Strive, Inc. (ASST)

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. The following discussion and analysis should be read in conjunction with our financial
statements and the related notes thereto included elsewhere in this Annual Report. The discussion contains forward-looking statements
that are based on the beliefs of management, as well as assumptions made by, and information currently available to, management. Actual
results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including
those discussed below and elsewhere in this Annual Report, particularly in the sections titled Item 1A. “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. 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. 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.

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Our Discord investment education and entertainment
service is designed primarily by and for enthusiastic Generation Z, or Gen Z, retail investors, creators and influencers. Gen Z is commonly
considered to be people born between 1997 and 2012. Our investment education and entertainment service focuses on stock, real estate,
cryptocurrency, and NFT community learning programs designed for the next generation. While we believe that Gen Z will continue to be
our primary market, our Discord server offering features education and entertainment content covering real estate investments, which is
expected to appeal strongly to older generations as well. Our combined server user membership was approximately 206,899 as of December
31, 2024.

Our social media and marketing services utilize
our management’s social influencer backgrounds by offering social media and marketing campaign services to business clients. 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.

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. 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. 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. As a Stripe-verified partner through Ternary v2, we can also assist subscribers with integrating other platforms into their Discord
servers with open application programming interfaces, further extending our platform’s capabilities.

We believe that we are a leading provider of all
of these services, and that demand for all of our services will continue to grow. We expect to experience rapid revenue growth from our
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. 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. During the years ended
December 31, 2024 and 2023, we had a net loss of $6,393,932 and $4,931,197, respectively. To date, the Company has financed its
operations primarily through capital raises and sales of its services. In April 2024, the Company filed the Shelf Registration
Statement, which was declared effective by the SEC on April 26, 2024, for potential offerings of up to $100,000,000 in aggregate,
subject to the requirement that in no event may we sell shares having a value exceeding more than one-third of our public float in
any 12-month period under the Shelf Registration Statement so long as our public float remains below $75,000,000. In May 2024, the
Company completed the first of a two-part private placement of its Series A Preferred Stock for gross proceeds of $1.5 million, and
in July 2024, the Company completed the second part of the private placement for an additional $1.5 million in gross proceeds. In
September 2024, the Company entered into the ATM Sales Agreement, and filed a prospectus supplement to the Shelf Registration
Statement for the ATM Financing for gross proceeds of up to $1,791,704. As of March 31, 2025, the Company had filed additional
prospectus supplements to the Shelf Registration Statement to increase the maximum gross proceeds to $5,489,399. Since the
commencement of the ATM Financing, a total of 5,417,700 shares has been sold, for net proceeds to the Company of $4,830,647.56,
after paying $329,362 in compensation to the Sales Agent and the same amount to Boustead under the Boustead ATM Waiver. The
Company has received confirmation from the investor in its Series A Preferred Stock that it will invest up to an additional $3
million upon request by the Company. Based on the Company’s existing cash resources and the cash expected to be
received from 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. “—Liquidity and Capital Resources”.

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Principal Factors Affecting Our Financial Performance

Our operating results are primarily affected by
the following factors:

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

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. 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.

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.

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.

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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.
Pursuant to the A&R Ionic ATM Waiver, Ionic waived any prohibition, restriction or adverse adjustment that would otherwise apply to
any action of the Company relating to an “at the market offering” (as defined in Rule 415(a)(4) under the Securities Act),
under a sales agreement between the Company and A.G.P. under which the Company may offer and sell through A.G.P., as sales agent, the
Company’s shares of Class B Common Stock (“Waived A.G.P. ATM”), under the Securities Purchase Agreement, dated as of
May 24, 2024, between the Company and Ionic, as amended by the First Amendment to Securities Purchase Agreement, dated as of June 13,
2024, between the Company and Ionic (as amended, the “Ionic Purchase Agreement”), or Series A Certificate of Designation.
Pursuant to the A&R Ionic ATM Waiver, regardless of the terms and conditions of the Ionic Purchase Agreement and the Series A Certificate
of Designation, the Company may at any time enter into or consummate the transactions contemplated by any agreement relating to a Waived
A.G.P. ATM, the filing of a prospectus supplement to a prospectus contained in an effective registration statement that was filed under
the Securities Act relating to a Waived A.G.P. ATM, the announcement of a Waived A.G.P. ATM, the issuance, offer, sale, or grant of any
shares of the Class B Common Stock relating to a Waived A.G.P. ATM, or the issuance, offer, sale, or grant of any securities in connection
with either the provision of goods or services or settlement of any obligations that may otherwise arise with respect to a Waived A.G.P.
ATM. In addition, pursuant to the A&R Ionic ATM Waiver, Ionic waived any adjustment to the applicable Conversion Price (as defined
in the Series A Certificate of Designation), which partly determines the number of shares of Class B Common Stock issuable upon conversion
of a share of Series A Preferred Stock, that would otherwise occur as a result of any Waived A.G.P. ATM under the terms of the Series
A Certificate of Designation.

Results of Operations

The following table summarizes our results of
operations for the fiscal years ended December 31, 2024 and 2023.

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Revenue.
Our revenue increased 128.7% to approximately $0.6 million for the fiscal year ended December 31, 2024 from approximately $0.3 million
for the fiscal year ended December 31, 2023. This increase was primarily due to an increase in revenues from the increased number of
our Discord server paying subscribers during the fiscal year ended December 31, 2024, including subscribers to the OptionsSwing and Pure
Profits Discord servers that the Company acquired in November 2023 and June 2024, respectively, compared to such revenues for the fiscal
year ended December 31, 2023, the majority of which preceded the acquisitions of the OptionsSwing and Pure Profits Discord servers. There
was no material difference in the Company’s subscription pricing structure between these periods.

Operating Expenses. Our total operating
expenses increased 35.1% to approximately $7.0 million for the fiscal year ended December 31, 2024 from approximately $5.2 million for
the fiscal year ended December 31, 2023. This increase was primarily due to an increase in advertising, marketing, payroll and other
administrative expenses and administrative cost of public filings of approximately $1.1 million and an increase in management compensation
costs of approximately $0.7 million for the fiscal year ended December 31, 2024, compared to such costs for the fiscal year ended December
31, 2023.

Loss
From Operations. Our loss from operations increased 29.9% to approximately $6.4 million for the fiscal year ended December 31,
2024 from approximately $4.9 million for the fiscal year ended December 31, 2023. This increase was primarily due to an increase in advertising,
marketing, payroll and other administrative expenses and administrative cost of public filings of approximately $1.1 million and an
increase in management compensation costs of approximately $0.7 million for the fiscal year ended December 31, 2024, compared to such
costs for the fiscal year ended December 31, 2023.

Liquidity and Capital Resources

As
of December 31, 2024, the Company had an accumulated deficit of $12,006,357 and cash balance of $2,660,624. During the years ended
December 31, 2024 and 2023, we had a net loss of $6,393,932 and $4,931,197, respectively. To date, the Company has financed its operations
primarily through capital raises and sales of its services. In April 2024, the Company filed the Shelf Registration Statement, which
was declared effective by the SEC on April 26, 2024, for potential offerings of up to $100,000,000 in aggregate, subject to the requirement
that in no event may we sell shares having a value exceeding more than one-third of our public float in any 12-month period under the
Shelf Registration Statement so long as our public float remains below $75,000,000. In May 2024, the Company completed the first of a
two-part private placement of its Series A Preferred Stock for gross proceeds of $1.5 million, and in July 2024, the Company completed
the second part of the private placement for an additional $1.5 million in gross proceeds. In September 2024, the Company entered into
the ATM Sales Agreement, and filed a prospectus supplement to the Shelf Registration Statement for the ATM Financing for gross proceeds
of up to $1,791,704. As of March 31, 2025, the Company has filed additional prospectus supplements to the Shelf Registration Statement
to increase the maximum gross proceeds to $5,489,399. Since the commencement of the ATM Financing, a total of 5,417,700 shares has been
sold, for net proceeds to the Company of $4,830,647.56, after paying $329,362 in compensation to the Sales Agent and the same amount
to Boustead under the Boustead ATM Waiver. The Company has received confirmation
from the investor in its Series A Preferred Stock that it will invest up to an additional $3 million upon request by the Company. Based on the Company’s existing cash resources and the cash expected to be received
from the ATM Financing and other planned financings, it is expected that the Company will have sufficient funds to carry out the Company’s
planned operations through December 31, 2025 and for at least 12 months beyond that period.

We may, however, in the
future require additional cash resources due to changing business conditions, implementation of our strategy to expand our business, or
other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements,
we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities
could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could
require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts
or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit
our ability to expand our business operations and could harm our overall business prospects.

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Summary of Cash Flow

The following table provides detailed information
about our net cash flow for the periods presented:

Net cash used in operating activities was approximately
$4.9 million for the fiscal year ended December 31, 2024, as compared to net cash used
in operating activities of approximately $3.8 million for the fiscal year ended December 31, 2023. This increase was primarily due to
an increase in net loss.

Net cash used in investing activities was $0.4
million for the fiscal year ended December 31, 2024, as compared to net cash used in operating activities of approximately $0.1 for the
fiscal year ended December 31, 2023. The change was primarily due to the purchase of intangible
assets during the fiscal year ended December 31, 2024 compared to a lesser amount of such
purchases during the fiscal year ended December 31, 2023.

Net cash provided by financing activities was
approximately $5.0 million for the fiscal year ended December 31, 2024, as compared to net cash provided by financing activities of
approximately $6.7 million for the fiscal year ended December 31, 2023. The change was primarily due to the reduced amount of proceeds
from the Company’s private placements during the fiscal year ended December 31, 2024 compared to the proceeds received from its
February 2023 initial public offering.

Initial Public
Offering and Underwriting Agreement

The closing of our initial public offering took
place on February 7, 2023 pursuant to the Underwriting Agreement. 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.

Pursuant to the Underwriting Agreement, as of
February 3, 2023, we were subject to a lock-up agreement that prevented us, subject to certain exceptions, from selling or transferring
any of our shares of capital stock of the Company for up to 12 months. In addition, our officers, directors and beneficial owners of approximately
78.0% of our common stock agreed to be locked up for a period of 12 months. Holders of approximately 7.2% of our outstanding common stock
agreed to be locked up for a period of nine months, and a holder of approximately 2.3% of our outstanding Class B Common Stock prior to
the initial public offering agreed to be locked up for a period of six months with respect to approximately 0.9% of the outstanding common
stock held by such holder, subject to certain exceptions. The remaining shares were not subject to lock-up provisions or such lock-up
provisions were waived. This lock-up period expired on February 2, 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.

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, 2024:

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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.

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.

Engagement Letter
and Underwriting Agreement with Boustead Securities, LLC

Under the engagement letter agreement, dated November
29, 2021, between the Company and Boustead (the “Boustead Engagement Letter”), during the term that began on November 29,
2021 and ending 12 months following the termination or expiration of the Boustead Engagement letter, which occurred on February 7, 2024
(see below), we were required to compensate Boustead with a cash fee equal to seven percent (7.0%)
and non-accountable expense allowance equal to one percent (1.0%) of the gross proceeds received by the Company from the sale of securities
in an investment transaction, or up to ten percent (10.0%) of the gross proceeds from certain other merger, acquisition, or joint venture,
strategic alliance, license, research and development, or other similar transactions, with a party, including any investor in a private
placement in which Boustead served as placement agent or in the initial public offering, or who became aware of the Company or who became
known to the Company prior to the termination or expiration of the Boustead Engagement Letter, including any Company officers, directors,
employees, consultants, advisors, stockholders, members, or partners, for such transactions that occurred during the 12-month period following
the termination or expiration of the Boustead Engagement Letter (the “Tail Rights”). The Boustead Engagement Letter
expired on February 7, 2024. The Tail Rights therefore expired on February 7, 2025.

Pursuant to the Underwriting
Agreement, the Company granted Boustead an irrevocable right of first refusal until February 2, 2025, to act as financial advisor, lead
managing underwriter, book runner, placement agent, or to act as joint advisor, managing underwriter, book runner, or placement agent
on at least equal economic terms, on any public or private financing (debt or equity), merger, business combination, recapitalization
or sale of some or all of the equity or assets of the Company. This right of first refusal expired on February 7, 2025.

October 2023 and April 2024 Private Placements
with Triton Funds LP

Sales to Triton Funds
LP

Under a Closing Agreement,
dated as of June 30, 2023 (the “Triton Closing Agreement”), between the Company and Triton Funds LP, a Delaware limited partnership
(“Triton”), the Company agreed to sell to Triton, at its option, shares of Class B Common Stock having an aggregate value
of $1,000,000 (“Triton Shares”), pursuant to a registration statement to be filed and made effective for the resale of the
Triton Shares. Subject to the terms of the Triton Closing Agreement, the Company was provided a right to deliver a closing notice (the
“Triton Closing Notice”) and issue the Triton Shares to Triton at any time before September 30, 2023, pursuant to which Triton
had agreed to purchase the Triton Shares for $1,000,000 before deducting a $25,000 administrative fee. The price of each of the Triton
Shares was agreed to be 85% of the lowest daily volume-weighted average price of the Class B Common Stock during the five business days
prior to the closing of the purchase of the Triton Shares (the “Triton Closing”). The Triton Closing was required to occur
within five business days after the Triton Shares were received by Triton. Triton’s obligation to purchase the Triton Shares was
conditioned on the effectiveness of a registration statement covering the resale of the Triton Shares and Triton’s ownership not
exceeding 9.99% of the Class B Common Stock outstanding as of June 30, 2023.

The Triton Closing Agreement
contained additional requirements, including that the Company maintain the listing of the Class B Common Stock on the primary market on
which the Class B Common Stock is listed and provide notice to Triton of certain events affecting registration or that may suspend its
right to submit the Triton Closing Notice. The Company also agreed to provide indemnification against liabilities relating to misrepresentations,
breaches of obligations, and third-party claims relating to the Triton Closing Agreement, with certain exceptions. The Triton Closing
Agreement provided that it would expire either upon the Triton Closing or September 30, 2023.

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Under an Amended and
Restated Closing Agreement, dated as of August 1, 2023, between the Company and Triton (the “Triton Amended and Restated Closing
Agreement”), the Closing Agreement was amended and restated to provide that, subject to its terms and conditions, the Company may
deliver a Triton Closing Notice and issue certain securities to Triton at any time on or before September 30, 2023, pursuant to which
Triton would be required to purchase such securities of the Company with an aggregate gross purchase price of $1,000,000 in the following
manner. Upon delivery of a Triton Closing Notice and the issuance and delivery of securities as described below, Triton would purchase
Triton Shares in an amount equal to up to 9.99% of the outstanding shares of Class B Common Stock following such purchase, pre-funded
warrants (“Triton Pre-Funded Warrants” and together with Triton Shares, “Triton Securities”) that may be exercised
to purchase an amount of newly-issued shares of Class B Common Stock (“Triton Warrant Shares”), or both Triton Shares and
Triton Pre-Funded Warrants, such that the aggregate price of the Triton Shares and the Triton Pre-Funded Warrants together with the exercise
price to be paid upon full exercise of the Triton Pre-Funded Warrants was required to equal a total gross purchase price of $1,000,000.
Any proceeds under the Triton Amended and Restated Closing Agreement must be reduced by a $25,000 administrative fee. The Triton Amended
and Restated Closing Agreement also provided that it would expire either upon the date that Triton paid the required purchase price after
receiving a Triton Closing Notice, or September 30, 2023. The terms of the price of the Triton Securities and the required date of the
Triton Closing were not amended, except that if Triton elected to purchase Triton Pre-Funded Warrants in lieu of Triton Shares, then the
purchase price per Triton Pre-Funded Warrant acquired would be reduced by $0.01 with such $0.01 being the exercise price of the Triton
Pre-Funded Warrant.

The Triton Amended and
Restated Closing Agreement provided that Triton’s obligation to purchase the Triton Securities was subject to certain conditions.
These conditions included the filing and effectiveness of the required registration statement for the resale of the Triton Securities.
In addition, the Class B Common Stock was required to remain listed on The Nasdaq Capital Market tier of Nasdaq, and the issuance of the
Triton Securities was required to not violate any requirements of Nasdaq. Triton’s purchase requirement was also subject to provisions
that prevented Triton from acquiring shares of Class B Common Stock at the time of any sale of the Triton Securities or exercise of the
Triton Pre-Funded Warrants that would result in the number of shares beneficially owned by Triton and its affiliates exceeding 9.99% of
the total number of shares of Class B Common Stock outstanding immediately after giving effect to the issuance of the shares under the
Triton Amended and Restated Closing Agreement or the Triton Pre-Funded Warrants (the “Triton Beneficial Ownership Limitation”).
The Triton Amended and Restated Closing Agreement provided for the issuance of the Triton Pre-Funded Warrants in lieu of issuance of some
or all the Triton Shares, with an exercise price of $0.01 per share and with no expiration date, if, in Triton’s sole discretion,
it would otherwise exceed the Triton Beneficial Ownership Limitation, or otherwise upon Triton’s election. For each of the Triton
Shares that Triton instead elected to be issuable as Triton Warrant Shares, the number of Triton Shares that we were required to issue
to Triton at the time of any sale of the Triton Securities was required to be decreased on a one-for-one basis. We were also required
to provide indemnification against liabilities relating to misrepresentations, breaches of obligations, and third-party claims relating
to the Triton Amended and Restated Closing Agreement, with certain exceptions.

On August 18, 2023, the
Company filed a Registration Statement on Form S-1 (File No. 333-274079) to register the offer and sale of the Triton Securities in an
amount of up to 177,000 shares of Class B Common Stock consisting of Triton Shares and Triton Warrant Shares, as well as other securities.
The registration statement was declared effective by the SEC on September 6, 2023.

Under an Amendment to
Triton Amended and Restated Closing Agreement (the “First Triton Amendment”), dated as of September 27, 2023, the Company
and Triton agreed to amend the Triton Amended and Restated Closing Agreement (as amended, the “Amended A&R Closing Agreement”)
to provide that the Amended A&R Closing Agreement would expire on December 30, 2023 instead of September 30, 2023; to provide that
up to an aggregate value of $1,000,000 of the Class B Common Stock, based on the purchase price formula described above, may be sold and
purchased pursuant to a Triton Closing Notice; and to amend the form of Triton Closing Notice to provide for a specific number of shares
that may be sold to Triton under the Amended A&R Closing Agreement. The First Triton Amendment did not amend any of the other provisions
of the Triton Amended and Restated Closing Agreement.

As an incentive to Triton
to enter into the First Triton Amendment and agree to the extension of the term under the Amended A&R Closing Agreement to December
30, 2023, the Company indicated to Triton that it would deliver a Triton Closing Notice under the Amended A&R Closing Agreement to
sell a number of shares of Class B Common Stock equal to approximately 4.9% of the outstanding shares of Class B Common Stock prior to
the sale. Therefore, on September 29, 2023, under the Amended A&R Closing Agreement, the Company delivered a Triton Closing Notice
to Triton (the “First Triton Closing Notice”) for the purchase of 52,682 Triton Shares (the “First Triton Shares”),
which was the amount of shares of Class B Common Stock equal to approximately 4.9% of the shares of Class B Common Stock outstanding on
that date. Pursuant to the Amended A&R Closing Agreement, the closing date for this purchase was required to take place within five
business days after the Triton Shares were delivered to Triton. On the date of this Triton Closing (the “First Triton Closing”),
Triton was required to pay the Company a purchase price per share equal to 85% of the lowest daily volume-weighted average price of the
Class B Common Stock during the five business days prior to the date of the First Triton Closing, the proceeds of which would be reduced
by the $25,000 administrative fee, in accordance with the terms of the Amended A&R Closing Agreement.

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On October 4, 2023, the
First Triton Shares were received by Triton. Pursuant to the Amended A&R Closing Agreement, on the fifth business day following the
day that the First Triton Shares were received, Triton was required to pay the Company approximately $45,841, based on a price per share
of $1.3447, equal to 85% of $1.582, the lowest daily volume-weighted average price of the Class B Common Stock during the five-business-day
period ending October 11, 2023, less the $25,000 administrative fee. The Company received payment of this amount on October 13, 2023.

Under a Second Amendment
to Triton Amended and Restated Closing Agreement (the “Second Triton Amendment”), dated as of December 30, 2023, the Company
and Triton agreed to amend the Amended A&R Closing Agreement to provide that the Amended A&R Closing Agreement would expire on
March 31, 2024, instead of December 30, 2023. The Second Triton Amendment did not amend any of the other provisions of the Amended A&R
Closing Agreement.

Under a Third Amendment
to Amended and Restated Closing Agreement (the “Third Triton Amendment”), dated as of March 29, 2024, the Company and Triton
agreed to amend the Amended A&R Closing Agreement to provide that the Amended A&R Closing Agreement would expire on April 30,
2024, instead of March 31, 2024. The Third Triton Amendment did not amend any of the other provisions of the Amended A&R Closing Agreement.

Pursuant to the Amended
A&R Closing Agreement, as amended by each of the Second Triton Amendment and the Third Triton Amendment, on March 27, 2024, the Company
delivered a Triton Closing Notice to Triton informing Triton that the Company had elected to exercise its right to sell Triton 124,318
Triton Shares (the “Second Triton Shares”). The price of each of the Second Triton Shares was required to be 85% of the lowest
daily volume-weighted average price of the Class B Common Stock during the five business days prior to the Triton Closing for the sale
of the Second Triton Shares (the “Second Triton Closing”), and the Second Triton Closing was required to occur within five
business days after the date that the Second Triton Shares were received by Triton.

On April 10, 2024, the
date of the Second Triton Closing, the price of the Second Triton Shares was determined to be $1.70 per share based on the lowest daily
volume-weighted average price of the Class B Common Stock during the five business days prior to the Second Triton Closing. On April 17,
2024, the Company received gross proceeds of $211,341.

Compensation to Boustead
Securities, LLC

In connection with the
First Triton Closing, pursuant to the Boustead Engagement Letter and the Underwriting Agreement, the Company was required to pay Boustead
a fee equal to 7% of the aggregate purchase price, and non-accountable expense allowance equal to 1% of the aggregate purchase price for
the First Triton Shares. In addition, the Company issued a warrant to Boustead for the purchase of 3,688 shares of Class B Common Stock,
equal to 7% of the number of the First Triton Shares, with an exercise price of $1.3447 per share, subject to adjustment, a five-year
term, and cashless exercise and registration rights.

In connection with the
Second Triton Closing, pursuant to the Boustead Engagement Letter and the Underwriting Agreement, the Company paid Boustead, as placement
agent compensation, a fee equal to 7% of the aggregate purchase price and a non-accountable expense allowance equal to 1% of the aggregate
purchase price for the Second Triton Shares. In addition, the Company issued a warrant to Boustead for the purchase of 8,702 shares of
Class B Common Stock, equal to 7% of the number of the Second Triton Shares, with an exercise price of $1.70 per share, subject to adjustment,
a five-year term, and cashless exercise and registration rights.

June 2024 TommyBoyTV
Asset Purchase Agreement

Under an Asset Purchase
Agreement (the “TBTV Asset Purchase Agreement”), dated as of June 21, 2024, among the Company, TommyBoyTV, LLC (the “TBTV
Seller”), and Tomas Cvercko, the owner of all of the membership interests of the TBTV Seller (the “TBTV Member”), the
Company agreed to purchase all of the TBTV Seller’s right, title, and interest in and to substantially all of the assets and properties
owned by the TBTV Seller and used in connection with its business of Discord development, social media, online community management, marketing,
and analytics for the payment of $200,000 in cash (the “TBTV Cash Consideration”) and the issuance of 5,000 shares of Class
B Common Stock (the “TBTV Stock Consideration”).

Pursuant to the TBTV
Asset Purchase Agreement, on June 21, 2024, the Company paid the TBTV Seller $200,000 and issued the TBTV Stock Consideration to the TBTV
Member, and the TBTV Seller and the TBTV Member delivered title to all of the assets of the TBTV Seller. The TBTV Stock Consideration
vested immediately upon issuance.

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. These assumed liabilities also exclude any obligations arising from the TBTV Seller’s
breach or default before June 21, 2024.

The TBTV Asset Purchase
Agreement also contains mutual indemnification provisions with respect to breaches of representations and warranties as well as to certain
third-party claims, and indemnification by the Company of the TBTV Seller and the TBTV Member with respect to certain damages with respect
to the assumed liabilities and certain other liabilities asserted by a third party arising after June 21, 2024. In the case of indemnification
provided with respect to breaches of certain non-fundamental representations and warranties, the indemnifying party will only become liable
for indemnified losses to the extent that the amount exceeds an aggregate threshold of $25,000. However, this threshold limitation does
not apply to claims by the Company for breaches by the TBTV Seller or the TBTV Member of certain fundamental representations and warranties.
In addition, the Company’s aggregate remedy with respect to any and all indemnifiable losses may in no event exceed the purchase
price, consisting of the TBTV Cash Consideration.

Private Placements of Series A Preferred
Stock

Under the Ionic Purchase
Agreement, the Company agreed to the issuance and sale of up to 330 shares of the Company’s newly designated Series A Preferred
Stock for maximum gross proceeds of $3,000,000. The shares of the Series A Preferred Stock are convertible into shares of Class B Common
Stock. Pursuant to the Ionic Purchase Agreement, the Company is required to issue and sell 165 shares of Series A Preferred Stock at each
of two closings subject to the satisfaction of the terms and conditions for each closing.

The first closing (the “First Ionic Closing”)
occurred on May 24, 2024 for the issuance and sale of 165 shares of Series A Preferred Stock for gross proceeds of $1,500,000. The second
closing (the “Second Ionic Closing”), for the issuance and sale of 165 shares of Series A Preferred Stock for gross proceeds
of $1,500,000, was required to occur on the first business day on which the conditions specified in the Ionic Purchase Agreement for the
Second Ionic Closing were satisfied or waived, including the filing and effectiveness of the First Registration Statement (as defined
below) and the effectiveness of the Stockholder Approval (as defined below). On July 29, 2024, the conditions to the occurrence of the
Second Ionic Closing were met. As a result, on July 29, 2024, the Company issued and sold 165 shares of Series A Preferred Stock to Ionic
for gross proceeds of $1,500,000.

Registration Rights
Agreement

In connection with the Ionic Purchase Agreement,
the Company agreed to provide certain registration rights to Ionic, pursuant to the Registration Rights Agreement, dated as of May 24,
2024, between the Company and Ionic (the “Ionic Registration Rights Agreement”). The Ionic Registration Rights Agreement provides
for the registration for resale of any and all shares of Class B Common Stock issuable to Ionic with respect to the shares of Series A
Preferred Stock under the Ionic Purchase Agreement (the “Registrable Conversion Shares”). Within the later of 15 calendar
days of the First Ionic Closing or May 24, 2024, the Company was required to file a registration statement (the “First Registration
Statement”) for the offer and resale of the maximum number of Registrable Conversion Shares permitted to be covered in accordance
with applicable SEC rules, regulations and interpretations. The First Registration Statement was required to be declared effective within
45 days of the First Ionic Closing, or 90 days if the First Registration Statement received a review. Pursuant to these requirements,
a Registration Statement on Form S-1 (File No. 333-280020), was originally filed by the Company with the SEC on June 7, 2024, and as amended,
was filed to register the offer and resale of 385,894 shares of Class B Common Stock, which was considered the maximum number of
Registrable Conversion Shares permitted to be covered in accordance with applicable SEC rules, regulations and interpretations, and was
declared effective by the SEC on July 24, 2024. Following the Second Ionic Closing, which occurred on July 29, 2024, for the issuance
and sale of an additional 165 shares of Series A Preferred Stock for gross proceeds of $1,500,000, the Company was required to file a
registration statement (the “Second Registration Statement”) within 45 days of the Second Ionic Closing for the offer and
resale of the maximum number of Registrable Conversion Shares permitted to be covered in accordance with applicable SEC rules, regulations
and interpretations. The Second Registration Statement was required to be declared effective within 45 days of the Second Ionic Closing,
or 90 days if the Second Registration Statement received a review. Pursuant to these requirements, a Registration Statement on Form S-1
(File No. 333-281438), was originally filed by the Company with the SEC on August 9, 2024, and as amended, was filed to register the offer
and resale of 482,120 shares of Class B Common Stock, which was considered the maximum number of Registrable Conversion Shares permitted
to be covered in accordance with applicable SEC rules, regulations and interpretations, and was declared effective by the SEC on September
11, 2024.

48

In the event the number
of shares of Class B Common Stock available under the First Registration Statement and the Second Registration Statement is insufficient
to cover all of the Registrable Conversion Shares, the Company will be required to file at least one additional registration statement
(each of such additional registration statement, the First Registration Statement, and the Second Registration Statement, and collectively,
the “Registration Statement”) within 14 days of the date that the necessity arises and that such additional Registration Statement
may be filed under SEC rules to cover such Registrable Conversion Shares up to the maximum permitted to be covered under SEC rules, which
must be made effective within 45 days of such date, or 90 days if such additional Registration Statement receives a review. Any failure
to meet the filing deadline for either the First Registration Statement or the Second Registration Statement (“Filing Failure”)
would have resulted in liquidated damages of 20,000 shares of Class B Common Stock. Any failure to meet the effectiveness deadline for
any Registration Statement (“Effectiveness Failure”) will result in liquidated damages of 20,000 shares of Class B Common
Stock. Each of the shares issuable upon a Filing Failure or an Effectiveness Failure must also be covered by a Registration Statement
to the same extent as the Registrable Conversion Shares. The Company will be required to use its best efforts to keep each Registration
Statement effective until all such shares of Class B Common Stock are sold or may be sold without restriction pursuant to Rule 144 under
the Securities Act (“Rule 144”), and without the requirement for us to be in compliance with the current public information
requirement under Rule 144.

Terms of Series A
Convertible Preferred Stock under Certificate of Designation and Securities Purchase Agreement

Pursuant to the Ionic
Purchase Agreement, on May 24, 2024, the Company filed a Certificate of Designation of Series A Convertible Preferred Stock of the Company
with the Secretary of State of the State of Nevada (the “Initial Certificate of Designation”), as amended by the Certificate
of Amendment to Designation (the “First Designation Amendment”) filed with the Secretary of State of the State of Nevada on
June 14, 2024, as amended by the Certificate of Amendment to Designation (the “Second Designation Amendment”) filed with the
Secretary of State of the State of Nevada on September 4, 2024 at 9:58 AM Pacific Daylight Time, as amended by the Certificate of Amendment
to Designation (the “Third Designation Amendment”) filed with the Secretary of State of the State of Nevada on September 4,
2024 at 11:38 AM Pacific Daylight Time (as amended, the “Series A Certificate of Designation”), designating 660 shares of
the Company’s preferred stock as “Series A Convertible Preferred Stock,” $0.0001 par value per share, and setting forth
the voting and other powers, preferences and relative, participating, optional or other rights of the Series A Preferred Stock. Each share
of Series A Preferred Stock has an initial stated value (“Stated Value”) of $10,000 per share.

The Series A Preferred
Stock ranks senior to all other capital stock of the Company with respect to the payment of dividends, distributions and payments upon
the liquidation, dissolution and winding up of the Company, unless the holders of the majority of the outstanding shares of Series A Preferred
Stock consent to the creation of other capital stock of the Company that is senior or equal in rank to the Series A Preferred Stock.

Holders of Series A Preferred
Stock will be entitled to receive cumulative dividends, in shares of Class B Common Stock (or cash at the Company’s option) on the
Stated Value at an annual rate of 6% (which will increase to 12% if a Triggering Event (as defined in the Series A Certificate of Designation)
occurs until such Triggering Event, if curable, is cured). Dividends will be payable upon conversion or redemption of the Series A Preferred
Stock.

Holders of Series A Preferred
Stock will be entitled to convert shares of Series A Preferred Stock into a number of shares of Class B Common Stock determined by dividing
the Stated Value of such shares (plus any accrued but unpaid dividends and other amounts due, unless paid by the Company in cash) by the
conversion price of the Series A Preferred Stock (the “Conversion Price”). The initial Conversion Price is $3.75, subject
to adjustment including adjustments due to full-ratchet anti-dilution provisions. Holders may elect to convert shares of Series A Preferred
Stock to Class B Common Stock at an alternate conversion price equal to 85% (or 70% if the Company’s Class B Common Stock is suspended
from trading on or delisted from a principal trading market or upon occurrence of a Triggering Event) of the average of the lowest daily
volume weighed average price of the Class B Common Stock during the Alternate Conversion Measuring Period (as defined in the Series A
Certificate of Designation).

A holder of Series A
Preferred Stock may not convert the Series A Preferred Stock into Class B Common Stock to the extent that such conversion would cause
such holder’s beneficial ownership of Class B Common Stock to exceed 4.99% of the outstanding Class B Common Stock immediately after
conversion, which may be increased by the holder to up to 9.99% upon no fewer than 61 days’ prior notice (the “Series A Beneficial
Ownership Limitation”). Any conversion of shares of Series A Preferred Stock that would result in the holder beneficially owning
in excess of 4.99% of the shares of Class B Common Stock will not be effected, and the shares of Class B Common Stock that would cause
such excess will be held in abeyance and not issued to the holder until the date the Company is notified by the holder that its ownership
is less than 4.99%, at the applicable Conversion Price, and subject to the holder’s compliance with other applicable procedural
requirements for conversion. Holders of Series A Preferred Stock are not prohibited from delivering a Conversion Notice (as defined by
the Series A Certificate of Designation) while another Conversion Notice remains outstanding.

49

The Series A Certificate
of Designation provides that the Conversion Price may not be lower than a floor price (the “Floor Price”) of $0.4275 per share,
subject to adjustment for stock splits and similar transactions. If the Conversion Price would be less than the Floor Price, then, subject
to the terms and conditions of the Series A Certificate of Designation, the Stated Value will automatically increase in the manner provided
pursuant to the Series A Certificate of Designation, as described in the following paragraph. The Series A Preferred Stock also may not
be converted except to the extent that the shares of Class B Common Stock issuable upon such conversion may be resold pursuant to Rule
144 or an effective and available registration statement.

If a conversion of Series
A Preferred Stock would have resulted in the issuance of an amount of shares of Class B Common Stock exceeding 19.99% of the Company’s
common stock outstanding as of the date of the signing of the related binding agreement, which number of shares would be reduced, on a
share-for-share basis, by the number of shares of common stock issued or issuable pursuant to any transaction or series of transactions
that may be aggregated with the transactions contemplated by the Series A Certificate of Designation under applicable rules of Nasdaq,
including Nasdaq Listing Rule 5635(d) (such amount, the “Exchange Limitation”), the Conversion Price would have been required
to be at least equal to the price (the “Minimum Price”) that would be the lower of the last closing price of the stock immediately
preceding the signing of the related binding agreement and the average closing price for the five Trading Days (as defined below) immediately
preceding the signing of the related binding agreement, before the effectiveness of the approval of such number of the holders of the
outstanding shares of the Company’s voting securities as required by the Bylaws of the Company (the “Bylaws”) and the
NRS, to ratify and approve all of the transactions contemplated by the Transaction Documents (as defined in the Ionic Purchase Agreement),
including the issuance of all of the shares of Series A Preferred Stock and shares of Class B Common Stock upon conversion of the shares
of Series A Preferred Stock, all as may be required by the applicable rules and regulations of The Nasdaq Capital Market tier of Nasdaq
(or any successor entity) (the “Stockholder Approval”). In the event that the Conversion Price on a Conversion Date (as defined
in the Series A Certificate of Designation) would have been less than the applicable Minimum Price or the Floor Price if not for the immediately
preceding sentence, then, upon any conversion of shares of Series A Preferred Stock, the Stated Value will automatically be increased
by an amount equal to the product obtained by multiplying (A) the higher of (I) the highest price that the Class B Common Stock trades
at on the Trading Day immediately preceding the Conversion Date and (II) the applicable Conversion Price and (B) the difference obtained
by subtracting (I) the number of shares of Class B Common Stock delivered (or to be delivered) to the holder on the applicable Conversion
Date with respect to such conversion of shares of Series A Preferred Stock from (II) the quotient obtained by dividing (x) the Stated
Value (plus any accrued but unpaid dividends and other amounts due on such shares) of the Series A Preferred Stock being converted that
the holder has elected to be the subject of the applicable conversion, by (y) the applicable Conversion Price.

The Ionic Purchase Agreement
required that the Company obtain the Stockholder Approval, by the prior written consent of the requisite stockholders as required by the
Bylaws and the NRS, to ratify and approve all of the transactions contemplated by the Transaction Documents, including the issuance of
all of the shares of Series A Preferred Stock and shares of Class B Common Stock issuable upon conversion of such shares pursuant to the
Ionic Purchase Agreement, all as may be required by the applicable rules and regulations of The Nasdaq Capital Market tier of Nasdaq (or
any successor entity). The Ionic Purchase Agreement and the Series A Certificate of Designation further required that the Company file
a Preliminary Information Statement on Schedule 14C with the SEC within 10 days of the date of the First Ionic Closing followed by the
filing of a Definitive Information Statement on Schedule 14C with the SEC within 20 days of the date of the First Ionic Closing, or within
45 days of the date of the First Ionic Closing if delayed due to a court or regulatory agency, including but not limited to the SEC, which
was required to disclose the Stockholder Approval. In accordance with the rules of the SEC, the Stockholder Approval was required to become
effective 20 days after the Definitive Information Statement was sent or given in accordance with SEC rules.

In accordance with the
requirements and provisions described above, on May 24, 2024, the Company obtained the execution of a written consent in lieu of a special
meeting of a majority of the voting power of the stockholders of the Company approving a resolution approving the issuance of Class B
Common Stock in aggregate in excess of the limitations provided by Nasdaq Listing Rule 5635(d), including that an amount of shares of
Class B Common Stock equal to or greater than 20% of the total common stock or voting power outstanding on the date of the Series A Certificate
of Designation may be issued pursuant to the Series A Certificate of Designation at a price that may be less than the Minimum Price. On
May 31, 2024, the Company filed a Preliminary Information Statement on Schedule 14C with the SEC. On June 13, 2024, the Company filed
a Definitive Information Statement on Schedule 14C with the SEC disclosing such written consent. As of the 20th  day following
actions meeting these and other applicable requirements, the Company is permitted to issue more than the limited number of shares as defined
by the Exchange Limitation, at a Conversion Price that may be below the Minimum Price.

50

Under the Ionic Purchase
Agreement, if the closing price of the Class B Common Stock falls below $3.75 per share, the holder’s total sales of Class B Common
Stock will be restricted. The holder may only sell either the greater of $25,000 per Trading Day or 15% of the daily trading volume of
the Class B Common Stock reported by Bloomberg, LP, until the closing price exceeds $3.75. “Trading Day” is defined as a day
on which the principal trading market for the Class B Common Stock is open for trading for at least six hours.

In addition, while any
of the shares of Series A Preferred Stock are outstanding, if the closing price of the Class B Common Stock is equal to or less than $0.4275
per share for a period of ten consecutive Trading Days, then the Company will promptly take all corporate action necessary to authorize
a reverse stock split of the Class B Common Stock by a ratio equal to or greater than 300% of the quotient obtained by dividing $0.4275
by the lowest closing price of the Class B Common Stock during such ten-Trading Day period, including calling a special meeting of stockholders
to authorize such reverse stock split or obtaining written consent for such reverse stock split, and voting the management shares of the
Company in favor of such reverse stock split.

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

The Company will have
the right at any time to redeem all or any portion of the Series A Preferred Stock then outstanding at a price equal to 110% of the Stated
Value plus any accrued but unpaid dividends and other amounts due.

Holders of the Series
A Preferred Stock will generally have the right to vote on an as-converted basis with the Class B Common Stock, subject to the Series
A Beneficial Ownership Limitation.

Under the Ionic Purchase
Agreement, the Company generally may not sell securities in a financing transaction while Ionic beneficially owns any shares of Series
A Preferred Stock or common stock until the end of the 30-day period following the initial date of the effectiveness of each Registration
Statement or during any Alternate Conversion Measuring Period. In addition, the Company may not file any other registration statement
or any offering statement under the Securities Act, other than a registration statement on Form S-8 or supplements or amendments to registration
statements that were filed and effective as of the date of the Ionic Purchase Agreement (solely to the extent necessary to keep such registration
statements effective and available and not with respect to any Subsequent Placement (as defined by the Ionic Purchase Agreement)), unless
each of the First Registration Statement and the Second Registration Statement is effective and the respective prospectuses are available
for use, or the outstanding shares of Series A Preferred Stock and underlying shares of Class B Common Stock may be resold without limitation
under Rule 144. Additionally, the Company may not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution
on, any securities of the Company without the prior express written consent of Ionic (other than as required by the Series A Certificate
of Designation).

Compensation to Boustead
Securities, LLC

In connection with each
of the First Ionic Closing and the Second Ionic Closing, pursuant to the Boustead Engagement Letter and the Underwriting Agreement, the
Company was required to pay Boustead a fee equal to 7% of the aggregate purchase price and a non-accountable expense allowance equal to
1% of the aggregate purchase price for the Series A Preferred Stock. On the date of the First Ionic Closing, we therefore paid Boustead
a total amount of $120,000. In addition, the Company was required to issue a warrant to Boustead for the purchase of 30,800 shares of
Class B Common Stock, equal to 7% of the number of shares of Class B Common Stock that may be issued upon conversion of the shares of
Series A Preferred Stock sold at the First Ionic Closing at the initial Conversion Price of $3.75 per share (the “May 2024 Boustead
Warrant”). On the date of the Second Ionic Closing, we paid Boustead a total amount of $120,000. In addition, on the date of the
Second Ionic Closing, the Company was required to issue a warrant to Boustead for the purchase of 30,800 shares of Class B Common Stock,
equal to 7% of the number of shares of Class B Common Stock that may be issued upon conversion of the shares of Series A Preferred Stock
sold at the Second Ionic Closing at the initial Conversion Price of $3.75 per share (the “July 2024 Boustead Warrant”).

51

Pursuant to an Assignment
and Assumption Agreement, dated as of July 30, 2024, among Boustead, Sutter Securities, Inc., a registered broker-dealer and an affiliate
of Boustead (“Sutter”), and the Company (the “First July 2024 Boustead Warrant Assignment Agreement”), all of
the rights to the July 2024 Boustead Warrant were assigned by Boustead to Sutter. Pursuant to an Assignment and Assumption Agreement,
dated as of July 30, 2024, among Sutter, Michael R. Jacks (the “Warrant Assignee”), Boustead, and the Company (the “Second
July 2024 Boustead Warrant Assignment Agreement”), all of the rights to the July 2024 Boustead Warrant were assigned by Sutter to
the Warrant Assignee, a registered representative of Sutter. Pursuant to the First July 2024 Boustead Warrant Assignment Agreement and
the Second July 2024 Boustead Warrant Assignment Agreement, the July 2024 Boustead Warrant was cancelled, and a warrant (the “July
2024 Assignee Warrant”) was issued to the Warrant Assignee. The terms of the July 2024 Assignee Warrant are identical to those of
the July 2024 Boustead Warrant.

The May 2024 Boustead
Warrant and the July 2024 Assignee Warrant have an exercise price of $3.75 per share, subject to adjustment, five-year terms, and cashless
exercise and piggyback registration rights.

ATM Financing

ATM Sales Agreement

On September 27, 2024,
the Company entered into the ATM Sales Agreement with the Sales Agent. Under the terms of the ATM Sales Agreement, the Company may, from
time to time, in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities
Act, issue and sell through or to the Sales Agent, initially up to a maximum aggregate amount of $2,271,487 of shares of the Company’s
Class B Common Stock (the “ATM Shares”). The issuance and sale of the ATM Shares to or through the Sales Agent from time to
time will be effected pursuant to the Shelf Registration Statement and the prospectus supplements filed by the Company with the SEC on
September 30, 2024 and November 18, 2024 relating to the offering of the ATM Shares and the accompanying base prospectus.

Pursuant to the ATM Sales
Agreement, the Company may issue and sell the ATM Shares from time to time through or to the Sales Agent, acting as sales agent or principal,
subject to the terms and conditions of the ATM Sales Agreement. The Company may instruct the Sales Agent to make such sales, and the Sales
Agent, as agent, will use its commercially reasonable efforts to sell the ATM Shares within the parameters set forth in the Company’s
notice to sell, and subject to the satisfaction of the Company’s obligations as set forth in the ATM Sales Agreement. The Company
will designate the parameters within which the ATM Shares must be sold, including at a minimum the number to be sold, the time period
during which sales are requested to be made, any limitation on the number of the ATM Shares that may be sold in any one trading day, and
any minimum price below which sales may not be made. The Company has no obligation to sell, and the Sales Agent is not obligated to buy
or sell, any of the ATM Shares under the ATM Sales Agreement and may at any time suspend offers under the ATM Sales Agreement or terminate
the ATM Sales Agreement as provided for in the ATM Sales Agreement. The offering of the ATM Shares pursuant to the related prospectus
supplements to the Shelf Registration Statement and the accompanying base prospectus will terminate upon the earlier of (i) the sale of
all of the ATM Shares pursuant to such prospectus supplements and accompanying base prospectus having an aggregate sales price of $2,271,487,
and (ii) the termination by the Company or the Sales Agent of the ATM Sales Agreement pursuant to its terms.

Notwithstanding anything
to the contrary in the ATM Sales Agreement, the Sales Agent may only sell the ATM Shares directly into the market at prevailing market
prices in ordinary brokerage transactions that are open to all market participants, and will not sell shares in privately negotiated transactions,
whether acting solely as an agent on behalf of the Company or on a principal basis if agreed by the Sales Agent and the Company.

Unless otherwise agreed
between the Company and the Sales Agent, settlement for sales of the ATM Shares will occur on the first trading day following the date
on which any sales are made. Sales of the ATM Shares will be settled through the facilities of The Depository Trust Company or by such
other means as the Company and the Sales Agent may agree. There is no arrangement for funds to be received in an escrow, trust or similar
arrangement.

The Company will pay
the Sales Agent a cash commission of 3.0% of the gross sales price of the ATM Shares sold by the Sales Agent pursuant to the ATM Sales
Agreement. Pursuant to the terms of the ATM Sales Agreement, the Company also agreed to reimburse the Sales Agent for reasonable fees
and expenses, not to exceed $60,000 (including but not limited to the reasonable and documented fees and disbursements of its legal counsel),
and additional amounts for annual maintenance of the ATM Sales Agreement (including but not limited to the reasonable and documented fees
and disbursements of its legal counsel) on a quarterly basis, not to exceed $5,000 per quarter.

Each of the Company and
the Sales Agent has the right, by giving written notice as specified in the ATM Sales Agreement, to terminate the ATM Sales Agreement
in its sole discretion at any time upon five (5) days’ prior written notice. The Sales Agent also has the right to terminate the
ATM Sales Agreement at any time in certain circumstances, including in the event of the occurrence of a material adverse change with respect
to the Company, the failure of the Company to perform its obligations under the ATM Sales Agreement, any failure to fulfill any condition
to the obligations of the Sales Agent under the ATM Sales Agreement, or any suspension or limitation of trading of the ATM Shares.

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The ATM Sales Agreement
contains certain covenants, representations and warranties customary for an agreement of this type. The Company agreed to provide indemnification
and contribution to the Sales Agent against certain liabilities, including liabilities under the Securities Act.

Waivers and Consents to ATM Financing

On September 20, 2024,
the Company entered into a Waiver and Consent, dated as of September 20, 2024 (the “Ionic ATM Waiver”), between the Company
and Ionic, pursuant to which Ionic waived any prohibition, restriction or adverse adjustment that would otherwise apply to any action
of the Company relating to an “at the market offering” (as defined in Rule 415(a)(4) under the Securities Act), of equity
securities of up to $5 million (“Waived ATM Financing”) under the Ionic Purchase Agreement or the Series A Certificate of
Designation. Pursuant to the Ionic ATM Waiver, regardless of the terms and conditions of the Ionic Purchase Agreement and the Series A
Certificate of Designation, the Company may at any time enter into any agreement relating to a Waived ATM Financing, the filing of a prospectus
supplement to a prospectus contained in an effective registration statement that was filed under the Securities Act relating to a Waived
ATM Financing, the announcement of a Waived ATM Financing, the issuance, offer, sale, or grant of any shares of Class B Common Stock relating
to a Waived ATM Financing, or the issuance, offer, sale, or grant of any securities in connection with either the provision of goods or
services or settlement of any obligations that may otherwise arise with respect to a Waived ATM Financing. In addition, pursuant to the
Ionic ATM Waiver, Ionic waived any adjustment to the applicable Conversion Price, which partly determines the number of shares of Class
B Common Stock issuable upon conversion of a share of Series A Preferred Stock, that would otherwise occur as a result of any Waived ATM
Financing under the terms of the Series A Certificate of Designation.

On September 26, 2024,
the Company entered into a Limited Waiver and Consent, dated as of September 26, 2024 (the “Boustead ATM Waiver”), between
the Company and Boustead. Pursuant to the Boustead ATM Waiver, Boustead waived any condition on, restriction on, compensation rights,
or rights of first refusal that would be applicable under the Boustead Engagement Letter and the Underwriting Agreement in relation to
a Waived ATM Financing. Pursuant to the Boustead ATM Waiver, the Company may at any time enter into any agreement relating to a Waived
ATM Financing, the filing of a prospectus supplement to a prospectus contained in an effective registration statement that was filed under
the Securities Act relating to a Waived ATM Financing, the announcement of a Waived ATM Financing, the issuance, offer, sale, or grant
of any shares of the Class B Common Stock relating to a Waived ATM Financing, or the issuance, offer, sale, or grant of any securities
in connection with either the provision of goods or services or settlement of any obligations that may otherwise arise with respect to
a Waived ATM Financing. As consideration, the Boustead ATM Waiver provides that the Company will promptly pay Boustead 3.0% of the gross
sales price of all shares of Class B Common Stock sold in connection with any Waived ATM Financing until the end of the applicability
of the provisions of the right of first refusal provisions of the Boustead Engagement Letter.

Critical Accounting Estimates

This discussion and analysis of our financial
condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted
accounting principles in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based
on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are
described in more detail in the notes to our financial statements included with this Annual Report, we believe that the following accounting
policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving
management’s judgments and estimates. We believe our most critical accounting policies and estimates relate to the following:

Intangible Assets

Intangible assets acquired are recorded at fair
value. We test our finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying
value of the assets may not be recoverable. We test our indefinite-lived intangible assets for impairment annually or whenever events
or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If the carrying value exceeds the fair
value, we recognize an impairment in an amount equal to the excess, not to exceed the carrying value. Management uses considerable judgment
to determine key assumptions, including projected revenue, royalty rates and appropriate discount rates. During the year ended December
31, 2024 and 2023, there were no intangible asset impairment charges.

53

Finite-lived intangible assets are amortized using
the straight-line method over their estimated useful lives, which ranges from 5 to 15 years. Our finite-lived intangible assets include
acquired franchise agreements, acquired customer relationships, acquired customer lists, and internally developed software. Our indefinite-lived
intangible assets include acquired domain names, trade names, and purchased software.

Intangible assets internally developed are measured
at cost. We capitalize costs to develop or purchase computer software for internal use which are incurred during the application development
stage. These costs include fees paid to third parties for development services and payroll costs for employees’ time spent developing
the software. We expense costs incurred during the preliminary project stage and the post-implementation stage. Capitalized development
costs are amortized on a straight-line basis over the estimated useful life of the software. The capitalization and ongoing assessment
of recoverability of development costs requires considerable judgment by management with respect to certain external factors, including,
but not limited to, technological and economic feasibility, and estimated economic life.

Impairment of Long-lived Assets Other Than
Goodwill

Long-lived assets with finite lives, primarily
property and equipment, intangible assets, and operating lease right-of-use assets are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the
asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down
to its fair value.

Advertising Expenses

The Company expenses advertising costs as they
incurred. Total advertising expenses were $944,635 and $436,066 for the year ended December 31, 2024 and 2023, respectively, and have
been included as part of general and administrative expenses.

Research and Development

Research and development costs are charged to
expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development
costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable
agreement.

The Company incurred research and development
expenses of $423,299 and $18,935 for the year ended December 31, 2024 and 2023, respectively, and have been included as
part of contract labor.

Stock Based Compensation

Service-Based Awards

The Company records stock-based compensation for
awards granted to employees, non-employees, and to members of the board for their services on the board based on the grant date fair value
of awards issued, and the expense is recorded on a straight-line basis over the requisite service period, which is generally one to three
years.

For restricted stock awards (“RSAs”)
issued under the Company’s stock-based compensation plans, the fair value of each grant is calculated based on the Company’s
stock price on the date of grant.

Share Repurchase

Share repurchases are open market purchases. Share
repurchases are generally recorded on the settlement date, as treasury stock. When shares are cancelled, the value of repurchased shares
is deducted from stockholders’ equity through common stock with the excess over par value recorded to accumulated deficit.

54

Revenue Recognition

The Company recognizes revenue utilizing the following
steps: (i) Identify the contract, or contracts, with a customer; (ii) Identify the performance obligations in the contract; (iii) Determine
the transaction price; (iv) Allocate the transaction price to the performance obligations in the contract; (v) Recognize revenue when
the Company satisfies a performance obligation.

Subscriptions

Subscription revenue is related to a single performance
obligation that is recognized over time when earned. Subscriptions are paid in advance and can be purchased on a monthly, quarterly, or
annual basis. Any quarterly or annual subscription revenue is recognized as a contract liability recorded over the contracted service
period.

Marketing

Revenue related to marketing campaign contracts
with customers are normally of a short duration, typically less than two (2) weeks.

AE.360.DDM Contracts

Revenue related to AE.360.DDM contracts with customers
are normally of a short duration, typically less than one (1) week.

Contract Liabilities

Contract liabilities consist of quarterly and
annual subscription revenue that have not been recognized. Revenue under these agreements is recognized over the related service period.
As of December 31, 2024 and 2023, total contract liabilities were $369 and $3,445 respectively. Contract liabilities are expected
to be recognized as revenue over a period not to exceed twelve (12) months.

Changes in contract liabilities for the year ended
December 31, 2024 are as follows:

Earnings per Share
of Common Stock

The Company has adopted Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, “Earnings per Share” which
requires presentation of basic earnings per share on the face of the statements of operations for all entities with complex capital structures
and requires a reconciliation of the numerator and denominator of the basic earnings per share computation. In the accompanying financial
statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding
during the year. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock
and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from
common stock issuable through contingent share arrangements, stock options and warrants unless the result would be antidilutive. The
Company would account for the potential dilution from convertible securities using the as-if converted method. The Company accounts for
warrants and options using the treasury stock method.

As of December
31, 2024, warrants representing 105,490 shares of common stock equivalents were excluded from the computation from diluted net loss per
share as the result was anti-dilutive.

Income Taxes

As described in more detail above (see Item 1.
“Business – Corporate History and Structure – Formation and Merger into Asset Entities Inc.”), the business
now conducted by the Company was operated as a partnership from August 1, 2020 until October 19, 2020, when it was reorganized as a limited
liability company, or LLC, and that LLC was merged into the Company on March 28, 2022. Prior to that date, the partnership and the subsequent
LLC were not subject to federal income tax and all income, deductions, gains and losses were attributed to the partners or members.

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The Company adopted FASB ASC 740, Income Taxes,
at its inception. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred
tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense
represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets
and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets
will not be realized. No deferred tax assets or liabilities were recognized as of December 31, 2024 or December 31, 2023.

Segment Reporting

The Company operates as one operating
segment. The Company's chief operating decision maker ("CODM") is its chief executive officer, who reviews the operating results
for the Company as a whole to make decisions about allocating resources and assessing financial performance. The CODM uses operating margin
and net income to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating
decisions, such as the determination of the rate at which the Company seeks to grow operating margin, the allocation of budget between
operating expenses and the management and forecasting of cash to ensure enough capital is available. Accordingly, we determined we operate
in a single reporting segment.

Our CEO assesses performance and decides how to
allocate resources primarily based on consolidated net income, which is reported on our Consolidated Statements of Operations. Total assets
on the Consolidated Balance Sheets represent our segment assets.

Recent Accounting Pronouncements

In
November 2024, the FASB issued ASU 2024-03 final standard on Income Statement: Disaggregation of Income Statement Expenses, which requires
disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity
presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories
in disclosures within the footnotes to the financial statements. This guidance will be effective for us on January 1, 2027.

The Company has considered
all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact
on its financial statements.

Recently Adopted Accounting Standards

In November 2023, the FASB issued ASU 2023-07,
which improves reportable segment disclosure requirements. Primarily through enhanced disclosures about significant segment expenses among
other disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within
fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU 2023-07 on January 1, 2024. The amendments
will be applied retrospectively to all prior periods presented in the accompanying financial statements. The adoption of ASU 2023-07 has
not had a material effect on the Company’s statements and disclosures.

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. The following discussion and analysis should be read in conjunction with our
financial statements and the related notes thereto included elsewhere in this Annual Report. The discussion contains forward-looking
statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, management.
Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors,
including those discussed below and elsewhere in this Annual Report, particularly in the sections titled “Item 1A. 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. 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. All of our services are based on our effective use of Discord as well as other social media including
TikTok, X, Instagram, and YouTube.

Our Discord investment education and entertainment service is designed
primarily by and for enthusiastic Generation Z, or Gen Z, retail investors, creators and influencers. Gen Z is commonly considered to
be people born between 1997 and 2012. Our investment education and entertainment service focuses on stock, real estate, cryptocurrency,
and NFT community learning programs designed for the next generation. While we believe that Gen Z will continue to be our primary market,
our recently-expanded Discord server offering features education and entertainment content covering real estate investments, which is
expected to appeal strongly to older generations as well. Our current combined server user membership is approximately 210,000 as of March
2024.

Our social media and marketing services utilize
our management’s social influencer backgrounds by offering social media and marketing campaign services to business clients. 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.

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. 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. 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. 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. The Company initiated
a sale of 621,590 shares of common stock under its Amended and Restated Closing Agreement on March 27, 2024, and the Company intends to
file a “shelf” registration statement and arrange for one or more financings to commence pursuant to such shelf registration
statement shortly after it becomes effective. Based on the Company’s existing cash resources and the cash expected to be received
from these financings, it is expected that the Company will have sufficient funds to carry out the Company’s planned operations
through December 31, 2024.  For further discussion, see Item 7. “Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Liquidity and Capital Resources”.

Impact of COVID-19 Pandemic

The current global pandemic of a novel strain
of coronavirus, or COVID-19, and the global measures taken to combat it, may have an adverse effect on our business. Public health authorities
and governments at local, national and international levels have announced various measures to respond to the pandemic. Some measures
that directly or indirectly impact our business include voluntary or mandatory quarantines, restrictions on travel and limiting gatherings
of people in public places.

We believe that we have fully complied with all
federal, state and local requirements relating to COVID-19. We have undertaken various measures in an effort to mitigate the spread of
COVID-19. From our founding, we have been a highly efficient remote-first company, which has been able to continue to function as normal
even with pandemic-related stay at home orders and other regulations. We have also exploited certain trends related to the COVID-19 pandemic,
including its acceleration of global growth in virtual services. However, the COVID-19 pandemic has adversely impacted global economic
activity and has contributed to significant volatility and negative pressure in financial markets. The resulting global deterioration
in economic conditions and financial volatility may have an adverse impact on discretionary consumer spending or investing, could also
impact our business and demand for our services.

As events are rapidly changing, we cannot predict
how long the effects of the COVID-19 pandemic and the efforts to contain it could disrupt our operations or the full extent of that disruption.
Governments could take additional restrictive measures to combat the pandemic that could further impact our business or the economy in
the geographies in which we operate. It is also possible that the impact of the pandemic and response on our customers, users, and markets
will persist for some time after governments ease their restrictions.

The extent to which the pandemic may
impact our results will depend on future developments, which are highly uncertain and cannot be predicted as of the date of this Annual
Report, including new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or
treat its impact, among others. Nevertheless, the pandemic and the current financial, economic and capital markets environment, and future
developments in the global supply chain and other areas present material uncertainty and risk with respect to our performance, financial
condition, results of operations and cash flows. See also “Item 1A. Risk Factors – Risks Related to Our Business and Industry
– The COVID-19 pandemic may cause a material adverse effect on our business” above.

Principal Factors Affecting Our Financial
Performance

Our operating results are primarily affected
by the following factors:

48

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

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. 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.

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.

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.

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. 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”).
The Second Triton Closing is required to occur within five business days after the delivery of the Second Triton Shares to Triton. 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. In addition, the Company will issue a Tail Warrant to Boustead for the purchase of 43,511 shares
of Class B Common Stock, equal to 7% of the number of the Second Triton Shares, with an exercise price equal to the purchase price per
share of the Second Triton Shares.

Under a Third Amendment
to Amended and Restated Closing Agreement (the “Third Triton Amendment”), dated as of March 29, 2024, the Company and Triton
agreed to amend the Amended A&R Closing Agreement to provide that the Amended A&R Closing Agreement will expire on April 30, 2024,
instead of March 31, 2024. The Third Triton Amendment did not amend any of the other provisions of the Amended A&R Closing Agreement.
A copy of the Third Triton Amendment is attached to the Annual Report as Exhibit 10.32, and the description above is qualified in its
entirety by reference to such exhibit.

49

Results of Operations

The following table summarizes our results of
operations for the fiscal years ended December 31, 2023 and 2022.

Revenues.
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. 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.
Our total operating expenses increased 427% to approximately $5.2 million for the fiscal year ended December 31, 2023 from approximately
$1.0 million for the fiscal year ended December 31, 2022. This increase was primarily due to an increase in advertising, marketing, payroll
and other administrative expenses associated with the Company’s February 2023 initial public offering and administrative cost of
public filings of approximately $1.7 million and an increase in management compensation costs of approximately $2.5 million for the fiscal
year ended December 31, 2023 compared to such costs for the fiscal year ended December 31, 2022.

Loss From Operations.
Our loss from operations increased 664% to approximately $5.0 million for the fiscal year ended December 31, 2023 from approximately $0.6
million for the fiscal year ended December 31, 2022. This increase was primarily due to an increase in advertising, marketing, payroll
and other administrative expenses associated with the Company’s February 2023 initial public offering and administrative cost of
public filings of approximately $1.7 million and an increase in management compensation costs of approximately $2.5 million for the fiscal
year ended December 31, 2023 compared to such costs for the fiscal year ended December 31, 2022.

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. 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.

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. In
February 2023 we raised approximately $6.6 million in net proceeds from the Company’s initial public offering. The Company initiated
a sale of 621,590 shares of common stock under its Amended and Restated Closing Agreement on March 27, 2024, and the Company intends to
file a “shelf” registration statement and arrange for one or more financings to commence pursuant to such shelf registration
statement shortly after it becomes effective. Based on the Company’s existing cash resources and the cash expected to be received
from these financings, it is expected that the Company will have sufficient funds to carry out the Company’s planned operations
through December 31, 2024. We may, however, in the future require additional cash resources due to changing business conditions, implementation
of our strategy to expand our business, or other investments or acquisitions we may decide to pursue. If our own financial resources are
insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit
facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would
result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our
operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds
on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

50

Summary of Cash Flow

The following table provides detailed information
about our net cash flow for the periods presented:

Net cash used in operating activities was approximately
$3.8 million for the fiscal year ended December 31, 2023, as compared to net cash used in operating activities of approximately $0.6 million
for the fiscal year ended December 31, 2022. The increase was primarily due to an increase in advertising, marketing, payroll and other
administrative expenses associated with the Company’s February 2023 initial public offering and administrative cost of public filings
of approximately $1.7 million and an increase in management compensation costs of approximately $2.5 million for the fiscal year ended
December 31, 2023 compared to such costs for the year ended December 31, 2022.

Net cash used in investing activities was approximately
$0.1 million for the fiscal year ended December 31, 2023, as compared to net cash used in operating activities of $0 for the fiscal year
ended December 31, 2022. The change was primarily due to the purchase of the Ternary and OptionsSwing software platforms as well as minor
capital expenditures of equipment and fixtures.

Net cash provided by financing activities was approximately $6.7 million
for the fiscal year ended December 31, 2023, as compared to net cash provided by financing activities of approximately $0.7 million for
the fiscal year ended December 31, 2022. The change was primarily due to an increase in financing activities from the Company’s
February 2023 initial public offering compared to financing from private placements conducted during the year ended December 31, 2022.

Initial Public
Offering and Underwriting Agreement

The closing of our initial public offering took
place on February 7, 2023 pursuant to the Underwriting Agreement. At the closing, the Company sold the IPO Shares for total gross proceeds
of $7,500,000. 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.

Pursuant to the Underwriting Agreement, as of
February 3, 2023, we were subject to a lock-up agreement that prevented us, subject to certain exceptions, from selling or transferring
any of our shares of capital stock of the Company for up to 12 months. In addition, our officers, directors and beneficial owners of
approximately 78.0% of our common stock agreed to be locked up for a period of 12 months. Holders of approximately 7.2% of our outstanding
common stock agreed to be locked up for a period of nine months, and a holder of approximately 2.3% of our outstanding Class B Common
Stock prior to the initial public offering agreed to be locked up for a period of six months with respect to approximately 0.9% of the
outstanding common stock held by such holder, subject to certain exceptions. The remaining shares were not subject to lock-up provisions
or such lock-up provisions were waived. This lock-up period expired on February 2, 2024.

51

Other terms of and agreements relating to the
Underwriting Agreement and the underwriter are described under Item 1. “Business – Corporate Structure and History –
Initial Public Offering and Underwriting Agreement” and Item 7. “Management’s Discussion and Analysis of Financial
Condition – Liquidity and Capital Resources – Engagement Letter with Boustead Securities, LLC”. A copy of each
of the Underwriting Agreement and the Representative’s Warrant is filed as Exhibit 10.24 and Exhibit 4.5 to this Annual Report,
respectively, and the description above is qualified in its entirety by reference to each such exhibit.

As stated in the IPO Public Offering Prospectus,
the Company intended to use the net proceeds from the initial public offering for investment in corporate infrastructure, marketing and
promotion of Discord communities, social campaigns, and the Company’s “AE.360.DDM” Discord design, development and
management service, expansion of “SiN”, the Company’s social influencer network, increasing staff and company personnel,
and general working capital, operating, and other corporate expenses.

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:

As 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.

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.

Engagement Letter
with Boustead Securities, LLC

Under the Boustead Engagement Letter, during
the term that began on November 29, 2021 and ending 12 months following the termination or expiration of the Boustead Engagement letter,
which occurred on February 7, 2024 (see below), we must compensate Boustead with a cash fee equal to seven percent (7.0%) and non-accountable
expense allowance equal to one percent (1.0%) of the gross proceeds received by the Company from the sale of securities in an investment
transaction, or up to ten percent (10.0%) of the gross proceeds from certain other merger, acquisition, or joint venture, strategic alliance,
license, research and development, or other similar transactions, with a party, including any investor in a private placement in which
Boustead served as placement agent or in the initial public offering, or who became aware of the Company or who became known to the Company
prior to the termination or expiration of the Boustead Engagement Letter, including any Company officers, directors, employees, consultants,
advisors, stockholders, members, or partners, for such transactions that occur during the 12-month period following the termination or
expiration of the Boustead Engagement Letter (the “Tail Rights”). The Boustead Engagement Letter expired on February 7, 2024.

We also agreed to provide Boustead the right
of first refusal (the “Right of First Refusal”) for two years following the expiration of the Boustead Engagement Letter
to act as financial advisor, lead managing underwriter, book runner, placement agent, or to act as joint advisor, managing underwriter,
book runner, or placement agent on at least equal economic terms, on any public or private financing (debt or equity), merger, business
combination, recapitalization or sale of some or all of the equity or assets of the Company.  In the event that we engage Boustead
to provide such services, Boustead will be compensated consistent with the Boustead Engagement Letter, as described below, unless we
mutually agree otherwise.

52

Under the Boustead Engagement Letter, in connection
with a transaction as to which Boustead duly exercises the Right of First Refusal or is entitled to the Tail Rights, Boustead shall receive
compensation as follows:

The Boustead Engagement
Letter contains other customary representations, warranties and covenants by the Company, customary conditions to closing, indemnification
obligations of the Company and Boustead, including for liabilities under the Securities Act, other obligations of the parties, and termination
provisions. The representations, warranties and covenants contained in the Boustead Engagement Letter were made only for purposes of
such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations
agreed upon by the contracting parties.

Amended and Restated
Closing Agreement

On August 1, 2023, the Company entered into the Amended and Restated
Closing Agreement with Triton. Subject to its terms, the Amended and Restated Closing Agreement provided that the Company may deliver
a Closing Notice and issue certain securities to Triton at any time on or before September 30, 2023, pursuant to which Triton agreed to
be required to purchase such securities with an aggregate gross purchase price of $1,000,000 in the following manner. Upon delivery of
a Closing Notice and the issuance and delivery of securities as described below, Triton agreed to purchase Triton Shares in an amount
equal to up to 9.99% of the outstanding shares of Class B Common Stock following such purchase, Triton Pre-Funded Warrants that may be
exercised to purchase an amount of newly-issued Triton Warrant Shares, or both Triton Shares and Triton Pre-Funded Warrants, such that
the aggregate price of the Triton Shares and the Triton Pre-Funded Warrants together with the exercise price to be paid upon full exercise
of the Triton Pre-Funded Warrants was required to equal a total gross purchase price of $1,000,000. Upon the Company’s election
to deliver a Closing Notice, the price of each of the Triton Shares was required to be set at 85% of the lowest daily volume-weighted
average price of the Class B Common Stock during the five business days after the date that the Triton Securities were received by Triton.
Any proceeds under the Amended and Restated Closing Agreement must be reduced by a $25,000 administrative fee. The Amended and Restated
Closing Agreement also provided that it would expire either upon the date that Triton paid the required purchase price after receiving
a Closing Notice, or September 30, 2023.

53

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. In addition,
the Class B Common Stock was required to remain listed on the Nasdaq Capital Market tier of Nasdaq, and the issuance of the Triton Securities
was required to not violate any requirements of Nasdaq. Triton’s purchase requirement was also subject to provisions that prevented
Triton from acquiring shares of Class B Common Stock at the time of any sale of the Triton Securities or exercise of the Triton Pre-Funded
Warrants that would result in the number of shares beneficially owned by Triton and its affiliates exceeding the Beneficial Ownership
Limitation. The Amended and Restated Closing Agreement provided for the issuance of the Triton Pre-Funded Warrants in lieu of issuance
of some or all the Triton Shares, with an exercise price of $0.01 per share and with no expiration date, if, in Triton’s sole discretion,
it would otherwise exceed the Beneficial Ownership Limitation, or otherwise upon Triton’s election. For each of the Triton Shares
that Triton instead elected to be issuable as Triton Warrant Shares, the number of Triton Shares that we were required to issue to Triton
at the time of any sale of the Triton Securities was required to be decreased on a one-for-one basis. We were also required to provide
indemnification against liabilities relating to misrepresentations, breaches of obligations, and third-party claims relating to the Amended
and Restated Closing Agreement, with certain exceptions.

In connection with the
Amended and Restated Closing Agreement, pursuant to the Boustead Engagement Letter, upon a closing under the Amended and Restated Closing
Agreement, the Company must pay Boustead a cash fee equal to 7% of the gross proceeds to be received from such closing and pay Boustead
a non-accountable expense allowance equal to 1% of the gross proceeds to be received from such closing. The Company must also issue Boustead
a Tail Warrant with respect to any Triton Shares exercisable for a number of shares of Class B Common Stock equal to 7% of the number
of the Triton Shares at an exercise price equal to the price per share for the Triton Shares, and a warrant with respect to the issuance
of any Triton Pre-Funded Warrants exercisable for a number of shares of Class B Common Stock equal to 7% of the Triton Warrant Shares
at an exercise price equal to $0.01 per share. Each Tail Warrant must be exercisable for a period of five years and contain cashless
exercise provisions. The Company also must reimburse Boustead for all reasonable invoiced out-of-pocket expenses in connection with its
performance of any services relating to the Amended and Restated Closing Agreement, regardless of whether a sale under the Amended and
Restated Closing Agreement occurred. For further discussion of the Underwriting Agreement and the Boustead Engagement Letter, see “—Liquidity
and Capital Resources – Initial Public Offering and Underwriting Agreement” and “—Liquidity and Capital
Resources – Engagement Letter with Boustead Securities, LLC”.

On August 18, 2023,
the Company filed a Registration Statement on Form S-1 (File No. 333-274079) to register the offer and sale of the Triton Securities
in an amount of up to 885,000 shares of Class B Common Stock consisting of Triton Shares and Triton Warrant Shares. The registration
statement also registered the offer and sale of up to 61,950 shares of Class B Common Stock under Tail Warrants. The registration statement
was declared effective on September 6, 2023.

Under the First Triton
Amendment, the Company and Triton agreed to amend the Amended and Restated Closing Agreement to provide that the Amended A&R Closing
Agreement will expire on December 30, 2023 instead of September 30, 2023; to provide that up to an aggregate value of $1,000,000 of the
Class B Common Stock, based on the purchase price formula described above, may be sold and purchased pursuant to a Closing Notice; 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. The First Triton Amendment did not amend any of the other provisions of the Amended and Restated Closing Agreement.

As an incentive to Triton
to enter into the First Triton Amendment and agree to the extension of the term of the $1,000,000 equity line under the Amended A&R
Closing Agreement to December 30, 2023, the Company indicated to Triton that it would deliver a Closing Notice under the Amended A&R
Closing Agreement to sell a number of shares of Class B Common Stock equal to approximately 4.9% of the outstanding shares of Class B
Common Stock prior to the sale. Therefore, on September 29, 2023, under the Amended A&R Closing Agreement, the Company delivered
the First Closing Notice for the purchase of the 263,410 First Triton Shares, which was the amount of shares of Class B Common Stock
equal to approximately 4.9% of the 5,375,724 shares of Class B Common Stock outstanding on that date. Pursuant to the Amended A&R
Closing Agreement, the Closing Date was required to take place within five business days after the Triton Shares were received by Triton.
On the Closing Date, Triton was required to pay the Company a purchase price per share equal to 85% of the lowest daily volume-weighted
average price of the Class B Common Stock during the period between the date that the shares were delivered to Triton and the Closing
Date, the proceeds of which would be reduced by the $25,000 administrative fee, in accordance with the terms of the Amended A&R Closing
Agreement.

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On October 4, 2023,
the First Triton Shares were received by Triton. Pursuant to the Amended A&R Closing Agreement, on the fifth business day following
the day that the First Triton Shares were received, Triton was required to pay the Company $46,083.53, based on a price per share of
$0.26894, equal to 85% of $0.3164, the lowest daily volume-weighted average price of the Class B Common Stock during the five-business-day
period ending October 11, 2023, less the $25,000 administrative fee. The Company received payment of this amount on October 13, 2023.

In connection with the
closing pursuant to the First Closing Notice under the Amended A&R Closing Agreement described above, pursuant to the Boustead Engagement
Letter and the Underwriting Agreement, the Company paid Boustead a fee of $4,975.85, equal to 7% of the aggregate purchase price, and
non-accountable expense allowance of $710.84, equal to 1% of the aggregate purchase price for the First Triton Shares. In addition, the
Company issued a Tail Warrant to Boustead for the purchase of 18,439 shares of Class B Common Stock, equal to 7% of the number of the
First Triton Shares, with an exercise price of $0.26894 per share, equal to the purchase price per share of the First Triton Shares.

Under the Second Triton
Amendment, the Company and Triton agreed to amend the Amended A&R Closing Agreement to provide that the Amended A&R Closing Agreement
will expire on March 31, 2024, instead of December 30, 2023. The Second Triton Amendment did not amend any of the other provisions of
the Amended A&R Closing Agreement.

Copies of the Closing
Agreement, the Amended and Restated Closing Agreement, the First Triton Amendment, the Second Triton Amendment, the form of the Triton
Pre-Funded Warrants, and the form of the warrants issuable to Boustead in connection with the Amended and Restated Closing Agreement,
as amended, are each attached to the Annual Report as Exhibit 10.25, Exhibit 10.26, Exhibit 10.27, Exhibit 10.30, and Exhibit 4.6, respectively,
and the description above is qualified in its entirety by reference to such exhibit.

Contractual Obligations

During the fiscal years ended December 31, 2023
and 2022, we had no significant cash requirements for capital expenditures or other cash needs under any contractual or other obligations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that
have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues
or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

This discussion and analysis of our financial
condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted
accounting principles in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based
on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are
described in more detail in the notes to our financial statements included with this Annual Report, we believe that the following accounting
policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas
involving management’s judgments and estimates. We believe our most critical accounting policies and estimates relate to the following:

Intangible Assets

Intangible assets acquired are recorded at fair
value. We test our finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying
value of the assets may not be recoverable. We test our indefinite-lived intangible assets for impairment annually or whenever events
or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If the carrying value exceeds the
fair value, we recognize an impairment in an amount equal to the excess, not to exceed the carrying value. Management uses considerable
judgment to determine key assumptions, including projected revenue, royalty rates and appropriate discount rates. There were no intangible
asset impairment charges in 2023 or 2022.

55

Finite-lived intangible assets are amortized
using the straight-line method over their estimated useful lives, which ranges from 5 to 15 years. Our finite-lived intangible assets
include acquired franchise agreements, acquired customer relationships, acquired customer lists, and internally developed software. Our
indefinite-lived intangible assets include acquired domain names, trade names, and purchased software.

Intangible assets internally developed are measured
at cost. We capitalize costs to develop or purchase computer software for internal use which are incurred during the application development
stage. These costs include fees paid to third parties for development services and payroll costs for employees’ time spent developing
the software. We expense costs incurred during the preliminary project stage and the post-implementation stage. Capitalized development
costs are amortized on a straight-line basis over the estimated useful life of the software. The capitalization and ongoing assessment
of recoverability of development costs requires considerable judgment by management with respect to certain external factors, including,
but not limited to, technological and economic feasibility, and estimated economic life.

Impairment of Long-lived Assets Other Than
Goodwill

Long-lived assets with finite lives, primarily
property and equipment, intangible assets, and operating lease right-of-use assets are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the
asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down
to its fair value.

Stock Based Compensation

Service-Based Awards

The Company records stock-based compensation
for awards granted to employees, non-employees, and to members of the board for their services on the board based on the grant date fair
value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period, which is generally one
to three years.

For restricted stock awards (“RSAs”)
issued under the Company’s stock-based compensation plans, the fair value of each grant is calculated based on the Company’s
stock price on the date of grant.

Share Repurchase

Share repurchases are open market purchases.
Share repurchases are generally recorded on the settlement date, as treasury stock. When shares are cancelled, the value of repurchased
shares is deducted from stockholders’ equity through common stock with the excess over par value recorded to accumulated deficit.

Revenue Recognition

The Company recognizes revenue utilizing the
following steps: (i) Identify the contract, or contracts, with a customer; (ii) Identify the performance obligations in the contract;
(iii) Determine the transaction price; (iv) Allocate the transaction price to the performance obligations in the contract; (v) Recognize
revenue when the Company satisfies a performance obligation.

Subscriptions

Subscription revenue is related to a single performance
obligation that is recognized over time when earned. Subscriptions are paid in advance and can be purchased on a monthly, quarterly, or
annual basis. Any quarterly or annual subscription revenue is recognized as a contract liability recorded over the contracted service
period.

Marketing

Revenue related to marketing campaign contracts
with customers are normally of a short duration, typically less than two (2) weeks.

AE.360.DDM Contracts

Revenue related to AE.360.DDM contracts with
customers are normally of a short duration, typically less than one (1) week.

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Earnings per Share
of Common Stock

The Company has adopted Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, “Earnings per Share” which
requires presentation of basic earnings per share on the face of the statements of operations for all entities with complex capital structures
and requires a reconciliation of the numerator and denominator of the basic earnings per share computation. In the accompanying consolidated
financial statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding
during the year. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock
and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from
common stock issuable through contingent share arrangements, stock options and warrants unless the result would be antidilutive. The Company
would account for the potential dilution from convertible securities using the as-if converted method. The Company accounts for warrants
and options using the treasury stock method. As of December 31, 2023, dilutive potential shares of common stock include outstanding warrants.

Income Taxes

As described in more detail above (see Item 1.
“Business – Corporate Structure and History – Formation and Merger into Asset Entities Inc.”), the business
now conducted by the Company was operated as a partnership from August 1, 2020 until October 19, 2020, when it was reorganized as a limited
liability company, or LLC, and that LLC was merged into the Company on March 28, 2022. Prior to that date, the partnership and the subsequent
LLC were not subject to federal income tax and all income, deductions, gains and losses were attributed to the partners or members.

The Company adopted FASB Topic ASC 740, “Income
Taxes” (“FASB ASC 740”), at its inception. Under FASB ASC 740, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes
the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities.
The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion
or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of December 31, 2023
or December 31, 2022.

Recent Accounting Pronouncements

In June 2022, the FASB issued Accounting Standards Update (“ASU”)
2022-03, ASC Subtopic “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale
Restrictions”. These amendments clarify that a contractual restriction on the sale of an equity security is not considered part
of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update
are effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December
15, 2023. Early adoption is permitted. The Company is currently assessing the impact of the adoption of this standard on its consolidated
financial statements.

The Company has considered
all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact
on its financial statements.

Recently Adopted Accounting Standards

In June 2016, the FASB
issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326) — Measurement of Credit Losses on Financial
Instruments, which has been subsequently amended by ASU No. 2018-19, ASU No. 2019-04, ASU No. 2019-05, ASU No. 2019-10, ASU No. 2019-11
and ASU No. 2020-03 (“ASU 2016-13”). The provisions of ASU 2016-13 modify the impairment model to utilize an expected loss
methodology in place of the currently used incurred loss methodology and require a consideration of a broader range of reasonable and
supportable information to inform credit loss estimates. The Company adopted ASU 2016-13 on January 1, 2023, using the modified retrospective
approach. The Company’s consolidated financial statements for prior-year periods have not been revised and are reflective of the
credit loss requirements which were in effect for that period. The adoption of ASU 2016-13 did not have a material impact on the Company’s
consolidated financial statements and related disclosures.

In January 2017, the
FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies
the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Instead of determining a hypothetical
purchase price allocation to measure goodwill impairment, the Company will compare the fair value of a reporting unit with its carrying
amount. The update also includes a new requirement to disclose the amount of goodwill allocated to reporting units with zero or negative
carrying amounts. The Company adopted ASU 2017-04 on January 1, 2023. The adoption of ASU 2017-04 did not have a material impact on the
Company’s consolidated financial statements and related disclosures.

The Company has considered all other recently
issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial
statements.

57

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. The following discussion and analysis should be read in conjunction with our
financial statements and the related notes thereto included elsewhere in this report. The discussion contains forward-looking statements
that are based on the beliefs of management, as well as assumptions made by, and information currently available to, management. Actual
results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including
those discussed below and elsewhere in this report, particularly in the sections titled ”Item 1. 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. 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. All of our services are based on our effective use of Discord
as well as other social media including TikTok, Twitter, Instagram, and YouTube.

Our
Discord investment education and entertainment service is designed primarily by and for enthusiastic Generation Z, or Gen Z, retail investors,
creators and influencers. Gen Z is commonly considered to be people born between 1997 and 2012. Our investment education and entertainment
service focuses on stock, real estate, cryptocurrency, and NFT community learning programs designed for the next generation. While we
believe that Gen Z will continue to be our primary market, our recently-expanded Discord server offering features education and entertainment
content covering real estate investments, which is expected to appeal strongly to older generations as well. Our current combined server
user membership is approximately 260,000 as of March 2023.

Our
social media and marketing services utilize our management’s social influencer backgrounds by offering social media and marketing
campaign services to business clients. 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.

39

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. 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. 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. During the years ended December 31, 2022 and 2021, we received
revenue from 622 and 8,694 Asset Entities Discord server paying subscribers, respectively.

Our
Historical Performance

The Company had an accumulated deficit of $627,118
at December 31, 2022 and a net loss of $645,255 during the year ended December 31, 2022. However, in February 2023, the Company
completed an equity offering which generated net proceeds of $6.6 million. Consequently, the Company’s existing cash resources
and the cash received from the equity offering are expected to provide sufficient funds to carry out the Company’s planned operations
through the next 12 months.

Impact of COVID-19 Pandemic

The
current global pandemic of a novel strain of coronavirus, or COVID-19, and the global measures taken to combat it, may have an adverse
effect on our business. Public health authorities and governments at local, national and international levels have announced various
measures to respond to the pandemic. Some measures that directly or indirectly impact our business include voluntary or mandatory quarantines,
restrictions on travel and limiting gatherings of people in public places.

We
believe that we have fully complied with all federal, state and local requirements relating to COVID-19. We have undertaken various measures
in an effort to mitigate the spread of COVID-19. From our founding, we have been a highly efficient remote-first company, which has been
able to continue to function as normal even with pandemic-related stay at home orders and other regulations. We have also exploited certain
trends related to the COVID-19 pandemic, including its acceleration of global growth in virtual services. However, the COVID-19 pandemic
has adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets.
The resulting global deterioration in economic conditions and financial volatility may have an adverse impact on discretionary consumer
spending or investing, could also impact our business and demand for our services.

As
events are rapidly changing, we cannot predict how long the effects of the COVID-19 pandemic and the efforts to contain it could disrupt
our operations or the full extent of that disruption.  Governments could take additional restrictive measures to combat the pandemic
that could further impact our business or the economy in the geographies in which we operate. It is also possible that the impact of
the pandemic and response on our customers, users, and markets will persist for some time after governments ease their restrictions.

The
extent to which the pandemic may impact our results will depend on future developments, which are highly uncertain and cannot
be predicted as of the date of this report, including new information that may emerge concerning the severity of the pandemic and
steps taken to contain the pandemic or treat its impact, among others. Nevertheless, the pandemic and the current financial,
economic and capital markets environment, and future developments in the global supply chain and other areas present material uncertainty
and risk with respect to our performance, financial condition, results of operations and cash flows. See also “Item 1A. Risk
Factors – Risks Related to Our Business and Industry – The COVID-19 pandemic may cause a material adverse effect on our business”
above.

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Principal
Factors Affecting Our Financial Performance

Our
operating results are primarily affected by the following factors:

Emerging
Growth 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. For so long as we are an emerging growth company, we will not be required to:

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. 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.

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.

Recent
Developments

Initial
Public Offering

On
February 2, 2023, we entered into the Underwriting Agreement with Boustead, as representative of the underwriters named on Schedule 1
thereto, relating to the IPO of the IPO Shares. Pursuant to the Underwriting Agreement, in exchange for Boustead’s firm commitment
to purchase the IPO Shares, the Company agreed to sell the IPO Shares to Boustead at the IPO Price of $4.65 (93% of the public offering
price per share of $5.00, after deducting underwriting discounts and commissions and before deducting a 0.75% non-accountable expense
allowance). The Company also granted Boustead a 45-day over-allotment option to purchase up to an additional 225,000 shares of Class
B Common Stock at the IPO Price, less the non-accountable expense allowance, from the Company, representing 15% of the IPO Shares. Pursuant
to the Underwriting Agreement, on February 7, 2023, the Company issued Boustead the Representative’s Warrant. The Representative’s
Warrant will have an exercise price of $6.25 per share, which is equal to 125% of the public offering price, subject to adjustment, a
cashless exercise provision, and may be exercised at any time for five years following the date of issuance.

41

The
closing of the IPO took place on February 7, 2023. At the closing, the Company sold the IPO Shares for total gross proceeds of $7,500,000.
After deducting underwriting discounts and commissions, the non-accountable expense allowance, and other expenses from the IPO, the Company
received net proceeds of approximately $6.6 million. The Company also issued the Representative’s Warrant to Boustead for the purchase
of 105,000 shares of Class B Common Stock.

The
IPO Shares were offered and sold, and the Representative’s Warrant was issued, pursuant to the Registration Statement, initially
filed with the SEC on September 2, 2022, and declared effective by the SEC on February 2, 2023, 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 Company intends to use the net
proceeds from the IPO 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.

We
also agreed to provide Boustead the Right of First Refusal for two years following the consummation of the IPO to act as financial advisor,
lead managing underwriter, book runner, placement agent, or to act as joint advisor, managing underwriter, book runner, or placement
agent on at least equal economic terms, on any public or private financing (debt or equity), merger, business combination, recapitalization
or sale of some or all of the equity or assets of the Company.  In the event that we engage Boustead to provide such services, Boustead
will be compensated consistent with the Boustead Engagement Letter, as described below, unless we mutually agree otherwise.

Under
the Boustead Engagement Letter, during the 12-month period following the termination or expiration of the Boustead Engagement letter,
which will occur no earlier than February 7, 2024 (see below), we must also compensate Boustead for any transaction with a party, including
any investor in a private placement in which Boustead served as placement agent or in the IPO, or any party who became aware of the Company
or who became known to the Company prior to the termination or expiration of the Boustead Engagement Letter. Such party will include,
but not be limited to, Company officers, directors, employees, consultants, advisors, shareholders, members, and partners. The Boustead
Engagement Letter will expire upon the later to occur of February 7, 2024 (12 months from the completion date of the IPO) or mutual written
agreement of the Company and Boustead.

Under
the Boustead Engagement Letter, in connection with a transaction as to which Boustead duly exercises the Right of First Refusal or is
entitled to the Tail Rights, Boustead shall receive compensation as follows:

42

Pursuant
to the Underwriting Agreement, as of February 3, 2023, we are subject to a lock-up agreement that prevents, subject to certain exceptions,
selling or transferring any of our shares of capital stock of the Company for up to 12 months. In addition, our officers, directors and
beneficial owners of approximately 78.0% of our common stock agreed to be locked up for a period of 12 months. Holders of approximately
7.2% of our outstanding common stock agreed to be locked up for a period of nine months, and a holder of approximately 2.3% of our outstanding
Class B Common Stock prior to this offering has agreed to be locked up for a period of six months with respect to approximately 0.9%
of the outstanding common stock held by such holder, subject to certain exceptions. The remaining shares are not subject to lock-up provisions
or such lock-up provisions have been waived.

The
Underwriting Agreement and Boustead Engagement Letter contain other customary representations, warranties and covenants by the Company,
customary conditions to closing, indemnification obligations of the Company and Boustead, including for liabilities under the Securities
Act, other obligations of the parties, and termination provisions. The representations, warranties and covenants contained in the Underwriting
Agreement and Boustead Engagement Letter were made only for purposes of such agreement and as of specific dates, were solely for the
benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.

In
addition, the Registration Statement registered for resale a total of 1,500,000 shares of Class B Common Stock by the selling stockholders
named in the Registration Statement. Any sales of these shares occurred at a fixed price of $5.00 per share until the Class B Common
Stock was listed on Nasdaq on February 3, 2023. Thereafter, these sales will occur at fixed prices, at market prices prevailing at the
time of sale, at prices related to prevailing market prices, or at negotiated prices. The Company will not receive any proceeds from
the sale of Class B Common Stock by the selling stockholders. The Company has no knowledge of whether any of the shares of Class B Common
Stock that may be sold by the selling stockholders have been sold.

In
total, the Registration Statement registered for sale shares of Class B Common Stock with a maximum aggregate offering price of $8,625,000,
representing the right to sell up to 1,725,000 shares of Class B Common Stock at the IPO Price upon full exercise of the over-allotment
option; the Representative’s Warrant; shares of Class B Common Stock underlying the Representative’s Warrant with a maximum
aggregate offering price of $754,687.50, representing rights to purchase up to 120,750 shares of Class B Common Stock at the exercise
price of $6.25 per share, upon full exercise of the over-allotment option; and 1,500,000 shares of Class B Common Stock on
behalf of certain selling stockholders. As of the date of this report, the IPO Shares were sold for aggregate gross proceeds of
$7,500,000 and the Representative’s Warrant was issued with the right to purchase up to 105,000 shares of Class B Common Stock
at $6.25 per share for gross proceeds of up to $656,250. As of the date of this report, the underwriter’s over-allotment option
has not been exercised and the securities issuable upon exercise of the Representative’s Warrant have not been sold.

The
Company’s officers, directors, and certain stockholders who, prior to the IPO, held shares of Class B Common Stock or the Class
A Common Stock, have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for
the sale of or otherwise dispose of any shares of Class A Common Stock or Class B Common Stock or other securities convertible into or
exercisable or exchangeable for shares of Class A Common Stock or Class B Common Stock for a period of 6 months, 9 months or 12 months,
as applicable, without the prior written consent of Boustead.

43

A
copy of each of the Underwriting Agreement and the Representative’s Warrant is filed as Exhibit 10.24 and Exhibit 4.5 to this
Annual Report, respectively, and the description above is qualified in its entirety by reference to each such exhibit.

As
of December 31, 2022, we had used none of the proceeds from the IPO because the proceeds from the IPO were not received until February
7, 2023.

As
of the date of this report, none of the proceeds from the IPO 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

There
has not been, and we do not expect, any material change in the planned use of proceeds from the IPO as described in the Registration
Statement.

Management
Agreements

Under
the employment letter agreement between the Company and the Company’s Chief Executive Officer and President, Arshia Sarkhani, dated
as of April 21, 2022, the term of the agreement commenced as of the closing of the IPO on February 7, 2023, and will continue for two
years unless terminated earlier in accordance with its terms. During the term of the agreement, the Company will pay Mr. Sarkhani an
annual salary of $240,000 and an initial cash bonus of $10,000. Mr. Sarkhani will be eligible to receive an annual cash bonus as determined
by the board of directors of the Company. Pursuant to the employment letter agreement, following the closing of the IPO, on February
7, 2023, the Company entered into its standard form of restricted stock award agreement with Mr. Sarkhani granting restricted stock under
the Plan in the amount of 200,000 shares of Class B Common Stock to vest equally over three years on each anniversary of the agreement.
Upon a change of control of the Company, all of the shares will vest immediately. Under the employment letter agreement, Mr. Sarkhani
will be eligible to participate in standard benefits plans offered to similarly-situated employees by the Company from time to time,
subject to plan terms and generally applicable Company policies. The employment letter agreement also has certain confidentiality and
non-competition provisions. The Company previously entered into its standard form of directors and officers indemnification agreement
with Mr. Sarkhani, and provided standard directors and officers liability insurance, in accordance with the employment letter agreement.

Under
the employment letter agreement between the Company and the Company’s Chief Experience Officer, Derek Dunlop, dated as of April
21, 2022, the term of the agreement commenced as of the closing of the IPO on February 7, 2023, and will continue for two years unless
terminated earlier in accordance with its terms. During the term of the agreement, the Company will pay Mr. Dunlop an annual salary of
$220,000 and an initial cash bonus of $10,000. Mr. Dunlop will be eligible to receive an annual cash bonus as determined by the Company’s
board of directors. Pursuant to the employment letter agreement, following the closing of the IPO, on February 7, 2023, the Company entered
into its standard form of restricted stock award agreement with Mr. Dunlop granting restricted stock under the Plan in the amount of
225,500 shares of Class B Common Stock to vest equally over three years on each anniversary of the agreement. Upon a change of control
of the Company, all of the shares will vest immediately. Under the employment letter agreement, Mr. Dunlop will be eligible to participate
in standard benefits plans offered to similarly-situated employees by the Company from time to time, subject to plan terms and generally
applicable Company policies. The employment letter agreement also has certain confidentiality and non-competition provisions. The Company
previously entered into its standard form of directors and officers indemnification agreement with Mr. Dunlop, and provided standard
directors and officers liability insurance, in accordance with the employment letter agreement.

Under
the employment letter agreement between the Company and the Company’s Chief Financial Officer, Treasurer and Secretary, Matthew
Krueger, dated as of April 21, 2022, the term of the agreement commenced as of the closing of the IPO on February 7, 2023, and will continue
for two years unless terminated earlier in accordance with its terms. During the term of the agreement, the Company will pay Mr. Krueger
an annual salary of $180,000 and an initial cash bonus of $25,000. Mr. Krueger will be eligible to receive an annual cash bonus
as determined by the Company’s board of directors. Pursuant to the employment letter agreement, following the closing of the IPO,
on February 7, 2023, the Company entered into its standard form of restricted stock award agreement with Mr. Krueger granting restricted
stock under the Plan in the amount of 198,000 shares of Class B Common Stock to vest equally over three years on each anniversary of
the agreement. Upon a change of control of the Company, all of the shares will vest immediately. Under the employment letter agreement,
Mr. Krueger will be eligible to participate in standard benefits plans offered to similarly-situated employees by the Company from time
to time, subject to plan terms and generally applicable Company policies. The employment letter agreement also has certain confidentiality
and non-competition provisions. The Company previously entered into its standard form of directors and officers indemnification agreement
with Mr. Krueger, and provided standard directors and officers liability insurance, in accordance with the employment letter agreement.

44

Each
of the above employment letter agreements may be terminated by the Company only for “cause”. “Cause” is defined
as (a) conviction of or plea of guilty or nolo contendere to a felony under the laws of the United States or any state thereof; (b) commission
of fraud or embezzlement on the Company or any of its subsidiaries; (c) willful act or omission which results in an assessment of a civil
or criminal penalty against the Company or any of its subsidiaries that causes material financial or reputational harm to the Company
or any of its subsidiaries; (d) any intentional act of dishonesty resulting or intending to result in personal gain or enrichment at
the expense of the Company or any of its subsidiaries; (e) a violation by of law (whether statutory, regulatory or common law), causing
a material financial harm or material reputational harm to the Company or any of its subsidiaries; (f) a material violation of the Company’s
(or any of its subsidiaries’) bona fide, written equal employment opportunity, antidiscrimination, anti-harassment, or anti-retaliation
policies; (g) material breach of this agreement; (h) the consistent abuse of alcohol, prescription drugs or controlled substances, which
interferes with the performance of the officer’s duties to the Company; (i) failure to execute the duties and responsibilities
of the officer position which the officer holds; (j) a breach or default of the officer’s obligations to the Company or under the
agreement; or (k) excessive absenteeism other than for reasons of illness. Each officer may terminate such officer’s employment
letter agreement at will.

In
addition, the term of, and compensation provided under, each of the employment letter agreements with the Company’s Chief Marketing
Officer, Jackson Fairbanks, Executive Vice-Chairman, Kyle Fairbanks, Chief Operating Officer, and Arman Sarkhani, and the consulting
agreement with the Company’s Executive Chairman, Michael Gaubert, commenced upon the closing of the IPO.

See
“Item 11. Executive Compensation – Executive Employment and Consulting Agreements” and “Item 11. Executive
Compensation – 2022 Equity Incentive Plan” for important related disclosures.

Results
of Operations

The
following table summarizes our results of operations for the fiscal years ended December 31, 2022 and 2021.

Revenues.
Our revenues decreased 58.6% to approximately $0.8 million for the fiscal year ended December 31, 2022 from approximately $0.8 million
for the fiscal year ended December 31, 2021. This decrease was primarily due to a decrease in subscription revenue as a result of a decrease
in the number of paying subscribers to 622 for the fiscal year ended December 31, 2022 from 8,694 for the fiscal year ended December
31, 2021. There was no material difference in the Company’s subscription pricing structure between these periods. During the fiscal
year ended December 31, 2021, COVID-19-related social and economic restrictions, the relative unavailability of vaccines and vaccine
hesitancy, particularly for members of Generation Z, and the emergence of interest in meme stocks and other market developments resulted
in more use of online services like Discord in general, and increased interest from members of Generation Z in services like ours in
particular. Conversely, during the nine months ended fiscal year ended December 31, 2022, the relaxation of COVID-19-related restrictions
on social and work life and the wide availability of COVID-19 vaccines for most individuals reduced interest in online use of Discord
and services like ours. As a result, we experienced a decrease in subscriptions and related revenues.

45

Operating Expenses.
Our total operating expenses increased 21.3% to approximately $1.0 million for the fiscal year ended December 31, 2022 from approximately
$0.8 million for the fiscal year ended December 31, 2021. This increase was primarily due to an increase in costs associated with the
IPO.

Income (Loss) From
Operations. Our loss from operations of approximately $0.6 million for the fiscal year ended December 31, 2022 was a change from
income from operations of $14,871 for the fiscal year ended December 31, 2021. This decrease was primarily due to a decrease in subscription
revenue and an increase in costs associated with the IPO.

Net Income (Loss). Our net loss
of approximately $0.6 million for the fiscal year ended December 31, 2022 was a change from net income of $14,871 for the fiscal year
ended December 31, 2021. This change was primarily due to a decrease in subscription revenue and an increase in costs associated with
the IPO.

Liquidity and Capital Resources

As of December 31, 2022 and December 31, 2021, we had cash consisting
of $137,177 and $33,731, respectively. To date, we have financed our operations primarily through contributed capital and sales of our
services. In June 2022 and October 2022 we raised a total of $750,000 in gross proceeds from private placements of shares of common stock,
before fees and expenses, and in February 2023 we raised approximately $6.6 million in net proceeds from the IPO. We believe that our
current levels of cash will be sufficient to meet our anticipated cash needs for our operations and cash payment obligations for both
the fiscal year ended December 31, 2023 and in the long-term beyond this period, including our anticipated costs associated with being
a public reporting company. We may, however, in the future require additional cash resources due to changing business conditions, implementation
of our strategy to expand our business, or other investments or acquisitions we may decide to pursue. If our own financial resources are
insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit
facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would
result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our
operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds
on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

Going
Concern

The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern. The Company had an accumulated deficit of $627,118 at
December 31, 2022 and a net loss of $645,255 during the year ended December 31, 2022. However, in February 2023, the Company completed
an equity offering which generated net proceeds of $6.6 million. Consequently, the Company’s existing cash resources and the cash
received from the equity offering are expected to provide sufficient funds to carry out the Company’s planned operations through
the next 12 months.

The
Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future
and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when
they come due. Management has plans to seek additional capital through public offerings, private equity offerings, debt financings, and
government or other third-party funding. These plans, if successful, will mitigate the factors which raise substantial doubt about the
Company’s ability to continue as a going concern.

However,
the sale of additional equity securities could result in dilution to the Company’s stockholders. The incurrence of indebtedness
would result in increased debt service obligations and could require the Company to agree to operating and financial covenants that would
restrict the Company’s operations. Financing may not be available in amounts or on terms acceptable to the Company, if at all.
Any failure by the Company to raise additional funds on terms favorable to the Company, or at all, could limit the Company’s ability
to expand the Company’s business operations and could harm the Company’s overall business prospects.

46

Summary
of Cash Flow

The
following table provides detailed information about our net cash flow for the periods presented:

Net cash provided by operating activities was $23,370 for the year
ended December 31, 2021, as compared to net cash used in operating activities of $602,829 for the year ended December 31, 2022. The change
was primarily due to an increase in costs associated with the IPO.

We
had no net cash provided by or used in investing activities for the years ended December 31, 2022 and 2021.

Net cash provided by financing activities was $706,275 for the year
ended December 31, 2022, as compared to no net cash provided by or used in financing activities for the year ended December 31, 2021.
The change was primarily due to the issuance of Class B Common Stock to unaffiliated investors.

Contractual
Obligations

During
the fiscal years ended December 31, 2022 and 2021, we had no significant cash requirements for capital expenditures or other cash needs
under any contractual or other obligations.

Off-Balance
Sheet Arrangements

We
have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical
Accounting Policies

This
discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared
in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these financial
statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting
periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting
policies are described in more detail in the notes to our financial statements included with this report, we believe that the following
accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant
areas involving management’s judgments and estimates. We believe our most critical accounting policies and estimates relate to
the following:

Revenue
Recognition

The
Company recognizes revenue utilizing the following steps: (i) Identify the contract, or contracts, with a customer; (ii) Identify the
performance obligations in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to the performance
obligations in the contract; (v) Recognize revenue when the Company satisfies a performance obligation.

47

Subscriptions

Subscription
revenue is related to a single performance obligation that is recognized over time when earned. Subscriptions are paid in advance and
can be purchased on a monthly, quarterly, or annual basis. Any quarterly or annual subscription revenue is recognized as a contract liability
expensed over the contracted service period.

Marketing

Revenue
related to marketing campaign contracts with customers are normally of a short duration, typically less than two (2) weeks.

AE.360.DDM
Contracts

Revenue
related to AE.360.DDM contracts with customers are normally of a short duration, typically less than one (1) week.

Income
Taxes

As
described in more detail in “Item 1. Business – Corporate Structure and History – Formation and Merger into Asset
Entities Inc.”, the business now conducted by the Company was operated as a partnership from August 1, 2020 until October 19,
2020, when it was reorganized as a limited liability company, or LLC, and that LLC was merged into the Company on March 28, 2022. Prior
to that date, the partnership and the subsequent LLC were not subject to federal income tax and all income, deductions, gains and losses
were attributed to the partners or members. Consequently, no provision was made for federal income taxes payable in respect of the year
ended December 31, 2021.

The
Company adopted FASB ASC 740, Income Taxes, at its inception. Under FASB ASC 740, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes
the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities.
The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion
or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of December 31, 2022
or December 31, 2021.

Recent
Accounting Pronouncements

In
June 2022, the FASB issued ASU 2022-03, ASC Subtopic “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities
Subject to Contractual Sale Restrictions”. These amendments clarify that a contractual restriction on the sale of an equity security
is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments
in this update are effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning
after December 15, 2023. Early adoption is permitted. The Company is currently assessing the impact of the adoption of this standard
on its consolidated financial statements.

In June 2016, the FASB issued ASU No.
2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The amendments
in this Update affect loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive
cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. For public entities,
the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.
For the Company which is a smaller reporting company, ASU No. 2019-10 extends the effective dates for two years. The Company will adopt
this standard beginning January 1, 2023. The Company is currently evaluating the effect of the adoption of this standard on the consolidated
financial statements and related disclosures.

The
Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will
have a material impact on its financial statements.