Eva Live Inc: Form 10-K/A for the period ended Dec 31, 2024

DESCRIPTION OF BUSINESS

Background

Eva Live Inc. (the “Company”) was incorporated under the laws of the State of Nevada on August 27, 2002, as International Pit Boss Gaming, Inc. On October 1, 2002, the Company merged with Pro Roads Systems, Inc. (a Florida corporation), a public shell company traded on the pink sheets. Pro Roads Systems, Inc. had no operations before the merger. The purpose of the merger was to change the Company’s domicile from Florida to Nevada. From its inception to 2006, the Company designed and developed software for the gaming industry. The Company changed its name on February 14, 2006, to Logo Industries Corporation and, on November 18, 2008, to Malwin Ventures Inc. On February 11, 2014, the Company announced negotiations with Impact Future Media LLC, and their President/Founder, Francois Garcia, acquired 100% of Impact Future Media LLC and its media and entertainment assets. The Company announced the closing of this transaction on March 25, 2014. From March 2014 to September 28, 2021, the Company was involved in the entertainment, publishing, and interactive industries.

The Company’s year-end is December 31.

Current Operations

We execute our business through the Eva Platform based on Artificial Intelligence, or AI, to match advertising campaigns to specific ad spots one at a time. Our system creates conversion mapping tables that allow us to increase conversion rates by analyzing those trends with optimized historical conversion rates and further capitalizing on and improving those rates. We leverage “big data,” an accumulation of data that is too large and complex for traditional database management tools to process. Since more companies are attempting to leverage big data to make strategic business decisions, we have built automated tools that analyze the data and feed the relevant information into our decision logic. We have designed our solution to optimize brand campaigns to create brand awareness and direct response campaigns with a fixed conversion point.

Since September 28, 2021, the Company has operated at the junction of digital marketing and media monetization. We enable market awareness of companies and brands by providing best-in-class digital marketing and monetization services on the Internet. Our typical customers are advertising agencies (classified under SIC7319) and businesses in various industries seeking to market their products and services using our platform, including media companies, financial institutions, and other retail entities. Most of our customers are from North America, mainly the US and Canada. For the fiscal year ending December 31, 2024, we had six (6) customers, primarily from North America, compared to seven (7) customers for the fiscal year ending December 31, 2023. The top three customers represent 85% and 93% of revenue for the fiscal year ending December 31, 2024, and 2023, respectively. Our company’s financial health is highly dependent on these top customers. If any of them were to significantly reduce their spending or cease doing business with your company, it could have a major impact on your revenue and overall financial health. These clients utilize our platform to advertise with media outlets and participate in media buying services, including acquiring online traffic through the Eva Platform. We also deal with businesses (as described under NAICS 541810) that utilize our in-house digital marketing capabilities, including advice, creative services, account management, production of advertising material, media planning, and buying (i.e., placing advertising).

In November 2020, the Company completed the development of the Eva XML Platform, where the Platform buys traffic from various sources and sells that traffic to landing pages that display advertising via XML feeds. A price discrepancy exists between buying traffic on display and native platforms for specific keywords in an ad campaign and the XML search feeds. The Eval XML Platform manages the entire ad buying/selling process by integrating into Google, Microsoft, Taboola, Revcontent, Gemini, and Facebook. The Eva XML Platform creates thousands of ads with the push of a button. The Eva XML Platform manages the spending depending on the performance of keywords in the ad campaign to maximize the arbitrage revenue.

The Company earns revenues from advertisers by signing purchase or insertion orders based on Standard Terms and Conditions for Internet Advertising for Media Buys One Year or Less, Version 3.0, as defined in 4’s/IAB. We intend to offer media companies and advertising agencies a standard for conducting business that is acceptable to both parties based on such terms and conditions. When incorporated into an insertion order, this protocol represents the Company and its customers’ shared understanding of doing business. The Company may also sign additional documents to cover sponsorships and other arrangements involving content association, integration, and special production. The Company considers an insertion order with its customers a binding contract with the customer or other similar documentation reflecting the terms and conditions under which it provides products or services. As a result, the Company considers the insertion order persuasive evidence of an arrangement. Each insertion is specific to the customer, defines each party’s fee schedule, duties, and responsibilities, and is governed by 4’s/IAB Version 3.0 for renewal and termination terms, confidentiality agreement, dispute resolution, and other clauses necessary for such contract.

We sign the Interactive Advertising Bureau (IAB) and the American Association of Advertising Agencies (4As) standard terms and conditions for internet advertising for media buys one year or less. We execute an Insertion Order (IO) with our customers, a formal, contractual document used in advertising. It outlines the specifics of an advertising campaign a client has agreed to run with an advertising sales agency or a publisher. It serves as a purchase order but for media space or time slots, and its primary function is to specify the obligations of all parties involved. We comply with the IO, including all Ad placement restrictions, and provide Ads to the Site specified on the IO when an Internet user visits such a Site. We sent the initial invoice upon completion of the first month’s delivery or within 30 days of completion of the IO, whichever is earlier. Our customers will make payment 30 days from receipt of the invoice or as otherwise stated in a payment schedule set forth on the IO. We hold customers liable for payments solely to the extent proceeds have cleared from Advertiser to Agency for Ads placed following the IO. We provide reports at least as often as weekly, either electronically or in writing, unless otherwise specified on the IO. Our customers may cancel the entire IO, or any portion thereof, as follows:

• With 14 days prior written notice to us, without penalty, for any guaranteed Deliverable, including, but not limited to, CPM (cost per thousand impressions) Deliverables.
• With seven (7) days prior written notice to us, without penalty, for any non-guaranteed Deliverable, including, but not limited to, CPC (cost per clicks) Deliverables, CPL (cost per leads) Deliverables, or CPA (cost per acquisition) Deliverables, as well as some non-guaranteed CPM Deliverables.
• With 30 days prior written notice to us, without penalty, for any flat fee-based or fixed-placement Deliverables.
• Either party may terminate an IO at any time if the other party is in material breach of its obligations hereunder, which breach is not cured within ten days after receipt of written notice thereof from the non-breaching party.

Our contract includes other standard terms and conditions, including but not limited to force majeure, indemnification, limitation of liability, non-disclosure, data usage and ownership, privacy and laws, third-party ad serving and tracking (applicable if third-party ad server is used), and other legally binding clauses.

We execute our business through the Eva Platform based on Artificial Intelligence, or AI, to match advertising campaigns to specific ad spots one at a time. Our system creates conversion mapping tables that allow us to increase conversion rates by analyzing those trends with optimized historical conversion rates and further capitalizing on and improving those rates. We leverage “big data,” an accumulation of data that is too large and complex for traditional database management tools to process. Since more companies are attempting to leverage big data to make strategic business decisions, we have built automated tools that analyze the data and feed the relevant information into our decision logic. We have designed our solution to optimize brand campaigns to create awareness and direct response campaigns with a fixed conversion point.

The Company also owns the Eva XML Platform, which buys traffic from various sources and sells that traffic to landing pages that display advertising via XML feeds. A price discrepancy exists between buying traffic on display and native platforms for specific keywords in an ad campaign and the XML search feeds. The Eval XML Platform manages the entire ad buying/selling process by integrating into Google, Microsoft, Taboola, Revcontent, Gemini, and Facebook. It allows thousands of ads to be created with the push of a button. The Eva XML Platform manages the spending depending on the performance of keywords in the ad campaign to maximize the arbitrage revenue.

Russia – Ukraine Conflict

The geopolitical situation in Eastern Europe intensified on February 24, 2022, with Russia’s invasion of Ukraine. The war between the two countries continues to evolve as military activity continues. The United States and certain European countries have imposed additional sanctions on Russia and specific individuals. The Company has no operation exposure in the region affected by war. As of the date of this report, there has been no disruption in our operations.

Reverse Capitalization

On September 28, 2021 (the ‘Acquisition Date’), the Company merged into EvaMedia Corp. (‘EvaMedia). Upon completion of the reverse merger, the Company acquired all issued and outstanding shares of EvaMedia’s capital stock. As a result, the Company issued 27,548,044 (110,192,177 pre-split) shares of the Company’s common stock to shareholders of EvaMedia, and immediately following the Acquisition, 27,792,381 (111,169,525 pre-split) shares of common stock were issued and outstanding. As a result, EvaMedia’s shareholders control 99.12% of the issued and outstanding shares of the Company on a fully diluted basis. Following the Acquisition, David Boulette of EvaMedia became the company’s CEO, director, and controlling shareholder. He appointed two additional board members from EvaMedia, Phil Aspin and Darly Walser. Terry Fields remained the only board member of the company.

We determine EvaMedia an accounting acquirer based on the following facts: (i) after the reverse merger, former shareholders of EvaMedia held a majority of the voting interest of the combined company; (ii) former Board of Directors of EvaMedia possess majority control of the Board of Directors of the combined company; (iii) members of the management of EvaMedia are responsible for the management of the combined company. As such, we have treated the financial statements of EvaMedia as the historical financial statements of the combined company, and (iv) EvaMedia’s relative size, measured in assets and revenues, is significantly larger than that of the Company.

We have identified the Company as the legal acquirer, as it is the entity that issued securities. Comparatively, we have identified EvaMedia as the legal acquiree, the entity whose equity interests are acquired.

After the SEC’s order on BF Borgers CPA in May 2024, the Company reevaluated the significant transaction as reverse capitalization instead of a reverse acquisition. On September 28, 2021 (the ‘Acquisition Date’), the Company entered a reverse capitalization transaction (Acquisition) with EvaMedia Corp. (EvaMedia). As per SEC 7050 – Reverse Mergers, A reverse recapitalization is a transaction in which a shell company (as defined in Exchange Act Rule 12b-2) issues its equity interests to effect the acquisition of an operating company. Reverse recapitalization is accounted for as a capital transaction equivalent to the operating company (i.e., the accounting acquirer, EvaMedia) issuing its equity for the net assets of the shell company (the Company), followed by recapitalization. A reverse recapitalization is not accounted for as a business combination because the shell company is not a business. Since reverse recapitalization is not accounted for as a business combination, no goodwill would be recorded because of the reverse recapitalization transaction. Therefore, we have eliminated goodwill of $2,010,606 as of December 31, 2024. Rather, any excess of the fair value of the shares issued by the operating company over the value of the net monetary assets of the shell company is recognized as a reduction to equity. In a reverse recapitalization, the legal acquirer/issuer is a shell company, the Company.

AdFlare Acquisition

On July 13, 2022, the Company entered into a Share Exchange Agreement (“AdFlare SEA”) with AdFlare Limited, a company duly formed under the laws of Ireland (Reg. Number: 714192) (“AdFlare”), and the shareholders of AdFlare, Phil Aspin, an individual and Stephen Adds, an individual (collectively, the “Shareholders”) whereby the Company acquired One Hundred (100%) percent of the issued and outstanding shares of AdFlare in exchange for 125,000 shares of the Company’s restricted common stock valued at $1,500,000 using the discounted cash flow methodology. Mr. Phil Aspin, co-founder of AdFlare, has served as a member of the Company’s Board of Directors since September 28, 2021. The Company carried out the Goodwill Impairment Analysis as of December 31, 2022, where the carrying value of Goodwill as of December 31, 2022, is $1,500,000. The fair market value of the implied Goodwill is approximately $0, which is less than the carrying value, and thus, the impairment as of December 31, 2022, is $1,500,000.

AdFlare, a wholly owned subsidiary of the Company, is a leader in the specialized field of “Header Bidding,” with a deep contextual understanding of an array of ad technologies spanning search, display, and video across mobile and desktop, providing solutions to help all publishers drive revenue. Header bidding, also known as advance or pre-bidding, is a technology wherein publishers simultaneously offer their inventory to multiple ad exchanges, advertisers, and agencies. The idea is that by letting various buyers bid on the same inventory at the same time, in real-time, there’s more competition driving up the auction pressure and a chance to serve each impression at a higher Cost Per Mille rate (“CPM rate”), meaning capturing additional revenue. AdFlare has a track record of delivering over 1 billion ad impressions a month and increasing Google AdX over Google AdSense CPM by over 30%, with an average fill rate of 99.9% in the US market.

Our Revenue Model

We can generate revenues as a principal-based or an agency-based service provider. At present, we generate revenues on a principal-based model.

Under the principal-based agency, the Company takes the principal position in the contract. The Company uses its Eva Platform to buy media (advertising inventory) directly from the media sellers. The Company repackages the advertising inventory for sale to clients. The Company also performs other advertising and branding work for the client, such as developing a landing page, website, widget design, banner design, and so on. The Company receives the Ad Spend or a marketing budget from the client to perform such services. In some instances, these services are performed non-disclosed, meaning the client does not know what the Company paid for the media space, time, or development. The Company recognizes the total Ad Spend of the client as its revenue.

Under the agency-based model, the Company acts as an agent of the client and negotiates deals with media sellers. The client is responsible for paying the media sellers directly or for paying the Company, which then pays the media sellers on behalf of the client. Under the agency-based model, the Company earns revenue by charging clients a platform fee based on a percentage of a client’s total spend (Ad Spend) on the purchase of advertising from the Advertising Inventory Supplier (seller). We keep a portion of that advertising spend as a fee and remit the remainder to the seller. The Company has no leverage to control the cost of the seller’s inventory before the client’s purchase. The platform fee we intend to charge clients is a percentage of their purchases through our platform, similar to a commission, and the platform fee is not contingent on the results of an advertising campaign.

We recognize revenue upon fulfilling our contractual obligations with a complete transaction, subject to satisfying all other revenue recognition criteria.

Business Strategy

Our team members have successfully run advertising campaigns for products and brands, ranging from consumer products to clothing items to automobiles. We provide a differentiated solution that is simple, powerful, scalable, and extensible across geographies, industry verticals, and display, mobile, social, and video digital advertising channels. We expect our Eva Platform to be fully automated, scalable, and cost-effective as it will allow us to run several campaigns simultaneously. As the number of campaigns grows, we scale up our technology and hardware rather than increasing our workforce. Consequently, we can grow operations cost-effectively as we acquire new clients if our platform’s demand and acceptance increase. We intend to expand our core business, increase market share, and improve profitability principally by deploying the following growth strategies:

• Complete the integration of AI in the fiscal year ending December 31, 2023;
• We intend to continue innovating in AI and machine learning technology to improve the Eva Platform and augment its features and functionalities.
• We view big data as one of our critical competitive advantages. We will continue to invest resources in growing our data offerings, both from third-party providers and our proprietary data;
• Ramp up paid customers through our digital and traditional marketing strategies;
• Continue to enhance and promote our core proprietary Eva Platform and Eva XML Platform;
• Future growth will depend on the timely development and successful distribution of our AdTech solutions by signing larger deals in the United States and globally.
• Increase our software development capabilities to develop disruptive and next-generation machine learning and artificial intelligence-driven technologies to grow and retain our customer base;
• Improving the share of current clients’ advertising budgets and ad spends as many of our present and potential clients spend a larger percentage of their advertising budgets on programmatic channels and
• Grow customer base through accretive acquisitions, opportunistic investments, and beneficial partnerships.

7

Industry and Competitive Analysis

Our industry is extremely competitive and fragmented. The Company directly competes with other demand-side platforms (DSP) providers. DSP is a technology platform that enables advertisers and agencies to automate the purchasing of digital advertising inventory across multiple channels. By leveraging real-time bidding (RTB) and data-driven targeting, DSPs allow advertisers to reach specific audiences efficiently, optimizing ad campaigns for performance and cost-effectiveness.

The digital marketing ecosystem is divided into buyers (advertisers), sellers (publishers), and marketplaces. The landscape has several segments, such as display and programmatic, mobile, video, search engine, content advertisement, and social ads.

We believe that participants on the buy-side or sell-side should be advocates for their buyers or sellers, while those in the market business should act as referees or have market-driven incentives to protect or enhance the integrity of the marketplace. We believe there are inherent conflicts of interest when market participants serve buyers and sellers.

The DSP market has experienced significant growth in recent years and is projected to continue its upward trajectory:

• Fortune Business Insights projects the global DSP market to grow from $25.54 billion in 2023 to $114.51 billion by 2030, at a CAGR of 23.9% during the forecast period. ​
• Contrive Datum Insights estimates the market size to reach $92.12 billion by 2029, exhibiting a CAGR of 23.7% from 2022 to 2029. ​
• Allied Market Research forecasts the DSP system market to grow from $21 billion in 2022 to $228.4 billion by 2032, with a CAGR of 27.3%. ​

These projections underscore the robust expansion and increasing adoption of DSPs in the digital advertising landscape.

Key Drivers of Growth

Several factors contribute to the rapid growth of the DSP market:

Rise in Programmatic Advertising: The shift towards automated, data-driven ad buying has propelled the adoption of DSPs, enabling advertisers to manage and optimize campaigns in real time.

Advancements in AI and Machine Learning: Integration of AI technologies enhance targeting capabilities, bid optimization, and overall campaign performance, making DSPs more effective and attractive to advertisers.

Expansion of Digital Channels: The proliferation of digital platforms, including mobile apps, social media, and connected TV, has increased the demand for centralized platforms like DSPs to manage cross-channel advertising efforts.

Industry Trends and Developments

The DSP landscape is continually evolving, with notable trends shaping its future:

Consolidation and Mergers: The industry has seen significant mergers and acquisitions, such as the merger of Omnicom Group and Interpublic Group, forming the largest advertising company focused on leveraging data, technology, and AI.

Expansion of Services: Companies like Taboola are moving beyond traditional native advertising by launching new ad platforms, such as Realize, to capture additional market opportunities and compete with established DSPs.

Regulatory Scrutiny: Major players like Google are facing antitrust lawsuits over alleged monopolistic practices in the digital advertising market, highlighting the increasing regulatory focus on the industry.

Leading DSP Providers

Several companies have established themselves as leaders in the DSP market:

The Trade Desk: Recognized as the largest independent DSP, offering a self-service platform for advertisers to manage digital campaigns across various channels.

Amazon Advertising: Provides a DSP that allows advertisers to programmatically buy display, video, and audio ads both on and off Amazon.

Google Display & Video 360: Part of Google’s Marketing Platform, offering integrated tools for campaign management across display, video, TV, and more.

Adobe Advertising Cloud: Offers a DSP that integrates with other Adobe products, providing data-driven insights and cross-channel campaign management.

These platforms offer diverse features and integrations, catering to the varying needs of advertisers in the digital ecosystem.

In conclusion, the Demand-Side Platform market is poised for substantial growth, driven by technological advancements, the rise of programmatic advertising, and the expanding digital landscape. Advertisers are increasingly leveraging DSPs to enhance targeting precision, optimize ad spending, and achieve better campaign outcomes in an ever-evolving digital environment.

BOARD OF DIRECTORS

As of the date of this filing, the Company had four (4) directors.

EMPLOYEES

As of the date of this prospectus, we had three employees, all of whom were our executive officers. In the future, we may rely on independent contractors to assist us in marketing and selling our products.

The Company has entered into a formalized employment agreement with Mr. Boulette, the Company’s CEO, President, and CFO (“CEO”). The CEO’s annual salary is $360,000 per annum. The Company accrues compensation payable to the CEO in Accounts Payable and accrued expenses.

Phil Aspin, Director and CEO of AdFlare, and Daryl Walser, Director and Chief Marketing Officer, are not currently bound by any written agreements for any specific employment term or covenants not to compete. However, we may enter employment agreements with these people with appropriate non-competition provisions. Mr. Boulette, Mr. Aspin, and Mr. Walser devote 100%, 75%, and 75% of their time to the Company’s business.

CORPORATE INFORMATION

The Company’s principal office is The Plaza, 1800 Century Park East, Suite 600, Los Angeles, CA 90067. Our telephone number is (310) 229-5981.

As of the date of this prospectus, our common stock is traded on the OTC Bulletin Board under the trading symbol GOAI.

GOING CONCERN

Although our financial statements have been prepared on a going concern basis, we must raise additional capital to continue as a going concern. See Risk Factors relating to “Going Concern.”

DESCRIPTION OF COMPANY’S SECURITIES TO BE REGISTERED

Effective November 01, 2023, the Company incorporated by reference the description of its common stock, par value $0.0001 per share, to be registered hereunder contained under the heading “Description of Securities” in the Company’s Registration Statement on Form S-1/A (File No. 333-273162), as initially filed with the Securities and Exchange Commission (the “Commission”) on July 07, 2023, as subsequently amended (the “Registration Statement”). Since the Registration Statement filing, the Company has made all required filings pursuant to Section 15(d) and has continued to file all reports voluntarily.

ROUNDING ERROR

Due to rounding, numbers presented in the financial statements for the period ending December 31, 2024, and 2023, and throughout the report, may not add up precisely to the totals provided, and percentages may not reflect the absolute figures.

Our Company is a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this Item.

The Company recognizes that cybersecurity risks present a growing and evolving challenge. We are committed to protecting our systems, networks, and data from unauthorized access, disruption, or damage that could adversely affect our operations, customers, or stakeholders.

Cybersecurity Risk Management and Strategy

We have implemented a multi-layered cybersecurity program designed to identify, assess, and manage material risks related to information technology systems and data. Our approach includes:

• Continuous monitoring of systems for vulnerabilities, unauthorized access, and threats;
• Use of third-party security assessments and tools, including firewalls, endpoint detection and response (EDR), encryption, and secure cloud infrastructure.
• Regular employee training on data security, phishing awareness, and incident response protocols;
• A cybersecurity incident response plan that includes identification, containment, remediation, and notification procedures.

We align our cybersecurity controls with industry standards and frameworks, including principles derived from the NIST Cybersecurity Framework.

Impact of Cybersecurity Risks on Business

To date, the Company has not experienced a cybersecurity incident that has materially affected our operations, reputation, or financial performance. However, like other public companies, we remain exposed to cyber threats that may arise from internal or external sources. We continue to invest in technologies and partnerships to mitigate such risks and safeguard our digital assets.

Governance and Oversight

Board Oversight:

The Board of Directors, through the Audit Committee, has primary oversight of responsibility for cybersecurity risks. Cybersecurity matters are reviewed at least annually, or more frequently if needed, in connection with strategic planning and risk management discussions.

Management Oversight:

Our Compliance Officer leads day-to-day cybersecurity risk management in conjunction with third-party cybersecurity consultants. Our Compliance Officer oversees our cybersecurity protocols and is responsible for ensuring the effective execution of incident response and recovery processes. Reports regarding cybersecurity risk assessments, incidents (if any), and mitigation efforts are provided to the Board at regular intervals.

As of September 28, 2021, the Company’s new corporate address was 1800 Century Park East, Suite 600, Los Angeles, CA 90067 (“California Lease”). The Company has signed the California Lease on a month-to-month basis, entitled the Company to use the office and conference space on a need-only basis. The lease payment is $229 per month, included in General and Administrative expenses. For the fiscal year ended December 31, 2024, and 2023, the office’s rent payment was $2,748 and $2,748, included in the General and administrative expenses.

The Company discloses a loss contingency if there is at least a reasonable possibility of material loss. The Company records its best estimate of loss related to pending legal proceedings when the loss is considered probable, and the amount can be reasonably estimated. When no best estimate is available, we reasonably estimate a range of losses; the Company records the minimum estimate as a liability. As additional information becomes available, the Company assesses the potential liability of pending legal proceedings, revises its estimates, and updates its disclosures accordingly. We record the Company’s legal costs associated with defending itself against expenses incurred. The Company is currently not involved in any litigation.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer (together, the “Certifying Officers”), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective at the end of the period covered by this Report.

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officers or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

MANAGEMENT’S REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a- 15(f) under the Securities Exchange Act, as amended. Management, with the participation of the Chief Executive Officer, evaluated the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013 Framework). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external reporting purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company,

(2) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of consolidated financial statements in accordance with GAAP and that our receipts and expenditures are being made only in accordance with the authorizations of our management and directors and

(3) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our consolidated financial statements. Also, projections of any evaluation of effectiveness in future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting on December 31, 2024. Based on our assessments, management determined that we did not maintain effective internal control over financial reporting as of December 31, 2024, due to the material weakness in our internal controls due to inadequate segregation of duties within account processes due to limited personnel and insufficient written policies and procedures for accounting, IT, and financial reporting and record keeping.

Management intends to implement remediation steps to improve our internal controls due to inadequate segregation of duties within account processes due to limited personnel and insufficient written policies and procedures for accounting, IT, and financial reporting and record keeping. We plan to further improve this process by enhancing the size and composition of our board upon the closing of the business, identifying third-party professionals with whom to consult regarding complex accounting applications, and considering additional staff with the requisite experience and training to supplement existing accounting professionals and implemented additional layers of reviews in the internal controls and financial reporting process.

This Report does not include an attestation report of our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during the fiscal year ended December 31, 2024, that has materially affected or is reasonably likely to affect, our internal control over financial reporting materially.