

Cash Flows/Liquidity

Cash flows as of March 31, 2025 and December 31,

As of March 31, 2025 and December 31, 2024, we had

cash of $247 thousand and $48 thousand, respectively.

Liquidity is a measure of our ability to meet potential cash requirements.

fund our operations with cash flow from operations, and, when needed, borrowed funds from financial institutions and capital injections

from our principal shareholders.

Our principal use of liquidity has been to fund our daily operations and working capital.

We expect that

our cash and cash equivalents will be sufficient to fund our operating expenses and cash obligations for the next 12 months, although

our ability to continue as a going concern depends upon our ability to attract and retain revenue generating customers, acquire new customer

contracts, and secure additional financing.

Flows/Liquidity

flows as of June 30, 2025 and December 31, 2024

of June 30, 2025 and December 31, 2024, we had cash of $739,000 and $48,000, respectively.

Liquidity is a measure of our ability to meet

potential cash requirements.

We generally fund our operations with cash flow from operations, and, when needed, borrowed funds from financial

institutions and capital injections from our principal shareholders.

Our principal use of liquidity has been to fund our daily operations

and working capital.

We expect that our cash and cash equivalents will be sufficient to fund our operating expenses and cash obligations

for the next 12 months, although our ability to continue as a going concern depends upon our ability to attract and retain revenue generating

customers, acquire new customer contracts, and secure additional financing.

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

4 unchanged sentences

Stock-based compensation

Loss on extinguishment of debt

Changes in operating assets and liabilities:

2 unchanged sentences

Prepaid expenses and other assets

Income tax receivable

Accounts payable

16 unchanged sentences

Cash and cash equivalents at end of period

Operating Activities

Net cash used in operating activities

increased from $581 thousand during the three months ended March 31, 2024 to $6,785 thousand during the three months ended March 31,

The increase in cash outflow was primarily due to the higher loss in the three months ended March 31, 2025.

Investing Activities

cash used in investing activities increased from $269 thousand during the three months ended March 31, 2024 to $273 thousand during

the three months ended March 31, 2025.

The increase in cash outflow was mainly due to an increase in the amount capitalized with respect

to the internally developed software.

Financing Activities

Net cash provided by financing activity

increased from $917 thousand during the three months ended March 31, 2024 to $7,257 thousand during the three months ended March 31,

The increase was primarily due to the proceeds received from issuance of shares, partially offset by the payment made related

to the outstanding loans.

Contractual Obligations and Commitments

As of March 31, 2025, the Company had total of $4,664 thousand contractual

obligations for future payments.

of March 31, 2025

due by period:

lease payments

Capital Expenditures

Our capital expenditure primarily consists of acquisition

of computer hardware equipment and capitalized software.

the three months ended March 31, 2025 and 2024, we spent $273 thousand and $269 thousand, respectively, on acquisitions of

computer hardware / equipment and capitalized software.

Off-Balance Sheet Arrangements

of March 31, 2025, the Company did not have any off-balance sheet arrangements, as defined in the rules and regulations of the

Critical Accounting Policies and Estimates

The preparation of the consolidated financial statements

and accompanying notes included elsewhere in this annual report requires us to make estimates and judgments that affect the reported amounts

of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

We base our estimates on historical

experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the

basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

identified certain accounting policies that are significant to the preparation of our consolidated financial statements.

These accounting

policies are important for an understanding of our financial condition and results of operation.

Critical accounting policies are those

that are most important to the portrayal of our financial conditions and results of operations and require management’s difficult,

subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain

and may change in subsequent periods.

Certain accounting estimates are particularly sensitive because of their significance to financial

statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current

While our significant accounting policies are more fully described in Note 2 to the consolidated financial statements included

elsewhere in this prospectus, we believe the following critical accounting policies involve the most significant estimates and judgments

used in the preparation of our consolidated financial statements.

Use of Estimates

provided by operating activities mainly consists of our net loss adjusted for certain non-cash items, including stock-based compensation

expense and depreciation and amortization, as well as the effect of changes in operating assets and liabilities during each period.

the six months ended June 30, 2025, net cash used in operating activities was $7,577,000, primarily resulting from our net loss during

the period and increase in advances to a related party, partially offset by non-cash adjustments related to stock-based compensation

and loss on extinguishment of debt.

the six months ended June 30, 2024, net cash used in operating activities was $1,007,000, primarily resulting from our net loss.

cash used in investing activities decreased from $541,000 for the six months ended June 30, 2024 to $530,000 for the six months ended

June 30, 2025.

The decrease in cash outflow was mainly due to a decrease in the purchase of property and equipment.

cash provided by financing activity increased from $1,327,000 for the six months ended June 30, 2024 to $8,798,000 for the six months

ended June 30, 2025.

The increase was primarily due to the proceeds received from issuance of shares and short-term loans, partially

offset by the payments made related to the outstanding loans.

Obligations and Commitments

of June 30, 2025, the Company had total of $4,306,000 contractual obligations for future payments.

As of June 30, 2025

(in thousands)

Payments due by period:

Short-term debt

Operating lease payments

capital expenditure primarily consists of acquisition of computer hardware equipment and capitalized software.

the six months ended June 30, 2025 and 2024, we spent $529,000 and $511,000, respectively, on acquisitions of computer hardware/equipment

and capitalized software.

Sheet Arrangements

of June 30, 2025, the Company did not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Accounting Policies and Estimates

preparation of the consolidated financial statements and accompanying notes included elsewhere in this annual report requires us to make

estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent

assets and liabilities.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable

under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities

that are not readily apparent from other sources.

We have identified certain accounting policies that are significant to the preparation

of our consolidated financial statements.

These accounting policies are important for an understanding of our financial condition and

results of operation.

Critical accounting policies are those that are most important to the portrayal of our financial conditions and

results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make

estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

Certain accounting estimates

are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting

the estimate may differ significantly from management’s current judgments.

While our significant accounting policies are more fully

described in Note 2 to the consolidated financial statements included elsewhere in this quarterly report, we believe the following critical

accounting policies involve the most significant estimates and judgments used in the preparation of our consolidated financial statements.

preparation of the consolidated financial statements in conformity with the U.S.

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These estimates are based on management’s best knowledge

of current events and actions that the Company may undertake in the future and include, but are not limited to, allowance

for credit losses, useful lives of property and equipment and capitalized software, the carrying value of operating lease right-of-use

assets, impairment of long-lived assets, and valuation allowance against net deferred tax assets.

Actual results could differ from those

The following critical accounting policies rely upon

assumptions and estimates and were used in the preparation of our financial statements:

Revenue Recognition

of current events and actions that the Company may undertake in the future and include, but are not limited to, allowance for credit

losses, useful lives of property and equipment and capitalized software, the carrying value of operating lease right-of-use assets, impairment

of long-lived assets, and valuation allowance against net deferred tax assets.

Actual results could differ from those estimates.

following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our financial statements:

Company applies ASC 606 for all periods presented in the consolidated financial statements.

To determine the appropriate amount

of revenue to be recognized in accordance with ASC 606, the Company follows a five-step model as follows:

1 – Identification

of the contract with a customer

2 – Identification

of the performance obligation in the contract

3 – Determination of

the transaction price

4 – Allocation of the

transaction price to the performance obligation in the contract

5 – Recognition of

revenue when, or as, a performance obligation is satisfied

Hybrid, virtual and physical

event revenue

Revenue from hybrid, virtual

and physical events is generated from producing and delivering hybrid or virtual events using the Company’s platform, the Xyvid

Pro Platform, or delivering physical events.

Virtual events are online events and conferences where participants interact in an online

environment, and physical events are events where participants meet in a physical location.

The transaction price is

determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer.

The transaction price is generally fixed at contract inception and is based on the agreed upon rates stated in the contract which indicates

the amount of consideration the Company expects to be entitled to in exchange for satisfaction of performance obligation (i.e., delivering

The amount on the final invoice depends on the actual work performed and might differ from the amount stated in the initial contract.

When there is variable consideration included in the transaction price if, in the management’s judgment, it is probable that a significant

future reversal of cumulative revenue recognized under the contract will not occur, the Company and the customer agree on the price on

the final invoice, and revenue is recognized based on the amount on the final invoice.

None of our contracts contain a significant financing

Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to government entities.

Revenue is recognized at

the time the related performance obligation is satisfied by transferring the promised services to the customer, which is upon completion

of the event.

Revenue is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those

The Company sometimes enters

into the contract with a bundle of events.

Contracts that contain multiple performance obligations require an allocation of the transaction

price to each performance obligation based on each performance obligation’s relative standalone selling price.

The Company’s

contracts with multiple performance obligations are generally sold over the same contract terms as that of the contract with single performance

obligation and have the same pattern of transferring services to the customer, and therefore, they are accounted for as one combined performance

obligation in the context of the contract.

From time to time, the Company

engages subcontractors for delivering events.

The Company assesses and records revenue on a gross basis as a principal versus on a net

basis as an agent in the presentation of revenue and expenses.

For events delivered with subcontractors, the Company has concluded that

gross reporting is appropriate because the Company (i) has the risk of identifying and hiring qualified vendors, (ii) has the discretion

to select the vendors and establish their price and duties, and (iii) bears the risk for services that are not fully paid for by its customers.

To determine the appropriate amount of revenue

to be recognized in accordance with ASC 606, the Company follows a five-step model as follows:

– Identification of the contract with a customer

– Identification of the performance obligation in the contract

– Determination of the transaction price

– Allocation of the transaction price to the performance obligation in the contract

– Recognition of revenue when, or as, a performance obligation is satisfied

virtual and physical event revenue

from hybrid, virtual and physical events is generated from producing and delivering hybrid or virtual events using the Company’s

platform, the Xyvid Pro Platform, or delivering physical events.

Virtual events are online events and conferences where participants

interact in an online environment, and physical events are events where participants meet in a physical location.

transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services

to the customer.

The transaction price is generally fixed at contract inception and is based on the agreed upon rates stated in the contract

which indicates the amount of consideration the Company expects to be entitled to in exchange for satisfaction of performance obligation

(i.e., delivering events).

The amount on the final invoice depends on the actual work performed and might differ from the amount stated

in the initial contract.

When there is variable consideration included in the transaction price if, in the management’s judgment,

it is probable that a significant future reversal of cumulative revenue recognized under the contract will not occur, the Company and

the customer agree on the price on the final invoice, and revenue is recognized based on the amount on the final invoice.

contracts contain a significant financing component.

Revenue is recognized net of any taxes collected from customers, which are subsequently

remitted to government entities.

is recognized at the time the related performance obligation is satisfied by transferring the promised services to the customer, which

is upon completion of the event.

Revenue is recognized in an amount that reflects the consideration that the Company expects to receive

in exchange for those services.

Company sometimes enters into the contract with a bundle of events.

Contracts that contain multiple performance obligations require an

allocation of the transaction price to each performance obligation based on each performance obligation’s relative standalone selling

The Company’s contracts with multiple performance obligations are generally sold over the same contract terms as that of

the contract with single performance obligation and have the same pattern of transferring services to the customer, and therefore, they

are accounted for as one combined performance obligation in the context of the contract.

time to time, the Company engages subcontractors for delivering events.

The Company assesses and records revenue on a gross basis as

a principal versus on a net basis as an agent in the presentation of revenue and expenses.

For events delivered with subcontractors,

the Company has concluded that gross reporting is appropriate because the Company (i) has the risk of identifying and hiring qualified

vendors, (ii) has the discretion to select the vendors and establish their price and duties, and (iii) bears the risk for services that

are not fully paid for by its customers.

and Equipment, Net

equipment are recorded at the cost less accumulated depreciation.

and equipment are recorded at the cost less accumulated depreciation.

Depreciation is computed using the straight-line method.

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useful lives of assets are as follows:

Property and Equipment

Estimated Useful Life

and Equipment

Computer and equipment

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Leasehold improvement

Shorter of 10 years or lease term

Repair and maintenance

costs are expensed as incurred.

Shorter of 10 years or lease

and maintenance costs are expensed as incurred.

assets consist of capitalized software.

1 unchanged sentence

350-40, Internal-use software.

The costs incurred prior to the application development stage

and post implementation are expensed as incurred.

Direct and incremental internal and external costs incurred during the application development

stage are capitalized until the application is substantially complete and ready for its intended use, at which point amortization begins.

Training, data conversion and maintenance costs are expensed as incurred.

Costs of capitalized software are amortized on a straight-line

basis over the estimated period of benefit, which is approximately five years, and are recorded in cost of revenue in the Consolidated

Statements of Operations.

The costs incurred prior to the application development stage and post implementation are expensed as

Direct and incremental internal and external costs incurred during the application development stage are capitalized until

the application is substantially complete and ready for its intended use, at which point amortization begins.

Training, data conversion

and maintenance costs are expensed as incurred.

Costs of capitalized software are amortized on a straight-line basis over the estimated

period of benefit, which is approximately five to seven years, and are recorded in cost of revenue in the Consolidated Statements of

or Disposal of Long-Lived Assets

Long-lived assets

used in operations are reviewed for impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.

For long-lived assets to be held and used, the Company recognizes an impairment loss only if the carrying amount is not recoverable when

compared to the Company’s undiscounted cash flows, and the impairment loss is measured based on the difference between the carrying

amount and fair value.

Long-lived assets held for sales are reported at the lower of cost or fair value less costs to sell.

assets used in operations are reviewed for impairment whenever events or changes in circumstances indicate that carrying amounts may

not be recoverable.

For long-lived assets to be held and used, the Company recognizes an impairment loss only if the carrying amount

is not recoverable when compared to the Company’s undiscounted cash flows, and the impairment loss is measured based on the difference

between the carrying amount and fair value.

Long-lived assets held for sales are reported at the lower of cost or fair value less costs

Quantitative and Qualitative Disclosures About Market Risk .

As a smaller reporting company, we are not required

to provide this information.

a smaller reporting company, we are not required to provide this information.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis