Myseum.AI, Inc.
For the period ended Mar 31, 2025. Filed May 15, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 15, 2025
MYSE$1.26+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001213900-24-098452
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001213900-25-044159
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 97 previous paragraphs and 85 current paragraphs.
41 unchanged; 26 reworded; 18 added; 30 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Myseum Social Media Platform
Current report
We recently launched our Myseum social media platform, an innovative social media platform that brings a fresh approach to digital media and content management, allowing users to create a digital legacy that can be easily shared today and with future generations. Backed by AI technology and proprietary software, the multi-tiered social media ecosystem enables individuals, families, and other groups to store and share digital content such as messages, photos, videos, and documents within a highly secure and private family library. Myseum allows users to create amazing albums and galleries for everyone to see, create special private and secure galleries with limited access, personalize a user’s newsfeed with updates from other Myseums and leave time released video messages for both now and future generations.
Current report
RPM Interactive, Inc.
Current report
In October 2024, our majority owned subsidiary, Dragon Interact, Inc. (“Dragon”), entered into a Share Exchange Agreement with RPM Interactive, Inc., a Florida corporation (“RPM”), pursuant to which Dragon acquired 100% of the equity interests of RPM, including all assets of RPM in consideration for the issuance of 3,500,000 restricted shares of Dragon’s common stock. RPM’s assets included an artificial intelligence (“AI”) tool used for publishing AI-generated consumer gaming and podcasting/vodcasting applications and certain intellectual property. As part of the acquisition, Dragon has changed its corporate name to RPM Interactive, Inc. (“RPM Interactive”) and shifted its focus to developing AI-driven podcast and gaming technologies.
Current report
Following the acquisition, in January 2025, we returned 3,500,000 shares of the RPM Interactive common stock held by us to RPM Interactive, which shares were cancelled and are no longer outstanding on RPM Interactive’s stock ledger. Following these transactions, we hold 9,000,000 shares of the RPM Interactive’s common stock, or approximately 34% of its outstanding shares.
Current report
The Habytat
Current report
Prior to the acquisition of RPM, we developed and launched, in November 2022, the Habytat, a virtual space that blends real world and virtual realities into one, in real time, using emerging technology like virtual and augmented reality, to create a highly immersive 3D environment. We had further contemplated spinning-off our Habytat platform business into a new standalone public company pursuant to a distribution of the shares. As discussed above, following our acquisition of RPM in October 2024, we ceased our development of the Habytat platform and are evaluating ways to utilize the technology that had been developed by our subsidiary.
Current report
Return of Subsidiary Shares
Current report
In January 2025, we returned 3,500,000 shares of the Subsidiary’s. common stock held by us to the Subsidiary, which shares were cancelled and are no longer outstanding on the Subsidiary’s stock ledger. Following this transaction, we held 12.5 million shares of the Subsidiary’s common stock, or approximately 34% of its outstanding shares.
Current report
January 2025 Offering
Current report
On January 8, 2025, we entered into a securities purchase agreement with certain institutional investors, pursuant to which we sold 1,200,000 shares of our common stock at a purchase price of $4.25 per share of Common Stock. Proceeds from the offering were approximately $5.1 million, prior to deducting placement agent’s fees and other offering expenses payable by the Company. The shares of Common Stock were offered by the Company pursuant to its shelf registration statement on Form S-3 (File No. 333-268058), which was declared effective by the Securities and Exchange Commission on December 6, 2022, a base prospectus dated December 6, 2022, and a prospectus supplement dated January 8, 2025. The closing of the offering took place on January 9, 2025. In addition, pursuant to the terms of the offering, the Company issued to The Benchmark Company, LLC, the exclusive placement agent for the offering, warrants to purchase up to 60,000 shares of the Company’s common stock, at an exercise price equal to 100.0% of the offering price per share of Common Stock, or $4.25 per share. The Placement Agent Warrant is exercisable during the four-and-a-half year period commencing six months after the date of the closing of this Offering.
Current report
Noncontrolling interests
Current report
The Company follows ASC Topic 810, “Consolidation,” governing the accounting for and reporting of noncontrolling interests (“NCI”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCI be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially-owned consolidated subsidiary be allocated to noncontrolling interests even when such allocation might result in a deficit balance. The net loss attributed to NCI was separately designated in the accompanying consolidated statements of operations and comprehensive loss. Losses attributable to NCI in a subsidiary may exceed a NCI’s interests in the subsidiary’s equity. The excess attributable to NCI is attributed to those interests. NCI shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance.
Current report
The Company allocates certain corporate common expenses to its subsidiaries based on the ratio of direct subsidiary expenses to total consolidated expenses. Management believes that this allocation method is reasonable.
Current report
The Company accounts for its noncontrolling interest in RPM Interactive in accordance with ASC Topic 810-10-45, which requires the Company to present noncontrolling interests as a separate component of total shareholders’ equity on the consolidated balance sheets and the consolidated net loss attributable to its noncontrolling interest be clearly identified and presented on the face of the consolidated statements of operations. Through January 10, 2024, the date that VR Interactive purchased 8,000,000 shares of RPM Interactive from Metabizz LLC, any noncontrolling interest eliminated in consolidation. Because this change in ownership moved from a consolidated entity (the VIE entities) to a nonconsolidated entity (VR Interactive), subsequent to January 10, 2024 the Company ceased eliminating the noncontrolling interest in consolidation and recorded an initial negative noncontrolling interest in total equity for the portion of equity ownership not attributable to DatChat based on the minority interest holders’ ownership interest in the carrying value of RPM Interactive’s equity. Due to the issuance of common shares by RPM Interactive, during the three months ended March 31, 2025, the Company recorded aggregate initial negative noncontrolling interest of $188,810 in total equity for the portion of additional equity ownership not attributable to the Company based on the minority interest holders’ ownership interest in the carrying value of RPM Interactive’s equity. The Company allocated $145,914 of the net loss of the subsidiary to noncontrolling interest during the three months ended March 31, 2025. As a result of changes in RPM Interactive outstanding common stock and the Company’s share of losses of subsidiary since January 2024, aggregate noncontrolling interest deficit amounted to $2,472,513 as of March 31, 2025.
Current report
During the three months ended March 31, 2025, loss from operations amounted to $1,660,446 as compared to $1,663,419 during the three months ended March 31, 2024, a decrease of $2,973, or 0.2%.
Current report
The accompanying unaudited consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. As of March 31, 2025, we had cash and cash equivalents of $1,265,478, short-term investments of $5,785,219, and working capital of $6,506,071. Short-term investments include U.S. Treasury zero coupon bills that are all highly rated and have initial maturities between four and twelve months. On January 8, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors pursuant to which the Company agreed to sell to such investors 1,200,000 shares of common stock of the Company at a purchase price of $4.25 per share of Common Stock (the “Offering”). The closing of the sales of these securities under the Purchase Agreement took place on January 9, 2025 and we received net proceeds of $4,532,000. Net cash used in operations was $1,405,389 for the three months ended March 31, 2025. Until such time that the Company implements its growth strategy, it expects to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead, research and development, and costs of being a public company. We believe that our existing working capital and cash on hand will provide sufficient cash to enable the Company to meet its operating needs and debt requirements for the next twelve months from the issuance date of this report.
Current report
During the three months ended March 31, 2025, we received $4,532,000 from the sale of common stock, net, and paid deferred offering costs of $152,500.
Removed paragraphs (30)
Previous report
Habytat
Previous report
In June 2022, we formed a majority owned subsidiary, Dragon Interact, Inc. (formerly, SmarterVerse, Inc.) (“Dragon”). In August 2022, we launched the “Habytat”, a virtual space that blends real world and virtual realities into one, in real time, using emerging technology like virtual and augmented reality, to create a highly immersive 3D environment. Habytat is supported by proprietary artificial intelligence (“AI”) and utilizes a machine learning engine to develop more realistic looking content, daily rewards, games, and new utilities that are designed to further enhance the user experience in an engaging way. Our goal is to leverage our patents and develop new technology that leads to more people joining and seeing the value in the metaverse. Currently, the development agreement is not active.
Previous report
Each Habytat user is granted user rights to use a designated piece of virtual property in Geniuz City, the first world within Habytat, through the minting and issuance of a unique NFT. Geniuz City is designed to be a near photo-realistic world based on Miami’s Wynwood arts district and its surrounding areas. Geniuz City enables users to visit art galleries, explore the town, interact with other users, take selfies with famous landmarks, customize their properties and enjoy the culture of Geniuz City.
Previous report
Users will be able to customize their virtual property to represent their personal style and taste. Users will then be able to accumulate reward points when they visit and interact with such virtual property or invite others to join Habytat, and such rewards can be used to enhance, expand, and improve their virtual property. The official in-world currency of Habytat is the “Nirad,” which can be earned through participation on the DatChat Social Network+ or Habytat and used to upgrade properties and experiences in Habytat.
Previous report
Mobile Metaverse
Previous report
In May 2023, we launched the open mobile metaverse, Habytat 1.0, as part of our mission to democratize access to the metaverse. We hope that by making Habytat available via mobile devices and offering free ownership of virtual land and homes, that Habytat will break down obstacles that previously limited participation, such as the necessity for expensive virtual reality (“VR”) gear or metaverse properties. We have assembled a team of over twenty game developers, graphic artists and back-end developers to create Habytat 1.0.
Previous report
HabyPets
Previous report
In August 2023, we launched a series of novel AI-powered pets called “HabyPets.” HabyPets provides an interactive experience within the Habytat world, creating a more immersive and personal experience for users. Supported by Habytat’s proprietary AI and machine learning engine, HabyPets grow over time from playful companions to mature adult pets. Similar to real-life pets, these AI pets can be trained by users via a range of behavioral commands, replicating the natural progression of real pets over time. These include, but are not limited to, catching frisbees, playing with toys, engaging in tug of war, and even participating in thrilling races with other pets at the park. By actively engaging with their pets, users can establish a connection and provide proper care for their virtual companions, fostering a realistic experience within the Habytat metaverse.
Previous report
Myseum
Previous report
We are currently developing “Myseum,” a platform that will allow users to create a personal museum designed to easily share pictures, videos and documents utilizing planned features, such as creating instant sharing spaces at family gatherings, time released video messages, multi-tiered social media, and secure family document storage and sharing. Currently, Myseum is scheduled to launch in the second half of 2024 and will encompass features and social networking technology designed to unlock and share digital media.
Previous report
Spin-off and Name Change
Previous report
In January 2024, we announced plans to spin-off the Habytat platform business into a new standalone public company pursuant to a distribution of the Dragon shares as further discussed below. As of the date of this Quarterly Report, we currently own approximately 45.5% of Dragon, the entity that owns and operates the Habytat platform business. This marked a significant step forward in our corporate strategy to reposition the Company as a pureplay social media ecosystem centered around our Myseum assets.
Previous report
In February 2024, Dragon changes its name from “SmarterVerse, Inc.” name to “Dragon Interactive Corporation”.
Previous report
In February 2024, Darin Myman was appointed as President of Dragon.
Previous report
On August 7, 2024, Dragon filed a Certificate of Amendment with the State of Nevada to change its name from “Dragon Interactive Corporation” to “Dragon Interact, Inc”.
Previous report
If the share distribution proceeds, it is currently contemplated that our shareholders will maintain their current shares in the Company and receive a pro-rata distribution of a portion of our shares of Dragon. The proposed share distribution remains subject to approval by our board of directors as well as other customary conditions, including the filing and effectiveness of either a Form S-1 or Form 10 registration statement with the U.S. Securities and Exchange Commission and obtaining of any other required regulatory approvals. Upon consummation of the proposed distribution, Dragon would become a standalone public company with plans to list on a national stock exchange. No assurance can be given that the spin-off and/or the distribution will occur as anticipated or at all.
Previous report
On January 16, 2024, we entered into an underwriting agreement with EF Hutton LLC, as the representative of the underwriters named therein, relating to an underwritten public offering of 382,972 shares of our common stock and pre-funded warrants to purchase up 590,000 shares of our common stock for net proceeds of approximately $1.4 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, which closed on January 16, 2024.** As of the date of this report, this agreement has been terminated.**
Previous report
During the nine months ended September 30, 2024 and 2023, compensation and related expenses amounted to $1,881,682 and $4,177,032, respectively, a decrease of $2,295,350, or 54.9%. The decrease was attributable to a decrease in stock-based compensation of $1,966,364 and an overall decrease in compensation and other related expenses of $328,986.
Previous report
During the three months ended September 30, 2024 and 2023, we reported professional and consulting expenses of $222,220 and $483,319, respectively, a decrease of $261,099, or 54.0%. The decrease was primarily attributable to a decrease in investor relations of $218,664 and a decrease in stock-based consulting fees of $65,184, offset by an increase in legal fees of $31,710.
Previous report
On August 27, 2024, we entered into an Asset Purchase Agreement with Judaopta LLC, a Delaware limited liability company (the “Seller”), pursuant to which it acquired from Seller (i) certain software (the “RenAI Software”), which consists of an artificial intelligence (AI) tool designed used for media library organization with the ability to tag and rename images for PC and MAC devices using AI with integration to Gemini, OpenAI and Claude and (ii) certain domain names (the “Assets”) in consideration for the transfer by the Company of 8,000,000 restricted shares of common stock of Dragon Interact, Inc., a majority-owned subsidiary of the Company. In connection with this asset acquisition, for the three and nine months ended September 30, 2024, we recorded research and development expense of $166,667 since the Company is still in the development stage and spends most of its time and efforts planning, raising capital, and performing research and development and accordingly, the recoverability of the cost was not certain. Research and development expense was calculated as follows:
Previous report
During the nine months ended September 30, 2024 and 2023, general and administrative expenses amounted to $636,067 and $651,461, a decrease of $15,394, or 2.4%.
Previous report
Impairment loss on digital currencies and other digital assets
Previous report
During the three months ended September 30, 2024 and 2023, operating expenses did not include an impairment charge related to the write down of digital assets. During the nine months ended September 30, 2024 and 2023, operating expenses included an impairment charge related to the write down of digital assets of $0 and $23,381, respectively.
Previous report
During the three months ended September 30, 2024, loss from operation amounted to $1,238,246 as compared to $2,542,151 during the three months ended September 30, 2023, a decrease of $1.303,967, or 51.3%. During the nine months ended September 30, 2024, loss from operation amounted to $4,168,706 as compared to $7,291,427 during the nine months ended September 30, 2023, a decrease of $3,122,721, or 42.8%.
Previous report
During the nine months ended September 30, 2024, other income, net primarily consisted of interest income of $232,191, a gain on deconsolidation of variable interest entities of $107, and a foreign currency exchange loss of $12,965. During the nine months ended September 30, 2023, other income, net primarily consisted of interest income of $245,440, a gain on initial consolidation of variable interest entities of $42,737, a foreign currency exchange loss of $102, and a realized loss on short-term investments of $47,672.
Previous report
The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying unaudited consolidated financial statements, we had a net loss of $3,949,373 for the nine months ended September 30, 2024. Net cash used in operations was $3,507,202 for the nine months ended September 30, 2024. Additionally, as of September 30, 2024, we had an accumulated deficit of $51,526,948 and have generated minimal revenues since inception. As of September 30, 2024, we had working capital of $4,226,065, including cash of $632,497 and short-term investments of $3,919,697. These factors raise substantial doubt about our ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. We are seeking to raise capital through additional debt and/or equity financings to fund our operations in the future. Although we have historically raised capital from sales of common shares, there is no assurance that it will be able to continue to do so. If we are unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail its operations. These unaudited consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.
Previous report
On April 3, 2024, Dragon entered into a Securities Purchase Agreement with an institutional and accredited investor, pursuant to which Dragon agreed to sell an aggregate of 120,000 shares of Dragon’s common stock, par value $0.0001 per share for an aggregate purchase price of $36,000. Following the sale, the Company retained approximately 71.4% ownership of Dragon.
Previous report
On May 31, 2024, Dragon entered into a Securities Purchase Agreement with an institutional and accredited investor, pursuant to which Dragon agreed to sell an aggregate of 666,660 shares of Dragon’s common stock, par value $0.0001 per share for an aggregate purchase price of $199,998. Following the sale, the Company retained approximately 70.0% ownership of Dragon.
Previous report
During September 2024, Dragon entered into a Securities Purchase Agreement with investors pursuant to which Dragon agreed to sell an aggregate of 866,666 shares of Dragon’s common stock, par value $0.0001 per share for an aggregate purchase price of $260,000, or $0.30 per share. Following the sale, the Company retains approximately 54.5% ownership of Dragon.
Previous report
During the nine months ended September 30, 2023, we repaid related party advances of $1,315, we used cash of $397,969 to purchase 66,945 treasury stock at an average price of $5.94 per share, and we receive $1,000 from the sale of Series B preferred stock.
Reworded paragraphs (26)
Previous wording
We are a blockchain, cybersecurity, and social media company that not only focuses on protecting privacy on personal devices, but also protects user information after it is shared with others. We believe that one’s right to privacy should not end the moment they click “send”, and that we all deserve the same right to privacy online that we enjoy in our own living rooms. Our flagship product, DatChat Messenger & Private Social Network, is a privacy platform and mobile application that gives users the ability to communicate with the privacy and protection they deserve. Recently, we have expanded our business and product offerings to include the co-development of a mobile-based social and gaming metaverse, known as “Habytat”, as well as the development of Museum, a social network and multi-media storage platform for consumers and enterprises.
Current wording
We are a private messaging, cybersecurity, and social media company that not only focuses on protecting privacy on personal devices, but also protects user information after it is shared with others. We believe that one’s right to privacy should not end the moment they click “send”, and that we all deserve the same right to privacy online that we enjoy in our own living rooms. Our flagship product, DatChat Messenger & Private Social Network, is a privacy platform and mobile application that gives users the ability to communicate with the privacy and protection they deserve. Recently, we have expanded our business and product offerings to include the development of our Myseum platform, a secure digital content management and storage solution for families, groups and individuals. In addition, as a result of our acquisition of RPM Interactive, Inc. in October 2024, we have repositioned our majority-owned subsidiary, Dragon Interact, Inc. (recently renamed RPM Interactive, Inc.) away from the development of the Habytat platform to focus on becoming an AI generated publishing company of trivia mobile game apps and vodcasts/podcasts designed to publish content across hundreds of evergreen topics every day and be distributed to all major streaming platforms. See “Business – RPM Interactive, Inc.” and “Business – The Habytat.”
Previous wording
Costs incurred to develop internal-use software including Metaverse software development, are expensed as incurred during the preliminary project stage. Internal-use software development costs are capitalized during the application development stage, which is after: (i) the preliminary project stage is completed; and (ii) management authorizes and commits to funding the project and it is probable the project will be completed and used to perform the function intended. Capitalization ceases at the point the software project is substantially complete and ready for its intended use, and after all substantial testing is completed. Upgrades and enhancements are capitalized if it is probable that those expenditures will result in additional functionality. Amortization is provided for on a straight-line basis over the expected useful life of the internal-use software development costs and related upgrades and enhancements. When existing software is replaced with new software, the unamortized costs of the old software are expensed when the new software is ready for its intended use. Software development costs incurred during the nine months ended September 30, 2024 and 2023 were expensed since the Metaverse software development project is in the preliminary project stage. Such costs are included in research and development costs on the accompanying consolidated statement of operations.
Current wording
We capitalize costs to develop or purchase internal-use software in accordance with ASC section 350-40,Intangibles — Goodwill and Other — Internal-Use Software. Costs incurred to develop internal-use software are expensed as incurred during the preliminary project stage. Internal-use software development costs are capitalized upon purchase and during the application development stage, which is after: (i) the preliminary project stage is completed; and (ii) management authorizes and commits to funding the project and it is probable the project will be completed and used to perform the intended function. Capitalization ceases at the point where the software project is substantially complete and ready for its intended use, and after all substantial testing is completed. Upgrades and enhancements are capitalized if it is probable that those expenditures will result in additional functionality. Amortization is provided for on a straight-line basis over the expected useful life of the internal-use software development costs and related upgrades and enhancements. When the existing software is replaced with new software, the unamortized costs of the old software are expensed when the new software is ready for its intended use. During the three months ending March 31, 2025, we capitalized certain software development costs incurred amounting to $72,625 since the Company’s software development projects were in the application development stage. During the three months ending March 31, 2024, software development costs incurred internally, other than purchased software, were expensed since the Company’s software development projects were in the preliminary project stage. Such costs were included in research and development costs on the accompanying unaudited consolidated statement of operations and comprehensive loss.
Previous wording
Based on the Company’s analysis, on February 14, 2023, Metabizz, LLC, a Florida corporation, and Metabizz SAS, a company incorporated under the laws of Columbia (collectively “Metabizz”), were determined to be VIE entities in accordance withASC 810-10-25-22 because the equity owners in Metabizz did not have the characteristics of a controlling financial interest and the initial equity investments in these entities may be or were insufficient to meet or sustain its operations without additional subordinated financial support from DatChat. The equity owners of Metabizz had only a nominal equity investment at risk, and the Company absorbed or received a majority of the entity’s expected losses or benefits. The Company participated significantly in the design of Metabizz. The Company provided working capital advances to Metabizz to allow Metabizz to fund its day-to-day obligations. Substantially all of the activities of Metabizz were conducted for the Company’s benefit, as evidenced by the fact that the operations of Metabizz consisted of development of software and technologies to be used by Dragon and the Company provided working capital to Metabizz to pay employees and independent contractors to perform the development services on behalf of the Company. Repayment of the working capital advances is not guaranteed by the equity owner of Metabizz and creditors of Metabizz do not have recourse against the Company. Accordingly, the Company was required to consolidate the assets, liabilities, revenues and expenses of Metabizz using the fair value method. Additionally, the managing partner of Metabizz was also the Chief Innovation Officer of Dragon. Since Metabizz, LLC and Metabizz SAS were considered VIE’s, any noncontrolling interest eliminated in consolidation. In connection with the initial consolidation of Metabizz, on February 14, 2023 (the initial consolidation date), the Company recorded a gain on initial consolidation of variable interest entities of $42,737.
Current wording
Based on the Company’s analysis, on February 14, 2023, Metabizz, LLC, a Florida corporation, and Metabizz SAS, a company incorporated under the laws of Columbia (collectively “Metabizz”), were determined to be VIE entities in accordance withASC 810-10-25-22 because the equity owners in Metabizz did not have the characteristics of a controlling financial interest and the initial equity investments in these entities may be or were insufficient to meet or sustain its operations without additional subordinated financial support from DatChat. The equity owners of Metabizz had only a nominal equity investment at risk, and the Company absorbed or received a majority of the entity’s expected losses or benefits. The Company participated significantly in the design of Metabizz. The Company provided working capital advances to Metabizz to allow Metabizz to fund its day-to-day obligations. Substantially all of the activities of Metabizz were conducted for the Company’s benefit, as evidenced by the fact that the operations of Metabizz consisted of development of software and technologies to be used by RPM Interactive and the Company provided working capital to Metabizz to pay employees and independent contractors to perform the development services on behalf of the Company. Repayment of the working capital advances is not guaranteed by the equity owner of Metabizz and creditors of Metabizz do not have recourse against the Company. Accordingly, the Company was required to consolidate the assets, liabilities, revenues and expenses of Metabizz using the fair value method. Additionally, the managing partner of Metabizz was also the Chief Innovation Officer of RPM Interactive. Since Metabizz, LLC and Metabizz SAS were considered VIE’s, any noncontrolling interest eliminated in consolidation. In connection with the initial consolidation of Metabizz, on February 14, 2023 (the initial consolidation date), the Company recorded a gain on initial consolidation of variable interest entities of $42,737.
Previous wording
On March 31, 2024, based on the Company’s analysis, the Company deconsolidated Metabizz, LLC and Metabizz SAS. During the three months ended March 31, 2024, the Company ceased doing business with Metabizz, LLC and Metabizz SAS and will pay technology professionals directly. In connection with the deconsolidation of Metabizz, LLC and Metabizz SAS, during the nine months ended September 30, 2024, the Company recorded a gain on deconsolidation of $107.
Current wording
On March 31, 2024, based on the Company’s analysis, the Company deconsolidated Metabizz, LLC and Metabizz SAS. During the three months ended March 31, 2024, the Company ceased doing business with Metabizz, LLC and Metabizz SAS and will pay technology professionals directly. In connection with the deconsolidation of Metabizz, LLC and Metabizz SAS, during the three months ended March 31, 2024, the Company recorded a gain on deconsolidation of $107.
Previous wording
On August 27, 2024, the Company entered into an Asset Purchase Agreement with the Seller, pursuant to which it acquired from Seller the Assets (See Note 1) in consideration for the transfer by the Company of 8,000,000 restricted shares of common stock of Dragon Interact, Inc., a majority-owned subsidiary of the Company. Accordingly, as of September 30, 2024, the Company owns 45.5% of Dragon. On August 27, 2024, based on the Company’s analysis, the Company determined that Dragon met the definition of a VIE under the VIE model, which provides for situations in which control may be demonstrated other than by the possession of voting rights in Dragon. Based on Company’s analysis, the Company continues to have the power to direct the activities of Dragon that most significantly impact Dragon’s economic performance and the obligation to absorb losses of Dragon that could potentially be significant to Dragon or the right to receive benefits from Dragon that could potentially be significant to Dragon.
Current wording
On August 27, 2024, the Company entered into an Asset Purchase Agreement with the Seller, pursuant to which it acquired from Seller the Assets (See Note 1) in consideration for the transfer by the Company of 8,000,000 restricted shares of common stock of RPM Interactive. Accordingly, as of September 30, 2024, the Company owned 45.5% of RPM Interactive. On August 27, 2024, based on the Company’s analysis, the Company determined that RPM Interactive met the definition of a VIE under the VIE model, which provides for situations in which control may be demonstrated other than by the possession of voting rights in RPM Interactive. Based on Company’s analysis, the Company continues to have the power to direct the activities of RPM Interactive that most significantly impact RPM Interactive’s economic performance and the obligation to absorb losses of RPM Interactive that could potentially be significant to RPM Interactive or the right to receive benefits from RPM Interactive that could potentially be significant to RPM Interactive. As of March 31, 2025 and December 31, 2024, the Company retained approximately 34.0% and 39.7%
Previous wording
During the three months ended September 30, 2024 and 2023, we generated minimal revenues of $62 and $175, respectively. During the nine months ended September 30, 2024 and 2023, we generated minimal revenues of $344 and $501, respectively.
Current wording
During the three months ended March 31, 2025 and 2024, we generated minimal revenues of $83 and $131, respectively, which consisted of subscription revenues.
Previous wording
For the three months ended September 30, 2024, operating expenses amounted to $1,238,246 as compared to $2,542,326 for the three months ended September 30, 2023, a decrease of $1,304,080, or 51.3%. For the nine months ended September 30, 2024, operating expenses amounted to $4,169,050 as compared to $7,291,928 for the nine months ended September 30 2023, a decrease of $3,122,721, or 42.8%. For the three and nine months ended September 30, 2024 and 2023, operating expenses consisted of the following:
Current wording
For the three months ended March 31, 2025, operating expenses amounted to $1,660,529 as compared to $1,663,550 for the three months ended March 31, 2024, a decrease of $3,021, or 0.2%. For the three months ended March 31, 2025 and 2024, operating expenses consisted of the following:
Previous wording
During the three months ended September 30, 2024 and 2023, compensation and related expenses amounted to $461,422 and $1,247,302, respectively, a decrease of $785,880, or 63.0%. The decrease was attributable to a decrease in stock-based compensation of $620,976 and an overall decrease in compensation and other related expenses of $164,904.
Current wording
During the three months ended March 31, 2025 and 2024, compensation and related expenses amounted to $967,280 and $897,664, respectively, an increase of $69,616, or 7.8%. The increase was attributable to an increase in executive bonus of $350,000, and an increase in stock-based compensation of $148,359 due to the issuance of new stock options, offset by an overall decrease in compensation and other related expenses of $428,743 due to a reduction in staff.
Previous wording
During the three months ended September 30, 2024 and 2023, marketing and advertising expenses amounted to $34,134 and $219,008, respectively, a decrease of $184,874, or 84.4%. During the nine months ended September 30, 2024 and 2023, marketing and advertising expenses amounted to $101,734 and $379,410, respectively, a decrease of $277,676, or 73.2%. The decrease was primarily due to an overall decrease in promotions, branding and digital marketing strategies and social media ads.
Current wording
During the three months ended March 31, 2025 and 2024, marketing and advertising expenses amounted to $38,262 and $34,717, respectively, an increase of $3,545, or 10.2%. The increase was primarily due to an increase in promotions, branding and digital marketing strategies and social media ads.
Previous wording
During the nine months ended September 30, 2024 and 2023, we reported professional and consulting expenses of $726,119 and $1,060,396, respectively, a decrease of $334,277, or 31.5%. The decrease was primarily attributable to a decrease in investor relations of $263,310, a decrease in stock-based consulting fees of $77,467, and a decrease in other professional fees of $20,978, offset by an increase in accounting fees of $27,478.
Current wording
During the three months ended March 31, 2025 and 2024, we reported professional and consulting expenses of $455,484 and $253,625, respectively, an increase of $201,859, or 79.6%. The increase was primarily attributable to an increase in investor relations of $77,500, an increase in legal fees of $73,410, an increase in accounting fees of $40,137, an increase in consulting fees – related party of $18,000, and an increase of other professional fees of $1,485, offset by a decrease in aggregate consulting fees of $8,673, which includes a decrease in stock-based consulting fees of $52,323 and an increase in other consulting fees of $43,650.
Previous wording
During the three months ended September 30, 2024 and 2023, we incurred $363,472 and $380,017 in research and development expenses, a decrease of $16,545, or 4.4%. During the nine months ended September 30, 2024 and 2023, we incurred $823,448 and $1,000,248 in research and development expenses, a decrease of $176,800, or 17.7%. Research and development costs were incurred in connection with our Metaverse software development project, including the development of Habytat which is in the preliminary stage.
Current wording
During the three months ended March 31, 2025 and 2024, we incurred $6,000 and $233,918 in research and development expenses, a decrease of $227,918, or 97.4%. Research and development costs were incurred in connection with our Metaverse software development project, including the development of Habytat which is in the preliminary stage. As of March 31, 2025, we ceased development of our Metaverse software.
Previous wording
During the three months ended September 30, 2024 and 2023, general and administrative expenses amounted to $156,998 and $212,680, a decrease of $55,682, or 26.2%. The decrease was primarily attributable to a decrease in travel expenses of $40,212 and a decrease in other general and administrative expenses of $15,470.
Current wording
During the three months ended March 31, 2025 and 2024, general and administrative expenses amounted to $193,503 and $243,626, a decrease of $50,123, or 20.6%. The decrease was primarily attributable to a decrease in computer and internet expenses of $26,517, a decrease in proxy meeting expenses of $19,288, and a decrease in other general and administrative expenses of $4,318.
Previous wording
Other income (expenses) primarily consisted of interest income, gain on initial consolidation of variable interest entities, gain on deconsolidation of variable interest entities, foreign currency exchange loss, and realized gains or losses on short-term investments. During the three months ended September 30, 2024 and 2023, we reported other income, net of $54,726 and $177,571, respectively. During the nine months ended September 30, 2024 and 2023, we reported other income, net of $219,333 and $240,403, respectively.
Current wording
Other income (expenses) primarily consisted of interest income, gain on deconsolidation of variable interest entities, and foreign currency exchange loss. During the three months ended March 31, 2025 and 2024, we reported other income, net of $41,336 and $101,612, respectively.
Previous wording
During the three months ended September 30, 2024, other income, net solely consisted of interest income of $54,726. During the three months ended September 30, 2023, other income, net primarily consisted of interest income of $177,607 and a foreign currency exchange loss of $36.
Current wording
During the three months ended March 31, 2025, other income, net solely consisted of interest income of $41,336. During the three months ended March 31, 2024, other income, net primarily consisted of interest income of $114,470, gain on deconsolidation of variable interest entities of $107, and a foreign currency exchange loss of $12,965.
Previous wording
Due to the foregoing reasons, during the three months ended September 30, 2024 and 2023, our net loss was $1,183,458 and $2,364,580, respectively, a decrease of $1,181,122, or 50.0%. During the nine months ended September 30, 2024 and 2023, our net loss was $3,949,373 and $7,051,024, a decrease of $3,101,651, or 44.0%. During the three months ended September 30, 2024 and 2023, after adjusting net loss for net (income) of subsidiary attributable to noncontrolling interest of $(88,343) and $0, respectively, net loss attributable to common shareholders of was $1,271,801, or $(0.42) per common share (basic and diluted) and $2,364,580, or ($1.13) per common share (basic and diluted), respectively, a decrease of $1,092,779, or 46.2%. During the nine months ended September 30, 2024 and 2023, after adjusting net loss for net loss of subsidiary attributable to noncontrolling interest of $566,513 and $0, respectively, our net loss attributable to common shareholders was $3,392,860, or $(1.15) per common share (basic and diluted) and $7,051,024, or ($3.40) per common share (basic and diluted), respectively, a decrease of $3,658,164, or 51.9%.
Current wording
Due to the foregoing reasons, during the three months ended March 31, 2025 and 2024, our net loss was $1,619,110 and $1,561,807, respectively, an increase of $57,303, or 3.7%. During the three months ended March 31, 2025 and 2024, after adjusting net loss for the net loss of subsidiary attributable to noncontrolling interest of $145,914 and $423,995, respectively, net loss attributable to common shareholders of was $1,473,196, or ($0.36) per common share (basic and diluted) and $1,137,812, or ($0.41) per common share (basic and diluted), respectively, an increase of $335,384, or 29.5%.
Previous wording
As of September 30, 2024, we had cash and cash equivalents of $632,497 and short-term investments of $3,919,697. Short-term investments include U.S. Treasury zero coupon bills that are all highly rated and have initial maturities between four and twelve months.
Current wording
As of March 31, 2025, we had cash and cash equivalents of $1,265,478 and short-term investments of $5,785,219. Short-term investments include U.S. Treasury zero coupon bills that are all highly rated and have initial maturities between four and twelve months.
Previous wording
Our primary uses of cash have been for compensation and related expenses, fees paid to third parties for professional services, marketing and advertising expenses, and general and administrative expenses. All funds received have been expended in the furtherance of growing the business. We received funds from the sale of our common stock and the exercise of warrants. The following trends are reasonably likely to result in changes in our liquidity over the near to long term:
Current wording
Our primary uses of cash have been for research and development, compensation and related expenses, fees paid to third parties for professional services, marketing and advertising expenses, and general and administrative expenses. All funds received have been expended in the furtherance of growing the business. We received funds from the sale of our common stock, sale of common stock in our subsidiary, RPM Interactive, and the exercise of warrants. The following trends are reasonably likely to result in changes in our liquidity over the near to long term:
Previous wording
Cash Flow Activities for the Nine Months ended September 30, 2024 and 2023
Current wording
Cash Flow Activities for the Three Months ended March 31, 2025 and 2024
Previous wording
Net cash used in operating activities totaled $3,507,202 and $5,159,510 for the nine months ended September 30, 2024, and 2023, respectively, a decrease of $1,652,308.
Current wording
Net cash used in operating activities totaled $1,405,389 and $1,477,240 for the three months ended March 31, 2025 and 2024, respectively, a decrease of $71,851.
Previous wording
Net cash flow used in operating activities for the nine months ended September 30, 2023 primarily reflected a net loss of $7,051,024, adjusted for the add-back (reduction) of non-cash items consisting of depreciation of $20,687, amortization of right of use assets of $44,272, accretion of stock-based stock option and common stock expense of $2,183,835, a non-cash gain from initial consolidation of variable interest entities of $(42,737), impairment loss on digital assets of $23,381, net unrealized loss on short-term investments of $47,672, and non-cash accrued interest included in short-term investments of $239,382, offset by changes in operating assets and liabilities primarily consisting of a decrease in accounts payable – related party of $21,801, an increase in prepaid expenses of $61,456, a decrease in accounts payable and accrued expenses of $14,385, and a decrease in operating lease liabilities of $48,808.
Current wording
Net cash flow used in operating activities for the three months ended March 31, 2025 primarily reflected a net loss of $1,619,110 adjusted for the add-back of non-cash items consisting of depreciation and amortization of $5,541, and accretion of stock-based stock option and common stock expense of $155,054, offset by changes in operating assets and liabilities primarily consisting of an increase in prepaid expenses of $15,959, and an increase in accounts payable and accrued expenses of $69,092.
Previous wording
Net cash flow used in operating activities for the nine months ended September 30, 2024 primarily reflected a net loss of $3,949,373 adjusted for the add-back (reduction) of non-cash items consisting of depreciation and amortization of $17,347, amortization of right of use assets of $54,065, accretion of stock-based stock option and common stock expense of $125,810, a non-cash gain from deconsolidation of variable interest entities of $(107), foreign currency exchange loss of $12,965, and non-cash research and development expense of$166,667, offset by changes in operating assets and liabilities primarily consisting of an increase in prepaid expenses of $59,179, an increase in accounts payable and accrued expenses of 185,469, and a decrease in operating lease liabilities of $60,823.
Current wording
Net cash flow used in operating activities for the three months ended March 31, 2024 primarily reflected a net loss of $1,561,807 adjusted for the add-back (reduction) of non-cash items consisting of depreciation and amortization of $5,782, amortization of right of use assets of $17,123, accretion of stock-based stock option and common stock expense of $59,018, a non-cash gain from deconsolidation of variable interest entities of $(107), and foreign currency exchange loss of $12,965, offset by changes in operating assets and liabilities primarily consisting of an increase in prepaid expenses of $52,659, an increase in accounts payable and accrued expenses of $61,794, and a decrease in operating lease liabilities of $19,376.
Previous wording
Net cash provided by investing activities amounted to $1,269,566 and $4,496,890 for the nine months ended September 30, 2024 and 2023, respectively.
Current wording
Net cash used by investing activities amounted to $2,905,332 and $648,447 for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
During the nine months ended September 30, 2023, we purchased short-term investments of $5,363,163 and received gross proceeds from the sale of short-term investments of $9,845,000. Additionally, we received $64,538 in cash upon initial consolidation of variable interest entities and purchased property and equipment of $49,485.
Current wording
During the three months ended March 31, 2025, we purchased short-term investments of $4,314,310 and received gross proceeds from the sale of short-term investments of $1,481,603. Additionally, we capitalized internal-use software of $72,625.
Previous wording
During the nine months ended September 30, 2024, we received gross proceeds from the sale of short-term investments of $9,757,175 and purchased short-term investments of $8,487,609.
Current wording
During the three months ended March 31, 2024, we purchased short-term investments of $3,337,115 and received gross proceeds from the sale of short-term investments of $2,688,668.
Previous wording
Net cash provided by (used in) financing activities totaled approximately $1,916,771 and $(398,284) for the nine months ended September 30, 2024 and 2023, respectively.
Current wording
Net cash provided by financing activities totaled $4,379,500 and $1,420,773 for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
During the nine months ended September 30, 2024, we received $559,251 from the sale of common stock, net, received $495,998 from the sale of subsidiary common stock, net, and received $861,522 from the sale of pre-funded warrants.
Current wording
During the three months ended March 31, 2024, we received $559,251 from the sale of common stock, net, and received $861,522 from the sale of pre-funded warrants.