THUMZUP MEDIA Corp

Thumzup Media Corporation

Notes to the Condensed Consolidated Financial Statements (Unaudited)

June 30, 2025

Note 1 -Business Organization and Nature of Operations

Thumzup Media Corporation (“Thumzup” or the “Company”) was incorporated on October 27, 2020, under the laws of the State of Nevada, and its headquarters is located in Los Angeles, California. The Company’s primary business is software as a service provider dedicated to connecting businesses with consumers and allowing the business to incentivize consumers to post about their experience on social media. Thumzup’s mission is to democratize social media marketing by connecting advertisers with non-professional people, who can be paid for their posts about products and services they love through its technology which utilizes a proprietary mobile app (“App”). The App generates scalable word-of-mouth product posts and recommendations for advertisers on social media and is designed to connect advertisers with individuals who are willing to promote their products online.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Our unaudited condensed consolidated financial statements include the accounts of xBitcoin, LLC and Quantum Reach Corporation, our wholly owned subsidiaries. All intercompany transactions were eliminated during consolidation.

The Company is an “emerging growth company” as that term is used in the Jumpstart our Business Startups Act of 2012, and as such, has elected to comply with certain reduced public company reporting requirements.

Note 2 –Summary of Significant Accounting Policies

Basis of Presentation - Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year.

Certain information and disclosures normally included in the notes to the annual financial statements have been condensed, consolidated or omitted from these interim unaudited condensed consolidated financial statements. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on March 11, 2025, as amended on Form 10-K/A on April 30, 2025 (the “Annual Report”). The December 31, 2024, balance sheet is derived from those financial statements.

Use of Estimates

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America, which requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures at the date of the financial statements and the reported amounts of expenses during the reported period. These assumptions and estimates could have a material effect on the financial statements. Actual results may differ materially from those estimates. The Company’s management periodically reviews estimates on an ongoing basis based on information currently available, and changes in facts and circumstances may cause the Company to revise these estimates. Significant estimates include estimates used in the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.

Alleviation of Going Concern

The Company incurred losses of $1,194,490 and $3,348,342 and did not generate substantial revenues during the three and six months ended June 30, 2025, respectively. Further, the Company utilized $2,664,485 cash in operating activities revenues during the six months ended June 30, 2025. These indicators of a potential doubt about going concern were alleviated by an approximately $6,500,000 equity financing of the Company’s Series C Convertible Preferred Stock, par value $0.001 per share, in July 2025. The Company believes it has sufficient cash to maintain operations for at least one year from the issuance of these financial statements.

Cash and Cash Equivalents

Cash and cash equivalents include all cash on hand, demand deposits and short-term investments with original maturities of three months or less when purchased.

As of June 30, 2025, and December 31, 2024, the Company’s cash and cash equivalents consisted of $60,430 and $4,680,840, respectively. The Company maintains its cash in banks insured by the Federal Deposit Insurance Corporation (“FDIC”) in accounts that at times may be in excess of the federally insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. At June 30, 2025, and December 31, 2024, the uninsured balances amounted to $0 and $3,772,766, respectively. There is a risk the Company may lose uninsured balances over the FDIC insurance limit.

Digital Assets

The Company accounts for its digital assets, which are comprised solely of bitcoin, as indefinite-lived intangible assets in accordance with Accounting Standards Codification (“ASC”) 350,Intangibles—Goodwill and Other. The Company has ownership of and control over its bitcoin and uses third-party custodial services to store its bitcoin. The Company’s digital assets are initially recorded at cost. Subsequently, they are measured at cost, net of any impairment losses incurred since acquisition.

The Company determines the fair value of its bitcoin on a nonrecurring basis in accordance with ASC 820,Fair Value Measurement, based on quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company has determined is its principal market for bitcoin (Level 1 inputs). The Company performs an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted (unadjusted) prices on the active exchange, indicate that it is more likely than not that any of the assets are impaired. In determining if an impairment has occurred, the Company considers the lowest price of one bitcoin quoted on the active exchange at any time since acquiring the specific bitcoin held by the Company. If the carrying value of a bitcoin exceeds that lowest price, an impairment loss has occurred with respect to that bitcoin in the amount equal to the difference between its carrying value and such lowest price.

Impairment losses are recognized in the period in which the impairment occurs and are reflected within “Digital asset impairment losses (gains on sale), net” in the Company’s Statements of Operations. The impaired digital assets are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. Gains (if any) are not recorded until realized upon sale, at which point they are presented net of any impairment losses in the Company’s Statements of Operations. In determining the gain to be recognized upon sale, the Company calculates the difference between the sales price and carrying value of the specific bitcoins sold immediately prior to sale.

See Note 3, Digital Assets, to the Financial Statements for further information regarding the Company’s purchases of digital assets.

Prepaid Expenses

As of June 30, 2025, and December 31, 2024, the Company had $150,708 and $141,300 in prepaid expenses, respectively. The Company’s prepaid expenses as of December 31, 2024, primarily consisted of premiums on insurance policies.

Property and Equipment

Property and equipment, which consists of computer equipment is recorded at cost and depreciated using the straight-line method over the estimated useful lives. Ordinary repair and maintenance costs are included in general and administrative expenses on our statement of operations. However, expenditures for additions or improvements that significantly extend the useful life of the asset are capitalized in the period incurred. At the time assets are sold or disposed of, the cost and accumulated depreciation are removed from their respective accounts and the related gains or losses are reflected in the statements of operations in gains from sales of property and equipment, net.

The estimated useful life for computer equipment isthree years. The Company evaluates the appropriateness of remaining depreciable lives assigned to computer equipment at the end of each fiscal year. Depreciation expense for the three months ended June 30, 2025, and 2024 was $985 and $1,067, respectively. Depreciation expense for the six months ended June 30, 2025, and 2024 was $2,321 and $1,725, respectively.

Capitalized Software Development Costs

We capitalize certain costs related to the development and enhancement of the Thumzup platform. In accordance with authoritative guidance, including ASC 350-40, we began to capitalize these costs when the technological feasibility was established and preliminary development efforts were successfully completed, management has authorized and committed project funding, and it was probable that the project would be completed and the software would be used as intended. Such costs are amortized when placed in service, on a straight-line basis over the estimated useful life of the related asset, generally estimated to be three years. Costs incurred prior to meeting these criteria together with costs incurred for training and maintenance are expensed as incurred and recorded in product development expenses on our statements of operations. Costs incurred for enhancements that were expected to result in additional features or functionality that would generate additional revenue are capitalized and expensed over the estimated useful life of the enhancements, generally three years. The Company does not capitalize any testing or maintenance costs. The accounting for these capitalized software costs requires us to make significant judgments, assumptions and estimates related to the timing and amount of recognized capitalized software development costs. For the six months ended June 30, 2025, and 2024, the Company capitalized $156,471 and $126,665 of costs related to the development of software applications, respectively. Amortization of capitalized software costs was $40,789 and $21,858 for the three months ended June 30, 2025, and 2024, respectively. Amortization of capitalized software costs were $74,016 and $38,438 for the six months ended June 30, 2025, and 2024, respectively. The balance of capitalized software was $331,084 and $248,627, net of accumulated amortization of $194,732 and $120,716 at June 30, 2025, and December 31, 2024, respectively.

The Company evaluates its capitalized software costs for impairment annually, at year-end. As of December 31, 2024, the Company determinedno impairment of its capitalized software costs was warranted.

Revenue Recognition

The Company recognizes revenue when services are realized.

The Company’s revenues are accounted for under ASC Topic 606, “Revenue From Contracts With Customers” (“ASC 606”). The fees are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration.

In accordance with ASC 606, the Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company recognizes revenue in accordance with that core principle by applying the following:

The Company derives its revenue principally from service fees paid by the client for the use of our platform in connection with our advertising technology platform which incentivizes users to leave reviews of our clients. The Company’s sole performance obligation in the transaction is to connect clients with end-users to facilitate the completion of a successful review on the user’s social media accounts.

Judgment is required in evaluating the presentation of revenue on a gross versus net basis based on whether we control the service provided to the end-user and are the principal in the transaction (gross), or we arrange for other parties to provide the service to the end-user and are the agent in the transaction (net). The Company has concluded that it is the agent in its current transactions as it arranges for users to provide the service to the clients and the users post reviews on social media accounts controlled by the users. The assessment of whether the Company is considered the principal or the agent in a transaction could impact the accounting for these transactions and change the timing and amount of revenue recognized. The percentage fee the Company charges is not variable.

Cost of Goods Sold

The Company classifies its credit card transaction fees as cost of goods sold.

Client Deposits

Thumzup’s clients generally prepay to utilize the Company’s technology platform. All client deposits for services are recorded as a client deposit liability upon receipt. Upon a user leaving a qualified review for the client, as defined in Thumzup’s Mobile Terms and Conditions, the Company transfers the fee payable to the user to a user account balances liability account and realizes the fees payable to the Company as revenue. The Company holds all client deposits and user account balances in cash or cash-equivalents, including money market accounts.

Income Taxes

The Company utilizes the asset and liability approach to measure deferred tax assets and liabilities based on temporary differences existing at each balance sheet date using currently enacted tax rates in accordance with ASC 740. ASC 740 considers the differences between financial statement treatment and tax treatment of certain transactions. 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 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 of a change in tax rate is recognized as income or expense in the period that includes the enactment date of that rate.

The Company hasno tax positions as of June 30, 2025, and December 31, 2024, for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

The Company recognizes any interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. For the three and six months ending June 30, 2025, and 2024, the Company recognizedno interest and penalties.

Share-based Compensation

The Company maintains its 2024 Equity Incentive Plan and 2025 Equity Incentive Plan (collectively, the “Equity Plans”), under which, the Company’s employees, officers, directors, and other eligible participants may be and have been awarded various types of share-based compensation, including options to purchase shares of the Company’s common stock, restricted stock units, and other stock-based awards. Additionally, under the Equity Plans, awards may be and have been granted that are subject to the achievement of one or more performance measures established by the Company’s Board of Directors or a duly authorized committee thereof.

For options and other stock-based awards, the share-based compensation expense is based on the fair value of the awards on the date of grant, as estimated using the Black-Scholes valuation model. For restricted stock units, the share-based compensation expense is based on the fair value of the Company’s common stock on the date of grant. The fair value of liability-classified awards (e.g., the other stock-based awards and cash-settled restricted stock units) is remeasured at each reporting date.

The Company recognizes share-based compensation expense for service-conditioned awards granted under the Equity Plans on a straight-line basis over the requisite service period (generally, the vesting period for service-conditioned awards under the Equity Plans).

See Note 7, Stock Options, to the Financial Statements for further information regarding the Equity Plans, related share-based compensation expense, and assumptions used in determining fair value.

Treasury Stock

On March 7, 2025, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to an aggregate of $1 million of the Company’s common stock. The share repurchase program is in accordance with Rule 10b-18 of the Exchange Act. Subject to applicable rules and regulations, the shares may be purchased from time to time in the open market or in privately negotiated transactions. Such purchases will be at times and in amounts as the Company deems appropriate, based on factors such as market conditions, legal requirements and other business considerations.

The Company accounts for Treasury Stock at cost.

During the six months ended June 30, 2025, the Company repurchased 79,377 shares of common stock for approximately $298,207 under its share repurchase authorization.

As of June 30, 2025, and December 31, 2024, the Company had $298,207 and $0 in Treasury Stock, respectively.

Net Earnings (Loss) Per Common Share

The Company computes earnings (loss) per share under ASC subtopic 260-10, Earnings Per Share. Net loss per common 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, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods, as applicable.

The computation of basic and diluted income (loss) per share, for the three and six months ended June 30, 2025, and 2024, excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period.

Potentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:

Recent Accounting Pronouncements

Crypto Assets

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-08,Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires in-scope crypto assets (including the Company’s bitcoin holdings) to be measured at fair value in the statement of financial position, with gains and losses from changes in the fair value of such crypto assets recognized in net income each reporting period. ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standard. The Company adopted this guidance effective January 1, 2025, on a prospective basis.

The Company expects the adoption of ASU 2023-08 will have a material impact on its balance sheets, statements of operations, statements of cash flows and disclosures. The Company will initially record its bitcoin purchases at cost, upon adopting ASU 2023-08, any subsequent increases or decreases in fair value will be recognized as incurred in the Company’s Statements of Operations, and the fair value of the Company’s bitcoin will be reflected within the Company’s Balance Sheets each reporting period-end. Additionally, the Company will provide quantitative and qualitative disclosures to meet the new requirements under ASU 2023-08, including a roll-forward of its bitcoin holdings during the reporting period and period-end cost basis, fair value, number of units held, and restrictions.

The U.S. enacted the Inflation Reduction Act of 2022 (“IRA”) in August 2022. Among other things, unless an exemption by statute or regulation applies, a provision of the IRA imposes a 15% corporate alternative minimum tax (“CAMT”) on a corporation with respect to an initial tax year and subsequent tax years, if the average annual adjusted financial statement income for any consecutive three-tax-year period preceding the initial tax year exceeds $1 billion. On September 12, 2024, the Department of Treasury and the Internal Revenue Service issued proposed regulations with respect to the application of the CAMT. For purposes of calculating the adjusted financial statement income, the Company will be required to ratably allocate from 2025 through 2028 the increase to the Company’s retained earnings. When determining whether the Company is subject to CAMT and when calculating any related tax liability for an applicable tax year, the proposed regulations provide that, among other adjustments, the Company’s adjusted financial statement income must include this ratable amount in addition to any unrealized gains or losses reported in the applicable tax year. Accordingly, as a result of the enactment of the IRA and the Company’s adoption of ASU 2023-08 on January 1, 2025, unless the IRA is amended or the proposed regulations, when finalized, are revised to provide relief (or other interim relief is granted), the Company could become subject to CAMT in the tax years 2026 and beyond. If the Company becomes subject to the CAMT, it could result in a material tax obligation that the Company would need to satisfy in cash, which could materially affect its financial results, including its earnings and cash flow, and its financial condition.

Income Taxes

In December 2023, the FASB issued Accounting Standards Update No. 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures(“ASU 2023-09”). ASU 2023-09 requires enhanced disclosures surrounding income taxes, particularly related to rate reconciliation and income taxes paid information. In particular, on an annual basis, companies will be required to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Companies will also be required to disclose, on an annual basis, the amount of income taxes paid, disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions above a quantitative threshold. The standard is effective for the Company for annual periods beginning January 1, 2025, on a prospective basis, with retrospective application permitted for all prior periods presented. The Company will adopt ASU 2023-09 for the annual period ending December 31, 2025, and is currently evaluating the impact of this guidance on its disclosures.

Segment Reporting

In November 2023, the FASB issued Accounting Standards Update No. 2023-07,Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires enhanced disclosures surrounding reportable segments, particularly (i) significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included in the reported measure(s) of a segment’s profit and loss and (ii) other segment items that reconcile segment revenue and significant expenses to the reported measure(s) of a segment’s profit and loss, both on an annual and interim basis. Companies are also required to provide all annual disclosures currently required under Topic 280 in interim periods, in addition to disclosing the title and position of the CODM and how the CODM uses the reported measure(s) of segment profit and loss in assessing segment performance and allocating resources. The Company adopted ASU 2023-07 for interim periods beginning January 1, 2025.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued Accounting Standards Update No. 2024-03,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)(“ASU 2024-03”). ASU 2024-03 requires specified information about certain costs and expenses be disclosed in the notes to the financial statements, including the expense caption on the face of the income statement in which they are disclosed, in addition to a qualitative description of remaining amounts not separately disaggregated. Entities will also be required to disclose their definition of “selling expenses” and the total amount in each annual period. The standard is effective for the Company for annual periods beginning January 1, 2027, and for interim periods beginning January 1, 2028, with updates applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its disclosures.

There are other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

NOTE 3 –Digital Assets

The following table summarizes the Company’s digital asset holdings, as of:

The carrying value on the Company’s Balance Sheet at each period-end represents the lowest fair value (based on Level 1 inputs in the fair value hierarchy) of the bitcoins at any time since their acquisition. Therefore, these fair value measurements were made during the period from their acquisition through June 30, 2025, and December 31, 2024, respectively, and not as of June 30, 2025, or December 31, 2024, respectively.

The following table summarizes the Company’s digital asset purchases, digital asset sales, digital asset impairment losses, and gains on sale of digital assets for the periods indicated:

**Note 4 –Credit Facilities **

On May 12, 2025, the Company entered into that certain Master Loan Agreement (the “MLA”) with Coinbase Credit, Inc. (“Coinbase”) and Coinbase, Inc., pursuant to which the Company and Coinbase may enter into transactions (each such transaction, a “Loan”) in which Coinbase will lend to the Company certain Digital Assets or Cash against a transfer of Collateral (each as defined in the MLA). Pursuant to the MLA, the Company and Coinbase shall agree on the terms of the Loan, and Coinbase shall confirm such Loan by sending a confirmation to the Company. Unless otherwise agreed, the Company will transfer to Coinbase the Collateral with a market value at least equal to the margin percentage of the market value of the Loaned Asset (as defined in the MLA). During the six months ended June 30, 2025, the Company received $500,000 in proceeds under the MLA. During the three and six months ended June 30, 2025, there were interest expenses of $5,873. The Company made $2,277 in interest payments during the six months ended June 30, 2025. The borrowings under the Master Loan are collateralized by approximately $1.25 million of bitcoin as of the date of June 30, 2025. As of June 30, 2025, there was principal and accrued interest balances of $500,000 and $3,596, respectively.

Note 5 –Shareholders’ Equity

Preferred Stock

The Company is authorized to issue 25,000,000 shares of preferred stock, par value $0.001 per share.

Series A Preferred Stock

Starting on September 21, 2022, the Company entered into securities purchase agreements with four accredited investors, pursuant to which the Company sold 16,446 Shares of its Series A Preferred Convertible Voting Stock (the “Series A Preferred”) at a per share price of $45.00 per preferred share and received gross proceeds of $740,000.

On September 21, 2022, the Company filed a Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series A Preferred Convertible Voting Stock with the Secretary of State of the State of Nevada designating 1,000,000 shares of its preferred stock as Series A Preferred. On September 26, 2022, the Company submitted an Amended and Restated Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series A Preferred Convertible Voting Stock with the Secretary of State of Nevada (as amended and restated, the “Series A Certificate of Designation”).

Pursuant to the Series A Certificate of Designations, each holder of the Series A Preferred has the right, at any time and from time to time, at the shareholder’s option to convert any or all of such holder’s shares of Series A Preferred into the number of shares of common stock. Each share of Series A Preferred is initially convertible into 15 shares of common stock at a reference rate of $3.00 per share of common stock, subject to adjustments set forth in the Series A Certificate of Designations.

The holders of Series A Preferred are entitled to receive dividends, in cash or in-kind at the Company’s election, in an amount equal to $0.875 per share per quarter. If paid in kind, the dividend shall be in shares of Series A Preferred (the “Dividend Shares”) valued at the $45.00 per share of Series A Preferred (the “Purchase Price”) unless the closing price of the Common Stock on the Trading Day prior to the issuance of the dividend is below the Reference Rate, in which case the Dividend Shares shall be valued at the Purchase Price adjusted pursuant to the formula set forth in Section 3 of the Series A Certificate of Designations.

On March 15, 2025, the Company issued 2,982 Dividend Shares.

On April 25, 2025, the Company issued 12,105 shares of common stock in connection with the conversion of 807 shares of Series A Preferred.

On June 15, 2025, the Company issued 3,046 Dividend Shares to the holders of the Series A Preferred.

As June 30, 2025, and December 31, 2024, the Company had 158,632 and 153,411 shares of Series A Preferred issued and outstanding, respectively.

Series B Preferred Stock

On March 5, 2024, the Company filed a Certificate of Designation (the “Series B Certificate of Designation”) with the Secretary of State of Nevada designating 40,000 shares of preferred stock as Series B Preferred (“Series B Preferred”).

From March 14 to March 28, 2024, the Company entered into securities purchase agreements with accredited investors, pursuant to which the Company issued 3,800 shares of Series B Preferred for cash proceeds of $190,000.

Pursuant to the Series B Certificate of Designations, each holder of the Series B Preferred has the right, at any time and from time to time, at the shareholder’s option to convert any or all of such holder’s shares of Series B Preferred into the number of shares of Common Stock. Each share of Series B Preferred is initially convertible into 10 shares of common stock at a reference rate of $5.00 per share of Common Stock, subject to adjustments to set forth in the Series B Certificate of Designations.

Upon the Company’s up-listing to the Nasdaq Capital Market, the Series B Preferred became convertible at $4.00 per share and the downside price protections were eliminated. On March 29, 2025, certain call protection provisions in the Series B Preferred went into effect, providing that if the common stock trades at a 100% premium to the conversion price of the Series B Preferred for 10 days or more, the Company can force the conversion of the Series B Preferred into shares of common stock. The Company has agreed to pay the costs of Rule 144 legal opinions for the holders of the Series B Preferred.

The holders of Series B Preferred are entitled to receive dividends, in cash or in-kind at the Company’s election, in an amount equal to $1.25 per share per quarter. If paid in kind, the number of shares of common stock issued for the dividend shall be equal to the quotient of the dividend payable divided by the volume weighted average price on the dividend date.

On February 25, 2025, a holder converted 400 shares of Series B Preferred into 5,000 shares of common stock.

On March 15, 2025, the Company issued 5,293 shares of common stock as a dividend for the Series B Preferred.

On April 24, 2025, a holder converted 1,000 shares of Series B Preferred into 12,500 shares of common stock.

On May 29, 2025, the automatic conversion provision of the Series B Preferred was triggered, which resulted in the automatic conversion of 13,700 shares of Series B Preferred into 171,250 shares of common stock.

On June 15, 2025, the Company issued 176 shares of common stock as a dividend for the Series B Preferred.

As of June 30, 2025, and December 31, 2024, the Company had 1,000 and 16,100 shares of Series B Preferred issued and outstanding, respectively.

Subsequent to June 30, 2025, the 1,000 shares of Series B Preferred were converted to 12,500 shares of common stock. On July 18, 2025, the Company filed a Withdrawal of Designation (the “Withdrawal of Designation”) with the Secretary of State of the State of Nevada and terminated the designation of the Series B Preferred. At the time of the filing of the Withdrawal of Designation, there were no shares of Series B Preferred remained issued and outstanding. The Withdrawal of Designation became effective upon filing and eliminated from the Articles of Incorporation all matters as set forth in the Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of Series B Preferred Convertible Voting Stock.

Series C Preferred Stock

On June 17, 2025, the Company filed a Certificate of Designation (the “Series C Certificate of Designation”) with the Secretary of State of Nevada designating 200,000 shares of preferred stock as Series C Preferred Stock (“Series C Preferred”).

On June 30, 2025, the Company filed an amendment to the Series C Certificate of Designation which provides that except as otherwise required by the Nevada Revised Statutes, the holders of Series C shall have no voting rights with respect to such shares.

The Series C is functionally the same as our Common Stock except for the inclusion of either, at the election of the holder, a 4.99% or 9.99% beneficial ownership equity blocker and a liquidation preference in the event of a Liquidation Event(as defined in the Certificate of Designation) so that before any amount shall be paid to the holders of any of shares of junior stock, the holders of the Series C shall receive an amount per Series C equal to the amount per share such holder would receive if such holder converted such Series C into Common Stock immediately prior to the date of such payment.

*General.*The Certificate of Designation for the Series C authorizes 200,000 shares of Series C, par value of $0.001. Each share of Series C has a stated value of $60.00. Each share of Series C is convertible into 10 shares of our Common Stock, subject to certain adjustments. The initial Series C Conversion price is $6.00 per share of Common Stock.

Exchange Listing. There is no trading market available for the Series C. We do not intend to list or quote the Series C on any securities exchange or nationally recognized trading system.

*Ranking.*The Series C ranks junior to the Company’s Series A Convertible Preferred Stock and Series B Convertible Preferred Stock, but ranks senior to the Company’s Common Stock and any preferred stock issued after the Series C. In the event of the merger or consolidation of the Company with or into another entity, the Series C shall maintain its relative rights, powers, designations, privileges and preferences provided for in the Certificate of Designations. In the event of a liquidation of the Company, the holders of Series C will share in the distribution of our net assets on an as-converted basis.

*Voting.*Except as otherwise required by the Nevada Revised Statutes, the holders of Series C shall have no voting rights with respect to such shares.

As June 30, 2025, and December 31, 2024, the Company had 0 and 0 shares of Series C Preferred issued and outstanding, respectively.

Common Stock

The Company is authorized to issue 250,000,000 shares of common stock, par value $0.001 per share.

During the six months ended June 30, 2025, the Company issued 70,861 shares of common stock with a fair market value of $680,765 for services rendered and to be rendered to the Company.

During the six months ended June 30, 2025, the Company issued 188,750 shares of common stock upon the conversion of 15,100 shares of Series B Preferred.

During the six months ended June 31, 2025, the Company issued 5,469 shares of common stock with a value of $20,900 as a dividend for the Series B Preferred.

During the six months ended June 30, 2025, the Company issued 12,105 shares of common stock upon the conversion of 807 shares of Series A Preferred.

As of June 30, 2025, and December 31, 2024, the Company had 9,677,720 and 9,400,535 shares of common stock issued and outstanding, respectively.

Treasury Stock

On March 7, 2025, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to an aggregate of $1 million of the Company’s common stock. The share repurchase program is in accordance with Rule 10b-18 of the Exchange Act. Subject to applicable rules and regulations, the shares may be purchased from time to time in the open market or in privately negotiated transactions. Such purchases will be at times and in amounts as the Company deems appropriate, based on factors such as market conditions, legal requirements and other business considerations.

During the six months ended June 30, 2025, the Company repurchased 79,377 shares of common stock for approximately $298,207 under its share repurchase program.

As of June 30, 2025, and December 31, 2024, the Company had $298,207 and $0 in Treasury Stock, respectively.

Note 6 –Contingencies

Russia-Ukraine conflict

The Russian-Ukraine conflict is a global concern. The Company does not have any direct exposure to Russia or Ukraine through its operations, employee base, investments or sanctions. However, if the conflict escalates, it is unknown whether its direct or indirect effects may impact our business.

Note 7 –Stock Options

The Company’s stockholders approved our 2024 Equity Incentive Plan in May 2024, amending it in July 2024 to increase the number of shares issuable thereunder to 2,000,000, and approved our 2025 Equity Incentive Plan in April 2025 with an additional 2,000,000 shares issuable thereunder (the “Plans”). As of June 30, 2025, the Company had 2,700,597 shares of common stock available for future issuance under the Plans.

The Plans provide for the grant of incentive stock options to our employees and our subsidiaries’ employees, and for the grant of stock options, stock bonus awards, restricted stock awards, performance stock awards and other forms of stock compensation to our employees, including officers, consultants and directors. The Plans also provides that the grant of performance stock awards may be paid out in cash as determined by the committee administering the Plans.

Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option pricing model with a volatility figure derived from historical data. The Company accounts for the expected life of options based on the contractual life of the options.

On January 15, 2025, the Company issued options to purchase 40,000 shares of common stock with a $5.00 exercise price with a fair value of $132,651. The Company estimated the fair value of the options using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 149.21%, (3) risk-free interest rate of 4.59%, and (4) expected life of 10 years.

There were no options exercised during the three and six months ended June 30, 2025, and 2024, respectively.

A summary of the stock option activity for the six months ended June 30, 2025, and 2024, is as follows:

A summary of the stock options outstanding at June 30, 2025, is as follows:

The aggregate intrinsic value of outstanding stock options was $2,385,380, based on options with an exercise price less than the Company’s stock price of $7.01 as of June 30, 2025, which would have been received by the option holders had those option holders exercised their options as of that date.

The fair value of all options that vested during the three months ended June 30, 2025, and 2024 was $208,702 and $0, respectively. The fair value of all options that vested during the six months ended June 30, 2025, and 2024 was $450,566 and $0, respectively. Unrecognized compensation expense was $2,688,995 as of June 30, 2025.

Note 8 –Warrants

A summary of the warrant activity for the six months ended June 30, 2025, is as follows:

A summary of the warrants outstanding at June 30, 2025, is as follows:

The aggregate intrinsic value of outstanding stock warrants was $54,150 based on warrants with an exercise price less than the Company’s stock price of $7.01 as of June 30, 2025, which would have been received by the warrant holders had those holders exercised the warrants as of that date.

Note 9-Segment Information

The Company has one reportable operating segment, the “Software Business,” which is engaged in the design, development, marketing, and sales of the Company’s software platform. The Company’s chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer. The CODM uses the number of advertisers and users to assess the growth of the business on a monthly basis. In doing so, he focuses on “controllable costs” across main functions of the Software Business and will allocate personnel and budget accordingly to maximize growth and revenues.

Note 10 –Related Party Transactions

On March 15, 2025, Westside Strategic Partners, LLC (“Westside”), controlled by our director, Robert Haag, received a dividend of 627 shares of Series A Preferred, per the terms of the Company’s Series A Certificate of Designation.

On March 15, 2025, Westside received a dividend of 337 shares of common stock pursuant to the Series B Certificate of Designation.

On March 15, 2025, Isaac Dietrich received a dividend of 15 shares of Series A Preferred, per the terms of the Series A Certificate of Designation.

On March 15, 2025, Joanna Massey received a dividend of 31 shares of Series A Preferred, per the terms of the Series A Certificate of Designation.

On March 15, 2025, Joanna Massey received a dividend of 270 shares of common stock pursuant to the Series B Certificate of Designation.

On May 29, 2025, Joanna Massey received 10,000 common shares for the automatic conversion of 800 Series B Preferred shares, per the terms of the Series B Certificate of Designation.

On May 29, 2025, Westside received 12,500 common shares for the automatic conversion of 1,000 Series B Preferred shares, per the terms of the Series B Certificate of Designation.

On June 15, 2025, Isaac Dietrich received a dividend of 16 shares of Series A Preferred, per the terms of the Series A Certificate of Designation.

On June 15, 2025, Joanna Massey received a dividend of 31 shares of Series A Preferred, per the terms of the Series A Certificate of Designation.

On June 15, 2025, Westside received a dividend of 639 shares of Series A Preferred, per the terms of the Series A Certificate of Designation.

Note 11 –Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through the date which the financial statements were issued.

Series C Offering

On June 30, 2025, as part of a registered direct offering (the “Series C Offering”), the Company agreed to sell 108,336 shares of Company’s Series C Preferred, at a price of $60.00 per share for gross proceeds of $6,499,980. Each share of Series C converts into 10 shares of common stock. The Series C Offering closed on July 7, 2025. The net proceeds to the Company from the Series C Offering were approximately $6.04 million after deducting placement agent fees and offering expenses payable by the Company. The Series C contains a beneficial ownership limitation, pursuant to which a holder may not convert Series C into common stock to the extent that, after such conversion, the holder (together with its affiliates) would beneficially own more than either 4.99% or 9.99% of the Company’s outstanding common stock, as initially elected by the holder.

Robert Steele Private Transactions

On July 8, 2025, simultaneously with the closing of the Series C Offering, Mr. Robert Steele, the Company’s Chief Executive Officer, agreed to sell 2,500,000 shares of common stock (the “Private Transaction Shares”) to certain accredited investors that participated in the Series C Offering. The purchase price of the Private Transaction Shares was $0.50 per share and Mr. Steele received $1,250,000 in net proceeds from the sale of the Private Transaction Shares. The Company has agreed to register the resale of the Private Transaction Shares with the Securities and Exchange Commission within 30 days of the closing of the offering of the Private Transaction Shares.

Option Assignment

On July 8, 2025, simultaneously with the closing of the Series C Offering, pursuant to an option assignment agreement dated June 19, 2025 (the “Option Agreement”), Hampton Growth Resources, LLC (the “Assignor”) sold an option to purchase 750,000 shares of the Company’s common stock at an exercise price of $0.30 per share (the “Option”) to certain accredited investors who are anticipated to be purchasers in the Series C Offering (the “Assignees”). The sale price of the Option was $150,000. Mr. Andrew Haag, the brother of Mr. Robert Haag, a member of the Company’s Board of Directors, is a stockholder of the Company and the Managing Member of the Assignor. The Assignor had previously purchased the Option for $125,000 from Mr. Daniel Lupinelli, a principal stockholder of the Company beneficially owing 14.47% of the outstanding Common Stock of the Company as of June 16, 2025. Within 30 days of the closing of the Option sale, the Company has agreed to register the resale of the underlying shares of common stock issuable upon the full exercise of such Option within 30 days.

From July 8 to August 8, 2025, the Company issued 828,337 shares of common stock for the conversion of 82,834 shares of Series C Preferred.

From July 24 to August 12, 2025, the Company issued 41,050 shares of common stock for the cash exercise of 41,050 warrants for proceeds of $256,563.

On July 17, 2025, the Company issued 12,500 shares of common stock for the conversion of 1,000 shares of Series B Preferred.

From July 17 to August 8, 2025, the Company issued 11,500 shares of common stock from the Company’s 2024 Employee Incentive Plan, net rescissions of 40,000 shares.

From July 15 to August 13, 2025, the Company issued 8,906 shares of common stock for the cashless exercise of 15,000 options.

On July 18, 2025, the Company filed a Withdrawal of Designation with the Secretary of State of the State of Nevada and terminated the designation of its Series B Preferred.

On August 4, 2025, the Company issued an aggregate of 650,000 shares of common stock awards for past services rendered to the following officer and directors: Robert Haag (500,000 shares), Isaac Dietrich (50,000 shares), Joanna Massey (50,000 shares), and Paul Dickman (50,000 shares).

On August 4, 2025, the Company issued 49,332 common for the conversion of 3,289 shares of Series A Preferred.

On July 16, 2025, the Board approved an amendment (the “Amendment”) to its Amended and Restated Bylaws (the “Bylaws”). Pursuant to the Amendment, Section 2.5 of Article II of the Bylaws was amended to provide that except as limited by the Company’s Articles of Incorporation (as amended, the “Articles of Incorporation”) or by law, a director may be removed by the stockholders only at an annual meeting of stockholders or at a special meeting of stockholders called for such purpose and otherwise in conformity with the Bylaws, and only by the affirmative vote of the holders of two-thirds of the voting power of all the shares entitled to vote at such meeting.

On August 12, 2025, the Company entered into a Financial Advisory Agreement (the “American Ventures Advisory Agreement”) with American Ventures LLC, Series XVIII DOGE TREAS (the “Advisor”) pursuant to which the Advisor agreed to provide the Company with certain financial advisory services, including advising the Company on crypto treasury strategies, on a non-exclusive basis. Pursuant to the American Ventures Advisory Agreement, the Company agreed to issue the Advisor 750,000 shares (the “American Ventures Advisory Shares”) of common stock, which such shares of common stock are subject to Stockholder Approval (as such term is defined in the American Ventures Advisory Agreement). The American Ventures Advisory Agreement may be terminated by either party upon five days prior written notice to the other party.

On August 11, 2025, the Company entered into a placement agency agreement (the “August 2025 Dominari Agreement”) with Dominari Securities LLC (the “Dominari”) pursuant to which the Company agreed to issue and sell directly to certain investors (the “Investors”), in a best efforts offering (the “August 2025 Offering”), an aggregate of 5,000,000 shares of our common stock. The Company issued 5,000,000 shares of common stock for the August 2025 Offering on August 12, 2025.

The closing of the August 2025 Offering occurred on August 12, 2025. The gross proceeds to the Company were approximately $50 million, before deducting the placement agent’s fees and expenses and estimated offering expenses payable by us. Pursuant to the August 2025 Dominari Agreement, the Company paid Dominari a cash fee equal to 7% of the aggregate purchase price paid by the Investors in the August 2025 Offering and a cash fee equal to 1% of the aggregate purchase price paid by the Investors in the August 2025 Offering for non-accountable expensesm and reimbursed Dominari for all reasonable and out-of-pocket expenses incurred in connection with its engagement, including reasonable fees and expenses of its legal counsel in the amount of $150,000. Additionally, the Company issued warrants (the “August 2025 Dominari Warrants”) to Dominari to purchase up to 350,000 shares of common at an exercise price of $10.00 per share. The August 2025 Dominari Warrant will be exercisable 180 days after the issuance date and has a term of exercise equal to five years from the date of issuance.