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What changed in Strive, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Strive, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+576 added−580 removedSource: 10-K (2025-03-31) vs 10-K (2024-04-02)

Top changes in Strive, Inc.'s 2024 10-K

576 paragraphs added · 580 removed · 161 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeTernary generates revenue by charging community owners a monthly subscription plus a processing fee to use its platform. ● We launched a new AE.360.DDM website; engaged music producer Jeff Blue as Head of Entertainment to lead the development of the AE.360.DDM Music and Entertainment Artist and Repertoire (A&R) service; hired a Senior Project Manager for all Discord servers under the AE.360.DDM suite of services; introduced a ChatGPT AI bot as an AE.360.DDM Discord server customer service feature; engaged professional golfers Bryson DeChambeau and Scott Verplank to promote the AE.360.DDM service; and engaged Michael Irvin, American sports commentator and former professional football player, to provide marketing services for the AE.360.DDM service. ● We signed AE.360.DDM contracts with apparel brand Kappa USA, rock band Matchbox Twenty, and former professional football player Michael Irvin.
Biggest changeDuring 2023 and through March 2024, we initiated an online marketing campaign and expanded use of SEO, Facebook Ads, Google Ads and Google Analytics to accelerate customer acquisition for our AE.360.DDM service; launched a new AE.360.DDM website; engaged music producer Jeff Blue as Head of Entertainment to lead the development of the AE.360.DDM Music and Entertainment A&R service; hired a Senior Project Manager for all Discord servers under the AE.360.DDM suite of services; introduced a ChatGPT AI bot as an AE.360.DDM Discord server customer service feature; engaged professional golfers Bryson DeChambeau and Scott Verplank to promote the AE.360.DDM service; and engaged Michael Irvin, American sports commentator and former professional football player, to provide marketing services for the AE.360.DDM service; launched an official YouTube channel, “The Lounge,” which will feature podcast interviews with celebrities, sports figures, business professionals, and more, and where interviews will focus on each guest’s journey through life; expanded the AE.360.DDM service with Ternary V2, the next generation of the Ternary Stripe-verified payment processing platform for Discord communities; introduced a ChatGPT AI bot as an AE.360.DDM Discord server customer service feature; and entered into an agreement with Zendrop, an industry leader in dropshipping and ecommerce, to provide CRM, Discord customer analytics, payment processing, and related services.
Private chat channels may be used to offer premium content to users. ● Third-party integrations, which may be used to integrate the use of complimentary apps into the Discord server such as other social media platforms, productivity or data-management apps, and others. ● Special-purpose community bot and chat features. ● External links to websites that a client wishes to promote may also be included. ● “360.M” Management service: We will act as the lead moderator and community manager of the client’s Discord server.
Private chat channels may be used to offer premium content to users. ● Third-party integrations, which may be used to integrate the use of complimentary apps into the Discord server such as other social media platforms, productivity or data-management apps, and others. ● Special-purpose community bot and chat features. ● External links to websites that a client wishes to promote may also be included. 6 ● “360.M” Management service: We will act as the lead moderator and community manager of the client’s Discord server.
While we believe that Gen Z will continue to be our primary market, our recently-expanded Discord server offering also features education and entertainment content covering real estate investments, which is expected to appeal strongly to older generations as well. 1 We initially developed our Discord community and other social media following for our company through the talents, insights and efforts of our executive social influencers, Messrs.
While we believe that Gen Z will continue to be our primary market, our expanded Discord server offering also features education and entertainment content covering real estate investments, which is expected to appeal strongly to older generations as well. 1 We initially developed our Discord community and other social media following for our company through the talents, insights and efforts of our executive social influencers, Messrs.
We believe it is significant, and shows the pioneering vision of our founders, that we were able to obtain the Discord domain names of “STOCKS”, “CRYPTOS”, “NFTS”, and “REALTY” for their four main Discord communities. We believe that each of our servers is one of the first of its kind on Discord.
We believe it is significant, and shows the pioneering vision of our founders, that we were able to obtain the Discord domain names of “STOCKS”, “CRYPTOS”, “NFTS”, and “REALTY” for their four main Discord communities. We believe that each of these servers is one of the first of its kind on Discord.
Through the consistent release of relevant content, cross-marketing, and strategic subscription pricing, we anticipate that our various Discord communities will continue to grow. Our record of growth on Discord has also depended and will continue to depend on a massive social media following.
Through the consistent release of relevant content, cross-marketing, strategic subscription pricing, and strategic acquisitions, we anticipate that our various Discord communities will continue to grow. Our record of growth on Discord has also depended and will continue to depend on a massive social media following.
Our largest Discord server focuses on stock investing education and entertainment, and we have smaller but growing real estate and cryptocurrency education and entertainment Discord servers. One of the unique aspects of Discord is that the base access to certain materials is free to all users.
Our largest Discord server, “STOCKS”, focuses on stock investing education and entertainment, and we have smaller but growing real estate and cryptocurrency education and entertainment Discord servers. One of the unique aspects of Discord is that the base access to certain materials is free to all users.
According to Bloomberg, on September 15, 2021, Discord’s valuation doubled from $7 billion in 2020 to about $15 billion based on a $500 million capital raise. 3 Discord is split into servers – essentially chat rooms similar to the workplace tool Slack – which facilitate casual, free-flowing conversations about shared interests such as gaming, music, art, school, and memes.
According to Bloomberg, on September 15, 2021, Discord’s valuation doubled from $7 billion in 2020 to about $15 billion based on a $500 million capital raise. 4 Discord is split into servers – essentially chat rooms similar to the workplace tool Slack – which facilitate casual, free-flowing conversations about shared interests such as gaming, music, art, school, and memes.
Kyle Fairbanks, our Executive Vice-Chairman and Chief Marketing Officer, had been actively investing and developing social influencer followings on their own when they had a vision: Bring Wall Street trading education and entertainment to the Generation Z masses through social media through the community-based platform known as Discord. Mr. Sarkhani and Mr.
Arshia Sarkhani, our Chief Executive Officer and President, and Mr. Kyle Fairbanks, our Executive Vice-Chairman and Chief Marketing Officer, had been actively investing and developing social influencer followings on their own when they had a vision: Bring Wall Street trading education and entertainment to the Generation Z masses through social media through the community-based platform known as Discord. Mr.
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources ”. 2 Industry Overview The social influencer and online media presence on various platforms are expanding and evolving. More than any previous generation, Generation Z is immersed in social media platforms like TikTok, X, and Meta Platforms’ Facebook and Instagram.
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources ”. 3 Industry Overview The social influencer and online media presence on various platforms are expanding and evolving. More than any previous generation, Generation Z is immersed in social media platforms like TikTok, X, and Meta Platforms’ Facebook and Instagram.
Since deciding to form our Discord communities, our social influencers’ effective use of TikTok and other social media has fueled their rapid growth.
Since deciding to form our Discord communities, our social influencers’ effective use of TikTok and other social media has fueled their growth.
Through social media, we have conducted marketing and other social media campaigns on behalf of clients in investing, gaming, recreation, cryptocurrency assets, NFTs, and other areas through our growing team of social media influencers, which we call our “Social Influencer Network,” or “SiN”. 4 We utilize our “SiN” or “Social Influencer Network,” our social influencer independent contractors, in part to increase social media reach for our clients’ Discord servers or to drive traffic to their businesses.
Through social media, we have conducted marketing and other social media campaigns on behalf of clients in investing, gaming, recreation, cryptocurrency assets, NFTs, and other areas through our team of social media influencers, which we call our “Social Influencer Network,” or “SiN”. 5 We utilize our “SiN” or “Social Influencer Network,” our social influencer independent contractors, in part to increase social media reach for our clients’ Discord servers or to drive traffic to their businesses.
Since August 2020, as a result of social media campaigns helping to promote our Discord servers in the financial education and entertainment space, our social media presence has grown organically from fewer than 50,000 members and followers, to 2 million by March 2024. Our social media reach across all platforms has accumulated well over 1 billion interactions.
Since August 2020, as a result of social media campaigns helping to promote our Discord servers in the financial education and entertainment space, our social media presence has grown from fewer than 50,000 members and followers, to over 2 million by December 31, 2024. Our social media reach across all platforms has accumulated well over 1 billion interactions.
As of March 2024, the platform has more than 150 million active users each month – up from 56 million in 2019. It has expanded from gamers to many other groups including music aficionados, students, art communities, and cryptocurrency enthusiasts.
As of March 2025, the platform has more than 259 million active users each month – up from 56 million in 2019. It has expanded from gamers to many other groups including music aficionados, students, art communities, and cryptocurrency enthusiasts.
Team leaders usually have the ability to create channels, create and delete roles, and perform other administrative functions ● Provide informative, fun, and interactive announcements; ● Make suggestions on how to improve the Discord community based on performance over time; ● Add all necessary bots for security, gaming, fun and so on. ● Managing the Discord server through moderation and maintenance through a proprietary process. ● ChatGPT AI bot as an AE.360.DDM Discord server customer service feature.
Features may include the following: ● Moderating and interacting in daily chats; ● Answering support tickets; ● Acting as a moderator and team leader; team leaders usually have the ability to create channels, create and delete roles, and perform other administrative functions; ● Provide informative, fun, and interactive announcements; ● Make suggestions on how to improve the Discord community based on performance over time; ● Add all necessary bots for security, gaming, fun and so on. ● Managing the Discord server through moderation and maintenance through a proprietary process. ● ChatGPT AI bot as an AE.360.DDM Discord server customer service feature.
As one of the largest community-based education and entertainment platforms on Discord, with four separate servers with a combined user membership of approximately 210,000 as of March 2024, we provide financial literacy education and entertainment on trading and investment.
As one of the largest community-based education and entertainment platforms on Discord, with ten separate servers with a combined user membership of approximately 206,899 as of December 31, 2024, we provide financial literacy education and entertainment on trading and investment.
ITEM 1. BUSINESS. Overview Asset Entities is a technology company providing social media marketing and content delivery services across Discord, TikTok, and other social media platforms. We also design, develop and manage servers for communities on Discord. Based on the rapid growth of our Discord servers and social media following, we have developed three categories of services.
ITEM 1. BUSINESS. Overview Asset Entities is a technology company providing social media marketing and content delivery services across Discord, TikTok, and other social media platforms. We also design, develop and manage servers for communities on Discord.
In forming thriving community groups on Discord, we designed and developed four Asset Entities server communities and manage a combined server user membership of approximately 260,000 as of March 2023. As a result, we have developed a high level of expertise in designing, developing, and managing Discord servers.
In forming community groups on Discord, we designed and developed 25 Asset Entities server communities and manage a combined server user membership of approximately 212,253 as of December 31, 2024. As a result, we have developed a high level of expertise in designing, developing, and managing Discord servers.
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.
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. For further discussion, see Part II. Item 7.
Fairbanks sensed that social media could empower retail investors, as later demonstrated in the extreme by recent developments such as the GameStop meme stock phenomenon. Based on their vision and personal investing experience, Mr. Sarkhani and Mr. Fairbanks founded our company with fellow investors and social influencers Jackson Fairbanks, our Director of Socials, and Arman Sarkhani, our Chief Operating Officer.
Sarkhani and Mr. Fairbanks sensed that social media could empower retail investors, as later demonstrated in the extreme by recent developments such as the GameStop meme stock phenomenon. Based on their vision and personal investing experience, Mr. Sarkhani and Mr.
TikTok’s quick ascension to Gen Z dominance at comparable levels to other well-established online titans has captivated potential investors, e-marketers, and others looking to profit from this bustling and youthful platform.
Their most-used social media platforms are Instagram, Snapchat, and TikTok, according to a 2021 Pew Research survey. TikTok’s quick ascension to Gen Z dominance at comparable levels to other well-established online titans has captivated potential investors, e-marketers, and others looking to profit from this bustling and youthful platform.
We also recently launched a real estate Discord server in May 2022, with the server name “REALTY”, to provide similar content on various aspects of residential and commercial real estate investing.
Subsequently, in 2021, we formed similar servers focusing on cryptocurrencies and nonfungible tokens, or NFTs, with the server names “CRYPTOS” and “NFTS”, respectively. We also launched a real estate Discord server in May 2022, with the server name “REALTY”, to provide similar content on various aspects of residential and commercial real estate investing.
Our company initially focused on providing social media and marketing campaigns and consulting services for clients. By October 2020, we had determined that the social media platform Discord, which focuses on users’ shared interests and features premium content instead of advertisements, would be the most effective forum for our vision.
By October 2020, we had determined that the social media platform Discord, which focuses on users’ shared interests and features premium content instead of advertisements, would be the most effective forum for our vision. We formed a stock investing education and entertainment Discord server, with the server name “STOCKS”.
Meanwhile, there is new vocabulary to decipher every day if investors want to understand chatter about the markets, from “diamond hands” to NFTs. While banks and mutual fund companies offer advisory services to their members, they tend to reserve advisory services for higher-net-worth individuals, and generally do not make their advice particularly entertaining or accessible to Generation Z consumers.
While banks and mutual fund companies offer advisory services to their members, they tend to reserve advisory services for higher-net-worth individuals, and generally do not make their advice particularly entertaining or accessible to Generation Z consumers.
As Bloomberg has reported (“Influencers Are Luring Investors Flummoxed by Meme Stonks and Options,” June 18, 2021), in the U.S., there is relatively little formal personal-finance education. Only seven states require – or are in the process of mandating – a standalone high school course on the topic, according to the advocacy group Next Gen Personal Finance.
As Bloomberg has reported (“Influencers Are Luring Investors Flummoxed by Meme Stonks and Options,” June 18, 2021), in the U.S., there is relatively little formal personal-finance education.
With such authority over the way consumers spend their money on commercial goods, Gen Z influencers are bound to sway their followers’ interests in the area of financial education. Gen Z’s social media habits are distinctive from other generations. Their most-used social media platforms are Instagram, Snapchat, and TikTok, according to a 2021 Pew Research survey.
Internet users look to niche influencers they trust as their go-to source for new information and product recommendations. With such authority over the way consumers spend their money on commercial goods, Gen Z influencers are bound to sway their followers’ interests in the area of financial education. Gen Z’s social media habits are distinctive from other generations.
For most students, learning about money means learning about topics like budgeting, understanding compound interest or opening a savings account. While this information might be useful, there are many more complex and risky financial opportunities available to young, inexperienced investors who are digital natives, i.e., most of Generation Z.
While this information might be useful, there are many more complex and risky financial opportunities available to young, inexperienced investors who are digital natives, i.e., most of Generation Z. $1 can be used to open financial accounts and buy fractions of shares or portions of cryptocurrencies through companies like Robinhood, Cash App and others.
As of March 2024, our Discord servers had approximately 210,000 members combined, consisting of approximately 150,000, 48,000, and 11,500 members on our STOCKS, REALTY, and CRYPTOS servers, respectively. We plan to launch servers with other popular investment themes in the future.
As of December 31, 2024, we had launched or acquired a total of ten Discord servers, and our Discord servers had approximately 206,899 members combined. We plan to launch or acquire servers with other popular investment themes in the future.
All of these services – our Discord investment education and entertainment, social media and marketing, and AE.360.DDM services – are therefore based on our effective use of Discord as well as other social media including TikTok, X, Instagram, and YouTube. Our Background In 2020, Mr. Arshia Sarkhani, our Chief Executive Officer and President, and Mr.
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 Background In 2020, Mr.
First, we have established and developed large communities with subscription upgrades to premium content on our investment education and entertainment servers on Discord. Second, we develop, codevelop and execute influencer social media and marketing campaigns for clients. Third, we design, develop and manage Discord servers for clients under our “AE.360.DDM” brand.
Based on the growth of our Discord servers and social media following, we have developed three categories of services: (1) our Discord investment education and entertainment services, (2) social media and marketing services, and (3) our “AE.360.DDM” brand services.
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We formed a stock investing education and entertainment Discord server, with the server name “STOCKS”. Subsequently, in 2021, we formed similar servers focusing on cryptocurrencies and nonfungible tokens, or NFTs, with the server names “CRYPTOS” and “NFTS”, respectively.
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Fairbanks founded our company with fellow investors and social influencers Jackson Fairbanks, our Director of Socials, and Arman Sarkhani, our Chief Operating Officer. Our company initially focused on providing social media and marketing campaigns and consulting services for clients.
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Fiscal Year 2023 Highlights During 2023, we took the following initiatives to expand our business: ● In November 2023, we acquired certain assets of Ternary Inc., a Florida corporation (“Ternary FL”), Ternary Developments Inc., a Delaware corporation (“Ternary DE” and together with Ternary FL, “Ternary”), and their Chief Executive Officer, Jason Lee, relating a cloud-based subscription management solution for Discord communities and Stripe-verified payment processor, and OptionsSwing Inc. a Florida corporation (“OptionsSwing”), the provider of an investment research and analysis education service.
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In addition, through Ternary v2, our subscription management and payment processing solution for Discord communities, subscribers can monetize and manage their Discord users.
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The acquisitions are intended to add new Discord and social media customers to Asset Entities, expand the Company’s platform, and provide a Stripe-verified payment processing platform to Asset Entities’ AE.360.DDM suite of services for Discord communities and beyond.
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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 expire.
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In February 2024, we launched Ternary V2, the next generation of the Ternary platform, which includes additional customer relations management (CRM) tools, allowing community owners the ability to scale, manage, and transact payments all in a single platform.
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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.
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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.
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Fiscal Year 2024 Highlights During 2024, we took the following initiatives to expand our business: ● In March 2024, we launched our official YouTube channel, "The Lounge," which features podcast interviews with celebrities, sports figures, business professionals, and more, and where interviews will focus on each guest's journey through life.
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The Company initiated a sale of 621,590 shares of common stock under its Amended and Restated Closing Agreement (as amended and as defined in Item 5.
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Previous guests have included Michael “the Playmaker” Irvin, former NFL superstar Hall of Fame wide receiver and three-time Superbowl Champion; Jeff Blue, the Company’s Head of Entertainment and a multi-platinum music producer; and Ray Crockett, a winner of two Super Bowl rings. ● In March 2024, we entered into an agreement with Zendrop, an industry leader in dropshipping and ecommerce.
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“ Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities – Recent Sales of Unregistered Securities ”) 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.
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We will provide its services and solutions to Zendrop through Ternary v2, our SaaS platform for payment processing and Stripe Verified Partner for Discord communities.
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Only $1 or less can be used to open financial accounts and buy fractions of shares or portions of cryptocurrencies through companies like Robinhood, Cash App and others. With slightly more in their investment accounts, people can get access to higher-risk strategies such as margin or option trading.
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These services will include a suite of customer relationship management (CRM) solutions, Discord customer analytics, and payment processing. ● In May 2024, we completed the first closing of our financing transaction involving the sale of shares of the Company’s newly designated Series A Preferred Stock, for gross proceeds of $1.5 million, from an institutional investor. ● In April 2024, we filed a Registration Statement on Form S-3 (File No. 333-278707) (the “Shelf Registration Statement”) with the Securities and Exchange Commission (the “SEC”), which was declared effective by the SEC on April 26, 2024.
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Internet users look to niche influencers they trust as their go-to source for new information and product recommendations, and 74% of consumers say they would spend up to $629 on a product recommended by an influencer.
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Pursuant to the Shelf Registration Statement, we may offer to the public from time to time, in one or more offerings, shares of Class B Common Stock, preferred stock, debt securities, warrants, subscription rights, and units in up to a total aggregate offering amount of $100,000,000, 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.
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Features may include the following: ● Moderating and interacting in daily chats; 5 ● Answering support tickets; ● Acting as a moderator and team leader.
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The securities will be offered at prices and on terms to be determined at the time of any such offering.
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COVID-19 Pandemic On March 11, 2020, the World Health Organization declared the novel coronavirus COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. 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.
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The specifics of any offerings, along with the use of proceeds of any such securities, will be described in detail in a prospectus supplement at the time of any such offering. 2 ● In June 2024, we acquired the assets of TommyBoyTV, LLC (“TommyBoyTV”), a company engaged in the business of Discord development, social media, online community management, marketing, and analytics, expanding the Company’s share of the Discord community market. ● In July 2024, we completed the second closing of our financing transaction involving the sale of shares of the Company’s newly designated Series A Preferred Stock, for gross proceeds of $1.5 million, from an institutional investor, for a total of $3.0 million from sales of the Series A Preferred Stock to the investor. ● In September 2024, we commenced an “at the market offering” (as defined in Rule 415(a)(4) under the Securities Act) of up to $1,791,704 of shares of Class B Common Stock, which, as of March 31, 2025, has been increased to $5,489,399 of shares of Class B Common Stock in November 2024 (the “ATM Financing”).
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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.
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Sales from the offering will be made from time to time solely through or to A.G.P./Alliance Global Partners, as sales agent (“A.G.P.” or the “Sales Agent”). These sales, if any, will be made pursuant to the terms of a sales agreement between us and the Sales Agent, dated September 27, 2024 (the “ATM Sales Agreement”).
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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. For more information on the impacts of COVID-19 on our business and related risks, please refer to the sections entitled “Item 1A.
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Since the commencement of the ATM Financing, a total of 5,417,700 shares has been sold, for net proceeds to the Company of $4,830,648, after paying $329,362 in compensation to the Sales Agent and the same amount to Boustead Securities, LLC (“Boustead”) under the Boustead ATM Waiver (as defined in Item 7.
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Risk Factors – Risks Related to Our Business and Industry – The COVID-19 pandemic may cause a material adverse effect on our business.” and
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“ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – ATM Financing – Waivers and Consents to ATM Financing ”) with respect to such sales. ● In October-November 2024, we were selected to design, develop, and manage the Discord servers for Maxx Talent Awards, a premier platform for showcasing the talents of aspiring actors, models, and singers; social media influencer, American fitness model, training specialist, actor, and entrepreneur, Scott Mathison; Grammy Award-winning R&B and soul singer, songwriter, producer and actress Macy Gray; and dog behavioralist Jas Leverette, star of the Netflix show Canine Intervention . ● In November 2024, we acquired the assets of the TikTok Shop space known as the TikTok Money Machine, which included its Discord community.
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The Discord community teaches content creators how to sell products on TikTok Shop via the use of product content videos. It also connects major consumer product brands with these content creators, offering the latter the opportunity to earn sales commissions, via their TikTok accounts, on each product sale completed.
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We also secured consulting agreements with TikTokers and lead creators of the Discord, who have an aggregate of approximately 280,000 followers on Instagram and 4,700,000 followers on TikTok. ● In November 2024, we signed an agreement with our Head of Entertainment, Jeff Blue, to acquire a 50% ownership interest in all film, TV, streaming and media rights to Blue’s story, One Step Closer: From Xero to #1: Becoming Linkin Park .
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Under the agreement, we also engaged with Mr. Blue to write the screenplay. Published by Simon & Schuster/Posthill Press in 2020, One Step Closer: From Xero to #1: Becoming Linkin Park has been translated into seven different languages. ● In December 2024, we were approved as a TikTok Shop Partner.
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We plan to work with TikTok to connect brands with creators and help them collaborate further in the affiliate marketing space. Our Historical Performance As of December 31, 2024, the Company had an accumulated deficit of $12,006,357 and a cash balance of $2,660,624.
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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.
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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.
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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.
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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. In November 2024, the Company filed an additional prospectus supplement to the Shelf Registration Statement to increase the maximum gross proceeds to $2,271,487.
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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.
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Only 26 states require – or are in the process of mandating – a standalone high school course on the topic (Ramsey Solutions, “Which States Require Financial Literacy for High School Students,” August 19, 2024). For most students, learning about money means learning about topics like budgeting, understanding compound interest or opening a savings account.
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With modestly more in their investment accounts, people can get access to higher-risk strategies such as margin or option trading. Meanwhile, there is new jargon to decipher every day if investors want to understand chatter about the markets.
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Our Market Opportunity and Customers We market our services primarily to “Generation Z” users and businesses seeking to market their services to these users. As the first generation to have grown up with access to the Internet and portable digital technology from a young age, members of Generation Z have been dubbed “digital natives”.
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Around the world, it has been reported that members of Generation Z are spending more time on electronic devices and less time reading books than before, with implications for their attention span and vocabulary, as well as their future in the modern economy.
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As discussed above, Gen Z users are often bereft of the financial literacy needed to invest, in spite of growing demand for financial services especially in an era of meme stocks and stock trading apps like Webull, Robinhood, and E*Trade.
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With our emphasis on video, chat, and other social media education, entertainment and marketing, and deep knowledge of Discord server design and trending investment topics, we have positioned ourselves to attract younger investors and businesses seeking to market to them. We also target millennials, Generation X, and older generations.
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Sales, Marketing and Customer Acquisition We will continue to seek customers by producing content for our Discord servers and other social media accounts and using our Social Influencer Network to increase our Discord members and to provide marketing services.
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To that end, we frequently engage in social media campaigns for our Discord servers by posting free videos, tweets, and other social media content on Discord, TikTok, X, Instagram, and YouTube. We use search engine optimization, or SEO, to gain further reach in acquiring paying subscribers and other members to our Discord servers and potential customers of our other services.
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We expect that we will increase sales and revenues from increased Discord members and customers of our paid services from the expansion of our AE.360.DDM service and expansion of our Discord servers. One of the ways we can increase our Discord users and customer base is to utilize our “SiN” or “Social Influencer Network,” our social influencer independent contractors.
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Each of our SiN social influencer independent contractors can perform social media outreach to expand our Discord server bases and increase membership in our Discord servers. When we use our social influencers to increase our user base, we have the right to preapprove and remove the influencer’s posts at our discretion. They are generally paid on a commission-only basis.
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Typical payment terms are a dollar amount for a certain number of new member signups or subscription net revenue. We may also commission them to provide premium video education series with revenue-sharing provisions for any related subscription fees. We generally own all content produced by our SiN influencers. Depending on each contract, we may require weekly meetings with the influencer.
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Our SiN contracts are terminable on 30 days’ notice and have customary confidentiality, nondisclosure, and noncompete provisions. As discussed above, we likewise offer the services of our SiN independent contractors to current and potential social media and marketing customers.
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We are also working to expand our user base by contracting with trained social media analysts in order to develop larger and more long-term campaigns to promote our business.
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We expect that these offerings may accelerate growth in client contracts for our social media and marketing customer services. 7 Our AE.360.DDM service is expected to grow through multiple avenues including the use of SEO with Facebook and Google Ads, as well as our targeted outreach to venture capitalists, social media influencers, digital technology brands, and other businesses.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that: ● had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or ● in the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or ● in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or whose public float was less than $700 million, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available.
Biggest changeRule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that: ● had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or ● in the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or ● in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or whose public float was less than $700 million, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available. 33 If a company determines that it does not qualify for smaller reporting company status because it exceeded one or more of the above thresholds, it will remain unqualified unless when making its annual determination it meets certain alternative threshold requirements which will be lower than the above thresholds if its prior public float or prior annual revenues exceed certain thresholds.
The social media, education, and community-based platform sectors are subject to rapid technological change and, to compete, we must continually evolve and upgrade the user experience to enhance our business. We must continue to enhance and improve the performance, functionality and reliability of business.
The social media, education, and community-based platform sectors are subject to rapid technological change and, to compete, we must continually evolve and upgrade the user experience to enhance our business. We must continue to enhance and improve the performance, functionality and reliability of our business.
In particular, on March 6, 2024, the SEC adopted rules that will require us to disclose: ● Climate-related risks that have had or are reasonably likely to have a material impact on our business strategy, results of operations, or financial condition; ● The actual and potential material impacts of any identified climate-related risks on our strategy, business model, and outlook; ● If, as part of our strategy, we have undertaken activities to mitigate or adapt to a material climate-related risk, a quantitative and qualitative description of material expenditures incurred and material impacts on financial estimates and assumptions that directly result from such mitigation or adaptation activities; ● Specified disclosures regarding our activities, if any, to mitigate or adapt to a material climate-related risk including the use, if any, of transition plans, scenario analysis, or internal carbon prices; ● Any oversight by our board of directors of climate-related risks and any role by management in assessing and managing our material climate-related risks; ● Any processes we have for identifying, assessing, and managing material climate-related risks and, if we are managing those risks, whether and how any such processes are integrated into our overall risk management system or processes; ● Information about our climate-related targets or goals, if any, that have materially affected or are reasonably likely to materially affect our business, results of operations, or financial condition; required disclosures would include material expenditures and material impacts on financial estimates and assumptions as a direct result of the target or goal or actions taken to make progress toward meeting such target or goal; ● The capitalized costs, expenditures expensed, charges, and losses incurred as a result of severe weather events and other natural conditions, such as hurricanes, tornadoes, flooding, drought, wildfires, extreme temperatures, and sea level rise, subject to applicable one percent and de minimis disclosure thresholds, disclosed in a note to the financial statements; ● The capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable energy credits or certificates if used as a material component of our plans to achieve our disclosed climate-related targets or goals, disclosed in a note to our financial statements; and ● If the estimates and assumptions we use to produce our financial statements were materially impacted by risks and uncertainties associated with severe weather events and other natural conditions or any disclosed climate-related targets or transition plans, a qualitative description of how the development of such estimates and assumptions was impacted, disclosed in a note to our financial statements.
In particular, on March 6, 2024, the SEC adopted rules that will require us to disclose: ● Climate-related risks that have had or are reasonably likely to have a material impact on our business strategy, results of operations, or financial condition; ● The actual and potential material impacts of any identified climate-related risks on our strategy, business model, and outlook; ● If, as part of our strategy, we have undertaken activities to mitigate or adapt to a material climate-related risk, a quantitative and qualitative description of material expenditures incurred and material impacts on financial estimates and assumptions that directly result from such mitigation or adaptation activities; ● Specified disclosures regarding our activities, if any, to mitigate or adapt to a material climate-related risk including the use, if any, of transition plans, scenario analysis, or internal carbon prices; ● Any oversight by our board of directors of climate-related risks and any role by management in assessing and managing our material climate-related risks; ● Any processes we have for identifying, assessing, and managing material climate-related risks and, if we are managing those risks, whether and how any such processes are integrated into our overall risk management system or processes; 27 ● Information about our climate-related targets or goals, if any, that have materially affected or are reasonably likely to materially affect our business, results of operations, or financial condition; required disclosures would include material expenditures and material impacts on financial estimates and assumptions as a direct result of the target or goal or actions taken to make progress toward meeting such target or goal; ● The capitalized costs, expenditures expensed, charges, and losses incurred as a result of severe weather events and other natural conditions, such as hurricanes, tornadoes, flooding, drought, wildfires, extreme temperatures, and sea level rise, subject to applicable one percent and de minimis disclosure thresholds, disclosed in a note to the financial statements; ● The capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable energy credits or certificates if used as a material component of our plans to achieve our disclosed climate-related targets or goals, disclosed in a note to our financial statements; and ● If the estimates and assumptions we use to produce our financial statements were materially impacted by risks and uncertainties associated with severe weather events and other natural conditions or any disclosed climate-related targets or transition plans, a qualitative description of how the development of such estimates and assumptions was impacted, disclosed in a note to our financial statements.
If we are required to register under these laws, we may no longer be able to continue to offer our investment education and entertainment services, which may have a significant adverse impact on our business and results of operations. We will face growing regulatory and compliance requirements which can be costly and time-consuming.
If we are required to register under these laws, we may no longer be able to continue to offer our investment education and entertainment services, which may have a significant adverse impact on our business and results of operations. 24 We will face growing regulatory and compliance requirements which can be costly and time-consuming.
Additional changes in the legislative and regulatory landscape regarding Internet neutrality, or otherwise regarding the regulation of the Internet, could harm our business, operating results and financial condition. Our business could be affected by new governmental regulations regarding the Internet. To date, government regulations have not materially restricted use of the Internet in most parts of the world.
Additional changes in the legislative and regulatory landscape regarding Internet neutrality, or otherwise regarding the regulation of the Internet, could harm our business, operating results and financial condition. 26 Our business could be affected by new governmental regulations regarding the Internet. To date, government regulations have not materially restricted use of the Internet in most parts of the world.
Our failure to accommodate increased traffic, increased costs, inefficiencies or failures to adapt to new technologies or customer requirements and the associated adjustments to our infrastructure could harm our business, financial condition and results of operations. If the Company fails to develop or protect its intellectual property adequately, the Company’s business could suffer.
Our failure to accommodate increased traffic, increased costs, inefficiencies or failures to adapt to new technologies or customer requirements and the associated adjustments to our infrastructure could harm our business, financial condition and results of operations. 20 If the Company fails to develop or protect its intellectual property adequately, the Company’s business could suffer.
We could incur significant costs investigating and defending such claims and, if we are found liable, significant damages. We could also face fines, orders restricting or blocking our services in particular geographies, or other government-imposed remedies as a result of our content or the content hosted on our services.
We could incur significant costs investigating and defending such claims and, if we are found liable, significant damages. 23 We could also face fines, orders restricting or blocking our services in particular geographies, or other government-imposed remedies as a result of our content or the content hosted on our services.
To the extent changes in the political environment have a negative impact on us or on our customers, our markets, our business, results of operation and financial condition could be materially and adversely impacted in the future. 30 Our business depends on our customers’ continued and unimpeded access to the Internet and the development and maintenance of Internet infrastructure.
To the extent changes in the political environment have a negative impact on us or on our customers, our markets, our business, results of operation and financial condition could be materially and adversely impacted in the future. Our business depends on our customers’ continued and unimpeded access to the Internet and the development and maintenance of Internet infrastructure.
It is likely that certain, if not many, of the aspects of the business objectives will not proceed as contemplated. 20 The Company may not be able to create and maintain a competitive advantage, given the rapid technological and other competitive changes affecting all markets nationally and worldwide.
It is likely that certain, if not many, of the aspects of the business objectives will not proceed as contemplated. The Company may not be able to create and maintain a competitive advantage, given the rapid technological and other competitive changes affecting all markets nationally and worldwide.
The Company’s failure to obtain the necessary licenses or other rights could prevent the development or distribution of the Company’s products and services and, therefore, could have a material adverse effect on the Company’s business. We may experience disruption to our servers or our software which could cause us to lose customers.
The Company’s failure to obtain the necessary licenses or other rights could prevent the development or distribution of the Company’s products and services and, therefore, could have a material adverse effect on the Company’s business. 21 We may experience disruption to our servers or our software which could cause us to lose customers.
It may also limit the price and liquidity of our common stock due to its ineligibility for inclusion in certain stock market indices. ” Current market conditions and recessionary pressures in one or more of the Company’s markets could impact the Company’s ability to grow its business.
It may also limit the price and liquidity of our common stock due to its ineligibility for inclusion in certain stock market indices. ” 22 Current market conditions and recessionary pressures in one or more of the Company’s markets could impact the Company’s ability to grow its business.
In addition, investors of shares of our Class B Common Stock may experience losses, which may be material, if the price of our Class B Common Stock experiences such declines after any investors purchase shares of our Class B Common Stock. 35 We may not be able to maintain a listing of our Class B Common Stock on Nasdaq.
In addition, investors of shares of our Class B Common Stock may experience losses, which may be material, if the price of our Class B Common Stock experiences such declines after any investors purchase shares of our Class B Common Stock. We may not be able to maintain a listing of our Class B Common Stock on Nasdaq.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq in the future. Our management team has limited experience managing a public company.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq in the future. 28 Our management team has limited experience managing a public company.
Our current internal controls and any new controls that we develop may be inadequate or become inadequate because of changes in conditions in our business or changes in the applicable laws, regulations and standards.
Our current disclosure controls and internal controls and any new controls that we develop may be inadequate or become inadequate because of changes in conditions in our business or changes in the applicable laws, regulations and standards.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our Class B Common Stock to decline. 36 We have never paid cash dividends on our stock and do not intend to pay dividends for the foreseeable future.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our Class B Common Stock to decline. 31 We have never paid cash dividends on our stock and do not intend to pay dividends for the foreseeable future.
In the future, we may attempt to increase our capital resources by entering into additional debt or debt-like financing that is secured by all or up to all of our assets, or issuing debt or equity securities, which could include issuances of commercial paper, medium-term notes, senior notes, subordinated notes or shares.
In addition, in the future, we may attempt to increase our capital resources by entering into additional debt or debt-like financing that is secured by all or up to all of our assets, or issuing debt or equity securities, which could include issuances of commercial paper, medium-term notes, senior notes, subordinated notes, or preferred shares.
Any actual attacks could lead to damage to our reputation with our customers and other parties and the market, additional costs to the Company (such as repairing systems, adding new personnel or protection technologies or compliance costs), regulatory penalties, financial losses to both us and our customers and partners and the loss of customers and business opportunities.
Any actual attacks could lead to damage to our reputation with our customers and other parties and the market, additional costs to the Company (such as repairing systems, adding new personnel or protection technologies or compliance costs), regulatory penalties, financial losses to both us and our customers and collaborators and the loss of customers and business opportunities.
Rule 12b-2 under the Exchange Act defines a “large accelerated filer” in the same way except that the company meeting the definition must have a public float of $700 million or more as of the last business day of the company’s most recently completed second fiscal quarter.
Rule 12b-2 under the Exchange Act defines a “large accelerated filer” in the same way as an “accelerated filer” except that the company meeting the definition must have a public float of $700 million or more as of the last business day of the company’s most recently completed second fiscal quarter.
If we are unable to maintain a good relationship with the social media platforms where we operate, our business will suffer. We expect to generate substantially all of our revenue through social media, marketing agreements, and performing services in connection with social media platforms. Any deterioration in our relationship with these social media platforms would harm our business.
If we are unable to maintain our good standing with the social media platforms where we operate, our business will suffer. We expect to generate substantially all of our revenue through social media, marketing agreements, and performing services in connection with social media platforms. Any deterioration in our relationship with these social media platforms would harm our business.
The Company may incur significant losses, and there can be no assurance that the Company will ever become a profitable business. We had a net loss for the years ended December 31, 2023 and 2022. It is anticipated that the Company may continue to sustain operating losses.
The Company may incur significant losses, and there can be no assurance that the Company will ever become a profitable business. We had a net loss for the years ended December 31, 2024 and 2023. It is anticipated that the Company may continue to sustain operating losses.
Risk Factors—Risks Related to Ownership of Our Class B Common Stock—The structure of our common stock has the effect of concentrating voting control with certain Asset Entities officers and directors; this will limit or preclude your ability to influence corporate matters.
Risks Related to Ownership of Our Class B Common Stock The structure of our common stock has the effect of concentrating voting control with certain Asset Entities officers and directors; this will limit or preclude your ability to influence corporate matters.
In addition, the market price of our Class B Common Stock may fluctuate significantly in response to several factors, most of which we cannot control, including: ● quarterly variations in our operating results compared to market expectations; ● adverse publicity about us, the industries we participate in or individual scandals; ● announcements of new offerings or significant price reductions by us or our competitors; ● stock price performance of our competitors; ● fluctuations in stock market prices and volumes; 34 ● changes in senior management or key personnel; ● changes in financial estimates by securities analysts; ● the market’s reaction to our reduced disclosure as a result of being an “emerging growth company” under the JOBS Act; ● negative earnings or other announcements by us or our competitors; ● defaults on indebtedness, incurrence of additional indebtedness, or issuances of additional capital stock; ● global economic, legal and regulatory factors unrelated to our performance; and ● the other factors listed in this section.
In addition, the market price of our Class B Common Stock may fluctuate significantly in response to several factors, most of which we cannot control, including: ● quarterly variations in our operating results compared to market expectations; ● adverse publicity about us, the industries we participate in or individual scandals; 29 ● announcements of new offerings or significant price reductions by us or our competitors; ● stock price performance of our competitors; ● fluctuations in stock market prices and volumes; ● changes in senior management or key personnel; ● changes in financial estimates by securities analysts; ● the market’s reaction to our reduced disclosure as a result of being an “emerging growth company” under the JOBS Act; ● negative earnings or other announcements by us or our competitors; ● defaults on indebtedness, incurrence of additional indebtedness, or issuances of additional capital stock; ● global economic, legal and regulatory factors unrelated to our performance; and ● the other factors listed in Item 1A.
This report includes or refers to, and periodic reports that we may in the future file with the SEC may include or refer to, statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties and surveys and studies that we undertook ourselves regarding the market potential for our current services.
This report includes or refers to, and periodic reports that we may in the future file with the SEC may include or refer to, statistical and other industry and market data that we obtained or may obtain from industry publications and research, surveys and studies conducted by third parties and surveys and studies that we may undertake ourselves regarding the market potential for our current services.
To the extent any laws, regulations or rulings permit Internet service providers to charge some users higher rates than others for the delivery of their content, Internet service providers could attempt to use such law, regulation or ruling to impose higher fees or deliver our content with less speed, reliability or otherwise on a non-neutral basis as compared to other market participants, and our business could be adversely impacted.
To the extent any laws, regulations or rulings permit ISPs to charge some users higher rates than others for the delivery of their content, ISPs could attempt to use such law, regulation or ruling to impose higher fees or deliver our content with less speed, reliability or otherwise on a non-neutral basis as compared to other market participants, and our business could be adversely impacted.
New and evolving regulations and compliance standards for cyber security, data protection, privacy, and internal IT controls are often created in response to the tide of cyberattacks and will increasingly impact organizations like our company. Existing regulatory standards require that organizations implement internal controls for user access to applications and data.
New and evolving regulations and compliance standards for cybersecurity, data protection, privacy, and internal IT controls are often created in response to the tide of cyberattacks and will increasingly impact organizations like our company. Existing regulatory standards require that organizations implement internal controls for user access to applications and data.
The Company’s failure to obtain or maintain adequate protection of its intellectual property rights for any reason could have a material adverse effect on its business, financial condition and results of operations. If the Company were to develop intellectual property, the Company may seek to enforce its intellectual property rights on others through litigation.
The Company’s failure to obtain or maintain adequate protection of its intellectual property rights for any reason could have a material adverse effect on its business, financial condition and results of operations. The Company may seek to enforce its intellectual property rights on others through litigation.
Fairbanks from using their services in the future. 19 Our business would also be harmed if: ● Discord, TikTok, Instagram, YouTube, X, Apple, Google, or other social media companies whose services we use to market our services, establish terms or conditions which have the effect of discontinuing or limiting our access to their platforms; ● These companies modify their terms of service or other policies, including fees charged to, or other restrictions on, and change how the personal information of its users is made available on their respective platforms or shared by users; or ● These companies develop their own competitive offerings.
Our business would also be harmed if: ● Discord, TikTok, Instagram, YouTube, X, Apple, Google, or other social media companies whose services we use to market our services, establish terms or conditions which have the effect of discontinuing or limiting our access to their platforms; ● These companies modify their terms of service or other policies, including fees charged to, or other restrictions on, and change how the personal information of its users is made available on their respective platforms or shared by users; or ● These companies develop their own competitive offerings.
There can be no assurances that: (a) The Company will be able to develop products or services on a timely and cost effective basis; (b) the Company will be able to generate any increase in revenues; (c) the Company will have adequate financing or resources to continue operating its business and to provide services to customers; (d) the Company will earn a profit; (e) the Company can raise sufficient capital to support operations by attaining profitability; or (f) the Company can satisfy future liabilities. 18 The Company may experience negative cash flow.
There can be no assurances that: (a) The Company will be able to develop products or services on a timely and cost effective basis; (b) the Company will be able to generate any increase in revenues; (c) the Company will have adequate financing or resources to continue operating its business and to provide services to customers; (d) the Company will earn a profit; (e) the Company can raise sufficient capital to support operations by attaining profitability; or (f) the Company can satisfy future liabilities.
The Company’s operating results may fluctuate from year to year due to the factors listed above, others described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ”, or not listed. At times, these fluctuations may be significant.
The Company’s operating results may fluctuate from year to year due to the factors listed above, others described in Part II Item 7. “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ”, or not listed. At times, these fluctuations may be significant.
If our business plans are successful, we may experience significant growth in a short period of time and potential scaling issues. Should we grow rapidly, our financial, management and operating resources may not expand sufficiently to adequately manage our growth.
We may not be able to manage future growth effectively. If our business plans are successful, we may experience significant growth in a short period of time and potential scaling issues. Should we grow rapidly, our financial, management and operating resources may not expand sufficiently to adequately manage our growth.
The outcome of this litigation cannot be determined as of the date of this report. 32 Assuming that the SEC climate disclosure rules are ultimately upheld in their present form, and even in light of the exemptions and accommodations made for smaller reporting companies and emerging growth companies described above, the costs to adopt the necessary disclosure controls and procedures to disclose all required information, the potential costs to make changes in our operations to allow us to improve our climate change-related disclosures, or the potential loss of revenues from these disclosure requirements due to investor, customer, or vendor requirements to disclose and meet certain climate change-related targets pursuant to these disclosure rules, may still have a material adverse effect on our business and operations.
Assuming that the SEC climate disclosure rules are ultimately upheld in their present form, and even in light of the exemptions and accommodations made for smaller reporting companies and emerging growth companies described above, the costs to adopt the necessary disclosure controls and procedures to disclose all required information, the potential costs to make changes in our operations to allow us to improve our climate change-related disclosures, or the potential loss of revenues from these disclosure requirements due to investor, customer, or vendor requirements to disclose and meet certain climate change-related targets pursuant to these disclosure rules, may still have a material adverse effect on our business and operations.
We may issue additional debt and equity securities, which are senior to our Class B Common Stock as to distributions and in liquidation, which could materially adversely affect the market price of our Class B Common Stock.
We have issued and may in the future issue additional debt or equity securities which are senior to our Class B Common Stock as to distributions and in liquidation, which could materially adversely affect the market price of our Class B Common Stock.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided 180 calendar days, or until March 26, 2024, to regain compliance with Nasdaq Listing Rule 5550(a)(2). To regain compliance, the Company’s common stock must have a closing bid price of at least $1.00 for a minimum of 10 consecutive business days.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided 180 calendar days, or until June 16, 2025, to regain compliance with Nasdaq Listing Rule 5550(a)(2). To regain compliance, the Company’s common stock must have a closing bid price of at least $1.00 for a minimum of 10 consecutive business days.
We had a net loss for the years ended December 31, 2023 and 2022. The Company intends to increase expenditures to develop its business and, as a result, may continue to incur losses. There can be no assurance that the Company will achieve significant revenues or profitability.
The Company may experience negative cash flow. We had a net loss for the years ended December 31, 2024 and 2023. The Company intends to increase expenditures to develop its business and, as a result, may continue to incur losses. There can be no assurance that the Company will achieve significant revenues or profitability.
The Investment Advisers Act requires: (i) fiduciary duties to clients; (ii) substantive prohibitions and requirements; (iii) contractual requirements; (iv) record-keeping requirements; and (v) administrative oversight by the SEC, primarily by inspection. Requirements and obligations imposed on investment advisers can be burdensome and costly.
The Investment Advisers Act imposes: (i) fiduciary duties to clients; (ii) substantive prohibitions and requirements; (iii) contractual requirements; (iv) record-keeping requirements; and (v) administrative oversight by the SEC, primarily by inspection. These requirements and obligations can be burdensome and costly.
Volatility in the market price of our Class B Common Stock may prevent investors from being able to sell their shares at or above the price at which they purchased our Class B Common Stock. As a result, you may suffer a loss on your investment.
“ Risk Factors ” of this Annual Report. Volatility in the market price of our Class B Common Stock may prevent investors from being able to sell their shares at or above the price at which they purchased our Class B Common Stock. As a result, you may suffer a loss on your investment.
Any claims, even those without merit, could: ● be expensive and time-consuming to defend; ● cause the Company to cease making, licensing, or using services that incorporate the challenged intellectual property; ● divert management’s attention and resources; or ● require the Company to enter into royalty or licensing agreements in order to obtain the right to use a necessary feature of any proposed mobile app.
Any claims, even those without merit, could: ● be expensive and time-consuming to defend; ● cause the Company to cease making, licensing, or using services that incorporate the challenged intellectual property; ● divert management’s attention and resources; or ● require the Company to enter into royalty or licensing agreements in order to obtain the right to use a necessary feature of any of the Company’s current or proposed products, services, business methods, or processes.
Despite our security measures, it is impossible for us to eliminate this risk. 29 U.S. federal data privacy laws include the CAN-SPAM Act, which, among other things, restricts data collection and use in connection with CAN-SPAM Act’s opt-out process requirements for senders of commercial emails; and COPPA, which regulates the collection of information by operators of websites and other electronic solutions that are directed to children under 13 years of age, although our website and app user terms of service and privacy policy expressly prohibit children under 13 from submitting information to or on our website or app.
U.S. federal data privacy laws include the CAN-SPAM Act, which, among other things, restricts data collection and use in connection with CAN-SPAM Act’s opt-out process requirements for senders of commercial emails; and COPPA, which regulates the collection of information by operators of websites and other electronic solutions that are directed to children under 13 years of age, although our website and app user terms of service and privacy policy expressly prohibit children under 13 from submitting information to or on our website or app.
The market price for our Class B Common Stock is likely to be volatile, in part because our shares have not been traded publicly prior to February 2023.
The market price for our Class B Common Stock is likely to be volatile, in part because our shares had not been traded publicly prior to our initial public offering in February 2023.
For example, in April 2019, the European Union passed a directive (the European Copyright Directive) expanding online platform liability for copyright infringement and regulating certain uses of news content online, which member states are currently implementing into their national laws.
For example, in April 2019, the European Union passed a directive (the European Copyright Directive) expanding online platform liability for copyright infringement and regulating certain uses of news content online, which the EU member states have since implemented into their national laws.
Fairbanks has not experienced similar issues since the incident, there is no assurance that TikTok or any other service will permit our key influencers like Mr.
Fairbanks has not experienced similar issues since the incident, there is no assurance that TikTok or any other service will permit our key influencers like Mr. Fairbanks from using their services in the future.
Federal, state and local governments are responding to climate change issues. This increased focus on sustainability is resulting in new regulations and legislation and vendor and customer requirements that could negatively affect us as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations.
This increased focus on sustainability is resulting in new regulations and legislation and vendor and customer requirements that could negatively affect us as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations.
Although we believe that such information has been obtained from reliable sources, the sources of such data have not guaranteed the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data.
Although we believe that such information has been obtained from reliable sources, the sources of such data have not guaranteed the accuracy or completeness of such information. Industry publications and third-party research, surveys and studies may not be reliable.
The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. The number and sophistication of attempted attacks and intrusions that companies have experienced from third parties has increased over the past few years.
The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. The number and sophistication of attempted attacks and intrusions that companies have experienced from third parties has increased over the past few years. Despite our security measures, it is impossible for us to eliminate this risk.
On September 28, 2023, the Company received a written notification (the “Notification Letter”) from Nasdaq notifying the Company that it is not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market tier of Nasdaq.
On December 16, 2024, the Company received a written notification (the “December 2024 Notification Letter”) from the Staff notifying the Company that it is not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market tier of Nasdaq.
Our failure to avoid a negative perception among consumers or anticipate and respond to changes in consumer preferences, including in the form of content creation or distribution, could result in reduced demand for our services, or reduced social media followings, which could adversely affect our business, financial condition and operating results. 22 Our business depends on our ability to attract and retain talented qualified employees or key personnel.
Our failure to avoid a negative perception among consumers or anticipate and respond to changes in consumer preferences, including in the form of content creation or distribution, could result in reduced demand for our services, or reduced social media followings, which could adversely affect our business, financial condition and operating results.
In addition, there have been, and continue to be, various legislative and executive efforts to remove or restrict the scope of the protections available to online platforms under Section 230 of the Communications Decency Act, as well as to impose new obligations on online platforms with respect to commerce listings, user content, counterfeit goods and copyright-infringing material, and our services’ and social media platforms’ current protections from liability for third-party content in the United States could decrease or change.
There also have been, and continue to be, various other litigation concerning, and state and federal legislative and executive efforts to remove or restrict, the scope of the protections under Section 230, as well as to impose new obligations on online platforms with respect to commerce listings, user access and content, counterfeit goods and copyright-infringing material, and our current protections from liability for third-party content in the United States could decrease or change.
Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its NOLs and other pre-change tax attributes to offset its post-change taxable income or taxes may be limited.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income or taxes may be limited.
The trading market for our Class B Common Stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the shares and trading volume could decline. The trading market for our Class B Common Stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
In addition, our products and services will be subject to new restrictions and requirements, and our compliance costs may significantly increase, as a result of the Digital Services Act in the European Union, which may apply to our business as early as June 2023, and potentially other content-related legislative developments such as proposed online safety bills in Ireland and the United Kingdom.
In addition, our products and services are subject to new restrictions and requirements, and our compliance costs may significantly increase, as a result of the Digital Services Act in the European Union, and other content-related legislative developments such as the Online Safety and Media Regulation Act in Ireland and the Online Safety Act in the United Kingdom.
If we fail to establish and promote the brand, or if it incurs excessive expenses in this effort, our business, operating results and financial condition will be materially and adversely affected.
Maintaining and enhancing our brand may require us to make substantial investments, and these investments may not be successful. If we fail to establish and promote the brand, or if it incurs excessive expenses in this effort, our business, operating results and financial condition will be materially and adversely affected.
If we do not succeed in attracting, hiring, integrating, retaining and motivating excellent personnel, we may be unable to grow effectively. Our inability to attract highly skilled personnel with sufficient experience in our industries could harm our business. We may not be able to manage future growth effectively.
The market for highly skilled workers and leaders in our industry is extremely competitive. If we do not succeed in attracting, hiring, integrating, retaining and motivating excellent personnel, we may be unable to grow effectively. Our inability to attract highly skilled personnel with sufficient experience in our industries could harm our business.
This concentration of ownership may also have the effect of discouraging, delaying or preventing a future change of control. For further discussion, please see “Item 1A.
This concentration of ownership may also have the effect of discouraging, delaying or preventing a future change of control.
Any of the foregoing events could adversely affect our business and financial results. 28 We are not currently registered as an investment adviser and if we should have registered as an investment adviser, our failure to do so could subject us to civil and/or criminal penalties.
We are not currently registered as an investment adviser and if we should have registered as an investment adviser, our failure to do so could subject us to civil and/or criminal penalties.
Risks relating to the blockchain, cryptocurrencies, and NFT industries may cause material adverse effects on our business operations. There are a number of unique risks to investments in digital assets such as cryptocurrencies and NFTs which use blockchain technologies in retail and commercial marketplaces. Currently, there is a relatively limited use for such digital assets.
There are a number of unique risks to investments in digital assets such as cryptocurrencies and NFTs which use blockchain technologies in retail and commercial marketplaces. Currently, there is a relatively limited use for such digital assets.
Furthermore, the Company may encounter substantial delays and unexpected expenses related to development, technological changes, marketing, insurance, legal or regulatory requirements and changes to such requirements or other unforeseen difficulties. There can be no assurance that the Company will remain profitable. If the Company sustains losses over a period of time, it may be unable to continue in business.
Furthermore, the Company may encounter substantial unexpected expenses related to development, technological changes, marketing, insurance, legal or regulatory requirements and changes to such requirements or other unforeseen difficulties. There can be no assurance that the Company will become or remain profitable.
In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period.
In addition, we must establish the corporate infrastructure necessary for operating a public company, which may divert our management’s attention from implementing our growth strategy, which could delay or slow the implementation of our business strategies, and in turn negatively impact our company’s financial condition and results of operations. 31 Climate change and increased focus by governmental organizations on sustainability issues, including those related to climate change, may have a material adverse effect on our business and operations.
In addition, we must establish the corporate infrastructure necessary for operating a public company, which may divert our management’s attention from implementing our growth strategy, which could delay or slow the implementation of our business strategies, and in turn negatively impact our company’s financial condition and results of operations.
If the Company is unable, for technical or other reasons, to develop and introduce new services and products or enhancements of existing services and products in a timely manner in response to changing market conditions or customer requirements, or if new services and products do not achieve market acceptance, the Company’s business, results of operations or financial condition could be materially and adversely affected.
If the Company is unable, for technical or other reasons, to develop and introduce new services and products or enhancements of existing services and products in a timely manner in response to changing market conditions or customer requirements, or if new services and products do not achieve market acceptance, the Company’s business, results of operations or financial condition could be materially and adversely affected. 18 If our paying subscribers are not satisfied with our Discord subscription services, we may face additional cost, loss of profit opportunities, damage to our reputation, or legal liability.
Under Nasdaq rules, a “smaller reporting company,” as defined in Rule 12b-2 under the Exchange Act, is not subject to certain corporate governance requirements otherwise applicable to companies listed on Nasdaq.
As a “smaller reporting company,” we may choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public stockholders . Under Nasdaq rules, a “smaller reporting company,” as defined in Rule 12b-2 under the Exchange Act, is not subject to certain corporate governance requirements otherwise applicable to companies listed on Nasdaq.
We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our Class B Common Stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares. 38 As a “smaller reporting company,” we may choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public stockholders .
We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our Class B Common Stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares.
We cannot predict if investors will find our Class B Common Stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our Class B Common Stock. 37 As a non-accelerated filer, we are not required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act.
We cannot predict if investors will find our Class B Common Stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our Class B Common Stock.
We cannot yet determine the impact that these laws and regulations may have on our business. Outside of the U.S., data protection laws, including the GDPR, also might apply to some of our operations or business collaborators. Legal requirements in the European Union and United Kingdom relating to the collection, storage, processing and transfer of personal data/information continue to evolve.
We cannot yet determine the impact that these laws and regulations may have on our business. 25 Outside of the U.S., data protection laws, including the GDPR, also might apply to some of our operations or business collaborators.
Our success depends to a significant degree upon our ability to attract, retain and motivate skilled and qualified personnel. Recruiting and retaining the skilled personnel we require to maintain and grow our market position may be difficult. The market for highly skilled workers and leaders in our industry is extremely competitive.
Our business depends on our ability to attract and retain talented qualified employees or key personnel. Our success depends to a significant degree upon our ability to attract, retain and motivate skilled and qualified personnel. Recruiting and retaining the skilled personnel we require to maintain and grow our market position may be difficult.
If a paying subscriber is not satisfied with our services, it could cause us to incur additional costs and impair profitability, loss of the paying subscriber relationship, or legal liability.
We depend, to a large extent, on our relationships with our Discord servers’ paying subscribers, and our reputation for high-quality education and entertainment material. If a paying subscriber is not satisfied with our services, it could cause us to incur additional costs and impair profitability, loss of the paying subscriber relationship, or legal liability.
These threats may derive from fraud or malice on the part of our employees or third parties, or may result from human error or accidental technological failure.
These threats may derive from fraud or malice on the part of our employees or third parties, or may result from human error or accidental technological failure. These threats include cyberattacks, such as computer viruses, malicious code, phishing attacks or information security breaches.
In the United States, changes to the protections available under Section 230 or the First Amendment to the U.S. Constitution or new state or federal content-related legislation may increase our costs or require significant changes to our services, business practices, or operations, which could adversely affect user growth and engagement.
Constitution or new state or federal content-related legislation may increase our costs or require significant changes to our services, business practices, or operations, which could adversely affect user growth and engagement. Any of the foregoing events could adversely affect our business and financial results.
Turbulence in the United States and international markets and economic conditions may adversely affect the Company’s liquidity and financial condition, and the liquidity and financial condition of the Company’s customers.
Foreign countries, including those in the Euro zone, are affected by similar systemic impacts. Turbulence in the United States and international markets and economic conditions may adversely affect the Company’s liquidity and financial condition, and the liquidity and financial condition of the Company’s customers.
Our customers will rely on our digital technologies, computer, email and messaging systems, software and networks to conduct their operations or to utilize our products or services. In addition, to access our products and services, our customers will use personal smartphones, tablet computers and other mobile devices that may be beyond our control.
In addition, to access our products and services, our customers will use personal smartphones, tablet computers and other mobile devices that may be beyond our control.
However, as discussed above, the Company’s NOL carryforwards may be subject to federal annual limitations, such as in the event of an “ownership change” as described above, or to applicable state tax law annual limitations, either of which could reduce or defer the utilization of the losses. 27 Risks Related to Government Regulation and Being a Public Company We may incur liability as a result of information retrieved from or transmitted over the Internet or published using our services or services of social media platforms, or as a result of claims related to our services or services of social media platforms, and legislation regulating content on social media platforms may require us to change our services or business practices and may adversely affect our business and financial results.
Risks Related to Government Regulation and Being a Public Company We may incur liability as a result of information retrieved from or transmitted over the Internet or published using our services or services of social media platforms, or as a result of claims related to our services or services of social media platforms, and legislation regulating content on social media platforms may require us to change our services or business practices and may adversely affect our business and financial results.
The results of this data represent various methodologies, assumptions, research, analysis, projections, estimates, composition of respondent pool, presentation of data and adjustments, each of which may ultimately prove to be incorrect, and cause actual results and market viability to differ materially from those presented in any such report or other materials. 33 Risks Related to Ownership of Our Class B Common Stock The structure of our common stock has the effect of concentrating voting control with certain Asset Entities officers and directors; this will limit or preclude your ability to influence corporate matters.
The results of this data represent various methodologies, assumptions, research, analysis, projections, estimates, composition of respondent pool, presentation of data and adjustments, each of which may ultimately prove to be incorrect, and cause actual results and market viability to differ materially from those presented in any such report or other materials.
The shares of Class A Common Stock held by AEH are controlled by its officers and board of managers, all of whom are also some of our officers and directors.
The shares of Class A Common Stock held by AEH are controlled by its officers and managers, all of whom are also some of our officers and directors. AEH also owns 250,000 shares of our Class B Common Stock. There are 13,413,162 shares of Class B Common Stock issued and outstanding as of March 25, 2025.
Class A Common Stock is entitled to ten votes per share on proposals requiring or requesting stockholder approval, and Class B Common Stock is entitled to one vote on any such matter. In our initial public offering, we offered and sold shares of Class B Common Stock to public investors (see Item 1.
Class A Common Stock is entitled to ten votes per share on proposals requiring or requesting stockholder approval, and Class B Common Stock is entitled to one vote on any such matter. As of March 25, 2025, AEH owns all of the 1,000,000 shares of our outstanding Class A Common Stock.
The Company’s future revenue and operating results are unpredictable and may fluctuate significantly. We had a net loss for the years ended December 31, 2023 and 2022. It is difficult to accurately forecast the Company’s revenues and operating results, and they could continue to fluctuate in the future due to a number of factors.
It is difficult to accurately forecast the Company’s revenues and operating results, and they could continue to fluctuate in the future due to a number of factors.
In addition, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indexes. For example, in July 2017, FTSE Russell and Standard & Poor’s announced that they would cease to allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices.
For example, in July 2017, FTSE Russell and Standard & Poor’s announced that they would cease to allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices. Under the announced policies, our capital structure would make us ineligible for inclusion in any of these indices.
We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customer requirements or emerging industry standards. If we are unable to adapt to changing market conditions, customer requirements or emerging industry standards, we may not be able to either generate revenue or expand our business.
We may fail to use new technologies effectively or to adapt our proprietary technology and systems to customer requirements or emerging industry standards.
Effective January 1, 2025, we may also become subject to the ICPA, a similar consumer data privacy law in Iowa. Further, there are several legislative proposals in the United States, at both the federal and state level, that could impose new privacy and security obligations.
Further, there are several legislative proposals in the United States, at both the federal and state level, that could impose new privacy and security obligations.
Enforcing or defending the Company’s registered and unregistered trademarks or service marks might result in significant litigation costs and damages, including the inability to continue using certain marks. 23 The laws of foreign countries in which the Company may contemplate doing business in the future may not recognize intellectual property rights or protect them to the same extent as do the laws of the United States.
The laws of foreign countries in which the Company may contemplate doing business in the future may not recognize intellectual property rights or protect them to the same extent as do the laws of the United States.
The potential effects of this legislation are far-reaching and may require us to modify our data processing practices and policies and incur substantial costs and expenses in compliance and potential ligation efforts.
The potential effects of this legislation are far-reaching and may require us to modify our data processing practices and policies and incur substantial costs and expenses in compliance and potential ligation efforts. Effective January 1, 2023, we also became subject to the CPRA in California, which expands upon the consumer data use restrictions, penalties and enforcement provisions under the CCPA.
The Company operates in a highly competitive industry and there can be no assurance that the Company will be able to compete successfully. The Company competes with many other social media and community-based platform companies. Many of those companies are larger, more experienced and better funded than the Company.
The Company competes with many other social media and community-based platform companies. Many of those companies are larger, more experienced and better funded than the Company.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes regular assessments by our Chief Experience Officer. This approach is designed to mitigate risks related to data breaches or other security incidents originating from third parties.
Biggest changeOverseeing Third-Party Risk Because we are aware of the risks associated with third-party service providers, we implement processes to oversee and manage these risks. We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes regular assessments by our Chief Technology Officer.
The Chief Experience Officer must ensure that all industry standard cybersecurity measures are functioning as required to prevent or detect cybersecurity threats and related risks. The Chief Experience Officer provides briefings on cybersecurity threats and related risks to our Chief Executive Officer on a regular basis.
Our Chief Technology Officer must ensure that all industry standard cybersecurity measures are functioning as required to prevent or detect cybersecurity threats and related risks. The Chief Technology Officer provides briefings on cybersecurity threats and related risks to our Chief Executive Officer on a regular basis.
Governance Board of Directors Oversight Our board of directors oversees the management of risks associated with cybersecurity threats. 40 Management’s Role Managing Risk The Company’s Chief Experience Officer is primarily responsible for assessing, monitoring and managing our cybersecurity risks.
Governance Board of Directors Oversight Our board of directors oversees the management of risks associated with cybersecurity threats. Management’s Role Managing Risk The Company’s Chief Technology Officer, Chief Operating Officer, and Technology Consultant are primarily responsible for assessing, monitoring and managing our cybersecurity risks.
We have adopted the standard 2FA (two factor authentication) for all our eData access (emails, online storage, etc.). In addition, all our applications and third-party applications have timed, authentication and environmental disposable cookie processes that force every user to reauthenticate their credentials.
We continuously evaluate and address cybersecurity risks in alignment with our business objectives and operational needs. We have adopted the standard 2FA (two factor authentication) for all our eData access (emails, online storage, etc.). In addition, all our applications and third-party applications have timed, authentication and environmental disposable cookie processes that force every user to reauthenticate their credentials.
Our Chief Experience Officer has ten years of experience in the field of information technology. The Chief Experience Officer oversees and tests our compliance with standards, remediates known risks, and leads our employee training program. The Chief Experience Officer has extensive experience in cybersecurity and possesses the knowledge and skills and background and experience necessary, as described in his biography.
Our Chief Technology Officer has nine years of experience in the field of information technology. The Chief Technology Officer oversees and tests our compliance with standards, remediates known risks, and leads our employee training program. The Company’s Chief Technology Officer and Technology Consultant have extensive experience in cybersecurity and possess the necessary knowledge, skills, background, and experience.
Risks from Cybersecurity Threats We have not encountered cybersecurity challenges that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
This approach is designed to mitigate risks related to data breaches or other security incidents originating from third parties. Risks from Cybersecurity Threats We have not encountered cybersecurity challenges that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
These comprehensive security measures not only protect our business transactional data but also uphold the integrity and confidentiality of our systems and information assets. Engaging Third-Parties on Risk Management Recognizing the complexity and evolving nature of cybersecurity threats, our Chief Experience Officer periodically evaluates and tests our risk management systems.
These comprehensive security measures not only protect our business transactional data but also uphold the integrity and confidentiality of our systems and information assets. 34 Engaging Risk Management Systems and Third-Party Consultant Recognizing the complexity and evolving nature of cybersecurity threats, we use risk management systems developed and tested by external experts, including cybersecurity assessors, consultants, and auditors.
Managing Material Risks & Integrated Overall Risk Management We have integrated cybersecurity risk management into our risk management processes. This integration is intended to ensure that cybersecurity considerations are part of our decision-making processes. We continuously evaluate and address cybersecurity risks in alignment with our business objectives and operational needs.
In addition, we have developed the following processes as part of our strategy for assessing, identifying, and managing material risks from cybersecurity threats. Managing Material Risks and Integrated Overall Risk Management We have integrated cybersecurity risk management into our risk management processes. This integration is intended to ensure that cybersecurity considerations are part of our decision-making processes.
Monitoring Cybersecurity Incidents The Chief Experience Officer is continually informed about the latest developments in cybersecurity, including potential threats and innovative risk management techniques. The Chief Experience Officer implements and oversees processes for the regular monitoring of our information systems. This includes the deployment of industry-standard security measures and regular system audits to identify potential vulnerabilities.
Monitoring Cybersecurity Incidents The Company’s Chief Technology Officer and Technology Consultant are continually informed about the latest developments in cybersecurity, including potential threats and innovative risk management techniques. The Chief Technology Officer and Technical Consultant implement and oversee processes for the regular monitoring of our information systems.
ITEM 1C. CYBERSECURITY. 39 Risk Management and Strategy The Company recognizes the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data. We have developed the following processes as part of our strategy for assessing, identifying, and managing material risks from cybersecurity threats.
ITEM 1C. CYBERSECURITY. Risk Management and Strategy The Company recognizes the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data. We maintain cybersecurity insurance coverage that provides protection against potential losses arising from certain cybersecurity incidents.
In the event of a cybersecurity incident, the Chief Experience Officer will implement an incident response plan. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents. Reporting to Board of Directors Significant cybersecurity matters, and strategic risk management decisions, will be escalated to the board of directors.
This includes the deployment of industry-standard security measures and regular system audits to identify potential vulnerabilities. In the event of a cybersecurity incident, the Chief Technology Officer and Technical Consultant will implement an incident response plan. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
Removed
Our Chief Experience Officer has specialized knowledge and insights, ensuring our cybersecurity strategies and processes remain at the forefront of industry best practices. Overseeing Third-Party Risk Because we are aware of the risks associated with third-party service providers, we implement processes to oversee and manage these risks.
Added
These risk management systems enable us to leverage specialized knowledge and insights as part of our cybersecurity strategies and processes. These systems are assessed and maintained with the assistance of third-party service providers, including a Technology Consultant engaged by the Company.
Added
Reporting to Board of Directors Significant cybersecurity matters, and strategic risk management decisions, will be escalated to the board of directors. 35

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeEach lease will automatically renew for an additional one-year term unless cancelled by either party with at least three months’ notice. The rent on any renewal will be at the then-prevailing market rate.
Biggest changeOn June 9, 2024, between the Company and Regus Management, we renewed an office lease at this location for a monthly payment of $1,981 from October 1, 2024 to September 30, 2025. Each lease will automatically renew for an additional one-year term unless cancelled by either party with at least three months’ notice.
Our headquarters is in Dallas, leased through Regus Management at The Crescent Office Complex located at 100 Crescent Court, 7th Floor, in Dallas, Texas. Our monthly rent was initially $985 per month from February 1, 2022 to January 31, 2023.
Our headquarters is in Dallas, leased through Regus Management at The Crescent Office Complex located at 100 Crescent Court, 7th Floor, in Dallas, Texas. Our rent was initially $32.82 per day from February 1, 2022 to January 31, 2023.
On October 10, 2022, we renewed the lease at this location for an additional one-year term for $1,085 per month from February 1, 2023 to January 31, 2024. On May 4, 2022, we leased an additional office at this location for $1,339 per month from June 1, 2022 to May 31, 2023.
On October 10, 2022, we renewed an office lease at this location for $1,085 per month from February 1, 2023 to January 31, 2024. On May 4, 2022, we leased an office at this location for a daily payment of $44.63 from June 1, 2022 to May 31, 2023.
We believe that all our properties have been adequately maintained, are generally in good condition, and are suitable and adequate for our businesses.
The rent on any renewal will be at the then-prevailing market rate. We believe that all our properties have been adequately maintained, are generally in good condition, and are suitable and adequate for our businesses.
Removed
A copy of each lease agreement described above has been filed as Exhibit 10.20, Exhibit 10.21 and Exhibit 10.22 to this Annual Report, respectively, and the description above is qualified in its entirety by reference to each such exhibit.
Added
On March 3, 2023, we transferred an office lease to a different office at this location for a monthly payment of $4,989 from March 7, 2023 to May 31, 2023. On March 6, 2023, we renewed an office lease at this location for a monthly payment of $5,104 from June 1, 2023 to February 29, 2024.
Added
On October 10, 2023, we renewed an office lease at this location for a monthly payment of $1,228 from February 1, 2024 to January 31, 2025. On November 9, 2023, we renewed an office lease at this location for a monthly payment of $5,329 from March 1, 2024 to November 30, 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not currently aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 41 PART II
Biggest changeWe are not currently aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of December 31, 2023, none of the proceeds from the initial public offering were used to make direct or indirect payments to any of our directors or officers, any of their associates, any persons owning 10% or more of any class of our equity securities, or any of our affiliates, or direct or indirect payments to any others other than for the direct costs of the offering.
Biggest changeThe 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, 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; ● Approximately $6.3 million was used for working capital; and ● None was used for temporary investments. 38 As of December 31, 2024, none of the proceeds from the initial public offering were used to make direct or indirect payments to any of our directors or officers, any of their associates, any persons owning 10% or more of any class of our equity securities, or any of our affiliates, or direct or indirect payments to any others other than for the direct costs of the offering.
Risk Factors – Risks Related to Ownership of Our Class B Common Stock – We have never paid cash dividends on our stock and do not intend to pay dividends for the foreseeable future .” Recent Sales of Unregistered Securities During 2023, the Company did not sell any equity securities that were not registered under the Securities Act and that were not previously disclosed in a Quarterly Report on Form 10-Q or Current Report on Form 8-K where required, except as disclosed below.
Risk Factors – Risks Related to Ownership of Our Class B Common Stock – We have never paid cash dividends on our stock and do not intend to pay dividends for the foreseeable future .” Recent Sales of Unregistered Securities During 2024, the Company did not sell any equity securities that were not registered under the Securities Act and that were not previously disclosed in a Quarterly Report on Form 10-Q or Current Report on Form 8-K where required.
Securities Authorized for Issuance Under Equity Compensation Plans See Item 12 “ Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters – Securities Authorized for Issuance Under Equity Compensation Plans ”. Dividend Policy We have never declared or paid cash dividends on our common stock.
“ Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters – Securities Authorized for Issuance Under Equity Compensation Plans ”. Dividend Policy We have never declared or paid cash dividends on our common stock.
Number of Holders of Our Common Stock As of March 29, 2024, there was one holder of record of our Class A Common Stock, which is not listed, quoted or traded on any stock exchange or over-the-counter market, and 25 holders of record of our Class B Common Stock, which is listed and traded on Nasdaq under the symbol “ASST”.
Number of Holders of Our Common Stock As of March 25, 2025, there was one holder of record of our Class A Common Stock, which is not listed, quoted or traded on any stock exchange or over-the-counter market, and 19 holders of record of our Class B Common Stock, which is listed and traded on Nasdaq under the symbol “ASST”.
The Company will not receive any proceeds from the resale of Class B Common Stock by the selling stockholders.
The Company did not and will not receive any proceeds from the resale of Class B Common Stock by the selling stockholders.
The IPO Registration Statement also registered for sale shares of Class B Common Stock with a maximum aggregate offering price of $1,125,000 for an additional 225,000 shares of Class B Common Stock at the assumed public offering price of $5.00 per share upon full exercise of the underwriters’ over-allotment option; and up to an additional 15,750 shares of Class B Common Stock underlying the Representative’s Warrant with a maximum aggregate offering price of $98,437.50 at the assumed exercise price of $6.25 per share assuming full exercise of the over-allotment option.
The IPO Registration Statement also registered for sale shares of Class B Common Stock with a maximum aggregate offering price of $1,125,000 for an additional 45,000 shares of Class B Common Stock at the assumed public offering price of $25.00 per share upon full exercise of the underwriters’ over-allotment option; and up to an additional 3,150 shares of Class B Common Stock underlying the Representative’s Warrant with a maximum aggregate offering price of $98,437.50 at the assumed exercise price of $31.25 per share assuming full exercise of the over-allotment option.
The underwriters’ over-allotment option expired unexercised, and as of the date of this Annual Report, the Representative’s Warrant has not been exercised. On April 4, 2023, the IPO Post-Effective Amendment was filed with the SEC and became effective on April 14, 2023.
The underwriters’ over-allotment option expired unexercised, and as of the date of this Annual Report, the Representative’s Warrant has not been exercised. On April 4, 2023, Post-Effective Amendment No. 1 to the IPO Registration Statement was filed with the SEC and became effective on April 14, 2023 (the “IPO Post-Effective Amendment”).
In addition, a total of 1,500,000 shares of Class B Common Stock were registered for resale by the selling stockholders named in the IPO Registration Statement, and the IPO Resale Prospectus, was filed with the SEC on February 6, 2023 pursuant to Rule 424(b)(3) of the Securities Act.
In addition, a total of 300,000 shares of Class B Common Stock were registered for resale by the selling stockholders named in the IPO Registration Statement and a final prospectus relating to these shares, dated February 2, 2023, which was filed with the SEC on February 6, 2023 pursuant to Rule 424(b)(3) of the Securities Act (the “IPO Resale Prospectus”).
At the closing, the Company sold the IPO Shares for total gross proceeds of $7,500,000. 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. Other terms of and agreements relating to the Underwriting Agreement and the underwriter are described under Item 1.
At the closing, the Company sold 300,000 shares of Class B Common Stock for total gross proceeds of $7,500,000. 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.
There has not been, and we do not expect, any material change in the planned use of proceeds from the initial public offering as described in the IPO Registration Statement.
There has not been, and we do not expect, any material change in the planned use of proceeds from the initial public offering as described in the IPO Registration Statement. Securities Authorized for Issuance Under Equity Compensation Plans See Part III. Item 12.
In computing the number of holders of record of our common stock, holders whose shares are held in nominee or “street name” accounts through banks, brokers or other financial institutions are not included. Use of Proceeds from Registered Securities The closing of our initial public offering took place on February 7, 2023, pursuant to the Underwriting Agreement.
In computing the number of holders of record of our common stock, holders whose shares are held in nominee or “street name” accounts through banks, brokers or other financial institutions are not included.
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. 42 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 real estate; ● None was used for the acquisition of other businesses; ● None was used for the repayment of indebtedness; ● $3.5 million was used for working capital; and ● None was used for temporary investments.
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.
The IPO Shares were offered and sold, and the Representative’s Warrant was issued, pursuant to the IPO Registration Statement, initially filed with the SEC on September 2, 2022, and declared effective by the SEC on February 2, 2023, and the IPO Public Offering Prospectus, dated February 2, 2023, filed with the SEC on February 6, 2023 pursuant to Rule 424(b)(4) of the Securities Act.
Pursuant to the Underwriting Agreement, on February 7, 2023, the Company also agreed to issue Boustead a warrant to purchase the number of shares of Class B Common Stock equal to 7% of the aggregate number of shares of Class B Common Stock sold in the initial public offering (the “Representative’s Warrant”). 37 The shares were offered and sold, and the Representative’s Warrant was issued, pursuant to the Registration Statement on Form S-1 (File No. 333-267258), initially filed with the SEC on September 2, 2022, and declared effective by the SEC on February 2, 2023 (as amended, the “IPO Registration Statement”), and the final prospectus, dated February 2, 2023, filed with the SEC on February 6, 2023 pursuant to Rule 424(b)(4) of the Securities Act (the “IPO Public Offering Prospectus”).
Removed
“ 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 ”.
Added
Use of Proceeds from Registered Securities The closing of our initial public offering took place on February 7, 2023, pursuant to the Underwriting Agreement, dated as of February 2, 2023, between the Company and Boustead, as representative of the underwriters named on Schedule 1 thereto (the “Underwriting Agreement”).
Removed
As stated in the IPO Resale Prospectus, any resales of these shares occurred at a fixed price of $5.00 per share until the Class B Common Stock was listed on Nasdaq. Thereafter, these sales will occur at fixed prices, at market prices prevailing at the time of sale, at prices related to prevailing market prices, or at negotiated prices.
Added
In addition, the Series A Certificate of Designation prohibits the Company from declaring or paying any cash dividends on its capital stock other than as required by the Series A Certificate of Designation with respect to the outstanding shares of Series A Preferred Stock.
Removed
On June 30, 2023, the Company entered into a Closing Agreement (the “Triton Closing Agreement”) with Triton Funds LP, a Delaware limited partnership (“Triton”).
Added
Purchases of Equity Securities No repurchases of our common stock were made during the fourth quarter of 2024. ITEM 6. [RESERVED]
Removed
Under the Closing Agreement, the Company agreed to sell to Triton, at its option, shares of Class B Common Stock having an aggregate value of $1,000,000 (the “Triton Shares”), pursuant to a registration statement to be filed and made effective for the resale of the Triton Shares.
Removed
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.
Removed
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”).
Removed
The Triton Closing was required to occur within five business days after the delivery of the Triton Shares to Triton.
Removed
Triton’s obligation to purchase the Triton Shares was conditioned on the effectiveness of the required registration statement and Triton’s ownership not exceeding 9.99% of the Class B Common Stock outstanding as of June 30, 2023. 43 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.
Removed
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.
Removed
On August 1, 2023, the Company entered into an Amended and Restated Closing Agreement (the “Amended and Restated Closing Agreement”) with Triton.
Removed
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 of the Company with an aggregate gross purchase price of $1,000,000 in the following manner.
Removed
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, 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.
Removed
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 delivered to Triton.
Removed
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.
Removed
The Amended and Restated Closing Agreement provided that Triton’s obligation to purchase the Triton Securities was subject to certain conditions. These conditions included the filing and effectiveness of the required registration statement for the resale of the Triton Securities.
Removed
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.
Removed
Triton’s purchase requirement was also subject to provisions that prevented Triton from acquiring shares of Class B Common Stock at the time of any sale of the Triton Securities or exercise of the Triton Pre-Funded Warrants that would result in the number of shares beneficially owned by Triton and its affiliates exceeding 9.99% of the total number of shares of Class B Common Stock outstanding immediately after giving effect to the issuance of the shares under the Amended and Restated Closing Agreement or the Triton Pre-Funded Warrants (the “Beneficial Ownership Limitation”).
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
The Company must also issue Boustead a warrant with respect to any Triton Shares exercisable for a number of shares of Class B Common Stock equal to 7% of the number of the Triton Shares at an exercise price equal to the price per share for the Triton Shares, and a warrant with respect to the issuance of any Triton Pre-Funded Warrants exercisable for a number of shares of Class B Common Stock equal to 7% of the Triton Warrant Shares at an exercise price equal to $0.01 per share (any such warrant, a “Tail Warrant”).
Removed
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.
Removed
For further discussion of the Underwriting Agreement and the Boustead Engagement Letter, see Item 7.
Removed
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Initial Public Offering and Underwriting Agreement ” and “— Liquidity and Capital Resources – Engagement Letter with Boustead Securities, LLC ”. 44 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.
Removed
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.
Removed
Under an Amendment to Amended and Restated Closing Agreement (the “First Triton Amendment”), dated as of September 27, 2023, the Company and Triton agreed to amend the Amended and Restated Closing Agreement (as amended, the “Amended A&R Closing Agreement”) to provide that the Amended A&R Closing Agreement will expire on December 30, 2023 instead of September 30, 2023; to provide that up to an aggregate value of $1,000,000 of the Class B Common Stock, based on the purchase price formula described above, may be sold and purchased pursuant to a Closing Notice; and to amend the form of Closing Notice to provide for a specific number of shares that may be sold to Triton under the Amended A&R Closing Agreement.
Removed
The First Triton Amendment did not amend any of the other provisions of the Amended and Restated Closing Agreement.
Removed
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.
Removed
Therefore, on September 29, 2023, under the Amended A&R Closing Agreement, the Company delivered a Closing Notice to Triton (the “First Closing Notice”) for the purchase of 263,410 Triton Shares (the “First Triton Shares”), which was the amount of shares of Class B Common Stock equal to approximately 4.9% of the 5,375,724 shares of Class B Common Stock outstanding on that date.
Removed
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 (the “Closing Date”).
Removed
On the Closing Date, Triton was required to pay the Company a purchase price per share equal to 85% of the lowest daily volume-weighted average price of the Class B Common Stock during the period between the date that the shares were delivered to Triton and the Closing Date, the proceeds of which would be reduced by the $25,000 administrative fee, in accordance with the terms of the Amended A&R Closing Agreement.
Removed
On October 4, 2023, the First Triton Shares were received by Triton.
Removed
Pursuant to the Amended A&R Closing Agreement, on the fifth business day following the day that the First Triton Shares were received, Triton was required to pay the Company $46,083.53, based on a price per share of $0.26894, equal to 85% of $0.3164, the lowest daily volume-weighted average price of the Class B Common Stock during the five-business-day period ending October 11, 2023, less the $25,000 administrative fee.
Removed
The Company received payment of this amount on October 13, 2023.
Removed
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.
Removed
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. 45 Under a Second Amendment to 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 will expire on March 31, 2024, instead of December 30, 2023.
Removed
The Second Triton Amendment did not amend any of the other provisions of the Amended A&R Closing Agreement.
Removed
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, Exhibit 4.6, and the description above is qualified in its entirety by reference to such exhibit.
Removed
Unless otherwise stated above, the issuances of these securities were made in reliance upon exemptions provided by Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D thereunder for the offer and sale of securities not involving a public offering and in reliance on similar exemptions under applicable state laws.
Removed
Purchases of Equity Securities The following table provides information about our repurchases of common stock during the three months ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (1) October 1, 2023 – October 31, 2023 - $ - - 1,250,000 November 1, 2023 – November 30, 2023 92,000 $ 0.7592 92,000 1,158,000 December 1, 2023 – December 31, 2023 158,000 $ 0.6541 250,000 1,000,000 (1) On November 27, 2023, the Company announced that its board of directors has approved a stock repurchase program to purchase up to an aggregate of 1,250,000 shares of its outstanding Class B Common Stock.
Removed
Acquisitions pursuant to this stock repurchase program may be made through a combination of open market repurchases in compliance with Rule 10b-18 (“Rule 10b-18”) promulgated under the Exchange Act, privately negotiated transactions, and/or other transactions at the Company’s discretion. The Company expects to finance any stock repurchases with existing cash balances.
Removed
The stock repurchase program may be suspended or discontinued at any time and does not obligate the Company to acquire any amount of common stock. The stock repurchase program will expire on November 21, 2024, unless otherwise modified by the board of directors.
Removed
All shares of Class B Common Stock purchased during the three months ended December 31, 2023, were repurchased pursuant to this publicly-announced repurchase program and were repurchased in compliance with Rule 10b-18.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+26 added−148 removed0 unchanged
Biggest changeThe 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.
Biggest changeCautionary Note Regarding Forward-Looking Statements This report contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements.
Removed
ITEM 6. [RESERVED] 46 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The 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.
Added
Item 6. [Reserved] 39 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 39 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 56 Item 8. Financial Statements and Supplementary Data. 56 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. 57 Item 9A. Controls and Procedures. 57 Item 9B.
Removed
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.
Added
Other Information. 58 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 59 PART III Item 10. Directors, Executive Officers and Corporate Governance. 60 Item 11. Executive Compensation. 64 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 73 Item 13. Certain Relationships and Related Transactions, and Director Independence. 75 Item 14.
Removed
Risk Factors” and “ Special Note Regarding Forward-Looking Statements. ” Overview Asset Entities is a technology company providing social media marketing and content delivery services across Discord, TikTok, and other social media platforms. We also design, develop and manage servers for communities on Discord.
Added
Principal Accountant Fees and Services. 79 PART IV Item 15. Exhibit and Financial Statement Schedules. 81 Item 16.
Removed
Based on the rapid growth of our Discord servers and social media following, we have developed three categories of services: (1) our Discord investment education and entertainment services, (2) social media and marketing services, and (3) our AE.360.DDM services.
Added
Form 10-K Summary. 84 Signatures 85 i INTRODUCTORY NOTES Use of Terms Except as otherwise indicated by the context and for the purposes of this Annual Report on Form 10-K (this “Annual Report”) only, references in this Annual Report to “we,” “us,” “our,” the “Company,” “Asset Entities,” and “our company” are to Asset Entities Inc., a Nevada corporation.
Removed
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.
Added
“Class A Common Stock” refers to the Company’s Class A Common Stock, $0.0001 par value per share. “Class B Common Stock” refers to the Company’s Class B Common Stock, $0.0001 par value per share. “Series A Preferred Stock” refers to the Company’s Series A Convertible Preferred Stock, $0.0001 par value per share.
Removed
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.
Added
Unless otherwise noted, the share and per share information in this report have been adjusted to give effect to the one-for-five (1-for-5) reverse stock split of the authorized and issued and outstanding Class A Common Stock and the authorized and issued and outstanding Class B Common Stock, which became effective as of 5:00 p.m. Eastern Time on July 1, 2024.
Removed
While we believe that Gen Z will continue to be our primary market, our recently-expanded Discord server offering features education and entertainment content covering real estate investments, which is expected to appeal strongly to older generations as well. Our current combined server user membership is approximately 210,000 as of March 2024.
Added
Note Regarding Trademarks, Trade Names and Service Marks We use various trademarks, trade names and service marks in our business, including “AE 360 DDM”, “Asset Entities Where Assets Are Created”, “SiN”, “Social Influencer Network”, Ternary D, OptionsSwing, and associated marks.
Removed
Our social media and marketing services utilize our management’s social influencer backgrounds by offering social media and marketing campaign services to business clients.
Added
For convenience, we may not include the SM, ® or ™ symbols, but such omission is not meant to indicate that we would not protect our intellectual property rights to the fullest extent allowed by law. Any other trademarks, trade names or service marks referred to in this Annual Report are the property of their respective owners.
Removed
Our team of social influencer independent contractors, which we call our “SiN” or “Social Influencer Network”, can perform social media and marketing campaign services to expand our clients’ Discord server bases and drive traffic to their businesses, as well as increase membership in our own servers.
Added
Note Regarding Industry and Market Data We are responsible for the information contained in this Annual Report. This report includes industry data and forecasts that we obtained from industry publications and surveys as well as public filings and internal company sources.
Removed
Our “AE.360.DDM, Design Develop Manage” service, or “AE.360.DDM”, is a suite of services to individuals and companies seeking to create a server on Discord. We believe we are the first company to provide “Design, Develop and Manage,” or DDM, services for any individual, company, or organization that wishes to join Discord and create their own community.
Added
Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable. Statements as to our ranking, market position and market estimates are based on third-party forecasts, management’s estimates and assumptions about our markets and our internal research.
Removed
With our AE.360.DDM rollout, we are uniquely positioned to offer DDM services 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.
Added
We have not independently verified such third-party information, nor have we ascertained the underlying economic assumptions relied upon in those sources.
Removed
We believe that we have built a scalable and sustainable business model and that our competitive strengths position us favorably in each aspect of our business. Our revenue depends on the number of paying subscribers to our Discord servers.
Added
While we believe that all such information contained in this Annual Report is accurate and complete, nonetheless such data involve uncertainties and risks, including risks from errors, and is subject to change based on various factors, including those discussed under Item 1A. “Risk Factors ” and “ Cautionary Note Regarding Forward-Looking Statements ” below.
Removed
During the years ended December 31, 2023 and 2022, we received revenue from 298 and 8,694 Asset Entities Discord server paying subscribers, respectively. 47 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.
Added
These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Removed
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.
Added
Forward-looking statements include, but are not limited to, statements about: ● our ability to introduce new products and services; ● our ability to obtain additional funding to develop additional services and offerings; ● compliance with obligations under intellectual property licenses with third parties; ● market acceptance of our new offerings; ● competition from existing online offerings or new offerings that may emerge; ● our ability to establish or maintain collaborations, licensing or other arrangements; ● our ability and third parties’ abilities to protect intellectual property rights; ● our ability to adequately support future growth; ● our goals and strategies; ii ● our future business development, financial condition and results of operations; ● expected changes in our revenue, costs or expenditures; ● growth of and competition trends in our industry; ● the accuracy and completeness of the data underlying our or third-party sources’ industry and market analyses and projections; ● our expectations regarding demand for, and market acceptance of, our services; ● our expectations regarding our relationships with investors, institutional funding partners and other parties with whom we collaborate; ● fluctuations in general economic and business conditions in the markets in which we operate; and ● relevant government policies and regulations relating to our industry.
Removed
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.
Added
In some cases, you can identify forward-looking statements by terms such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions.
Removed
“ 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.
Added
You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item 1A.
Removed
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.
Added
“ Risk Factors ” and elsewhere in this Annual Report. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.
Removed
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 COVID-19.
Added
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject.
Removed
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.
Added
These statements are based upon information available to us as of the date of this Annual Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.
Removed
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.
Added
These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. The forward-looking statements made in this Annual Report relate only to events or information as of the date on which the statements are made in this Annual Report.
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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.
Added
Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason. Summary of Risk Factors The following is a summary of material risks that could affect our business.
Removed
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.
Added
This summary may not contain all of our material risks, and it is qualified in its entirety by the more detailed risk factors set forth under “Item 1A.
Removed
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.
Added
Risk Factors ”. ● We have a limited operating history, which may make it difficult to evaluate our business and prospects. ● The Company may experience negative cash flow. ● The Company may need to raise additional capital to support its operations. ● The Company may incur significant losses, and there can be no assurance that the Company will ever become a profitable business. ● The Company’s future revenue and operating results are unpredictable and may fluctuate significantly. ● If we are unable to maintain our good standing with the social media platforms where we operate, our business will suffer. iii ● The regulation of social media services, and the ban of TikTok in the United States in particular, may threaten our ability to market and promote our services effectively. ● Risks relating to the blockchain, cryptocurrencies, and NFT industries may cause material adverse effects on our business operations. ● If demand for our services does not develop as expected, our projected revenues and profits will be affected. ● The Company will be subject to risk associated with the development of new products or services. ● The Company may not be able to create and maintain a competitive advantage, given the rapid technological and other competitive changes affecting all markets nationally and worldwide.
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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.
Added
The Company’s success will depend on its ability to keep pace with any such changes. ● The technology area is subject to rapid change, and there are risks associated with new products and services. ● If our paying subscribers are not satisfied with our Discord subscription services, we may face additional cost, loss of profit opportunities, damage to our reputation, or legal liability. ● Our services are based in a new and unproved market and are subject to the risks of failure inherent in the development of new products and services. ● Our business depends on a strong brand, and if we are not able to maintain and enhance our brand, our ability to expand our customer base will be impaired and our business and operating results will be harmed. ● The social media, education, and community-based platform sectors are subject to rapid technological change and, to compete, we must continually evolve and upgrade the user experience to enhance our business. ● The Company operates in a highly competitive industry and there can be no assurance that the Company will be able to compete successfully. ● We are dependent on the continued services and performance of our senior management and other key employees, the loss of any of whom could adversely affect our business, operating results and financial condition. ● If our co-founders were to experience a loss to their social media followings, it could adversely affect our business, operating results and financial condition. ● Our business depends on our ability to attract and retain talented qualified employees or key personnel. ● We may not be able to manage future growth effectively. ● We may have difficulty scaling and adapting our existing infrastructure to accommodate a larger customer base, technology advances or customer requirements. ● If the Company fails to develop or protect its intellectual property adequately, the Company’s business could suffer. ● The Company’s products, services or processes could be subject to claims of infringement of the intellectual property of others. ● We may experience disruption to our servers or our software which could cause us to lose customers. ● A failure or breach of our security systems or infrastructure as a result of cyberattacks could disrupt our business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and cause losses. ● Certain stockholders have substantial influence over our company, and their interests may not be aligned with the interests of other stockholders. iv ● Current market conditions and recessionary pressures in one or more of the Company’s markets could impact the Company’s ability to grow its business. ● We may incur liability as a result of information retrieved from or transmitted over the Internet or published using our services or services of social media platforms, or as a result of claims related to our services or services of social media platforms, and legislation regulating content on social media platforms may require us to change our services or business practices and may adversely affect our business and financial results. ● We are not currently registered as an investment adviser and if we should have registered as an investment adviser, our failure to do so could subject us to civil and/or criminal penalties. ● We will face growing regulatory and compliance requirements which can be costly and time-consuming. ● Failure to comply with data privacy and security laws and regulations could adversely affect our operating results and business. ● Our business could be negatively impacted by changes in the U.S. political environment. ● Our business depends on our customers’ continued and unimpeded access to the Internet and the development and maintenance of Internet infrastructure.
Removed
Risk Factors – Risks Related to Our Business and Industry – The COVID-19 pandemic may cause a material adverse effect on our business ” above.
Added
Internet access providers may be able to block, degrade or charge for access to certain of our services, which could lead to additional expenses and the loss of customers. ● Our business could be affected by new governmental regulations regarding the Internet. ● The requirements of being a public company may strain our resources. ● Climate change and increased focus by governmental organizations on sustainability issues, including those related to climate change, may have a material adverse effect on our business and operations. ● If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired. ● The structure of our common stock has the effect of concentrating voting control with certain Asset Entities officers and directors; this will limit or preclude your ability to influence corporate matters.
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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; and ● market conditions and our market position. 48 Emerging Growth Company and Smaller Reporting Company We qualify as an “emerging growth company” under the JOBS Act.
Added
It may also limit the price and liquidity of our common stock due to its ineligibility for inclusion in certain stock market indices. v PART I
Removed
As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.
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For so 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;” 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.
Removed
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
Removed
In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
Removed
We will remain an emerging growth company for 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, (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.
Removed
To the extent that we continue to qualify as a “smaller reporting company,” as such term is defined in Rule 12b-2 under the Exchange Act, after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including as to: (i) the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act; (ii) scaled executive compensation disclosures; (iii) presenting two years of audited financial statements, instead of three years; and (iv) compliance with certain greenhouse gas emissions disclosure and related third-party assurance requirements.
Removed
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.
Removed
The price of 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”).
Removed
The Second Triton Closing is required to occur within five business days after the delivery of the Second Triton Shares to Triton.
Removed
In 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.
Removed
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.
Removed
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.
Removed
The Third Triton Amendment did not amend any of the other provisions of the Amended A&R Closing Agreement.
Removed
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. 49 Results of Operations The following table summarizes our results of operations for the fiscal years ended December 31, 2023 and 2022.
Removed
Year Ended Consolidated Operations Data December 31, 2023 December 31, 2022 Revenues $ 277,038 $ 343,106 Operating expenses Contract labor 176,773 155,232 General and administrative 2,183,155 462,971 Management compensation 2,848,307 370,158 Total operating expenses 5,208,235 988,361 Loss from operations (4,931,197 ) (645,255 ) Net loss $ (4,931,197 ) $ (645,255 ) Revenues .
Removed
Our revenues decreased 19% to approximately $0.27 million for the fiscal year ended December 31, 2023 from approximately $0.34 million for the fiscal year ended December 31, 2022.
Removed
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. Operating Expenses .
Removed
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.
Removed
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.
Removed
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.
Removed
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.
Removed
Net Loss . 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.
Removed
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.
Removed
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.
Removed
In February 2023 we raised approximately $6.6 million in net proceeds from the Company’s initial public offering.
Removed
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.
Removed
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.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

12 edited+216 added−150 removed4 unchanged
Biggest changeUnder the Asset Purchase Agreement, the Company agreed to purchase all of the Sellers’ right, title, and interest in and to substantially all of the assets and properties owned by the Sellers and used in connection with their business of Discord development, social media, online community management, marketing, and business-to-business software-as-a-service that offers sales, service, marketing, and analytics for the payment of $100,000 in cash (the “Cash Consideration”), the issuance of 300,000 shares of Class B Common Stock (the “Stock Consideration”), and other good and valuable consideration as described herein.
Biggest changeJune 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”).
At the closing, the Company sold the IPO Shares for total gross proceeds of $7,500,000. After deducting the underwriting discounts and commissions, non-accountable expense allowance, and other expenses from the initial public offering, the Company received net proceeds of approximately $6.6 million.
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.
In the case of indemnification provided with respect to breaches of certain non-fundamental representations and warranties, the indemnifying party will only become liable for indemnified losses to the extent that the amount exceeds an aggregate threshold of $25,000. However, this threshold limitation does not apply to claims by the Company for breaches by the Seller or Mr.
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.
The Asset Purchase Agreement also contains mutual indemnification provisions with respect to breaches of representations and warranties as well as to certain third-party claims, and indemnification by the Company of the Sellers and Mr. Lee with respect to certain damages with respect to the assumed liabilities and certain other liabilities asserted by a third party arising after November 10, 2023.
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.
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. 16 Asset Purchase Agreement On November 10, 2023, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Ternary FL, Ternary DE, OptionsSwing (each of Ternary FL, Ternary DE and OptionsSwing, a “Seller,” and collectively, the “Sellers”), and Jason Lee, the principal shareholder of each Seller.
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.
Pursuant to the Asset Purchase Agreement, the Company agreed to assume certain liabilities including accrued liabilities (other than taxes), customer deposits and accounts payable, the obligations, duties and liabilities with respect to the contracts used in conducting or relating to the business of the Sellers and other specified assets, in each case only to the extent arising from and after November 10, 2023.
The TBTV Stock Consideration vested immediately upon issuance. 47 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.
Lee of certain fundamental representations and warranties. In addition, the Company’s aggregate remedy with respect to any and all indemnifiable losses may in no event exceed the purchase price, consisting of the Cash Consideration and the Stock Consideration. 17 Organizational Structure The following diagram depicts our organizational structure as of March 29, 2024.
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.
Pursuant to the Asset Purchase Agreement, on November 10, 2023, the Company paid the Sellers the Cash Consideration, issued 177,000 shares of the Stock Consideration to Mr. Lee, and 123,000 shares of the Stock Consideration in the aggregate to three other designated individuals, and the Sellers and Mr. Lee delivered title to all of the assets of the Sellers.
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 Company also issued the Representative’s Warrant to Boustead for the purchase of 105,000 shares of Class B Common Stock at an exercise price of $6.25 per share, subject to adjustment.
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.
We believe that our AE.360.DDM service is a first-of-its-kind business developed by our company to design, develop, and manage Discord servers for customers wanting to create their own Discord communities for their business.
Our “AE.360.DDM, Design Develop Manage” service, or “AE.360.DDM”, is a suite of services to individuals and companies seeking to create a server on Discord. We believe we are the first company to provide “Design, Develop and Manage,” or DDM, services for any individual, company, or organization that wishes to join Discord and create their own community.
Upon the transfer of such shares of Class A Common Stock to the transferees, such transferred shares automatically converted to shares of Class B Common Stock.
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 Stock.
Pursuant to the Underwriting Agreement, on February 7, 2023, the Company also agreed to issue Boustead a warrant to purchase the number of shares of Class B Common Stock equal to 7% of the aggregate number of shares of Class B Common Stock sold in the initial public offering (the “Representative’s Warrant”).
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 Warrant”).
Removed
Item 7. “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Impact of COVID-19 Pandemic ”. We cannot predict the extent to which the ongoing COVID-19 pandemic or related regulatory or legislative activity may impact us.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The 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.
Removed
Our Market Opportunity and Customers We market our services primarily to “Generation Z” users and businesses seeking to market their services to these users. As the first generation to have grown up with access to the Internet and portable digital technology from a young age, members of Generation Z have been dubbed “digital natives”.
Added
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.
Removed
Around the world, it has been reported that members of Generation Z are spending more time on electronic devices and less time reading books than before, with implications for their attention span and vocabulary, as well as their future in the modern economy.
Added
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.
Removed
As discussed above, Gen Z users are often bereft of the financial literacy needed to invest, in spite of growing demand for financial services especially in an era of meme stocks and stock trading apps like Webull, Robinhood, and E*Trade.
Added
“ Risk Factors” and “ Cautionary Note Regarding Forward-Looking Statements. ” Overview Asset Entities is a technology company providing social media marketing and content delivery services across Discord, TikTok, and other social media platforms. We also design, develop and manage servers for communities on Discord.
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With our emphasis on video, chat, and other social media education, entertainment and marketing, and deep knowledge of Discord server design and trending investment topics, we have positioned ourselves to attract younger investors and businesses seeking to market to them. We are also now targeting millennials, Generation X, and older generations.
Added
Based on the growth of our Discord servers and social media following, we have developed three categories of services: (1) our Discord investment education and entertainment services, (2) social media and marketing services, and (3) our “AE.360.DDM” brand services.
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Sales, Marketing and Customer Acquisition We will continue to seek customers by producing content for our Discord servers and other social media accounts and using our Social Influencer Network to increase our Discord members and to provide marketing services.
Added
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.
Removed
To that end, we frequently engage in social media campaigns for our Discord servers by posting free videos, tweets, and other social media content on Discord, TikTok, X, Instagram, and YouTube.
Added
All of our services are based on our effective use of Discord as well as other social media including TikTok, X, Instagram, and YouTube. 39 Our Discord investment education and entertainment service is designed primarily by and for enthusiastic Generation Z, or Gen Z, retail investors, creators and influencers.
Removed
We will use search engine optimization, or SEO, to gain further reach in acquiring paying subscribers and other members to our Discord servers and potential customers of our other services.
Added
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.
Removed
We expect that we will increase sales and revenues from increased Discord members and customers of our paid services from the expansion of our AE.360.DDM service and expansion of our STOCKS, CRYPTOS and REALTY Discord servers. 6 One of the ways we can increase our Discord users and customer base is to utilize our “SiN” or “Social Influencer Network,” our social influencer independent contractors.
Added
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 combined server user membership was approximately 206,899 as of December 31, 2024.
Removed
Each of our SiN social influencer independent contractors can perform social media outreach to expand our Discord server bases and increase membership in our Discord servers. When we use our social influencers to increase our user base, we have the right to preapprove and remove the influencer’s posts at our discretion. They are generally paid on a commission-only basis.
Added
Our social media and marketing services utilize our management’s social influencer backgrounds by offering social media and marketing campaign services to business clients.
Removed
Typical payment terms are a dollar amount for a certain number of new member signups or subscription net revenue. We may also commission them to provide premium video education series with revenue-sharing provisions for any related subscription fees. We generally own all content produced by our SiN influencers. Depending on each contract, we may require weekly meetings with the influencer.
Added
Our team of social influencer independent contractors, which we call our “SiN” or “Social Influencer Network”, can perform social media and marketing campaign services to expand our clients’ Discord server bases and drive traffic to their businesses, as well as increase membership in our own servers.
Removed
Our SiN contracts are terminable on 30 days’ notice our SiN and have customary confidentiality, nondisclosure, and noncompete provisions. As discussed above, we likewise offer the services of our SiN independent contractors to current and potential social media and marketing customers.
Added
With our AE.360.DDM rollout, we are uniquely positioned to offer DDM services in the growing market for Discord servers. Through Ternary v2, our subscription management and payment processing solution for Discord communities, subscribers can monetize and manage their Discord users.
Removed
We are also working to expand our user base by contracting with trained social media analysts in order to develop larger and more long-term campaigns to promote our business. We expect that these offerings may accelerate growth in client contracts for our social media and marketing customer services.
Added
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 expire.
Removed
Our AE.360.DDM service is expected to grow through multiple avenues including the use of SEO with Facebook and Google Ads, as well as our targeted outreach to venture capitalists, social media influencers, digital technology brands, and other businesses.
Added
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.
Removed
We also expect that revenues from this service will increase organically by showing our expertise in Discord design, development and management through our own growing Discord communities.
Added
We expect to experience rapid revenue growth from our services. We believe that we have built a scalable and sustainable business model and that our competitive strengths position us favorably in each aspect of our business. Our revenue depends on the number of paying subscribers to our Discord servers.
Removed
During 2023 and through March 2024, we initiated an online marketing campaign and expanded use of SEO, Facebook Ads, Google Ads and Google Analytics to accelerate customer acquisition for our AE.360.DDM service; launched a new AE.360.DDM website; engaged music producer Jeff Blue as Head of Entertainment to lead the development of the AE.360.DDM Music and Entertainment A&R service; hired a Senior Project Manager for all Discord servers under the AE.360.DDM suite of services; introduced a ChatGPT AI bot as an AE.360.DDM Discord server customer service feature; engaged professional golfers Bryson DeChambeau and Scott Verplank to promote the AE.360.DDM service; and engaged Michael Irvin, American sports commentator and former professional football player, to provide marketing services for the AE.360.DDM service; launched an official YouTube channel, “The Lounge,” which will feature podcast interviews with celebrities, sports figures, business professionals, and more, and where interviews will focus on each guest’s journey through life; expanded the AE.360.DDM service with Ternary V2, the next generation of the Ternary Stripe-verified payment processing platform for Discord communities; and introduced a ChatGPT AI bot as an AE.360.DDM Discord server customer service feature.
Added
During the years ended December 31, 2024 and 2023, we received revenue from 1,302 and 298 Asset Entities Discord server paying subscribers, respectively. Our Historical Performance As of December 31, 2024, the Company had an accumulated deficit of $12,006,357 and a cash balance of $2,660,624.
Removed
Competition While we do not have any competitors that compete with us across our business in its entirety, we face competition in certain aspects of our business. Our products and services face competition from different businesses depending on the offering.
Added
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.
Removed
The education components of our investment education and entertainment services have the following primary competitors: ● Xtrades Discord Server – Stocks and options trading communities with real traders providing analysis; fees range from $38/month to $988 for a lifetime membership.
Added
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.
Removed
Their Discord server had approximately 116,000 members as of March 2024. ● WallStreetBets Discord Server and Subreddit – These are generally free services where anyone can offer advice on high-risk investing in stocks, options, and futures trading.
Added
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.
Removed
Their Discord server has approximately 527,000 members and their subreddit had approximately 15 million registered users as of March 2024. ● Eagle Investors – An online investment education service provided by investment advisory firm Eagle Investments LLC. They manage a Discord server which includes a free investor community, a number of channels on diverse topics, and free webinars.
Added
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 had filed additional prospectus supplements to the Shelf Registration Statement to increase the maximum gross proceeds to $5,489,399.
Removed
They also offer premium-only content for $27 or $87 per month for different levels of access to trading alerts on their Discord server. They also offer paid stocks and options training courses for $400 per course not including discounts, and private one-on-one sessions ranging from one to eight hours with expert traders at varying prices.
Added
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.
Removed
Their Discord server had approximately 165,000 members as of March 2024. 7 Our social media marketing and advertising competitors primarily include social media influencers who are the owners of alternative Discord servers and social media education and entertainment services, which may detract from our current and potential paying subscriber base and customers of our other services.
Added
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.
Removed
These competitors include: ● @Fourtoeight – A social influencer who is the owner of the Discord server Wiseguyinvesting. Wiseguyinvesting offers several payment plans for investment education resources and other features. Its community size is similar to ours.
Added
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. For further discussion, see Item 7.
Removed
Its plans range from $25 per week to $800 per year. ● @moneylinemark – A social influencer who owns the “StockVIP” Discord server with approximately 262,000 members. Their revenue model relies 100% on Discord memberships. We are not aware of any competitors for our AE.360.DDM suite of services.
Added
“ —Liquidity and Capital Resources ”. 40 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; and ● market conditions and our market position.
Removed
We believe that we have other competitive strengths, some of which are discussed below, that position us favorably in each aspect of our business. However, the technology industry is evolving rapidly and is increasingly competitive.
Added
Emerging Growth Company and Smaller Reporting Company We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.
Removed
A variety of business models are being pursued or may be considered for the provision of digital learning tools, some of which may be more profitable or successful than our business model. Our Strengths We believe that we have competitive strengths, some of which are discussed below, that position us favorably in each aspect of our business.
Added
For so long 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 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;” 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.
Removed
We believe our key competitive strengths include the following: ● Superior Social Influencer Team . We believe that our greatest competitive strength is our people. Our blend of young, dynamic, entrepreneurial executive social influencers are part of Generation Z and understand their needs and interests.
Added
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
Removed
Moreover, our executive team includes professionals with two or more decades of accounting, legal, technology, sales, and management experience including our Executive Chairman, who has practiced law for over 25 years; our Chief Financial Officer, a Certified Public Accountant, or CPA, with over ten years of experience in finance and accounting; our Chief Experience Officer, who has been in the technology and marketing management field for over two decades; and our Chief Technology Officer, a former Salesforce Inc.
Added
In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
Removed
Senior Solution Engineer, who joined us in connection with our Ternary and OptionsSwing assets acquisitions. We believe that we have a unique combination of knowledge, global experience and business acumen to sustain long-term growth. ● First-Mover Advantage .
Added
We will remain an emerging growth company for 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, (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.
Removed
With our superior understanding of the Discord platform, we can provide the technology and speed to market which customers require to set up successful Discord servers. ● Best-in-Class Investment Education, Entertainment and Technology .
Added
To the extent that we continue to qualify as a “smaller reporting company,” as such term is defined in Rule 12b-2 under the Exchange Act, after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including as to: (i) the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act; (ii) scaled executive compensation disclosures; (iii) presenting two years of audited financial statements, instead of three years; and (iv) compliance with certain greenhouse gas emissions disclosure and related third-party assurance requirements. 41 Recent Developments 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.
Removed
Our insights into compelling investment education and entertainment methods and subjects for Gen Z and other types of interested customers; experience creating communities for Gen Z and social media consumers; and our growing social influencer network, or “SiN”, and related content publishing network, are some of the hallmarks of our business. ● Service Synergy .
Added
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.
Removed
Each of our operating business categories has the ability to be a standalone business, but all are housed within our single Asset Entities enterprise. With each deployment of additional services, we have historically experienced organic growth in our other businesses.
Added
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.
Removed
Our Growth Strategies The key elements of our strategy to expand our business include the following: ● Expand Our Social Influencer Network . Our growth has been grounded on our team of social influencers. In order to generate even greater momentum for the growth of our services, we will continue to expand our “SiN” social influencer network.
Added
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 A.G.P.
Removed
We plan to bring top current and former athletes, celebrities, and rising and high-profile social influencers into our SiN network to promote our established and newer Discord servers. We have also begun utilizing our SiN network to accelerate the growth of our social media and marketing service. ● Leverage Discord Server Community Outreach .
Added
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.

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