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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>As filed with the Securities and Exchange Commission
January 23, 2025</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><b>Registration Statement No. 333-</b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>UNITED STATES<br/>
SECURITIES AND EXCHANGE COMMISSION<br/>
WASHINGTON, D.C. 20549</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>FORM <ix:nonNumeric contextRef="c0" name="dei:DocumentType" id="ixv-16841">S-1</ix:nonNumeric><br/>
REGISTRATION STATEMENT<br/>
UNDER<br/>
THE SECURITIES ACT OF 1933</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 14pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><ix:nonNumeric contextRef="c0" name="dei:EntityRegistrantName" id="ixv-39"><span style="font-family: Times New Roman, Times, Serif; font-size: 14pt"><b>GAXOS.AI
INC.</b></span></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Exact name of registrant as specified in its charter)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 8pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="width: 32%; border-bottom: black 1.5pt solid; text-align: center"><ix:nonNumeric contextRef="c0" format="ixt-sec:stateprovnameen" name="dei:EntityIncorporationStateCountryCode" id="ixv-51"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Delaware</b></span></ix:nonNumeric></td> <td style="white-space: nowrap; width: 2%; text-align: center">&#160;</td> <td style="width: 32%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>7372</b></span></td> <td style="white-space: nowrap; width: 2%; text-align: center">&#160;</td> <td style="width: 32%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>87-3288897</b></span></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(State or other jurisdiction of<br/>
incorporation or organization)</span></td> <td style="white-space: nowrap; text-align: center">&#160;</td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Primary Standard Industrial<br/>
Classification Code Number)</span></td> <td style="white-space: nowrap; text-align: center">&#160;</td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(I.R.S. Employer<br/>
Identification Number)</span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>101 Eisenhower Pkwy</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Roseland, New Jersey 07068</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(973) 275-7428<br/>
</b>(Address and telephone number of registrant&#8217;s principal executive offices)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Vadim Mats</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Gaxos.ai Inc.<br/>
Chief Executive Officer</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>101 Eisenhower Parkway, Suite 300</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Roseland, NJ 07068</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(973) 275-7428<br/>
</b>(Name, address, including zip code, and telephone number, including area code, of agent for service)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><i>Copies to:</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 8pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 100%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Richard A. Friedman, Esq.</b></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Emily A. Mastoloni, Esq.</b></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Sheppard, Mullin, Richter &amp; Hampton LLP</b></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>30 Rockefeller Plaza</b></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>New York, NY 10112</b></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Tel: (212) 653-8700</b></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Fax: (212) 653-8701 </b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Approximate date of commencement of proposed
sale to the public:</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 8pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>As soon as practicable after the effective date
of this registration statement becomes effective.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If any of the securities being
registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check
the following box: &#9746;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. &#9744;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. &#9744;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If this Form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. &#9744;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging
growth company. See the definitions of &#8220;large accelerated filer,&#8221; &#8220;accelerated filer,&#8221; &#8220;smaller reporting
company&#8221; and &#8220;emerging growth company&#8221; in Rule 12b-2 of the Exchange Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="width: 31%; padding-left: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large accelerated filer &#9744;</span></td> <td style="white-space: nowrap; width: 1%; text-align: justify">&#160;</td> <td style="width: 20%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerated filer &#9744;</span></td> <td style="white-space: nowrap; width: 1%; text-align: justify">&#160;</td> <td style="width: 20%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonNumeric contextRef="c0" format="ixt-sec:entityfilercategoryen" name="dei:EntityFilerCategory" id="ixv-16842">Non-accelerated filer</ix:nonNumeric> &#9746;</span></td> <td style="white-space: nowrap; width: 1%; text-align: justify">&#160;</td> <td style="width: 26%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Smaller reporting company <ix:nonNumeric contextRef="c0" format="ixt-sec:boolballotbox" name="dei:EntitySmallBusiness" id="ixv-16843">&#9746;</ix:nonNumeric></span></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">&#160;</td> <td style="white-space: nowrap; text-align: justify">&#160;</td> <td style="text-align: justify">&#160;</td> <td style="white-space: nowrap; text-align: justify">&#160;</td> <td style="text-align: justify">&#160;</td> <td style="white-space: nowrap; text-align: justify">&#160;</td> <td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Emerging growth company <ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:EntityEmergingGrowthCompany" id="ixv-16844">&#9746;</ix:nonNumeric></span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided to Section 7(a)(2)(B) of the Securities Act. <ix:nonNumeric contextRef="c0" format="ixt-sec:boolballotbox" name="dei:EntityExTransitionPeriod" id="ixv-16845">&#9744;</ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine</b>.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="font-size: 1pt; border-top: Black 1pt solid; border-bottom: Black 2pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 8pt">&#160;</span></p><div>




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 1; Options: NewSection --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="margin: 0pt">&#160;</p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="color: Red"><b>The information in
this preliminary prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities
and it is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 30%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Red"><b>PRELIMINARY PROSPECTUS</b></span></td>
    <td style="width: 40%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Red"><b>SUBJECT
    TO COMPLETION</b></span></td>
    <td style="width: 30%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Red"><b>DATED
    JANUARY 23, 2025</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Gaxos.ai Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Up to 3,005,642 Shares of Common Stock</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to this prospectus,
the selling stockholders identified herein (the &#8220;Selling Stockholders&#8221;) are offering on a resale basis an aggregate of 3,005,642
shares of common stock, par value $0.0001 per share (the &#8220;Common Stock&#8221;) of Gaxos.ai Inc. (the &#8220;Company,&#8221; &#8220;we,&#8221;
&#8220;us&#8221; or &#8220;our&#8221;) consisting of (i) 1,449,277 shares of Common Stock that are issuable upon exercise of warrants
(the &#8220;December 18 Warrants&#8221;) issued pursuant to a securities purchase agreement entered into by and between us and certain
Selling Stockholders dated December 18, 2024 (the &#8220;December 18 Purchase Agreement&#8221;), (ii) up to 108,696 shares of Common Stock
issuable upon exercise of warrants (the &#8220;December 18 Placement Agent Warrants) issued pursuant to the engagement agreement dated
as of September 20 2024 (the &#8220;Engagement Agreement&#8221;), by and between the Company and H.C. Wainwright &amp; Co., LLC (the &#8220;Placement
Agent&#8221;), (iii) 1,346,669 shares of Common Stock issuable upon exercise of warrants (the &#8220;December 26 Warrants&#8221;, together
with the December 18 Warrants, the &#8220;Common Warrants&#8221;) issued pursuant to an securities purchase agreement by and between us
and the Selling Stockholders dated December 26, 2024 (the &#8220;December 26 Purchase Agreement&#8221;, together with the December 18
Purchase Agreement, the &#8220;Purchase Agreements&#8221;) and (iv) up to 101,000 shares of Common Stock issuable upon exercise of warrants
(the &#8220;December 26 Placement Agent Warrants&#8221;, together with the December 18 Placement Agent Warrants, the &#8220;Placement
Agent Warrants&#8221;) issued to the Placement Agent pursuant to the Engagement Agreements. The Common Warrants and Placement Agent Warrants
are collectively referred to herein as the &#8220;Warrants&#8221;.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will not receive any of
the proceeds from the sale by the Selling Stockholders of the Common Stock. Upon any exercise of the Warrants by payment of cash, however,
we will receive the exercise price of the Warrants, which, if exercised in cash with respect to the 3,005,642 shares of Common Stock offered
hereby, would result in gross proceeds to us of approximately $9.7 million. However, we cannot predict when and in what amounts or if
the Warrants will be exercised by payments of cash and it is possible that the Warrants may expire and never be exercised, in which case
we would not receive any cash proceeds.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Selling Stockholders may
sell or otherwise dispose of the Common Stock covered by this prospectus in a number of different ways and at varying prices. We provide
more information about how the Selling Stockholders may sell or otherwise dispose of the Common Stock covered by this prospectus in the
section entitled &#8220;Plan of Distribution&#8221; on page 62. Discounts, concessions, commissions and similar selling expenses attributable
to the sale of Common Stock covered by this prospectus will be borne by the Selling Stockholders. We will pay all expenses (other than
discounts, concessions, commissions and similar selling expenses) relating to the registration of the Common Stock with the Securities
and Exchange Commission (the &#8220;SEC&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Our Common Stock is listed
on The Nasdaq Capital Market under the symbol &#8220;GXAI&#8221;. On January 17, 2025, the closing price as reported on The Nasdaq Capital
Market was $2.00 per share. There is no established public trading market for the Warrants, and we do not expect a market to develop.
Without an active trading market, the liquidity of the Warrants will be limited. In addition, we do not intend to list the Warrants on
The Nasdaq Capital Market, any other national securities exchange or any other trading system.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are an &#8220;emerging
growth company&#8221; under the federal securities laws and, as such, are subject to reduced public company reporting requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Investing in our Common
Stock involves a high degree of risk. See &#8220;Risk Factors&#8221; beginning on page 4 of this prospectus.</b>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The date of this prospectus is&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
, 2025</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>TABLE OF CONTENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="width: 92%">&#160;</td>
    <td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_001"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">About this Prospectus</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">ii</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center"/></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_002"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cautionary Statement Regarding Forward-Looking Statements</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">iii</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_003"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prospectus Summary</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">1</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_004"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Offering</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">3</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_005"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risk Factors</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">4</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_006"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Use of Proceeds</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">33</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_007"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividend Policy</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">34</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#b_001">Management&#8217;s Discussions and Analysis of Financial Condition and Results of Operation</a></td>
    <td>&#160;</td>
    <td style="text-align: center">35</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_008"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Determination of Offering Price</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">45</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_009"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Business</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">46</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_010"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">50</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_011"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Executive and Director Compensation</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">53</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_012"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain Relationships and Related Person Transactions</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">55</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_013"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Security Ownership of Beneficial Owners and Management</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">56</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_014"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Description of Capital Stock</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">57</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_015"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Selling Stockholders</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">60</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_016"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Plan of Distribution</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">62</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_017"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Legal Matters</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">63</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_018"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Experts</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">63</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_019"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where You Can Find More Information</span></a></td>
    <td>&#160;</td>
    <td style="text-align: center">63</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><a href="#a_020"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Index to Financial Statements</span></a></td>
    <td/>
    <td style="text-align: center">F-1</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="a_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>ABOUT THIS PROSPECTUS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This prospectus relates to the resale by the Selling Stockholders identified
in this prospectus under the caption &#8220;Selling Stockholders,&#8221; from time to time, of up to an aggregate of 3,005,642 shares
of Common Stock. We are not selling any shares of Common Stock under this prospectus, and we will not receive any proceeds from the sale
of shares of Common Stock offered hereby by the Selling Stockholders, although we may receive cash from the exercise of the Warrants.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You should rely only on the
information provided in this prospectus, including any information incorporated by reference. We have not authorized anyone to provide
you with any other information and we take no responsibility for, and can provide no assurances as to the reliability of, any other information
that others may give you. The information contained in this prospectus speaks only as of the date set forth on the cover page and may
not reflect subsequent changes in our business, financial condition, results of operations and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are not, and the Selling
Stockholders are not, making offers to sell these securities in any jurisdiction in which an offer or solicitation is not authorized or
permitted or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to
make such an offer or solicitation. You should read this prospectus, including any information incorporated by reference, in its entirety
before making an investment decision.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><div><a id="a_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This prospectus contains forward-looking
statements, which reflect the views of our management with respect to future events and financial performance. These forward-looking statements
are subject to a number of uncertainties and other factors that could cause actual results to differ materially from such statements.
Forward-looking statements are identified by words such as &#8220;anticipates,&#8221; &#8220;believes,&#8221; &#8220;estimates,&#8221;
&#8220;expects,&#8221; &#8220;intends,&#8221; &#8220;plans,&#8221; &#8220;projects,&#8221; &#8220;targets,&#8221; and similar expressions.
Such forward-looking statements may be contained in the sections &#8220;Risk Factors,&#8221; and &#8220;Business,&#8221; among other places
in this prospectus. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on the information
available to management at this time and which speak only as of this date. We undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise. For a discussion of some of the factors that may cause
actual results to differ materially from those suggested by the forward-looking statements, please read carefully the information under
&#8220;Risk Factors.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The identification in this
document of factors that may affect future performance and the accuracy of forward-looking statements is meant to be illustrative and
by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. You may
rely only on the information contained in this prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have not authorized anyone
to provide information different from that contained in this prospectus. Neither the delivery of this prospectus nor the sale of our Common
Stock means that information contained in this prospectus is correct after the date of this prospectus. This prospectus is not an offer
to sell or solicitation of an offer to buy these securities in any circumstances under which the offer or solicitation is unlawful.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>
</div><div style="padding-right: 6pt; padding-left: 6pt; border: Black 1.5pt solid; width: 98%">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p>

<a id="a_003"></a><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>PROSPECTUS SUMMARY</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>This summary highlights selected information
about us, this offering and information appearing elsewhere in this prospectus supplement, in the accompanying prospectus and in the documents
incorporated by reference herein and therein. This summary is not complete and does not contain all the information you should consider
before investing in our securities pursuant to this prospectus supplement and the accompanying prospectus. Before making an investment
decision, to fully understand this offering and its consequences to you, you should carefully read this entire prospectus supplement and
the accompanying prospectus, including &#8220;Risk Factors,&#8221; the financial statements, and related notes, and the other information
incorporated&#160;by reference herein and therein.</i></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 10pt"><i>&#160;</i></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Our Business</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 10pt"><b>&#160;</b></span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are a technology-based
company that is developing applications aimed at redefining the way we utilize artificial intelligence (&#8220;AI&#8221;) to optimize
the user experience. We are committed to addressing the need for AI solutions in both health and entertainment.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Gaxos Labs</i></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our flagship product, Gaxos
Labs, launched in September 2024 and is a transformative generative AI service that empowers game developers and publishers. Key features
of the product include:</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">AI-Powered
Creativity: Reduces creative asset development time from hours to minutes, transforming artistic visions into reality with ease. Rapid
prototyping abilities allows for experimentation with different designs quickly and easily.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Monetization:
Publishers have the ability to offer users AI-generated assets for player customization.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Seamless
Integration: With plug-and-play functionality for Unity and Godot, integration is effortless into existing workflows.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in"><span style="font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">API:
Connect to any game development engine and build for any platform including mobile and PC.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dynamic
Content Generation: User-Generated-Ai-Content (&#8220;UGAiC&#8221;) feature offers new experiences with each playthrough by letting gamers
use AI in real time, fostering a dynamic gaming environment.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><span style="font-size: 10pt">&#160;</span></p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Customized
Solutions: From personalized AI models including images and sound capabilities to expert consulting services, our offering includes customizable
solutions to meet the unique needs of any developer.</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Gaxos Gaming</i></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Gaxos Gaming (the &#8220;Platform&#8221;
or &#8220;Gaxos Gaming&#8221;) was created with a vision to develop, design, acquire, and manage conventional games and to combine these
games with unconventional game mechanisms, such as the ability for gamers and developers to utilize AI to create and design in-game features,
as well as to mint unique in-game features, such as skins, characters, weapons, gear, levels, and virtual lands, in the form of non-fungible
tokens, or &#8220;NFTs,&#8221; that will allow users to have unique experiences and more control over in-game assets.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p></div><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><div style="border: Black 1.5pt solid; padding-right: 6pt; padding-left: 6pt; width: 98%"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2023, we launched our own proprietary games that are simple and fun to play, and that offer gamers the ability to utilize AI to personalize
their gaming experience as well as to mint their own affordable NFTs, with unique and exclusive features, that can be utilized across
our network of games. As of December 2024, we have launched four games, Space Striker AI, Brawl Bots, BattleFleet AI, and Jigsaw Puzzle
AI. &#160;Space Striker AI allows players to engage in a captivating storyline and exciting retro shooting space action in the players
AI-generated spaceship. Players can fuse crystals to upgrade their ship parts to craft, clash and conquer the galaxy all within a dynamic
free-to-play economy. Brawl Bots immerses users in high-octane battles in real time against other players, in solo play or teams. Each
player gets to control their own exclusive Bot character, ensuring a personalized gaming experience. BattleFleet AI is a take on the
classic Battleship game with AI elements that allow gamers to design their ships. Jigsaw Puzzle AI lets gamers solve preloaded jigsaw
puzzles as well as design and solve new jigsaw puzzles using AI.</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Gaxos Health</i></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In July 2024, we launched
Gaxos Health, which is dedicated to revolutionizing personal health and wellness by developing a suite of innovative AI-powered health
optimization solutions. Gaxos Health will integrate AI-driven insights with individual biometric data and health goals to create web and
application based personalized wellness strategies for users. We believe that this cutting-edge approach will redefine preventative medicine,
offering unparalleled personalization in health and wellness. Gaxos Health solutions will analyze a wide range of health data to provide
tailored wellness plans and address the growing demand for personalized health solutions. We believe that this technology is not just
a step but a leap forward in empowering individuals to take control of their health and longevity with AI&#8217;s precision and intelligence.
Currently, Gaxos Health offers customized health plans and coaching based on collected DNA, blood biomarkers, and individual goals and
traits.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>RNK Health</i></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 23, 2024, the
Company formed a wholly-owned subsidiary, RNK Health LLC (&#8220;RNK Health&#8221;), to form a partnership and potential relationship
with Nekwellness to engage in the proposed business of marketing certain health-related products. On October 10, 2024, the Company, RNK
Health and Nekwellness entered into an operating agreement with respect to the regulation and management of the affairs of RNK Health
and, as of such date, the Company owns a 70% membership interest in RNK Health and Nekwellness owns a 30% membership interest in RNK Health.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Corporate Information</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 10pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our principal executive offices
are located at 101 Eisenhower Parkway, Suite 300, Roseland, NJ 07068 and our telephone number is (973) 275-7428. Our website address
is&#160;<i>https://gaxos.ai</i>. None of the information on or accessible through our website is incorporated by reference in, or constitutes
a part of, this prospectus supplement or in any other filings with, or in any information furnished or submitted to, the SEC.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p>
</div><div>
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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>
</div><div style="padding-right: 6pt; padding-left: 6pt; border: Black 1.5pt solid; width: 98%">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b>&#160;</b></p>

<a id="a_004"></a><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>THE OFFERING</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="text-indent: -0.125in; padding-left: 0.125in; width: 29%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common Stock to be offered by the Selling Stockholder</b></span></td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 70%; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">Up to </span><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3,005,642 <span style="background-color: white">shares of Common Stock</span></span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: white">
    <td style="text-indent: -0.125in; padding-left: 0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common stock outstanding prior to this offering</b></span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">6,923,453 shares of Common Stock. </span></td></tr>
  <tr style="vertical-align: top; background-color: white">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: white">
    <td style="text-indent: -0.125in; padding-left: 0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common stock to be outstanding after this offering</b></span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">9,929,095 shares of Common Stock, assuming the exercise of all of the Warrants </span></td></tr>
  <tr style="vertical-align: top; background-color: white">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: white">
    <td style="text-indent: -0.125in; padding-left: 0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Use of proceeds</b></span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">We
    will not receive any proceeds from the sale of the shares of Common Stock by the Selling Stockholders, except for the warrant
    exercise price paid for the Common Stock offered hereby and issuable upon the exercise of the Warrants.&#160;See &#8220;Use of
    Proceeds&#8221; on page 33 of this prospectus.</span></td></tr>
  <tr style="vertical-align: top; background-color: white">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: white">
    <td style="text-indent: -0.125in; padding-left: 0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risk Factors</b></span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">See &#8220;Risk
    Factors&#8221; beginning on page 4 of this prospectus, as well as other information included in this prospectus, for a discussion of
    factors you should read and consider carefully before investing in our securities.</span></td></tr>
  <tr style="vertical-align: top; background-color: white">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: white">
    <td style="text-indent: -0.125in; padding-left: 0.125in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Nasdaq Capital Markets symbol</b></span></td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our common stock is listed on The Nasdaq Capital Markets under the symbol &#8220;GXAI&#8221;. There is no established trading market for the Warrants and we do not expect a trading market to develop. We do not intend to list the Common Warrants on any securities exchange or other trading market. Without a trading market, the liquidity of the Warrants will be extremely limited.</span></td></tr>
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The number of shares of our
Common Stock to be outstanding after this offering as shown above is based on 6,923,453 shares outstanding as of January 17, 2025 and
excludes as of that date:</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,503,617
shares of common stock issuable upon exercise of warrants with a weighted average exercise price of $3.19;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">64,084
shares of common stock issuable upon exercise of options with a weighted average exercise price of $31.35;</span></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">239,553 shares of common stock reserved for future issuance under our
2022 Equity Incentive Plan.</p></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
</div><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><div><a id="a_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>RISK FACTORS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>An investment in our securities
involves a high degree of risk. This prospectus contains a discussion of the risks applicable to an investment in our securities. Prior
to deciding about investing in our securities, you should carefully consider the specific factors discussed within this prospectus. The
risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us
or that we currently deem immaterial may also affect our operations. The occurrence of any of these known or unknown risks might cause
you to lose all or part of your investment in the offered securities.</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span style="text-decoration:underline">Risks Related to Our Business and Industry</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We have a limited operating history and,
therefore, cannot accurately project our revenues and operating expenses.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: justify">Because we have a limited history, it is difficult
to evaluate our proposed business and future prospects, including our ability to plan for and model future growth. For example, we intend
to launch our Platform. There is no guarantee that the Platform will be launched or that expenditures will result in profit or growth
of our business. Our limited operating experience, combined with the rapidly evolving nature of the NFT market in which we intend to operate,
substantial uncertainty concerning how this market may develop, and other economic factors beyond our control reduce our ability to accurately
forecast quarterly or annual revenue. Failure to manage our current and future growth effectively could have an adverse effect on our
business, operating results, and financial condition. Our business should be considered in light of the risks, expenses, and difficulties
that we have encountered to date and will continue to encounter.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We have not developed a strong customer
base, and we have not generated sustainable revenue since inception. We cannot assure you that we ever will. We will incur significant
losses in launching products and we may not realize sufficient subscriptions or profits in order to sustain our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We have not yet developed a strong customer base
and we have not generated sustainable revenue since inception. We are subject to the substantial risk of failure facing businesses seeking
to develop and commercialize new products and technologies. Maintaining and improving our Platform will require significant capital. We
will also incur substantial accounting, legal, and other overhead costs as a public company. If our offerings to customers are unsuccessful,
result in insufficient revenue, or result in us not being able to sustain revenue, we will be forced to reduce expenses, which may result
in an inability to gain new customers.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may encounter numerous difficulties frequently
encountered by companies in the early stage of operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We have a limited operating history upon which
any investor may evaluate our current business and future prospects. Any potential investor must consider the risks and difficulties frequently
encountered by early-stage&#160;companies. Historically, there has been a high failure rate among early-stage&#160;companies. Our future
performance will depend upon a number of factors, including our ability to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">implement
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</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">aggressively
counter and respond to actions by our competitors;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">pursue
new users and maintain relationship with current users;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">maintain
adequate control of our expenses;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">attract,
retain and motivate qualified personnel;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">react
to user preferences and demands;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
ability to successfully implement, launch, and achieve market acceptance of our NFT products and to anticipate and manage the risks associated
therewith; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">regulatory
compliance.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We cannot assure investors that we will successfully
address any of these factors, and our failure to do so could have a material adverse effect on our business, financial condition, results
of operations, and future prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may be unable to manage our growth or
implement our expansion strategy.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We may not be able to develop our product or implement
the other features of our business strategy at the rate or to the extent presently planned. Our projected growth will place a significant
strain on our administrative, operational, and financial resources. If we are unable to successfully manage our future growth, establish
and continue to upgrade our operating and financial control systems, recruit and hire necessary personnel, or effectively manage unexpected
expansion difficulties, our financial condition and results of operations could be materially and adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We will need additional debt or equity financing
in the future.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">While we expect to be able to generate operating
revenues from the sale of our video digital products, our operating revenues will not be sufficient to finance our operations including
our marketing efforts. Accordingly, we will need to obtain additional financing to operate and fully implement our business plan and aggressive
growth strategy. There can be no assurance that any additional financing will be available to us or, if available, that such financing
will be on terms acceptable to us. If we obtain additional financing through the issuance of equity or convertible debt securities, it
may be significantly dilutive to our shareholders and such additional equity or convertible debt securities may have rights, preferences,
or privileges senior to those of our Common Stock. In addition, our ability to issue debt securities or to service any debt may also be
limited by our inability to generate consistent cash flow. If additional financing is not available on acceptable terms, we may not be
able to fund our on-going&#160;operations or any future expansion of our business, develop or enhance our products or services, or respond
effectively to competitive pressures. The inability to raise additional capital in the future may force us to curtail future business
opportunities or cease operations entirely.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we are unable to obtain additional funding
when needed, our business operations will be harmed, and if we do obtain additional financing, our&#160;then-existing&#160;shareholders
may suffer substantial dilution.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">As we take steps in the commercialization and
marketing of our technologies, or respond to potential opportunities and/or adverse events, our working capital needs may change. We anticipate
that if our cash and cash equivalents are insufficient to satisfy our liquidity requirements, we will require additional funding to sustain
our ongoing operations and to continue our research and development activities. We do not have any contracts or commitments for additional
funding, and there can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all, if needed.
The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to conduct business operations.
If we are unable to obtain additional financing to finance a revised growth plan, we will likely be required to curtail such plans or
cease our business operations. Any additional equity financing may involve substantial dilution to our then existing shareholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We are dependent on the services of certain
key management personnel, employees, and advisors. If we are unable to retain or motivate such individuals or hire qualified personnel,
we may not be able to grow effectively.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We depend on the services of a number of key management
personnel, employees, and advisors and our future performance will largely depend on the talents and efforts of such individuals. We do
not currently maintain &#8220;key person&#8221; life insurance on any of our employees. The loss of one or more of such key individuals,
or failure to find a suitable successor, could hamper our efforts to successfully operate our business and achieve our business objectives.
Our future success will also depend on our ability to identify, hire, develop, motivate, and retain highly skilled personnel. Competition
in our industry for qualified employees is intense, and our compensation arrangements may not always be successful in attracting new employees
and/or retaining and motivating our existing employees. Future acquisitions by us may also cause uncertainty among our current employees
and employees of the acquired entity, which could lead to the departure of key individuals. Such departures could have an adverse impact
on the anticipated benefits of an acquisition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may continue to incur substantial losses
and negative operating cash flows and may not achieve or maintain positive cash flow or profitability in the future.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We have incurred significant losses and negative
operating cash flow from inception and may continue to incur significant losses and negative operating cash flow into the future. In order
to reach our business growth objectives, we expect to incur significant sales, marketing, software development and other operating costs,
including costs associated with the expansion of our personnel. As a result, we will need to generate and grow our revenues significantly
to achieve positive cash flow and profitability. There can be no assurance that we will be successful in generating and increasing our
revenues or that we can achieve or maintain positive cash flow or profitability. The uncertainties regarding the commencement of adequate
commercial revenues raise substantial doubt about our ability to continue as a going concern.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our Platform is currently under development
and no assurance can be given that our Platform will be accepted by others or generate sufficient interest</i></b>.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our proposed Platform is currently under development.
It is our intent that the Platform will (i)&#160;support our owned- and-operated&#160;games; (ii)&#160;provide third-party&#160;game creators
and publishers with the ability to integrate our NFT infrastructure; and (iii)&#160;create a unified environment where all the games and
users on the Platform can participate in promotions, opportunities, and various experiences. Failure to develop a robust gaming platform
will adversely affect our business objectives.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our business will be intensely competitive.
We may not deliver successful and engaging games, or players and consumers may prefer our competitors&#8217; products over our own.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We operate in a competitive environment that is
characterized by price fluctuation and technological change. We will compete with major international and domestic companies. Some of
our current and future potential competitors may have greater market recognition and customer bases, longer operating histories, and substantially
greater financial, technical, marketing, distribution, purchasing, manufacturing, personnel, and other resources than we do. In addition,
competitors may be developing similar technologies with a cost similar to, or lower than, our projected costs. As a result, they may be
able to respond more quickly to changing customer demands or to devote greater resources to the development, promotion and sales of blockchain-based&#160;games
and NFT products than we can.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The Platform is based on new and unproven
technologies and is subject to the risks of failure inherent in the development of new products and services.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Because the Platform is based on certain new technologies,
it is subject to risks of failure that are particular to new technologies, including the possibility that:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
Platform may not gain market acceptance;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">proprietary
rights of third parties may preclude us from marketing a new product or service;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
Platform may not receive the exposure required to obtain new users; or</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">third
parties may market superior products or services.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Digital ecosystems, including offerings
of digital assets, is evolving, and uncertain, and new regulations or policies may materially adversely affect our development.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The technologies supporting these digital assets
like blockchain and NFTs are new and rapidly evolving. To the extent these technologies become more widely utilized in the industry, our
revenues could be negatively impacted. If we fail to explore these new technologies and apply them innovatively to keep our products and
services competitive, we may not experience significant growth of our business. Regulation of digital assets like cryptocurrencies, blockchain
technologies, NFTs, and cryptocurrency exchanges is currently underdeveloped and likely to rapidly evolve as government agencies take
greater interest in them. Regulation also varies significantly among international, federal, state and local jurisdictions and is subject
to significant uncertainty. Various legislative and executive bodies in the United&#160;States and in other countries may in the future
adopt laws, regulations, or guidance, or take other actions, which may severely impact the permissibility of tokens generally and the
technology behind them or the means of transacting in or transferring them. The regulatory regime governing blockchain technologies, NFTs,
cryptocurrencies, digital assets, utility tokens, security tokens and offerings of digital assets is uncertain, and new regulations or
policies may materially adversely affect our development and our value if we materially embrace digital assets and cryptocurrencies in
the future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Marketplace demand of the NFTs is unpredictable.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The appetite in the marketplace is unpredictable
as it is related to NFTs and may change over time. The trading of NFTs in the open market and use in gameplay are based purely on marketplace
demand.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may not be able to adequately evaluate
the risks associated with our planned NFT platform.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The Platform may not be successful and may expose
us to legal, regulatory, and other risks. Given the nascent and evolving nature of cryptocurrencies, NFTs, and blockchain technology,
we may be unable to accurately anticipate or adequately address such risks or the potential impact of such risks. The occurrence of any
such risks could materially and adversely affect our business, financial condition, results of operations, reputation, and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">As the market for NFTs is relatively nascent,
it is difficult to predict how the legal and regulatory framework around NFTs will develop and how such developments will impact our business
and the Platform. Further, market acceptance of NFTs is uncertain as buyers may be unfamiliar or uncomfortable with digital assets generally,
how to transact in digital assets, or how to assess the value of NFTs. The launch of the Platform also subjects us to risks similar to
those associated with any new platform offering, including, but not limited to, our ability to accurately anticipate market demand and
acceptance, our ability to successfully launch our new offering, creator and buyer acceptance, technical issues with the operation of
the Platform, and legal and regulatory risks as discussed above. We believe these risks may be heightened with respect to the Platform,
as NFTs are still considered a relatively novel concept. If we fail to accurately anticipate or manage the risks associated with the Platform
or with our facilitation of crypto asset transactions, or if we directly or indirectly become subject to disputes, liability, or other
legal or regulatory issues in connection with the Platform or crypto asset transactions, the Platform may not be successful and our business,
financial condition, results of operations, reputation, and prospects could be materially harmed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our industry is subject to rapid technological
change, and if we do not adapt to, and appropriately allocate our resources among, emerging technologies and business models, our business
may be negatively impacted.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Technology changes rapidly in the interactive
entertainment industry. We must continually anticipate and adapt to emerging technologies, such as cloud-based&#160;game streaming, and
business models, such as free-to-play&#160;and subscription-based&#160;access to a portfolio of interactive content, to stay competitive.
Forecasting the financial impact of these changing technologies and business models is inherently uncertain and volatile. Supporting a
new technology or business model may require partnering with a new platform, business, or technology partner, which may be on terms that
are less favorable to us than those for traditional technologies or business models. If we invest in the development of interactive entertainment
products for distribution channels that incorporate a new technology or business model that does not achieve significant commercial success,
whether because of competition or otherwise, we may not recover the often-substantial&#160;up-front&#160;costs of developing and marketing
those products, or recover the opportunity cost of diverting management and financial resources away from other products or opportunities.
Further, our competitors may adapt to an emerging technology or business model more quickly or effectively than we do, creating products
that are technologically superior to ours, more appealing to consumers, or both.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">If, on the other hand, we elect not to pursue
the development of products incorporating a new technology, or otherwise elect not to pursue new business models that achieve significant
commercial success, it may have adverse consequences. It may take significant time and expenditures to shift product development resources
to that technology or business model, and it may be more difficult to compete against existing products incorporating that technology
or using that business model.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Negative perceptions about our business,
products, and services and the communities within our products and services may damage our business, and we may incur costs to address
concerns.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Expectations regarding the quality, performance
and integrity of our products and services are high. Negative responses about our products and services may not be foreseeable. We also
may not effectively manage these responses because of reasons within or outside of our control. For example, we have included in certain
games the ability for players to purchase digital items, including in some instances virtual &#8220;packs&#8221;, &#8220;boxes&#8221;
or &#8220;crates&#8221; that contain variable digital items. The inclusion of variable digital items in certain games has the possibility
of creating a negative perception of gameplay fairness or other negative perceptions, our reputation and brand could be harmed and revenue
could be negatively impacted.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In addition, we aim to offer our players safe,
inclusive and fulfilling online communities. We may not be able to maintain healthy, long-term&#160;online communities within our games
and services as a result of the use of those communities as forums for harassment or bullying, our inability to successfully discourage
overuse of our games and services or overspending within our games and services, or the successful implementation of cheating programs.
Although we expend resources, and expect to continue to expend resources, to maintain healthy online communities, our efforts may not
be successful due to scale, limitations of existing technologies or other factors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In the event that there is negative sentiment
about gameplay fairness, our online communities, our business practices, business models or game content, it can lead to investigations
or increased scrutiny from governmental bodies and consumer groups, as well as litigation, which, regardless of their outcome, may be
costly, damaging to our reputation and harm our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may become involved in legal proceedings
that may result in adverse outcomes.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We may become subject to claims, suits, government
investigations, and other proceedings involving competition and antitrust, intellectual property, privacy, tax, labor and employment,
commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, and
other matters. Such claims, suits, government investigations, and proceedings are inherently uncertain and their results cannot be predicted
with certainty. Regardless of the outcome, such legal proceedings can have an adverse impact on us because of legal costs, diversion of
management resources, and other factors. Determining reserves for our pending litigation is a complex, fact-intensive&#160;process that
requires significant judgment. It is possible that a resolution of one or more such proceedings could result in substantial fines and
penalties that could adversely affect our business, financial position, results of operations, or cash flows in a particular period. These
proceedings could also result in criminal sanctions, consent decrees, or orders preventing us from offering certain features, functionalities,
products, or services, requiring a change in our business practices, or requiring development of non-infringing&#160;products or technologies,
which could also adversely affect our business and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our business is subject to economic, market
and geopolitical conditions.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our business is subject to economic, market, public
health, and geopolitical conditions which are beyond our control. The United&#160;States and other international economies have experienced
cyclical downturns from time to time. Worsening economic conditions that negatively impact discretionary consumer spending and consumer
demand, including inflation, slower growth, recession, and other macroeconomic conditions, including those resulting from public health
outbreaks such as the COVID-19&#160;pandemic and geopolitical issues could have a material adverse impact on our business and operating
results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We are particularly susceptible to market conditions
and risks associated with the entertainment industry, which, in addition to general macroeconomic downturns, also include the popularity,
price and timing of our games, changes in consumer demographics, the availability and popularity of other forms of entertainment, and
critical reviews and public tastes and preferences, which may change rapidly and cannot necessarily be predicted.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Catastrophic events may disrupt our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Natural disasters, cyber-incidents, weather events,
wildfires, power disruptions, telecommunications failures, public health outbreaks, failed upgrades of existing systems or migrations
to new systems, acts of terrorism or other events could cause outages, disruptions and/or degradations of our infrastructure, including
our or our partners&#8217; information technology and network systems, a failure in our ability to conduct normal business operations,
or the closure of public spaces in which players engage with our games and services. The health and safety of our employees, players,
third-party&#160;organizations with whom we partner or regulatory agencies on which we rely could be also affected, which may prevent
us from executing against our business strategies or cause a decrease in consumer demand for our products and services. System redundancy
may be ineffective and our disaster recovery and business continuity planning may not be sufficient for all eventualities. Such failures,
disruptions, closures, or inability to conduct normal business operations could also prevent access to our products, services or online
stores selling our products and services, cause delay or interruption in our product or live services offerings, allow breaches of data
security or result in the loss of critical data. An event that results in the disruption or degradation of any of our critical business
functions or information technology systems, harms our ability to conduct normal business operations or causes a decreased in consumer
demand for our products and services could materially impact our reputation and brand, financial condition and operating results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may not meet our product and live service
development schedules and live service release schedule may be delayed, cancelled, or poorly received.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our ability to meet product development schedules
is affected by a number of factors both within and outside our control, including feedback from our players, the creative processes involved,
the coordination of large and sometimes geographically dispersed development teams, the complexity of our products and the platforms for
which they are developed, the need to fine-tune&#160;our products prior to their release and, in certain cases, approvals from third parties.
Any failure to meet anticipated production or release schedules likely would result in a delay of revenue and/or possibly a significant
shortfall in our revenue, increase our development and/or marketing expenses, harm our profitability, and cause our operating results
to be materially different than anticipated. If we miss key selling periods for products or services, particularly the fiscal quarter
ending in December, for any reason, including product delays or product cancellations our sales likely will suffer significantly.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Increasing gas fees on Polygon could materially
affect our revenues.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Users must pay gas fees on NFT platforms when
minting NFTs. Gas fees are transaction fees specific to the Ethereum (&#8220;ETH&#8221;) blockchain network. The fee is determined by
the number of transactions on the protocol and type of computations required to verify transactions; the greater the popularity, the greater
the fee. Increased traffic can also lead to scalability problems which may also push gas fees higher. To mitigate this risk we have chosen
to build our NFTs on the Polygon network and to strategically price our NFTs. Gas fees on Polygon are significantly cheaper than that
of the most widely used blockchain network, Ethereum. We do not currently anticipate any material changes in gas prices on the Polygon
network that would affect our business model. However, if gas prices on the Polygon network become too high, then demand for our NFTs
could decrease and we could potentially lose existing and potential customers to competitors with cheaper fees. This would materially
and adversely affect our revenues and thereby the success of our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span style="text-decoration:underline">Risks Related to Information Technology
Systems, Intellectual Property and Privacy Laws</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Security breaches and attacks against our
systems and network, and any potentially resulting breach or failure to otherwise protect confidential and proprietary information, could
damage our reputation and negatively impact our business, as well as materially and adversely affect our financial condition and results
of operations.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Although we have employed significant resources
to develop our security measures against breaches, our cybersecurity measures may not detect or prevent all attempts to compromise our
systems, including distributed denial-of-service&#160;attacks, viruses, malicious software, break-ins, phishing attacks, social engineering,
security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in and transmitted by
our systems or that we otherwise maintain. Breaches of our cybersecurity measures could result in unauthorized access to our systems,
misappropriation of information or data, deletion or modification of client information, or a denial-of-service&#160;or other interruption
to our business operations. As techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known
until launched against us or our third-party&#160;service providers, we may be unable to anticipate, or implement adequate measures to
protect against, these attacks.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">If we are unable to avert these attacks and security
breaches, we could be subject to significant legal and financial liability, our reputation would be harmed and we could sustain substantial
revenue loss from lost sales and customer dissatisfaction. We may not have the resources or technical sophistication to anticipate or
prevent rapidly evolving types of cyber-attacks. Cyber-attacks&#160;may target us, our Traders or other participants, the communication
infrastructure, or the e-platform&#160;on which we depend. Actual or anticipated attacks and risks may cause us to incur significantly
higher costs, including costs to deploy additional personnel and network protection technologies, train employees, and engage third-party&#160;experts
and consultants. Cybersecurity breaches would not only harm our reputation and business, but also could materially decrease our revenue
and net income.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We face the risk of fraud.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Online transactions may be subject to sophisticated
schemes or collusion to defraud, launder money or other illegal activities, and there is a risk that our products may be used for those
purposes either by our customers or our employees or contractors. This may be especially true when dealing with cryptocurrencies, which
by design, may be difficult or impossible to trace. While we believe that our systems, both computer and procedural, afford an adequate
degree of protection against fraudulent activities, if such protection is not effective in all cases, is circumvented or if we fail to
implement updated controls and procedures or to counter new fraud techniques, we could lose the confidence of our customers and our reputation
could be damaged. Moreover, any failure to protect ourselves and our customers from fraudulent activity, could result in reputational
damage and could materially adversely affect our operations, financial performance and prospects. Failure to adequately monitor and prevent
money laundering and other fraudulent activity could also result in civil or criminal liability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We use&#160;open-source&#160;software in
connection with certain of our games and services which may pose particular risks to our proprietary software, products, and services
in a manner that could have a negative impact on our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We use open-source&#160;software in connection
with some of the games and services we offer. Some open-source&#160;software licenses require users who distribute open source software
as part of their software to publicly disclose all or part of the source code to such software or make available any derivative works
of the open source code on unfavorable terms or at no cost. The terms of various open-source&#160;licenses have not been interpreted by
courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on
our use of the open-source&#160;software. Were it determined that our use was not in compliance with a particular license, we may be required
to release our proprietary source code, pay damages for breach of contract, re-engineer&#160;our games or products, discontinue distribution
in the event re-engineering&#160;cannot be accomplished on a timely basis, or take other remedial action that may divert resources away
from our game development efforts, any of which could negatively impact our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We rely on&#160;third-party&#160;providers
for computing infrastructure, secure network connectivity, and other&#160;technology-related&#160;services needed to deliver our products.
Any disruption in the services provided by such&#160;third-party&#160;provider could adversely affect our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our products are hosted from, and use computing
infrastructure, secure network connectivity, and other technology-related&#160;services<b><i>&#160;</i></b>provided by third-party&#160;providers.
We do not control the operations of these third-party&#160;provider or own the equipment used to provide such services. Because we cannot
easily switch between cloud providers, any disruption of or interference, for example, due to natural disasters, cyber-attacks, terrorist
attacks, power losses, telecommunications failures, or similar events, would impact our operations and may adversely affect our business,
financial condition, operating results and cash flows. In addition, these providers have no obligation to renew their agreements with
us on commercially reasonable terms or at all. If we are unable to renew our agreements on commercially reasonable terms or develop our
blockchain capabilities, we may be required to transition to a new provider, and we may incur significant costs and possible service interruption
in connection with doing so.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, these providers may take actions
beyond our control that could seriously harm our business, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">discontinuing
or limiting our access to its cloud platform</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">increasing
pricing terms;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">terminating
or seeking to terminate our contractual relationship altogether;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">establishing
more favorable relationships or pricing terms with one or more of our competitors; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">modifying
or interpreting its terms of service or other policies in a manner that impacts our ability to run our business and operations.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Cloud hosting providers have broad discretion
to change and interpret their terms of service and other policies with respect to us, and those actions may be unfavorable to us. They
may also alter how we are able to process data on their respective cloud platforms. If changes or interpretations are made that are unfavorable
to us, our business could be seriously harmed.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may not be able to secure all rights
to our intellectual property or our rights may be subject to claims of infringement by others and other issues affecting production.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We will rely on a combination of trade secret,
trademark, and copyright laws, as well as employee and third-party&#160;non-disclosure&#160;agreements and other protective measures,
to protect intellectual property rights pertaining to our products and technologies both in the U.S.&#160;and abroad. There can be no
assurance, however, that these measures will provide meaningful protection of our technology, trade secrets, know-how&#160;or other intellectual
property in the event of any unauthorized use, misappropriation, or disclosure. There can also be no assurance that others will not independently
develop similar technologies or duplicate any technology that we develop or have developed without violating our intellectual property
rights. In addition, there can be no assurance that our intellectual property rights will be held to be valid, will not be successfully
challenged or will otherwise be of value. In the event that we are subject to a claim of intellectual property infringement, whether it
be patent, copyright or trademark, the cost of defending such a claim, even if partly covered by insurance, will be significant and will
have a material adverse effect on our financial results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If third parties claim that we infringe
their intellectual property, it may result in costly litigation.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We cannot assure you that third parties will not
claim our current or future products or services infringe their intellectual property rights. Any such claims, with or without merit,
could cause costly litigation that could consume significant management time. Such claims also might require us to enter into royalty
or license agreements. If required, we may not be able to obtain such royalty or license agreements, or obtain them on terms acceptable
to us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may not be able to adequately protect
our proprietary technology, and our competitors may be able to offer similar products and services which would harm our competitive position.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our success, in part, depends upon our proprietary
technology. We have various forms of intellectual property including patent, copyright, trademark and trade secret laws, confidentiality
procedures and contractual provisions to establish and protect our proprietary rights. Despite these precautions, third parties could
copy or otherwise obtain and use our technology without authorization, or develop similar technology independently. We also pursue the
registration of our domain names, trademarks, and service marks in the United&#160;States. However, we cannot provide any assurance that
patent applications that we file will ultimately result in an issued patent or, if issued, that they will provide sufficient protections
for our technology against competitors. We cannot assure you that the protection of our proprietary rights will be adequate or that our
competitors will not independently develop similar technology, duplicate our products and services or design around any intellectual property
rights we hold.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The Platform may raise issues regarding
third party intellectual property rights.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">NFTs raise various intellectual property law considerations,
including adequacy and scope of assignment, licensing, transfer, copyright, and other right of use issues. The creator of an NFT will
often have all rights to the content of the NFT and can determine what rights to assign to a buyer, such as the right to display, modify,
or copy the content. To the extent we are directly or indirectly involved in a dispute between creators and buyers on the Platform, it
could materially and adversely affect the success of the Platform and harm our business and reputation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The Platform may face cybersecurity risks.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">NFTs in general, and the Platform specifically,
may also be an attractive target for cybersecurity attacks. For example, a perpetrator could seek to obtain the private key associated
with a digital wallet holding an NFT to access and sell the NFT without valid authorization, and the owner of the NFT may have limited
recourse due to the nature of blockchain transactions and of cybercrimes generally. NFT marketplaces, including the Platform, may also
be vulnerable to attacks where an unauthorized party acquires the necessary credentials to access user accounts. The safeguards we have
implemented or may implement in the future to protect against cybersecurity threats may be insufficient. If the Platform were to experience
any cyberattacks, it could negatively impact our reputation and market acceptance of our platform.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The laws and regulations concerning data
privacy are continually evolving. Failure to comply with these laws and regulations could harm our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We will collect and store information about our
consumers, including consumers who play our games. In addition, we collect and store information about our employees. We will be subject
to laws from a variety of jurisdictions regarding privacy and the protection of this information, including the E.U.&#8217;s General Data
Protection Regulation (the &#8220;GDPR&#8221;), the U.S.&#160;Children&#8217;s Online Privacy Protection Act (&#8220;COPPA&#8221;), which
regulates the collection, use, and disclosure of personal information from children under 13&#160;years of age, and the California Consumer
Privacy Act (the &#8220;CCPA&#8221;). Failure to comply with any of these laws or regulations may increase our costs, subject us to expensive
and distracting government investigations, and result in substantial fines.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Data privacy protection laws are rapidly changing
and likely will continue to do so for the foreseeable future and may be inconsistent from jurisdiction to jurisdiction. For example, the
E.U. has traditionally taken a broader view than the United&#160;States and certain other jurisdictions as to what is considered personal
information and has imposed greater obligations under data privacy and protection regulations, including those imposed under the GDPR.&#160;The
U.S.&#160;government, including the Federal Trade Commission and the Department of Commerce, as well as various U.S.&#160;state governments,
are continuing to review the need for greater regulation over the collection of personal information and information about consumer behavior
on the Internet and on mobile devices. Complying with emerging and changing laws could require us to incur substantial costs or impact
our approach to operating and marketing our games. Due to the rapidly changing nature of these data privacy protection laws, there is
not always clear guidance from the respective governments and regulators regarding the interpretation of the law, which may create the
risk of an inadvertent violation. For example, the California legislature recently passed the CCPA and the E.U. has proposed further reforms
to its existing data protection legal framework, in addition to the GDPR, which may further change our compliance obligations. Various
government and consumer agencies worldwide have also called for new regulation and changes in industry practices. In addition, in some
cases, we are dependent upon our platform providers and external data processors to assist us in ensuring compliance with these various
types of regulations, and a violation by one of these third parties may also subject us to government investigations and result in substantial
fines.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Player interaction with our games will be subject
to our privacy policies, end user license agreements (&#8220;EULAs&#8221;), and terms of service. If we fail to comply with our posted
privacy policies, EULAs, or terms of service, or if we fail to comply with existing privacy-related&#160;or data protection laws and regulations,
it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgments
against us, damage our reputation, impact our financial condition, and harm our business. If regulators, the media, consumers, or employees
raise any concerns about our privacy and data protection or consumer protection practices, even if unfounded, this could also result in
fines or judgments against us, damage our reputation, negatively impact our financial condition, or damage our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Gaxos Health will rely on information systems
to obtain, process, analyze, and manage data. To the extent IT systems are not successfully implemented or fail, our business and results
of operations may be adversely affected. Further, our business will rely to a significant degree upon the secure transmission, use and
storage of sensitive information, including protected health information and other personally identifiable information, financial information
and other confidential information and data within these systems.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">To protect this information, we will need to implement
commercially reasonable security measures and maintain information security policies and procedures informed by requirements under applicable
law and recommended practices, in each case, as applicable to the data collected, hosted and processed. Despite our efforts, our business
will be vulnerable to unauthorized access to data and/or breaches of confidential information due to criminal conduct, physical break-ins,
hackers, employee or insider malfeasance and/or improper employee or contractor access, computer viruses, programming errors, denial-of-service
attacks, ransomware events, phishing schemes, fraud, terrorist attacks, human error or other breaches by insiders or third parties or
similar disruptive problems. It is not possible to prevent all security threats to our data. Techniques used to obtain unauthorized access,
disable or degrade service or sabotage systems change frequently and may be difficult to detect for long periods of time. Further, defects
in the design or manufacture of applications we develop or procure from third parties could compromise our data. These events, including
unauthorized access, misappropriation, disclosure or loss of sensitive information (including financial or personal health information)
or a significant disruption of our network, expose us to risks including risks to our ability to provide our solutions, management distraction
and the obligation to devote significant financial and other resources to mitigate such problems and increases to our future information
security costs. Moreover, unauthorized access, use or disclosure of certain sensitive information in our possession or our failure to
satisfy legal requirements, including requirements relating to safeguarding protected health information under the Health Insurance Portability
and Accountability Act (&#8220;HIPAA&#8221;) or state data privacy laws could result in civil and criminal liability and regulatory action,
which could result in potential fines and penalties, as well as costs relating to investigation of an incident or breach, corrective actions,
required notifications to regulatory agencies and customers, credit monitoring services and other necessary expenses. In addition, actual
or perceived breaches of our security management efforts can cause existing customers to terminate their relationship with us and deter
existing or prospective customers from using or purchasing our solutions in the future. These events can have a material adverse impact
on our business, results of operations, financial condition and reputation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We collect, store, process, and use personal
data, which subjects us to legal obligations and laws and regulations related to security and privacy, and any actual or perceived failure
to meet those obligations could harm our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We collect, process, store, and use a wide variety
of data from our customers, including personal information. We are subject to federal, state and international laws relating to the collection,
use, retention, security and transfer of various types of personal information. U.S. federal, state, and international laws and regulations
governing privacy and data protection impose restrictions on what we can do with our customers&#8217; personal data and provide for related
obligations. These obligations include heightened transparency about data collection, use and sharing practices, new data privacy rights,
and rules in respect to cross-border data transfers, which carry significant enforcement penalties for non-compliance. These laws and
regulations also require us to safeguard our customers&#8217; personal data. Although we have established security procedures to protect
customer information, our or our third-party service providers&#8217; security and testing measures may not prevent security breaches.
Any compromise of our security or breach of our customers&#8217; privacy could harm our reputation or financial condition and, therefore,
our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In addition to the risks generally relating to
the collection, use, retention, security and transfer of personal information, we are also subject to specific obligations relating to
information considered sensitive under applicable laws, such as health data and biometric data. Health data is subject to additional privacy,
security and breach notification requirements, and we are subject to audit by governmental authorities regarding our compliance with these
obligations. The collection, handling, and other processing of biometric data also are subject to particular scrutiny and obligations
under applicable laws and regulations, including consumer protection legislation (such as the Federal Trade Commission Act and similar
state legislation), general privacy legislation (such as the California Consumer Privacy Act, or CCPA), and state statutes addressing
biometric information specifically (including Illinois&#8217; Biometric Information Privacy Act, or BIPA), and by consumer protection
regulators. If we fail to adequately comply with applicable rules and requirements, or if health data is handled in a manner not permitted
by law or under our agreements with healthcare institutions, we can be subject to litigation or government investigations or other proceedings,
and can be liable for associated investigatory expenses, and can also incur significant fees or fines. Some of those laws, including BIPA,
provide consumers with a private right of action for certain violations and large potential statutory damages awards. Recent litigation
around these laws has encouraged plaintiffs&#8217; attorneys to bring additional actions against other targets. Further, the FTC issued
a policy statement regarding biometric information on May 18, 2023, that identifies numerous risks the FTC considers key, outlines relevant
practices the FTC plans to scrutinize, and affirms the FTC&#8217;s commitment to addressing deceptive and unfair practices involving the
collection and use of biometric information, as well as deceptive marketing of biometric information technologies. These developments
underscore the legal and regulatory risks applicable to our collection, use, disclosure, and other processing of health and biometric
information.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In addition, a party who circumvents our security
measures or exploits inadequacies in our security measures, could, among other effects, misappropriate customer data or other proprietary
information or cause interruptions in our operations. Actual or perceived vulnerabilities may lead to claims against us. To the extent
that the measures we or our third-party business partners have taken are, or are perceived to be, insufficient or inadequate, we may become
subject to litigation, breach notification obligations, or regulatory or administrative sanctions, which could result in significant fines,
penalties, or damages and harm to our reputation. Depending on the nature of the information compromised, in the event of a data breach
or other unauthorized processing of our customer data, we may also have obligations to notify customers about the incident and we may
need to provide some form of remedy for the individuals affected by the incident. A growing number of legislative and regulatory bodies
have adopted consumer notification requirements in the event of unauthorized access to or acquisition of certain types of personal data.
Such breach notification laws continue to evolve and may be inconsistent from one jurisdiction to another. Complying with these obligations
could cause us to incur substantial costs and could increase negative publicity surrounding any incident that compromises customer data.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Violations of applicable laws relating to privacy,
data protection, or cybersecurity, or cybersecurity breaches or incidents, as well as the perception that any of the foregoing have occurred,
could impact our business in a number of ways, such as a temporary suspension of some or all of our operating and/or information systems,
damage to our reputation and brand and our relationships with customers, suppliers, vendors, and service providers and could result in
lost, unavailable, or corrupted data, lost sales, increased insurance premiums, substantial breach-notification and other remediation
costs and claims, demands, and litigation, as well as adversely affect results of operations. In addition, we may also face regulatory
investigations and other proceedings with corresponding fines, penalties, and other liabilities, civil claims including representative
actions, and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation
or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm. We may also incur additional
costs in the future related to the implementation of additional security measures to protect against new or enhanced data security and
privacy threats, to comply with state, federal, and international laws that may be enacted to address personal data processing risks and
data security threats, or to investigate or address potential or actual data security breaches or incidents or violations of our actual
or alleged obligations relating to privacy, data protection, or cybersecurity.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>United States federal and state privacy
laws, and equivalent laws of other nations, may increase our costs of operation and expose us to civil and criminal sanctions.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Regulation of data processing is evolving, as
federal, state, and foreign governments continue to adopt new, or modify existing, laws and regulations addressing data privacy and security,
and the collection, processing, storage, transfer, and use of data. These new or proposed laws and regulations are subject to differing
interpretations and may be inconsistent among jurisdictions, and guidance on implementation and compliance practices are often updated
or otherwise revised, which adds to the complexity of processing personal data. These and other requirements could require us or our collaborators
to incur additional costs to achieve compliance, limit our competitiveness, necessitate the acceptance of more onerous obligations in
our contracts, restrict our ability to use, store, transfer, and process data, impact our or our collaborators&#8217; ability to process
or use data in order to support the provision of our products, affect our or our collaborators&#8217; ability to offer our products in
certain locations, or cause regulators to reject, limit or disrupt our clinical trial activities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We and our collaborators may be subject to federal,
state, and foreign data protection laws and regulations (i.e., laws and regulations that address privacy and data security). In the United
States, numerous federal and state laws and regulations, including federal health information privacy laws, state personal information
laws, state data breach notification laws, state health information privacy laws and federal and state consumer protection laws and regulations
that govern the collection, use, disclosure and protection of health-related and other personal information could apply to our operations
or the operations of our collaborators. In addition, we may obtain health information from third parties (including research institutions
from which we obtain clinical trial data) that are subject to privacy and security requirements under the federal Health Insurance Portability
and Accountability Act of 1996 (&#8220;HIPAA&#8221;), as amended by the Health Information Technology for Economic and Clinical Health
Act of 2009, or HITECH. Depending on the facts and circumstances, we could be subject to civil or criminal penalties if we knowingly use
or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted
by HIPAA.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our business will be subject to complex
and prescriptive regulations regarding consumer protection and data privacy practices, and could be adversely affected if our consumer
protection, data privacy and security practices are not adequate, or perceived as being inadequate.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We will be subject to global data privacy, data
protection, localization, security and consumer-protection&#160;laws and regulations worldwide. These laws and regulations are emerging
and evolving and the interpretation and application of these laws and regulations often are uncertain, contradictory, and changing. The
failure to maintain data practices that are compliant with applicable laws and regulations, or evolving interpretations of applicable
laws and regulations, could result in inquiries from enforcement agencies or direct consumer complaints, resulting in civil or criminal
penalties, and could adversely impact our reputation and brand. In addition, the operational costs of compliance with these regulations
are high and will likely continue to increase.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Even if we remain in strict compliance with applicable
laws and regulations, consumer sensitivity to the collection and processing of their personal information continues to increase. Any real
or perceived failures in maintaining acceptable data privacy practices, including allowing improper or unauthorized access, acquisition
or misuse and/or uninformed disclosure of consumer, employee and other information, or a perception that we do not adequately secure this
information or provide consumers with adequate notice about the information that they authorize us to collect and disclose could result
in brand, reputational, or other harms to the business, result in costly remedial measures, deter current and potential customers from
using our products and services and cause our financial results to be materially affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Third party vendors and business partners receive
access to certain information that we collect. These vendors and business partners may not prevent data security breaches with respect
to the information we provide them or fully enforce our policies, contractual obligations and disclosures regarding the collection, use,
storage, transfer and retention of personal data. A data security breach of one of our vendors or business partners could cause reputational
and financial harm to them and us, negatively impact our ability to offer our products and services, and could result in legal liability,
costly remedial measures, governmental and regulatory investigations, harm our profitability, reputation and brand, and cause our financial
results to be materially affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Digital ecosystems, including offerings
of digital assets, are evolving, and uncertain, and new regulations or policies may materially adversely affect our development.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The technologies supporting these digital assets
like blockchain and NFT are new and rapidly evolving. To the extent these technologies become more widely utilized in the industry, our
revenues could be negatively impacted. If we fail to explore these new technologies and apply them innovatively to keep our products and
services competitive, we may not experience significant growth of our business. Regulation of digital assets like, cryptocurrencies, blockchain
technologies, NFTs and cryptocurrency exchanges, is currently underdeveloped and likely to rapidly evolve as government agencies take
greater interest in them. Regulation also varies significantly among international, federal, state and local jurisdictions and is subject
to significant uncertainty. Various legislative and executive bodies in the United&#160;States and in other countries may in the future
adopt laws, regulations, or guidance, or take other actions, which may severely impact the permissibility of tokens generally and the
technology behind them or the means of transacting in or transferring them. The regulatory regime governing blockchain technologies, NFTs,
cryptocurrencies, digital assets, utility tokens, security tokens and offerings of digital assets is uncertain, and new regulations or
policies may materially adversely affect our development and our value if we materially embrace digital assets and cryptocurrencies in
the future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span style="text-decoration:underline">Risks Related to Digital Assets</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The sale of NFTs on the Platform could be
determined to be the unregistered sale of securities.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">There is regulatory uncertainty with respect to
whether certain NFTs could be considered securities. If NFTs sold on the Platform were deemed to be securities, we may be found to be
in violation of securities laws for engaging in transactions regarding unregistered securities. Such a determination could lead to an
enforcement action by the SEC and result in fines and other penalties, and have a negative impact on our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Risks relating to our decision to accept
cryptocurrency as a form of payment may subject us to exchange risk and additional tax and regulatory requirements.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We currently plan to accept Bitcoin and Ethereum,
as a form of payment for purchases on the Platform, in which case we would be subject to additional regulatory requirements. We do not
currently plan to accept any other cryptocurrencies as a form of payment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Cryptocurrencies are not currently considered
legal tender or backed by any government. The prices of digital assets have been in the past and may continue to be highly volatile, including
as a result of various associated risks and uncertainties. For example, the prevalence of such assets is a relatively recent trend, and
their long-term&#160;adoption by investors, consumers and businesses is unpredictable. Moreover, their lack of a physical form, their
reliance on technology for their creation, existence and transactional validation and their decentralization may subject their integrity
to the threat of malicious attacks and technological obsolescence. As intangible assets without centralized issuers or governing bodies,
digital assets have been, and may in the future be, subject to security breaches, cyberattacks or other malicious activities, as well
as human errors or computer malfunctions that may result in the loss or destruction of private keys needed to access such assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We will not accept such cryptocurrency payments
directly, but plan to use a third-party&#160;vendor to accept and process any such cryptocurrency payments on our behalf. Such third-party&#160;vendor
may then immediately convert the cryptocurrency into U.S.&#160;dollars so that we would receive payment in U.S.&#160;dollars. However,
the regulatory environment covering the acceptance of cryptocurrencies is still evolving and the extent to which we would be responsible
for any decrease in the value of such cryptocurrencies after the customer has tendered the funds but prior to its delivery to us in U.S.&#160;dollars
has not been established.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We may also hold cryptocurrencies directly, and
we have exchange rate risk in the amounts we hold as well as the risks that regulatory or other developments may adversely affect the
value of the cryptocurrencies we hold. There is substantial uncertainty regarding legal and regulatory requirements relating to cryptocurrencies
or transactions utilizing cryptocurrencies. These uncertainties, as well as potential accounting and tax issues, or other requirements
relating to cryptocurrencies could have a material adverse effect on our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Furthermore, it is unclear the extent to which
accepting Bitcoin and Ethereum would subject us to additional money laundering regulations, &#8220;Know Your Customer&#8221; (&#8220;KYC&#8221;)
procedures or other laws or to additional taxation. If we fail to comply with prohibitions applicable to us, we could face regulatory
or other enforcement actions and potential fines and other consequences.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We rely on third parties for certain aspects
of our business, which creates additional risk.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We rely on third parties for certain aspects of
our business, including payment service providers and digital wallets to process transactions. We may not manage to comply with our agreement
with third parties or these third parties may refuse to process transactions adequately, may breach their agreements with us, may refuse
to renew agreements on commercially reasonable terms, take actions that degrade the functionality of our services, impose additional costs,
new licenses or other requirements on us, or give preferential treatment to competitive services or suffer outages in their systems, any
of which could disrupt our operations and materially and adversely affect our business, financial condition and results of operations.
Some third parties that provide services to us may have or gain market power and could increase their prices to us without competitive
constraint. In addition, there can be no assurance that third parties that provide services directly to us will continue to do so on acceptable
terms, or at all, or will not suffer from outages to their systems. If any third parties were to stop providing services to us on acceptable
terms, we may be unable to find alternative providers in a timely and efficient manner and on acceptable terms, or at all, which could
materially adversely affect our business, financial condition, and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our crypto assets may be subject to loss,
damage, theft or restriction on access. Further, digital asset exchanges on which crypto assets trade are relatively new and largely unregulated,
and thus may be exposed to fraud and failure. Incorrect or fraudulent cryptocurrency transactions may be irreversible.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We plan to use a third party payment service provider
to process any transactions involving payment for our NFTs with digital currencies. In addition, we intend to purchase and hold MATIC,
in increments as needed, solely for the purpose of paying the fees associated with minting our NFTs on the Polygon network. Our intention
is to immediately convert all cryptocurrency received as payment to cash. In addition, we intend to hold only the minimal amount of MATIC
required to interact with the blockchain as part of our core business of minting NFTs, and we do not intend to accept MATIC as a form
of payment or to hold MATIC as a long term asset. We are currently in the process of selecting the right custodian for our crypto assets
and do not have any custody arrangements. There is a risk that part or a portion or all of our crypto assets could be lost, stolen or
destroyed. Crypto assets are stored in crypto asset sites commonly referred to as &#8220;wallets&#8221; which may be accessed to exchange
a holder&#8217;s crypto assets. Access to our crypto assets could also be restricted by cybercrime (such as a denial of service attack)
against a service at which we maintain a hosted wallet. We believe that our crypto assets will be an appealing target to hackers or malware
distributors seeking to destroy, damage or steal our crypto assets. Hackers or malicious actors may attempt to steal our crypto assets,
such as by attacking such network source code, exchange miners, third-party&#160;platforms, storage locations or software, our general
computer systems or networks, or by other means. Access to our crypto assets could also be restricted by natural events (such as an earthquake
or flood) or human actions (such as a terrorist attack). Any of these events may adversely affect our operations and, consequently, our
investments and profitability and we cannot guarantee that we will prevent loss, damage or theft, whether caused intentionally, accidentally
or by act of God. The loss or destruction of a private key required to access our digital wallets may be irreversible and we may be denied
access for all time to our crypto asset holdings. Our loss of access to our private keys or our experience of a data loss relating to
our digital wallets could adversely affect our investments and assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">It is possible that, through computer or human
error, theft or criminal action, our crypto assets could be transferred in incorrect amounts or to unauthorized third parties or accounts.
In general, Bitcoin transactions are irrevocable, and stolen or incorrectly transferred cryptocurrencies may be irretrievable, and we
may have extremely limited or no effective means of recovering such Bitcoins.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Digital asset payment service providers and exchanges
on which cryptocurrencies trade are relatively new and, in most cases, largely unregulated. Many digital asset payment service providers
and/or exchanges do not provide the public with significant information regarding their ownership structure, management teams, corporate
practices or regulatory compliance. As a result, the marketplace may lose confidence in, or may experience problems relating to, cryptocurrency
payment service providers and/or exchanges, including prominent exchanges handling a significant portion of the volume of digital asset
trading. During 2022, a number of companies in the crypto industry have declared bankruptcy, including ore Scientific Inc., Celsius Network
LLC (&#8220;Celsius&#8221;), Voyager Digital Ltd., Three Arrows Capital, BlockFi Lending LLC, and FTX Trading Ltd. (&#8220;FTX&#8221;).
In June 2022, Celsius began pausing all withdrawals and transfers between accounts on its platform, and in July 2022, it filed for Chapter
11 bankruptcy protection. Further, in November 2022, FTX, one of the major cryptocurrency exchanges, also filed for Chapter 11 bankruptcy.
Such bankruptcies have contributed, at least in part, to further price decreases in most crypto assets, a loss of confidence in the participants
of the digital asset ecosystem and negative publicity surrounding digital assets more broadly, and other participants and entities in
the digital asset industry have been, and may continue to be, negatively affected. These events have also negatively impacted the liquidity
of the digital assets markets as certain entities affiliated with FTX engaged in significant trading activity.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We have not been directly impacted by any of the
recent bankruptcies in the crypto asset space, as we have no contractual privity or relationship to the relevant parties. However, we
are dependent on the overall crypto assets industry with respect to any transactions involving payment for our NFTs with digital currencies
and for the digital currencies needed by us to pay the fees associated with minting our NFTs, and such recent events may contribute, at
least in part, to decreases and volatility to our stock price as well as the price of most crypto assets. If the liquidity of the digital
assets markets continues to be negatively impacted, digital asset prices (including the price of bitcoin) may continue to experience significant
volatility and confidence in the digital asset markets may be further undermined. A perceived lack of stability in the digital asset market
and the closure or temporary shutdown of digital asset payment service providers and/or exchanges due to business failure, hackers or
malware, government-mandated&#160;regulation, or fraud, may reduce confidence in digital asset networks and result in greater volatility
in cryptocurrency values. These potential consequences of a digital asset payment service provider&#8217;s and/or exchange&#8217;s failure
could adversely affect an investment in us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We intend safeguard and keep private custodian
our digital assets by utilizing storage solutions provided by a custodian, which will likely require multi-factor&#160;authentication.
While we are confident in the security of our digital assets that will be held by our custodian, given the broader market conditions,
there can be no assurance that other crypto asset market participants, including our custodian, will not ultimately be impacted by recent
market events. If our custodian were to limit or halt services, we would need to find another custodian. While we have not been directly
impacted by any of the recent bankruptcies in the crypto asset space as we had no contractual privity or relationship to the relevant
parties, we are dependent on the overall industry perception tied to these recent bankruptcy events, and this may be reflected in our
stock price as well as the price of Bitcoin and other crypto assets. We continue to monitor the digital assets industry as a whole, although
these events are continuing to develop and it is not possible at this time to predict all of the risks stemming from these events that
may result to us, our service providers, including digital asset payment service providers, custodians and wallets, our counterparties,
and the broader industry as a whole.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Any of these events may adversely affect our operations
and results of operations and, consequently, an investment in us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If our current, or any of our future, custodians
file for bankruptcy, crypto assets held in their custody could be determined to be property of a bankruptcy estate and we could be considered
a general unsecured creditor thereof.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The treatment of bitcoins and other crypto assets
held by custodians that file for bankruptcy protection is uncharted territory in U.S. Bankruptcy law. We cannot say with certainty whether
bitcoins and other crypto assets held in custody by a bankrupt custodian would be treated as property of a bankruptcy estate and, accordingly,
whether the owner of that bitcoin would be treated as a general unsecured creditor.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Malicious actors could manipulate distributed
ledger networks and smart contract technology upon which digital assets rely and increase the vulnerability of the distributed ledger
networks.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">If a malicious actor, including a state-sponsored&#160;actor,
is able to hack or otherwise exert unilateral control over a particular distributed ledger network, or the digital assets on such a network,
that actor could attempt to divert assets from that distributed ledger or otherwise prevent the confirmation of transactions recorded
on that distributed ledger.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Such an event could materially and adversely affect
our business. Digital assets have been the subject of attempted manipulation by hackers to use them for malicious purposes. For example,
misuses could occur if a malicious actor obtains a majority of the processing power controlling the digital asset validating activities
and altering the distributed ledger on which digital asset transactions rely. Moreover, if the award for solving transaction blocks for
a particular digital asset declines, and transaction fees are not sufficiently high, the incentive to continue validating distributed
ledger transactions would decrease and could lead to a stoppage of validation activities. The collective processing power of that distributed
ledger would be reduced, which would adversely affect the confirmation process for transactions by decreasing the speed of the adaptation
and adjustment in the difficulty for transaction block solutions. Such slower adjustments would make the distributed ledger network more
vulnerable to malicious actors&#8217; obtaining control of the processing power over distributed ledger network processing.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The network contributors for certain Digital
Assets could propose amendments to the network protocols and software for Digital Assets that, if accepted and authorized by the network
for the Digital Assets, could adversely affect the Platform.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The networks for certain digital assets are based
on a protocol governing the peer-to-peer&#160;interactions between computers connected to each other within that network. The development
team for a network (if any) might propose and implement amendments to a network&#8217;s source code through software upgrades altering
the original protocol, including fundamental ideas such as the irreversibility of transactions and limitations on the validation of blockchain
software distributed ledgers. Such changes to original protocols and software could materially and adversely affect our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We currently support, and expect to continue
to support, certain smart contract-based crypto assets. If the underlying smart contracts for these crypto assets do not operate as expected,
they could lose value and our business could be adversely affected.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We currently support, and expect to continue to
support, various crypto assets that represent units of value on smart contracts deployed on a third party blockchain. Smart contracts
are programs that store and transfer value and execute automatically when certain conditions are met. Since smart contracts typically
cannot be stopped or reversed, vulnerabilities in their programming and design can have damaging effects. For instance, in April 2018,
a batch overflow bug was found in many Ethereum-based&#160;ERC20-compatible&#160;smart contract tokens that allows hackers to create a
large number of smart contract tokens, causing multiple crypto asset platforms worldwide to shut down ERC20-compatible&#160;token trading.
If any such vulnerabilities or flaws come to fruition, smart contract-based&#160;crypto assets, including those held by our customers
on our platforms, may suffer negative publicity, be exposed to security vulnerabilities, decline significantly in value, and lose liquidity
over a short period of time.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In some cases, smart contracts can be controlled
by one or more &#8220;admin keys&#8221; or users with special privileges, or &#8220;super users&#8221;. These users have the ability to
unilaterally make changes to the smart contract, enable or disable features on the smart contract, change how the smart contract receives
external inputs and data, and make other changes to the smart contract. For smart contracts that hold a pool of reserves, these users
may also be able to extract funds from the pool, liquidate assets held in the pool, or take other actions that decrease the value of the
assets held by the smart contract in reserves. Even for crypto assets that have adopted a decentralized governance mechanism, such as
smart contracts that are governed by the holders of a governance token, such governance tokens can be concentrated in the hands of a small
group of core community members, who would be able to make similar changes unilaterally to the smart contract. If any such super user
or group of core members unilaterally make adverse changes to a smart contract, the design, functionality, features and value of the smart
contract, its related crypto assets may be harmed. In addition, assets held by the smart contract in reserves may be stolen, misused,
burnt, locked up or otherwise become unusable and irrecoverable. These super users can also become targets of hackers and malicious attackers.
If an attacker is able to access or obtain the super user privileges of a smart contract, or if a smart contract&#8217;s super-users&#160;or
core community members take actions that adversely affects the smart contract, our customers who hold and transact in the affected crypto
assets may experience decreased functionality and value of the applicable crypto assets, up to and including a total loss of the value
of such crypto assets. Although we do not control these smart contracts, any such events could cause customers to seek damages against
us for their losses, result in reputational damage to us, or in other ways adversely impact our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Acceptance and/or widespread use of digital
assets is uncertain.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Currently, there is a relatively small use of
digital assets in the retail and commercial marketplace for goods or services. In comparison, there is relatively large use by speculators
contributing to price volatility.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The relative lack of acceptance of digital assets
in the retail and commercial marketplace limits the ability of end-users&#160;to use them to pay for goods and services. Such lack of
acceptance or decline in acceptances would have a material adverse effect on our ability to continue as a going concern or to pursue this
segment at all, which would have a material adverse effect on our business, prospects or operations and potentially the value of any digital
assets we hold or expect to acquire for our own account.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Incorrect or fraudulent cryptocurrency transactions
may be irreversible.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Cryptocurrency transactions are irrevocable and
stolen or incorrectly transferred cryptocurrencies may be irretrievable. As a result, any incorrectly executed or fraudulent cryptocurrency
transactions, such as a result of a cybersecurity breach against our cryptocurrency holdings, could adversely affect our investments and
assets. This is because cryptocurrency transactions are not, from an administrative perspective, reversible without the consent and active
participation of the recipient of the cryptocurrencies from the transaction. Once a transaction has been verified and recorded in a block
that is added to a blockchain, an incorrect transfer of a cryptocurrency or a theft thereof generally will not be reversible, and we may
not have sufficient recourse to recover our losses from any such transfer or theft. Further, it is possible that, through computer or
human error, or through theft or criminal action, our cryptocurrency rewards could be transferred in incorrect amounts or to unauthorized
third parties, or to uncontrolled accounts. If an errant or fraudulent transaction in our cryptocurrency holdings were to occur, we would
have very limited means of seeking to reverse the transaction or seek recourse. To the extent that we are unable to recover our losses
from such action, error or theft, such events could have a material adverse effect on our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Because there has been limited precedent
set for financial accounting for digital assets, the determinations that we have made for how to account for digital assets transactions
may be subject to change.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Because there has been limited precedent set for
the financial accounting for digital assets and related revenue recognition and no official guidance has yet been provided by the Financial
Accounting Standards Board or the SEC, it is unclear how companies may in the future be required to account for cryptocurrency transactions
and assets and related revenue recognition. A change in regulatory or financial accounting standards could result in the necessity to
change the accounting methods we currently intend to employ in respect of our anticipated revenues and assets and restate any financial
statements produced based on those methods. Such a restatement could adversely affect our business, prospects, financial condition, and
results of operation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Banks and financial institutions may not
provide banking services, or may cut off services, to businesses that provide&#160;cryptocurrency-related&#160;services or that accept
cryptocurrencies as payment.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">A number of companies that provide cryptocurrency-related&#160;services
have been unable to find banks or financial institutions that are willing to provide them with bank accounts and other services. Similarly,
a number of companies and individuals or businesses associated with cryptocurrencies may have had and may continue to have their existing
bank accounts closed or services discontinued with financial institutions. We also may be unable to maintain these services for our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The difficulty that many businesses that provide
cryptocurrency-related&#160;services have and may continue to have in finding banks and financial institutions willing to provide them
services may decrease the usefulness of cryptocurrencies as a payment system and harm public perception of cryptocurrencies. Similarly,
the usefulness of cryptocurrencies as a payment system and the public perception of cryptocurrencies could be damaged if banks or financial
institutions were to close the accounts of businesses providing cryptocurrency-related&#160;services. This could occur as a result of
compliance risk, cost, government regulation or public pressure. The risk applies to securities firms, clearance and settlement firms,
national stock and commodities exchanges, the over the counter market and the Depository Trust Company. Such factors would have a material
adverse effect on our business, prospects, financial condition, and operating results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Regulatory changes or actions may restrict
the use of digital assets in a manner that adversely affects an investment in us.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">As digital assets have grown in popularity and
in market size, the Federal Reserve Board, U.S.&#160;Congress and certain U.S.&#160;agencies (e.g., the CFTC, the Commission, FinCEN and
the Federal Bureau of Investigation) have begun to examine digital assets. On March&#160;9, 2022, President Biden signed an executive
order on cryptocurrencies. While the executive order did not mandate any specific regulations, it instructs various federal agencies to
consider potential regulatory measures, including the evaluation of the creation of a U.S.&#160;Central Bank digital currency. Future
changes to existing regulations or entirely new regulations may affect our business in ways it is not presently possible for us to predict
with any reasonable degree of reliability. Digital assets currently face an uncertain regulatory landscape in not only the United&#160;States
but also in such foreign jurisdictions as the European Union and China. While certain governments such as Germany, have issued guidance
as to how to treat cryptocurrencies, most regulatory bodies have not issued specific policy determinations. Future changes to existing
regulations or entirely new regulations may affect our business in ways it is not presently possible for us to predict with any reasonable
degree of reliability, but such change could be substantial and adverse to us and could adversely affect an investment in us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Political or economic crises may motivate&#160;large-scale&#160;sales
of crypto assets, which could result in a reduction in values of crypto assets and adversely affect an investment in us.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Geopolitical crises such as Russia&#8217;s recent
invasion of Ukraine may motivate large-scale&#160;sales of crypto assets, which could rapidly decrease the price of crypto assets. Alternatively,
as an emerging asset class with limited acceptance as a payment system or commodity, global crises and general economic downturn may discourage
investment in crypto assets as investors focus their investment on less volatile asset classes as a means of hedging their investment
risk.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Crypto assets, which are relatively new, are subject
to supply and demand forces based upon the desirability of an alternative, decentralized means of buying and selling goods and services,
and it is unclear how such supply and demand will be impacted by geopolitical events, including the war in Ukraine or other crises which
may arise in the future. Nevertheless, political or economic crises may motivate large-scale&#160;acquisitions or sales of crypto assets
either globally or locally. Large-scale&#160;sales of crypto assets would result in a reduction in cryptocurrency values and could adversely
affect an investment in us.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may lose our private key to our digital
wallet, causing a loss of all of our digital assets.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Digital assets, such as cryptocurrencies and NFTs,
are stored in a so-called&#160;&#8220;digital wallet&#8221;, which may be accessed to exchange a holder&#8217;s digital assets and is
controllable by the processor of both the public key and the private key relating to this digital wallet in which the digital assets are
held, both of which are unique. We will publish the public key relating to digital wallets in use when we verify the receipt of transfers
and disseminate such information into the network, but we will need to safeguard the private keys relating to such digital wallets, which
are stored in the possession of certain of our officers. If the private key is lost, destroyed, or otherwise compromised, we may be unable
to access our cryptocurrencies held in the related digital wallet which will essentially be lost. If the private key is acquired by a
third party, then this third party may be able to gain access to our cryptocurrencies. Any loss of private keys relating to digital wallets
used to store our cryptocurrencies could have a material adverse effect on our ability to continue as a going concern or could have a
material adverse effect on our business, prospects, financial condition, and operating results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Whether a particular NFT or other digital
or &#8220;crypto&#8221; asset is a &#8220;security&#8221; is subject to a high degree of uncertainty, and if we are unable to properly
characterize an NFT or other digital asset, we may be subject to regulatory scrutiny, inquiries, investigations, fines, and other penalties,
which may adversely affect our business, operating results, and financial condition.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The SEC and its staff have taken the position
that certain digital or &#8220;crypto&#8221; assets (which includes NFTs) fall within the definition of a &#8220;security&#8221; under
the U.S. federal securities laws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The classification of a digital asset as a security
under applicable law has wide-ranging&#160;implications for the regulatory obligations that flow from the offer and sale of such assets.
For example, a digital asset that is a security in the United&#160;States may generally only be offered or sold in the United States pursuant
to a registration statement filed with the SEC or in an offering that qualifies for an exemption from registration. Persons that effect
transactions in digital assets that are securities in the United States may be subject to registration with the SEC as a &#8220;broker&#8221;
or &#8220;dealer.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Platforms that bring together purchasers and sellers
to trade digital assets that are securities in the United States are generally subject to registration as national securities exchanges,
or must qualify for an exemption, such as by being operated by a registered broker-dealer&#160;as an alternative trading system (&#8220;ATS&#8221;)
in compliance with rules for ATSs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We will have policies and processes to analyze
whether each NFT that we sell on the Platform could be deemed to be a &#8220;security&#8221; under applicable laws. Our policies and processes
do not constitute a legal standard but rather represent our company-developed&#160;model, which permits us to make a risk-based&#160;assessment
regarding the likelihood that a particular NFT could be deemed a &#8220;security&#8221; under applicable laws. Regardless of our conclusions,
they are not binding on regulators or courts and we could be subject to legal or regulatory action in the event the SEC, a state or foreign
regulatory authority, or a court were to determine that an NFT posted and sold on the Platform is a &#8220;security&#8221; under applicable
laws. Because the Platform is not registered or licensed with the SEC or foreign authorities as a broker-dealer, national securities exchange,
or ATS (or foreign equivalents), and we do not seek to register or rely on an exemption from such registration or license to facilitate
the offer and sale of NFTs on the Platform, we only permit posting on the Platform of our own NFTs for which we determine there are reasonably
strong arguments to conclude that the NFT is not a security. We believe that our process reflects a comprehensive and thoughtful analysis
and is reasonably designed to facilitate consistent application of available legal guidance to digital assets to facilitate informed risk-based&#160;business
judgment. However, we recognize that the application of securities laws to the specific facts and circumstances of digital assets may
be complex and subject to change, and that a posting determination does not guarantee any conclusion under the U.S. federal securities
laws. We expect our risk assessment policies and to continuously evolve to take into account case law, facts, and developments in technology.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">There can be no assurances that we will properly
characterize any given NFT as a security or non-security&#160;for purposes of determining whether the Platform will allow the posting
of such NFT, or that the SEC, foreign regulatory authority, or a court, if the question was presented to it, would agree with our assessment.
If the SEC, state or foreign regulatory authority, or a court were to determine that NFTs offered or sold on the Platform are securities,
we would not be able to offer such NFTs until we are able to do so in a compliant manner. A determination by the SEC, a state or foreign
regulatory authority, or a court that an NFT sold on our Platform was a security may also result in us determining that it is advisable
to remove NFTs from the Platform that have similar characteristics to the NFT that was determined to be a security. In addition, we could
be subject to judicial or administrative sanctions for failing to offer or sell the NFT in compliance with the registration requirements,
or for acting as a broker, dealer, or national securities exchange without appropriate registration. Such an action could result in injunctions,
cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, criminal liability, and reputational harm. Customers
that purchased such NFTs on the Platform and suffered losses could also seek to rescind a transaction that we facilitated as the basis
that it was conducted in violation of applicable law, which could subject us to significant liability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span style="text-decoration:underline">Risks Related to Regulatory Changes</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Changes in our tax rates or exposure to
additional tax liabilities, and changes to tax laws and interpretations of tax&#160;laws could adversely affect our earnings and financial
condition.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We are subject to taxes in the United&#160;States
and in various foreign jurisdictions. Significant judgment will be required to determine our worldwide income tax provision, tax assets,
and accruals for other taxes, and there are many transactions and calculations where the ultimate tax determination is uncertain. Our
effective income tax rate is based in part on our corporate operating structure and the manner in which we operate our business and develop,
value and use our intellectual property. Taxing authorities in jurisdictions in which we operate may challenge and audit our methodologies
for calculating our income taxes, which could increase our effective income tax rate and have an adverse impact on our results of operations
and cash flows. In addition, our provision for income taxes is materially affected by our profit levels, changes in our business, changes
in the mix of earnings in countries with differing statutory tax rates, changes in the elections we make, changes in the valuation of
our deferred tax assets and liabilities, or changes in applicable tax laws or interpretations of existing income and withholding tax laws,
as well as other factors. For example, the outcome of future guidance related to the U.S.&#160;Tax Act could cause us to change our analysis
and materially impact our previous estimates and financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In addition, changes to U.S.&#160;federal, state
or international tax laws or their applicability to corporate multinationals in the countries in which we do business may affect our effective
tax rates and cash taxes, cause us to change the way in which we structure our business and resulted in other costs. Our effective tax
rate also could be adversely affected by changes in our valuation allowances for deferred tax assets. Actual financial results also may
differ materially from our current estimates and could have a material impact on our assessment of the valuation allowance.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The Platform may be subject to regulation
by financial regulators.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">NFTs, in general, and the Platform may also be
subject to regulations of the Financial Crimes Enforcement Network (&#8220;FinCEN&#8221;) of the U.S.&#160;Department of Treasury and
the Bank Secrecy Act. Further, the Office of Foreign Assets Controls (&#8220;OFAC&#8221;) has signaled sanctions could apply to digital
transactions and has pursued enforcement actions involving cryptocurrencies and digital asset accounts. The nature of many NFT transactions
also involve circumstances which present higher risks for potential violations, such as anonymity, subjective valuation, use of intermediaries,
lack of transparency, and decentralization associated with blockchain technology. In addition, the Commodity Futures Trading Commission
has stated that cryptocurrencies, with which NFTs have some similarities, fall within the definition of &#8220;commodities.&#8221; If
NFTs were deemed to be a commodity, NFT transactions could be subject to prohibitions on deceptive and manipulative trading or restrictions
on manner of trading (e.g., on a registered derivatives exchange), depending on how the transaction is conducted. Moreover, if NFTs were
deemed to be a &#8220;security&#8221;, it could raise federal and state securities law implications, including exemption or registration
requirements for marketplaces for NFT transactions, sellers of NFTs, and the NFT transactions themselves, as well as liability issues,
such as insider trading or material omissions or misstatements, among others. NFT transactions may also be subject to laws governing virtual
currency or money transmission. For example, New&#160;York has legislation regarding the operation of virtual currency businesses. NFT
transactions also raise issues regarding compliance with laws of foreign jurisdictions, many of which present complex compliance issues
and may conflict with one another. Our launch and operation of the Platform (including our facilitation of transactions in Ether, a cryptocurrency,
in connection therewith) expose us to the foregoing risks, among others, any of which could materially and adversely affect the success
of the Platform and harm our business, financial condition, results of operations, reputation, and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our facilitation of transactions in cryptocurrencies
such as Ether on the Platform exposes us to risks under U.S.&#160;and foreign tax laws.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Although under U.S.&#160;federal tax laws, cryptocurrencies
are currently considered property versus currency, we are obligated to report transactions involving cryptocurrencies in U.S.&#160;dollars
and must determine their fair market value on each transaction date. The U.S.&#160;federal taxing authorities have issued limited guidance
on cryptocurrency transactions. The current guidance treats the use of cryptocurrency to purchase a NFT as a taxable disposition of the
cryptocurrency, which subjects the holder to taxable gain that such holder must report for federal and state tax purposes. Similarly,
a seller of a NFT is subject to tax on the sale of the NFT.&#160;Congress is currently proposing legislation that could require us to
report such transactions to the IRS.&#160;Our failure to accurately record or report the cryptocurrency and NFT sales transacted through
the Platform, or held by us, would expose us to adverse tax consequences, penalties, and interest. Moreover, the IRS, in connection with
audits of cryptocurrency exchanges, has successfully sued to obtain account holder transaction and tax information. The applicability
of tax laws in the United&#160;States and foreign jurisdictions with respect to cryptocurrency and NFTs will continue to evolve. This
uncertainty increases the risk of non-compliance&#160;with tax laws, which in turn could result in adverse tax consequences, penalties,
investigations or audits, litigation, account holder lawsuits, or the need to revise or restate our financial statements and associated
consequences therewith, among other things. Any of the foregoing could materially and adversely affect our business, financial condition,
results of operations, reputation, and prospects.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Government regulations applicable to us
may negatively impact our business.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We are a global company subject to various and
complex laws and regulations domestically and internationally, including laws and regulations related to consumer protection, protection
of minors, content, advertising, localization, information security, intellectual property, competition and taxation, among others. Many
of these laws and regulations are continuously evolving and developing, and the application to, and impact on, us is uncertain. For example,
the World Health Organization recently included &#8220;gaming disorder&#8221; in the 11<sup>th</sup>&#160;Revision of the International
Classification of Diseases, prompting discussion and consideration of legislation and policies aimed at mitigating the risk of overuse
of, and overspending within, video games. These laws could harm our business by limiting the products and services we can offer consumers
or the manner in which we offer them. The costs of compliance with these laws may increase in the future as a result of changes in applicable
laws or changes to interpretation. Any failure on our part to comply with these laws or the application of these laws in an unanticipated
manner may harm our business and result in penalties or significant legal liability.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Certain of our business models will be subject
to new laws or regulations or evolving interpretations and application of existing laws and regulations, including those related to gambling.
The growth and development of electronic commerce, virtual items and virtual currency has prompted calls for new laws and regulations
and resulted in the application of existing laws or regulations that have limited or restricted the sale of our products and services
in certain territories. New laws&#160;&#8212;&#160;each of which could vary significantly across jurisdictions&#160;&#8212;&#160;could
subject us to additional regulation and oversight, cause us to further limit or restrict the sale of our products and services or otherwise
impact our products and services, lessen the engagement with, and growth of, profitable business models, and expose us to increased compliance
costs, significant liability, fines, penalties and harm to our reputation and brand.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We may be subject to laws in certain foreign countries,
and adhere to industry standards in the United&#160;States, that mandate rating requirements or set other restrictions on the advertisement
or distribution of interactive entertainment software based on content. In addition, certain foreign countries allow government censorship
of interactive entertainment software products. Adoption of ratings systems, censorship or restrictions on distribution of interactive
entertainment software based on content could harm our business by limiting the products we are able to offer to our consumers. In addition,
compliance with new and possibly inconsistent regulations for different territories could be costly, delay or prevent the release of our
products in those territories.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our Platform may not be successful and may
expose us to legal, regulatory, and other risks. Given the nascent and evolving nature of cryptocurrencies, NFTs, and our Platform, we
may be unable to accurately anticipate or adequately address such risks or the potential impact of such risks. The occurrence of any such
risks could materially and adversely affect our business, financial condition, results of operations, reputation, and prospects.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">As the market for NFTs and cryptocurrencies is
relatively nascent, it is difficult to predict how the legal and regulatory framework around NFTs and cryptocurrencies will develop and
how such developments will impact our business and our Platform. The future legal status of NFTs and cryptocurrencies under state and
federal laws (including without limitation, securities, banking, and commodities laws) is highly uncertain and unresolved. As a result
of the uncertain legal status of crypto assets, we may have legal exposure for our failure to adequately comply with legal regimes. In
addition governmental agencies may seek to apply laws to our business that we believe are inapplicable, and may seek sanctions relating
to our alleged failure to comply with those laws. There is regulatory uncertainty with respect to whether certain NFTs and cryptocurrencies
could be considered securities. If NFTs sold on our Platform or any cryptocurrencies exchanged for purposes of payment or minting of NFTs
on our Platform were deemed to be a &#8220;security&#8221;, we may be in violation of securities laws for engaging in transactions regarding
the sale of unregistered securities. Such a determination could lead to an enforcement action by the SEC and result in fines and other
penalties and have a negative impact on our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Additionally, if either the NFTs we sell or the
Bitcoin, Ethereum, or MATIC tokens we may acquire or hold at any time are deemed to be a &#8220;security&#8221; we may also be subject
to regulations of FinCEN of the U.S. Department of Treasury and the Bank Secrecy Act. Further, OFAC has signaled that sanctions could
apply to digital transactions and has pursued enforcement actions involving cryptocurrencies and digital asset accounts. This could expose
us to future allegations of violations of the Bank Secrecy Act, including any applicable KYC and Anti-Money&#160;Laundering laws and regulations
(&#8220;AML&#8221;), or sanctions compliance obligations among others. In addition governmental agencies may seek to apply laws to our
business that we believe are inapplicable, and may seek sanctions relating to our alleged failure to comply with those laws which would
negatively impact our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our launch and operation of the Platform potentially
exposes us to the foregoing risks, among others, any of which could materially and adversely affect the success of our Platform and harm
our business, financial condition, results of operations, reputation, and prospects. If we fail to accurately anticipate or manage the
risks associated with our NFTs or with our facilitation of crypto asset transactions, or if we directly or indirectly become subject to
disputes, liability, or other legal or regulatory issues in connection with the operation of our business and Platform, we may not be
successful and our business, financial condition, results of operations, reputation, and prospects could be expected to be materially
adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may face significant competition, which
may harm our business, results of operations or financial condition.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We may face substantial competition in the healthcare
services markets. Our key competitors will include, among others, healthcare consulting service providers, healthcare payment accuracy
companies and providers of other data products and data analytics solutions, including healthcare risk adjustment, quality, economic statistics
and other data. The increasing standardization of certain healthcare services has made it easier for companies to enter these markets
with competitive products and services. We cannot fully anticipate whether or when companies in adjacent or other product or service areas
may launch competitive products and/or services, and any such entry may lead to obsolescence of our products and/or services or loss of
market share or erosion of the prices for our solutions, or both. The extent of this competition may vary by the size of companies, geographical
coverage and scope and breadth of products and services offered. Furthermore, some of our competitors may be significantly larger and
have greater financial or other resources than we do. The vigorous competition we face requires us to provide high quality, innovative
products at a competitive price. We cannot guarantee that we will be able to upgrade our existing solutions, or introduce new solutions
at the same rate as our competitors, or at all, nor can we guarantee that such upgrades or new solutions will achieve market acceptance
over or among competitive offerings, or at all. Therefore, these competitive pressures could have a material adverse impact on our business,
results of operations or financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Gaxos Health would be adversely affected
if we cannot obtain, process or distribute data we require to provide our solutions.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The success of Gaxos Health will depend on our
ability to obtain, process, monetize and distribute data in the healthcare industry in a manner that complies with applicable law, regulation
and contractual and restrictions. Our failure to obtain and distribute such data in a compliant manner could have a harmful effect on
our ability to use and disclose such data which in turn could impair our ability to share such data with our customers or incorporate
it into our services and offerings. In addition to complying with requirements in obtaining the data, the use, processing and distribution
of such data may require us to obtain consent from third parties or follow additional laws, regulations or contractual restrictions that
apply to the healthcare industry. Moreover, we may be subject to claims or liability for use or disclosure of information. Any such claims
or liabilities and other failures to comply with applicable requirements could subject us to unexpected costs and adversely affect our
operating results.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span style="text-decoration:underline">Risks Related to Our Common Stock</span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The market prices and trading volume of
our shares of common stock may experience rapid and substantial price volatility which could cause purchasers of our common stock to incur
substantial losses.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Recently, the market prices and trading volume
of shares of common stock of other small publicly traded with a limited number of shares available to purchasers, have experienced rapid
and substantial price volatility unrelated to the financial performance of those companies. Similarly, shares of our common stock may
experience similar rapid and substantial price volatility unrelated to our financial performance, which could cause purchasers of our
common stock to incur substantial losses, which may be unpredictable and not bear any relationship to our business and financial performance.
Extreme fluctuations in the market price of our common stock may occur in response to strong and atypical retail investor interest, including
on social media and online forums, the direct access by retail investors to broadly available trading platforms, the amount and status
of short interest in our securities, access to margin debt, trading in options and other derivatives on our common stock and any related
hedging and other trading factors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If there is extreme market volatility and trading
patterns in our common stock, it may create several risks for investors, including the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
market price of our common stock may experience rapid and substantial increases or decreases unrelated to our operating performance or
prospects, or macro or industry fundamentals;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
our future market capitalization reflects trading dynamics unrelated to our financial performance or prospects, purchasers of our common
stock could incur substantial losses as prices decline once the level of market volatility has abated;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
the future market price of our common stock declines, purchasers may be unable to resell your shares at or above the price at which you
acquired them. We cannot assure you that the market of our common stock will not fluctuate or decline significantly in the future, in
which case you could incur substantial losses.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Further, we may incur rapid and substantial increases
or decreases in our stock price in the foreseeable future that may not coincide in timing with the disclosure of news or developments
by or affecting us. Accordingly, the market price of our shares of common stock may fluctuate dramatically, and may decline rapidly, regardless
of any developments in our business. Overall, there are various factors, many of which are beyond our control, that could negatively affect
the market price of our common stock or result in fluctuations in the price or trading volume of our common stock, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">actual
or anticipated variations in our annual or quarterly results of operations, including our earnings estimates and whether we meet market
expectations with regard to our earnings;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
current inability to pay dividends or other distributions;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">publication
of research reports by analysts or others about us or cryptocurrency including the NFT industry which may be unfavorable, inaccurate,
inconsistent or not disseminated on a regular basis;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes
in market valuations of similar companies;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">market
reaction to any additional equity, debt or other securities that we may issue in the future, and which may or may not dilute the holdings
of our existing stockholders;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">additions
or departures of key personnel;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">actions
by institutional or significant stockholders;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">short
interest in our stock and the market response to such short interest;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
dramatic increase in the number of individual holders of our stock and their participation in social media platforms targeted at speculative
investing;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">speculation
in the press or investment community about our company or industry;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in"></p><div>

</div><!-- Field: Page; Sequence: 30 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->25<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">strategic
actions by us or our competitors, such as acquisitions or other investments;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">legislative,
administrative, regulatory or other actions affecting our business, our industry, including positions taken by the Internal Revenue Service
(&#8220;IRS&#8221;);</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">investigations,
proceedings, or litigation that involve or affect us;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
occurrence of any of the other risk factors included in this Registration Statement on Form&#160;S-1; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">general
market and economic conditions.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The price of our securities may fluctuate
substantially.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">You should consider an investment in our securities
to be risky, and you should invest in our securities only if you can withstand a significant loss and wide fluctuations in the market
value of your investment. Some factors that may cause the market price of our Common Stock to fluctuate, in addition to the other risks
mentioned in this &#8220;<i>Risk Factors</i>&#8221; section and elsewhere in this Annual Report on Form 10-K, are:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">sale
of our Common Stock by our&#160;shareholders, executives, and directors;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">volatility
and limitations in trading volumes of our shares of Common Stock;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
ability to obtain financing;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
timing and success of introductions of new products by us or our competitors or any other change in&#160;the competitive dynamics of
our industry, including consolidation among competitors;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
ability to attract new customers;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes
in our capital structure or dividend policy, future issuances of securities, sales of large blocks of&#160;Common Stock by our&#160;shareholders;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
cash position;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">announcements and events surrounding financing efforts, including
debt and equity securities;</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">our inability to enter into new markets or develop new products;</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reputational
issues;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">announcements
of acquisitions, partnerships, collaborations, joint ventures, new products, capital&#160;commitments, or other events by us or our competitors;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes
in general economic, political and market conditions in or any of the regions in which we conduct&#160;our business;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes
in industry conditions or perceptions;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">analyst
research reports, recommendation and changes in recommendations, price targets, and withdrawals&#160;of coverage;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">departures
and additions of key personnel;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">disputes
and litigations related to intellectual properties, proprietary rights, and contractual obligations;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes
in applicable laws, rules, regulations, or accounting practices and other dynamics; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">other
events or factors, many of which may be out of our control.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In addition, if the market for stocks in our industry
or industries related to our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of
our Common Stock could decline for reasons unrelated to our business, financial condition and results of operations. If any of the foregoing
occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and
a distraction to management.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->26<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may acquire other companies or technologies,
which could divert our management&#8217;s attention, result in dilution to our stockholders and otherwise disrupt our operations and adversely
affect our operating results.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We may in the future seek to acquire or invest
in businesses, applications and services or technologies that we believe could complement or expand our services, enhance our technical
capabilities or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management and
cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In addition, we do not have any experience in
acquiring other businesses. If we acquire additional businesses, we may not be able to integrate the acquired personnel, operations and
technologies successfully, or effectively manage the combined business following the acquisition. We also may not achieve the anticipated
benefits from the acquired business due to a number of factors, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">inability
to integrate or benefit from acquired technologies or services in a profitable manner;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">unanticipated
costs or liabilities associated with the acquisition;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">difficulty
integrating the accounting systems, operations, and personnel of the acquired business;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">difficulties
and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">difficulty
converting the customers of the acquired business onto the Platform and contract terms, including&#160;disparities in the revenue, licensing,
support, or professional services model of the acquired company;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">diversion
of management&#8217;s attention from other business concerns;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">adverse
effects to our existing business relationships with business partners and customers as a result of the acquisition;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
potential loss of key employees;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">use
of resources that are needed in other parts of our business; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">use
of substantial portions of our available cash to consummate the acquisition.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In addition, a significant portion of the purchase
price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment
at least annually. In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operating
results based on this impairment assessment process, which could adversely affect our results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Acquisitions could also result in dilutive issuances
of equity securities or the incurrence of debt, which could adversely affect our operating results. In addition, if an acquired business
fails to meet our expectations, our operating results, business and financial position may suffer.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If research analysts do not publish research
about our business or if they issue unfavorable commentary or downgrade our Common Stock, our securities&#8217; price and trading volume
could decline.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The trading market for our securities may depend
in part on the research and reports that research analysts publish about us and our business. If we do not maintain adequate research
coverage, or if any of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business,
the price of our Common Stock could decline. If one or more of our research analysts ceases to cover our business or fails to publish
reports on us regularly, demand for our securities could decrease, which could cause the price of our Common Stock or trading volume to
decline.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Market and economic conditions may negatively
impact our business, financial condition and share price.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Concerns over inflation, energy costs, geopolitical
issues, the U.S.&#160;mortgage market and a declining real estate market, unstable global credit markets and financial conditions, and
volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in
consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic
growth going forward, increased unemployment rates, and increased credit defaults in recent&#160;years. Our general business strategy
may be adversely affected by any such economic downturns, volatile business environments and continued unstable or unpredictable economic
and market conditions. If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing
more difficult to complete, more costly, and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable
terms could have a material adverse effect on our growth strategy, financial performance, and share price and could require us to delay
or abandon development or commercialization plans.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The ability of a stockholder to recover
all or any portion of such stockholder&#8217;s investment in the event of a dissolution or termination may be limited.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In the event of a dissolution or termination of
the Company, the proceeds realized from the liquidation of the assets of the Company, or such subsidiaries will be distributed among the
stockholders, but only after the satisfaction of the claims of third-party&#160;creditors of the Company.&#160;The ability of a stockholder
to recover all or any portion of such stockholder&#8217;s investment under such circumstances will, accordingly, depend on the amount
of net proceeds realized from such liquidation and the amount of claims to be satisfied therefrom. There can be no assurance that the
Company will recognize gains on such liquidation, nor is there any assurance that Common Stockholders will receive a distribution in such
a case.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We do not intend to pay cash dividends on
our shares of Common Stock so any returns will be limited to the value of our shares.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We currently anticipate that we will retain future
earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for
the foreseeable future. Any return to shareholders will therefore be limited to the increase, if any, of our share price.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our Certificate of Incorporation provides
that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between the Company
and its stockholders, which could limit stockholders&#8217; ability to obtain a favorable judicial forum for disputes with the Company
or its directors, officers or employees.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our Certificate of Incorporation provides that
unless the Company consents in writing to the selection of an alternative forum, the State of Delaware is the sole and exclusive forum
for: (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary
duty owed by any director, officer or other employee of the Company to the Company or the Company&#8217;s stockholders, (iii) any action
asserting a claim against the Company, its directors, officers or employees arising pursuant to any provision of the Delaware General
Corporation Law (the &#8220;DGCL&#8221;) or our Certificate of Incorporation or the Company&#8217;s Bylaws, or (iv) any action asserting
a claim against the Company, its directors, officers, employees or agents governed by the internal affairs doctrine, including, without
limitation, any action to interpret, apply, enforce or determine the validity of the Company&#8217;s Certificate of Incorporation or Bylaws.
This exclusive forum provision would not apply to suits brought to enforce any liability or duty created by the Securities Act or the
Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. To the extent that any such claims may be based
upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty
or liability created by the Exchange Act or the rules and regulations thereunder.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Section 22 of the Securities Act creates concurrent
jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the
rules and regulations thereunder. However, our Certificate of Incorporation contain a federal forum provision which provides that unless
the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America
will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Any person
or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation are deemed to have notice of and
consented to this provision. As this provision applies to Securities Act claims, there may be uncertainty whether a court would enforce
such a provision.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">These choice of forum provisions may limit a stockholder&#8217;s
ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers or other
employees, which may discourage such lawsuits against the Company and its directors, officers and other employees. Alternatively, if a
court were to find our choice of forum provisions contained in either our Certificate of Incorporation or Bylaws to be inapplicable or
unenforceable in an action, the Company may incur additional costs associated with resolving such action in other jurisdictions, which
could harm its business, results of operations, and financial condition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We are an &#8220;emerging growth company&#8221;
and are able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make our Common
Stock less attractive to investors.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We are an &#8220;emerging growth company,&#8221;
as defined in the Jumpstart Our Business Startups Act&#160;of&#160;2012 (the &#8220;JOBS Act&#8221;), and we have elected to take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not &#8220;emerging growth
companies&#8221; including not being required to comply with the auditor attestation requirements of Section&#160;404(b)&#160;of the Sarbanes-Oxley&#160;Act,
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the
requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments
not previously approved. In addition, pursuant to Section&#160;107 of the JOBS Act, as an &#8220;emerging growth company&#8221; we have
elected to take advantage of the extended transition period provided in Section&#160;7(a)(2)(B)&#160;of the Securities Act, for complying
with new or revised accounting standards. In other words, an &#8220;emerging growth company&#8221; can delay the adoption of certain accounting
standards until those standards would otherwise apply to private companies. As such, our financial statements may not be comparable to
companies that comply with public company effective dates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We cannot predict if investors will find our Common
Stock less attractive because we may rely on these exemptions. If some investors find our Common Stock less attractive as a result, there
may be a less active trading market for our Common Stock and our stock price may be more volatile. We may take advantage of these reporting
exemptions until we are no longer an &#8220;emerging growth company.&#8221; We will remain an &#8220;emerging growth company&#8221; until
the earliest of (i)&#160;the last&#160;day of the fiscal year in which we have total annual gross revenues of $1.235&#160;billion or more;
(ii)&#160;the last&#160;day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering;
(iii)&#160;the date on which we have issued more than $1&#160;billion in nonconvertible debt during the previous three&#160;years; or
(iv)&#160;the date on which we are deemed to be a large accelerated filer under the rules of the SEC.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Financial reporting obligations of being
a public company in the United&#160;States are expensive and&#160;time-consuming, and our management will be required to devote substantial
time to compliance matters.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">As a publicly traded company, we will incur significant
additional legal, accounting and other expenses that we did not incur as a private company. The obligations of being a public company
in the United&#160;States require significant expenditures and will place significant demands on our management and other personnel, including
costs resulting from public company reporting obligations under the Exchange&#160;Act and the rules and regulations regarding corporate
governance practices, including those under the Sarbanes-Oxley&#160;Act&#160;of&#160;2002 (&#8220;Sarbanes-Oxley&#8221;), the Dodd-Frank&#160;Wall
Street Reform and Consumer Protection Act, and the listing requirements of the stock exchange on which our securities are listed. These
rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial
reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor
and maintain compliance with. Moreover, despite recent reforms made possible by the JOBS Act, the reporting requirements, rules, and regulations
will make some activities more time-consuming&#160;and costly, particularly after we are no longer an &#8220;emerging growth company.&#8221;
In addition, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer
liability insurance. Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with
all of these requirements and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to
litigation or being delisted, among other potential problems.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we fail to comply with the rules under&#160;Sarbanes-Oxley&#160;related
to accounting controls and procedures in the future, or, if we discover material weaknesses and other deficiencies in our internal control
and accounting procedures, our stock price could decline significantly and raising capital could be more difficult.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Section&#160;404 of Sarbanes-Oxley&#160;requires
annual management assessments of the effectiveness of our internal control over financial reporting. If we fail to comply with the rules
under Sarbanes-Oxley&#160;related to disclosure controls and procedures in the future, or, if we discover material weaknesses and other
deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could
be more difficult. If material weaknesses or significant deficiencies are discovered or if we otherwise fail to achieve and maintain the
adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal
controls over financial reporting in accordance with Section&#160;404 of Sarbanes-Oxley. Moreover, effective internal controls are necessary
for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial
reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial
information, and the trading price of our Common Stock could drop significantly.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Changes in our tax rates or exposure to
additional tax liabilities, and changes to tax laws and interpretations of tax laws could adversely affect our earnings and financial
condition.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We are subject to taxes in the United&#160;States
and in various foreign jurisdictions. Significant judgment will be required to determine our worldwide income tax provision, tax assets,
and accruals for other taxes, and there are many transactions and calculations where the ultimate tax determination is uncertain. Our
effective income tax rate is based in part on our corporate operating structure and the manner in which we operate our business and develop,
value and use our intellectual property. Taxing authorities in jurisdictions in which we operate may challenge and audit our methodologies
for calculating our income taxes, which could increase our effective income tax rate and have an adverse impact on our results of operations
and cash flows. In addition, our provision for income taxes is materially affected by our profit levels, changes in our business, changes
in the mix of earnings in countries with differing statutory tax rates, changes in the elections we make, changes in the valuation of
our deferred tax assets and liabilities, or changes in applicable tax laws or interpretations of existing income and withholding tax laws,
as well as other factors. For example, the outcome of future guidance related to the U.S.&#160;Tax Act could cause us to change our analysis
and materially impact our previous estimates and financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In addition, changes to U.S.&#160;federal, state,
or international tax laws or their applicability to corporate multinationals in the countries in which we do business may affect our effective
tax rates and cash taxes, cause us to change the way in which we structure our business and resulted in other costs. Our effective tax
rate also could be adversely affected by changes in our valuation allowances for deferred tax assets. Actual financial results also may
differ materially from our current estimates and could have a material impact on our assessment of the valuation allowance.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our principal stockholders and management
own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our directors, executive officers, and each of
our stockholders who owned greater than 5% of our outstanding Common Stock beneficially, as of March 27, 2024, own approximately 32.41%
of our Common Stock. Accordingly, these stockholders have and will continue to have significant influence over the outcome of corporate
actions requiring stockholder approval, including the election of directors, a merger, the consolidation or sale of all or substantially
all of our assets or any other significant corporate transaction. The interests of these stockholders may not be the same as or may even
conflict with our other investors&#8217; interests.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our Certificate of Incorporation, our Bylaws,
and Delaware law may have&#160;anti-takeover&#160;effects that could discourage, delay or prevent a change in control, which may cause
our stock price to decline.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Anti-takeover&#160;provisions may limit the ability
of another party to acquire us, which could cause our stock price to decline. Our Certificate of Incorporation, Bylaws and Delaware law
contain provisions that could discourage, delay or prevent a third party from acquiring us, even if doing so may be beneficial to our
stockholders. In addition, these provisions could limit the price investors would be willing to pay in the future for shares of our Common
Stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Certain provisions of our certificate of
incorporation and Delaware law make it more difficult for a third party to acquire us and make a takeover more difficult to complete,
even if such a transaction were in stockholders&#8217; interest.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our certificate of incorporation and the Delaware
General Corporation Law contain certain provisions that may have the effect of making it more difficult or delaying attempts by others
to obtain control of our Company, even when these attempts may be in the best interests of our stockholders. We also are subject to the
anti-takeover&#160;provisions of the Delaware General Corporation Law, which prohibits us from engaging in a &#8220;business combination&#8221;
with an &#8220;interested stockholder&#8221; unless the business combination is approved in a prescribed manner and prohibits the voting
of shares held by persons acquiring certain numbers of shares without obtaining requisite approval. The statutes and our certificate of
incorporation have the effect of making it more difficult to effect a change in control of our Company. On January 10, 2024, the board
of directors (the &#8220;Board&#8221;) of the Company approved an amendment (the &#8220;Amendment&#8221;) to the bylaws (the &#8220;Bylaws&#8221;),
effective as of January 10, 2024. The Amendment amends and restates Article 2, Section 2.4 in its entirety to lower quorum requirement
for shareholder meetings from requiring the holders of a majority in voting power of the stock issued and outstanding and entitled to
vote, present in person, or by remote communication, if applicable, or represented by proxy to one-third in voting power of the stock
issued and outstanding and entitled to vote, present in person, or by remote communication, if applicable, or represented by proxy.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If our shares become subject to the penny
stock rules, it would become more difficult to trade our shares.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The SEC has adopted rules that regulate broker-dealer&#160;practices
in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided
that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we
do not obtain or retain a listing on the Nasdaq Capital Market or if the price of our Common Stock falls below $5.00, our Common Stock
will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt
from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules
require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer&#160;must make a
special written determination that the penny stock is a suitable investment for the purchaser and receive (i)&#160;the purchaser&#8217;s
written acknowledgment of the receipt of a risk disclosure statement; (ii)&#160;a written agreement to transactions involving penny stocks;
and (iii)&#160;a signed and dated copy of a written suitability statement. These disclosure requirements would likely have the effect
of reducing the trading activity in the secondary market for our Common Stock, and therefore stockholders may have difficulty selling
their shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>FINRA sales practice requirements may limit
a stockholder&#8217;s ability to buy and sell our stock.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In addition to the &#8220;penny stock&#8221; rules
described above, the Financial Industry Regulatory Authority, Inc. (&#8220;FINRA&#8221;), has adopted rules that require that in recommending
an investment to a customer, a broker-dealer&#160;must have reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative, low-priced&#160;securities to their non-institutional&#160;customers, broker-dealers&#160;must
make reasonable efforts to obtain information about the customer&#8217;s financial status, tax status, investment objectives and other
information. The FINRA requirements may make it more difficult for broker-dealers&#160;to recommend that their customers buy our Common
Stock, which may have the effect of reducing the level of trading activity in our Common Stock. As a result, fewer broker-dealers&#160;may
be willing to make a market in our Common Stock, reducing a stockholder&#8217;s ability to resell shares, as well as overall liquidity,
of our Common Stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may be considered a smaller reporting
company and will be exempt from certain disclosure requirements, which could make our Common Stock less attractive to potential investors.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Rule&#160;12b-2&#160;of the Exchange&#160;Act,
defines a &#8220;smaller reporting company&#8221; as an issuer that is not an investment company, an asset-backed&#160;issuer, or a majority-owned&#160;subsidiary
of a parent that is not a smaller reporting company and that:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">had
a public float of less than $250&#160;million as of the last business&#160;day of its most recently completed second fiscal quarter,
computed by multiplying the aggregate worldwide number of shares of its voting and non-voting&#160;common equity held by non-affiliates&#160;by
the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market
for the common equity; or</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

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<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">in
the case of an initial registration statement under the Securities Act&#160;of&#160;1933, as amended (&#8220;Securities Act&#8221;),
or the Exchange&#160;Act for shares of its common equity, had a public float of less than $250&#160;million as of a date within 30&#160;days
of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by
non-affiliates&#160;before the registration plus, in the case of a Securities Act registration statement, the number of such shares included
in the registration statement by the estimated public offering price of the shares; or</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6in; text-align: justify; text-indent: -0.3in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">in
the case of an issuer whose public float was zero, had annual revenues of less than $100.0&#160;million during the most recently completed
fiscal year for which audited financial statements are available.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">As a smaller reporting company, we would not be
required and may not include a Compensation Discussion and Analysis section in our proxy statements; we would provide only two&#160;years
of financial statements; and we would not need to provide the table of selected financial data. We also would have other &#8220;scaled&#8221;
disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our Common
Stock less attractive to potential investors, and also could make it more difficult for our stockholders to sell their shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="a_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>USE OF PROCEEDS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will not receive any of the proceeds from the sale by the Selling
Stockholders of the Common Stock. Upon any exercise of the Warrants by payment of cash, however, we will receive the exercise price of
the Warrants, which, if exercised in cash with respect to the 3,005,642 shares of Common Stock offered hereby, would result in gross proceeds
to us of approximately $9.7 million. However, we cannot predict when and in what amounts or if the Warrants will be exercised by payments
of cash and it is possible that the Warrants may expire and never be exercised, in which case we would not receive any cash proceeds.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="a_007"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>DIVIDEND POLICY</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">We
have never paid cash dividends on our Common Stock and we do not anticipate paying cash dividends in the foreseeable future, but intend
to retain our capital resources for reinvestment in our business. Any future determination to pay cash dividends on our Common Stock will
be at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital requirements
and other factors as the board of directors deems relevant.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&#160;</p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><b>&#160;</b></p><div>

</div><div><a id="b_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><b>MANAGEMENT&#8217;S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">We are a technology-based
company that is developing applications aimed at redefining the way we utilize artificial intelligence (&#8220;AI&#8221;) to optimize
the user experience. We are committed to addressing the need for AI solutions in both health and entertainment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Gaxos Gaming</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Our flagship product
is our gaming platform called &#8220;Gaxos&#8221; (the &#8220;Platform&#8221; or &#8220;Gaxos Gaming&#8221;), created with a vision to
develop, design, acquire, and manage conventional games and to combine these games with unconventional game mechanisms, such as the ability
for gamers and developers to utilize artificial intelligence to create and design in-game features, as well as to mint unique in-game&#160;features,
such as skins, characters, weapons, gear, levels, and virtual lands, in the form of non-fungible&#160;tokens, or &#8220;NFTs,&#8221; that
will allow users to have unique experiences and more control over in-game&#160;assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">In 2023, we launched
our own proprietary games that are simple and fun to play, and that offer gamers the ability to utilize AI to personalize their gaming
experience as well as to mint their own affordable NFTs, with unique and exclusive features, that can be utilized across the network of
games and platform that we intend to build. As of December 31, 2023, we have launched four games, Space Striker AI, Brawl Bots, BattleFleet
AI, and Jigsaw Puzzle AI. Space Striker AI allows players to engage in a captivating storyline and exciting retro shooting space action
in the players AI-generated spaceship. Players can fuse crystals to upgrade their ship parts to craft, clash and conquer the galaxy all
within a dynamic free-to-play economy. Brawl Bots immerses users in high-octane battles in real time against other players, in solo play
or teams. Each player gets to control their own exclusive Bot character, ensuring a personalized gaming experience. BattleFleet AI is
a take on the classic Battleship game with AI elements that allow gamers to design their ships. Jigsaw Puzzle AI lets gamers solve preloaded
jigsaw puzzles as well as design and solve new jigsaw puzzles using AI.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">In addition to launching
our own proprietary games, Gaxos Gaming is developing an artificial intelligence solution for game developers and studios. The solution
is intended to offer a transformative generative AI service that empowers the gaming industry to create without limits through dynamic
content generation, seamless integration, and personalized solutions. Key features of the product will be:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">AI-Powered
Creativity: Reduces creative asset development time from hours to minutes, transforming artistic visions into reality with ease.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><i>Gaxos Health</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Recently, we began to
develop a new initiative, Gaxos Health, which is dedicated to revolutionizing personal health and wellness by developing a suite of innovative
AI-powered health optimization solutions. Gaxos Health will integrate AI-driven insights with individual biometric data and health goals
to create web and application based personalized wellness strategies for users. We believe that this cutting-edge approach will redefine
preventative medicine, offering unparalleled personalization in health and wellness. Gaxos Health solutions will analyze a wide range
of health data to provide tailored wellness plans and address the growing demand for personalized health solutions. We believe that this
technology is not just a step but a leap forward in empowering individuals to take control of their health and longevity with AI&#8217;s
precision and intelligence.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">We launched the AI-powered
health optimization product in the third quarter of 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Basis of Presentation</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">The unaudited financial
statements contained herein have been prepared in accordance with U.S. Generally Accepted Accounting Principles (&#8220;US GAAP&#8221;)
and the requirements of the Securities and Exchange Commission (&#8220;SEC&#8221;).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Use of Estimates</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">The preparation of financial
statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying
financial statements include valuation of investments, valuation of intangible assets and other long-lived assets, estimates of deferred
tax valuation allowances and the fair value of stock options issued for services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Critical Accounting
Estimates</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Critical accounting estimates
are those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty
and have had or are reasonably likely to have a material impact on our financial condition or results of operations. We consider the following
to be critical accounting estimates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Intangible assets</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Intangible assets, consisting
of software licenses and technology licenses, are carried at cost less accumulated amortization, computed using the straight-line method
over the estimated useful life of 5 years, less any impairment charges. We test intangible assets for impairment whenever events or changes
in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Recoverability of assets is determined
by comparing the estimated undiscounted future cash flows of the asset or asset group to their carrying amount. If the carrying value
of the assets exceeds their estimated undiscounted future cash flows, an impairment loss would be determined as the difference between
the fair value of the assets and its carrying value. Typically, the fair value of the assets would be determined using a discounted cash
flow model which would be sensitive to judgments of what constitutes an asset group and certain assumptions such as estimated future financial
performance, discount rates, and other assumptions that marketplace participants would use in their estimates of fair value. There have
been no material changes in the underlying assumptions and estimates used in these calculations in the relevant period. The accounting
estimate related to asset impairments is highly susceptible to change from period to period because it requires management to make assumptions
about the existence of impairment indicators and cash flows over future years. These assumptions impact the amount of an impairment, which
could materially adversely impact the statements of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Stock-based compensation</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Stock-based compensation
is accounted for based on the requirements of ASC 718 &#8211;&#160;<i>&#8220;Compensation&#8211;Stock Compensation</i>&#8221;, which requires
recognition in the financial statements of the cost of employee, non-employee and director services received in exchange for an award
of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively,
the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award
based on the grant-date fair value of the award.&#160;The Company has elected to account for forfeitures as they occur. We recognize compensation
costs resulting from the issuance of stock-based awards to employees, non-employees, and directors as an expense in the statements of
operations over the requisite service period based on a measurement of fair value for each stock-based award. The fair value of each option
granted is estimated as of the date of grant using the Black-Scholes-Merton option-pricing model, net of actual forfeitures. The fair
value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the
vesting period. The Black-Scholes-Merton option-pricing model includes various assumptions, including the fair market value of our common
stock, expected life of stock options, the expected volatility, and the expected risk-free interest rate, among others. These assumptions
reflect our best estimates, but they involve inherent uncertainties based on market conditions generally outside of our control. As a
result, if other assumptions had been used, stock-based compensation expense, as determined in accordance with authoritative guidance,
could have been materially impacted. Furthermore, if we use different assumptions on future grants, stock-based compensation expense could
be materially affected in future periods.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Capital Expenditures</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">We do not have any contractual
obligations for ongoing capital expenditures at this time. We do, however, purchase equipment and software necessary to conduct our operations
on an as needed basis.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Results of Operations</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span style="text-decoration:underline">Comparison of Our Results of Operations
for the Year Ended December 31, 2023 and 2022<i>.</i></span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Revenue</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the year ended December 31, 2023, we generated
revenue of $256. During the year ended December 31, 2022, we did not generate any revenues from operations. Once we achieve a critical
mass of users, we plan to offer new features and to charge fees in order to generate revenues from these added features.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Operating Expenses</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the years ended December 31, 2023 and 2022,
we incurred operating expenses of $4,015,541 and $1,424,096, respectively, an increase of $2,591,445, or 182.0%. Operating consisted of
the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Research and development
fees</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">We enter into agreements with third-party&#160;developers
that require us to make payments for game and software development services upon reaching the application development stage. In exchange
for our payments, we receive the exclusive publishing and distribution rights to the finished game title and software. During the preliminary
project stage and prior to the application development stage of the product, we record any costs incurred by third-party&#160;developers
as research and development expenses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">We capitalize all development and production service
payments to third-party&#160;developers as internal-use&#160;software development costs and licenses once we reach the application development
stage. During the years ended December 31, 2023 and 2022, we reported research and development fees of $915,818 and $824,523, respectively,
an increase of $91,295, or 11.1%, primarily due to an increase in labor and outside development costs incurred in connection with the
development of games and our platform. We expect research and development fees to increase in the future as development of games accelerates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>General and administrative
expenses</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">For the years ended December
31, 2023 and 2022, general and administrative expenses consisted of the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the<br/> Year Ended December&#160;31,<br/> 2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the<br/> Year Ended December&#160;31,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,432,427</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">369,914</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">1,066,969</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">164,495</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Other general and administrative expenses</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">547,964</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Total general and administrative expenses</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">599,573</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Compensation and related
benefits</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the years ended December 31, 2023 and 2022,
compensation and related benefits amounted to $1,432,427 and $369,914, respectively, an increase of $1,062,513, or 287.2%. The increase
during the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily attributable to the accretion of stock-based
compensation related to issuance of stock options to executive officers, directors and employees of $722,079 and the hiring of executive
officers and employees beginning in February 2023, which increased wages by approximately $274,000 over fiscal 2022.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Professional fees</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the years ended December 31, 2023 and 2022,
we incurred professional fees of $1,066,969 and $164,495, respectively, an increase of $902,474, or 548.6%, attributable to an increase
in stock-based consulting fees attributable to the accretion of stock-based consulting fees related to issuance of stock options to consultants
of $214,275, an increase in investor relations fees of $374,970, an increase in legal fees of $138,912, an increase in accounting fees
of $24,688, an increase in advisory fees of $147,500, and an increase in director fees of $39,375, offset by a decrease in other professional
fees of $37,246.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Other general and administrative
expenses</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">General and administrative expenses consist of
advertising and marketing expenses, office expenses, insurance, listing fees, computer and interest expenses, travel expenses, amortization
expense, and other general business expenses. During the years ended December 31, 2023 and 2022, we incurred general and administrative
expenses of $547,964 and $65,164, respectively, an increase of $482,800, or 741.0%. Generally, the increase in other general and administrative
expenses during the year ended December 31, 2023 as compared to the year ended December 31, 2022 was attributable to a ramp up of operations
which began in February 2023 following the Company&#8217;s IPO.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Impairment loss</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On August 9, 2023 and effective August 1, 2023,
the Company and Columbia University agreed to the termination of the Software and Patent License Agreement between the Company and The
Trustees of Columbia University in the City of New York, dated August 29, 2022. Accordingly, as of December 31, 2023, we wrote off the
remaining unamortized book value of the intangible asset of $52,363, and during the year ended December 31, 2023, we recorded an impairment
loss of $52,363, which is included in operating expenses on the accompanying statement of operations and comprehensive loss.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Loss from operations</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the years ended December 31, 2023 and 2022,
we reported a loss from operations of $4,015,285 and $1,424,096, respectively, an increase of $2,591,189, or 182.0%. The increase in loss
from operations was due to the increases in research and development and general and administrative expenses discussed above.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Other income</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the years ended December 31, 2023 and 2022,
we reported other income of $67,188 and $2,924, respectively, which consisted of interest income in both years and a realized gain on
short-term investments in 2023. The increase is primarily due to the short-term investments acquired by the Company during the year ended
December 31, 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Net loss</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the years ended December 31, 2023 and 2022,
our net loss amounted to $3,948,097 and $1,421,172, respectively, an increase of $2,526,925, OR 177.8%. During the years ended December
31, 2023 and 2022, our comprehensive loss amounted to $3,852,312, or a net loss per common share of $0.33 (basic and diluted) and $1,421,172,
or a net loss per common share of $0.14 (basic and diluted), respectively, an increase of $2,431,140, or 171.1%.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Liquidity, Capital Resources and Plan of Operations</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Liquidity is the ability of a company to generate
funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. On December 31,
2023, we had a cash balance of $1,024,710, had short-term investments of $2,592,689, and had working capital of $3,372,503. On February
17, 2023, we completed an initial public offering (&#8220;IPO&#8221;) and sold 140,563 shares of its common stock at a price to the public
of $49.80 per share for gross proceeds of $7,000,000. We received net proceeds of $5,958,470 which is net of offering related expenses
paid with proceeds of $1,041,530. We also reclassified $202,559 of deferred offering costs as of December 31, 2022 to additional paid
in capital upon completing the IPO which resulted in total net proceeds, after equity issuance costs, of $5,755,871. During the year ended
December 31, 2023, we used net cash in operations of $2,980,592 and purchased liquid short-term investments of $3,491,242.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On March 13, 2024, we entered into a securities
purchase agreement with an institutional investor for the issuance and sale in a private placement of (i) 108,000 shares of the Company&#8217;s
common stock (the &#8220;Common Stock&#8221;), (ii) pre-funded warrants to purchase 520,367 shares of Common Stock, (iii) series A warrants
to purchase up to 628,367 shares of Common Stock, and (iv) series B warrants to purchase up to 628,367 shares Common Stock. The purchase
price of each share of Common Stock and associated warrants was $5.57 and the purchase price of each pre-funded warrant and associated
warrants was $5.569. The private placement closed on March 15, 2024 and the aggregate gross proceeds of $3,499,484, before deducting placement
agent fees and expenses and estimated offering expenses payable by the Company. The Company intends to use the net proceeds received from
the Private Placement for general corporate purposes and working capital.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Until such time that the Company implements its
growth strategy, we expect 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.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Cash Flows from Operating Activities</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">For the year ended December 31, 2023, net cash
used in operations was $2,980,592, which primarily resulted from our net loss of $3,948,097, adjusted for the add back of amortization
expense of $10,649, stock-based compensation to employees and consultants of $936,354, a realized gain on short-term investments of $(20,662),
and impairment loss of $52,363, and changes in operating asset and liabilities such as an increase in prepaid expenses and other current
assets of $24,732, a decrease in accounts payable of $29,930, and an increase in accrued expenses of $43,471.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">For the year ended December 31, 2022, net cash
used in operations was $1,260,425, which primarily resulted from our net loss of $1,421,172, adjusted for the add back of amortization
expense of $4,189 and changes in operating asset and liabilities such as an increase in accounts payable of $148,761 and an increase in
accrued expenses of $8,197, offset by a decrease of $400 in prepaid expenses and other current assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Cash Flows from Investing Activities</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">For the year ended December 31, 2023, net cash
used in investing activities was $2,533,213, which resulted from the purchase of short-term investments of $3,491,242 and an increase
in capitalized internal-use software development costs of $56,971, offset by proceeds received from the sale of short-term investments
of $1,015,000.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">For the year ended December 31, 2022, net cash
used in investing activities was $62,836, which resulted from the execution of a software and patent license agreement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Cash Flows from Financing Activities</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">For the year ended December 31, 2023, net cash
provided by financing activities was $5,858,734. On February 17, 2023, we closed an IPO pursuant to which we issued 1,686,755 of our common
stock for gross proceeds of approximately $7 million and net proceeds of $5,958,470, after deducting underwriting discounts and commissions,
and offering expenses. Additionally, during the year ended December 31, 2023, we purchased and cancelled 244,184 treasury shares for $99,736,
or at an average price of $0.408 per share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">For the year ended December 31, 2022, net cash
used in financing activities was $75,099 and consisted of the payment of deferred offering costs, offset by proceeds from subscriptions
receivable of $37,500.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Our ultimate success is dependent on our ability
to obtain additional financing and generate sufficient cash flow to meet our obligations on a timely basis. We will require significant
amounts of capital to sustain operations, and we will need to make the investments we need to execute our longer-term business plan to
support new technologies and help advance innovation. Absent generation of sufficient revenue from the execution of our long-term business
plan, we will need to obtain debt or equity financing, especially if we experience downturns in our business that are more severe or longer
than anticipated, or if we experience significant increases in expense levels resulting from being a publicly-traded company or from operations.
Such additional debt or equity financing may not be available to us on favorable terms, if at all. We plan to pursue our plans with respect
to the research and development of our products which will require resources beyond those that we currently have, ultimately requiring
additional capital from third party sources. However, we believe the net proceeds received in the IPO that closed in February 2023 will
be sufficient to meet our financial obligations for at least the next 12 months.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;<b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><span style="text-decoration:underline">Comparison of Our
Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023<i>.</i></span></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Revenue</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the three and
nine months ended September 30, 2024, we generated revenues of $2,704 and $2,723, respectively, primarily from the sale of health coaching
packages to its customers. Health coaching packages consist of a series of lab tests and personal health coaching sessions. We did not
generate during the 2023 periods.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Operating Expenses</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the three months
ended September 30, 2024 and 2023, we incurred operating expenses of $908,573 and $873,616, respectively, an increase of $34,957, or 4.0%.
During the nine months ended September 30, 2024 and 2023, we incurred operating expenses of $2,806,934 and $3,184,549, respectively, a
decrease of $377,615, or 11.9%. For the three and nine months ended September 30, 2024 and 2023, operating expenses consisted of the following:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Research and development
expenses</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">We enter into agreements
with third-party&#160;developers that require us to make payments for game and software development services. In exchange for our payments,
we receive the exclusive publishing and distribution rights to the finished game title and software. During the preliminary project stage
and prior to the application development stage of the product, we record any costs incurred by third-party&#160;developers as research
and development expenses.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">We capitalize all development
and production service payments to third-party&#160;developers as internal-use&#160;software development costs and licenses once we reach
the application development stage. Prior to this stage, we expense all research and development fees. During the three months ended September
30, 2024 and 2023, we reported research and development expense of $252,657 and $258,405, respectively, a decrease of $5,748, or 2.2%.
The decrease is primarily due to a decrease in outside development costs incurred in connection with the development of Gaxos Games offset
by an increase in development of the Gaxos Health platforms. During the nine months ended September 30, 2024 and 2023, we reported research
and development expense of $684,327 and $630,574, respectively, an increase of $53,753, or 8.5%. The increase is primarily due to an increase
in outside development costs incurred in connection with the development of Gaxos Health platforms offset by a decrease in outside development
costs incurred in connection with the development of Gaxos Games. We expect research and development expenses to increase in the future
as development of Gaxos Games and Gaxos Health accelerates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>General and administrative
expenses</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the<br/> Nine&#160;Months ended<br/> September&#160;30,<br/> 2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">655,916</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Compensation and
related benefits</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the three months
ended September 30, 2024 and 2023, compensation and related benefits amounted to $172,502 and $208,365, respectively, a decrease of $35,863,
or 17.2%. The decrease during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily
attributable to a decrease in executive officer and employee compensation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the nine months
ended September 30, 2024 and 2023, compensation and related benefits amounted to $689,565 and $1,202,199, respectively, a decrease of
$512,634, or 42.6%. The decrease during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
was primarily attributable to a decrease in accretion of stock-based compensation related to issuance of stock options to executive officers,
directors and employees of $640,537, offset by an increase in executive officer and employee compensation of $127,903.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Professional fees</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the three months
ended September 30, 2024 and 2023, we incurred professional fees of $259,167 and $254,553, respectively, an increase of $4,614, or 1.8%,
attributable to an increase in advisory fees of $129,500, offset by a decrease in other professional fees of $124,886.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the nine months
ended September 30, 2024 and 2023, we incurred professional fees of $819,528 and $952,431, respectively, a decrease of $132,903, or 13.9%,
attributable to a decrease in stock-based consulting fees due to the accretion of stock options expense to consultants of $189,699, and
a decrease in investor relations fees of $328,050, offset by an increase in advisory fees of $306,695 and an increase in other professional
fees of $78,151.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Other general and
administrative expenses</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">General and administrative
expenses consist of advertising and marketing expenses, office expenses, insurance, listing fees, computer and interest expenses, travel
expenses, amortization expense, and other general business expenses. During the three months ended September 30, 2024 and 2023, we incurred
general and administrative expenses of $224,247 and $152,293, respectively, an increase of $71,954, or 47.2%. During the nine months ended
September 30, 2024 and 2023, we incurred general and administrative expenses of $613,514 and $346,982, respectively, an increase of $266,532,
or 76.8%. Generally, the increase in other general and administrative expenses during the three and nine months ended September 30, 2024
as compared to the three and nine months ended September 30, 2023 was primarily attributable to an increase in advertising and marketing
expenses and a ramp up of operations which began in February 2023 following the Company&#8217;s IPO.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Impairment loss</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On August 9, 2023 and
effective August 1, 2023, the Company and Columbia University agreed to the termination of the Software and Patent License Agreement between
the Company and The Trustees of Columbia University in the City of New York, dated August 29, 2022. Accordingly, as of September 30, 2023,
we wrote off the remaining unamortized book value of the intangible asset of $52,363, and during the nine months ended September 30, 2023,
recorded an impairment loss of $52,363, which is included in operating expenses on the accompany statement of operations and comprehensive
loss.&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Loss from operations</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the three months
ended September 30, 2024 and 2023, we reported a loss from operations of $905,869 and $873,616, respectively, an increase of $32,253,
or 3.7%. During the nine months ended September 30, 2024 and 2023, we reported a loss from operations of $2,804,211 and $3,184,549, respectively,
a decrease of $380,338, or 11.9%. The change in loss from operations was due to changes in general and administrative expenses, research
and development, and impairment loss as discussed above.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Other income</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the three months
ended September 30, 2024 and 2023, we reported other income of $41,459 and $16,557, respectively, an increase of $24,902, or 150.4%. This
increase is attributable to an increase in interest income. During the nine months ended September 30, 2024 and 2023, we reported other
income of $218,418 and $37,415, respectively, an increase of $181,003, or 483.8%. This increase is attributable to an increase in interest
income of $59,238. Additionally, we recorded a realized gain on short-term investments during the nine months ended September 30, 2024
and 2023 of $121,765 and $0, respectively.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Net loss</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the three months
ended September 30, 2024 and 2023, our net loss amounted to $864,410, or a net loss per common share of $0.61 (basic and diluted) and
$857,059, or a net loss per common share of $0.85 (basic and diluted), respectively, an increase of $7,351, or 0.86%. During the three
months ended September 30, 2024 and 2023, our total comprehensive loss amounted to $864,410 and $815,218, respectively, an increase of
$49,192, or 6.0%.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">During the nine months
ended September 30, 2024 and 2023, our net loss amounted to $2,585,793, or a net loss per common share of $1.95 (basic and diluted) and
$3,147,134, or a net loss per common share of $3.20 (basic and diluted), respectively, a decrease of $561,341, or 17.8%. During the nine
months ended September 30, 2024 and 2023, our total comprehensive loss amounted to $2,668,279 and $3,067,488, respectively, a decrease
of $389,325, or 12.7%.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Liquidity, Capital
Resources and Plan of Operations</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Liquidity is the ability
of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing
basis. On September 30, 2024, we had a cash balance of $5,227,894, had short-term investments of $1,416,056, and had working capital of
$6,525,650.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On March 13, 2024, we
entered into a securities purchase agreement (the &#8220;March 2024 Purchase Agreement&#8221;) with an institutional investor (&#8220;the
&#8220;Purchaser&#8221;) for the issuance and sale in a private placement (the &#8220;March 2024 Private Placement&#8221;) of aggregate
Units consisting of (i) 108,000 shares of the Company&#8217;s common stock, (ii) series A warrants to purchase up to 628,367 shares of
the Company&#8217;s common stock (the &#8220;Series A Warrants&#8221;), and (iii) series B warrants to purchase up to 628,367 shares of
the Company&#8217;s common stock (the &#8220;Series B Warrants&#8221; and together with the Series A Warrants, the &#8220;March 2024 Common
Warrants&#8221;). The purchase price of each Unit consisted of one share of the Company&#8217;s common stock and associated March 2024
Common Warrants, was $5.57 per Unit for aggregate gross proceeds of $601,560. Additionally, we sold pre-funded warrants to purchase up
to 520,367 shares of the Company&#8217;s common stock (the &#8220;Pre-Funded Warrants&#8221;). Pre-funded Warrants are a type of warrant
that allows the warrant holder to purchase a specified number of a company&#8217;s securities at a nominal exercise price. The purchase
price of each Pre-Funded Warrant was $5.569 for aggregate gross proceeds of $2,897,924. In connection with this March 2024 Private Placement,
we raised aggregate gross proceeds of $3,499,484 consisting of $601,560 from the sales of common stock units and $2,897,924 from the sale
of pre-funded warrants, and we received net proceeds of $3,056,984, net of offering costs paid to the placement agent of $382,500 and
legal fees of $60,000, which were netted against the $601,560 of gross proceeds from the sale of common stock units for net proceeds allocated
to the sale of common stock units of $159,060. We are using the net proceeds received from the March 2024 Private Placement for general
corporate purposes and working capital.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On September 20, 2024,
we entered into an inducement offer agreement with the Holder of the March 2024 Common Warrants to immediately exercise for cash an aggregate
1,256,734 of the March 2024 Common Warrants to purchase shares of the Company&#8217;s common stock at a reduced exercise price of $2.58
per share for gross proceeds to the Company of $3,242,374&#160;and we received net proceeds of $2,834,843 after deducting placement agent
fees of $376,552 and other offering expenses paid by the Company of $30,979. The exercised March 2024 Common Warrants were issued pursuant
to a March 2024 Purchase Agreement dated March 13, 2024 by and between the Company and the Holder. Each March 2024 Common Warrant was
initially exercisable at an original exercise price of $5.50 per share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Until such time that
the Company implements its growth strategy, we expect 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.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Cash Flows from
Operating Activities</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">For the nine months ended
September 30, 2024, net cash used in operations was $2,512,166, which primarily resulted from our net loss of $2,585,793, adjusted for
the add back of amortization expense of $37,036, stock-based compensation to employees of $84,190, and a realized gain on short-term investments
of $121,765, and changes in operating asset and liabilities such as an increase in prepaid expenses and other current assets of $61,477,
an increase in accounts payable of $113,406, and an increase in accrued expenses of $19,089.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">For the nine months ended
September 30, 2023, net cash used in operations was $2,307,697, which primarily resulted from our net loss of $3,147,134, adjusted for
the add back of amortization expense of $6,968, stock-based compensation to employees and consultants of $914,426, and impairment loss
of $52,363, and changes in operating asset and liabilities such as an increase in prepaid expenses and other current assets of $79,319,
a decrease in accounts payable of $65,967, and an increase in accrued expenses of $10,966.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Cash Flows from
Investing Activities</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">For the nine months ended
September 30, 2024, net cash provided by investing activities was $842,604, which resulted from proceeds received from the sale of short-term
investments of $3,312,205, offset by cash used for the purchase of short-term investments of $2,096,293, the purchase of equity securities
of $199,998, an increase in capitalized internal-use software development costs of $23,310, and the purchase of an intangible asset of
$150,000.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">For the nine months ended
September 30, 2023, net cash used in investing activities was $3,515,867, which resulted from the purchase of short-term investments of
$3,491,242 and an increase in capitalized software development costs of $24,625. For the nine months ended September 30, 2022, there was
no net cash used in investing activities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b><i>Cash Flows from
Financing Activities</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">For the nine months ended
September 30, 2024, net cash provided by financing activities was $5,872,746. On March 13, 2024, we entered into the March 2024 Private
Placement of aggregate Units consisting of (i) 108,000 shares of the Company&#8217;s common stock, (ii) the March 2024 Common Warrants.
The purchase price of each Unit consisted of one share of the Company&#8217;s common stock and associated March 2024 Common Warrants,
was $5.57 per Unit for aggregate gross proceeds of $601,560. Additionally, we sold pre-funded warrants to purchase up to 520,367 shares
of the Company&#8217;s common stock (the &#8220;Pre-Funded Warrants&#8221;). Pre-funded Warrants are a type of warrant that allows the
warrant holder to purchase a specified number of a company&#8217;s securities at a nominal exercise price. The purchase price of each
Pre-Funded Warrant was $5.569 for aggregate gross proceeds of $2,897,924. In connection with this March 2024 Private Placement, we raised
aggregate gross proceeds of $3,499,484 consisting of $601,560 from the sales of common stock units and $2,897,924 from the sale of pre-funded
warrants, and we received net proceeds of $3,056,984, net of offering costs paid to the placement agent of $382,500 and legal fees of
$60,000, which were netted against the $601,560 of gross proceeds from the sale of common stock units for net proceeds allocated to the
sale of common stock units of $159,060. Additionally, on September 20, 2024, we entered into an inducement offer agreement with the Holder
of the March 2024 Common Warrants to immediately exercise for cash an aggregate 1,256,734 of the March 2024 Common Warrants to purchase
shares of the Company&#8217;s common stock at a reduced exercise price of $2.58 per share for gross proceeds to the Company of $3,242,374&#160;and
the Company received net proceeds of $2,834,843 after deducting placement agent fees of $376,552 and other offering expenses paid by the
Company of $30,979. Furthermore, during the nine months ended September 30, 2024, we purchased and cancelled 6,846 treasury shares for
$19,602, or at an average price of $2.86 per share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">For the nine months ended
September 30, 2023, net cash provided by financing activities was $5,908,760. On February 17, 2023, we closed an IPO pursuant to which
we issued 1,686,755 of our common stock for gross proceeds of approximately $7 million and net proceeds of $5,958,470, after deducting
underwriting discounts and commissions, and offering expenses. Additionally, during the nine months ended September 30, 2023, we purchased
and cancelled 105,931 treasury shares for $49,710, or at an average price of $0.469 per share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Our ultimate success
is dependent on our ability to obtain additional financing and generate sufficient cash flow to meet our obligations on a timely basis.
We will require significant amounts of capital to sustain operations, and we will need to make the investments we need to execute our
longer-term business plan to support new technologies and help advance innovation. Absent generation of sufficient revenue from the execution
of our long-term business plan, we will need to obtain debt or equity financing, especially if we experience downturns in our business
that are more severe or longer than anticipated, or if we experience significant increases in expense levels resulting from being a publicly-traded
company or from operations. Such additional debt or equity financing may not be available to us on favorable terms, if at all. We plan
to pursue our plans with respect to the research and development of our products which will require resources beyond those that we currently
have, ultimately requiring additional capital from third party sources. However, we believe the net proceeds received in the IPO that
closed in February 2023 will be sufficient to meet our financial obligations for at least the next 12 months.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Off-Balance&#160;Sheet
Arrangements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">We did not have any off-balance&#160;sheet
arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations for the periods
presented.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>Recently Issued Accounting
Standards Not Yet Effective or Adopted</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Management does not believe
that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying
unaudited condensed consolidated financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>JOBS Act</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On April 5, 2012, the
JOBS Act was enacted. Section 107 of the JOBS Act provides that an &#8220;emerging growth company&#8221; can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. In other
words, an &#8220;emerging growth company&#8221; can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">We have chosen to take
advantage of the extended transition periods available to emerging growth companies under the JOBS Act for complying with new or revised
accounting standards until those standards would otherwise apply to private companies provided under the JOBS Act. As a result, our financial
statements may not be comparable to those of companies that comply with public company effective dates for complying with new or revised
accounting standards.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Subject to certain conditions
set forth in the JOBS Act, as an &#8220;emerging growth company,&#8221; we intend to rely on certain of these exemptions, including, without
limitation, (i) providing an auditor&#8217;s attestation report on our system of internal controls over financial reporting pursuant to
Section 404(b) of Sarbanes-Oxley and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight
Board regarding mandatory audit firm rotation or a supplement to the auditor&#8217;s report providing additional information about the
audit and the financial statements, known as the auditor discussion and analysis. We will remain an &#8220;emerging growth company&#8221;
until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii)
the last day of our fiscal year following the fifth anniversary of the date of our initial public offering; (iii) the date on which we
have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be
a large accelerated filer under the rules of the SEC</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&#160;</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><b>&#160;&#160;</b></p><div>

</div><div><a id="a_008"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><b>DETERMINATION OF THE
OFFERING PRICE</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">The
prices at which the shares of Common Stock covered by this prospectus may actually be sold will be determined by the prevailing public
market price for shares of our Common Stock or by negotiations between the Selling Stockholders and buyers of our Common Stock in private
transactions or as otherwise described in &#8220;Plan of Distribution.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><b>&#160;</b></p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="a_009"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>BUSINESS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;Our Business</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We are a technology-based company that is developing
applications aimed at redefining the way we utilize artificial intelligence (&#8220;AI&#8221;) to optimize the user experience. We are
committed to addressing the need for AI solutions in both health and entertainment.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Gaxos Labs</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our flagship product, Gaxos Labs, launched in
September 2024 and is a transformative generative AI service that empowers game developers and publishers. Key features of the product
include:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">AI-Powered
Creativity: Reduces creative asset development time from hours to minutes, transforming artistic visions into reality with ease. Rapid
prototyping abilities allows for experimentation with different designs quickly and easily.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Monetization:
Publishers have the ability to offer users AI-generated assets for player customization.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Seamless
Integration: With plug-and-play functionality for Unity and Godot, integration is effortless into existing workflows.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">API:
Connect to any game development engine and build for any platform including mobile and PC.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dynamic
Content Generation: User-Generated-Ai-Content (&#8220;UGAiC&#8221;) feature offers new experiences with each playthrough by letting gamers
use AI in real time, fostering a dynamic gaming environment.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Customized
Solutions: From personalized AI models including images and sound capabilities to expert consulting services, our offering includes customizable
solutions to meet the unique needs of any developer.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Gaxos Gaming</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Gaxos Gaming (the &#8220;Platform&#8221; or &#8220;Gaxos
Gaming&#8221;) was created with a vision to develop, design, acquire, and manage conventional games and to combine these games with unconventional
game mechanisms, such as the ability for gamers and developers to utilize AI to create and design in-game features, as well as to mint
unique in-game features, such as skins, characters, weapons, gear, levels, and virtual lands, in the form of non-fungible tokens, or &#8220;NFTs,&#8221;
that will allow users to have unique experiences and more control over in-game assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In 2023, we launched our own proprietary games
that are simple and fun to play, and that offer gamers the ability to utilize AI to personalize their gaming experience as well as to
mint their own affordable NFTs, with unique and exclusive features, that can be utilized across our network of games. As of December 2024,
we have launched four games, Space Striker AI, Brawl Bots, BattleFleet AI, and Jigsaw Puzzle AI. &#160;Space Striker AI allows players
to engage in a captivating storyline and exciting retro shooting space action in the players AI-generated spaceship. Players can fuse
crystals to upgrade their ship parts to craft, clash and conquer the galaxy all within a dynamic free-to-play economy. Brawl Bots immerses
users in high-octane battles in real time against other players, in solo play or teams. Each player gets to control their own exclusive
Bot character, ensuring a personalized gaming experience. BattleFleet AI is a take on the classic Battleship game with AI elements that
allow gamers to design their ships. Jigsaw Puzzle AI lets gamers solve preloaded jigsaw puzzles as well as design and solve new jigsaw
puzzles using AI.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Gaxos Health</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In July 2024, we launched Gaxos Health, which
is dedicated to revolutionizing personal health and wellness by developing a suite of innovative AI-powered health optimization solutions.
Gaxos Health will integrate AI-driven insights with individual biometric data and health goals to create web and application based personalized
wellness strategies for users. We believe that this cutting-edge approach will redefine preventative medicine, offering unparalleled personalization
in health and wellness. Gaxos Health solutions will analyze a wide range of health data to provide tailored wellness plans and address
the growing demand for personalized health solutions. We believe that this technology is not just a step but a leap forward in empowering
individuals to take control of their health and longevity with AI&#8217;s precision and intelligence. Currently, Gaxos Health offers customized
health plans and coaching based on collected DNA, blood biomarkers, and individual goals and traits.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>RNK Health</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">On September 23, 2024, the Company formed a wholly-owned
subsidiary, RNK Health LLC (&#8220;RNK Health&#8221;), to form a partnership and potential relationship with Nekwellness to engage in
the proposed business of marketing certain health-related products. On October 10, 2024, the Company, RNK Health and Nekwellness entered
into an operating agreement with respect to the regulation and management of the affairs of RNK Health and, as of such date, the Company
owns a 70% membership interest in RNK Health and Nekwellness owns a 30% membership interest in RNK Health.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Intellectual Property</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our business is dependent upon the creation, acquisition,
use and protection of intellectual property. Some of this intellectual property is expected to be in the form of software code, patented
technology, copyright, and trade secrets that we will use to develop our games and the Platform. While we will develop our own intellectual
property, we may also acquire and/or license other intellectual property which is owned by third parties.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We protect our intellectual property rights by
relying on federal, state and common law protections, as well as contractual restrictions. We actively seek protection covering any intellectual
property we believe may be useful or relevant to our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our goal is to obtain, maintain and enforce protection
for our intellectual property, and to operate without infringing on the rights of other parties. Our policy is to actively seek the broadest
intellectual property protection possible for our intellectual property through a combination of contractual arrangements, registration
of our domain names, copyrights, trademarks, service marks and/or patents. We have established business procedures designed to maintain
the confidentiality of our proprietary information, including the use of confidentiality agreements with employees, independent contractors,
consultants, and entities with which we conduct business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The Platform will allow third-party&#160;game
developers to mint NFTs using their own intellectual property and our tools to list those NFTs for sale (primary sales) on the Platform.
The Platform only allows NFTs that were originally minted using the Company&#8217;s NFT infrastructure to be listed for sale. All third-party
game developers who create NFTs on the Platform will be required to agree to our Terms of Service and Privacy Policy prior to engaging
with the Platform. Our Terms of Service and Privacy Policy will require creators to attest they own the intellectual property used to
create their NFTs and to monitor for obvious copyright violations. It is not yet certain to what extent the Digital Millennium Copyright
Act (DMCA) applies to NFT platforms. However, it seems likely that NFT platform owners will be subject to at least some responsibility
for responding to copyright infringement on their sites, therefore, we plan to take proactive approach by registering with the DMCA to
retain a designated agent for DMCA notices as well as instructions for submitting copyright infringement claims.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Government Regulation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Data Privacy Laws and Regulations</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We are subject to various federal, state, and
international laws and regulations that affect companies conducting business on the Internet and mobile platforms, including those relating
to privacy, use and protection of player and employee personal information and data (including the collection of data from minors), the
Internet, behavioral tracking, mobile applications, content, advertising and marketing activities and anti-corruption. Additional laws
in all of these areas are likely to be passed in the future, which could result in significant limitations on or changes to the ways in
which we can collect, use, host, store or transmit the personal information and data of our customers or employees, communicate with our
players and deliver products and services, which may significantly increase our compliance costs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We recognize that users of Gaxos Gaming and Gaxos
Health care deeply about how their personal information is collected, used and shared.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Users of Gaxos Gaming and Gaxos Health may be
required to provide us with certain personal information such as their name, email address and phone number. We take commercially reasonable
and appropriate measures to protect this personal information from accidental loss, misuse, and unauthorized access, disclosure, alteration,
or destruction, taking into account the risks involved in processing and the nature of such data, and comply with applicable laws and
regulations. We do not currently transfer any personal information to third-parties that do not act on our behalf, and we will not do
so without users&#8217; opt-in consent. Similarly, we do not currently collect sensitive personal information from users without opt-in
consent. We may disclose personal information to certain types of third-party companies, but only to the extent needed to enable them
to provide such services. The types of companies that may receive personal information and their functions are: marketing assistance,
analytics and reporting, customer support, email and SMS delivery, cloud infrastructure, and systems monitoring. All such third parties
function as our agents, performing services at our instruction and on our behalf pursuant to contracts which require them to provide at
least the same level of privacy protection as is required by our Privacy Policy. In addition, we may be required to disclose personal
information in response to lawful requests by public authorities, including for the purpose of meeting national security or law enforcement
requirements. We may also disclose personal information to other third parties when compelled to do so by government authorities or required
by law or regulation including, but not limited to, in response to court orders and subpoenas.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">With respect to retention of personal information,
we may only retain such users&#8217; personal information in a form that identifies them only for as long as it serves the purpose(s)
for which it was initially collected as stated in our Privacy Policy, as may be subsequently authorized. We may continue processing users&#8217;
personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of statistical
analysis, and subject to the protection of our Privacy Policy. After such time periods have expired, we may either delete the personal
information or retain it in a form such that it does not identify the user personally.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Healthcare Laws and Regulations</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We will be subject to healthcare regulation and
enforcement by the federal government and the states and foreign governments in which we might conduct our business, including the Health
Insurance Portability and Accountability Act of 1996 (&#8220;HIPAA&#8221;), as amended by the Health Information Technology for Economic
and Clinical Health Act of 2009 and their implementing regulations, impose obligations on certain types of individuals and entities regarding
the electronic exchange of information in common healthcare transactions, as well as standards relating to the privacy and security of
individually identifiable health information.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Competition</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We operate in industries that are highly competitive
and evolving. Specifically, our business faces intense competition in gaming, NFT marketplaces, and other various digital products. In
addition, our Platform may face competition from other AI services that cater to game users and game developers. Further, our competition
may become more intense if gaming industry leaders such as Sony, Nintendo, and Microsoft, all<b>&#160;</b>of whom<b>&#160;</b>have significant
financial, technical and other resources, greater brand recognition and longer operating histories, decide to focus their efforts on blockchain
gaming.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Gaxos Health will also operate in a competitive
health and wellness landscape. Specifically, Gaxos Health may face intense competition from other companies catering to individuals that
are seeking for ways to improve their longevity and health span. Certain competitors, such as Inside Tracker and Tally Health, may expand
their offering to include artificial intelligence and other proprietary methodologies that can further increase competition.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our ability to compete depends in large part on
our continuous commitment to research and development, our ability to rapidly introduce new features and functionality, and to acquire
users. We intend to work closely with our customers to continuously enhance the performance, functionality, usability, reliability and
flexibility of the Platform.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Employees</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">As of January 17, 2024, we
have a total of 3 full-time&#160;employees, We have established a network of external professionals and consultants to which we outsource
various research and development and operational tasks in an effort to minimize administrative overhead. We are not a party to any collective
bargaining agreements. We believe that we maintain good relations with our employees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Our Corporate Information</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We were originally incorporated in the State of
Wyoming on October&#160;27, 2021 (&#8220;NFT Wyoming&#8221;). On March&#160;29, 2022, the Board of Directors of the Company approved,
subject to shareholder approval, a Plan of Conversion, pursuant to which the Company converted from a corporation incorporated under the
laws of the State of Wyoming to a corporation incorporated under the laws of the State of Delaware (the &#8220;Reincorporation&#8221;),
and such approval included the adoption of the Certificate of Incorporation (the &#8220;Delaware Certificate&#8221;) and the Bylaws (the
&#8220;Delaware Bylaws&#8221;) for the Company under the laws of the State of Delaware, under the name, &#8220;The NFT Gaming Company,
Inc.,&#8221; to become effective with the effectiveness of the Reincorporation. On March&#160;29, 2022, we received majority shareholder
approval. On March&#160;30, 2022, we completed the Reincorporation by filing the Delaware Certificate with the Delaware Secretary of State.
On January 5, 2024, we filed an amendment to our Certificate of Incorporation with the Delaware Secretary of State to change our name
to &#8220;Gaxos.ai Inc.&#8221; On&#160;March 7, 2024, we filed a Certificate of Amendment with the Delaware Secretary of State to effectuate
a 1-for-12 reverse stock split of our issued and outstanding and authorized shares of common stock. The reverse stock split became effective
on March 7, 2024.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><div><a id="a_010"></a></div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><b>MANAGEMENT</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.5pt"><b>Executive Officers and Directors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Set forth below is certain
information with respect to the individuals who are our directors and executive officers as of January 17, 2025:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="width: 1%">&#160;</td>
    <td style="width: 14%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Age</b></span></td>
    <td style="width: 1%">&#160;</td>
    <td style="text-align: center; width: 42%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Positions</b></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Vadim Mats</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">40</span></td>
    <td>&#160;</td>
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  <tr style="vertical-align: top; background-color: white">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Steven A. Shorr</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">55</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Financial Officer</span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Adam Holzer</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">56</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</span></td></tr>
  <tr style="vertical-align: top; background-color: white">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Alex Kisin</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">36</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Scott A. Grayson</span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">65</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Vadim Mats</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Vadim Mats has served as Chief Executive Officer
and Chairman since October 2021. Mr. Mats was previously Chief Financial Officer of DatChat, Inc. (NASDAQ: DATS) from July 2021 to January
2022 and supported the company&#8217;s successful IPO on the NASDAQ. From March 2018 to June 2021, Mr. Mats served as the Chief Financial
Officer of Grand Private Equity, a fintech-focused family office. Mr. Mats is also the Founder and Partner of BespokeCFO, a finance and
accounting advisory practice. From June 2010 to December 2016, Mr. Mats was Chief Financial Officer of a hedge fund based in New Jersey.
Mr. Mats also served as the Assistant Controller at Eton Park Capital Management, LP, a multi-strategy fund, from July 2007 to December
2009. From June 2006 to July 2007, Mr. Mats was a Senior Fund Accountant at The Bank of New York Mellon. Mr. Mats holds a Master of Science
degree in accounting and finance and a Bachelor&#8217;s Degree in Business Administration specializing in finance and investments from
the Zicklin School of Business at Bernard Baruch College. Further, Mr. Mats is a CAIA &#169; Charterholder and a Certified Public Accountant
in the State of New York. We believe that Mr. Mats is qualified to serve as a member of our board of directors due the perspective and
experience he brings as our founder and Chief Executive Officer, his extensive experience in technology and finance companies and in the
management of public companies.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Steven A. Shorr</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Steven A. Shorr has served as our Chief Financial
Officer since March 2022. Mr. Shorr is an accomplished accounting professional with over 30 years of experience. Since 2006, he has been
Partner of Jubran, Shorr &amp; Company, a tax, accounting, and advisory firm. In 2001, Mr. Shorr founded Steven Shorr CPA, an accounting
and tax practice, operating until 2006. Prior to 2001, he served as the Controller of CounterPoint Capital Management, a New York-based
hedge fund. Mr. Shorr has also previously worked for public accounting firms, Kenneth Leventhal &amp; Company and Cavalcante &amp; Company.
Mr. Shorr earned his Bachelor of Arts degree in Accounting from Queens College and is a Certified Public Accountant in the State of New
York.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Adam Holzer</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Adam Holzer has served as a director since March
2022. Mr. Holzer is an accomplished sales and marketing executive with leadership experience at large media and marketing organizations.
Since 2019, he has served as Chief Executive Order of AJH Media &amp; Sponsorship Consulting, an advisory media and sponsorship company
for entertainment and sports companies. From 2017 to 2019, Mr. Holzer was Vice President of National Sales at Learfield, a collegiate
sports marketing company. Prior to December 2017, he served as Senior Vice President of Media in the Americas at Lagardere Sports &amp;
Entertainment and as Sales Executive at FOX Sports Media Group. Mr. Holzer earned his Bachelor of Science in Marketing from the University
of Maryland. We believe that Mr. Holzer is qualified to serve as a member of our board of directors because of his extensive professional
experience in senior leadership positions and marketing.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Alex Kisin</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Alex Kisin has served as a director since February
2023. Mr. Kisin is an experienced Account Executive with a demonstrated history of working in tech and startups. Since 2017, he has been
the Regional Sales Manager at OwnBackup, an enterprise software company. Mr. Kisin earned his Bachelor of Arts degree in Sociology from
Rutgers University and is skilled in sales, management, SaaS, business analytics, and business development. e believe that Mr. Kisin is
qualified to serve as a member of our board of directors because of his extensive professional experience in tech, startups and business
development.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Scott A. Grayson</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Scott Grayson has served as a director since February
2023. Mr. Grayson is an accomplished senior sales executive with over 25 years of experience in establishing the vision and strategies
necessary to be successful in the Financial Services software industry. Since November 2019, he has worked for Luxoft USA, Inc., a digital
transformation services and software engineering firm providing bespoke IT solutions, as the Head of Alliances for North America then
moved to the Head of Revenue for the banking, capital markets &amp; insurance divisions at Luxoft USA, Inc in 2020. In 2019, Mr. Grayson
was Head of Sales at AlphaPoint, a software company powering crypto exchanges worldwide. Prior to 2019, he served as Chief Sales Officer
for R3, a leading provider of enterprise technology and services. Mr. Grayson has significant expertise in both on-premise and SaaS delivery
models and is specially skilled at building sales organizations in both direct sales and partnership models while maintaining an entrepreneurial
environment to creatively close business. Mr. Grayson earned his Bachelor of Science degree in Accounting from Lehigh University. We believe
that Mr. Grayson is qualified to serve as a member of our board of directors because of his extensive professional experience in technology
and financial services.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-align: justify; text-indent: -10pt"><b>Family Relationships</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-align: justify; text-indent: -10pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">There are no family relationships
among any of our executive officers or directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Arrangements between Officers and Directors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Except as set forth herein,
to our knowledge, there is no arrangement or understanding between any of our officers or directors and any other person pursuant to which
the officer or director was selected to serve as an officer or director.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Involvement in Certain Legal Proceedings</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We are not aware of any of
our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy, insolvency,
criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of
Regulation S-K.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-indent: -10pt"><b>Committees of Our Board of Directors</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-indent: -10pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our board of directors directs
the management of our business and affairs, as provided by Nevada law, and conducts its business through meetings of the board of directors
and its standing committees. We have a standing audit committee, compensation committee and nominating and corporate governance committee.
In addition, from time to time, special committees may be established under the direction of the board of directors when necessary to
address specific issues.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our board of directors has
determined that all of the members of the audit committee, the compensation committee and the nominating and corporate governance committee
are independent as defined under the applicable rules of Nasdaq, including, in the case of all of the members of our audit committee,
the independence requirements contemplated by Rule 10A-3 under the Exchange Act. In making such determination, the board of directors
considered the relationships that each director has with our Company and all other facts and circumstances that the board of directors
deemed relevant in determining director independence, including the beneficial ownership of our capital stock by each director.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Audit Committee</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The audit committee is appointed by the Board
to assist the Board in its duty to oversee the Company&#8217;s accounting, financial reporting, and internal control functions and the
audit of the Company&#8217;s financial statements. The role of the audit committee is to oversee management in the performance of its
responsibility for the integrity of the Company&#8217;s accounting and financial reporting and its systems of internal controls, the performance
and qualifications of the Company&#8217;s independent auditor, including the independent auditor&#8217;s independence, the performance
of the Company&#8217;s internal audit function; and the Company&#8217;s compliance with legal and regulatory requirements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our audit committee consists of Scott A.&#160;Grayson,
Alex Kisin, and Adam Holzer, with Mr.&#160;Grayson serving as chair. Each member of our audit committee meets the financial literacy requirements
of Nasdaq rules. In addition, our board of directors has determined that Scott A.&#160;Grayson will qualify as an &#8220;audit committee
financial expert,&#8221; as such term is defined in Item&#160;407(d)(5)&#160;of Regulation&#160;S-K.&#160;Our board of directors have
adopted a written charter for the audit committee, which is available on our principal corporate website at&#160;<i>https://gaxos.ai</i>.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-indent: -10pt"><b><i>Compensation Committee</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-indent: -10pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The compensation committee is responsible for
reviewing and recommending, among other things: the adequacy and form of compensation of the board; the compensation of our Chief Executive
Officer, including base salary, incentive bonus, stock option and other grant, award and benefits upon hiring and on an annual basis;
the compensation of other senior management upon hiring and on an annual basis; and our incentive compensation and other equity-based&#160;plans
and recommending changes to such plans to our board of directors, when necessary.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our compensation committee consists of Adam Holzer,
Scott A.&#160;Grayson, and Alex Kisin, with Mr.&#160;Holzer serving as chair. Our board of directors have adopted a written charter for
the compensation committee, which is available on our principal corporate website at&#160;<i>https://gaxos.ai</i>.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-indent: -10pt"><b><i>Nominating and Governance Committee</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-indent: -10pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The nominating and corporate governance committee
is responsible for, among other things: developing criteria for membership on the board of directors and committees; identifying individuals
qualified to become members of the board of directors; recommending persons to be nominated for election as directors and to each committee
of the board of directors; annually reviewing our corporate governance guidelines; and monitoring and evaluating the performance of the
board of directors and leading the board in an annual self-assessment of its practices and effectiveness.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our nominating and corporate governance committee
consists of Alex Kisin, Adam Holzer, and Scott A.&#160;Grayson, with Mr.&#160;Kisin serving as chair. Our board of directors will adopt
a written charter for the nominating and corporate governance committee, which is available on our principal corporate website at&#160;<i>https://gaxos.ai</i>.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Medical Advisory Board</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">In February&#160;2024, our Board of Directors
formed a Medical Advisory Board. As of the Record Date, the members of such board are (i)&#160;Jeff R.&#160;Pavell, M.D.; (ii)&#160;Eric
J.&#160;Margolis, M.D. and (iii)&#160;Nathaniel E.&#160;Lebowitz, M.D.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Code of Business Code and Ethics Conduct</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We have adopted a written code of business conduct
and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar functions. A copy of the code posted on our website,&#160;<i>https://gaxos.ai</i>.
In addition, we intend to post on our website all disclosures that are required by law or rules concerning any amendments to, or waivers
from, any provision of the code.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="a_011"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>EXECUTIVE COMPENSATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Summary Compensation Table</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">The following table sets forth
for the year ended December&#160;31, 2023 and 2022, the compensation awarded to, paid to, or earned by, our Chief Executive Officer and
Chief Financial Officer (collectively, the &#8220;named executive officers&#8221;):</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">Vadim Mats, Chief Executive Officer; and</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">Steven Shorr, Chief Financial Officer.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&#160;</p><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total<br/> ($)</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -10pt; padding-left: 10pt; width: 23.5%">Vadim Mats,</td><td style="width: 0.5%">&#160;</td>
    <td style="width: 0.5%; text-align: center">&#160;</td><td style="width: 7%; text-align: center">2023</td><td style="width: 0.5%; text-align: left">&#160;</td><td style="width: 0.5%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">$</td><td style="text-align: right">0</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">0</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">0</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">$</td><td style="text-align: right">0</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt"></p><div>

</div><!-- Field: Rule-Page --><div style="width: 25%"><div style="font-size: 1pt; border-top: Black 1.5pt solid">&#160;</div></div><!-- Field: /Rule-Page --><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left">(1)</td><td style="text-align: justify">As required by SEC rules, the amounts in this column reflect
the grant date or modification date fair value as required by FASB ASC Topic&#160;718. A discussion of the assumptions and methodologies
used to calculate these amounts is contained in the notes to our financial statements under &#8220;Shareholders&#8217; Equity&#8221;.
In February&#160;2023, Mr.&#160;Mats received 16,667 stock options to purchase 16,667 shares of restricted stock at $49.80 per share.
In February&#160;2023, Mr.&#160;Shorr received 2,083 stock options to purchase 2,083 shares of restricted stock at $49.80 per share.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Employment Agreements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">Other than as set forth below,
we do not currently have employment agreements with any of our officers or employees.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Vadim Mats Employment Agreement</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">On February&#160;17, 2023,
upon the consummation of the IPO, we entered into an employment agreement with Vadim Mats (the &#8220;Mats Employment Agreement&#8221;),
pursuant to which he shall receive a base salary at the annual rate of $400,000 payable in equal installments in accordance with the Company&#8217;s
standard payroll policies. Mr.&#160;Mats shall also receive stock options to purchase up to 16,667&#160;shares of Common Stock under our
2022 Equity Incentive Plan. Mr.&#160;Mats shall also be eligible to receive an annual cash bonus in an amount up to 2x his then-current&#160;base
salary. On February&#160;17, 2023, and in connection with the consummation of the IPO, the Company issued 16,667 stock options to Mr.&#160;Mats.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Steven Shorr Employment Agreement</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">On March&#160;23, 2022, we
entered into an employment agreement with Steven Shorr, (the &#8220;Shorr Employment Agreement&#8221;), pursuant to which he shall receive
a base salary at the annual rate of $60,000 payable in equal installments in accordance with the Company&#8217;s standard payroll policies.
Mr.&#160;Shorr is also entitled to receive stock options to purchase up to 2,083&#160;shares of Common Stock under our 2022 Equity Incentive
Plan. On February&#160;17, 2023, and in connection with the consummation of the IPO, the Company issued 2,083 stock options to Mr.&#160;Shorr.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->53<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Equity Grant Practices</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>2022 Equity Incentive Plan</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">On March&#160;30, 2022, the Company&#8217;s Board
of Directors authorized and adopted the 2022 Equity Incentive Plan (the &#8220;<b>2022 Plan</b>&#8221;) and reserved 208,333&#160;shares
of common stock for issuance thereunder. The 2022 Plan was approved by shareholders on March&#160;30, 2022. The 2022 Plan&#8217;s purpose
is to encourage ownership in the Company by employees, officers, directors and consultants whose long-term&#160;service the Company considers
essential to its continued progress and, thereby, encourage recipients to act in the stockholders&#8217; interest and share in the Company&#8217;s
success. The 2022 Plan provides for the issuance of incentive stock options, non-statutory&#160;stock options, stock appreciation rights
(&#8220;<b>SARs</b>&#8221;), restricted stock, restricted stock units (&#8220;<b>RSUs</b>&#8221;), and other stock-based&#160;awards.
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Outstanding Equity Awards at 2023 Fiscal&#160;Year-End</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">The following table sets forth
information as options outstanding on December&#160;31, 2023.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 24pt">&#160;</p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->54<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><div><a id="a_012"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AND DIRECTOR INDEPENDENCE</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Transactions with Related Persons</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">Except for employment arrangements
which are described under &#8220;Executive Compensation,&#8221; during the fiscal&#160;years ended December&#160;31, 2023 and 2022, there
have not been, nor are there currently proposed, any transaction in which we are or were a participant, the amount involved exceeds the
lesser of $120,000 or 1% of the average of the total assets at December&#160;31, 2023, and any of our directors, executive officers, holders
of more than 5% of our Common Stock, or any immediate family member of any of the foregoing had or will have a direct or indirect material
interest.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Related Person Transaction Policy</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">We have adopted a related person
transaction policy that sets forth our procedures for the identification, review, consideration and approval or ratification of related
person transactions. For purposes of our policy only, a related person transaction is a transaction, arrangement or relationship, or any
series of similar transactions, arrangements or relationships, in which we and any related person are, were or will be participants in
which the amount involved exceeds the lesser of $120,000 or 1% of our total assets at year-end&#160;for our last two completed fiscal&#160;years.
Transactions involving compensation for services provided to us as an employee or director are not covered by this policy. A related person
is any executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate
family members and any entity owned or controlled by such persons.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">Under the policy, if a transaction
has been identified as a related person transaction, including any transaction that was not a related person transaction when originally
consummated or any transaction that was not initially identified as a related person transaction prior to consummation, our management
must present information regarding the related person transaction to our audit committee, or, if audit committee approval would be inappropriate,
to another independent body of our board of directors, for review, consideration and approval or ratification. The presentation must include
a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to
us of the transaction and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be,
an unrelated third party or to or from employees generally. Under the policy, we will collect information that we deem reasonably necessary
from each director, executive officer and, to the extent feasible, significant shareholder to enable us to identify any existing or potential
related-person&#160;transactions and to effectuate the terms of the policy. In addition, under our code of business conduct and ethics,
our employees and directors will have an affirmative responsibility to disclose any transaction or relationship that reasonably could
be expected to give rise to a conflict of interest. In considering related person transactions, our audit committee, or other independent
body of our board of directors, will take into account the relevant available facts and circumstances including, but not limited to:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">the risks, costs and benefits to us;</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">the impact on a director&#8217;s independence in the event
that the related person is a director, immediate family member of a director or an entity with which a director is affiliated;</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">the availability of other sources for comparable services
or products; and</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48pt; text-align: justify; text-indent: -24pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">the terms available to or from, as the case may be, unrelated
third parties or to or from employees generally.</td>
</tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in">The policy requires that, in
determining whether to approve, ratify or reject a related person transaction, our audit committee, or other independent body of our board
of directors, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests
and those of our shareholders, as our audit committee, or other independent body of our board of directors, determines in the good faith
exercise of its discretion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Director Independence </b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our Board of Directors has undertaken a review
of the independence of each director and considered whether each director has a material relationship with us that could compromise his
or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our Board of
Directors determined that Alex Kisin, Adam Holzer and Scott A.&#160;Grayson, representing three of our four incumbent directors, are &#8220;independent
directors&#8221; as defined under the applicable rules and regulations of the SEC and the listing requirements and rules of the Nasdaq
Stock Market. In making these determinations, our Board of Directors reviewed and discussed information provided by the directors and
us with regard to each directors&#8217; business and personal activities and relationships as they may relate to us and our management,
including the beneficial ownership of our capital stock by each non-employee&#160;director and any affiliates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>


</div><!-- Field: Page; Sequence: 60 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->55<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="a_013"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND<br/>
MANAGEMENT AND RELATED STOCKHOLDER MATTERS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The following table sets forth
certain information regarding beneficial ownership of shares of our common stock as of January 17, 2025 based on 6,923,453 shares issued
and outstanding by (i) each person known to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors,
(iii) our executive officers and (iv) all directors and executive officers as a group. Shares are beneficially owned when an individual
has voting and/or investment power over the shares or could obtain voting and/or investment power over the shares within 60 days of January
17, 2025. Except as otherwise indicated, the persons named in the table have sole voting and investment power with respect to all shares
beneficially owned, subject to community property laws, where applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold; border-bottom: Black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Beneficial Owner<sup>(1)</sup> &#160;</b></span></td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">Directors and Named Executive Officers:</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left; padding-left: 9pt">Vadim Mats </td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;239,099 </span></td><td style="width: 1%; text-align: left">(3)</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: right">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;*</span></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: right">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;*</span></td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt">Scott Grayson </td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;1,667 </span></td><td style="text-align: left">(4)</td><td>&#160;</td>
    <td style="text-align: right">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;*</span></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 9pt">All Named Executive Officers and Directors as a Group (5 persons) </td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">249,316</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: right">&#160;</td><td style="text-align: right">3.60</td><td style="text-align: left">%</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Represents beneficial ownership of less than 1%.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The address of each person is c/o Gaxos.ai Inc., 101 Eisenhower Parkway, Suite 300, Roseland, NJ, 07068 unless otherwise indicated herein.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td>
    <td style="text-align: justify"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">The calculation in this column is based upon 6,923,453 shares of common
stock outstanding on January 17, 2025. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes
voting or investment power with respect to the subject securities. Shares of common stock that are currently exercisable or convertible
within 60 days of January 17, 2025 are deemed to be beneficially owned by the person holding such securities for the purpose of computing
the percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial
ownership of any other person.</p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes options to purchase up to 16,667 shares of the Company&#8217;s common stock.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes options to purchase up to 1,667 shares of the Company&#8217;s common stock.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes options to purchase up to 2,083 shares of the Company&#8217;s common stock.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>


</div><!-- Field: Page; Sequence: 61 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="a_014"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>DESCRIPTION OF CAPITAL STOCK</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following description
of our common stock and preferred stock, together with the additional information we include in any prospectus supplement and in any related
free writing prospectus that we may authorize to be provided to you, summarizes the material terms and provisions of the common stock
and preferred stock that we may offer pursuant to this prospectus. While the terms we have summarized below will apply generally to any
future common stock or preferred stock that we may offer, we will describe the particular terms of any class or series of these securities
in more detail in the particular prospectus supplement and in any related free writing prospectus that we may authorize to be provided
to you. For the complete terms of our common stock and preferred stock, please refer to our current certificate of incorporation, as amended
to date (&#8220;Certificate of Incorporation&#8221;), and our bylaws, as amended to date (&#8220;Bylaws&#8221;), which have been filed
with the SEC and are incorporated herein by reference. The terms of these securities may also be affected by the Delaware General Corporation
Law (the &#8220;DGCL&#8221;). The summary below and any update which may be contained in any prospectus supplement and/or and in any related
free writing prospectus that we may authorize to be provided to you is qualified in its entirety by reference to our Certificate of Incorporation
and our Bylaws as either may be amended from time to time after the date of this prospectus, but before the date of any such prospectus
supplement and/or related free writing prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Our authorized capital stock
consists of 50,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001
per share. As of January 17, 2025, we had 6,923,453 shares of common stock outstanding and no shares of preferred stock outstanding.&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Common Stock</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Dividends</i></b>. Subject
to preferences that may be applicable to any outstanding shares of our preferred stock, holders of our common stock are entitled to receive
dividends, if any, as may be declared from time to time by our board of directors out of the Company&#8217;s assets which are legally
available.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Voting Rights</i></b>.
Except as set forth in the Certificate of Incorporation, holders of our common stock are entitled to one vote for each share held on all
matters submitted to a vote of the Company&#8217;s stockholders. Holders of our common stock have no cumulative voting rights.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Liquidation Rights</i></b>.
Upon our liquidation, dissolution or winding-up, holders of our common stock are entitled to share in all assets remaining after payment
of all liabilities and the liquidation preferences of any outstanding shares of preferred stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Other Rights</i></b>.
Holders of the Company&#8217;s common stock have no preemptive or conversion rights or other subscription rights.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Fully Paid</i></b>.
The issued and outstanding shares of our common stock are fully paid and non-assessable. This means the full purchase price for the outstanding
shares of common stock has been paid and the holders of such shares will not be assessed any additional amounts for such shares. Any additional
shares of common stock that we may issue in the future will also be fully paid and non-assessable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Preferred Stock</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are authorized to issue
up to 5,000,000 shares of preferred stock, par value $0.0001 per share. Our board of directors, without further action by the holders
of our common stock, may issue shares of preferred stock. The board of directors is vested with the authority to fix the designations,
preferences and relative, participating, optional or other special rights, and such qualifications, limitations or restrictions thereof,
including, without limitation, redemption rights, dividend rights, liquidation preferences and conversion or exchange rights of any class
or series of preferred stock, and to fix the number of classes or series of preferred stock, the number of shares constituting any such
class or series and the voting powers for each class or series.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The authority possessed
by our board of directors to issue preferred stock could potentially be used to discourage attempts by third parties to obtain control
of the company through a merger, tender offer, proxy contest or otherwise by making such attempts more difficult or more costly. Our board
of directors may issue preferred stock with voting rights or conversion rights that, if exercised, could adversely affect the voting power
of the holders of our common stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->57<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A prospectus supplement relating
to a series of preferred stock offered hereby and any related free writing prospectus that we may authorize to be provided to you will
describe terms of that series of preferred stock, including:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
designation and stated value of that series;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any preemptive rights;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any restrictions on transfer, sale or other assignment;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any restrictions on further issuances;</span></td></tr>
  </table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">whether interests in the preferred stock will be represented by depositary shares;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a discussion of any material United States federal income tax considerations applicable to the preferred stock;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any limitations on the issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of our affairs; and</span></td></tr>
  </table><div>

</div><p style="margin-top: 0; margin-bottom: 0">&#160;</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
other specific terms, preferences, rights or limitations of, or restrictions on, that series of preferred stock.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The rights, preferences, privileges,
and restrictions granted to or imposed upon any series of preferred stock that we offer and sell under this prospectus and applicable
prospectus supplements will be set forth in a certificate of designation relating to the series. We will incorporate by reference into
the registration statement of which this prospectus is a part the form of any certificate of designation that describes the terms of the
series of preferred stock we are offering before the issuance of shares of that series of preferred stock. You should read any prospectus
supplement and any free writing prospectus that we may authorize to be provided to you related to the series of preferred stock being
offered, as well as the complete certificate of designation that contains the terms of the applicable series of preferred stock.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Restrictions on Payment of Dividends</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are incorporated in Delaware
and governed by Delaware law. Delaware law allows a corporation to pay dividends only:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">out
of surplus, as determined under Delaware law; or</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">in
case there is no such surplus, out of the corporation&#8217;s net profits for the fiscal year in which the dividend is declared and/or
the preceding fiscal year.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Anti-takeover Effects of our Certificate of
Incorporation, Bylaws and Delaware Law</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Set forth below is a summary
of the provisions of our Certificate of Incorporation and Bylaws and the DGCL that could have the effect of delaying or preventing a change
in control of our Company. The following description is only a summary, and it is qualified by reference to our Certificate of Incorporation,
Bylaws and the relevant provisions of the DGCL.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Delaware Law</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are governed by the provisions
of Section 203 of the DGCL (&#8220;Section 203&#8221;). In general, Section 203 prohibits a publicly traded Delaware corporation from
engaging in a business combination with an interested stockholder for a period of three years after the date of the transaction in which
the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A business combination
includes mergers, asset sales or other transactions resulting in a financial benefit to the stockholder. An interested stockholder is
a person who, together with affiliates and associates, owns (or within three years, did own) 15% or more of the corporation&#8217;s voting
stock, subject to certain exceptions. The statute could have the effect of delaying, deferring or preventing a change in control of the
Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Board of Directors Vacancies</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Bylaws authorize our board
of directors to fill vacant directorships. In addition, the number of directors constituting our board of directors may be set by resolution
of the incumbent directors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Special Meeting of Stockholders</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Bylaws provide that special
meetings of our stockholders may be called by the Chief Executive Officer of the Company, the board of directors or a committee of the
board of directors that has been duly designated by the board of directors and whose powers and authority include the power to call such
meetings.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Advance Notice Requirements for Stockholder
Proposals and Director Nominations</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Bylaws provide that stockholders
seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual
meeting of stockholders, must provide timely notice of their intent in writing. To be timely, a stockholder&#8217;s notice must be delivered
to the secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the close of
business on the 120th day prior to the first anniversary of the preceding year&#8217;s annual meeting; provided, however, that in the
event the date of the annual meeting is not within 30 days before or after such anniversary date, to be timely, notice by the stockholder
must be so delivered not later than the close of business on the 10th day following the day on which such notice of the date of annual
meeting was mailed or public disclosure of the date of the annual meeting was made, whichever occurs first. These provisions may preclude
our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual
meeting of stockholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>&#160;</b></p><div>


</div><!-- Field: Page; Sequence: 64 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="a_015"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><span><b>SELLING
STOCKHOLDERS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Common Stock being offered
by the Selling Stockholders are those issuable to the Selling Stockholders, upon exercise of the Warrants. We are registering the shares
of Common Stock in order to permit the Selling Stockholders to offer the shares for resale from time to time. Except for the ownership
of the Warrants and as noted below, the Selling Stockholders have not had any material relationship with us within the past three years.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The table below lists the Selling
Stockholders and other information regarding the beneficial ownership of the shares of Common Stock by each of the Selling Stockholders.
The second column lists the number of shares of Common Stock beneficially owned by each Selling Stockholder, based on its ownership of
the shares of Common Stock and Warrants, as of January 17, 2024, assuming exercise of the Warrants held by the Selling Stockholders on
that date, without regard to any limitations on exercises.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The third column lists the
shares of Common Stock being offered by this prospectus by the Selling Stockholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In accordance with the terms
of a registration rights agreement with the Selling Stockholders, this prospectus generally covers the resale of the maximum number of
shares of Common Stock issuable upon exercise of the Warrants, determined as if the outstanding Warrants were exercised in full as of
the trading day immediately preceding the date this registration statement was initially filed with the SEC, each as of the trading day
immediately preceding the applicable date of determination and all subject to adjustment as provided in the registration rights agreement,
without regard to any limitations on the exercise of the Warrants. The fourth column assumes the sale of all of the shares offered by
the Selling Stockholders pursuant to this prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the terms of the Warrants,
a Selling Stockholder may not exercise the Warrants to the extent such exercise would cause such Selling Stockholder, together with its
affiliates and attribution parties, to beneficially own a number of shares of Common Stock which would exceed 4.99% of our then outstanding
Common Stock following such exercise, excluding for purposes of such determination shares of Common Stock issuable upon exercise of such
Warrants which have not been exercised. The number of shares in the second and fourth columns do not reflect this limitation. The Selling
Stockholders may sell all, some or none of their shares in this offering. See &#8220;Plan of Distribution.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">164,688</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">30,221</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Noam Rubinstein<sup>(7)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">349,725</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">199,389</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">120,646</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1.22</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Craig Schwabe<sup>(7)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">8,668</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">7,077</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,591</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Charles Worthman<sup>(7)</sup></span></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,568</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,097</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">471</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: left">%</td></tr>
  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="font-size: 10pt; width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less than 1%</span></td></tr>
</table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The ability to exercise the Warrants held by the Selling Stockholders is subject to a beneficial ownership limitation that, at the time of initial issuance of the Warrants was capped at 4.99% beneficial ownership of the Company&#8217;s issued and outstanding Common Stock (post-exercise). These beneficial ownership limitations may be adjusted up or down, subject to providing advanced notice to the Company. Beneficial ownership as reflected in the selling stockholder table reflects the total number of shares potentially issuable underlying the Warrants and does not give effect to these beneficial ownership limitations. Accordingly, actual beneficial ownership, as calculated in accordance with Section 13(d) and Rule 13d-3 thereunder may be lower than as reflected in the table.</span></td></tr>
</table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td>
    <td style="text-align: justify"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">Mitchell P. Kopin (&#8220;Mr. Kopin&#8221;) and Daniel B. Asher (&#8220;Mr.
Asher&#8221;), each of whom are managers of Intracoastal Capital LLC (&#8220;Intracoastal&#8221;), have shared voting control and investment
discretion over the securities reported herein that are held by Intracoastal. As a result, each of Mr. Kopin and Mr. Asher may be deemed
to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended (the &#8220;Exchange
Act&#8221;)) of the securities reported herein that are held by Intracoastal.</p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td>
    <td style="text-align: justify"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">Heights Capital Management, Inc., the authorized agent of CVI Investments,
Inc. (&#8220;CVI&#8221;), has discretionary authority to vote and dispose of the shares held by CVI and may be deemed to be the beneficial
owner of these shares. Martin Kobinger, in his capacity as President of Heights Capital Management, Inc., may also be deemed to have investment
discretion and voting power over the shares held by CVI. Mr. Kobinger disclaims any such beneficial ownership of the shares. CVI Investments,
Inc.is affiliated with one or more FINRA member, none of whom are currently expected to participate in the sale pursuant to the prospectus
contained in the Registration Statement of shares purchased by the investor in this offering.</p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</span></td>
    <td style="text-align: justify"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">Anson Advisors Inc and Anson Funds Management LP, the Co-Investment
Advisers of Anson Investments Master Fund LP (&#8220;AIMF&#8221;), hold voting and dispositive power over the Common Shares held by AIMF.
Tony Moore is the managing member of Anson Management GP LLC, which is the general partner of Anson Funds Management LP. Moez Kassam and
Amin Nathoo are directors of Anson Advisors Inc. Mr. Moore, Mr. Kassam and Mr. Nathoo each disclaim beneficial ownership of these Common
Shares except to the extent of their pecuniary interest therein. The principal business address of AIMF is Maples Corporate Services Limited,
PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.</p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5)</span></td>
    <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Anson Advisors Inc and Anson Funds Management LP, the Co-Investment Advisers of Anson East Master Fund LP (&#8220;Anson&#8221;), hold voting and dispositive power over the Common Shares held by Anson. Tony Moore is the managing member of Anson Management GP LLC, which is the general partner of Anson Funds Management LP. Moez Kassam and Amin Nathoo are directors of Anson Advisors Inc. Mr. Moore, Mr. Kassam and Mr. Nathoo each disclaim beneficial ownership of these Common Shares except to the extent of their pecuniary interest therein. The principal business address of Anson is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.</span></td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(6)</span></td>
    <td style="text-align: justify">Noam Rubinstein is the sole member of Stuywater Capital LLC and has sole voting and dispositive power
over the securities that are held by Stuywater Capital LLC. Mr. Rubinstein is an affiliated of H.C. Wainwright &amp; Co., LLC.</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(7)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each of the selling shareholders is affiliated with H.C. Wainwright &amp; Co., LLC, a registered broker dealer and has a registered address of c/o H.C. Wainwright &amp; Co., 430 Park Ave, 3rd Floor, New York, NY 10022, and has sole voting and dispositive power over the securities held. The Selling Stockholder acquired the Placement Agent Warrants in the ordinary course of business and, at the time the Placement Agent Warrants were acquired, the Selling Stockholder had no agreement or understanding, directly or indirectly, with any person to distribute such securities.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&#160;</p><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="a_016"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="text-transform: uppercase"><b>Plan
of Distribution</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each Selling Stockholder of
the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities
covered hereby on the principal Trading Market or any other stock exchange, market or trading facility on which the securities are traded
or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following
methods when selling securities:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">block
trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as
principal to facilitate the transaction;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">purchases
by a broker-dealer as principal and resale by the broker-dealer for its account;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
exchange distribution in accordance with the rules of the applicable exchange;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">privately
negotiated transactions;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">settlement
of short sales;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">in
transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated
price per security;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">through
the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
combination of any such methods of sale; or</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
other method permitted pursuant to applicable law.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Selling Stockholders may
also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended (the &#8220;Securities
Act&#8221;), if available, rather than under this prospectus. Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any
broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth
in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance
with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance with FINRA Rule 2121.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with the sale
of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling
Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities
to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer
or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Selling Stockholders and
any broker-dealers or agents that are involved in selling the securities may be deemed to be &#8220;underwriters&#8221; within the meaning
of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act. Each Selling Stockholder has informed us that it does not have any written or oral agreement or understanding, directly or indirectly,
with any person to distribute the securities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are required to pay certain
fees and expenses incurred by us incident to the registration of the securities. We have agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We agreed to keep this prospectus
effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and
without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for us to be in compliance with
the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities
have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities
will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in
certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is complied with.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Under
applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the Common Stock for the applicable restricted period, as defined in Regulation M,
prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the Common
Stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and
have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by
compliance with Rule 172 under the Securities Act).</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>


</div><!-- Field: Page; Sequence: 67 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->62<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="a_017"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>LEGAL MATTERS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Sheppard, Mullin, Richter &amp; Hampton LLP, New
York, New York, will pass upon the validity of the shares of our Common Stock offered hereby.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><div><a id="a_018"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>EXPERTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our consolidated
financial statements as of and for the years ended December 31, 2023 and 2022, incorporated by reference in this prospectus and the
registration statement, of which it forms a part, have been audited by Salberg &amp; Company, P.A. and D. Brooks &amp; Associates
CPAs, independent public accounting firms, as set forth in each of their reports herein, and are included in reliance on such
reports given on the authority of such reports given on the authority of such firms as experts in accounting and auditing.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><div><a id="a_019"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>WHERE YOU CAN FIND MORE INFORMATION&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We have filed with the SEC a registration statement
on Form S-1 under the Securities Act with respect to the securities offered by this prospectus. This prospectus, which constitutes a part
of the registration statement, does not contain all of the information set forth in the registration statement, some of which is contained
in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to
us and our securities, we refer you to the registration statement, including the exhibits filed as a part of the registration statement.
Statements contained in this prospectus concerning the contents of any contract or any other document is not necessarily complete. If
a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that
has been filed. Each statement is this prospectus relating to a contract or document filed as an exhibit is qualified in all respects
by the filed exhibit. We are subject to the informational requirements of the Exchange Act and in accordance therewith file annual, quarterly
and current reports, proxy statements and other information with the SEC. The SEC maintains an Internet website that contains reports,
proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is&#160;www.sec.gov<i>.&#160;</i>The
registration statement and the documents referred to below under &#8220;Incorporation of Documents By Reference&#8221; are also available
on our website,&#160;www.astrotechcorp.com. We have not incorporated by reference into this prospectus the information on our website,
and you should not consider it to be a part of this prospectus.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>


</div><!-- Field: Page; Sequence: 68 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->63<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="a_020"></a></div><p style="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>INDEX
TO FINANCIAL STATEMENTS</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="font-family: Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top; width: 90%"><span style="font-family: Times New Roman, Times, Serif"><a href="#f_001"><span style="font-size: 10pt">Report
    of Independent Registered Public Accounting Firm&#160;(PCAOB ID No. 106)</span></a></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; width: 10%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-2</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: White">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif"><a href="#f_002"><span style="font-size: 10pt">Report
    of Independent Registered Public Accounting Firm&#160;(PCAOB ID No. 4048)</span></a></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-3</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
    Statements:</span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"/></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: White">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif"><a href="#f_003"><span style="font-size: 10pt">Balance
    Sheets as of December 31, 2023 and 2022</span></a></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-4</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif"><a href="#f_004"><span style="font-size: 10pt">Statements
    of Operations and Comprehensive Loss &#8211; For the Years Ended December 31, 2023 and 2022</span></a></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-5</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: White">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif"><a href="#f_005"><span style="font-size: 10pt">Statements
    of Changes in Stockholders&#8217; Equity &#8211; For the Years Ended December 31, 2023 and 2022</span></a></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-6</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif"><a href="#f_006"><span style="font-size: 10pt">Statements
    of Cash Flows &#8211; For the Years Ended December 31, 2023 and 2022</span></a></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-7</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: White">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif"><a href="#f_007"><span style="font-size: 10pt">Notes
    to Financial Statements</span></a></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif">F-8</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: White">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif"><a href="#f_008"><span style="font-size: 10pt">Balance
    Sheets as of September 30, 2024 (Unaudited) and December 31, 2023</span></a></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-18</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif"><a href="#f_009"><span style="font-size: 10pt">Statements
    of Operations and Comprehensive Loss &#8211; For the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)</span></a></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-19</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: White">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif"><a href="#f_010"><span style="font-size: 10pt">Statements
    of Changes in Stockholders&#8217; Equity &#8211; For the Nine Months Ended September 30, 2024 and 2023 (Unaudited)</span></a></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-20</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif"><a href="#f_011"><span style="font-size: 10pt">Statements
    of Cash Flows &#8211; For the Nine Months Ended September 20, 2024 and 2023 (Unaudited)</span></a></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-21</span></td></tr>
  <tr style="font-family: Times New Roman, Times, Serif; background-color: White">
    <td style="font-family: Times New Roman, Times, Serif; padding-left: 0.125in; text-indent: -0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif"><a href="#f_012"><span style="font-size: 10pt">Notes
    to the Financial Statements (Unaudited)</span></a></span></td>
    <td style="font-family: Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-22</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>


</div><!-- Field: Page; Sequence: 69; Options: NewSection; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><div><a id="f_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;<img alt="" src="image_002.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Report of Independent Registered Public Accounting
Firm</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the Stockholders and the Board of Directors
of:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gaxos.AI Inc. (formerly The NFT Gaming Company,
Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Opinion on the Financial Statements</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying balance sheet
of Gaxos.AI Inc. (formerly The NFT Gaming Company, Inc.) (the &#8220;Company&#8221;) as of December 31, 2023, the related statements of
operations, changes in stockholders&#8217; equity and cash flows for the year then ended, and the related notes (collectively referred
to as the &#8220;financial statements&#8221;). In our opinion, the financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended,
in conformity with accounting principles generally accepted in the United States of America.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Basis for Opinion</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These financial statements are the responsibility
of the Company&#8217;s management. Our responsibility is to express an opinion on the Company&#8217;s financial statements based on our
audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (&#8220;PCAOB&#8221;)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of internal control over financial reporting. As part of our audit, we are required to obtain an understanding of
internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company&#8217;s
internal control over financial reporting. Accordingly, we express no such opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Critical Audit Matters</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The critical audit matters are matters arising
from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee
and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. We determined that there are no critical audit matters.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">/s/ Salberg&#160;&amp; Company, P.A.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">SALBERG&#160;&amp; COMPANY, P.A.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have served as the Company&#8217;s auditor
since 2023<i>.</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Boca Raton, Florida</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">March 27, 2024</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">2295 NW Corporate Blvd., Suite 240 &#9679; Boca
Raton, FL 33431-7326</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Phone: (561) 995-8270 &#9679; Toll Free: (866)
CPA-8500 &#9679; Fax: (561) 995-1920</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">www.salbergco.com &#9679; info@salbergco.com</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><i>Member National Association of Certified Valuation
Analysts &#9679; Registered with the PCAOB</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><i>Member CPAConnect with Affiliated Offices Worldwide
&#9679; Member AICPA Center for Audit Quality</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><i>&#160;</i></p><div>


</div><!-- Field: Page; Sequence: 70; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><div><a id="f_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><img alt="" src="image_003.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Report of Independent Registered Public Accounting
Firm</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the Board of Directors and<br/>
Stockholders of Gaxos.AI Inc. (formerly The NFT Gaming Company, Inc.)</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Opinion on the Financial Statements</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying balance sheets
of Gaxos.AI Inc. (formerly The NFT Gaming Company, Inc.) (the Company) as of December 31, 2022 and the related statements of operations,
stockholders&#8217; equity, and cash flows for year ended December 31, 2022 and the related notes (collectively referred to as the financial
statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2022 and the results of its operations and its cash flows for the year ended December 31, 2022 in conformity with accounting
principles generally accepted in the United States of America.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Basis for Opinion</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These financial statements are the responsibility
of the Company&#8217;s management. Our responsibility is to express an opinion on the Company&#8217;s financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company&#8217;s
internal control over financial reporting. Accordingly, we express no such opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We served as the Company&#8217;s auditor since 2021</span></td></tr>
  <tr style="vertical-align: top">
    <td colspan="2">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="width: 82%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img alt="" src="image_004.jpg"/></span></td>
    <td style="width: 18%">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td colspan="2"><p style="margin-top: 0; margin-bottom: 0"></p>
                    <p style="margin-top: 0; margin-bottom: 0">&#160;</p>
                    <p style="margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Palm Beach Gardens, FL</span></p></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">March 31, 2023, except for the evaluation of the
retroactive effect of the reverse stock split described in Note 1, which is as of March 27, 2024</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><img alt="" src="image_005.jpg"/></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(FORMERLY THE NFT GAMING COMPANY, INC.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>BALANCE SHEETS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-9">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt">Additional paid-in capital</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-14">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Accumulated deficit</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesAndStockholdersEquity" scale="0" unitRef="usd" id="ixv-16892">941,427</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;&#160;</p><div>

</div><div><a id="f_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(FORMERLY THE NFT GAMING COMPANY, INC.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center">For the Year Ended</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; padding-bottom: 1.5pt">REVENUES</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Revenues" scale="0" unitRef="usd" id="ixv-16893">256</ix:nonFraction></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-27">-</div></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">OPERATING EXPENSES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 18pt">Research and development</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ResearchAndDevelopmentExpense" scale="0" unitRef="usd" id="ixv-16894">915,818</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ResearchAndDevelopmentExpense" scale="0" unitRef="usd" id="ixv-16895">824,523</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 18pt">General and administrative</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GeneralAndAdministrativeExpense" scale="0" unitRef="usd" id="ixv-16896">3,047,360</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GeneralAndAdministrativeExpense" scale="0" unitRef="usd" id="ixv-16897">599,573</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 18pt">Impairment loss</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GoodwillImpairmentLoss" scale="0" unitRef="usd" id="ixv-16898">52,363</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-28">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt">Total Operating Expenses</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingExpenses" scale="0" unitRef="usd" id="ixv-16899">4,015,541</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingExpenses" scale="0" unitRef="usd" id="ixv-16900">1,424,096</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt">LOSS FROM OPERATIONS</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-16901">4,015,285</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-16902">1,424,096</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">OTHER INCOME:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 18pt">Interest income</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InterestAndOtherIncome" scale="0" unitRef="usd" id="ixv-16903">46,526</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InterestAndOtherIncome" scale="0" unitRef="usd" id="ixv-16904">2,924</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 18pt">Realized gain on short-term investments</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GainLossOnInvestments" scale="0" unitRef="usd" id="ixv-16905">20,662</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-29">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 18pt">Total other income</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherNonoperatingIncomeExpense" scale="0" unitRef="usd" id="ixv-16906">67,188</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherNonoperatingIncomeExpense" scale="0" unitRef="usd" id="ixv-16907">2,924</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 4pt">NET LOSS</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-16908">3,948,097</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-16909">1,421,172</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">COMPREHENSIVE LOSS:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Net loss</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-16910">3,948,097</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-16911">1,421,172</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Other comprehensive gain:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Unrealized gain on short-term investments</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:UnrealizedGainLossOnInvestments" scale="0" unitRef="usd" id="ixv-16912">95,785</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-30">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 4pt">Comprehensive loss</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ComprehensiveIncomeNetOfTax" scale="0" sign="-" unitRef="usd" id="ixv-16913">3,852,312</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ComprehensiveIncomeNetOfTax" scale="0" sign="-" unitRef="usd" id="ixv-16914">1,421,172</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>NET LOSS PER COMMON SHARE:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt; padding-left: 18pt">Basic and diluted</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c4" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EarningsPerShareDiluted" scale="0" sign="-" unitRef="usdPershares" id="ixv-16915"><ix:nonFraction contextRef="c4" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EarningsPerShareBasic" scale="0" sign="-" unitRef="usdPershares" id="ixv-16916">4.00</ix:nonFraction></ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c5" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EarningsPerShareDiluted" scale="0" sign="-" unitRef="usdPershares" id="ixv-16917"><ix:nonFraction contextRef="c5" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EarningsPerShareBasic" scale="0" sign="-" unitRef="usdPershares" id="ixv-16918">1.64</ix:nonFraction></ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>WEIGHTED AVERAGE COMMON SHARE OUTSTANDING:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 4pt; padding-left: 18pt">Basic and diluted</td><td style="padding-bottom: 4pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="f_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(FORMERLY THE NFT GAMING COMPANY, INC.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>STATEMENTS OF CHANGES IN STOCKHOLDERS&#8217;
EQUITY</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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    <td colspan="2"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td><td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


</div><!-- Field: Page; Sequence: 74; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="f_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(FORMERLY THE NFT GAMING COMPANY, INC.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>STATEMENTS OF CASH FLOWS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
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    <td>CASH FLOWS FROM OPERATING ACTIVITIES:</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left; padding-left: 9pt">Net loss</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-16958">3,948,097</ix:nonFraction></td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
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    <td style="text-align: left; padding-left: 9pt">Adjustments to reconcile net loss to net cash used in operating activities:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 18pt">Stock-based compensation</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-188">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 18pt">Impairment loss</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-189">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 18pt">Change in operating assets and liabilities:</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 27pt">Accounts receivable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsReceivable" scale="0" unitRef="usd" id="ixv-16965">8</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-190">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 27pt">Prepaid expenses and other current assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets" scale="0" unitRef="usd" id="ixv-16966">24,732</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 27pt">Accounts payable</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 27pt">Accrued expenses</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccruedLiabilities" scale="0" unitRef="usd" id="ixv-16970">43,471</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccruedLiabilities" scale="0" unitRef="usd" id="ixv-16971">8,197</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">NET CASH USED IN OPERATING ACTIVITIES</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd" id="ixv-16972">2,980,592</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd" id="ixv-16973">1,260,425</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">CASH FLOWS FROM INVESTING ACTIVITIES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 9pt">Purchase of short-term investments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireShortTermInvestments" scale="0" unitRef="usd" id="ixv-16974">3,491,242</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-191">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt">Proceeds from sale of short-term investments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromSaleOfShortTermInvestments" scale="0" unitRef="usd" id="ixv-16975">1,015,000</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-192">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 9pt">Increase in capitalized internal-use software development costs</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToDevelopSoftware" scale="0" unitRef="usd" id="ixv-16976">56,971</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-193">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Purchase of intangible asset</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-194">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireIntangibleAssets" scale="0" unitRef="usd" id="ixv-16977">62,836</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">NET CASH USED IN INVESTING ACTIVITIES</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInInvestingActivities" scale="0" sign="-" unitRef="usd" id="ixv-16978">2,533,213</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInInvestingActivities" scale="0" sign="-" unitRef="usd" id="ixv-16979">62,836</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">CASH FLOWS FROM FINANCING ACTIVITIES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 9pt">Proceeds from the sale of common stock</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfCommonStock" scale="0" unitRef="usd" id="ixv-16980">5,958,470</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-195">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt">Proceeds from subscriptions receivable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-196">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="gxai:ProceedsFromSubscriptionsReceivable" scale="0" unitRef="usd" id="ixv-16981">37,500</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 9pt">Payment of deferred offering costs</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-197">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsOfStockIssuanceCosts" scale="0" unitRef="usd" id="ixv-16982">112,599</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Purchase and cancellation of treasury shares</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForRepurchaseOfCommonStock" scale="0" unitRef="usd" id="ixv-16983">99,736</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-198">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd" id="ixv-16984">5,858,734</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" sign="-" unitRef="usd" id="ixv-16985">75,099</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">NET INCREASE (DECREASE) IN CASH</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseExcludingExchangeRateEffect" scale="0" unitRef="usd" id="ixv-16986">344,929</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseExcludingExchangeRateEffect" scale="0" sign="-" unitRef="usd" id="ixv-16987">1,398,360</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">CASH, beginning of year</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="0" unitRef="usd" id="ixv-16988">679,781</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c15" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="0" unitRef="usd" id="ixv-16989">2,078,141</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt">CASH, end of year</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="0" unitRef="usd" id="ixv-16990">1,024,710</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="0" unitRef="usd" id="ixv-16991">679,781</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_007"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(FORMERLY THE NFT GAMING COMPANY, INC.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><ix:nonNumeric contextRef="c4" escape="true" name="us-gaap:NatureOfOperations" id="ixv-9640"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 1 &#8211; <span style="text-decoration:underline">NATURE OF OPERATIONS</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gaxos.ai Inc. (formerly The NFT Gaming Company,
Inc.) (the &#8220;Company&#8221;) was incorporated in the state of Wyoming on October&#160;27, 2021 (&#8220;Inception&#8221;). On March&#160;30,
2022, the Company reincorporated to the State of Delaware pursuant to a Plan of Conversion approved by the Board of Directors and a majority
of the shareholders. On January 5, 2024, the Company changed its name from The NFT Gamimg Company, Inc. to Gaxos.ai Inc. The Company develops,
designs, acquires, and manages games that offer affordable non-fungible tokens (NFTs) for unique and exclusive features, rewards, and
opportunities. In addition to developing proprietary games, the Company&#8217;s platform will onboard third-party game publishers and
provide access to blockchain and NFT architecture, product experiences, exclusive content, and revenue opportunities.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c29" name="us-gaap:StockholdersEquityReverseStockSplit" id="ixv-16996">On November&#160;4, 2022, the Company filed a
Certificate of Amendment to the Amended and Restated Articles of Incorporation (the &#8220;Certificate of Amendment&#8221;) with the Secretary
of State of the State of Delaware to effect a 1-for-1.33 reverse stock split with respect to the outstanding shares of the Company&#8217;s
common stock.</ix:nonNumeric> The Certificate of Amendment and the reverse stock split became effective on November&#160;4, 2022.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additionally, on February 28, 2024, a majority
of the Company shareholders granted discretionary authority to the Company&#8217;s Board of Directors to amend the Company&#8217;s Certificate
of Incorporation to effect one or more consolidations of the Company&#8217;s issued and outstanding shares of common stock, pursuant to
which the shares of common stock would be combined and reclassified into on the basis of one share of common stock for each 12 shares
of the Company&#8217;s common stock then issued and outstanding (the &#8220;Reverse Stock Split&#8221;). On March 7, 2024, the Company
filed a Certificate of Amendment to the Amended and Restated Articles of Incorporation (the &#8220;Certificate of Amendment&#8221;) with
the Secretary of State of the State of Delaware to effect a 1-for-12 reverse stock split with respect to the outstanding shares of the
Company&#8217;s common stock. The Certificate of Amendment and the reverse stock split became effective on March 7, 2024. All share and
per share data in the accompanying financial statements have been retroactively adjusted to reflect the effect of the Reverse Stock Split.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 9, 2024, the Staff notified the Company
that it has not regained compliance with Listing Rule 5550(a)(2) and was not eligible for a second 180-day period (the &#8220;Delisting
Determination&#8221;). Further, unless the Company requested an appeal of the Delisting Determination to a Hearings Panel (the &#8220;Panel&#8221;),
the Company&#8217;s securities would be scheduled for delisting from The Nasdaq Capital Market.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In early January 2024, the Company submitted a
request to the Panel to appeal the Delisting Determination, and on January 16, 2024, the Panel notified the Company that it received the
request which stayed the suspension of the Company&#8217;s securities and the filing of the Form 25-NSE, pending the Hearing Panel&#8217;s
final written decision.&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 22, 2024, the Company received written
notice from the Panel that the Company regained compliance with the minimum bid price requirement under NASDAQ Listing Rule 5550(a)(2)
for continued listing on the Nasdaq Capital Market.</p></ix:nonNumeric><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c4" continuedAt="_SignificantAccountingPoliciesTextBlock-c4_cont_1" escape="true" name="us-gaap:SignificantAccountingPoliciesTextBlock" id="ixv-9659"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2 &#8211; <span style="text-decoration:underline">SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="c4" continuedAt="_BasisOfAccountingPolicyPolicyTextBlock-c4_cont_1" escape="true" name="us-gaap:BasisOfAccountingPolicyPolicyTextBlock" id="ixv-9664"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Basis of Presentation</i></b></p></ix:nonNumeric>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation continuedAt="_BasisOfAccountingPolicyPolicyTextBlock-c4_cont_2" id="_BasisOfAccountingPolicyPolicyTextBlock-c4_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This summary of significant account policies of
the Company is presented to assist in understanding the Company&#8217;s financial statements. The financial statements and the notes are
the representation of the Company&#8217;s management, who are responsible for their integrity and objectivity. These accounting policies
conform to U.S.&#160;generally accepted accounting principles (&#8220;US GAAP&#8221;) and have been consistently applied in the preparation
of the financial statements.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation continuedAt="_BasisOfAccountingPolicyPolicyTextBlock-c4_cont_3" id="_BasisOfAccountingPolicyPolicyTextBlock-c4_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying 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.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation continuedAt="_BasisOfAccountingPolicyPolicyTextBlock-c4_cont_4" id="_BasisOfAccountingPolicyPolicyTextBlock-c4_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Liquidity is the ability of a company to generate
funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. On December 31,
2023, the Company had a cash balance of $<ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashAndCashEquivalentsAtCarryingValue" scale="0" unitRef="usd" id="ixv-16997">1,024,710</ix:nonFraction>, had short-term investments of $<ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShortTermInvestments" scale="0" unitRef="usd" id="ixv-16998">2,592,689</ix:nonFraction>, and had working capital of $<ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="gxai:WorkingCapital" scale="0" unitRef="usd" id="ixv-16999">3,372,503</ix:nonFraction>. On
February 17, 2023, the Company completed an initial public offering (&#8220;IPO&#8221;) and sold <ix:nonFraction contextRef="c109" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" scale="0" unitRef="shares" id="ixv-17000">140,563</ix:nonFraction> shares of its common stock at
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of offering related expenses paid with proceeds of $<ix:nonFraction contextRef="c109" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromRelatedPartyDebt" scale="0" unitRef="usd" id="ixv-17004">1,041,530</ix:nonFraction>. The Company also reclassified $<ix:nonFraction contextRef="c111" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredOfferingCosts" scale="0" unitRef="usd" id="ixv-17005">202,559</ix:nonFraction> of deferred offering costs as of
December 31, 2022 to additional paid in capital upon completing the IPO which resulted in total net proceeds, after equity issuance costs,
of $<ix:nonFraction contextRef="c112" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromDebtNetOfIssuanceCosts" scale="0" unitRef="usd" id="ixv-17006">5,755,871</ix:nonFraction>. During the year ended December 31, 2023, the Company used net cash in operations of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd" id="ixv-17007">2,980,592</ix:nonFraction> and purchased liquid short-term
investments of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireShortTermInvestments" scale="0" unitRef="usd" id="ixv-17008">3,491,242</ix:nonFraction>. On March 13, 2024, the Company entered into a securities purchase agreement (the &#8220;Purchase Agreement&#8221;)
with an institutional investor (&#8220;the &#8220;Purchaser&#8221;) for the issuance and sale in a private placement (the &#8220;Private
Placement&#8221;). In connection with this Private Placement, the Company raised aggregate gross proceeds of $<ix:nonFraction contextRef="c113" decimals="0" format="ixt:num-dot-decimal" name="gxai:ProceedsFromPrivatePlacementGrossProceeds" scale="0" unitRef="usd" id="ixv-17009">3,499,484</ix:nonFraction> and received net
proceeds of $<ix:nonFraction contextRef="c113" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfCommonStock" scale="0" unitRef="usd" id="ixv-17010">3,056,984</ix:nonFraction>, net of offering costs of $<ix:nonFraction contextRef="c114" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherDeferredCostsNet" scale="0" unitRef="usd" id="ixv-17011">382,500</ix:nonFraction> and legal fees of $<ix:nonFraction contextRef="c113" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LegalFees" scale="0" unitRef="usd" id="ixv-17012">60,000</ix:nonFraction> (See Note 9).</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_BasisOfAccountingPolicyPolicyTextBlock-c4_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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. The Company believes that its 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.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p></ix:continuation></ix:nonNumeric><div>

</div><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(FORMERLY THE NFT GAMING COMPANY, INC.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c4_cont_2" id="_SignificantAccountingPoliciesTextBlock-c4_cont_1"><ix:nonNumeric contextRef="c4" continuedAt="_UseOfEstimates-c4_cont_1" escape="true" name="us-gaap:UseOfEstimates" id="ixv-9709"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Use of Estimates</i></b></p></ix:nonNumeric>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_UseOfEstimates-c4_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of financial statements in conformity
with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure
of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements
include valuation of intangible assets and other long-lived assets, estimates of deferred tax valuation allowances and the fair value
of stock options issued for services.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p>

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standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest
level of input that is significant to the fair value measurement. The Company identified the following assets or liabilities that are
required to be presented on the balance sheet at fair value in accordance with Accounting Standards Codification (&#8220;ASC&#8221;) Topic&#160;820.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation continuedAt="_FairValueMeasurementPolicyPolicyTextBlock-c4_cont_7" id="_FairValueMeasurementPolicyPolicyTextBlock-c4_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s short-term investments are
level 1 measurements and are based on the quoted fair value at each date.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_FairValueMeasurementPolicyPolicyTextBlock-c4_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The carrying amounts reported in the balance sheets
for cash, accounts receivable, prepaid expenses and other current assets, deferred offering costs, accounts payable, and accrued expenses
approximate their fair market value based on the short-term maturity of these instruments.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="c4" continuedAt="_CashAndCashEquivalentsPolicyTextBlock-c4_cont_1" escape="true" name="us-gaap:CashAndCashEquivalentsPolicyTextBlock" id="ixv-9829"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Cash and Cash Equivalents</i></b></p></ix:nonNumeric>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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accounts to be cash equivalents. The Company has no cash equivalents as of December&#160;31, 2023 and 2022.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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banks, which may at times exceed the Federal Deposit Insurance Corporation (&#8220;FDIC&#8221;) limit. To date, the Company has not experienced
any losses on its invested cash. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company&#8217;s
financial condition, results of operations, and cash flows.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

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to the estimated probable losses net of recoveries under the current expected credit loss method. The allowance is based on an analysis
of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable
customer accounts considered at risk or uncollectible. The bad debt expense associated with the allowance for doubtful accounts related
to accounts receivable is recognized in general and administrative expenses. As of December 31, 2023 and 2022, accounts receivable amounted
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</div><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(FORMERLY THE NFT GAMING COMPANY, INC.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c4_cont_3" id="_SignificantAccountingPoliciesTextBlock-c4_cont_2"><ix:nonNumeric contextRef="c4" continuedAt="_InvestmentPolicyTextBlock-c4_cont_1" escape="true" name="us-gaap:InvestmentPolicyTextBlock" id="ixv-9882"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Short-Term Investments</i></b></p></ix:nonNumeric>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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consists of marketable debt securities which are comprised solely of rated U.S. government securities with maturities of more than three
months, but less than one year. The Company classifies these as available-for-sale at purchase date and will reevaluate such designation
at each period end date. The Company may sell these marketable debt securities prior to their stated maturities depending upon changing
liquidity requirements. These debt securities are classified as current assets in the balance sheets and recorded at fair value, with
unrealized gains or losses included in accumulated other comprehensive income (loss) on the balance sheet and as a component of the statements
of comprehensive loss. Gains and losses are recognized when realized. Gains and losses are determined using the specific identification
method and are reported in other income (expense), net in the statements of operations.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation continuedAt="_InvestmentPolicyTextBlock-c4_cont_3" id="_InvestmentPolicyTextBlock-c4_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An impairment loss may be recognized when the
decline in fair value of the debt securities is determined to be other-than-temporary. The Company evaluates its investments for other-than-temporary
declines in fair value below the cost basis each quarter, or whenever events or changes in circumstances indicate that the cost basis
of the short-term investments may not be recoverable. The evaluation is based on a number of factors, including the length of time and
the extent to which the fair value has been below the cost basis, as well as adverse conditions related specifically to the security,
such as any changes to the credit rating of the security and the intent to sell or whether the Company will more likely than not be required
to sell the security before recovery of its amortized cost basis.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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gains as a component of other comprehensive loss for the years ended December 31, 2023 and 2022, respectively. During the years ended
December 31, 2023 and 2022, the Company recognized a gain on sale of short-term investments of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RealizedInvestmentGainsLosses" scale="0" unitRef="usd" id="ixv-17019">20,662</ix:nonFraction> and <span style="-sec-ix-hidden: hidden-fact-234">$0</span>, respectively.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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and Other Indefinite-lived intangible assets are not subject to amortization but rather evaluated for impairment annually and more frequently,
if events or circumstances change that indicate that it is more likely than not that the asset is impaired (i.e., if an impairment indicator
exists). As a result, the Company only recognizes decreases in the value of its digital currencies and other digital assets, and any increase
in value will be recognized only upon disposition. The Company plans to dispose of cryptocurrency received as a form of payment into fiat
currency and anticipates ownership of cryptocurrency to be minimal. As of December 31, 2023, the Company&#8217;s digital currencies consisted
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p>

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are depreciated using the straight-line method over their estimated useful lives. Maintenance and repairs are charged to expense as incurred.
When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or
losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets
when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_PropertyPlantAndEquipmentPolicyTextBlock-c4_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment includes capitalized internal-use
software development costs. Costs incurred to develop internal-use software, including game 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)&#160;the preliminary project stage is completed; and (ii)&#160;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, which currently
is three years. 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. During the years ended December 31, 2023 and 2022, internal-use software development costs
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

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amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of
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in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not
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authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected
as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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</div><div>


</div><!-- Field: Page; Sequence: 79; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(FORMERLY THE NFT GAMING COMPANY, INC.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>December 31, 2023 and 2022</b></p><div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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</div><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(FORMERLY THE NFT GAMING COMPANY, INC.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><ix:continuation id="_IntangibleAssetsDisclosureTextBlock-c4_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On August&#160;29, 2022, the Company entered into
a Software and Patent License Agreement (the &#8220;License Agreement&#8221;) with Columbia University (&#8220;Columbia&#8221;), whereby
the Company obtained a license from Columbia with respect to software and intellectual property rights and patents. In connection with
the License Agreement, Columbia granted to the Company a royalty-bearing, exclusive, worldwide, non-transferable license under the licensed
software and licensed patents, as defined in the License Agreement, to discover, develop, manufacture, have made, use, sell, offer to
sell, have sold, import, export, distribute, rent or lease licensed products and copy, use, modify, and create derivative works from licensed
software and technical information during the term of the License Agreement. The licensed documentation, licensed software, and licensed
patents will be used facilitate a &#8220;certificate of authentication&#8221; capability for image and video assets to prevent fraudulent
activity. This will allow us to certify the image is unaltered in an externally available and trusted way and for a chain-of-trust architecture
to be implemented within our system. The technology will also allow us to add an extra validation layer as well as track manipulation
of our NFT assets. This will further provide increased trust in our gaming partners to use our platform and provide additional validation
and control of third-party assets integrated into our platform.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In consideration of the Licenses granted under
this License Agreement, the Company paid or was to pay to Columbia fees and royalties as follows:</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 0.25in; text-align: justify">&#160;</td> <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">License Fee: A non-refundable, non-recoverable and non-creditable license fee in the sum of $<ix:nonFraction contextRef="c129" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromLicenseFeesReceived" scale="0" unitRef="usd" id="ixv-17045">25,000</ix:nonFraction> was paid to Columbia within 30&#160;days of the effective date of August&#160;29, 2022;</span></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify">&#160;</td> <td>&#160;</td> <td style="text-align: justify">&#160;</td></tr> <tr style="vertical-align: top"> <td style="text-align: justify">&#160;</td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue-based Milestone Payments including non-refundable, nonrecoverable and non-creditable milestone payments;</span></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify">&#160;</td> <td>&#160;</td> <td style="text-align: justify">&#160;</td></tr> <tr style="vertical-align: top"> <td style="text-align: justify">&#160;</td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Royalties: Non-refundable, non-recoverable and non-creditable running royalty on all Licensed Products that are Sold by Company, its Affiliates and Sublicenses, or as otherwise used in to generate Gross Revenue during the term of this Agreement:</span></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify">&#160;</td> <td>&#160;</td> <td style="text-align: justify">&#160;</td></tr> <tr style="vertical-align: top"> <td style="text-align: justify">&#160;</td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fees and expenses: In connection with the License, the Company paid Columbia $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncentiveFeeExpense" scale="0" unitRef="usd" id="ixv-17046">30,704</ix:nonFraction> to cover expenses and paid professional fees of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProfessionalFees" scale="0" unitRef="usd" id="ixv-17047">7,132</ix:nonFraction>. These fees and expenses were capitalized into intangible assets on the accompany balance sheets.</span></td></tr> <tr style="vertical-align: top"> <td style="text-align: justify">&#160;</td> <td>&#160;</td> <td style="text-align: justify">&#160;</td></tr> <tr style="vertical-align: top"> <td style="text-align: justify">&#160;</td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">5)</span></td> <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Win-State Payments: In the event of the Company&#8217;s success results in significant shareholder value appreciation after as Initial Financing (&#8220;Initial Financing&#8221; being the first bona fide equity financing of the Company after the Effective Date that results in gross proceeds to the Company of at least $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="gxai:InitialFinancingGrossProceeds" scale="0" unitRef="usd" id="ixv-17048">500,000</ix:nonFraction>), the Company will make a number of valuation dependent Win-State Payments&#8221; to Columbia in connection with a financing or sale (each such transaction a &#8216;Transaction&#8221;).</span></td></tr> </table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On August 9, 2023 and effective August 1, 2023,
the Company and Columbia University agreed to the termination of the Software and Patent License Agreement between the Company and The
Trustees of Columbia University in the City of New York, dated August 29, 2022. Based on management&#8217;s analysis, the Company determined
the Licenses were not commercially viable in the current competitive landscape. The termination of the Agreement will not have any impact
on the Company&#8217;s future revenues. Accordingly, as of December 31, 2023, the Company wrote off the remaining unamortized book value
of the intangible asset of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GoodwillAndIntangibleAssetImpairment" scale="0" unitRef="usd" id="ixv-17049">52,363</ix:nonFraction>, and during the year ended December 31, 2023, the Company recorded an impairment loss of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GoodwillImpairmentLoss" scale="0" unitRef="usd" id="ixv-17050">52,363</ix:nonFraction>, which
is included in operating expenses on the accompanying statement of operations and comprehensive loss.&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2023, amortization
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Preferred Stock</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is authorized to issue <ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PreferredStockSharesAuthorized" scale="0" unitRef="shares" id="ixv-17052">5,000,000</ix:nonFraction> shares
of its $<ix:nonFraction contextRef="c1" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:PreferredStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares" id="ixv-17053">0.0001</ix:nonFraction> par value preferred stock. The Company&#8217;s board of directors will have the authority to fix and determine the relative
rights and preferences of preferred shares, as well as the authority to issue such shares, without further stockholder approval. As of
December&#160;31, 2023 and 2022, <span style="-sec-ix-hidden: hidden-fact-257"><span style="-sec-ix-hidden: hidden-fact-258"><span style="-sec-ix-hidden: hidden-fact-259"><span style="-sec-ix-hidden: hidden-fact-260">no</span></span></span></span> preferred shares have been designated and no preferred shares were issued and outstanding.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Common Stock</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In January 2022, subscriptions receivable of $<ix:nonFraction contextRef="c130" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquityNoteSubscriptionsReceivable" scale="0" unitRef="usd" id="ixv-17054">37,500</ix:nonFraction>
were collected.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>2023 Stock Repurchase Plan</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 20, 2023, the Board of Directors of the
Company approved a stock repurchase program authorizing the purchase of up to $<ix:nonFraction contextRef="c131" decimals="0" format="ixt:num-dot-decimal" name="srt:StockRepurchaseProgramAuthorizedAmount1" scale="0" unitRef="usd" id="ixv-17055">500,000</ix:nonFraction> of the Company&#8217;s common stock until December
31, 2023 (the &#8220;2023 Stock Repurchase Program&#8221;). In connection with the 2023 Stock Repurchase Program, during the year ended
December 31, 2023, the Company purchased and cancelled <ix:nonFraction contextRef="c132" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod" scale="0" unitRef="shares" id="ixv-17056">20,349</ix:nonFraction> shares of its common stock for $<ix:nonFraction contextRef="c133" decimals="0" format="ixt:num-dot-decimal" name="srt:StockRepurchaseProgramAuthorizedAmount1" scale="0" unitRef="usd" id="ixv-17057">99,736</ix:nonFraction>, or at an average price of $<ix:nonFraction contextRef="c132" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:DividendsCommonStockCash" scale="0" unitRef="usd" id="ixv-17058">4.90</ix:nonFraction>
per share.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;&#160;</p></ix:nonNumeric><div>

</div><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(FORMERLY THE NFT GAMING COMPANY, INC.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c4_cont_2" id="_StockholdersEquityNoteDisclosureTextBlock-c4_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Initial Public Offering</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 17, 2023, the Company completed the
IPO and sold <ix:nonFraction contextRef="c109" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" scale="0" unitRef="shares" id="ixv-17059">140,563</ix:nonFraction> shares of its common stock at a price to the public of $<ix:nonFraction contextRef="c109" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:StockOptionExercisePriceIncrease" scale="0" unitRef="usdPershares" id="ixv-17060">49.80</ix:nonFraction> per share for gross proceeds of $<ix:nonFraction contextRef="c109" decimals="0" format="ixt:num-dot-decimal" name="gxai:ProceedsFromIssuanceInitialPublicOfferingGross" scale="0" unitRef="usd" id="ixv-17061">7,000,000</ix:nonFraction>. The Company
received net proceeds of $<ix:nonFraction contextRef="c109" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceInitialPublicOffering" scale="0" unitRef="usd" id="ixv-17062">5,958,470</ix:nonFraction> which is net of offering expenses of $<ix:nonFraction contextRef="c109" decimals="0" format="ixt:num-dot-decimal" name="gxai:NetOfferingExpenses" scale="0" unitRef="usd" id="ixv-17063">1,041,530</ix:nonFraction>. Additionally, the Company reclassified deferred offering
costs of $<ix:nonFraction contextRef="c134" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredOfferingCosts" scale="0" unitRef="usd" id="ixv-17064">202,599</ix:nonFraction> which were paid and deferred as of December 31, 2022 as a charge to additional paid in capital as equity issuance costs.
In connection with the IPO, the Company issued <ix:nonFraction contextRef="c135" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17065">11,245</ix:nonFraction> warrants to the placement agent. The warrants are exercisable at $<ix:nonFraction contextRef="c135" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares" id="ixv-17066">54.78</ix:nonFraction> per share
and expire on <ix:nonNumeric contextRef="c136" format="ixt:date-monthname-day-year-en" name="us-gaap:ClassOfWarrantOrRighstDateFromWhichWarrantsOrRightsExercisable" id="ixv-17067">February 14, 2028</ix:nonNumeric>. The fair value of these warrant of $<ix:nonFraction contextRef="c136" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FairValueAdjustmentOfWarrants" scale="0" unitRef="usd" id="ixv-17068">3,657,258</ix:nonFraction> was estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted-average assumptions: dividend yield of <ix:nonFraction contextRef="c136" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate" scale="-2" unitRef="pure" id="ixv-17069">0</ix:nonFraction>%; expected volatility of <ix:nonFraction contextRef="c136" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate" scale="-2" unitRef="pure" id="ixv-17070">69.8</ix:nonFraction>%; risk-free interest
rate of <ix:nonFraction contextRef="c136" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate" scale="-2" unitRef="pure" id="ixv-17071">4.03</ix:nonFraction>%; and an estimated holding period of <ix:nonNumeric contextRef="c136" format="ixt-sec:duryear" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardFairValueAssumptionsExpectedTerm1" id="ixv-17072">5</ix:nonNumeric> years. These warrants had no financial statement impact as they were considered to
be equity issuance costs.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>2022 Equity Incentive Plan</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March&#160;30, 2022, the Company&#8217;s Board
of Directors authorized and adopted the 2022 Equity Incentive Plan (the &#8220;2022 Plan&#8221;) and reserved <ix:nonFraction contextRef="c137" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockCapitalSharesReservedForFutureIssuance" scale="0" unitRef="shares" id="ixv-17073">208,333</ix:nonFraction> shares of common
stock for issuance thereunder. The 2022 Plan was approved by shareholders on March 30, 2022. The 2022 Plan&#8217;s purpose is to encourage
ownership in the Company by employees, officers, directors and consultants whose long-term service the Company considers essential to
its continued progress and, thereby, encourage recipients to act in the stockholders&#8217; interest and share in the Company&#8217;s
success. The 2022 Plan provides for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights (&#8220;SARs&#8221;),
restricted stock, restricted stock units (&#8220;RSUs&#8221;), and other stock-based awards.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Stock Options</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 14, 2023, the Company granted aggregate
stock options to purchase <ix:nonFraction contextRef="c138" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares" id="ixv-17074">33,333</ix:nonFraction> of the Company&#8217;s common stock at an exercise price of $<ix:nonFraction contextRef="c139" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:StockOptionExercisePriceIncrease" scale="0" unitRef="usdPershares" id="ixv-17075">49.80</ix:nonFraction> per share to the Company&#8217;s chief
executive officer, an executive officer, and employee and consultants pursuant to the 2022 Equity Incentive Plan. The grant date of the
stock options was February 14, 2023 and the options expire on <ix:nonNumeric contextRef="c4" format="ixt:date-monthname-day-year-en" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardExpirationDate" id="ixv-17076">February 14, 2033</ix:nonNumeric>. <ix:nonNumeric contextRef="c4" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardDescription" id="ixv-17077">The options vest as to (i) 28,333 of such options on
February 14, 2023; and (ii) the remaining 5,000 options vest quarterly (417 each quarter) beginning on May 14, 2023 and each quarter thereafter
through February 14, 2026.</ix:nonNumeric> The stock options were valued at $<ix:nonFraction contextRef="c138" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedInPeriodFairValue1" scale="0" unitRef="usd" id="ixv-17078">1,023,290</ix:nonFraction> on the grant date using a Black-Scholes option pricing model which
will be recognized as stock-based compensation expense over the vesting period.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 6, 2023, the Company granted stock options
to purchase <ix:nonFraction contextRef="c140" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross" scale="0" unitRef="shares" id="ixv-17079">5,000</ix:nonFraction> of the Company&#8217;s common stock at an exercise price of $<ix:nonFraction contextRef="c141" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:StockOptionExercisePriceIncrease" scale="0" unitRef="usdPershares" id="ixv-17080">49.80</ix:nonFraction> per share to the Company&#8217;s board of directors
pursuant to the 2022 Equity Incentive Plan. The grant date of the stock options was March 6, 2023 and the options expire on March 6, 2028.
The options vest on the one-year anniversary of the stock option grant on March 6, 2024.&#160;The stock options were valued at the grant
date using a Black-Scholes option pricing model which will be recognized as stock-based compensation expense over the vesting period.
The stock options were valued at $<ix:nonFraction contextRef="c140" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedInPeriodFairValue1" scale="0" unitRef="usd" id="ixv-17081">33,972</ix:nonFraction> on the grant date using a Black-Scholes option pricing model which will be recognized as stock-based
compensation expense over the vesting period.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The stock options were valued at the grant date
using a Black-Scholes option pricing model with the following assumptions: risk-free interest rates ranging from <ix:nonFraction contextRef="c142" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate" scale="-2" unitRef="pure" id="ixv-17082">3.95</ix:nonFraction>% to <ix:nonFraction contextRef="c143" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate" scale="-2" unitRef="pure" id="ixv-17083">4.0</ix:nonFraction>%, expected
dividend yield of <ix:nonFraction contextRef="c144" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate" scale="-2" unitRef="pure" id="ixv-17084">0</ix:nonFraction>%, expected option term of <ix:nonNumeric contextRef="c142" continuedAt="_SharebasedCompensationArrangementBySharebasedPaymentAwardFairValueAssumptionsExpectedTerm1-c142_cont_1" format="ixt-sec:durwordsen" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardFairValueAssumptionsExpectedTerm1" id="ixv-17085">three</ix:nonNumeric> to <ix:nonNumeric contextRef="c143" format="ixt-sec:durwordsen" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardFairValueAssumptionsExpectedTerm1" id="ixv-17086">six<ix:continuation id="_SharebasedCompensationArrangementBySharebasedPaymentAwardFairValueAssumptionsExpectedTerm1-c142_cont_1"> years</ix:continuation></ix:nonNumeric> using the simplified method, and expected volatilities ranging from <ix:nonFraction contextRef="c142" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate" scale="-2" unitRef="pure" id="ixv-17088">68.8</ix:nonFraction>%
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the year ended December 31, 2023, the Company
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c4" continuedAt="_ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock-c4_cont_1" escape="true" name="us-gaap:ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock" id="ixv-17093">There was no option activity during the year ended
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock-c4_cont_1"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<br/> Options</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Remaining<br/> Contractual<br/> Life<br/> (Years)</td><td style="padding-bottom: 1.5pt; 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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 31, 2023, the aggregate intrinsic
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(FORMERLY THE NFT GAMING COMPANY, INC.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><ix:continuation id="_StockholdersEquityNoteDisclosureTextBlock-c4_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Stock Warrants</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with the IPO, the Company issued
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The warrants were considered equity issuance costs; therefore, there was no financial statement impact for the grant during the year ended
December 31, 2023.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There was no warrant activity during the year
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock-c4_cont_1"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of Warrants</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Remaining<br/> Contractual<br/> Term<br/> (Years)</td><td style="padding-bottom: 1.5pt; 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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p><div>

</div><ix:nonNumeric contextRef="c4" escape="true" name="us-gaap:CommitmentsAndContingenciesDisclosureTextBlock" id="ixv-10744"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 7 &#8211; <span style="text-decoration:underline">COMMITMENTS AND CONTINGENCIES</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Employment Agreement</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 17, 2023, the Company entered into
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initial public offering (the &#8220;<b><i>IPO</i></b>&#8221;). The term of the agreement will continue for one (1) year from the date
of execution and automatically renews for successive one (1) year periods at the end of each term until either party delivers written
notice of their intent not to review at least 90 days prior to the expiration of the then effective term. Pursuant to the agreement, Mr.
Mats shall receive a base salary at the annual rate of $<ix:nonFraction contextRef="c154" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SalariesAndWages" scale="0" unitRef="usd" id="ixv-17115">400,000</ix:nonFraction> payable in equal installments in accordance with the Company&#8217;s standard
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for income tax using the
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based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in
effect in the year in which the differences are expected to reverse. The deferred tax assets on December 31, 2023 and 2022 consist of
net operating loss carryforwards and the mandatory capitalization of research and development cost for tax purposes pursuant to Section
174, as revised by the Tax Cuts and Jobs Act (&#8220;TCJA&#8221;). The TCJA amended Section 174 relating to the federal tax treatment
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(FORMERLY THE NFT GAMING COMPANY, INC.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2023, the Company had approximately
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subject to annual usage limitations of <ix:nonFraction contextRef="c4" decimals="2" format="ixt:num-dot-decimal" name="gxai:TaxableIncomePercentage" scale="-2" unitRef="pure" id="ixv-17141">80</ix:nonFraction>% of taxable income.&#160;Generally, these can be carried forward and applied against future
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In accordance with FASB ASC 740 &#8220;Income
Taxes&#8221;, valuation allowances are provided against deferred tax assets, if based on the weight of available evidence, some or all
of the deferred tax assets may or will not be realized. The Company has evaluated its ability to realize some or all of the deferred tax
assets on its balance sheet for the coming year and has established a valuation allowance in the amount of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncomeTaxReconciliationChangeInDeferredTaxAssetsValuationAllowance" scale="0" unitRef="usd" id="ixv-17143">1,161,745</ix:nonFraction> as of December 31,
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company does not have any uncertain tax positions
or events leading to uncertainty in a tax position. The Company&#8217;s 2023, 2022 and 2021 Corporate Income Tax Returns are subject to
Internal Revenue Service examination.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c4" continuedAt="_SubsequentEventsTextBlock-c4_cont_1" escape="true" name="us-gaap:SubsequentEventsTextBlock" id="ixv-10951"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 9 &#8211; <span style="text-decoration:underline">SUBSEQUENT EVENTS</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Reverse split</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 28, 2024, a majority of the Company
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to effect one or more consolidations of the Company&#8217;s issued and outstanding shares of common stock, pursuant to which the shares
of common stock would be combined and reclassified into on the basis of <ix:nonNumeric contextRef="c157" name="us-gaap:StockholdersEquityReverseStockSplit" id="ixv-17145">one share of common stock for each 12 shares of the Company&#8217;s
common stock</ix:nonNumeric> then issued and outstanding (the &#8220;Reverse Stock Split&#8221;). On March 7, 2024, the Company filed a Certificate of
Amendment to the Amended and Restated Articles of Incorporation (the &#8220;Certificate of Amendment&#8221;) with the Secretary of State
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accompanying financial statements have been retroactively adjusted to reflect the effect of the Reverse Stock Split.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Technology purchase agreement</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 4, 2024, the Company entered into a Purchase
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the Company a perpetual, worldwide, non-exclusive, non-transferable, royalty free, fully paid license to (a) modify and create derivative
works (&#8220;Derivative Works&#8221;) from certain technology and related codebase including, but not limited to, &#8220;Habit-tracking
Module,&#8221; &#8220;Administrative Panel,&#8221; and related computer code (the &#8220;Code&#8221;). The aggregate purchase price shall
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Stock options</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 5, 2024, the Company granted stock options
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5, 2025</ix:nonNumeric>.&#160;The stock options will be valued on the grant date using a Black-Scholes option pricing model which will be recognized as
stock-based compensation expense over the vesting period.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 7, 2024, the Company entered into Advisory
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the Advisory Agreements, each medical Board member shall be paid an annual cash fee of $<ix:nonFraction contextRef="c161" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForFees" scale="0" unitRef="usd" id="ixv-17155">40,000</ix:nonFraction> paid quarterly, and Company shall grant
each Medical Advisory Board member stock options to purchase <ix:nonFraction contextRef="c162" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" scale="0" unitRef="shares" id="ixv-17156">4,167</ix:nonFraction> shares of the Company&#8217;s common stock. As of the date of this
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model which will be recognized as stock-based professional fees over the vesting period.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p></ix:nonNumeric><div>

</div><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->16<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(FORMERLY THE NFT GAMING COMPANY, INC.)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>December 31, 2023 and 2022</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><ix:continuation id="_SubsequentEventsTextBlock-c4_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="text-decoration:underline">Private Placement</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 13, 2024, the Company entered into a
securities purchase agreement (the &#8220;Purchase Agreement&#8221;) with an institutional investor (&#8220;the &#8220;Purchaser&#8221;)
for the issuance and sale in a private placement (the &#8220;Private Placement&#8221;) of aggregate Units consisting of (i) <ix:nonFraction contextRef="c113" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" scale="0" unitRef="shares" id="ixv-17157">108,000</ix:nonFraction> shares
of the Company&#8217;s common stock, (ii) series A warrants to purchase up to <ix:nonFraction contextRef="c163" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesPurchaseOfAssets" scale="0" unitRef="shares" id="ixv-17158">628,367</ix:nonFraction> shares of the Company&#8217;s common stock (the
&#8220;Series A Warrants&#8221;), and (iii) series B warrants to purchase up to <ix:nonFraction contextRef="c164" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesPurchaseOfAssets" scale="0" unitRef="shares" id="ixv-17159">628,367</ix:nonFraction> shares of the Company&#8217;s common stock (the
&#8220;Series B Warrants&#8221; and together with the Series A Warrants, the &#8220;Common Warrants&#8221;). The purchase price of each
Unit consisted of one share of the Company&#8217;s common stock and associated Common Warrants, was $<ix:nonFraction contextRef="c114" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares" id="ixv-17160">5.57</ix:nonFraction> per Unit for aggregate gross
proceeds of $<ix:nonFraction contextRef="c165" decimals="0" format="ixt:num-dot-decimal" name="gxai:grossProceeds" scale="0" unitRef="usd" id="ixv-17161">601,560</ix:nonFraction>. Additionally, the Company sold pre-funded warrants to purchase up to <ix:nonFraction contextRef="c113" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockNumberOfSharesIssuedInTransaction" scale="0" unitRef="shares" id="ixv-17162">520,367</ix:nonFraction> shares of the Company&#8217;s common
stock (the &#8220;Pre-Funded Warrants&#8221;). Pre-funded Warrants are a type of warrant that allows the warrant holder to purchase a
specified number of a company&#8217;s securities at a nominal exercise price. The purchase price of each Pre-Funded Warrant was $<ix:nonFraction contextRef="c114" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByEachWarrantOrRight" scale="0" unitRef="shares" id="ixv-17163">5.569</ix:nonFraction>
for aggregate gross proceeds of $<ix:nonFraction contextRef="c166" decimals="0" format="ixt:num-dot-decimal" name="gxai:grossProceeds" scale="0" unitRef="usd" id="ixv-17164">2,897,924</ix:nonFraction>. In connection with this Private Placement, the Company raised aggregate gross proceeds of
$<ix:nonFraction contextRef="c113" decimals="0" format="ixt:num-dot-decimal" name="gxai:grossProceeds" scale="0" unitRef="usd" id="ixv-17165">3,499,484</ix:nonFraction> and received net proceeds of $<ix:nonFraction contextRef="c113" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfCommonStock" scale="0" unitRef="usd" id="ixv-17166">3,056,984</ix:nonFraction>, net of offering costs of $<ix:nonFraction contextRef="c114" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherDeferredCostsNet" scale="0" unitRef="usd" id="ixv-17167">382,500</ix:nonFraction> and legal fees of $<ix:nonFraction contextRef="c113" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LegalFees" scale="0" unitRef="usd" id="ixv-17168">60,000</ix:nonFraction>.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Common Warrants are exercisable immediately
upon issuance at an exercise price of $<ix:nonFraction contextRef="c167" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares" id="ixv-17169">5.50</ix:nonFraction> per share. The Series A Warrants will expire five and one-half years from the date of issuance
and the Series B Warrants will expire twenty-four months from the date of issuance. The Pre-Funded Warrants are exercisable immediately
upon issuance at a nominal exercise price of $<ix:nonFraction contextRef="c114" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares" id="ixv-17170">0.001</ix:nonFraction> and may be exercised at any time until the Pre-Funded Warrants are exercised in full.
A holder of Pre-Funded Warrants or Common Warrants (together with its affiliates) may not exercise any portion of a warrant to the extent
that the holder would own more than <ix:nonFraction contextRef="c168" decimals="4" format="ixt:num-dot-decimal" name="gxai:OwnPercentageOfOutstandingCommonStock" scale="-2" unitRef="pure" id="ixv-17171">4.99</ix:nonFraction>% (or, at the election of the holder <ix:nonFraction contextRef="c169" decimals="4" format="ixt:num-dot-decimal" name="gxai:OwnPercentageOfOutstandingCommonStock" scale="-2" unitRef="pure" id="ixv-17172">9.99</ix:nonFraction>%) of the Company&#8217;s outstanding Common Stock immediately
after exercise.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with the Private Placement, the
Company entered into a registration rights agreement (the &#8220;Registration Rights Agreement&#8221;), dated as of March 13, 2024, with
the Purchaser, pursuant to which the Company agreed to prepare and file a registration statement with the Securities and Exchange Commission
(the &#8220;<span style="text-decoration:underline">SEC</span>&#8221;) registering the resale of the securities issued in the Private Placement no later than 30 days after the
date of the Registration Rights Agreement, and to use its best efforts to have the registration statement declared effective as promptly
as practical thereafter, and in any event no later than 60 days following the date of the Registration Rights Agreement (or 90 days following
the date of the Registration Rights Agreement in the event of a &#8220;full review&#8221; by the SEC).</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Private Placement closed on March 15, 2024.
The gross proceeds to the Company from the Private Placement were approximately $<ix:nonFraction contextRef="c4" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfPrivatePlacement" scale="6" unitRef="usd" id="ixv-17173">3.5</ix:nonFraction> million, before deducting placement agent fees and
expenses and estimated offering expenses payable by the Company. The Company intends to use the net proceeds received from the Private
Placement for general corporate purposes and working capital.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">H.C. Wainwright &amp; Co., LLC (&#8220;Wainwright&#8221;)
acted as the Company&#8217;s exclusive placement agent in connection with the Private Placement, pursuant to that certain engagement letter,
dated as of March 7, 2024 and as amended on March 13, 2024, between the Company and Wainwright (the &#8220;Engagement Letter&#8221;).
Pursuant to the Engagement Letter, the Company paid Wainwright (i) a total cash fee equal to <ix:nonFraction contextRef="c165" decimals="3" format="ixt:num-dot-decimal" name="gxai:CashFeePercentage" scale="-2" unitRef="pure" id="ixv-17174">7.5</ix:nonFraction>% of the aggregate gross proceeds of the
Private Placement and (ii) a management fee of <ix:nonFraction contextRef="c165" decimals="3" format="ixt:num-dot-decimal" name="gxai:ManagementFeePercentage" scale="-2" unitRef="pure" id="ixv-17175">1.0</ix:nonFraction>% of the aggregate gross proceeds of the Private Placement. In addition, the Company
agreed to pay Wainwright certain expenses and issued to Wainwright or its designees warrants (the &#8220;Placement Agent Warrants&#8221;)
to purchase up to an aggregate of <ix:nonFraction contextRef="c165" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" scale="0" unitRef="shares" id="ixv-17176">47,128</ix:nonFraction> shares of the Company&#8217;s common stock at an exercise price equal to $<ix:nonFraction contextRef="c170" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares" id="ixv-17177">6.9625</ix:nonFraction> per share. The
Placement Agent Warrants are exercisable immediately upon issuance and have a term of exercise equal to five and a half years from the
date of issuance. In addition, pursuant to the Engagement Letter, the Company agreed that upon any exercise for cash of any privately
placed warrants issued to investors in an offering covered by the Engagement Letter, <ix:nonNumeric contextRef="c165" name="gxai:EngagementLetterDescription" id="ixv-17178">the Company shall (i) pay Wainwright a cash fee of
7.5% and a management fee of 1.0% of the aggregate gross exercise paid in cash with respect thereto, and (ii) issue warrants to purchase
that number of shares of common stock equal to 7.5% of the aggregate number of shares of common stock underlying the warrants that were
exercised.</ix:nonNumeric></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Treasury Shares</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with the 2023 Stock Repurchase Program,
from January 1, 2024 to March 28, 2024, the Company purchased and cancelled <ix:nonFraction contextRef="c171" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesPurchaseOfAssets" scale="0" unitRef="shares" id="ixv-17179">6,846</ix:nonFraction> shares of its common stock for $<ix:nonFraction contextRef="c171" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValueShareBasedCompensationForfeited" scale="0" unitRef="usd" id="ixv-17180">19,601</ix:nonFraction>, or at an average
price of $<ix:nonFraction contextRef="c171" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:StockOptionExercisePriceDecrease" scale="0" unitRef="usdPershares" id="ixv-17181">2.86</ix:nonFraction> per share.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">&#160;</p><div>

</div><div><a id="f_008"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>BALANCE SHEETS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">September&#160;30,</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">December&#160;31,</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2024</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold">&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">ASSETS</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>CURRENT ASSETS:</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-indent: -9pt; padding-left: 18pt">Cash</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashAndCashEquivalentsAtCarryingValue" scale="0" unitRef="usd" id="ixv-17182">5,227,894</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashAndCashEquivalentsAtCarryingValue" scale="0" unitRef="usd" id="ixv-17183">1,024,710</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -9pt; padding-left: 18pt">Short-term investments, at fair value</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherShortTermInvestments" scale="0" unitRef="usd" id="ixv-17184">1,416,056</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherShortTermInvestments" scale="0" unitRef="usd" id="ixv-17185">2,592,689</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 18pt">Investment in equity securities, at fair value</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EquitySecuritiesFvNi" scale="0" unitRef="usd" id="ixv-17186">199,998</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-15">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -9pt; padding-left: 18pt">Accounts receivable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-16">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsReceivableNetCurrent" scale="0" unitRef="usd" id="ixv-17187">8</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 18pt">Prepaid expenses and other current assets</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PrepaidExpenseAndOtherAssetsCurrent" scale="0" unitRef="usd" id="ixv-17188">86,609</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PrepaidExpenseAndOtherAssetsCurrent" scale="0" unitRef="usd" id="ixv-17189">25,132</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 18pt">Total Current Assets</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetsCurrent" scale="0" unitRef="usd" id="ixv-17190">6,930,557</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetsCurrent" scale="0" unitRef="usd" id="ixv-17191">3,642,539</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">LONG-TERM ASSETS:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -9pt; padding-left: 18pt">Property and equipment, net</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentNet" scale="0" unitRef="usd" id="ixv-17192">56,380</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentNet" scale="0" unitRef="usd" id="ixv-17193">52,606</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 18pt">Intangible assets, net</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IntangibleAssetsNetExcludingGoodwill" scale="0" unitRef="usd" id="ixv-17194">132,500</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-17">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 18pt">Digital currencies</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CryptoAssetFairValueNoncurrent" scale="0" unitRef="usd" id="ixv-17195">37</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CryptoAssetFairValueNoncurrent" scale="0" unitRef="usd" id="ixv-17196">801</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-20">&#160;</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">STOCKHOLDERS&#8217; EQUITY:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-22">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Total Stockholders&#8217; Equity</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Total Liabilities and Stockholders&#8217; Equity</td><td style="padding-bottom: 4pt">&#160;</td>
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to unaudited financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 86; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->18<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_009"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center">For the Three Months Ended</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center">For the Nine Months Ended</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">September 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
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    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-33">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-34">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingExpenses" scale="0" unitRef="usd" id="ixv-17245">908,573</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">LOSS FROM OPERATIONS</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">OTHER INCOME:</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Comprehensive loss</td><td style="padding-bottom: 4pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -9pt; padding-left: 9pt">NET LOSS PER COMMON SHARE:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 18pt">Basic and diluted</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EarningsPerShareDiluted" scale="0" sign="-" unitRef="usdPershares" id="ixv-17283"><ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EarningsPerShareBasic" scale="0" sign="-" unitRef="usdPershares" id="ixv-17284">1.95</ix:nonFraction></ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">WEIGHTED AVERAGE COMMON SHARE OUTSTANDING:</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 18pt">Basic and diluted</td><td style="padding-bottom: 4pt">&#160;</td>
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to unaudited financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">&#160;</p><div>

</div><div><a id="f_010"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>STATEMENTS OF CHANGES IN STOCKHOLDERS&#8217;
EQUITY</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2024 AND 2023</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
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    <td colspan="2">&#160;</td><td>&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-79">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-82">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-86">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-89">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-104">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Accretion of stock option expense</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-106">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-107">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-109">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-110">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-111">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-112">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Net loss</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-113">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-116">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-indent: -9pt; padding-left: 9pt">Balance, June 30, 2024</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-117">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Common shares issued for exercise of March 2024 Common Warrants for cash under warrants inducement offer, net</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-119">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c66" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValueStockOptionsExercisedNetOfTaxBenefitExpense" scale="0" unitRef="usd" id="ixv-17346">375</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-122">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-123">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Accretion of stock option expense</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-124">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-125">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-144">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-146">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-147">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-148">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-157">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c91" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValueShareBasedCompensationForfeited" scale="0" unitRef="usd" id="ixv-17384">24,241</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Accretion of stock option expense</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-158">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-159">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-160">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-161">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Accumulated other comprehensive gain - short-term investments</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-162">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-163">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-164">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-165">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Net loss</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-166">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-169">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;Balance, June 30, 2023</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-170">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Purchase and cancellation of treasury stock</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-172">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Accretion of stock option expense</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-174">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-175">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-176">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-178">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to unaudited financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->20<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>&#160;</b></p><div>

</div><div><a id="f_011"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>STATEMENTS OF CASH FLOWS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center">For&#160;the&#160;Nine&#160;Months&#160;Ended</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">September 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2024</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>CASH FLOWS FROM OPERATING ACTIVITIES:</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-17413">2,585,793</ix:nonFraction></td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(<ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd" id="ixv-17414">3,147,134</ix:nonFraction></td><td style="width: 1%; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 18pt">Impairment loss</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-207">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-208">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsReceivable" scale="0" sign="-" unitRef="usd" id="ixv-17422">8</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-210">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets" scale="0" unitRef="usd" id="ixv-17423">61,477</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 27pt">Accounts payable</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 27pt">Deferred revenue</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">NET CASH USED IN OPERATING ACTIVITIES</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd" id="ixv-17430">2,512,166</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd" id="ixv-17431">2,307,697</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">CASH FLOWS FROM INVESTING ACTIVITIES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 9pt">Purchase of short-term investments</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt">Purchase of marketable equity securities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireEquitySecuritiesFvNi" scale="0" unitRef="usd" id="ixv-17434">199,998</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-212">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 9pt">Proceeds from sale of short-term investments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromSaleOfShortTermInvestments" scale="0" unitRef="usd" id="ixv-17435">3,312,205</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-213">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt">Increase in capitalized internal-use software development costs</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToDevelopSoftware" scale="0" unitRef="usd" id="ixv-17436">23,310</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToDevelopSoftware" scale="0" unitRef="usd" id="ixv-17437">24,625</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Purchase of intangible asset</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireIntangibleAssets" scale="0" unitRef="usd" id="ixv-17438">150,000</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-214">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 1.5pt">NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInInvestingActivities" scale="0" unitRef="usd" id="ixv-17439">842,604</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInInvestingActivities" scale="0" sign="-" unitRef="usd" id="ixv-17440">3,515,867</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">CASH FLOWS FROM FINANCING ACTIVITIES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt">Proceeds from the sale of common stock units</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfCommonStock" scale="0" unitRef="usd" id="ixv-17441">159,060</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfCommonStock" scale="0" unitRef="usd" id="ixv-17442">5,958,470</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 9pt">Proceeds from exercise of pre-funded warrants</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromWarrantExercises" scale="0" unitRef="usd" id="ixv-17443">521</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-215">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt">Proceeds from sale of pre-funded warrants</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfWarrants" scale="0" unitRef="usd" id="ixv-17444">2,897,924</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-216">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-left: 9pt">Proceeds from induced exercise of warrants</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="gxai:ProceedsFromInducedExerciseOfWarrants" scale="0" unitRef="usd" id="ixv-17445">2,834,843</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-217">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Purchase and cancellation of treasury shares</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForRepurchaseOfCommonStock" scale="0" unitRef="usd" id="ixv-17446">19,602</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForRepurchaseOfCommonStock" scale="0" unitRef="usd" id="ixv-17447">49,710</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">NET CASH PROVIDED BY FINANCING ACTIVITIES</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd" id="ixv-17448">5,872,746</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd" id="ixv-17449">5,908,760</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">NET INCREASE IN CASH</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseExcludingExchangeRateEffect" scale="0" unitRef="usd" id="ixv-17450">4,203,184</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseExcludingExchangeRateEffect" scale="0" unitRef="usd" id="ixv-17451">85,196</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 1.5pt">CASH, beginning of period</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="0" unitRef="usd" id="ixv-17452">1,024,710</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c2" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="0" unitRef="usd" id="ixv-17453">679,781</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt">CASH, end of period</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="0" unitRef="usd" id="ixv-17454">5,227,894</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c108" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="0" unitRef="usd" id="ixv-17455">764,977</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Cash paid for:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 2.5pt; padding-left: 9pt">Interest</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-218">-</div></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-219">-</div></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 4pt; padding-left: 9pt">Income taxes</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-220">-</div></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-221">-</div></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt; padding-left: 9pt">Reclassification of deferred offering costs to equity</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-222">-</div></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="gxai:ReclassificationOfDeferredOfferingCostsToEquity" scale="0" unitRef="usd" id="ixv-17456">202,599</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left; padding-bottom: 4pt; padding-left: 9pt">Unrealized (loss) income on short-term investments</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="gxai:UnrealizedlossIncomeOnShorttermInvestments" scale="0" sign="-" unitRef="usd" id="ixv-17457">82,486</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="gxai:UnrealizedlossIncomeOnShorttermInvestments" scale="0" unitRef="usd" id="ixv-17458">79,646</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt; padding-left: 9pt">Increase in digital currency and accounts payable</td><td style="padding-bottom: 4pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to unaudited financial statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>


</div><!-- Field: Page; Sequence: 89; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><div><a id="f_012"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:NatureOfOperations" id="ixv-14334"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 1 &#8211; <span style="text-decoration:underline">NATURE OF OPERATIONS</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gaxos.ai Inc. (the &#8220;Company&#8221;) was
incorporated in the state of Wyoming on <ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-year-en" name="dei:EntityIncorporationDateOfIncorporation" id="ixv-17460">October&#160;27, 2021</ix:nonNumeric> (&#8220;Inception&#8221;). On March&#160;30, 2022, the Company reincorporated
to the State of Delaware pursuant to a Plan of Conversion approved by the Board of Directors and a majority of the shareholders. On January
5, 2024, the Company changed its name from The NFT Gaming Company, Inc. to Gaxos.ai Inc. The Company is a technology-based company that
is developing applications aimed at redefining the way we utilize artificial intelligence (&#8220;AI&#8221;) to optimize the user experience.
The Company&#8217;s flagship product is its gaming platform called &#8220;Gaxos&#8221; (the &#8220;Platform&#8221; or &#8220;Gaxos Gaming&#8221;),
created with a vision to develop, design, acquire, and manage conventional games and to combine these games with unconventional game mechanisms,
such as the ability for gamers and developers to utilize artificial intelligence to create and design in-game features, as well as to
mint unique in-game features, such as skins, characters, weapons, gear, levels, and virtual lands, in the form of non-fungible tokens,
or &#8220;NFTs,&#8221; that will allow users to have unique experiences and more control over in-game assets. Recently, we began to develop
a new initiative, Gaxos Health, which is dedicated to revolutionizing personal health and wellness by developing a suite of innovative
AI-powered health optimization solutions.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 28, 2024, a majority of the Company
shareholders granted discretionary authority to the Company&#8217;s Board of Directors to amend the Company&#8217;s Certificate of Incorporation
to effect one or more consolidations of the Company&#8217;s issued and outstanding shares of common stock, pursuant to which the shares
of common stock would be combined and reclassified into on the basis of one share of common stock for each 12 shares of the Company&#8217;s
common stock then issued and outstanding (the &#8220;Reverse Stock Split&#8221;). <ix:nonNumeric contextRef="c0" name="us-gaap:StockholdersEquityReverseStockSplit" id="ixv-17461">On March 7, 2024, the Company filed a Certificate of
Amendment to the Amended and Restated Articles of Incorporation (the &#8220;Certificate of Amendment&#8221;) with the Secretary of State
of the State of Delaware to effect a 1-for-12 reverse stock split with respect to the outstanding shares of the Company&#8217;s common
stock.</ix:nonNumeric> The Certificate of Amendment and the reverse stock split became effective on March 7, 2024. All share and per share data in the
accompanying financial statements have been retroactively adjusted to reflect the effect of the Reverse Stock Split.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 23, 2024, the Company formed a wholly-owned
subsidiary, RNK Health, LLC (&#8220;RNK Health&#8221;), a company incorporated under the laws of the State of Delaware as a limited liability
company. RNK Health was formed in order to form a partnership and potential relationship with Nekwellness, LLC (&#8220;Nekwellness&#8221;),
a third party, to engage in the proposed business of marketing certain products, including GLP-1 products (GLP-1 is short for glucagon-like
peptide-1), TRT (Testosterone replacement therapy) products and other potential products. In October 2024, the Company and Nekwellness
entered into an operating agreement (See Note 8 &#8211; Subsequent Events).</p></ix:nonNumeric><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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POLICIES</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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of the Company is presented to assist in understanding the Company&#8217;s financial statements. The financial statements and the notes
are the representation of the Company&#8217;s management, who are responsible for their integrity and objectivity. These accounting policies
conform to U.S.&#160;generally accepted accounting principles (&#8220;US GAAP&#8221;) and have been consistently applied in the preparation
of the financial statements.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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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.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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the preparation of the accompanying unaudited financial statements which reflect all adjustments, consisting of normal recurring and non-recurring
adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for
the periods presented.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_BasisOfAccountingPolicyPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying unaudited financial statements
of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the &#8220;U.S.
GAAP&#8221;) for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim
periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. Certain information and note disclosure
normally included in financial statements prepared in accordance with U.S. GAAP has been condensed or omitted from these statements pursuant
to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial
statements. These unaudited financial statements should be read in conjunction with the summary of significant accounting policies and
notes to the financial statements for the year ended December 31, 2023 included in the Company&#8217;s Annual Report on Form 10-K as filed
with the Securities and Exchange Commission on March 27, 2024.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p></ix:continuation></ix:nonNumeric><div>

</div><div>


</div><!-- Field: Page; Sequence: 90; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

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2024, the Company had a cash balance of $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="0" unitRef="usd" id="ixv-17462">5,227,894</ix:nonFraction>, had short-term investments of <ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherShortTermInvestments" scale="0" unitRef="usd" id="ixv-17463">1,416,056</ix:nonFraction>, and had working capital of $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="gxai:WorkingCapital" scale="0" unitRef="usd" id="ixv-17464">6,525,650</ix:nonFraction>. During
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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. The Company believes that its 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.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure
of contingent assets and liabilities at the date of the unaudited financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying unaudited financial
statements include the valuation of investments, valuation of intangible assets and other long-lived assets, estimates of deferred tax
valuation allowances and the fair value of stock options issued for services.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p>

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standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest
level of input that is significant to the fair value measurement. The Company identified the following assets or liabilities that are
required to be presented on the balance sheet at fair value in accordance with Accounting Standards Codification (&#8220;ASC&#8221;) Topic&#160;820.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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</div><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="c0" continuedAt="_CashAndCashEquivalentsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:CashAndCashEquivalentsPolicyTextBlock" id="ixv-14650"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Cash and Cash Equivalents</i></b></p></ix:nonNumeric>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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accounts to be cash equivalents. The Company has no cash equivalents as of September 30, 2024 and December&#160;31, 2023.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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banks, which may at times exceed the Federal Deposit Insurance Corporation (&#8220;FDIC&#8221;) limit. To date, the Company has not experienced
any losses on its invested cash. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company&#8217;s
financial condition, results of operations, and cash flows.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_CashAndCashEquivalentsPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 30, 2024, the Company had approximately
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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to the estimated probable losses net of recoveries under the current expected credit loss method. The allowance is based on an analysis
of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable
customer accounts considered at risk or uncollectible. The bad debt expense associated with the allowance for doubtful accounts related
to accounts receivable is recognized in general and administrative expenses. As of September 30, 2024 and December 31, 2023, accounts
receivable amounted to <span style="-sec-ix-hidden: hidden-fact-278">$0</span> and $<ix:nonFraction contextRef="c1" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsReceivableNetCurrent" scale="0" unitRef="usd" id="ixv-17478">8</ix:nonFraction>, respectively, and for the nine months ended September 30, 2024 and 2023, the Company did not recognize
any bad debt expense.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;&#160;</i></b></p></ix:continuation></ix:continuation><div>

</div><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->24<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p><div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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consists of marketable debt securities which are comprised solely of rated U.S. government securities with maturities of more than three
months, but less than one year. The Company classifies these as available-for-sale at purchase date and will reevaluate such designation
at each period end date. The Company may sell these marketable debt securities prior to their stated maturities depending upon changing
liquidity requirements. These debt securities are classified as current assets in the balance sheets and recorded at fair value, with
unrealized gains or losses included in accumulated other comprehensive income (loss) on the balance sheet and as a component of the statements
of comprehensive loss. Gains and losses are recognized when realized. Gains and losses are determined using the specific identification
method and are reported in other income (expense), net in the statements of operations.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation continuedAt="_InvestmentPolicyTextBlock-c0_cont_3" id="_InvestmentPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An impairment loss may be recognized when the
decline in fair value of the debt securities is determined to be other-than-temporary. The Company evaluates its investments for other-than-temporary
declines in fair value below the cost basis each quarter, or whenever events or changes in circumstances indicate that the cost basis
of the short-term investments may not be recoverable. The evaluation is based on a number of factors, including the length of time and
the extent to which the fair value has been below the cost basis, as well as adverse conditions related specifically to the security,
such as any changes to the credit rating of the security and the intent to sell or whether the Company will more likely than not be required
to sell the security before recovery of its amortized cost basis.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_InvestmentPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recorded $(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:UnrealizedGainLossOnInvestments" scale="0" sign="-" unitRef="usd" id="ixv-17479">82,486</ix:nonFraction>) and $<ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:UnrealizedGainLossOnInvestments" scale="0" unitRef="usd" id="ixv-17480">79,646</ix:nonFraction> of
unrealized (loss) income on short-term investments as a component of other comprehensive loss for the nine months ended September 30,
2024 and 2023, respectively. During the nine months ended September 30, 2024 and 2023, the Company recognized a gain on sale of short-term
investments of $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RealizedInvestmentGainsLosses" scale="0" unitRef="usd" id="ixv-17481">121,765</ix:nonFraction> and <span style="-sec-ix-hidden: hidden-fact-279">$0</span>, respectively.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_EquityMethodInvestmentsPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Equity investments are carried at fair value with
unrealized gains or losses which are recorded as net unrealized gain (loss) on equity investments in the accompanying statement of operations
and comprehensive loss.&#160;Realized gains and losses are determined on a specific identification basis which is recorded in earnings
or loss as a net realized gain (loss) on equity investments in the statement of operations and comprehensive loss. The Company reviews
investments in equity securities, at fair value, for impairment whenever circumstances and situations change such that there is an indication
that the carrying amounts may not be recovered.</p></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="gxai_AccountingForDigitalCurrenciesAndOtherDigitalAssetsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company accounts for digital currencies and
other digital assets as indefinite-lived intangible assets and accounts for them at historical cost in accordance with ASC&#160;350, <i>Intangibles&#160;-&#160;Goodwill
and Other Intangible Assets</i>. Indefinite-lived intangible assets are not subject to amortization but rather evaluated for impairment
annually and more frequently, if events or circumstances change that indicate that it is more likely than not that the asset is impaired
(i.e., if an impairment indicator exists). As a result, the Company only recognizes decreases in the value of its digital currencies and
other digital assets, and any increase in value will be recognized only upon disposition. The Company plans to dispose of cryptocurrency
received as a form of payment into fiat currency and anticipates ownership of cryptocurrency to be minimal. As of September 30, 2024,
the Company&#8217;s digital currencies consisted of <ix:nonFraction contextRef="c3" decimals="2" format="ixt:num-dot-decimal" name="gxai:UnitsOfPolygonMatic" scale="0" unitRef="pure" id="ixv-17482">52.78</ix:nonFraction> units of Polygon (MATIC), an Ethereum token. As of December 31, 2023, the Company&#8217;s
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>&#160;</i></b></p>

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When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or
losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets
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</div><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Unaudited)</b></p><div>

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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, which currently
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The
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amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of
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the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized
in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not
that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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</div><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Unaudited)</b></p><div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<ix:continuation id="_RevenueFromContractWithCustomerPolicyTextBlock-c0_cont_10"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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  </table></ix:continuation></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:nonNumeric contextRef="c0" continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock" id="ixv-14986"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Recent Accounting Pronouncements</i></b></p></ix:nonNumeric>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p>

<ix:continuation id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has implemented all new accounting
pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting
pronouncements that have been issued that might have a material impact on its financial position or results of operations.</p></ix:continuation></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:InvestmentTextBlock" id="ixv-15021"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 3 &#8211; <span style="text-decoration:underline">SHORT-TERM INVESTMENTS AND
INVESTMENT IN EQUITY SECURITIES</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Short-Term Investments</i></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfShortTermDebtTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfShortTermDebtTextBlock" id="ixv-17493">On September 30, 2024, the Company&#8217;s short-term
investments consisted of the following:</ix:nonNumeric></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation continuedAt="_ScheduleOfShortTermDebtTextBlock-c0_cont_2" id="_ScheduleOfShortTermDebtTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Cost</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Cumulative<br/> Unrealized<br/> Gain</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Fair Value</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 64%; text-align: justify; padding-bottom: 1.5pt">US Treasury bills</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c187" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AvailableForSaleDebtSecuritiesAmortizedCostBasis" scale="0" unitRef="usd" id="ixv-17494">1,402,757</ix:nonFraction></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c188" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:UnrealizedGainLossOnDerivatives" scale="0" unitRef="usd" id="ixv-17495">13,299</ix:nonFraction></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 4pt">Total short-term investments</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:UnrealizedGainLossOnDerivatives" scale="0" unitRef="usd" id="ixv-17498">13,299</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DebtSecuritiesAvailableForSaleAndHeldToMaturityFairValue" scale="0" unitRef="usd" id="ixv-17499">1,416,056</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:continuation continuedAt="_ScheduleOfShortTermDebtTextBlock-c0_cont_3" id="_ScheduleOfShortTermDebtTextBlock-c0_cont_2">On December 31, 2023, the Company&#8217;s short-term
investments consisted of the following:</ix:continuation></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_ScheduleOfShortTermDebtTextBlock-c0_cont_3"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Cost</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Cumulative<br/> Unrealized<br/> Gain</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Fair Value</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 64%; text-align: justify; padding-bottom: 1.5pt">US Treasury bills</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c127" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AvailableForSaleDebtSecuritiesAmortizedCostBasis" scale="0" unitRef="usd" id="ixv-17501">2,496,904</ix:nonFraction></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
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    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c127" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DebtSecuritiesAvailableForSaleAndHeldToMaturityFairValue" scale="0" unitRef="usd" id="ixv-17503">2,592,689</ix:nonFraction></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; padding-bottom: 4pt">Total short-term investments</td><td style="padding-bottom: 4pt">&#160;</td>
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  </table></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Investment in Equity Securities, at Fair Value</i></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c189" continuedAt="_TradingSecuritiesAndCertainTradingAssetsTextBlock-c189_cont_1" escape="true" name="us-gaap:TradingSecuritiesAndCertainTradingAssetsTextBlock" id="ixv-17507">The following table summarizes activity in the
Company&#8217;s investment in equity securities, at fair value for the periods presented:</ix:nonNumeric></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_TradingSecuritiesAndCertainTradingAssetsTextBlock-c189_cont_1"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">Nine Months<br/> Ended<br/> September&#160;30,</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">Nine Months<br/> Ended<br/> September&#160;30,</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2024</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Balance, beginning of period</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-281">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InvestmentsInAndAdvancesToAffiliatesAtFairValueGrossAdditions" scale="0" unitRef="usd" id="ixv-17508">199,998</ix:nonFraction></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-282">-</div></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 4pt">Balance, end of period</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EquitySecuritiesFvNi" scale="0" unitRef="usd" id="ixv-17509">199,998</ix:nonFraction></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-283">-</div></td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 30, 2024, investment in equity securities,
at fair value consisted of <ix:nonFraction contextRef="c184" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EquitySecuritiesFvNi" scale="0" unitRef="usd" id="ixv-17510">666,660</ix:nonFraction> shares of common equity securities of one entity, Dragon Interactive Corporation. On May 16, 2024,
the Company purchased <ix:nonFraction contextRef="c185" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EquitySecuritiesFvNi" scale="0" unitRef="usd" id="ixv-17511">666,660</ix:nonFraction> common shares of Dragon Interactive Corporation for $<ix:nonFraction contextRef="c186" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EquitySecuritiesFvNi" scale="0" unitRef="usd" id="ixv-17512">199,998</ix:nonFraction>.</p></ix:nonNumeric><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock" id="ixv-15188"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 4 &#8211; <span style="text-decoration:underline">PROPERTY AND EQUIPMENT</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c0" continuedAt="_PropertyPlantAndEquipmentTextBlock-c0_cont_1" escape="true" name="us-gaap:PropertyPlantAndEquipmentTextBlock" id="ixv-17513">On September 30, 2024 and December&#160;31, 2023,
property and equipment consisted of the following:</ix:nonNumeric></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:IntangibleAssetsDisclosureTextBlock" id="ixv-15276"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 5 &#8211;&#160;<span style="text-decoration:underline">INTANGIBLE ASSET</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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intangible asset consisted of the following:</ix:nonNumeric></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On August&#160;29, 2022, the Company entered into
a Software and Patent License Agreement (the &#8220;License Agreement&#8221;) with Columbia University (&#8220;Columbia&#8221;), whereby
the Company obtained a license from Columbia with respect to software and intellectual property rights and patents. In connection with
the License Agreement, Columbia granted to the Company a royalty-bearing, exclusive, worldwide, non-transferable license under the License
Agreement, to discover, develop, manufacture, have made, use, sell, offer to sell, have sold, import, export, distribute, rent or lease
licensed products and copy, use, modify, and create derivative works from licensed software and technical information during the term
of the License Agreement. On August 9, 2023 and effective August 1, 2023, the Company and Columbia University agreed to the termination
of the License Agreement. Based on management&#8217;s analysis, the Company determined the Licenses were not commercially viable in the
current competitive landscape. The termination of the Agreement will not have any impact on the Company&#8217;s future revenues. Accordingly,
as of June 30, 2023, the Company wrote off the remaining unamortized book value of the intangible asset of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GoodwillAndIntangibleAssetImpairment" scale="0" unitRef="usd" id="ixv-17533">52,363</ix:nonFraction>, and during the three
and nine months ended September 30, 2023, the Company recorded an impairment loss of <span style="-sec-ix-hidden: hidden-fact-287">$0</span> and $<ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GoodwillImpairmentLoss" scale="0" unitRef="usd" id="ixv-17534">52,363</ix:nonFraction>, respectively, which was included
in operating expenses.&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 4, 2024, the Company entered into a Purchase
Agreement with a third party to acquire certain technology and computer code. The Purchase Agreement grants the Company a perpetual, worldwide,
non-exclusive, non-transferable, royalty free, fully paid license to (a) modify and create derivative works from certain technology and
related codebase including, but not limited to, &#8220;Habit-tracking Module,&#8221; &#8220;Administrative Panel,&#8221; and related computer
code. The aggregate purchase price was $<ix:nonFraction contextRef="c196" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireIntangibleAssets" scale="0" unitRef="usd" id="ixv-17535">150,000</ix:nonFraction> and is included in intangible assets on the accompanying balance sheet. The purchase price
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the three months ended September 30, 2024
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and 2023, amortization of intangible assets amounted to $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GoodwillImpairmentLossNetOfTax" scale="0" unitRef="usd" id="ixv-17540">17,500</ix:nonFraction> and $<ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GoodwillImpairmentLossNetOfTax" scale="0" unitRef="usd" id="ixv-17541">6,284</ix:nonFraction>, respectively, which is based on an estimated useful life of
<ix:nonNumeric contextRef="c197" format="ixt-sec:duryear" name="us-gaap:FiniteLivedIntangibleAssetUsefulLife" id="ixv-17542"><ix:nonNumeric contextRef="c176" format="ixt-sec:duryear" name="us-gaap:FiniteLivedIntangibleAssetUsefulLife" id="ixv-17543">5</ix:nonNumeric></ix:nonNumeric> years and includes amortization expense related to the License Agreement prior to the impairment loss as discussed above.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleofFiniteLivedIntangibleAssetsFutureAmortizationExpenseTableTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleofFiniteLivedIntangibleAssetsFutureAmortizationExpenseTableTextBlock" id="ixv-17544">Amortization of the intangible asset attributable
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_ScheduleofFiniteLivedIntangibleAssetsFutureAmortizationExpenseTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: White">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:StockholdersEquityNoteDisclosureTextBlock" id="ixv-15392"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 6 &#8211; <span style="text-decoration:underline">STOCKHOLDERS&#8217; EQUITY</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Preferred Stock</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p>

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of its $<ix:nonFraction contextRef="c3" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:PreferredStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares" id="ixv-17552">0.0001</ix:nonFraction> par value preferred stock. The Company&#8217;s board of directors will have the authority to fix and determine the relative
rights and preferences of preferred shares, as well as the authority to issue such shares, without further stockholder approval. As of
September 30, 2024 and December&#160;31, 2023, <span style="-sec-ix-hidden: hidden-fact-299"><span style="-sec-ix-hidden: hidden-fact-300"><span style="-sec-ix-hidden: hidden-fact-301"><span style="-sec-ix-hidden: hidden-fact-302">no</span></span></span></span> preferred shares have been designated and no preferred shares were issued and outstanding.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Common Stock</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>2023 Stock Repurchase Plan</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 20, 2023, the Board of Directors of the
Company approved a stock repurchase program authorizing the purchase of up to $<ix:nonFraction contextRef="c198" decimals="0" format="ixt:num-dot-decimal" name="gxai:PurchaseOfCommonStock" scale="0" unitRef="usd" id="ixv-17553">500,000</ix:nonFraction> of the Company&#8217;s common stock until December
31, 2023 (the &#8220;2023 Stock Repurchase Program&#8221;). On January 1, 2024, the Board of Directors of the Company approved an extension
of the 2023 Stock Repurchase Program until March 31, 2024. In connection with the 2023 Stock Repurchase Program, from January 1, 2024
to March 31, 2024, the Company purchased and cancelled <ix:nonFraction contextRef="c199" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod" scale="0" unitRef="shares" id="ixv-17554">6,846</ix:nonFraction> shares of its common stock for $<ix:nonFraction contextRef="c199" decimals="0" format="ixt:num-dot-decimal" name="gxai:PurchaseOfCommonStock" scale="0" unitRef="usd" id="ixv-17555">19,602</ix:nonFraction>, or at an average price of $<ix:nonFraction contextRef="c199" decimals="2" format="ixt:num-dot-decimal" name="gxai:AveragePricePerShares" scale="0" unitRef="usdPershares" id="ixv-17556">2.86</ix:nonFraction> per
share, and during the nine months ended September 30, 2023, the Company purchased and cancelled <ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod" scale="0" unitRef="shares" id="ixv-17557">105,931</ix:nonFraction> shares of its common stock for
$<ix:nonFraction contextRef="c8" decimals="0" format="ixt:num-dot-decimal" name="gxai:PurchaseOfCommonStock" scale="0" unitRef="usd" id="ixv-17558">49,710</ix:nonFraction>, or at an average price of $<ix:nonFraction contextRef="c8" decimals="3" format="ixt:num-dot-decimal" name="gxai:AveragePricePerShares" scale="0" unitRef="usdPershares" id="ixv-17559">0.469</ix:nonFraction> per share</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p></ix:nonNumeric><div>

</div><div>


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Initial Public Offering</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 17, 2023, the Company completed the
IPO and sold <ix:nonFraction contextRef="c200" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesNewIssues" scale="0" unitRef="shares" id="ixv-17560">140,563</ix:nonFraction> shares of its common stock at a price to the public of $<ix:nonFraction contextRef="c110" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares" id="ixv-17561">49.80</ix:nonFraction> per share for gross proceeds of $<ix:nonFraction contextRef="c200" decimals="0" format="ixt:num-dot-decimal" name="gxai:ProceedsFromIssuanceInitialPublicOfferingGross" scale="0" unitRef="usd" id="ixv-17562">7,000,000</ix:nonFraction>. The Company
received net proceeds of $<ix:nonFraction contextRef="c200" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceInitialPublicOffering" scale="0" unitRef="usd" id="ixv-17563">5,958,470</ix:nonFraction> which is net of offering expenses of $<ix:nonFraction contextRef="c200" decimals="0" format="ixt:num-dot-decimal" name="gxai:NetOfferingExpenses" scale="0" unitRef="usd" id="ixv-17564">1,041,530</ix:nonFraction>. Additionally, the Company reclassified deferred offering
costs of $<ix:nonFraction contextRef="c201" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredOfferingCosts" scale="0" unitRef="usd" id="ixv-17565">202,599</ix:nonFraction> which were paid and deferred as of December 31, 2022 as a charge to additional paid in capital as equity issuance costs.
In connection with the IPO, the Company issued <ix:nonFraction contextRef="c202" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17566">11,245</ix:nonFraction> warrants to the placement agent. The warrants are exercisable at $<ix:nonFraction contextRef="c202" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares" id="ixv-17567">54.78</ix:nonFraction> per share
and expire on <ix:nonNumeric contextRef="c203" format="ixt:date-monthname-day-year-en" name="us-gaap:ClassOfWarrantOrRighstDateFromWhichWarrantsOrRightsExercisable" id="ixv-17568">February 14, 2028</ix:nonNumeric>. The fair value of these warrant of $<ix:nonFraction contextRef="c203" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FairValueAdjustmentOfWarrants" scale="0" unitRef="usd" id="ixv-17569">3,657,258</ix:nonFraction> was estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted-average assumptions: dividend yield of <ix:nonFraction contextRef="c203" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate" scale="-2" unitRef="pure" id="ixv-17570">0</ix:nonFraction>%; expected volatility of <ix:nonFraction contextRef="c203" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate" scale="-2" unitRef="pure" id="ixv-17571">69.8</ix:nonFraction>%; risk-free interest
rate of <ix:nonFraction contextRef="c203" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate" scale="-2" unitRef="pure" id="ixv-17572">4.03</ix:nonFraction>%; and an estimated holding period of <ix:nonNumeric contextRef="c203" format="ixt-sec:duryear" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardFairValueAssumptionsExpectedTerm1" id="ixv-17573">5</ix:nonNumeric> years. These warrants had no financial statement impact as they were considered to
be equity issuance costs.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Capital Raises</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">March 2024</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 13, 2024, the Company entered into a
securities purchase agreement (the &#8220;March 2024 Purchase Agreement&#8221;) with an institutional investor (&#8220;the &#8220;Purchaser&#8221;)
for the issuance and sale in a private placement (the &#8220;March 2024 Private Placement&#8221;) of aggregate Units consisting of (i)
<ix:nonFraction contextRef="c204" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesIssuedForServices" scale="0" unitRef="shares" id="ixv-17574">108,000</ix:nonFraction> shares of the Company&#8217;s common stock, (ii) series A warrants to purchase up to <ix:nonFraction contextRef="c205" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17575">628,367</ix:nonFraction> shares of the Company&#8217;s common
stock (the &#8220;Series A Warrants&#8221;), and (iii) series B warrants to purchase up to <ix:nonFraction contextRef="c206" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17576">628,367</ix:nonFraction> shares of the Company&#8217;s common
stock (the &#8220;Series B Warrants&#8221; and together with the Series A Warrants, the &#8220;March 2024 Common Warrants&#8221;). The
purchase price of each Unit consisted of one share of the Company&#8217;s common stock and associated March 2024 Common Warrants, was
$<ix:nonFraction contextRef="c207" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares" id="ixv-17577">5.57</ix:nonFraction> per Unit for aggregate gross proceeds of $<ix:nonFraction contextRef="c208" decimals="0" format="ixt:num-dot-decimal" name="gxai:ProceedsFromIssuanceInitialPublicOfferingGross" scale="0" unitRef="usd" id="ixv-17578">601,560</ix:nonFraction>. Additionally, the Company sold pre-funded warrants to purchase up to <ix:nonFraction contextRef="c209" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17579">520,367</ix:nonFraction>
shares of the Company&#8217;s common stock (the &#8220;Pre-Funded Warrants&#8221;). Pre-funded Warrants are a type of warrant that allows
the warrant holder to purchase a specified number of a company&#8217;s securities at a nominal exercise price. The purchase price of each
Pre-Funded Warrant was $<ix:nonFraction contextRef="c209" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares" id="ixv-17580">5.569</ix:nonFraction> for aggregate gross proceeds of $<ix:nonFraction contextRef="c210" decimals="0" format="ixt:num-dot-decimal" name="gxai:ProceedsFromIssuanceInitialPublicOfferingGross" scale="0" unitRef="usd" id="ixv-17581">2,897,924</ix:nonFraction>. In connection with this March 2024 Private Placement, the Company
raised aggregate gross proceeds of $<ix:nonFraction contextRef="c204" decimals="0" format="ixt:num-dot-decimal" name="gxai:ProceedsFromIssuanceInitialPublicOfferingGross" scale="0" unitRef="usd" id="ixv-17582">3,499,484</ix:nonFraction> consisting of $<ix:nonFraction contextRef="c211" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockConsiderationReceivedOnTransaction" scale="0" unitRef="usd" id="ixv-17583">601,560</ix:nonFraction> from the sales of common stock units and $<ix:nonFraction contextRef="c212" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfWarrants" scale="0" unitRef="usd" id="ixv-17584">2,897,924</ix:nonFraction> from the sale
of pre-funded warrants, and the Company received net proceeds of $<ix:nonFraction contextRef="c204" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceInitialPublicOffering" scale="0" unitRef="usd" id="ixv-17585">3,056,984</ix:nonFraction>, net of offering costs paid to the placement agent (see below)
of $<ix:nonFraction contextRef="c204" decimals="0" format="ixt:num-dot-decimal" name="gxai:NetOfferingExpenses" scale="0" unitRef="usd" id="ixv-17586">382,500</ix:nonFraction> and legal fees of $<ix:nonFraction contextRef="c204" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LegalFees" scale="0" unitRef="usd" id="ixv-17587">60,000</ix:nonFraction>, which were netted against the $<ix:nonFraction contextRef="c213" decimals="0" format="ixt:num-dot-decimal" name="gxai:ProceedFromIssuanceOfCommonStockGross" scale="0" unitRef="usd" id="ixv-17588">601,560</ix:nonFraction> of gross proceeds from the sale of common stock units for
net proceeds allocated to the sale of common stock units of $<ix:nonFraction contextRef="c213" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfCommonStock" scale="0" unitRef="usd" id="ixv-17589">159,060</ix:nonFraction>. The Company is using the net proceeds received from the March 2024
Private Placement for general corporate purposes and working capital.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The March 2024 Common Warrants are exercisable
immediately upon issuance at an exercise price of $<ix:nonFraction contextRef="c214" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares" id="ixv-17590">5.50</ix:nonFraction> per share. The Series A Warrants will expire <ix:nonNumeric contextRef="c215" name="gxai:WarrantExpireTerm" id="ixv-17591">five and one-half years</ix:nonNumeric> from the
date of issuance and the Series B Warrants will expire <ix:nonNumeric contextRef="c216" name="gxai:WarrantExpireTerm" id="ixv-17592">twenty-four months</ix:nonNumeric> from the date of issuance. The Pre-Funded Warrants are exercisable
immediately upon issuance at a nominal exercise price of $<ix:nonFraction contextRef="c217" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares" id="ixv-17593">0.001</ix:nonFraction> and may be exercised at any time until the Pre-Funded Warrants are exercised
in full. A holder of Pre-Funded Warrants or March 2024 Common Warrants (together with its affiliates) may not exercise any portion of
a warrant to the extent that the holder would own more than <ix:nonFraction contextRef="c218" decimals="4" format="ixt:num-dot-decimal" name="gxai:PercentageOfOutstandingCommonStockAfterExercise" scale="-2" unitRef="pure" id="ixv-17594">4.99</ix:nonFraction>% (or, at the election of the holder <ix:nonFraction contextRef="c219" decimals="4" format="ixt:num-dot-decimal" name="gxai:PercentageOfOutstandingCommonStockAfterExercise" scale="-2" unitRef="pure" id="ixv-17595">9.99</ix:nonFraction>%) of the Company&#8217;s outstanding
Common Stock immediately after exercise.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with the March 2024 Private Placement,
the Company entered into a registration rights agreement (the &#8220;Registration Rights Agreement&#8221;), dated as of March 13, 2024,
with the Purchaser, pursuant to which the Company agreed to prepare and file a registration statement with the Securities and Exchange
Commission (the &#8220;<span style="text-decoration:underline">SEC</span>&#8221;) registering the resale of the securities issued in the March 2024 Private Placement no later
than 30 days after the date of the Registration Rights Agreement, and to use its best efforts to have the registration statement declared
effective as promptly as practical thereafter, and in any event no later than 60 days following the date of the Registration Rights Agreement
(or 90 days following the date of the Registration Rights Agreement in the event of a &#8220;full review&#8221; by the SEC).</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">H.C. Wainwright &amp; Co., LLC (&#8220;Wainwright&#8221;)
acted as the Company&#8217;s exclusive placement agent in connection with the March 2024 Private Placement, pursuant to that certain engagement
letter, dated as of March 7, 2024 and as amended on March 13, 2024, between the Company and Wainwright (the &#8220;Engagement Letter&#8221;).
Pursuant to the Engagement Letter, the Company paid Wainwright (i) a total cash fee equal to <ix:nonFraction contextRef="c220" decimals="3" format="ixt:num-dot-decimal" name="gxai:PercentageOfGrossProceedsCashFee" scale="-2" unitRef="pure" id="ixv-17596">7.5</ix:nonFraction>% of the aggregate gross proceeds of the
March 2024 Private Placement and (ii) a management fee of <ix:nonFraction contextRef="c220" decimals="3" format="ixt:num-dot-decimal" name="gxai:PercentageOfManagementFeeExpense" scale="-2" unitRef="pure" id="ixv-17597">1.0</ix:nonFraction>% of the aggregate gross proceeds of the March 2024 Private Placement. In
addition, the Company agreed to pay Wainwright certain expenses and issued to Wainwright or its designees warrants (the &#8220;March 2024
Placement Agent Warrants&#8221;) to purchase up to an aggregate of <ix:nonFraction contextRef="c221" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17598">47,128</ix:nonFraction> shares of the Company&#8217;s common stock at an exercise price
equal to $<ix:nonFraction contextRef="c221" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares" id="ixv-17599">6.9625</ix:nonFraction> per share. The March 2024 Placement Agent Warrants are exercisable immediately upon issuance and have a term of exercise
equal to five and a half years from the date of issuance. The fair value of the March 2024 Placement Agent Warrants of $<ix:nonFraction contextRef="c222" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:WarrantsAndRightsOutstanding" scale="0" unitRef="usd" id="ixv-17600">318,900</ix:nonFraction> was calculated
using the Binomial Lattice valuation model, which is considered an offering cost and is netted against the net proceeds received. In addition,
pursuant to the Engagement Letter, the Company agreed that upon any exercise for cash of any privately placed warrants issued to investors
in an offering covered by the Engagement Letter, the Company shall (i) pay Wainwright a cash fee of <ix:nonFraction contextRef="c0" decimals="3" format="ixt:num-dot-decimal" name="gxai:PercentageOfWainwrightFeeExpense" scale="-2" unitRef="pure" id="ixv-17601">7.5</ix:nonFraction>% and a management fee of <ix:nonFraction contextRef="c0" decimals="3" format="ixt:num-dot-decimal" name="gxai:PercentageOfManagementFeeExpense" scale="-2" unitRef="pure" id="ixv-17602">1.0</ix:nonFraction>%
of the aggregate gross exercise paid in cash with respect thereto, and (ii) issue warrants to purchase that number of shares of common
stock equal to <ix:nonFraction contextRef="c0" decimals="3" format="ixt:num-dot-decimal" name="gxai:PercentageOfCommonStockUnderlyingWarrantThatWereExercised" scale="-2" unitRef="pure" id="ixv-17603">7.5</ix:nonFraction>% of the aggregate number of shares of common stock underlying the warrants that were exercised.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->30<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c0" continuedAt="_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock-c0_cont_1" escape="true" name="us-gaap:FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock" id="ixv-17604">The March 2024 Placement Agent Warrants were valued
on the date of issuance using Binomial Lattice valuation model with the following assumptions:</ix:nonNumeric></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 15,<br/> 2024</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Dividend rate</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-288">&#8212;</div></td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Term (in years)</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><ix:nonNumeric contextRef="c269" format="ixt-sec:duryear" name="us-gaap:WarrantsAndRightsOutstandingTerm" id="ixv-17605">5.5</ix:nonNumeric>&#160;years</span></td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify">Volatility</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c270" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:WarrantsAndRightsOutstandingMeasurementInput" scale="0" unitRef="pure" id="ixv-17606">186.5</ix:nonFraction></td><td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Risk&#8212;free interest rate</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c271" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:WarrantsAndRightsOutstandingMeasurementInput" scale="0" unitRef="pure" id="ixv-17607">4.33</ix:nonFraction></td><td style="text-align: left">%</td></tr> </table></ix:continuation>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The risk-free interest rate is based on the U.S.
Treasury rates at the date of issuance with a maturity date approximately equal to the expected life at issuance date. Volatility is based
on historical and expected future volatility of the Company&#8217;s common stock. The Company has not historically issued any dividends
and does not expect to in the future.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">September 2024</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 20, 2024, the Company entered into
an inducement offer agreement with the Holder of the March 2024 Common Warrants to immediately exercise for cash an aggregate <ix:nonFraction contextRef="c223" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17608">1,256,734</ix:nonFraction>
of the March 2024 Common Warrants to purchase shares of the Company&#8217;s common stock at a reduced exercise price of $<ix:nonFraction contextRef="c224" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares" id="ixv-17609">2.58</ix:nonFraction> per share
for gross proceeds to the Company of $<ix:nonFraction contextRef="c225" decimals="0" format="ixt:num-dot-decimal" name="gxai:ProceedsFromIssuanceInitialPublicOfferingGross" scale="0" unitRef="usd" id="ixv-17610">3,242,374</ix:nonFraction>&#160;and the Company received net proceeds of $<ix:nonFraction contextRef="c225" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceInitialPublicOffering" scale="0" unitRef="usd" id="ixv-17611">2,834,843</ix:nonFraction> after deducting placement agent
fees of $<ix:nonFraction contextRef="c225" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForBrokerageFees" scale="0" unitRef="usd" id="ixv-17612">376,552</ix:nonFraction> and other offering expenses paid by the Company of $<ix:nonFraction contextRef="c224" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherDeferredCostsNet" scale="0" unitRef="usd" id="ixv-17613">30,979</ix:nonFraction>. The exercised March 2024 Common Warrants were issued pursuant
to a March 2024 Purchase Agreement dated March 13, 2024 by and between the Company and the Holder. Each March 2024 Common Warrant was
initially exercisable at an original exercise price of $<ix:nonFraction contextRef="c224" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageExercisePrice1" scale="0" unitRef="usdPershares" id="ixv-17614">5.50</ix:nonFraction> per share.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As an inducement to such exercise, the Company
also agreed to issue new unregistered warrants to purchase new Series A common stock purchase warrants (the &#8220;New Series A Warrants&#8221;)
and new Series B common stock purchase warrants (the &#8220;New Series B Warrants&#8221;, and together with the Series A Warrants, the
&#8220;New Warrants&#8221;), as described below, to purchase an aggregate of up to <ix:nonFraction contextRef="c226" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17615">2,513,468</ix:nonFraction> shares of the Company&#8217;s common stock
(the &#8220;New Warrant Shares&#8221;) at an exercise price of $<ix:nonFraction contextRef="c227" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageExercisePrice1" scale="0" unitRef="usdPershares" id="ixv-17616">2.33</ix:nonFraction> per share. The New Series A Warrants to purchase up to <ix:nonFraction contextRef="c228" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17617">1,256,734</ix:nonFraction>
shares of common stock have a term of five and one-half years from the issuance date, and the New Series B Warrants to purchase up to
<ix:nonFraction contextRef="c229" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17618">1,256,734</ix:nonFraction> shares of common stock have a term of twenty-four months from the issuance date.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company engaged H.C. Wainwright &amp; Co.,
LLC (the &#8220;Placement Agent&#8221;) to act as its exclusive placement agent in connection with the transactions summarized above and
has agreed to pay the Placement Agent a cash fee equal to <ix:nonFraction contextRef="c0" decimals="3" format="ixt:num-dot-decimal" name="gxai:PercentageOfGrossProceedsCashFee" scale="-2" unitRef="pure" id="ixv-17619">7.5</ix:nonFraction>% of the gross proceeds received from the Holder&#8217;s exercise of its
Existing Warrants of $<ix:nonFraction contextRef="c230" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:WarrantsAndRightsOutstanding" scale="0" unitRef="usd" id="ixv-17620">243,178</ix:nonFraction>, as well as a management fee equal to <ix:nonFraction contextRef="c231" decimals="3" format="ixt:num-dot-decimal" name="gxai:PercentageOfManagementFeeExpense" scale="-2" unitRef="pure" id="ixv-17621">1.0</ix:nonFraction>% of the gross proceeds from the exercise of the Existing Warrants
of $<ix:nonFraction contextRef="c217" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:WarrantsAndRightsOutstanding" scale="0" unitRef="usd" id="ixv-17622">32,424</ix:nonFraction>.&#160;Additionally, the Company paid the Placement Agent $<ix:nonFraction contextRef="c232" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForBrokerageFees" scale="0" unitRef="usd" id="ixv-17623">85,000</ix:nonFraction> for non-accountable expenses and clearing fees in the amount
of $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClearanceFees" scale="0" unitRef="usd" id="ixv-17624">15,950</ix:nonFraction>. The Company has also issued to the Placement Agent, or its designees, warrants (the &#8220;September 2024 Placement Agent
Warrants&#8221;) to purchase up to <ix:nonFraction contextRef="c0" decimals="3" format="ixt:num-dot-decimal" name="gxai:PercentageOfCommonStock" scale="-2" unitRef="pure" id="ixv-17625">7.5</ix:nonFraction>% of the aggregate number of shares of common stock underlying the Existing Warrants (or Placement
Agent Warrants to purchase an aggregate of up to <ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17626">94,255</ix:nonFraction> shares of common stock), which Placement Agent Warrants have the same terms as
the New Series A Warrants except for an exercise price per share equal to <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="gxai:PercentageOfExercisePrice" scale="-2" unitRef="pure" id="ixv-17627">125</ix:nonFraction>% of the exercise price of the New Warrants (or $<ix:nonFraction contextRef="c3" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares" id="ixv-17628">3.225</ix:nonFraction> per
share).</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The amendment to the March 2024 Common Warrants
on September 20, 2024 to lower the exercise price thereof and issue new warrants, was considered a modification of the March 2024 Common
Warrants under the guidance of ASU 2021-04. The modification is consistent with the &#8220;Equity Issuance&#8221; classification under
that guidance as the reason for the modification was to induce the holders to cash exercise their warrants, resulting in the exercise
of the March 2024 Common Warrants on September 20, 2024.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 20, 2024, in connection with the
inducement offer agreement, with the Holder of the March 2024 Common Warrants, the Holder exercised the March 2024 Common Warrants for
cash at a reduced exercise price of $<ix:nonFraction contextRef="c233" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1" scale="0" unitRef="usdPershares" id="ixv-17629">2.58</ix:nonFraction> per share resulting in net proceeds to the Company of approximately $<ix:nonFraction contextRef="c234" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceInitialPublicOffering" scale="0" unitRef="usd" id="ixv-17630">2,834,843</ix:nonFraction> as discussed
above. In connection with such exercise, the Company was to issue up to <ix:nonFraction contextRef="c224" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17631">1,256,734</ix:nonFraction> Warrant Shares upon the exercise of the March 2024 Comon
Warrants. As of September 30, 2024, <ix:nonFraction contextRef="c235" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17632">978,000</ix:nonFraction> of the Warrant Shares were held in abeyance and were not reflected as issued and outstanding
common shares on the accompanying consolidated balance sheet, in accordance with the terms of the inducement offer agreement. Pursuant
to the inducement offer agreement, the Company only issued such number of Warrant Shares to the Holder that would not cause the Holder
to exceed the maximum number of Warrant Shares permitted thereunder, as directed by the Holder, with the balance of the Warrant Shares
held in abeyance until notice from the Holder that the balance (or portion thereof) may be issued in compliance with the limitations set
forth in the inducement offer agreement, which abeyance shall be evidenced through the March 2024 Common Warrants which shall be deemed
prepaid thereafter (including the cash payment in full of the exercise price), and exercised pursuant to a Notice of Exercise in the March
2024 Common Warrants (provided no additional exercise price shall be due and payable). As of September 30, 2024, the Company issued <ix:nonFraction contextRef="c233" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17633">278,734</ix:nonFraction>
Warrant Shares to the Holder, and <ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightOutstanding" scale="0" unitRef="shares" id="ixv-17634">978,000</ix:nonFraction> Warrant Shares were held in abeyance for future issuance. Subsequent to September 30, 2024,
the <ix:nonFraction contextRef="c217" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightOutstanding" scale="0" unitRef="shares" id="ixv-17635">978,000</ix:nonFraction> Warrant Shares held in abeyance were issued (See Note 8).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>


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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->31<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_4" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 20, 2024, the Company calculated
the total fair value of the consideration for the modification of the March 2024 Common Warrants, which includes the incremental fair
value of the March 2024 Common Warrants (determined by comparing the fair values immediately prior to and immediately after the modification).
The fair values were calculated using the Binomial Lattice valuation model, and the Company determined that the total fair value of the
consideration related to the modification of the March 2024 Common Warrants amounted to approximately $<ix:nonFraction contextRef="c224" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:WarrantsAndRightsOutstanding" scale="0" unitRef="usd" id="ixv-17636">297,500</ix:nonFraction>, which are considered offering
costs and were netted against the net proceeds received by the warrant exercise under the guidance of ASU 2021-04, resulting in both a
credit and a charge to additional paid-in capital and therefore no net accounting effect.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 20, 2024, in connection with the
inducement offer agreement issuance of the New Warrants and the September 2024 Placement Agent Warrants, the Company calculated the fair
value of such warrants using the Binomial option-pricing model, and the Company determined that the aggregate total fair value of the
New Warrants and the September 2024 Placement Agent Warrants amounted to approximately $<ix:nonFraction contextRef="c236" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:WarrantsAndRightsOutstanding" scale="0" unitRef="usd" id="ixv-17637">5,460,000</ix:nonFraction>, which are considered offering costs
and were netted against the net proceeds received by the warrant exercise under the guidance of ASU 2021-04, resulting in both a credit
and a charge to additional paid-in capital and therefore no net accounting effect.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfShareBasedPaymentAwardStockOptionsValuationAssumptionsTableTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfShareBasedPaymentAwardStockOptionsValuationAssumptionsTableTextBlock" id="ixv-17638">The fair value of the March 2024 Common Warrants
on the modification date, the fair value of the New Warrants, and the fair value of the September 2024 Placement Agent Warrants were estimated
using the Binomial option-pricing model with the following assumptions:</ix:nonNumeric></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<ix:continuation id="_ScheduleOfShareBasedPaymentAwardStockOptionsValuationAssumptionsTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">September 20, <br/> 2024</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>Exercise price</td><td>&#160;</td>
    <td style="text-align: center">$<ix:nonFraction contextRef="c272" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:WarrantsAndRightsOutstandingMeasurementInput" scale="0" unitRef="pure" id="ixv-17639">2.33</ix:nonFraction> to $<ix:nonFraction contextRef="c273" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:WarrantsAndRightsOutstandingMeasurementInput" scale="0" unitRef="pure" id="ixv-17640">3.225</ix:nonFraction></td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Term (years)</td><td>&#160;</td>
    <td style="text-align: center"><ix:nonNumeric contextRef="c274" format="ixt-sec:duryear" name="us-gaap:WarrantsAndRightsOutstandingTerm" id="ixv-17641">1.75</ix:nonNumeric> to <ix:nonNumeric contextRef="c275" format="ixt-sec:duryear" name="us-gaap:WarrantsAndRightsOutstandingTerm" id="ixv-17642">5.5</ix:nonNumeric></td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 84%; text-align: left">Expected stock price volatility</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Risk-free rate of interest</td><td>&#160;</td>
    <td style="text-align: center"><ix:nonFraction contextRef="c277" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:WarrantsAndRightsOutstandingMeasurementInput" scale="0" unitRef="pure" id="ixv-17644">3.48</ix:nonFraction>% to <ix:nonFraction contextRef="c278" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:WarrantsAndRightsOutstandingMeasurementInput" scale="0" unitRef="pure" id="ixv-17645">3.55</ix:nonFraction>%</td></tr>
  </table></ix:continuation>


<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Common Stock Issued for Pre-Funded Warrant
Exercises</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three months ended June 30, 2024, the
Company issued <ix:nonFraction contextRef="c53" decimals="0" format="ixt:num-dot-decimal" name="gxai:StockIssuedDuringPeriodSharesCommonSharesIssuedForWarrantExerciseinShares" scale="0" unitRef="shares" id="ixv-17646">103,367</ix:nonFraction> common shares in connection with the exercise of <ix:nonFraction contextRef="c237" decimals="0" format="ixt:num-dot-decimal" name="gxai:StockIssuedDuringPeriodSharesCommonSharesIssuedForWarrantExerciseinShares" scale="0" unitRef="shares" id="ixv-17647">103,367</ix:nonFraction> pre-funded warrants for net proceeds of $<ix:nonFraction contextRef="c237" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromWarrantExercises" scale="0" unitRef="usd" id="ixv-17648">104</ix:nonFraction>.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three months ended September 30, 2024,
the Company issued <ix:nonFraction contextRef="c65" decimals="0" format="ixt:num-dot-decimal" name="gxai:StockIssuedDuringPeriodSharesCommonSharesIssuedForWarrantExerciseinShares" scale="0" unitRef="shares" id="ixv-17649">417,000</ix:nonFraction> common shares in connection with the exercise of <ix:nonFraction contextRef="c238" decimals="0" format="ixt:num-dot-decimal" name="gxai:StockIssuedDuringPeriodSharesCommonSharesIssuedForWarrantExerciseinShares" scale="0" unitRef="shares" id="ixv-17650">417,000</ix:nonFraction> pre-funded warrants for net proceeds of $<ix:nonFraction contextRef="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromWarrantExercises" scale="0" unitRef="usd" id="ixv-17651">417</ix:nonFraction>.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Stock Warrants</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with the IPO, in February 2023,
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<ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-year-en" name="us-gaap:ClassOfWarrantOrRighstDateFromWhichWarrantsOrRightsExercisable" id="ixv-17654">February 14, 2028</ix:nonNumeric>. The warrants were considered equity issuance costs; therefore, there was no financial statement impact for the grant
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 13, 2024, in connection with the March
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 20, 2024, in connection with the
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</div><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>2022 Equity Incentive Plan</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March&#160;30, 2022, the Company&#8217;s Board
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of common stock for issuance thereunder. The 2022 Plan was approved by shareholders on March 30, 2022. The 2022 Plan&#8217;s purpose is
to encourage ownership in the Company by employees, officers, directors and consultants whose long-term service the Company considers
essential to its continued progress and, thereby, encourage recipients to act in the stockholders&#8217; interest and share in the Company&#8217;s
success. The 2022 Plan provides for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights (&#8220;SARs&#8221;),
restricted stock, restricted stock units (&#8220;RSUs&#8221;), and other stock-based awards. Pursuant to the 2022 Plan, there shall be
annual increase in the number shares reserved under the 2022 Plan on the first day of each calendar year beginning with the first January
1 following the effective date of the 2022 Plan and ending with the last January 1 during the initial ten-year term of the 2022 Plan,
equal to the lesser of (A)&#160;five percent&#160;(<ix:nonFraction contextRef="c250" decimals="2" format="ixt:num-dot-decimal" name="gxai:PercentageOfSharesOutstanding" scale="-2" unitRef="pure" id="ixv-17681">5</ix:nonFraction>%) of the Shares outstanding (on an as-converted basis, which shall include Shares
issuable upon the exercise or conversion of all outstanding securities or rights convertible into or exercisable for Shares, including
without limitation, preferred stock, warrants and employee options to purchase any Shares) on the final day of the immediately preceding
calendar year and (B) such lesser number of Shares as determined by the Board; provided, that, shares of Common Stock issued under the
2022 Plan with respect to an Exempt Award shall not count against such share limit. Accordingly, in June 2024, the number of shares reserved
under the 2022 Plan was increased by <ix:nonFraction contextRef="c251" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockCapitalSharesReservedForFutureIssuance" scale="0" unitRef="shares" id="ixv-17682">95,304</ix:nonFraction> to <ix:nonFraction contextRef="c252" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockCapitalSharesReservedForFutureIssuance" scale="0" unitRef="shares" id="ixv-17683">303,637</ix:nonFraction> reserved shares.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Stock Options</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 14, 2023, the Company granted aggregate
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executive officer, an executive officer, and employee and consultants pursuant to the 2022 Equity Incentive Plan. The grant date of the
stock options was February 14, 2023 and the options expire on <ix:nonNumeric contextRef="c0" format="ixt:date-monthname-day-year-en" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardExpirationDate" id="ixv-17686">February 14, 2033</ix:nonNumeric>. <ix:nonNumeric contextRef="c0" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardDescription" id="ixv-17687">The options vest as to (i) 28,333 of such options on
February 14, 2023; and (ii) the remaining 5,000 options vest quarterly (417 each quarter) beginning on May 14, 2023 and each quarter thereafter
through February 14, 2026.</ix:nonNumeric> The stock options were valued at $<ix:nonFraction contextRef="c253" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedInPeriodFairValue1" scale="0" unitRef="usd" id="ixv-17688">1,023,290</ix:nonFraction> on the grant date using a Black-Scholes option pricing model which
will be recognized as stock-based compensation expense over the vesting period.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 6, 2023, the Company granted stock options
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pursuant to the 2022 Equity Incentive Plan. The grant date of the stock options was March 6, 2023 and the options expire on March 6, 2028.
The options vest on the one-year anniversary of the stock option grant on March 6, 2024.&#160;The stock options were valued at the grant
date using a Black-Scholes option pricing model which will be recognized as stock-based compensation expense over the vesting period.
The stock options were valued at $<ix:nonFraction contextRef="c255" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedInPeriodFairValue1" scale="0" unitRef="usd" id="ixv-17691">33,972</ix:nonFraction> on the grant date using a Black-Scholes option pricing model which will be recognized as stock-based
compensation expense over the vesting period.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 5, 2024, the Company granted stock options
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was March 5, 2024 and the options expire on March 5, 2029. The options vest on the one-year anniversary of the stock option grant on March
5, 2025.&#160;The stock options were valued on the grant date at an aggregate fair value of $<ix:nonFraction contextRef="c259" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingAggregateIntrinsicValue" scale="0" unitRef="usd" id="ixv-17695">33,880</ix:nonFraction> using a Black-Scholes option pricing
model which will be recognized as stock-based compensation expense over the vesting period.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 7, 2024, the Company entered into Advisory
Board Agreements (the Advisory Agreements&#8221;) with three members of the Company&#8217;s Medical Advisory Board. In connection with
the Advisory Agreements, each medical Board member shall be paid an annual cash fee of $<ix:nonFraction contextRef="c260" decimals="0" format="ixt:num-dot-decimal" name="gxai:AmountOfAnnualCashFeeProceed" scale="0" unitRef="usd" id="ixv-17696">40,000</ix:nonFraction> paid quarterly, and Company shall grant
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board pursuant to the 2022 Equity Incentive Plan. The grant date of the stock options was May 28, 2024 and the options expire on May 28,
2029. The options vest <ix:nonFraction contextRef="c262" decimals="2" format="ixt:num-dot-decimal" name="gxai:SharebasedCompensationArrangementBySharebasedPaymentAwardVestingPercentage" scale="-2" unitRef="pure" id="ixv-17700">25</ix:nonFraction>% immediately and the remainder vest quarterly.&#160;The stock options were valued on the grant date at an aggregate
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period.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>GAXOS.AI INC.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>NOTES TO FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>September 30, 2024</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(Unaudited)</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p><div>

</div><ix:continuation id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 17, 2024, the Company granted stock options
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Board pursuant to the 2022 Equity Incentive Plan. The grant date of the stock options was July 17, 2024 and the options expire on July
17, 2034. The options vest quarterly (875 each quarter) beginning on October 17, 2024 and each quarter thereafter through October 17,
2026. The stock options were valued at $<ix:nonFraction contextRef="c264" decimals="0" format="ixt:num-dot-decimal" name="gxai:GrantDateFairValueOfStockOption" scale="0" unitRef="usd" id="ixv-17704">14,536</ix:nonFraction> on the grant date using a Black-Scholes option pricing model which will be recognized as
stock-based compensation expense over the vesting period.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c0" continuedAt="gxai_ScheduleOfGrantDateUsingABlackScholesOptionPricingModelTableTextBlock-c0_cont_1" escape="true" name="gxai:ScheduleOfGrantDateUsingABlackScholesOptionPricingModelTableTextBlock" id="ixv-17705">The stock options were valued at the grant date
using a Black-Scholes option pricing model with the following assumptions:</ix:nonNumeric></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p>

<ix:continuation id="gxai_ScheduleOfGrantDateUsingABlackScholesOptionPricingModelTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; width: 78%; text-align: center">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%; text-align: center">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%; text-align: center">&#160;</td>
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September&#160;30,<br/>
2024</b></span></td>
    <td style="padding-bottom: 1.5pt; width: 1%; text-align: center">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%; text-align: center">&#160;</td>
    <td style="padding-bottom: 1.5pt; width: 1%; text-align: center">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; white-space: nowrap; width: 8%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Nine Months Ended<br/>
September&#160;30,<br/>
2023</b></span></td>
    <td style="padding-bottom: 1.5pt; width: 1%; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividend rate</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="white-space: nowrap; text-align: center"><span style="-sec-ix-hidden: hidden-fact-294; font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;%</span></td>
    <td/>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="white-space: nowrap; text-align: center"><span style="-sec-ix-hidden: hidden-fact-295; font-family: Times New Roman, Times, Serif; font-size: 10pt">&#8212;%</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
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    <td>&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Volatility</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risk&#8212;free interest rate</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td></tr>
  </table></ix:continuation>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The expected terms of the options are based on
evaluations of historical and expected future employee exercise behavior using the simplified method. The risk-free interest rate is based
on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at grant date. Volatility
is based on historical and expected future volatility of the Company&#8217;s common stock. The Company has not historically issued any
dividends and does not expect to in the future.</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the nine months ended September 30, 2024
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p>

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 30, 2024, the aggregate intrinsic
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:CommitmentsAndContingenciesDisclosureTextBlock" id="ixv-16004"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 7 &#8211; <span style="text-decoration:underline">COMMITMENTS AND CONTINGENCIES</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Employment Agreement</b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 17, 2023, the Company entered into
an executive employment agreement with Vadim Mats, the Company&#8217;s Chief Executive Officer (CEO) in connection with the Company&#8217;s
initial public offering (the &#8220;<b><i>IPO</i></b>&#8221;). The term of the agreement will continue for one (1) year from the date
of execution and automatically renews for successive one (1) year periods at the end of each term until either party delivers written
notice of their intent not to review at least 90 days prior to the expiration of the then effective term. Pursuant to the agreement, Mr.
Mats shall receive a base salary at the annual rate of $<ix:nonFraction contextRef="c298" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SalariesAndWages" scale="0" unitRef="usd" id="ixv-17736">400,000</ix:nonFraction> payable in equal installments in accordance with the Company&#8217;s standard
payroll policies. Additionally, on February 14, 2023, the board of directors approved the issuance of stock options, with immediate vesting,
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shall also be eligible to receive an annual cash bonus in an amount up to 2x his then-current&#160;base salary if the Company meets or
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:SubsequentEventsTextBlock" id="ixv-16020"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 8 &#8211; <span style="text-decoration:underline">SUBSEQUENT EVENTS</span></b></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 23, 2024, the Company formed a wholly-owned
subsidiary, RNK Health, a company incorporated under the laws of the State of Delaware as a limited liability company. RNK Health was
formed in order to form a partnership and potential relationship with Nekwellness to engage in the proposed business of marketing certain
products. On October 10, 2024, the Company, RNK Health, and Nekwellness entered into an operating agreement (the &#8220;Operating Agreement&#8221;)
of RNK Health for the regulation and management of the affairs of RNK Health. On October 10, 2024, the Company, the sole member of RNK
Health, admitted Nekwellness as a member of RNK Health and accordingly, Nekwellness was granted a <ix:nonFraction contextRef="c300" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:InvestmentInterestRate" scale="-2" unitRef="pure" id="ixv-17738">30</ix:nonFraction>% membership interest in RNK Health,
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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p>

<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Subsequent to September 30, 2024, <ix:nonFraction contextRef="c230" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights" scale="0" unitRef="shares" id="ixv-17740">978,000</ix:nonFraction> Warrant
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 8pt">&#160;</span></p><div>


</div><!-- Field: Page; Sequence: 102; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->34<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b><img alt="" src="image_001.jpg"/></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Gaxos.ai Inc.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>3,005,642 Shares of Common Stock</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>PRELIMINARY PROSPECTUS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">, 2025</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>


</div><!-- Field: Page; Sequence: 103 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="margin: 0pt">&#160;</p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Part&#160;II</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>INFORMATION NOT REQUIRED IN PROSPECTUS&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Item 13. Other Expenses of Issuance and
Distribution.&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">We estimate that expenses in connection with the
distribution described in this registration statement (other than brokerage commissions, discounts or other expenses relating to the sale
of the shares in this offering) will be as set forth below. We will pay all of the expenses with respect to the distribution, and such
amounts, with the exception of the SEC registration fee, are estimates.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">927.23</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
    <td style="text-align: left">Legal fees and expenses</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">20,000.00</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Accounting fees and expenses</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">10,000.00</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: White">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt">Total offering expenses (other than placement agent&#8217;s fees)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">33,427.23</td><td style="padding-bottom: 2.5pt; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Item&#160;14. Indemnification of Directors and Officers&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our directors and officers are indemnified as
provided by the Delaware General Corporation Law (the &#8220;DGCL&#8221;), our Certificate of Incorporation and our Bylaws.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Section 102 of the DGCL permits a corporation
to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach
of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional
misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate
law or obtained an improper personal benefit. Our Certificate of Incorporation provides that no director of the Company shall be personally
liable to us or our stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of
law imposing such liability, except to the extent that the DGCL prohibits the elimination or limitation of liability of directors for
breaches of fiduciary duty.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Section 145 of the DGCL provides that a corporation
has the power to indemnify a director, officer, employee, or agent of the corporation, or a person serving at the request of the corporation
for another corporation, partnership, joint venture, trust or other enterprise in related capacities against expenses (including attorneys&#8217;
fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with an action, suit
or proceeding to which he was or is a party or is threatened to be made a party to any threatened, ending or completed action, suit or
proceeding by reason of such position, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his conduct was
unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect
to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all
of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our Certificate of Incorporation and Bylaws
provide indemnification for our directors and officers to the fullest extent permitted by the DGCL. We will indemnify each person
who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other
than an action by or in the right of us) by reason of the fact that he or she is or was, or has agreed to become, a director or
officer, or is or was serving, or has agreed to serve, at our request as a director, officer, partner, employee or trustee of, or in
a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (all such persons being referred
to as an &#8220;Indemnitee&#8221;), or by reason of any action alleged to have been taken or omitted in such capacity, against all
expenses (including attorneys&#8217; fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in
connection with such action, suit or proceeding and any appeal therefrom, if such Indemnitee acted in good faith and in a manner he
or she reasonably believed to be in, or not opposed to, our best interests, and, with respect to any criminal action or proceeding,
he or she had no reasonable cause to believe his or her conduct was unlawful. Our Certificate of Incorporation and Bylaws provide
that we will indemnify any Indemnitee who was or is a party to an action or suit by or in the right of us to procure a judgment in
our favor by reason of the fact that the Indemnitee is or was, or has agreed to become, a director or officer, or is or was serving,
or has agreed to serve, at our request as a director, officer, partner, employee or trustee of, or in a similar capacity with,
another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, against all expenses (including attorneys&#8217; fees) and, to the extent permitted by law, amounts paid
in settlement actually and reasonably incurred in connection with such action, suit or proceeding, and any appeal therefrom, if the
Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, except
that no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to
be liable to us, unless a court determines that, despite such adjudication but in view of all of the circumstances, he or she is
entitled to indemnification of such expenses. Notwithstanding the foregoing, to the extent that any Indemnitee has been successful,
on the merits or otherwise, he or she will be indemnified by us against all expenses (including attorneys&#8217; fees) actually and
reasonably incurred in connection therewith. Expenses must be advanced to an Indemnitee under certain circumstances.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Certificate of Incorporation</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Our Certificate of Incorporation provides that
the Company shall, to the fullest extent permitted by the provisions of Delaware General Corporation Law, indemnify any and all persons
whom it shall have the power to indemnify under such section.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions,
or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in such
Act and is, therefore, unenforceable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt"><b>&#160;</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Item&#160;15. Recent Sales of Unregistered Securities&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">None.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Item&#160;16. Exhibits and Financial Statement Schedules.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(a) Exhibits.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="background-color: white">
    <td style="border-bottom: Black 1.5pt solid; text-align: justify; vertical-align: top; width: 9%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exhibit Number</b></span></td>
    <td style="padding-bottom: 1.5pt; text-align: justify; vertical-align: top; width: 1%">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: center; vertical-align: bottom; width: 90%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Title of Document</b></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.1</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390023009099/ea172926ex3-1_nftgaming.htm">Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Company&#8217;s Form S-1/A Filed on February 8, 2023).</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.2</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390023009099/ea172926ex3-2_nftgaming.htm">Certificate of Incorporation (Incorporated by reference to Exhibit 3.2 to the Company&#8217;s Form S-1/A Filed on February 8, 2023).</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.3</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390023025417/f10k2022ex3-4_nftgaming.htm">Certificate of Amendment to Articles of Incorporation (Incorporated by reference to Exhibit 3.4 to the Company&#8217;s Annual Report on Form 10-K filed on March 31, 2023.)</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.4</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390023009099/ea172926ex3-3_nftgaming.htm">Bylaws (Incorporated by reference to Exhibit 3.3 to the Company&#8217;s Form S-1/A filed on February 8, 2023).</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.5</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024002754/ea191482ex3-1_gaxosaiinc.htm">Second Amendment to the Certificate of Incorporation of Gaxos.ai Inc. (Incorporated by reference to Exhibit 3.1 to the Company&#8217;s Current Report on Form 8-K filed on January 10, 2024.)</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.6</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024002754/ea191482ex3-2_gaxosaiinc.htm">Amendment to the Bylaws of Gaxos.ai Inc. (Incorporated by reference to Exhibit 3.2 to the Company&#8217;s Current Report on Form 8-K filed on January 10, 2024.)</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.7</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024021390/ea020155401ex3-1_gaxosaiinc.htm">Third Amendment to the Certificate of Incorporation of Gaxos.ai Inc. (Incorporated by reference to Exhibit 3.1 to the Company&#8217;s Current Report on Form 8-K filed on March 11, 2024.)</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.1</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024026681/ea020235601ex4-1_gaxosai.htm">Description of the Registrant&#8217;s Securities (Incorporated by reference to Exhibit 4.1 to the Company&#8217;s Form 10-K filed on March 27, 2024).</a> </span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390023009099/ea172926ex4-2_nftgaming.htm">Form of Stock Certificate (Incorporated by reference to Exhibit 4.2 to the Company&#8217;s Form S-1/A filed on February 8, 2023.)</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.3</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390023009099/ea172926ex4-4_nftgaming.htm">Form of Representatives Warrant (Incorporated by reference to Exhibit 4.4 to the Company&#8217;s Form S-1/A filed on February 8, 2023).</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.4</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024081033/ea021534501ex4-1_gaxos.htm">Form of New Series A Warrant (Incorporated by reference to Exhibit 4.1 to the Company&#8217;s Form 8-K filed on September 23, 2024)</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.5</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024081033/ea021534501ex4-2_gaxos.htm">Form of New Series B Warrant (Incorporated by reference to Exhibit 4.2 to the Company&#8217;s Form 8-K filed on September 23, 2024)</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.6</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024081033/ea021534501ex4-3_gaxos.htm">Form of Placement Agent Warrant (Incorporated by reference to Exhibit 4.3 to the Company&#8217;s Form 8-K filed on September 23, 2024)</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.7</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024110717/ea022538001ex4-1_gaxosai.htm">Form of Warrant (Incorporated by reference to Exhibit 4.1 to the Company&#8217;s Form 8-K filed on December 20, 2024)</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.8</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024110717/ea022538001ex4-2_gaxosai.htm">Form of Placement Agent Warrant (Incorporated by reference to Exhibit 4.2 to the Company&#8217;s Form 8-K filed on December 20, 2024)</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.9</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024113225/ea022614301ex4-1_gaxosai.htm">Form of Warrant (Incorporated by reference to Exhibit 4.1 to the Company&#8217;s Form 8-K filed on December 30, 2024)</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.10</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024113225/ea022614301ex4-2_gaxosai.htm">Form of Placement Agent Warrant (Incorporated by reference to Exhibit 4.2 to the Company&#8217;s Form 8-K filed on December 30, 2024)</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.1*</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><a href="ea022744001ex5-1_gaxos.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Opinion of Sheppard, Mullin, Richter &amp; Hampton LLP</span></a></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.1+</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390023012955/ea173936ex10-1_thenftgame.htm">Executive Employment Agreement dated February 17, 2023, by and between the Company and Vadim Mats (Incorporated by reference to Exhibit 10.1 to the Company Current Report on Form 8-K filed on February 17, 2023.)</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.2+</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390023009099/ea172926ex10-2_nftgaming.htm">Employment Agreement dated March 23, 2022, by and between the Company and Steven Shorr (Incorporated by reference to Exhibit 10.2 to the Company&#8217;s Form S-1/A filed on February 8, 2023.)</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.3+</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390023009099/ea172926ex10-3_nftgaming.htm">2022 Omnibus Equity Incentive Plan (Incorporated by reference to Exhibit 10.3 to the Company&#8217;s S-1/A filed on February 8, 2023.)</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.4#</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390023009099/ea172926ex10-4_nftgaming.htm">Software and License Agreement dated August 29, 2022, by and between the Company and Columbia University (Incorporated by reference to Exhibit 10.4 to the Company&#8217;s S-1/A filed on February 8, 2023.)</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.5</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390023009099/ea172926ex1-1_nftgaming.htm">Form of Underwriting Agreement (Incorporated by reference to Exhibit 1.1 to the Company&#8217;s S-1/A filed on February 8, 2023).</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.6</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390023009099/ea172926ex4-3_nftgaming.htm">Form of Subscription Agreement (Incorporated by reference to Exhibit 4.3 to the Company&#8217;s Form S-1/A filed on February 8, 2023.)</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.7</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024081033/ea021534501ex10-1_gaxos.htm">Form of Inducement Letter (Incorporated by reference to Exhibit 10.1 to the Company&#8217;s Form 8-K filed on September 23, 2024)</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.8</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024110717/ea022538001ex10-1_gaxosai.htm">Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Company&#8217;s Form 8-K filed on December 20, 2024)</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.9</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="http://www.sec.gov/Archives/edgar/data/1895618/000121390024113225/ea022614301ex10-1_gaxosai.htm">Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Company&#8217;s Form 8-K filed on December 30, 2024)</a></span></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">23.1*</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="ea022744001ex23-1_gaxos.htm">Consent of Salberg &amp; Company PA</a></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">23.2*</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><a href="ea022744001ex23-2_gaxos.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consent of D, Brooks and Associates CPA&#8217;s P.A.</span></a></td></tr>
  <tr style="background-color: White">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">23.3*</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><a href="ea022744001ex5-1_gaxos.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consent of Sheppard, Mullin, Richter &amp; Hampton LLP (included in Exhibit 5.1)</span></a></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="text-align: justify; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">24.1*</span></td>
    <td style="text-align: justify; vertical-align: top">&#160;</td>
    <td style="text-align: justify; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><a href="#a_021">Power of Attorney (included on signature pages to the registration statement)</a></span></td></tr>

<tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.INS*</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Instance Document</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.SCH</span>*</td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Schema Document</span></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.CAL</span>*</td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Calculation Linkbase Document</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.DEF</span>*</td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Definition Linkbase Document</span></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.LAB</span>*</td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Label Linkbase Document</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.PRE</span>*</td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Presentation Linkbase Document</span></td></tr>
  <tr style="vertical-align: top; background-color: White">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">104</span>*</td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)</span></td></tr>

<tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify; width: 9%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">107*</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 2%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td>
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  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Executive Compensation Plan or Agreement</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">#</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Portions of this exhibit (indicated by asterisks) have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv).</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 105 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Item&#160;17. Undertakings.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The undersigned registrant hereby undertakes:</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.75in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">i.</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Include
any prospectus required by Section 10(a)(3) of the Securities Act.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.75in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ii.</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Reflect
in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering price set forth in the &#8220;Calculation of Registration
Fee&#8221; table in the effective registration statement; and</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.75in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">iii.</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Include
any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material
change to such information in the registration statement;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><i>provided, however</i>, that paragraphs (1)(i),
(ii) and (iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained
in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to
Rule 424(b) that is part of the registration statement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">That,
for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to securities offered therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering thereof;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering;</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">That,
for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as
part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses
filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant&#8217;s annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan&#8217;s
annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such issue.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">II-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>SIGNATURES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the requirements
of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement on Form&#160;S-1 to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of Roseland, State of New Jersey, on the 23<sup>rd</sup> day of January,
2025.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td>&#160;</td>
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    <td>&#160;</td>
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  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="width: 60%">&#160;</td>
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    <td style="width: 36%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Vadim Mats</span></td></tr>
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    <td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

</div><div><a id="a_021"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>POWER OF ATTORNEY</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">KNOW ALL PERSONS BY THESE PRESENTS, that each
individual whose signature appears below constitutes and appoints Vadim Mats, his/her true and lawful attorney-in-fact and agent with
full power of substitution and re-substitution, for him/her and in his/her name, place and stead, in any and all capacities to sign any
or all amendments (including, without limitation, post-effective amendments) to this Registration Statement, any related Registration
Statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and any or all pre- or post-effective amendments
thereto, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises, as fully for all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming that said attorney-in-fact and agent, or any substitute or substitutes for him, may lawfully do or cause to be
done by virtue hereof.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Pursuant to the requirements of the Securities
Act of 1933, as amended, this Registration Statement on Form&#160;S-1 has been signed by the following persons in the capacities and on
the dates indicated below.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</p><div>

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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
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  <tr>
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  <tr style="vertical-align: top">
    <td>&#160;</td>
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    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td>
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  <tr>
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    <td style="vertical-align: top; text-align: center">January
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  <tr style="vertical-align: top">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Steven Shorr</span></td>
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    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr>
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr>
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    <td style="vertical-align: top; text-align: center">January
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  <tr style="vertical-align: top">
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
  <tr>
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    <td style="vertical-align: top; text-align: center">January
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  <tr style="vertical-align: top">
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Scott Grayson</span></td>
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: center">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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As filed with the Securities and Exchange Commission
January 23, 2025
Registration Statement No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GAXOS.AI
INC.
(Exact name of registrant as specified in its charter)
Delaware
7372
87-3288897
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)
101 Eisenhower Pkwy
Roseland, New Jersey 07068
(973) 275-7428
(Address and telephone number of registrant's principal executive offices)
Vadim Mats
Gaxos.ai Inc.
Chief Executive Officer
101 Eisenhower Parkway, Suite 300
Roseland, NJ 07068
(973) 275-7428
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Richard A. Friedman, Esq.
Emily A. Mastoloni, Esq.
Sheppard, Mullin, Richter & Hampton LLP
30 Rockefeller Plaza
New York, NY 10112
Tel: (212) 653-8700
Fax: (212) 653-8701
Approximate date of commencement of proposed
sale to the public:
As soon as practicable after the effective date
of this registration statement becomes effective.
If any of the securities being
registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check
the following box: ☒
If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging
growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting
company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer
☒
Smaller reporting company
☒
Emerging growth company
☒
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided to Section 7(a)(2)(B) of the Securities Act.
☐
The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine
.
The information in
this preliminary prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities
and it is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT
    TO COMPLETION
DATED
    JANUARY 23, 2025
Gaxos.ai Inc.
Up to 3,005,642 Shares of Common Stock
Pursuant to this prospectus,
the selling stockholders identified herein (the "Selling Stockholders") are offering on a resale basis an aggregate of 3,005,642
shares of common stock, par value $0.0001 per share (the "Common Stock") of Gaxos.ai Inc. (the "Company," "we,"
"us" or "our") consisting of (i) 1,449,277 shares of Common Stock that are issuable upon exercise of warrants
(the "December 18 Warrants") issued pursuant to a securities purchase agreement entered into by and between us and certain
Selling Stockholders dated December 18, 2024 (the "December 18 Purchase Agreement"), (ii) up to 108,696 shares of Common Stock
issuable upon exercise of warrants (the "December 18 Placement Agent Warrants) issued pursuant to the engagement agreement dated
as of September 20 2024 (the "Engagement Agreement"), by and between the Company and H.C. Wainwright & Co., LLC (the "Placement
Agent"), (iii) 1,346,669 shares of Common Stock issuable upon exercise of warrants (the "December 26 Warrants", together
with the December 18 Warrants, the "Common Warrants") issued pursuant to an securities purchase agreement by and between us
and the Selling Stockholders dated December 26, 2024 (the "December 26 Purchase Agreement", together with the December 18
Purchase Agreement, the "Purchase Agreements") and (iv) up to 101,000 shares of Common Stock issuable upon exercise of warrants
(the "December 26 Placement Agent Warrants", together with the December 18 Placement Agent Warrants, the "Placement
Agent Warrants") issued to the Placement Agent pursuant to the Engagement Agreements. The Common Warrants and Placement Agent Warrants
are collectively referred to herein as the "Warrants".
We will not receive any of
the proceeds from the sale by the Selling Stockholders of the Common Stock. Upon any exercise of the Warrants by payment of cash, however,
we will receive the exercise price of the Warrants, which, if exercised in cash with respect to the 3,005,642 shares of Common Stock offered
hereby, would result in gross proceeds to us of approximately $9.7 million. However, we cannot predict when and in what amounts or if
the Warrants will be exercised by payments of cash and it is possible that the Warrants may expire and never be exercised, in which case
we would not receive any cash proceeds.
The Selling Stockholders may
sell or otherwise dispose of the Common Stock covered by this prospectus in a number of different ways and at varying prices. We provide
more information about how the Selling Stockholders may sell or otherwise dispose of the Common Stock covered by this prospectus in the
section entitled "Plan of Distribution" on page 62. Discounts, concessions, commissions and similar selling expenses attributable
to the sale of Common Stock covered by this prospectus will be borne by the Selling Stockholders. We will pay all expenses (other than
discounts, concessions, commissions and similar selling expenses) relating to the registration of the Common Stock with the Securities
and Exchange Commission (the "SEC").
Our Common Stock is listed
on The Nasdaq Capital Market under the symbol "GXAI". On January 17, 2025, the closing price as reported on The Nasdaq Capital
Market was $2.00 per share. There is no established public trading market for the Warrants, and we do not expect a market to develop.
Without an active trading market, the liquidity of the Warrants will be limited. In addition, we do not intend to list the Warrants on
The Nasdaq Capital Market, any other national securities exchange or any other trading system.
We are an "emerging
growth company" under the federal securities laws and, as such, are subject to reduced public company reporting requirements.
Investing in our Common
Stock involves a high degree of risk. See "Risk Factors" beginning on page 4 of this prospectus.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is        
, 2025
TABLE OF CONTENTS
Page
About this Prospectus
ii
Cautionary Statement Regarding Forward-Looking Statements
iii
Prospectus Summary
1
The Offering
3
Risk Factors
4
Use of Proceeds
33
Dividend Policy
34
Management's Discussions and Analysis of Financial Condition and Results of Operation
35
Determination of Offering Price
45
Business
46
Management
50
Executive and Director Compensation
53
Certain Relationships and Related Person Transactions
55
Security Ownership of Beneficial Owners and Management
56
Description of Capital Stock
57
Selling Stockholders
60
Plan of Distribution
62
Legal Matters
63
Experts
63
Where You Can Find More Information
63
Index to Financial Statements
F-1
i
ABOUT THIS PROSPECTUS
This prospectus relates to the resale by the Selling Stockholders identified
in this prospectus under the caption "Selling Stockholders," from time to time, of up to an aggregate of 3,005,642 shares
of Common Stock. We are not selling any shares of Common Stock under this prospectus, and we will not receive any proceeds from the sale
of shares of Common Stock offered hereby by the Selling Stockholders, although we may receive cash from the exercise of the Warrants.
You should rely only on the
information provided in this prospectus, including any information incorporated by reference. We have not authorized anyone to provide
you with any other information and we take no responsibility for, and can provide no assurances as to the reliability of, any other information
that others may give you. The information contained in this prospectus speaks only as of the date set forth on the cover page and may
not reflect subsequent changes in our business, financial condition, results of operations and prospects.
We are not, and the Selling
Stockholders are not, making offers to sell these securities in any jurisdiction in which an offer or solicitation is not authorized or
permitted or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to
make such an offer or solicitation. You should read this prospectus, including any information incorporated by reference, in its entirety
before making an investment decision.
ii
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus contains forward-looking
statements, which reflect the views of our management with respect to future events and financial performance. These forward-looking statements
are subject to a number of uncertainties and other factors that could cause actual results to differ materially from such statements.
Forward-looking statements are identified by words such as "anticipates," "believes," "estimates,"
"expects," "intends," "plans," "projects," "targets," and similar expressions.
Such forward-looking statements may be contained in the sections "Risk Factors," and "Business," among other places
in this prospectus. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on the information
available to management at this time and which speak only as of this date. We undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise. For a discussion of some of the factors that may cause
actual results to differ materially from those suggested by the forward-looking statements, please read carefully the information under
"Risk Factors."
The identification in this
document of factors that may affect future performance and the accuracy of forward-looking statements is meant to be illustrative and
by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. You may
rely only on the information contained in this prospectus.
We have not authorized anyone
to provide information different from that contained in this prospectus. Neither the delivery of this prospectus nor the sale of our Common
Stock means that information contained in this prospectus is correct after the date of this prospectus. This prospectus is not an offer
to sell or solicitation of an offer to buy these securities in any circumstances under which the offer or solicitation is unlawful.
iii
PROSPECTUS SUMMARY
This summary highlights selected information
about us, this offering and information appearing elsewhere in this prospectus supplement, in the accompanying prospectus and in the documents
incorporated by reference herein and therein. This summary is not complete and does not contain all the information you should consider
before investing in our securities pursuant to this prospectus supplement and the accompanying prospectus. Before making an investment
decision, to fully understand this offering and its consequences to you, you should carefully read this entire prospectus supplement and
the accompanying prospectus, including "Risk Factors," the financial statements, and related notes, and the other information
incorporated by reference herein and therein.
Our Business
We are a technology-based
company that is developing applications aimed at redefining the way we utilize artificial intelligence ("AI") to optimize
the user experience. We are committed to addressing the need for AI solutions in both health and entertainment.
Gaxos Labs
Our flagship product, Gaxos
Labs, launched in September 2024 and is a transformative generative AI service that empowers game developers and publishers. Key features
of the product include:
●
AI-Powered
Creativity: Reduces creative asset development time from hours to minutes, transforming artistic visions into reality with ease. Rapid
prototyping abilities allows for experimentation with different designs quickly and easily.
●
Monetization:
Publishers have the ability to offer users AI-generated assets for player customization.
●
Seamless
Integration: With plug-and-play functionality for Unity and Godot, integration is effortless into existing workflows.
●
API:
Connect to any game development engine and build for any platform including mobile and PC.
●
Dynamic
Content Generation: User-Generated-Ai-Content ("UGAiC") feature offers new experiences with each playthrough by letting gamers
use AI in real time, fostering a dynamic gaming environment.
●
Customized
Solutions: From personalized AI models including images and sound capabilities to expert consulting services, our offering includes customizable
solutions to meet the unique needs of any developer.
Gaxos Gaming
Gaxos Gaming (the "Platform"
or "Gaxos Gaming") was created with a vision to develop, design, acquire, and manage conventional games and to combine these
games with unconventional game mechanisms, such as the ability for gamers and developers to utilize AI to create and design in-game features,
as well as to mint unique in-game features, such as skins, characters, weapons, gear, levels, and virtual lands, in the form of non-fungible
tokens, or "NFTs," that will allow users to have unique experiences and more control over in-game assets.
1
In
2023, we launched our own proprietary games that are simple and fun to play, and that offer gamers the ability to utilize AI to personalize
their gaming experience as well as to mint their own affordable NFTs, with unique and exclusive features, that can be utilized across
our network of games. As of December 2024, we have launched four games, Space Striker AI, Brawl Bots, BattleFleet AI, and Jigsaw Puzzle
AI.  Space Striker AI allows players to engage in a captivating storyline and exciting retro shooting space action in the players
AI-generated spaceship. Players can fuse crystals to upgrade their ship parts to craft, clash and conquer the galaxy all within a dynamic
free-to-play economy. Brawl Bots immerses users in high-octane battles in real time against other players, in solo play or teams. Each
player gets to control their own exclusive Bot character, ensuring a personalized gaming experience. BattleFleet AI is a take on the
classic Battleship game with AI elements that allow gamers to design their ships. Jigsaw Puzzle AI lets gamers solve preloaded jigsaw
puzzles as well as design and solve new jigsaw puzzles using AI.
Gaxos Health
In July 2024, we launched
Gaxos Health, which is dedicated to revolutionizing personal health and wellness by developing a suite of innovative AI-powered health
optimization solutions. Gaxos Health will integrate AI-driven insights with individual biometric data and health goals to create web and
application based personalized wellness strategies for users. We believe that this cutting-edge approach will redefine preventative medicine,
offering unparalleled personalization in health and wellness. Gaxos Health solutions will analyze a wide range of health data to provide
tailored wellness plans and address the growing demand for personalized health solutions. We believe that this technology is not just
a step but a leap forward in empowering individuals to take control of their health and longevity with AI's precision and intelligence.
Currently, Gaxos Health offers customized health plans and coaching based on collected DNA, blood biomarkers, and individual goals and
traits.
RNK Health
On September 23, 2024, the
Company formed a wholly-owned subsidiary, RNK Health LLC ("RNK Health"), to form a partnership and potential relationship
with Nekwellness to engage in the proposed business of marketing certain health-related products. On October 10, 2024, the Company, RNK
Health and Nekwellness entered into an operating agreement with respect to the regulation and management of the affairs of RNK Health
and, as of such date, the Company owns a 70% membership interest in RNK Health and Nekwellness owns a 30% membership interest in RNK Health.
Corporate Information
Our principal executive offices
are located at 101 Eisenhower Parkway, Suite 300, Roseland, NJ 07068 and our telephone number is (973) 275-7428. Our website address
is
https://gaxos.ai
. None of the information on or accessible through our website is incorporated by reference in, or constitutes
a part of, this prospectus supplement or in any other filings with, or in any information furnished or submitted to, the SEC.
2
THE OFFERING
Common Stock to be offered by the Selling Stockholder
Up to
3,005,642
shares of Common Stock
Common stock outstanding prior to this offering
6,923,453 shares of Common Stock.
Common stock to be outstanding after this offering
9,929,095 shares of Common Stock, assuming the exercise of all of the Warrants
Use of proceeds
We
    will not receive any proceeds from the sale of the shares of Common Stock by the Selling Stockholders, except for the warrant
    exercise price paid for the Common Stock offered hereby and issuable upon the exercise of the Warrants. See "Use of
    Proceeds" on page 33 of this prospectus.
Risk Factors
See "Risk
    Factors" beginning on page 4 of this prospectus, as well as other information included in this prospectus, for a discussion of
    factors you should read and consider carefully before investing in our securities.
Nasdaq Capital Markets symbol
Our common stock is listed on The Nasdaq Capital Markets under the symbol "GXAI". There is no established trading market for the Warrants and we do not expect a trading market to develop. We do not intend to list the Common Warrants on any securities exchange or other trading market. Without a trading market, the liquidity of the Warrants will be extremely limited.
The number of shares of our
Common Stock to be outstanding after this offering as shown above is based on 6,923,453 shares outstanding as of January 17, 2025 and
excludes as of that date:
●
1,503,617
shares of common stock issuable upon exercise of warrants with a weighted average exercise price of $3.19;
●
64,084
shares of common stock issuable upon exercise of options with a weighted average exercise price of $31.35;
●
239,553 shares of common stock reserved for future issuance under our
2022 Equity Incentive Plan.
3
RISK FACTORS
An investment in our securities
involves a high degree of risk. This prospectus contains a discussion of the risks applicable to an investment in our securities. Prior
to deciding about investing in our securities, you should carefully consider the specific factors discussed within this prospectus. The
risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us
or that we currently deem immaterial may also affect our operations. The occurrence of any of these known or unknown risks might cause
you to lose all or part of your investment in the offered securities.
Risks Related to Our Business and Industry
We have a limited operating history and,
therefore, cannot accurately project our revenues and operating expenses.
Because we have a limited history, it is difficult
to evaluate our proposed business and future prospects, including our ability to plan for and model future growth. For example, we intend
to launch our Platform. There is no guarantee that the Platform will be launched or that expenditures will result in profit or growth
of our business. Our limited operating experience, combined with the rapidly evolving nature of the NFT market in which we intend to operate,
substantial uncertainty concerning how this market may develop, and other economic factors beyond our control reduce our ability to accurately
forecast quarterly or annual revenue. Failure to manage our current and future growth effectively could have an adverse effect on our
business, operating results, and financial condition. Our business should be considered in light of the risks, expenses, and difficulties
that we have encountered to date and will continue to encounter.
We have not developed a strong customer
base, and we have not generated sustainable revenue since inception. We cannot assure you that we ever will. We will incur significant
losses in launching products and we may not realize sufficient subscriptions or profits in order to sustain our business.
We have not yet developed a strong customer base
and we have not generated sustainable revenue since inception. We are subject to the substantial risk of failure facing businesses seeking
to develop and commercialize new products and technologies. Maintaining and improving our Platform will require significant capital. We
will also incur substantial accounting, legal, and other overhead costs as a public company. If our offerings to customers are unsuccessful,
result in insufficient revenue, or result in us not being able to sustain revenue, we will be forced to reduce expenses, which may result
in an inability to gain new customers.
We may encounter numerous difficulties frequently
encountered by companies in the early stage of operations.
We have a limited operating history upon which
any investor may evaluate our current business and future prospects. Any potential investor must consider the risks and difficulties frequently
encountered by early-stage companies. Historically, there has been a high failure rate among early-stage companies. Our future
performance will depend upon a number of factors, including our ability to:
●
implement
our growth strategy;
●
aggressively
counter and respond to actions by our competitors;
●
pursue
new users and maintain relationship with current users;
●
maintain
adequate control of our expenses;
●
attract,
retain and motivate qualified personnel;
●
react
to user preferences and demands;
●
our
ability to successfully implement, launch, and achieve market acceptance of our NFT products and to anticipate and manage the risks associated
therewith; and
●
regulatory
compliance.
We cannot assure investors that we will successfully
address any of these factors, and our failure to do so could have a material adverse effect on our business, financial condition, results
of operations, and future prospects.
4
We may be unable to manage our growth or
implement our expansion strategy.
We may not be able to develop our product or implement
the other features of our business strategy at the rate or to the extent presently planned. Our projected growth will place a significant
strain on our administrative, operational, and financial resources. If we are unable to successfully manage our future growth, establish
and continue to upgrade our operating and financial control systems, recruit and hire necessary personnel, or effectively manage unexpected
expansion difficulties, our financial condition and results of operations could be materially and adversely affected.
We will need additional debt or equity financing
in the future.
While we expect to be able to generate operating
revenues from the sale of our video digital products, our operating revenues will not be sufficient to finance our operations including
our marketing efforts. Accordingly, we will need to obtain additional financing to operate and fully implement our business plan and aggressive
growth strategy. There can be no assurance that any additional financing will be available to us or, if available, that such financing
will be on terms acceptable to us. If we obtain additional financing through the issuance of equity or convertible debt securities, it
may be significantly dilutive to our shareholders and such additional equity or convertible debt securities may have rights, preferences,
or privileges senior to those of our Common Stock. In addition, our ability to issue debt securities or to service any debt may also be
limited by our inability to generate consistent cash flow. If additional financing is not available on acceptable terms, we may not be
able to fund our on-going operations or any future expansion of our business, develop or enhance our products or services, or respond
effectively to competitive pressures. The inability to raise additional capital in the future may force us to curtail future business
opportunities or cease operations entirely.
If we are unable to obtain additional funding
when needed, our business operations will be harmed, and if we do obtain additional financing, our then-existing shareholders
may suffer substantial dilution.
As we take steps in the commercialization and
marketing of our technologies, or respond to potential opportunities and/or adverse events, our working capital needs may change. We anticipate
that if our cash and cash equivalents are insufficient to satisfy our liquidity requirements, we will require additional funding to sustain
our ongoing operations and to continue our research and development activities. We do not have any contracts or commitments for additional
funding, and there can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all, if needed.
The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to conduct business operations.
If we are unable to obtain additional financing to finance a revised growth plan, we will likely be required to curtail such plans or
cease our business operations. Any additional equity financing may involve substantial dilution to our then existing shareholders.
We are dependent on the services of certain
key management personnel, employees, and advisors. If we are unable to retain or motivate such individuals or hire qualified personnel,
we may not be able to grow effectively.
We depend on the services of a number of key management
personnel, employees, and advisors and our future performance will largely depend on the talents and efforts of such individuals. We do
not currently maintain "key person" life insurance on any of our employees. The loss of one or more of such key individuals,
or failure to find a suitable successor, could hamper our efforts to successfully operate our business and achieve our business objectives.
Our future success will also depend on our ability to identify, hire, develop, motivate, and retain highly skilled personnel. Competition
in our industry for qualified employees is intense, and our compensation arrangements may not always be successful in attracting new employees
and/or retaining and motivating our existing employees. Future acquisitions by us may also cause uncertainty among our current employees
and employees of the acquired entity, which could lead to the departure of key individuals. Such departures could have an adverse impact
on the anticipated benefits of an acquisition.
5
We may continue to incur substantial losses
and negative operating cash flows and may not achieve or maintain positive cash flow or profitability in the future.
We have incurred significant losses and negative
operating cash flow from inception and may continue to incur significant losses and negative operating cash flow into the future. In order
to reach our business growth objectives, we expect to incur significant sales, marketing, software development and other operating costs,
including costs associated with the expansion of our personnel. As a result, we will need to generate and grow our revenues significantly
to achieve positive cash flow and profitability. There can be no assurance that we will be successful in generating and increasing our
revenues or that we can achieve or maintain positive cash flow or profitability. The uncertainties regarding the commencement of adequate
commercial revenues raise substantial doubt about our ability to continue as a going concern.
Our Platform is currently under development
and no assurance can be given that our Platform will be accepted by others or generate sufficient interest
.
Our proposed Platform is currently under development.
It is our intent that the Platform will (i) support our owned- and-operated games; (ii) provide third-party game creators
and publishers with the ability to integrate our NFT infrastructure; and (iii) create a unified environment where all the games and
users on the Platform can participate in promotions, opportunities, and various experiences. Failure to develop a robust gaming platform
will adversely affect our business objectives.
Our business will be intensely competitive.
We may not deliver successful and engaging games, or players and consumers may prefer our competitors' products over our own.
We operate in a competitive environment that is
characterized by price fluctuation and technological change. We will compete with major international and domestic companies. Some of
our current and future potential competitors may have greater market recognition and customer bases, longer operating histories, and substantially
greater financial, technical, marketing, distribution, purchasing, manufacturing, personnel, and other resources than we do. In addition,
competitors may be developing similar technologies with a cost similar to, or lower than, our projected costs. As a result, they may be
able to respond more quickly to changing customer demands or to devote greater resources to the development, promotion and sales of blockchain-based games
and NFT products than we can.
The Platform is based on new and unproven
technologies and is subject to the risks of failure inherent in the development of new products and services.
Because the Platform is based on certain new technologies,
it is subject to risks of failure that are particular to new technologies, including the possibility that:
●
the
Platform may not gain market acceptance;
●
proprietary
rights of third parties may preclude us from marketing a new product or service;
●
the
Platform may not receive the exposure required to obtain new users; or
●
third
parties may market superior products or services.
Digital ecosystems, including offerings
of digital assets, is evolving, and uncertain, and new regulations or policies may materially adversely affect our development.
The technologies supporting these digital assets
like blockchain and NFTs are new and rapidly evolving. To the extent these technologies become more widely utilized in the industry, our
revenues could be negatively impacted. If we fail to explore these new technologies and apply them innovatively to keep our products and
services competitive, we may not experience significant growth of our business. Regulation of digital assets like cryptocurrencies, blockchain
technologies, NFTs, and cryptocurrency exchanges is currently underdeveloped and likely to rapidly evolve as government agencies take
greater interest in them. Regulation also varies significantly among international, federal, state and local jurisdictions and is subject
to significant uncertainty. Various legislative and executive bodies in the United States and in other countries may in the future
adopt laws, regulations, or guidance, or take other actions, which may severely impact the permissibility of tokens generally and the
technology behind them or the means of transacting in or transferring them. The regulatory regime governing blockchain technologies, NFTs,
cryptocurrencies, digital assets, utility tokens, security tokens and offerings of digital assets is uncertain, and new regulations or
policies may materially adversely affect our development and our value if we materially embrace digital assets and cryptocurrencies in
the future.
6
Marketplace demand of the NFTs is unpredictable.
The appetite in the marketplace is unpredictable
as it is related to NFTs and may change over time. The trading of NFTs in the open market and use in gameplay are based purely on marketplace
demand.
We may not be able to adequately evaluate
the risks associated with our planned NFT platform.
The Platform may not be successful and may expose
us to legal, regulatory, and other risks. Given the nascent and evolving nature of cryptocurrencies, NFTs, and blockchain technology,
we may be unable to accurately anticipate or adequately address such risks or the potential impact of such risks. The occurrence of any
such risks could materially and adversely affect our business, financial condition, results of operations, reputation, and prospects.
As the market for NFTs is relatively nascent,
it is difficult to predict how the legal and regulatory framework around NFTs will develop and how such developments will impact our business
and the Platform. Further, market acceptance of NFTs is uncertain as buyers may be unfamiliar or uncomfortable with digital assets generally,
how to transact in digital assets, or how to assess the value of NFTs. The launch of the Platform also subjects us to risks similar to
those associated with any new platform offering, including, but not limited to, our ability to accurately anticipate market demand and
acceptance, our ability to successfully launch our new offering, creator and buyer acceptance, technical issues with the operation of
the Platform, and legal and regulatory risks as discussed above. We believe these risks may be heightened with respect to the Platform,
as NFTs are still considered a relatively novel concept. If we fail to accurately anticipate or manage the risks associated with the Platform
or with our facilitation of crypto asset transactions, or if we directly or indirectly become subject to disputes, liability, or other
legal or regulatory issues in connection with the Platform or crypto asset transactions, the Platform may not be successful and our business,
financial condition, results of operations, reputation, and prospects could be materially harmed.
Our industry is subject to rapid technological
change, and if we do not adapt to, and appropriately allocate our resources among, emerging technologies and business models, our business
may be negatively impacted.
Technology changes rapidly in the interactive
entertainment industry. We must continually anticipate and adapt to emerging technologies, such as cloud-based game streaming, and
business models, such as free-to-play and subscription-based access to a portfolio of interactive content, to stay competitive.
Forecasting the financial impact of these changing technologies and business models is inherently uncertain and volatile. Supporting a
new technology or business model may require partnering with a new platform, business, or technology partner, which may be on terms that
are less favorable to us than those for traditional technologies or business models. If we invest in the development of interactive entertainment
products for distribution channels that incorporate a new technology or business model that does not achieve significant commercial success,
whether because of competition or otherwise, we may not recover the often-substantial up-front costs of developing and marketing
those products, or recover the opportunity cost of diverting management and financial resources away from other products or opportunities.
Further, our competitors may adapt to an emerging technology or business model more quickly or effectively than we do, creating products
that are technologically superior to ours, more appealing to consumers, or both.
If, on the other hand, we elect not to pursue
the development of products incorporating a new technology, or otherwise elect not to pursue new business models that achieve significant
commercial success, it may have adverse consequences. It may take significant time and expenditures to shift product development resources
to that technology or business model, and it may be more difficult to compete against existing products incorporating that technology
or using that business model.
7
Negative perceptions about our business,
products, and services and the communities within our products and services may damage our business, and we may incur costs to address
concerns.
Expectations regarding the quality, performance
and integrity of our products and services are high. Negative responses about our products and services may not be foreseeable. We also
may not effectively manage these responses because of reasons within or outside of our control. For example, we have included in certain
games the ability for players to purchase digital items, including in some instances virtual "packs", "boxes"
or "crates" that contain variable digital items. The inclusion of variable digital items in certain games has the possibility
of creating a negative perception of gameplay fairness or other negative perceptions, our reputation and brand could be harmed and revenue
could be negatively impacted.
In addition, we aim to offer our players safe,
inclusive and fulfilling online communities. We may not be able to maintain healthy, long-term online communities within our games
and services as a result of the use of those communities as forums for harassment or bullying, our inability to successfully discourage
overuse of our games and services or overspending within our games and services, or the successful implementation of cheating programs.
Although we expend resources, and expect to continue to expend resources, to maintain healthy online communities, our efforts may not
be successful due to scale, limitations of existing technologies or other factors.
In the event that there is negative sentiment
about gameplay fairness, our online communities, our business practices, business models or game content, it can lead to investigations
or increased scrutiny from governmental bodies and consumer groups, as well as litigation, which, regardless of their outcome, may be
costly, damaging to our reputation and harm our business.
We may become involved in legal proceedings
that may result in adverse outcomes.
We may become subject to claims, suits, government
investigations, and other proceedings involving competition and antitrust, intellectual property, privacy, tax, labor and employment,
commercial disputes, content generated by our users, goods and services offered by advertisers or publishers using our platforms, and
other matters. Such claims, suits, government investigations, and proceedings are inherently uncertain and their results cannot be predicted
with certainty. Regardless of the outcome, such legal proceedings can have an adverse impact on us because of legal costs, diversion of
management resources, and other factors. Determining reserves for our pending litigation is a complex, fact-intensive process that
requires significant judgment. It is possible that a resolution of one or more such proceedings could result in substantial fines and
penalties that could adversely affect our business, financial position, results of operations, or cash flows in a particular period. These
proceedings could also result in criminal sanctions, consent decrees, or orders preventing us from offering certain features, functionalities,
products, or services, requiring a change in our business practices, or requiring development of non-infringing products or technologies,
which could also adversely affect our business and results of operations.
Our business is subject to economic, market
and geopolitical conditions.
Our business is subject to economic, market, public
health, and geopolitical conditions which are beyond our control. The United States and other international economies have experienced
cyclical downturns from time to time. Worsening economic conditions that negatively impact discretionary consumer spending and consumer
demand, including inflation, slower growth, recession, and other macroeconomic conditions, including those resulting from public health
outbreaks such as the COVID-19 pandemic and geopolitical issues could have a material adverse impact on our business and operating
results.
We are particularly susceptible to market conditions
and risks associated with the entertainment industry, which, in addition to general macroeconomic downturns, also include the popularity,
price and timing of our games, changes in consumer demographics, the availability and popularity of other forms of entertainment, and
critical reviews and public tastes and preferences, which may change rapidly and cannot necessarily be predicted.
Catastrophic events may disrupt our business.
Natural disasters, cyber-incidents, weather events,
wildfires, power disruptions, telecommunications failures, public health outbreaks, failed upgrades of existing systems or migrations
to new systems, acts of terrorism or other events could cause outages, disruptions and/or degradations of our infrastructure, including
our or our partners' information technology and network systems, a failure in our ability to conduct normal business operations,
or the closure of public spaces in which players engage with our games and services. The health and safety of our employees, players,
third-party organizations with whom we partner or regulatory agencies on which we rely could be also affected, which may prevent
us from executing against our business strategies or cause a decrease in consumer demand for our products and services. System redundancy
may be ineffective and our disaster recovery and business continuity planning may not be sufficient for all eventualities. Such failures,
disruptions, closures, or inability to conduct normal business operations could also prevent access to our products, services or online
stores selling our products and services, cause delay or interruption in our product or live services offerings, allow breaches of data
security or result in the loss of critical data. An event that results in the disruption or degradation of any of our critical business
functions or information technology systems, harms our ability to conduct normal business operations or causes a decreased in consumer
demand for our products and services could materially impact our reputation and brand, financial condition and operating results.
8
We may not meet our product and live service
development schedules and live service release schedule may be delayed, cancelled, or poorly received.
Our ability to meet product development schedules
is affected by a number of factors both within and outside our control, including feedback from our players, the creative processes involved,
the coordination of large and sometimes geographically dispersed development teams, the complexity of our products and the platforms for
which they are developed, the need to fine-tune our products prior to their release and, in certain cases, approvals from third parties.
Any failure to meet anticipated production or release schedules likely would result in a delay of revenue and/or possibly a significant
shortfall in our revenue, increase our development and/or marketing expenses, harm our profitability, and cause our operating results
to be materially different than anticipated. If we miss key selling periods for products or services, particularly the fiscal quarter
ending in December, for any reason, including product delays or product cancellations our sales likely will suffer significantly.
Increasing gas fees on Polygon could materially
affect our revenues.
Users must pay gas fees on NFT platforms when
minting NFTs. Gas fees are transaction fees specific to the Ethereum ("ETH") blockchain network. The fee is determined by
the number of transactions on the protocol and type of computations required to verify transactions; the greater the popularity, the greater
the fee. Increased traffic can also lead to scalability problems which may also push gas fees higher. To mitigate this risk we have chosen
to build our NFTs on the Polygon network and to strategically price our NFTs. Gas fees on Polygon are significantly cheaper than that
of the most widely used blockchain network, Ethereum. We do not currently anticipate any material changes in gas prices on the Polygon
network that would affect our business model. However, if gas prices on the Polygon network become too high, then demand for our NFTs
could decrease and we could potentially lose existing and potential customers to competitors with cheaper fees. This would materially
and adversely affect our revenues and thereby the success of our business.
Risks Related to Information Technology
Systems, Intellectual Property and Privacy Laws
Security breaches and attacks against our
systems and network, and any potentially resulting breach or failure to otherwise protect confidential and proprietary information, could
damage our reputation and negatively impact our business, as well as materially and adversely affect our financial condition and results
of operations.
Although we have employed significant resources
to develop our security measures against breaches, our cybersecurity measures may not detect or prevent all attempts to compromise our
systems, including distributed denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering,
security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in and transmitted by
our systems or that we otherwise maintain. Breaches of our cybersecurity measures could result in unauthorized access to our systems,
misappropriation of information or data, deletion or modification of client information, or a denial-of-service or other interruption
to our business operations. As techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known
until launched against us or our third-party service providers, we may be unable to anticipate, or implement adequate measures to
protect against, these attacks.
If we are unable to avert these attacks and security
breaches, we could be subject to significant legal and financial liability, our reputation would be harmed and we could sustain substantial
revenue loss from lost sales and customer dissatisfaction. We may not have the resources or technical sophistication to anticipate or
prevent rapidly evolving types of cyber-attacks. Cyber-attacks may target us, our Traders or other participants, the communication
infrastructure, or the e-platform on which we depend. Actual or anticipated attacks and risks may cause us to incur significantly
higher costs, including costs to deploy additional personnel and network protection technologies, train employees, and engage third-party experts
and consultants. Cybersecurity breaches would not only harm our reputation and business, but also could materially decrease our revenue
and net income.
9
We face the risk of fraud.
Online transactions may be subject to sophisticated
schemes or collusion to defraud, launder money or other illegal activities, and there is a risk that our products may be used for those
purposes either by our customers or our employees or contractors. This may be especially true when dealing with cryptocurrencies, which
by design, may be difficult or impossible to trace. While we believe that our systems, both computer and procedural, afford an adequate
degree of protection against fraudulent activities, if such protection is not effective in all cases, is circumvented or if we fail to
implement updated controls and procedures or to counter new fraud techniques, we could lose the confidence of our customers and our reputation
could be damaged. Moreover, any failure to protect ourselves and our customers from fraudulent activity, could result in reputational
damage and could materially adversely affect our operations, financial performance and prospects. Failure to adequately monitor and prevent
money laundering and other fraudulent activity could also result in civil or criminal liability.
We use open-source software in
connection with certain of our games and services which may pose particular risks to our proprietary software, products, and services
in a manner that could have a negative impact on our business.
We use open-source software in connection
with some of the games and services we offer. Some open-source software licenses require users who distribute open source software
as part of their software to publicly disclose all or part of the source code to such software or make available any derivative works
of the open source code on unfavorable terms or at no cost. The terms of various open-source licenses have not been interpreted by
courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on
our use of the open-source software. Were it determined that our use was not in compliance with a particular license, we may be required
to release our proprietary source code, pay damages for breach of contract, re-engineer our games or products, discontinue distribution
in the event re-engineering cannot be accomplished on a timely basis, or take other remedial action that may divert resources away
from our game development efforts, any of which could negatively impact our business.
We rely on third-party providers
for computing infrastructure, secure network connectivity, and other technology-related services needed to deliver our products.
Any disruption in the services provided by such third-party provider could adversely affect our business.
Our products are hosted from, and use computing
infrastructure, secure network connectivity, and other technology-related services
provided by third-party providers.
We do not control the operations of these third-party provider or own the equipment used to provide such services. Because we cannot
easily switch between cloud providers, any disruption of or interference, for example, due to natural disasters, cyber-attacks, terrorist
attacks, power losses, telecommunications failures, or similar events, would impact our operations and may adversely affect our business,
financial condition, operating results and cash flows. In addition, these providers have no obligation to renew their agreements with
us on commercially reasonable terms or at all. If we are unable to renew our agreements on commercially reasonable terms or develop our
blockchain capabilities, we may be required to transition to a new provider, and we may incur significant costs and possible service interruption
in connection with doing so.
In addition, these providers may take actions
beyond our control that could seriously harm our business, including:
●
discontinuing
or limiting our access to its cloud platform
●
increasing
pricing terms;
●
terminating
or seeking to terminate our contractual relationship altogether;
●
establishing
more favorable relationships or pricing terms with one or more of our competitors; and
●
modifying
or interpreting its terms of service or other policies in a manner that impacts our ability to run our business and operations.
Cloud hosting providers have broad discretion
to change and interpret their terms of service and other policies with respect to us, and those actions may be unfavorable to us. They
may also alter how we are able to process data on their respective cloud platforms. If changes or interpretations are made that are unfavorable
to us, our business could be seriously harmed.
10
We may not be able to secure all rights
to our intellectual property or our rights may be subject to claims of infringement by others and other issues affecting production.
We will rely on a combination of trade secret,
trademark, and copyright laws, as well as employee and third-party non-disclosure agreements and other protective measures,
to protect intellectual property rights pertaining to our products and technologies both in the U.S. and abroad. There can be no
assurance, however, that these measures will provide meaningful protection of our technology, trade secrets, know-how or other intellectual
property in the event of any unauthorized use, misappropriation, or disclosure. There can also be no assurance that others will not independently
develop similar technologies or duplicate any technology that we develop or have developed without violating our intellectual property
rights. In addition, there can be no assurance that our intellectual property rights will be held to be valid, will not be successfully
challenged or will otherwise be of value. In the event that we are subject to a claim of intellectual property infringement, whether it
be patent, copyright or trademark, the cost of defending such a claim, even if partly covered by insurance, will be significant and will
have a material adverse effect on our financial results.
If third parties claim that we infringe
their intellectual property, it may result in costly litigation.
We cannot assure you that third parties will not
claim our current or future products or services infringe their intellectual property rights. Any such claims, with or without merit,
could cause costly litigation that could consume significant management time. Such claims also might require us to enter into royalty
or license agreements. If required, we may not be able to obtain such royalty or license agreements, or obtain them on terms acceptable
to us.
We may not be able to adequately protect
our proprietary technology, and our competitors may be able to offer similar products and services which would harm our competitive position.
Our success, in part, depends upon our proprietary
technology. We have various forms of intellectual property including patent, copyright, trademark and trade secret laws, confidentiality
procedures and contractual provisions to establish and protect our proprietary rights. Despite these precautions, third parties could
copy or otherwise obtain and use our technology without authorization, or develop similar technology independently. We also pursue the
registration of our domain names, trademarks, and service marks in the United States. However, we cannot provide any assurance that
patent applications that we file will ultimately result in an issued patent or, if issued, that they will provide sufficient protections
for our technology against competitors. We cannot assure you that the protection of our proprietary rights will be adequate or that our
competitors will not independently develop similar technology, duplicate our products and services or design around any intellectual property
rights we hold.
The Platform may raise issues regarding
third party intellectual property rights.
NFTs raise various intellectual property law considerations,
including adequacy and scope of assignment, licensing, transfer, copyright, and other right of use issues. The creator of an NFT will
often have all rights to the content of the NFT and can determine what rights to assign to a buyer, such as the right to display, modify,
or copy the content. To the extent we are directly or indirectly involved in a dispute between creators and buyers on the Platform, it
could materially and adversely affect the success of the Platform and harm our business and reputation.
The Platform may face cybersecurity risks.
NFTs in general, and the Platform specifically,
may also be an attractive target for cybersecurity attacks. For example, a perpetrator could seek to obtain the private key associated
with a digital wallet holding an NFT to access and sell the NFT without valid authorization, and the owner of the NFT may have limited
recourse due to the nature of blockchain transactions and of cybercrimes generally. NFT marketplaces, including the Platform, may also
be vulnerable to attacks where an unauthorized party acquires the necessary credentials to access user accounts. The safeguards we have
implemented or may implement in the future to protect against cybersecurity threats may be insufficient. If the Platform were to experience
any cyberattacks, it could negatively impact our reputation and market acceptance of our platform.
11
The laws and regulations concerning data
privacy are continually evolving. Failure to comply with these laws and regulations could harm our business.
We will collect and store information about our
consumers, including consumers who play our games. In addition, we collect and store information about our employees. We will be subject
to laws from a variety of jurisdictions regarding privacy and the protection of this information, including the E.U.'s General Data
Protection Regulation (the "GDPR"), the U.S. Children's Online Privacy Protection Act ("COPPA"), which
regulates the collection, use, and disclosure of personal information from children under 13 years of age, and the California Consumer
Privacy Act (the "CCPA"). Failure to comply with any of these laws or regulations may increase our costs, subject us to expensive
and distracting government investigations, and result in substantial fines.
Data privacy protection laws are rapidly changing
and likely will continue to do so for the foreseeable future and may be inconsistent from jurisdiction to jurisdiction. For example, the
E.U. has traditionally taken a broader view than the United States and certain other jurisdictions as to what is considered personal
information and has imposed greater obligations under data privacy and protection regulations, including those imposed under the GDPR. The
U.S. government, including the Federal Trade Commission and the Department of Commerce, as well as various U.S. state governments,
are continuing to review the need for greater regulation over the collection of personal information and information about consumer behavior
on the Internet and on mobile devices. Complying with emerging and changing laws could require us to incur substantial costs or impact
our approach to operating and marketing our games. Due to the rapidly changing nature of these data privacy protection laws, there is
not always clear guidance from the respective governments and regulators regarding the interpretation of the law, which may create the
risk of an inadvertent violation. For example, the California legislature recently passed the CCPA and the E.U. has proposed further reforms
to its existing data protection legal framework, in addition to the GDPR, which may further change our compliance obligations. Various
government and consumer agencies worldwide have also called for new regulation and changes in industry practices. In addition, in some
cases, we are dependent upon our platform providers and external data processors to assist us in ensuring compliance with these various
types of regulations, and a violation by one of these third parties may also subject us to government investigations and result in substantial
fines.
Player interaction with our games will be subject
to our privacy policies, end user license agreements ("EULAs"), and terms of service. If we fail to comply with our posted
privacy policies, EULAs, or terms of service, or if we fail to comply with existing privacy-related or data protection laws and regulations,
it could result in proceedings or litigation against us by governmental authorities or others, which could result in fines or judgments
against us, damage our reputation, impact our financial condition, and harm our business. If regulators, the media, consumers, or employees
raise any concerns about our privacy and data protection or consumer protection practices, even if unfounded, this could also result in
fines or judgments against us, damage our reputation, negatively impact our financial condition, or damage our business.
Gaxos Health will rely on information systems
to obtain, process, analyze, and manage data. To the extent IT systems are not successfully implemented or fail, our business and results
of operations may be adversely affected. Further, our business will rely to a significant degree upon the secure transmission, use and
storage of sensitive information, including protected health information and other personally identifiable information, financial information
and other confidential information and data within these systems.
To protect this information, we will need to implement
commercially reasonable security measures and maintain information security policies and procedures informed by requirements under applicable
law and recommended practices, in each case, as applicable to the data collected, hosted and processed. Despite our efforts, our business
will be vulnerable to unauthorized access to data and/or breaches of confidential information due to criminal conduct, physical break-ins,
hackers, employee or insider malfeasance and/or improper employee or contractor access, computer viruses, programming errors, denial-of-service
attacks, ransomware events, phishing schemes, fraud, terrorist attacks, human error or other breaches by insiders or third parties or
similar disruptive problems. It is not possible to prevent all security threats to our data. Techniques used to obtain unauthorized access,
disable or degrade service or sabotage systems change frequently and may be difficult to detect for long periods of time. Further, defects
in the design or manufacture of applications we develop or procure from third parties could compromise our data. These events, including
unauthorized access, misappropriation, disclosure or loss of sensitive information (including financial or personal health information)
or a significant disruption of our network, expose us to risks including risks to our ability to provide our solutions, management distraction
and the obligation to devote significant financial and other resources to mitigate such problems and increases to our future information
security costs. Moreover, unauthorized access, use or disclosure of certain sensitive information in our possession or our failure to
satisfy legal requirements, including requirements relating to safeguarding protected health information under the Health Insurance Portability
and Accountability Act ("HIPAA") or state data privacy laws could result in civil and criminal liability and regulatory action,
which could result in potential fines and penalties, as well as costs relating to investigation of an incident or breach, corrective actions,
required notifications to regulatory agencies and customers, credit monitoring services and other necessary expenses. In addition, actual
or perceived breaches of our security management efforts can cause existing customers to terminate their relationship with us and deter
existing or prospective customers from using or purchasing our solutions in the future. These events can have a material adverse impact
on our business, results of operations, financial condition and reputation.
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We collect, store, process, and use personal
data, which subjects us to legal obligations and laws and regulations related to security and privacy, and any actual or perceived failure
to meet those obligations could harm our business.
We collect, process, store, and use a wide variety
of data from our customers, including personal information. We are subject to federal, state and international laws relating to the collection,
use, retention, security and transfer of various types of personal information. U.S. federal, state, and international laws and regulations
governing privacy and data protection impose restrictions on what we can do with our customers' personal data and provide for related
obligations. These obligations include heightened transparency about data collection, use and sharing practices, new data privacy rights,
and rules in respect to cross-border data transfers, which carry significant enforcement penalties for non-compliance. These laws and
regulations also require us to safeguard our customers' personal data. Although we have established security procedures to protect
customer information, our or our third-party service providers' security and testing measures may not prevent security breaches.
Any compromise of our security or breach of our customers' privacy could harm our reputation or financial condition and, therefore,
our business.
In addition to the risks generally relating to
the collection, use, retention, security and transfer of personal information, we are also subject to specific obligations relating to
information considered sensitive under applicable laws, such as health data and biometric data. Health data is subject to additional privacy,
security and breach notification requirements, and we are subject to audit by governmental authorities regarding our compliance with these
obligations. The collection, handling, and other processing of biometric data also are subject to particular scrutiny and obligations
under applicable laws and regulations, including consumer protection legislation (such as the Federal Trade Commission Act and similar
state legislation), general privacy legislation (such as the California Consumer Privacy Act, or CCPA), and state statutes addressing
biometric information specifically (including Illinois' Biometric Information Privacy Act, or BIPA), and by consumer protection
regulators. If we fail to adequately comply with applicable rules and requirements, or if health data is handled in a manner not permitted
by law or under our agreements with healthcare institutions, we can be subject to litigation or government investigations or other proceedings,
and can be liable for associated investigatory expenses, and can also incur significant fees or fines. Some of those laws, including BIPA,
provide consumers with a private right of action for certain violations and large potential statutory damages awards. Recent litigation
around these laws has encouraged plaintiffs' attorneys to bring additional actions against other targets. Further, the FTC issued
a policy statement regarding biometric information on May 18, 2023, that identifies numerous risks the FTC considers key, outlines relevant
practices the FTC plans to scrutinize, and affirms the FTC's commitment to addressing deceptive and unfair practices involving the
collection and use of biometric information, as well as deceptive marketing of biometric information technologies. These developments
underscore the legal and regulatory risks applicable to our collection, use, disclosure, and other processing of health and biometric
information.
In addition, a party who circumvents our security
measures or exploits inadequacies in our security measures, could, among other effects, misappropriate customer data or other proprietary
information or cause interruptions in our operations. Actual or perceived vulnerabilities may lead to claims against us. To the extent
that the measures we or our third-party business partners have taken are, or are perceived to be, insufficient or inadequate, we may become
subject to litigation, breach notification obligations, or regulatory or administrative sanctions, which could result in significant fines,
penalties, or damages and harm to our reputation. Depending on the nature of the information compromised, in the event of a data breach
or other unauthorized processing of our customer data, we may also have obligations to notify customers about the incident and we may
need to provide some form of remedy for the individuals affected by the incident. A growing number of legislative and regulatory bodies
have adopted consumer notification requirements in the event of unauthorized access to or acquisition of certain types of personal data.
Such breach notification laws continue to evolve and may be inconsistent from one jurisdiction to another. Complying with these obligations
could cause us to incur substantial costs and could increase negative publicity surrounding any incident that compromises customer data.
13
Violations of applicable laws relating to privacy,
data protection, or cybersecurity, or cybersecurity breaches or incidents, as well as the perception that any of the foregoing have occurred,
could impact our business in a number of ways, such as a temporary suspension of some or all of our operating and/or information systems,
damage to our reputation and brand and our relationships with customers, suppliers, vendors, and service providers and could result in
lost, unavailable, or corrupted data, lost sales, increased insurance premiums, substantial breach-notification and other remediation
costs and claims, demands, and litigation, as well as adversely affect results of operations. In addition, we may also face regulatory
investigations and other proceedings with corresponding fines, penalties, and other liabilities, civil claims including representative
actions, and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation
or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm. We may also incur additional
costs in the future related to the implementation of additional security measures to protect against new or enhanced data security and
privacy threats, to comply with state, federal, and international laws that may be enacted to address personal data processing risks and
data security threats, or to investigate or address potential or actual data security breaches or incidents or violations of our actual
or alleged obligations relating to privacy, data protection, or cybersecurity.
United States federal and state privacy
laws, and equivalent laws of other nations, may increase our costs of operation and expose us to civil and criminal sanctions.
Regulation of data processing is evolving, as
federal, state, and foreign governments continue to adopt new, or modify existing, laws and regulations addressing data privacy and security,
and the collection, processing, storage, transfer, and use of data. These new or proposed laws and regulations are subject to differing
interpretations and may be inconsistent among jurisdictions, and guidance on implementation and compliance practices are often updated
or otherwise revised, which adds to the complexity of processing personal data. These and other requirements could require us or our collaborators
to incur additional costs to achieve compliance, limit our competitiveness, necessitate the acceptance of more onerous obligations in
our contracts, restrict our ability to use, store, transfer, and process data, impact our or our collaborators' ability to process
or use data in order to support the provision of our products, affect our or our collaborators' ability to offer our products in
certain locations, or cause regulators to reject, limit or disrupt our clinical trial activities.
We and our collaborators may be subject to federal,
state, and foreign data protection laws and regulations (i.e., laws and regulations that address privacy and data security). In the United
States, numerous federal and state laws and regulations, including federal health information privacy laws, state personal information
laws, state data breach notification laws, state health information privacy laws and federal and state consumer protection laws and regulations
that govern the collection, use, disclosure and protection of health-related and other personal information could apply to our operations
or the operations of our collaborators. In addition, we may obtain health information from third parties (including research institutions
from which we obtain clinical trial data) that are subject to privacy and security requirements under the federal Health Insurance Portability
and Accountability Act of 1996 ("HIPAA"), as amended by the Health Information Technology for Economic and Clinical Health
Act of 2009, or HITECH. Depending on the facts and circumstances, we could be subject to civil or criminal penalties if we knowingly use
or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted
by HIPAA.
14
Our business will be subject to complex
and prescriptive regulations regarding consumer protection and data privacy practices, and could be adversely affected if our consumer
protection, data privacy and security practices are not adequate, or perceived as being inadequate.
We will be subject to global data privacy, data
protection, localization, security and consumer-protection laws and regulations worldwide. These laws and regulations are emerging
and evolving and the interpretation and application of these laws and regulations often are uncertain, contradictory, and changing. The
failure to maintain data practices that are compliant with applicable laws and regulations, or evolving interpretations of applicable
laws and regulations, could result in inquiries from enforcement agencies or direct consumer complaints, resulting in civil or criminal
penalties, and could adversely impact our reputation and brand. In addition, the operational costs of compliance with these regulations
are high and will likely continue to increase.
Even if we remain in strict compliance with applicable
laws and regulations, consumer sensitivity to the collection and processing of their personal information continues to increase. Any real
or perceived failures in maintaining acceptable data privacy practices, including allowing improper or unauthorized access, acquisition
or misuse and/or uninformed disclosure of consumer, employee and other information, or a perception that we do not adequately secure this
information or provide consumers with adequate notice about the information that they authorize us to collect and disclose could result
in brand, reputational, or other harms to the business, result in costly remedial measures, deter current and potential customers from
using our products and services and cause our financial results to be materially affected.
Third party vendors and business partners receive
access to certain information that we collect. These vendors and business partners may not prevent data security breaches with respect
to the information we provide them or fully enforce our policies, contractual obligations and disclosures regarding the collection, use,
storage, transfer and retention of personal data. A data security breach of one of our vendors or business partners could cause reputational
and financial harm to them and us, negatively impact our ability to offer our products and services, and could result in legal liability,
costly remedial measures, governmental and regulatory investigations, harm our profitability, reputation and brand, and cause our financial
results to be materially affected.
Digital ecosystems, including offerings
of digital assets, are evolving, and uncertain, and new regulations or policies may materially adversely affect our development.
The technologies supporting these digital assets
like blockchain and NFT are new and rapidly evolving. To the extent these technologies become more widely utilized in the industry, our
revenues could be negatively impacted. If we fail to explore these new technologies and apply them innovatively to keep our products and
services competitive, we may not experience significant growth of our business. Regulation of digital assets like, cryptocurrencies, blockchain
technologies, NFTs and cryptocurrency exchanges, is currently underdeveloped and likely to rapidly evolve as government agencies take
greater interest in them. Regulation also varies significantly among international, federal, state and local jurisdictions and is subject
to significant uncertainty. Various legislative and executive bodies in the United States and in other countries may in the future
adopt laws, regulations, or guidance, or take other actions, which may severely impact the permissibility of tokens generally and the
technology behind them or the means of transacting in or transferring them. The regulatory regime governing blockchain technologies, NFTs,
cryptocurrencies, digital assets, utility tokens, security tokens and offerings of digital assets is uncertain, and new regulations or
policies may materially adversely affect our development and our value if we materially embrace digital assets and cryptocurrencies in
the future.
Risks Related to Digital Assets
The sale of NFTs on the Platform could be
determined to be the unregistered sale of securities.
There is regulatory uncertainty with respect to
whether certain NFTs could be considered securities. If NFTs sold on the Platform were deemed to be securities, we may be found to be
in violation of securities laws for engaging in transactions regarding unregistered securities. Such a determination could lead to an
enforcement action by the SEC and result in fines and other penalties, and have a negative impact on our business.
15
Risks relating to our decision to accept
cryptocurrency as a form of payment may subject us to exchange risk and additional tax and regulatory requirements.
We currently plan to accept Bitcoin and Ethereum,
as a form of payment for purchases on the Platform, in which case we would be subject to additional regulatory requirements. We do not
currently plan to accept any other cryptocurrencies as a form of payment.
Cryptocurrencies are not currently considered
legal tender or backed by any government. The prices of digital assets have been in the past and may continue to be highly volatile, including
as a result of various associated risks and uncertainties. For example, the prevalence of such assets is a relatively recent trend, and
their long-term adoption by investors, consumers and businesses is unpredictable. Moreover, their lack of a physical form, their
reliance on technology for their creation, existence and transactional validation and their decentralization may subject their integrity
to the threat of malicious attacks and technological obsolescence. As intangible assets without centralized issuers or governing bodies,
digital assets have been, and may in the future be, subject to security breaches, cyberattacks or other malicious activities, as well
as human errors or computer malfunctions that may result in the loss or destruction of private keys needed to access such assets.
We will not accept such cryptocurrency payments
directly, but plan to use a third-party vendor to accept and process any such cryptocurrency payments on our behalf. Such third-party vendor
may then immediately convert the cryptocurrency into U.S. dollars so that we would receive payment in U.S. dollars. However,
the regulatory environment covering the acceptance of cryptocurrencies is still evolving and the extent to which we would be responsible
for any decrease in the value of such cryptocurrencies after the customer has tendered the funds but prior to its delivery to us in U.S. dollars
has not been established.
We may also hold cryptocurrencies directly, and
we have exchange rate risk in the amounts we hold as well as the risks that regulatory or other developments may adversely affect the
value of the cryptocurrencies we hold. There is substantial uncertainty regarding legal and regulatory requirements relating to cryptocurrencies
or transactions utilizing cryptocurrencies. These uncertainties, as well as potential accounting and tax issues, or other requirements
relating to cryptocurrencies could have a material adverse effect on our business.
Furthermore, it is unclear the extent to which
accepting Bitcoin and Ethereum would subject us to additional money laundering regulations, "Know Your Customer" ("KYC")
procedures or other laws or to additional taxation. If we fail to comply with prohibitions applicable to us, we could face regulatory
or other enforcement actions and potential fines and other consequences.
We rely on third parties for certain aspects
of our business, which creates additional risk.
We rely on third parties for certain aspects of
our business, including payment service providers and digital wallets to process transactions. We may not manage to comply with our agreement
with third parties or these third parties may refuse to process transactions adequately, may breach their agreements with us, may refuse
to renew agreements on commercially reasonable terms, take actions that degrade the functionality of our services, impose additional costs,
new licenses or other requirements on us, or give preferential treatment to competitive services or suffer outages in their systems, any
of which could disrupt our operations and materially and adversely affect our business, financial condition and results of operations.
Some third parties that provide services to us may have or gain market power and could increase their prices to us without competitive
constraint. In addition, there can be no assurance that third parties that provide services directly to us will continue to do so on acceptable
terms, or at all, or will not suffer from outages to their systems. If any third parties were to stop providing services to us on acceptable
terms, we may be unable to find alternative providers in a timely and efficient manner and on acceptable terms, or at all, which could
materially adversely affect our business, financial condition, and results of operations.
Our crypto assets may be subject to loss,
damage, theft or restriction on access. Further, digital asset exchanges on which crypto assets trade are relatively new and largely unregulated,
and thus may be exposed to fraud and failure. Incorrect or fraudulent cryptocurrency transactions may be irreversible.
We plan to use a third party payment service provider
to process any transactions involving payment for our NFTs with digital currencies. In addition, we intend to purchase and hold MATIC,
in increments as needed, solely for the purpose of paying the fees associated with minting our NFTs on the Polygon network. Our intention
is to immediately convert all cryptocurrency received as payment to cash. In addition, we intend to hold only the minimal amount of MATIC
required to interact with the blockchain as part of our core business of minting NFTs, and we do not intend to accept MATIC as a form
of payment or to hold MATIC as a long term asset. We are currently in the process of selecting the right custodian for our crypto assets
and do not have any custody arrangements. There is a risk that part or a portion or all of our crypto assets could be lost, stolen or
destroyed. Crypto assets are stored in crypto asset sites commonly referred to as "wallets" which may be accessed to exchange
a holder's crypto assets. Access to our crypto assets could also be restricted by cybercrime (such as a denial of service attack)
against a service at which we maintain a hosted wallet. We believe that our crypto assets will be an appealing target to hackers or malware
distributors seeking to destroy, damage or steal our crypto assets. Hackers or malicious actors may attempt to steal our crypto assets,
such as by attacking such network source code, exchange miners, third-party platforms, storage locations or software, our general
computer systems or networks, or by other means. Access to our crypto assets could also be restricted by natural events (such as an earthquake
or flood) or human actions (such as a terrorist attack). Any of these events may adversely affect our operations and, consequently, our
investments and profitability and we cannot guarantee that we will prevent loss, damage or theft, whether caused intentionally, accidentally
or by act of God. The loss or destruction of a private key required to access our digital wallets may be irreversible and we may be denied
access for all time to our crypto asset holdings. Our loss of access to our private keys or our experience of a data loss relating to
our digital wallets could adversely affect our investments and assets.
16
It is possible that, through computer or human
error, theft or criminal action, our crypto assets could be transferred in incorrect amounts or to unauthorized third parties or accounts.
In general, Bitcoin transactions are irrevocable, and stolen or incorrectly transferred cryptocurrencies may be irretrievable, and we
may have extremely limited or no effective means of recovering such Bitcoins.
Digital asset payment service providers and exchanges
on which cryptocurrencies trade are relatively new and, in most cases, largely unregulated. Many digital asset payment service providers
and/or exchanges do not provide the public with significant information regarding their ownership structure, management teams, corporate
practices or regulatory compliance. As a result, the marketplace may lose confidence in, or may experience problems relating to, cryptocurrency
payment service providers and/or exchanges, including prominent exchanges handling a significant portion of the volume of digital asset
trading. During 2022, a number of companies in the crypto industry have declared bankruptcy, including ore Scientific Inc., Celsius Network
LLC ("Celsius"), Voyager Digital Ltd., Three Arrows Capital, BlockFi Lending LLC, and FTX Trading Ltd. ("FTX").
In June 2022, Celsius began pausing all withdrawals and transfers between accounts on its platform, and in July 2022, it filed for Chapter
11 bankruptcy protection. Further, in November 2022, FTX, one of the major cryptocurrency exchanges, also filed for Chapter 11 bankruptcy.
Such bankruptcies have contributed, at least in part, to further price decreases in most crypto assets, a loss of confidence in the participants
of the digital asset ecosystem and negative publicity surrounding digital assets more broadly, and other participants and entities in
the digital asset industry have been, and may continue to be, negatively affected. These events have also negatively impacted the liquidity
of the digital assets markets as certain entities affiliated with FTX engaged in significant trading activity.
We have not been directly impacted by any of the
recent bankruptcies in the crypto asset space, as we have no contractual privity or relationship to the relevant parties. However, we
are dependent on the overall crypto assets industry with respect to any transactions involving payment for our NFTs with digital currencies
and for the digital currencies needed by us to pay the fees associated with minting our NFTs, and such recent events may contribute, at
least in part, to decreases and volatility to our stock price as well as the price of most crypto assets. If the liquidity of the digital
assets markets continues to be negatively impacted, digital asset prices (including the price of bitcoin) may continue to experience significant
volatility and confidence in the digital asset markets may be further undermined. A perceived lack of stability in the digital asset market
and the closure or temporary shutdown of digital asset payment service providers and/or exchanges due to business failure, hackers or
malware, government-mandated regulation, or fraud, may reduce confidence in digital asset networks and result in greater volatility
in cryptocurrency values. These potential consequences of a digital asset payment service provider's and/or exchange's failure
could adversely affect an investment in us.
We intend safeguard and keep private custodian
our digital assets by utilizing storage solutions provided by a custodian, which will likely require multi-factor authentication.
While we are confident in the security of our digital assets that will be held by our custodian, given the broader market conditions,
there can be no assurance that other crypto asset market participants, including our custodian, will not ultimately be impacted by recent
market events. If our custodian were to limit or halt services, we would need to find another custodian. While we have not been directly
impacted by any of the recent bankruptcies in the crypto asset space as we had no contractual privity or relationship to the relevant
parties, we are dependent on the overall industry perception tied to these recent bankruptcy events, and this may be reflected in our
stock price as well as the price of Bitcoin and other crypto assets. We continue to monitor the digital assets industry as a whole, although
these events are continuing to develop and it is not possible at this time to predict all of the risks stemming from these events that
may result to us, our service providers, including digital asset payment service providers, custodians and wallets, our counterparties,
and the broader industry as a whole.
Any of these events may adversely affect our operations
and results of operations and, consequently, an investment in us.
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If our current, or any of our future, custodians
file for bankruptcy, crypto assets held in their custody could be determined to be property of a bankruptcy estate and we could be considered
a general unsecured creditor thereof.
The treatment of bitcoins and other crypto assets
held by custodians that file for bankruptcy protection is uncharted territory in U.S. Bankruptcy law. We cannot say with certainty whether
bitcoins and other crypto assets held in custody by a bankrupt custodian would be treated as property of a bankruptcy estate and, accordingly,
whether the owner of that bitcoin would be treated as a general unsecured creditor.
Malicious actors could manipulate distributed
ledger networks and smart contract technology upon which digital assets rely and increase the vulnerability of the distributed ledger
networks.
If a malicious actor, including a state-sponsored actor,
is able to hack or otherwise exert unilateral control over a particular distributed ledger network, or the digital assets on such a network,
that actor could attempt to divert assets from that distributed ledger or otherwise prevent the confirmation of transactions recorded
on that distributed ledger.
Such an event could materially and adversely affect
our business. Digital assets have been the subject of attempted manipulation by hackers to use them for malicious purposes. For example,
misuses could occur if a malicious actor obtains a majority of the processing power controlling the digital asset validating activities
and altering the distributed ledger on which digital asset transactions rely. Moreover, if the award for solving transaction blocks for
a particular digital asset declines, and transaction fees are not sufficiently high, the incentive to continue validating distributed
ledger transactions would decrease and could lead to a stoppage of validation activities. The collective processing power of that distributed
ledger would be reduced, which would adversely affect the confirmation process for transactions by decreasing the speed of the adaptation
and adjustment in the difficulty for transaction block solutions. Such slower adjustments would make the distributed ledger network more
vulnerable to malicious actors' obtaining control of the processing power over distributed ledger network processing.
The network contributors for certain Digital
Assets could propose amendments to the network protocols and software for Digital Assets that, if accepted and authorized by the network
for the Digital Assets, could adversely affect the Platform.
The networks for certain digital assets are based
on a protocol governing the peer-to-peer interactions between computers connected to each other within that network. The development
team for a network (if any) might propose and implement amendments to a network's source code through software upgrades altering
the original protocol, including fundamental ideas such as the irreversibility of transactions and limitations on the validation of blockchain
software distributed ledgers. Such changes to original protocols and software could materially and adversely affect our business.
We currently support, and expect to continue
to support, certain smart contract-based crypto assets. If the underlying smart contracts for these crypto assets do not operate as expected,
they could lose value and our business could be adversely affected.
We currently support, and expect to continue to
support, various crypto assets that represent units of value on smart contracts deployed on a third party blockchain. Smart contracts
are programs that store and transfer value and execute automatically when certain conditions are met. Since smart contracts typically
cannot be stopped or reversed, vulnerabilities in their programming and design can have damaging effects. For instance, in April 2018,
a batch overflow bug was found in many Ethereum-based ERC20-compatible smart contract tokens that allows hackers to create a
large number of smart contract tokens, causing multiple crypto asset platforms worldwide to shut down ERC20-compatible token trading.
If any such vulnerabilities or flaws come to fruition, smart contract-based crypto assets, including those held by our customers
on our platforms, may suffer negative publicity, be exposed to security vulnerabilities, decline significantly in value, and lose liquidity
over a short period of time.
18
In some cases, smart contracts can be controlled
by one or more "admin keys" or users with special privileges, or "super users". These users have the ability to
unilaterally make changes to the smart contract, enable or disable features on the smart contract, change how the smart contract receives
external inputs and data, and make other changes to the smart contract. For smart contracts that hold a pool of reserves, these users
may also be able to extract funds from the pool, liquidate assets held in the pool, or take other actions that decrease the value of the
assets held by the smart contract in reserves. Even for crypto assets that have adopted a decentralized governance mechanism, such as
smart contracts that are governed by the holders of a governance token, such governance tokens can be concentrated in the hands of a small
group of core community members, who would be able to make similar changes unilaterally to the smart contract. If any such super user
or group of core members unilaterally make adverse changes to a smart contract, the design, functionality, features and value of the smart
contract, its related crypto assets may be harmed. In addition, assets held by the smart contract in reserves may be stolen, misused,
burnt, locked up or otherwise become unusable and irrecoverable. These super users can also become targets of hackers and malicious attackers.
If an attacker is able to access or obtain the super user privileges of a smart contract, or if a smart contract's super-users or
core community members take actions that adversely affects the smart contract, our customers who hold and transact in the affected crypto
assets may experience decreased functionality and value of the applicable crypto assets, up to and including a total loss of the value
of such crypto assets. Although we do not control these smart contracts, any such events could cause customers to seek damages against
us for their losses, result in reputational damage to us, or in other ways adversely impact our business.
Acceptance and/or widespread use of digital
assets is uncertain.
Currently, there is a relatively small use of
digital assets in the retail and commercial marketplace for goods or services. In comparison, there is relatively large use by speculators
contributing to price volatility.
The relative lack of acceptance of digital assets
in the retail and commercial marketplace limits the ability of end-users to use them to pay for goods and services. Such lack of
acceptance or decline in acceptances would have a material adverse effect on our ability to continue as a going concern or to pursue this
segment at all, which would have a material adverse effect on our business, prospects or operations and potentially the value of any digital
assets we hold or expect to acquire for our own account.
Incorrect or fraudulent cryptocurrency transactions
may be irreversible.
Cryptocurrency transactions are irrevocable and
stolen or incorrectly transferred cryptocurrencies may be irretrievable. As a result, any incorrectly executed or fraudulent cryptocurrency
transactions, such as a result of a cybersecurity breach against our cryptocurrency holdings, could adversely affect our investments and
assets. This is because cryptocurrency transactions are not, from an administrative perspective, reversible without the consent and active
participation of the recipient of the cryptocurrencies from the transaction. Once a transaction has been verified and recorded in a block
that is added to a blockchain, an incorrect transfer of a cryptocurrency or a theft thereof generally will not be reversible, and we may
not have sufficient recourse to recover our losses from any such transfer or theft. Further, it is possible that, through computer or
human error, or through theft or criminal action, our cryptocurrency rewards could be transferred in incorrect amounts or to unauthorized
third parties, or to uncontrolled accounts. If an errant or fraudulent transaction in our cryptocurrency holdings were to occur, we would
have very limited means of seeking to reverse the transaction or seek recourse. To the extent that we are unable to recover our losses
from such action, error or theft, such events could have a material adverse effect on our business.
Because there has been limited precedent
set for financial accounting for digital assets, the determinations that we have made for how to account for digital assets transactions
may be subject to change.
Because there has been limited precedent set for
the financial accounting for digital assets and related revenue recognition and no official guidance has yet been provided by the Financial
Accounting Standards Board or the SEC, it is unclear how companies may in the future be required to account for cryptocurrency transactions
and assets and related revenue recognition. A change in regulatory or financial accounting standards could result in the necessity to
change the accounting methods we currently intend to employ in respect of our anticipated revenues and assets and restate any financial
statements produced based on those methods. Such a restatement could adversely affect our business, prospects, financial condition, and
results of operation.
19
Banks and financial institutions may not
provide banking services, or may cut off services, to businesses that provide cryptocurrency-related services or that accept
cryptocurrencies as payment.
A number of companies that provide cryptocurrency-related services
have been unable to find banks or financial institutions that are willing to provide them with bank accounts and other services. Similarly,
a number of companies and individuals or businesses associated with cryptocurrencies may have had and may continue to have their existing
bank accounts closed or services discontinued with financial institutions. We also may be unable to maintain these services for our business.
The difficulty that many businesses that provide
cryptocurrency-related services have and may continue to have in finding banks and financial institutions willing to provide them
services may decrease the usefulness of cryptocurrencies as a payment system and harm public perception of cryptocurrencies. Similarly,
the usefulness of cryptocurrencies as a payment system and the public perception of cryptocurrencies could be damaged if banks or financial
institutions were to close the accounts of businesses providing cryptocurrency-related services. This could occur as a result of
compliance risk, cost, government regulation or public pressure. The risk applies to securities firms, clearance and settlement firms,
national stock and commodities exchanges, the over the counter market and the Depository Trust Company. Such factors would have a material
adverse effect on our business, prospects, financial condition, and operating results.
Regulatory changes or actions may restrict
the use of digital assets in a manner that adversely affects an investment in us.
As digital assets have grown in popularity and
in market size, the Federal Reserve Board, U.S. Congress and certain U.S. agencies (e.g., the CFTC, the Commission, FinCEN and
the Federal Bureau of Investigation) have begun to examine digital assets. On March 9, 2022, President Biden signed an executive
order on cryptocurrencies. While the executive order did not mandate any specific regulations, it instructs various federal agencies to
consider potential regulatory measures, including the evaluation of the creation of a U.S. Central Bank digital currency. Future
changes to existing regulations or entirely new regulations may affect our business in ways it is not presently possible for us to predict
with any reasonable degree of reliability. Digital assets currently face an uncertain regulatory landscape in not only the United States
but also in such foreign jurisdictions as the European Union and China. While certain governments such as Germany, have issued guidance
as to how to treat cryptocurrencies, most regulatory bodies have not issued specific policy determinations. Future changes to existing
regulations or entirely new regulations may affect our business in ways it is not presently possible for us to predict with any reasonable
degree of reliability, but such change could be substantial and adverse to us and could adversely affect an investment in us.
Political or economic crises may motivate large-scale sales
of crypto assets, which could result in a reduction in values of crypto assets and adversely affect an investment in us.
Geopolitical crises such as Russia's recent
invasion of Ukraine may motivate large-scale sales of crypto assets, which could rapidly decrease the price of crypto assets. Alternatively,
as an emerging asset class with limited acceptance as a payment system or commodity, global crises and general economic downturn may discourage
investment in crypto assets as investors focus their investment on less volatile asset classes as a means of hedging their investment
risk.
Crypto assets, which are relatively new, are subject
to supply and demand forces based upon the desirability of an alternative, decentralized means of buying and selling goods and services,
and it is unclear how such supply and demand will be impacted by geopolitical events, including the war in Ukraine or other crises which
may arise in the future. Nevertheless, political or economic crises may motivate large-scale acquisitions or sales of crypto assets
either globally or locally. Large-scale sales of crypto assets would result in a reduction in cryptocurrency values and could adversely
affect an investment in us.
20
We may lose our private key to our digital
wallet, causing a loss of all of our digital assets.
Digital assets, such as cryptocurrencies and NFTs,
are stored in a so-called "digital wallet", which may be accessed to exchange a holder's digital assets and is
controllable by the processor of both the public key and the private key relating to this digital wallet in which the digital assets are
held, both of which are unique. We will publish the public key relating to digital wallets in use when we verify the receipt of transfers
and disseminate such information into the network, but we will need to safeguard the private keys relating to such digital wallets, which
are stored in the possession of certain of our officers. If the private key is lost, destroyed, or otherwise compromised, we may be unable
to access our cryptocurrencies held in the related digital wallet which will essentially be lost. If the private key is acquired by a
third party, then this third party may be able to gain access to our cryptocurrencies. Any loss of private keys relating to digital wallets
used to store our cryptocurrencies could have a material adverse effect on our ability to continue as a going concern or could have a
material adverse effect on our business, prospects, financial condition, and operating results.
Whether a particular NFT or other digital
or "crypto" asset is a "security" is subject to a high degree of uncertainty, and if we are unable to properly
characterize an NFT or other digital asset, we may be subject to regulatory scrutiny, inquiries, investigations, fines, and other penalties,
which may adversely affect our business, operating results, and financial condition.
The SEC and its staff have taken the position
that certain digital or "crypto" assets (which includes NFTs) fall within the definition of a "security" under
the U.S. federal securities laws.
The classification of a digital asset as a security
under applicable law has wide-ranging implications for the regulatory obligations that flow from the offer and sale of such assets.
For example, a digital asset that is a security in the United States may generally only be offered or sold in the United States pursuant
to a registration statement filed with the SEC or in an offering that qualifies for an exemption from registration. Persons that effect
transactions in digital assets that are securities in the United States may be subject to registration with the SEC as a "broker"
or "dealer."
Platforms that bring together purchasers and sellers
to trade digital assets that are securities in the United States are generally subject to registration as national securities exchanges,
or must qualify for an exemption, such as by being operated by a registered broker-dealer as an alternative trading system ("ATS")
in compliance with rules for ATSs.
We will have policies and processes to analyze
whether each NFT that we sell on the Platform could be deemed to be a "security" under applicable laws. Our policies and processes
do not constitute a legal standard but rather represent our company-developed model, which permits us to make a risk-based assessment
regarding the likelihood that a particular NFT could be deemed a "security" under applicable laws. Regardless of our conclusions,
they are not binding on regulators or courts and we could be subject to legal or regulatory action in the event the SEC, a state or foreign
regulatory authority, or a court were to determine that an NFT posted and sold on the Platform is a "security" under applicable
laws. Because the Platform is not registered or licensed with the SEC or foreign authorities as a broker-dealer, national securities exchange,
or ATS (or foreign equivalents), and we do not seek to register or rely on an exemption from such registration or license to facilitate
the offer and sale of NFTs on the Platform, we only permit posting on the Platform of our own NFTs for which we determine there are reasonably
strong arguments to conclude that the NFT is not a security. We believe that our process reflects a comprehensive and thoughtful analysis
and is reasonably designed to facilitate consistent application of available legal guidance to digital assets to facilitate informed risk-based business
judgment. However, we recognize that the application of securities laws to the specific facts and circumstances of digital assets may
be complex and subject to change, and that a posting determination does not guarantee any conclusion under the U.S. federal securities
laws. We expect our risk assessment policies and to continuously evolve to take into account case law, facts, and developments in technology.
There can be no assurances that we will properly
characterize any given NFT as a security or non-security for purposes of determining whether the Platform will allow the posting
of such NFT, or that the SEC, foreign regulatory authority, or a court, if the question was presented to it, would agree with our assessment.
If the SEC, state or foreign regulatory authority, or a court were to determine that NFTs offered or sold on the Platform are securities,
we would not be able to offer such NFTs until we are able to do so in a compliant manner. A determination by the SEC, a state or foreign
regulatory authority, or a court that an NFT sold on our Platform was a security may also result in us determining that it is advisable
to remove NFTs from the Platform that have similar characteristics to the NFT that was determined to be a security. In addition, we could
be subject to judicial or administrative sanctions for failing to offer or sell the NFT in compliance with the registration requirements,
or for acting as a broker, dealer, or national securities exchange without appropriate registration. Such an action could result in injunctions,
cease and desist orders, as well as civil monetary penalties, fines, and disgorgement, criminal liability, and reputational harm. Customers
that purchased such NFTs on the Platform and suffered losses could also seek to rescind a transaction that we facilitated as the basis
that it was conducted in violation of applicable law, which could subject us to significant liability.
21
Risks Related to Regulatory Changes
Changes in our tax rates or exposure to
additional tax liabilities, and changes to tax laws and interpretations of tax laws could adversely affect our earnings and financial
condition.
We are subject to taxes in the United States
and in various foreign jurisdictions. Significant judgment will be required to determine our worldwide income tax provision, tax assets,
and accruals for other taxes, and there are many transactions and calculations where the ultimate tax determination is uncertain. Our
effective income tax rate is based in part on our corporate operating structure and the manner in which we operate our business and develop,
value and use our intellectual property. Taxing authorities in jurisdictions in which we operate may challenge and audit our methodologies
for calculating our income taxes, which could increase our effective income tax rate and have an adverse impact on our results of operations
and cash flows. In addition, our provision for income taxes is materially affected by our profit levels, changes in our business, changes
in the mix of earnings in countries with differing statutory tax rates, changes in the elections we make, changes in the valuation of
our deferred tax assets and liabilities, or changes in applicable tax laws or interpretations of existing income and withholding tax laws,
as well as other factors. For example, the outcome of future guidance related to the U.S. Tax Act could cause us to change our analysis
and materially impact our previous estimates and financial statements.
In addition, changes to U.S. federal, state
or international tax laws or their applicability to corporate multinationals in the countries in which we do business may affect our effective
tax rates and cash taxes, cause us to change the way in which we structure our business and resulted in other costs. Our effective tax
rate also could be adversely affected by changes in our valuation allowances for deferred tax assets. Actual financial results also may
differ materially from our current estimates and could have a material impact on our assessment of the valuation allowance.
The Platform may be subject to regulation
by financial regulators.
NFTs, in general, and the Platform may also be
subject to regulations of the Financial Crimes Enforcement Network ("FinCEN") of the U.S. Department of Treasury and
the Bank Secrecy Act. Further, the Office of Foreign Assets Controls ("OFAC") has signaled sanctions could apply to digital
transactions and has pursued enforcement actions involving cryptocurrencies and digital asset accounts. The nature of many NFT transactions
also involve circumstances which present higher risks for potential violations, such as anonymity, subjective valuation, use of intermediaries,
lack of transparency, and decentralization associated with blockchain technology. In addition, the Commodity Futures Trading Commission
has stated that cryptocurrencies, with which NFTs have some similarities, fall within the definition of "commodities." If
NFTs were deemed to be a commodity, NFT transactions could be subject to prohibitions on deceptive and manipulative trading or restrictions
on manner of trading (e.g., on a registered derivatives exchange), depending on how the transaction is conducted. Moreover, if NFTs were
deemed to be a "security", it could raise federal and state securities law implications, including exemption or registration
requirements for marketplaces for NFT transactions, sellers of NFTs, and the NFT transactions themselves, as well as liability issues,
such as insider trading or material omissions or misstatements, among others. NFT transactions may also be subject to laws governing virtual
currency or money transmission. For example, New York has legislation regarding the operation of virtual currency businesses. NFT
transactions also raise issues regarding compliance with laws of foreign jurisdictions, many of which present complex compliance issues
and may conflict with one another. Our launch and operation of the Platform (including our facilitation of transactions in Ether, a cryptocurrency,
in connection therewith) expose us to the foregoing risks, among others, any of which could materially and adversely affect the success
of the Platform and harm our business, financial condition, results of operations, reputation, and prospects.
Our facilitation of transactions in cryptocurrencies
such as Ether on the Platform exposes us to risks under U.S. and foreign tax laws.
Although under U.S. federal tax laws, cryptocurrencies
are currently considered property versus currency, we are obligated to report transactions involving cryptocurrencies in U.S. dollars
and must determine their fair market value on each transaction date. The U.S. federal taxing authorities have issued limited guidance
on cryptocurrency transactions. The current guidance treats the use of cryptocurrency to purchase a NFT as a taxable disposition of the
cryptocurrency, which subjects the holder to taxable gain that such holder must report for federal and state tax purposes. Similarly,
a seller of a NFT is subject to tax on the sale of the NFT. Congress is currently proposing legislation that could require us to
report such transactions to the IRS. Our failure to accurately record or report the cryptocurrency and NFT sales transacted through
the Platform, or held by us, would expose us to adverse tax consequences, penalties, and interest. Moreover, the IRS, in connection with
audits of cryptocurrency exchanges, has successfully sued to obtain account holder transaction and tax information. The applicability
of tax laws in the United States and foreign jurisdictions with respect to cryptocurrency and NFTs will continue to evolve. This
uncertainty increases the risk of non-compliance with tax laws, which in turn could result in adverse tax consequences, penalties,
investigations or audits, litigation, account holder lawsuits, or the need to revise or restate our financial statements and associated
consequences therewith, among other things. Any of the foregoing could materially and adversely affect our business, financial condition,
results of operations, reputation, and prospects.
22
Government regulations applicable to us
may negatively impact our business.
We are a global company subject to various and
complex laws and regulations domestically and internationally, including laws and regulations related to consumer protection, protection
of minors, content, advertising, localization, information security, intellectual property, competition and taxation, among others. Many
of these laws and regulations are continuously evolving and developing, and the application to, and impact on, us is uncertain. For example,
the World Health Organization recently included "gaming disorder" in the 11
th
Revision of the International
Classification of Diseases, prompting discussion and consideration of legislation and policies aimed at mitigating the risk of overuse
of, and overspending within, video games. These laws could harm our business by limiting the products and services we can offer consumers
or the manner in which we offer them. The costs of compliance with these laws may increase in the future as a result of changes in applicable
laws or changes to interpretation. Any failure on our part to comply with these laws or the application of these laws in an unanticipated
manner may harm our business and result in penalties or significant legal liability.
Certain of our business models will be subject
to new laws or regulations or evolving interpretations and application of existing laws and regulations, including those related to gambling.
The growth and development of electronic commerce, virtual items and virtual currency has prompted calls for new laws and regulations
and resulted in the application of existing laws or regulations that have limited or restricted the sale of our products and services
in certain territories. New laws — each of which could vary significantly across jurisdictions — could
subject us to additional regulation and oversight, cause us to further limit or restrict the sale of our products and services or otherwise
impact our products and services, lessen the engagement with, and growth of, profitable business models, and expose us to increased compliance
costs, significant liability, fines, penalties and harm to our reputation and brand.
We may be subject to laws in certain foreign countries,
and adhere to industry standards in the United States, that mandate rating requirements or set other restrictions on the advertisement
or distribution of interactive entertainment software based on content. In addition, certain foreign countries allow government censorship
of interactive entertainment software products. Adoption of ratings systems, censorship or restrictions on distribution of interactive
entertainment software based on content could harm our business by limiting the products we are able to offer to our consumers. In addition,
compliance with new and possibly inconsistent regulations for different territories could be costly, delay or prevent the release of our
products in those territories.
Our Platform may not be successful and may
expose us to legal, regulatory, and other risks. Given the nascent and evolving nature of cryptocurrencies, NFTs, and our Platform, we
may be unable to accurately anticipate or adequately address such risks or the potential impact of such risks. The occurrence of any such
risks could materially and adversely affect our business, financial condition, results of operations, reputation, and prospects.
As the market for NFTs and cryptocurrencies is
relatively nascent, it is difficult to predict how the legal and regulatory framework around NFTs and cryptocurrencies will develop and
how such developments will impact our business and our Platform. The future legal status of NFTs and cryptocurrencies under state and
federal laws (including without limitation, securities, banking, and commodities laws) is highly uncertain and unresolved. As a result
of the uncertain legal status of crypto assets, we may have legal exposure for our failure to adequately comply with legal regimes. In
addition governmental agencies may seek to apply laws to our business that we believe are inapplicable, and may seek sanctions relating
to our alleged failure to comply with those laws. There is regulatory uncertainty with respect to whether certain NFTs and cryptocurrencies
could be considered securities. If NFTs sold on our Platform or any cryptocurrencies exchanged for purposes of payment or minting of NFTs
on our Platform were deemed to be a "security", we may be in violation of securities laws for engaging in transactions regarding
the sale of unregistered securities. Such a determination could lead to an enforcement action by the SEC and result in fines and other
penalties and have a negative impact on our business.
23
Additionally, if either the NFTs we sell or the
Bitcoin, Ethereum, or MATIC tokens we may acquire or hold at any time are deemed to be a "security" we may also be subject
to regulations of FinCEN of the U.S. Department of Treasury and the Bank Secrecy Act. Further, OFAC has signaled that sanctions could
apply to digital transactions and has pursued enforcement actions involving cryptocurrencies and digital asset accounts. This could expose
us to future allegations of violations of the Bank Secrecy Act, including any applicable KYC and Anti-Money Laundering laws and regulations
("AML"), or sanctions compliance obligations among others. In addition governmental agencies may seek to apply laws to our
business that we believe are inapplicable, and may seek sanctions relating to our alleged failure to comply with those laws which would
negatively impact our business.
Our launch and operation of the Platform potentially
exposes us to the foregoing risks, among others, any of which could materially and adversely affect the success of our Platform and harm
our business, financial condition, results of operations, reputation, and prospects. If we fail to accurately anticipate or manage the
risks associated with our NFTs or with our facilitation of crypto asset transactions, or if we directly or indirectly become subject to
disputes, liability, or other legal or regulatory issues in connection with the operation of our business and Platform, we may not be
successful and our business, financial condition, results of operations, reputation, and prospects could be expected to be materially
adversely affected.
We may face significant competition, which
may harm our business, results of operations or financial condition.
We may face substantial competition in the healthcare
services markets. Our key competitors will include, among others, healthcare consulting service providers, healthcare payment accuracy
companies and providers of other data products and data analytics solutions, including healthcare risk adjustment, quality, economic statistics
and other data. The increasing standardization of certain healthcare services has made it easier for companies to enter these markets
with competitive products and services. We cannot fully anticipate whether or when companies in adjacent or other product or service areas
may launch competitive products and/or services, and any such entry may lead to obsolescence of our products and/or services or loss of
market share or erosion of the prices for our solutions, or both. The extent of this competition may vary by the size of companies, geographical
coverage and scope and breadth of products and services offered. Furthermore, some of our competitors may be significantly larger and
have greater financial or other resources than we do. The vigorous competition we face requires us to provide high quality, innovative
products at a competitive price. We cannot guarantee that we will be able to upgrade our existing solutions, or introduce new solutions
at the same rate as our competitors, or at all, nor can we guarantee that such upgrades or new solutions will achieve market acceptance
over or among competitive offerings, or at all. Therefore, these competitive pressures could have a material adverse impact on our business,
results of operations or financial condition.
Gaxos Health would be adversely affected
if we cannot obtain, process or distribute data we require to provide our solutions.
The success of Gaxos Health will depend on our
ability to obtain, process, monetize and distribute data in the healthcare industry in a manner that complies with applicable law, regulation
and contractual and restrictions. Our failure to obtain and distribute such data in a compliant manner could have a harmful effect on
our ability to use and disclose such data which in turn could impair our ability to share such data with our customers or incorporate
it into our services and offerings. In addition to complying with requirements in obtaining the data, the use, processing and distribution
of such data may require us to obtain consent from third parties or follow additional laws, regulations or contractual restrictions that
apply to the healthcare industry. Moreover, we may be subject to claims or liability for use or disclosure of information. Any such claims
or liabilities and other failures to comply with applicable requirements could subject us to unexpected costs and adversely affect our
operating results.
24
Risks Related to Our Common Stock
The market prices and trading volume of
our shares of common stock may experience rapid and substantial price volatility which could cause purchasers of our common stock to incur
substantial losses.
Recently, the market prices and trading volume
of shares of common stock of other small publicly traded with a limited number of shares available to purchasers, have experienced rapid
and substantial price volatility unrelated to the financial performance of those companies. Similarly, shares of our common stock may
experience similar rapid and substantial price volatility unrelated to our financial performance, which could cause purchasers of our
common stock to incur substantial losses, which may be unpredictable and not bear any relationship to our business and financial performance.
Extreme fluctuations in the market price of our common stock may occur in response to strong and atypical retail investor interest, including
on social media and online forums, the direct access by retail investors to broadly available trading platforms, the amount and status
of short interest in our securities, access to margin debt, trading in options and other derivatives on our common stock and any related
hedging and other trading factors.
If there is extreme market volatility and trading
patterns in our common stock, it may create several risks for investors, including the following:
●
the
market price of our common stock may experience rapid and substantial increases or decreases unrelated to our operating performance or
prospects, or macro or industry fundamentals;
●
if
our future market capitalization reflects trading dynamics unrelated to our financial performance or prospects, purchasers of our common
stock could incur substantial losses as prices decline once the level of market volatility has abated;
●
if
the future market price of our common stock declines, purchasers may be unable to resell your shares at or above the price at which you
acquired them. We cannot assure you that the market of our common stock will not fluctuate or decline significantly in the future, in
which case you could incur substantial losses.
Further, we may incur rapid and substantial increases
or decreases in our stock price in the foreseeable future that may not coincide in timing with the disclosure of news or developments
by or affecting us. Accordingly, the market price of our shares of common stock may fluctuate dramatically, and may decline rapidly, regardless
of any developments in our business. Overall, there are various factors, many of which are beyond our control, that could negatively affect
the market price of our common stock or result in fluctuations in the price or trading volume of our common stock, including:
●
actual
or anticipated variations in our annual or quarterly results of operations, including our earnings estimates and whether we meet market
expectations with regard to our earnings;
●
our
current inability to pay dividends or other distributions;
●
publication
of research reports by analysts or others about us or cryptocurrency including the NFT industry which may be unfavorable, inaccurate,
inconsistent or not disseminated on a regular basis;
●
changes
in market valuations of similar companies;
●
market
reaction to any additional equity, debt or other securities that we may issue in the future, and which may or may not dilute the holdings
of our existing stockholders;
●
additions
or departures of key personnel;
●
actions
by institutional or significant stockholders;
●
short
interest in our stock and the market response to such short interest;
●
the
dramatic increase in the number of individual holders of our stock and their participation in social media platforms targeted at speculative
investing;
●
speculation
in the press or investment community about our company or industry;
25
●
strategic
actions by us or our competitors, such as acquisitions or other investments;
●
legislative,
administrative, regulatory or other actions affecting our business, our industry, including positions taken by the Internal Revenue Service
("IRS");
●
investigations,
proceedings, or litigation that involve or affect us;
●
the
occurrence of any of the other risk factors included in this Registration Statement on Form S-1; and
●
general
market and economic conditions.
The price of our securities may fluctuate
substantially.
You should consider an investment in our securities
to be risky, and you should invest in our securities only if you can withstand a significant loss and wide fluctuations in the market
value of your investment. Some factors that may cause the market price of our Common Stock to fluctuate, in addition to the other risks
mentioned in this "
Risk Factors
" section and elsewhere in this Annual Report on Form 10-K, are:
●
sale
of our Common Stock by our shareholders, executives, and directors;
●
volatility
and limitations in trading volumes of our shares of Common Stock;
●
our
ability to obtain financing;
●
the
timing and success of introductions of new products by us or our competitors or any other change in the competitive dynamics of
our industry, including consolidation among competitors;
●
our
ability to attract new customers;
●
changes
in our capital structure or dividend policy, future issuances of securities, sales of large blocks of Common Stock by our shareholders;
●
our
cash position;
●
announcements and events surrounding financing efforts, including
debt and equity securities;
●
our inability to enter into new markets or develop new products;
●
reputational
issues;
●
announcements
of acquisitions, partnerships, collaborations, joint ventures, new products, capital commitments, or other events by us or our competitors;
●
changes
in general economic, political and market conditions in or any of the regions in which we conduct our business;
●
changes
in industry conditions or perceptions;
●
analyst
research reports, recommendation and changes in recommendations, price targets, and withdrawals of coverage;
●
departures
and additions of key personnel;
●
disputes
and litigations related to intellectual properties, proprietary rights, and contractual obligations;
●
changes
in applicable laws, rules, regulations, or accounting practices and other dynamics; and
●
other
events or factors, many of which may be out of our control.
In addition, if the market for stocks in our industry
or industries related to our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of
our Common Stock could decline for reasons unrelated to our business, financial condition and results of operations. If any of the foregoing
occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and
a distraction to management.
26
We may acquire other companies or technologies,
which could divert our management's attention, result in dilution to our stockholders and otherwise disrupt our operations and adversely
affect our operating results.
We may in the future seek to acquire or invest
in businesses, applications and services or technologies that we believe could complement or expand our services, enhance our technical
capabilities or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management and
cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.
In addition, we do not have any experience in
acquiring other businesses. If we acquire additional businesses, we may not be able to integrate the acquired personnel, operations and
technologies successfully, or effectively manage the combined business following the acquisition. We also may not achieve the anticipated
benefits from the acquired business due to a number of factors, including:
●
inability
to integrate or benefit from acquired technologies or services in a profitable manner;
●
unanticipated
costs or liabilities associated with the acquisition;
●
difficulty
integrating the accounting systems, operations, and personnel of the acquired business;
●
difficulties
and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;
●
difficulty
converting the customers of the acquired business onto the Platform and contract terms, including disparities in the revenue, licensing,
support, or professional services model of the acquired company;
●
diversion
of management's attention from other business concerns;
●
adverse
effects to our existing business relationships with business partners and customers as a result of the acquisition;
●
the
potential loss of key employees;
●
use
of resources that are needed in other parts of our business; and
●
use
of substantial portions of our available cash to consummate the acquisition.
In addition, a significant portion of the purchase
price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment
at least annually. In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operating
results based on this impairment assessment process, which could adversely affect our results of operations.
Acquisitions could also result in dilutive issuances
of equity securities or the incurrence of debt, which could adversely affect our operating results. In addition, if an acquired business
fails to meet our expectations, our operating results, business and financial position may suffer.
27
If research analysts do not publish research
about our business or if they issue unfavorable commentary or downgrade our Common Stock, our securities' price and trading volume
could decline.
The trading market for our securities may depend
in part on the research and reports that research analysts publish about us and our business. If we do not maintain adequate research
coverage, or if any of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business,
the price of our Common Stock could decline. If one or more of our research analysts ceases to cover our business or fails to publish
reports on us regularly, demand for our securities could decrease, which could cause the price of our Common Stock or trading volume to
decline.
Market and economic conditions may negatively
impact our business, financial condition and share price.
Concerns over inflation, energy costs, geopolitical
issues, the U.S. mortgage market and a declining real estate market, unstable global credit markets and financial conditions, and
volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in
consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic
growth going forward, increased unemployment rates, and increased credit defaults in recent years. Our general business strategy
may be adversely affected by any such economic downturns, volatile business environments and continued unstable or unpredictable economic
and market conditions. If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing
more difficult to complete, more costly, and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable
terms could have a material adverse effect on our growth strategy, financial performance, and share price and could require us to delay
or abandon development or commercialization plans.
The ability of a stockholder to recover
all or any portion of such stockholder's investment in the event of a dissolution or termination may be limited.
In the event of a dissolution or termination of
the Company, the proceeds realized from the liquidation of the assets of the Company, or such subsidiaries will be distributed among the
stockholders, but only after the satisfaction of the claims of third-party creditors of the Company. The ability of a stockholder
to recover all or any portion of such stockholder's investment under such circumstances will, accordingly, depend on the amount
of net proceeds realized from such liquidation and the amount of claims to be satisfied therefrom. There can be no assurance that the
Company will recognize gains on such liquidation, nor is there any assurance that Common Stockholders will receive a distribution in such
a case.
We do not intend to pay cash dividends on
our shares of Common Stock so any returns will be limited to the value of our shares.
We currently anticipate that we will retain future
earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for
the foreseeable future. Any return to shareholders will therefore be limited to the increase, if any, of our share price.
Our Certificate of Incorporation provides
that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between the Company
and its stockholders, which could limit stockholders' ability to obtain a favorable judicial forum for disputes with the Company
or its directors, officers or employees.
Our Certificate of Incorporation provides that
unless the Company consents in writing to the selection of an alternative forum, the State of Delaware is the sole and exclusive forum
for: (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary
duty owed by any director, officer or other employee of the Company to the Company or the Company's stockholders, (iii) any action
asserting a claim against the Company, its directors, officers or employees arising pursuant to any provision of the Delaware General
Corporation Law (the "DGCL") or our Certificate of Incorporation or the Company's Bylaws, or (iv) any action asserting
a claim against the Company, its directors, officers, employees or agents governed by the internal affairs doctrine, including, without
limitation, any action to interpret, apply, enforce or determine the validity of the Company's Certificate of Incorporation or Bylaws.
This exclusive forum provision would not apply to suits brought to enforce any liability or duty created by the Securities Act or the
Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. To the extent that any such claims may be based
upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty
or liability created by the Exchange Act or the rules and regulations thereunder.
28
Section 22 of the Securities Act creates concurrent
jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the
rules and regulations thereunder. However, our Certificate of Incorporation contain a federal forum provision which provides that unless
the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America
will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Any person
or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation are deemed to have notice of and
consented to this provision. As this provision applies to Securities Act claims, there may be uncertainty whether a court would enforce
such a provision.
These choice of forum provisions may limit a stockholder's
ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers or other
employees, which may discourage such lawsuits against the Company and its directors, officers and other employees. Alternatively, if a
court were to find our choice of forum provisions contained in either our Certificate of Incorporation or Bylaws to be inapplicable or
unenforceable in an action, the Company may incur additional costs associated with resolving such action in other jurisdictions, which
could harm its business, results of operations, and financial condition.
We are an "emerging growth company"
and are able to avail ourselves of reduced disclosure requirements applicable to emerging growth companies, which could make our Common
Stock less attractive to investors.
We are an "emerging growth company,"
as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and we have elected to take advantage
of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth
companies" including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act,
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the
requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments
not previously approved. In addition, pursuant to Section 107 of the JOBS Act, as an "emerging growth company" we have
elected to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying
with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting
standards until those standards would otherwise apply to private companies. As such, our financial statements may not be comparable to
companies that comply with public company effective dates.
We cannot predict if investors will find our Common
Stock less attractive because we may rely on these exemptions. If some investors find our Common Stock less attractive as a result, there
may be a less active trading market for our Common Stock and our stock price may be more volatile. We may take advantage of these reporting
exemptions until we are no longer an "emerging growth company." We will remain an "emerging growth company" until
the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more;
(ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering;
(iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or
(iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
Financial reporting obligations of being
a public company in the United States are expensive and time-consuming, and our management will be required to devote substantial
time to compliance matters.
As a publicly traded company, we will incur significant
additional legal, accounting and other expenses that we did not incur as a private company. The obligations of being a public company
in the United States require significant expenditures and will place significant demands on our management and other personnel, including
costs resulting from public company reporting obligations under the Exchange Act and the rules and regulations regarding corporate
governance practices, including those under the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley"), the Dodd-Frank Wall
Street Reform and Consumer Protection Act, and the listing requirements of the stock exchange on which our securities are listed. These
rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial
reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor
and maintain compliance with. Moreover, despite recent reforms made possible by the JOBS Act, the reporting requirements, rules, and regulations
will make some activities more time-consuming and costly, particularly after we are no longer an "emerging growth company."
In addition, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer
liability insurance. Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with
all of these requirements and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to
litigation or being delisted, among other potential problems.
29
If we fail to comply with the rules under Sarbanes-Oxley related
to accounting controls and procedures in the future, or, if we discover material weaknesses and other deficiencies in our internal control
and accounting procedures, our stock price could decline significantly and raising capital could be more difficult.
Section 404 of Sarbanes-Oxley requires
annual management assessments of the effectiveness of our internal control over financial reporting. If we fail to comply with the rules
under Sarbanes-Oxley related to disclosure controls and procedures in the future, or, if we discover material weaknesses and other
deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raising capital could
be more difficult. If material weaknesses or significant deficiencies are discovered or if we otherwise fail to achieve and maintain the
adequacy of our internal control, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal
controls over financial reporting in accordance with Section 404 of Sarbanes-Oxley. Moreover, effective internal controls are necessary
for us to produce reliable financial reports and are important to helping prevent financial fraud. If we cannot provide reliable financial
reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial
information, and the trading price of our Common Stock could drop significantly.
Changes in our tax rates or exposure to
additional tax liabilities, and changes to tax laws and interpretations of tax laws could adversely affect our earnings and financial
condition.
We are subject to taxes in the United States
and in various foreign jurisdictions. Significant judgment will be required to determine our worldwide income tax provision, tax assets,
and accruals for other taxes, and there are many transactions and calculations where the ultimate tax determination is uncertain. Our
effective income tax rate is based in part on our corporate operating structure and the manner in which we operate our business and develop,
value and use our intellectual property. Taxing authorities in jurisdictions in which we operate may challenge and audit our methodologies
for calculating our income taxes, which could increase our effective income tax rate and have an adverse impact on our results of operations
and cash flows. In addition, our provision for income taxes is materially affected by our profit levels, changes in our business, changes
in the mix of earnings in countries with differing statutory tax rates, changes in the elections we make, changes in the valuation of
our deferred tax assets and liabilities, or changes in applicable tax laws or interpretations of existing income and withholding tax laws,
as well as other factors. For example, the outcome of future guidance related to the U.S. Tax Act could cause us to change our analysis
and materially impact our previous estimates and financial statements.
In addition, changes to U.S. federal, state,
or international tax laws or their applicability to corporate multinationals in the countries in which we do business may affect our effective
tax rates and cash taxes, cause us to change the way in which we structure our business and resulted in other costs. Our effective tax
rate also could be adversely affected by changes in our valuation allowances for deferred tax assets. Actual financial results also may
differ materially from our current estimates and could have a material impact on our assessment of the valuation allowance.
Our principal stockholders and management
own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
Our directors, executive officers, and each of
our stockholders who owned greater than 5% of our outstanding Common Stock beneficially, as of March 27, 2024, own approximately 32.41%
of our Common Stock. Accordingly, these stockholders have and will continue to have significant influence over the outcome of corporate
actions requiring stockholder approval, including the election of directors, a merger, the consolidation or sale of all or substantially
all of our assets or any other significant corporate transaction. The interests of these stockholders may not be the same as or may even
conflict with our other investors' interests.
30
Our Certificate of Incorporation, our Bylaws,
and Delaware law may have anti-takeover effects that could discourage, delay or prevent a change in control, which may cause
our stock price to decline.
Anti-takeover provisions may limit the ability
of another party to acquire us, which could cause our stock price to decline. Our Certificate of Incorporation, Bylaws and Delaware law
contain provisions that could discourage, delay or prevent a third party from acquiring us, even if doing so may be beneficial to our
stockholders. In addition, these provisions could limit the price investors would be willing to pay in the future for shares of our Common
Stock.
Certain provisions of our certificate of
incorporation and Delaware law make it more difficult for a third party to acquire us and make a takeover more difficult to complete,
even if such a transaction were in stockholders' interest.
Our certificate of incorporation and the Delaware
General Corporation Law contain certain provisions that may have the effect of making it more difficult or delaying attempts by others
to obtain control of our Company, even when these attempts may be in the best interests of our stockholders. We also are subject to the
anti-takeover provisions of the Delaware General Corporation Law, which prohibits us from engaging in a "business combination"
with an "interested stockholder" unless the business combination is approved in a prescribed manner and prohibits the voting
of shares held by persons acquiring certain numbers of shares without obtaining requisite approval. The statutes and our certificate of
incorporation have the effect of making it more difficult to effect a change in control of our Company. On January 10, 2024, the board
of directors (the "Board") of the Company approved an amendment (the "Amendment") to the bylaws (the "Bylaws"),
effective as of January 10, 2024. The Amendment amends and restates Article 2, Section 2.4 in its entirety to lower quorum requirement
for shareholder meetings from requiring the holders of a majority in voting power of the stock issued and outstanding and entitled to
vote, present in person, or by remote communication, if applicable, or represented by proxy to one-third in voting power of the stock
issued and outstanding and entitled to vote, present in person, or by remote communication, if applicable, or represented by proxy.
If our shares become subject to the penny
stock rules, it would become more difficult to trade our shares.
The SEC has adopted rules that regulate broker-dealer practices
in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided
that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we
do not obtain or retain a listing on the Nasdaq Capital Market or if the price of our Common Stock falls below $5.00, our Common Stock
will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt
from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules
require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a
special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser's
written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks;
and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements would likely have the effect
of reducing the trading activity in the secondary market for our Common Stock, and therefore stockholders may have difficulty selling
their shares.
FINRA sales practice requirements may limit
a stockholder's ability to buy and sell our stock.
In addition to the "penny stock" rules
described above, the Financial Industry Regulatory Authority, Inc. ("FINRA"), has adopted rules that require that in recommending
an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative, low-priced securities to their non-institutional customers, broker-dealers must
make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other
information. The FINRA requirements may make it more difficult for broker-dealers to recommend that their customers buy our Common
Stock, which may have the effect of reducing the level of trading activity in our Common Stock. As a result, fewer broker-dealers may
be willing to make a market in our Common Stock, reducing a stockholder's ability to resell shares, as well as overall liquidity,
of our Common Stock.
31
We may be considered a smaller reporting
company and will be exempt from certain disclosure requirements, which could make our Common Stock less attractive to potential investors.
Rule 12b-2 of the Exchange Act,
defines a "smaller reporting company" as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary
of a parent that is not a smaller reporting company and that:
●
had
a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter,
computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by
the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market
for the common equity; or
●
in
the case of an initial registration statement under the Securities Act of 1933, as amended ("Securities Act"),
or the Exchange Act for shares of its common equity, had a public float of less than $250 million as of a date within 30 days
of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by
non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included
in the registration statement by the estimated public offering price of the shares; or
●
in
the case of an issuer whose public float was zero, had annual revenues of less than $100.0 million during the most recently completed
fiscal year for which audited financial statements are available.
As a smaller reporting company, we would not be
required and may not include a Compensation Discussion and Analysis section in our proxy statements; we would provide only two years
of financial statements; and we would not need to provide the table of selected financial data. We also would have other "scaled"
disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our Common
Stock less attractive to potential investors, and also could make it more difficult for our stockholders to sell their shares.
32
USE OF PROCEEDS
We will not receive any of the proceeds from the sale by the Selling
Stockholders of the Common Stock. Upon any exercise of the Warrants by payment of cash, however, we will receive the exercise price of
the Warrants, which, if exercised in cash with respect to the 3,005,642 shares of Common Stock offered hereby, would result in gross proceeds
to us of approximately $9.7 million. However, we cannot predict when and in what amounts or if the Warrants will be exercised by payments
of cash and it is possible that the Warrants may expire and never be exercised, in which case we would not receive any cash proceeds.
33
DIVIDEND POLICY
We
have never paid cash dividends on our Common Stock and we do not anticipate paying cash dividends in the foreseeable future, but intend
to retain our capital resources for reinvestment in our business. Any future determination to pay cash dividends on our Common Stock will
be at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital requirements
and other factors as the board of directors deems relevant.
34
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We are a technology-based
company that is developing applications aimed at redefining the way we utilize artificial intelligence ("AI") to optimize
the user experience. We are committed to addressing the need for AI solutions in both health and entertainment.
Gaxos Gaming
Our flagship product
is our gaming platform called "Gaxos" (the "Platform" or "Gaxos Gaming"), created with a vision to
develop, design, acquire, and manage conventional games and to combine these games with unconventional game mechanisms, such as the ability
for gamers and developers to utilize artificial intelligence to create and design in-game features, as well as to mint unique in-game features,
such as skins, characters, weapons, gear, levels, and virtual lands, in the form of non-fungible tokens, or "NFTs," that
will allow users to have unique experiences and more control over in-game assets.
In 2023, we launched
our own proprietary games that are simple and fun to play, and that offer gamers the ability to utilize AI to personalize their gaming
experience as well as to mint their own affordable NFTs, with unique and exclusive features, that can be utilized across the network of
games and platform that we intend to build. As of December 31, 2023, we have launched four games, Space Striker AI, Brawl Bots, BattleFleet
AI, and Jigsaw Puzzle AI. Space Striker AI allows players to engage in a captivating storyline and exciting retro shooting space action
in the players AI-generated spaceship. Players can fuse crystals to upgrade their ship parts to craft, clash and conquer the galaxy all
within a dynamic free-to-play economy. Brawl Bots immerses users in high-octane battles in real time against other players, in solo play
or teams. Each player gets to control their own exclusive Bot character, ensuring a personalized gaming experience. BattleFleet AI is
a take on the classic Battleship game with AI elements that allow gamers to design their ships. Jigsaw Puzzle AI lets gamers solve preloaded
jigsaw puzzles as well as design and solve new jigsaw puzzles using AI.
In addition to launching
our own proprietary games, Gaxos Gaming is developing an artificial intelligence solution for game developers and studios. The solution
is intended to offer a transformative generative AI service that empowers the gaming industry to create without limits through dynamic
content generation, seamless integration, and personalized solutions. Key features of the product will be:
-
AI-Powered
Creativity: Reduces creative asset development time from hours to minutes, transforming artistic visions into reality with ease.
-
Seamless Integration: With plug-and-play functionality for Unity and upcoming support for Unreal Engine, integration is effortless into existing workflows.
-
Dynamic Content Generation: User-Generated-Ai-Content ("UGAiC") feature offers new experiences with each playthrough by letting gamers use AI in real time, fostering a dynamic gaming environment.
-
Customized Solutions: From personalized AI models and templates to expert consulting services, offering to include custom solutions to meet unique needs of each developer.
35
Gaxos Health
Recently, we began to
develop a new initiative, Gaxos Health, which is dedicated to revolutionizing personal health and wellness by developing a suite of innovative
AI-powered health optimization solutions. Gaxos Health will integrate AI-driven insights with individual biometric data and health goals
to create web and application based personalized wellness strategies for users. We believe that this cutting-edge approach will redefine
preventative medicine, offering unparalleled personalization in health and wellness. Gaxos Health solutions will analyze a wide range
of health data to provide tailored wellness plans and address the growing demand for personalized health solutions. We believe that this
technology is not just a step but a leap forward in empowering individuals to take control of their health and longevity with AI's
precision and intelligence.
We launched the AI-powered
health optimization product in the third quarter of 2024.
Basis of Presentation
The unaudited financial
statements contained herein have been prepared in accordance with U.S. Generally Accepted Accounting Principles ("US GAAP")
and the requirements of the Securities and Exchange Commission ("SEC").
Use of Estimates
The preparation of financial
statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying
financial statements include valuation of investments, valuation of intangible assets and other long-lived assets, estimates of deferred
tax valuation allowances and the fair value of stock options issued for services.
Critical Accounting
Estimates
Critical accounting estimates
are those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty
and have had or are reasonably likely to have a material impact on our financial condition or results of operations. We consider the following
to be critical accounting estimates.
Intangible assets
Intangible assets, consisting
of software licenses and technology licenses, are carried at cost less accumulated amortization, computed using the straight-line method
over the estimated useful life of 5 years, less any impairment charges. We test intangible assets for impairment whenever events or changes
in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Recoverability of assets is determined
by comparing the estimated undiscounted future cash flows of the asset or asset group to their carrying amount. If the carrying value
of the assets exceeds their estimated undiscounted future cash flows, an impairment loss would be determined as the difference between
the fair value of the assets and its carrying value. Typically, the fair value of the assets would be determined using a discounted cash
flow model which would be sensitive to judgments of what constitutes an asset group and certain assumptions such as estimated future financial
performance, discount rates, and other assumptions that marketplace participants would use in their estimates of fair value. There have
been no material changes in the underlying assumptions and estimates used in these calculations in the relevant period. The accounting
estimate related to asset impairments is highly susceptible to change from period to period because it requires management to make assumptions
about the existence of impairment indicators and cash flows over future years. These assumptions impact the amount of an impairment, which
could materially adversely impact the statements of operations.
36
Stock-based compensation
Stock-based compensation
is accounted for based on the requirements of ASC 718 –
"Compensation–Stock Compensation
", which requires
recognition in the financial statements of the cost of employee, non-employee and director services received in exchange for an award
of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively,
the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award
based on the grant-date fair value of the award. The Company has elected to account for forfeitures as they occur. We recognize compensation
costs resulting from the issuance of stock-based awards to employees, non-employees, and directors as an expense in the statements of
operations over the requisite service period based on a measurement of fair value for each stock-based award. The fair value of each option
granted is estimated as of the date of grant using the Black-Scholes-Merton option-pricing model, net of actual forfeitures. The fair
value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the
vesting period. The Black-Scholes-Merton option-pricing model includes various assumptions, including the fair market value of our common
stock, expected life of stock options, the expected volatility, and the expected risk-free interest rate, among others. These assumptions
reflect our best estimates, but they involve inherent uncertainties based on market conditions generally outside of our control. As a
result, if other assumptions had been used, stock-based compensation expense, as determined in accordance with authoritative guidance,
could have been materially impacted. Furthermore, if we use different assumptions on future grants, stock-based compensation expense could
be materially affected in future periods.
Capital Expenditures
We do not have any contractual
obligations for ongoing capital expenditures at this time. We do, however, purchase equipment and software necessary to conduct our operations
on an as needed basis.
Results of Operations
Comparison of Our Results of Operations
for the Year Ended December 31, 2023 and 2022
.
Revenue
During the year ended December 31, 2023, we generated
revenue of $256. During the year ended December 31, 2022, we did not generate any revenues from operations. Once we achieve a critical
mass of users, we plan to offer new features and to charge fees in order to generate revenues from these added features.
Operating Expenses
During the years ended December 31, 2023 and 2022,
we incurred operating expenses of $4,015,541 and $1,424,096, respectively, an increase of $2,591,445, or 182.0%. Operating consisted of
the following:
Research and development
fees
We enter into agreements with third-party developers
that require us to make payments for game and software development services upon reaching the application development stage. In exchange
for our payments, we receive the exclusive publishing and distribution rights to the finished game title and software. During the preliminary
project stage and prior to the application development stage of the product, we record any costs incurred by third-party developers
as research and development expenses.
We capitalize all development and production service
payments to third-party developers as internal-use software development costs and licenses once we reach the application development
stage. During the years ended December 31, 2023 and 2022, we reported research and development fees of $915,818 and $824,523, respectively,
an increase of $91,295, or 11.1%, primarily due to an increase in labor and outside development costs incurred in connection with the
development of games and our platform. We expect research and development fees to increase in the future as development of games accelerates.
37
General and administrative
expenses
For the years ended December
31, 2023 and 2022, general and administrative expenses consisted of the following:
For the
Year Ended December 31,
2023
For the
Year Ended December 31,
2022
Compensation and related benefit
$
1,432,427
$
369,914
Professional fees
1,066,969
164,495
Other general and administrative expenses
547,964
65,164
Total general and administrative expenses
$
3,047,360
$
599,573
Compensation and related
benefits
During the years ended December 31, 2023 and 2022,
compensation and related benefits amounted to $1,432,427 and $369,914, respectively, an increase of $1,062,513, or 287.2%. The increase
during the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily attributable to the accretion of stock-based
compensation related to issuance of stock options to executive officers, directors and employees of $722,079 and the hiring of executive
officers and employees beginning in February 2023, which increased wages by approximately $274,000 over fiscal 2022.
Professional fees
During the years ended December 31, 2023 and 2022,
we incurred professional fees of $1,066,969 and $164,495, respectively, an increase of $902,474, or 548.6%, attributable to an increase
in stock-based consulting fees attributable to the accretion of stock-based consulting fees related to issuance of stock options to consultants
of $214,275, an increase in investor relations fees of $374,970, an increase in legal fees of $138,912, an increase in accounting fees
of $24,688, an increase in advisory fees of $147,500, and an increase in director fees of $39,375, offset by a decrease in other professional
fees of $37,246.
Other general and administrative
expenses
General and administrative expenses consist of
advertising and marketing expenses, office expenses, insurance, listing fees, computer and interest expenses, travel expenses, amortization
expense, and other general business expenses. During the years ended December 31, 2023 and 2022, we incurred general and administrative
expenses of $547,964 and $65,164, respectively, an increase of $482,800, or 741.0%. Generally, the increase in other general and administrative
expenses during the year ended December 31, 2023 as compared to the year ended December 31, 2022 was attributable to a ramp up of operations
which began in February 2023 following the Company's IPO.
Impairment loss
On August 9, 2023 and effective August 1, 2023,
the Company and Columbia University agreed to the termination of the Software and Patent License Agreement between the Company and The
Trustees of Columbia University in the City of New York, dated August 29, 2022. Accordingly, as of December 31, 2023, we wrote off the
remaining unamortized book value of the intangible asset of $52,363, and during the year ended December 31, 2023, we recorded an impairment
loss of $52,363, which is included in operating expenses on the accompanying statement of operations and comprehensive loss.
Loss from operations
During the years ended December 31, 2023 and 2022,
we reported a loss from operations of $4,015,285 and $1,424,096, respectively, an increase of $2,591,189, or 182.0%. The increase in loss
from operations was due to the increases in research and development and general and administrative expenses discussed above.
38
Other income
During the years ended December 31, 2023 and 2022,
we reported other income of $67,188 and $2,924, respectively, which consisted of interest income in both years and a realized gain on
short-term investments in 2023. The increase is primarily due to the short-term investments acquired by the Company during the year ended
December 31, 2023.
Net loss
During the years ended December 31, 2023 and 2022,
our net loss amounted to $3,948,097 and $1,421,172, respectively, an increase of $2,526,925, OR 177.8%. During the years ended December
31, 2023 and 2022, our comprehensive loss amounted to $3,852,312, or a net loss per common share of $0.33 (basic and diluted) and $1,421,172,
or a net loss per common share of $0.14 (basic and diluted), respectively, an increase of $2,431,140, or 171.1%.
Liquidity, Capital Resources and Plan of Operations
Liquidity is the ability of a company to generate
funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. On December 31,
2023, we had a cash balance of $1,024,710, had short-term investments of $2,592,689, and had working capital of $3,372,503. On February
17, 2023, we completed an initial public offering ("IPO") and sold 140,563 shares of its common stock at a price to the public
of $49.80 per share for gross proceeds of $7,000,000. We received net proceeds of $5,958,470 which is net of offering related expenses
paid with proceeds of $1,041,530. We also reclassified $202,559 of deferred offering costs as of December 31, 2022 to additional paid
in capital upon completing the IPO which resulted in total net proceeds, after equity issuance costs, of $5,755,871. During the year ended
December 31, 2023, we used net cash in operations of $2,980,592 and purchased liquid short-term investments of $3,491,242.
On March 13, 2024, we entered into a securities
purchase agreement with an institutional investor for the issuance and sale in a private placement of (i) 108,000 shares of the Company's
common stock (the "Common Stock"), (ii) pre-funded warrants to purchase 520,367 shares of Common Stock, (iii) series A warrants
to purchase up to 628,367 shares of Common Stock, and (iv) series B warrants to purchase up to 628,367 shares Common Stock. The purchase
price of each share of Common Stock and associated warrants was $5.57 and the purchase price of each pre-funded warrant and associated
warrants was $5.569. The private placement closed on March 15, 2024 and the aggregate gross proceeds of $3,499,484, before deducting placement
agent fees and expenses and estimated offering expenses payable by the Company. The Company intends to use the net proceeds received from
the Private Placement for general corporate purposes and working capital.
Until such time that the Company implements its
growth strategy, we expect 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.
Cash Flows from Operating Activities
For the year ended December 31, 2023, net cash
used in operations was $2,980,592, which primarily resulted from our net loss of $3,948,097, adjusted for the add back of amortization
expense of $10,649, stock-based compensation to employees and consultants of $936,354, a realized gain on short-term investments of $(20,662),
and impairment loss of $52,363, and changes in operating asset and liabilities such as an increase in prepaid expenses and other current
assets of $24,732, a decrease in accounts payable of $29,930, and an increase in accrued expenses of $43,471.
For the year ended December 31, 2022, net cash
used in operations was $1,260,425, which primarily resulted from our net loss of $1,421,172, adjusted for the add back of amortization
expense of $4,189 and changes in operating asset and liabilities such as an increase in accounts payable of $148,761 and an increase in
accrued expenses of $8,197, offset by a decrease of $400 in prepaid expenses and other current assets.
39
Cash Flows from Investing Activities
For the year ended December 31, 2023, net cash
used in investing activities was $2,533,213, which resulted from the purchase of short-term investments of $3,491,242 and an increase
in capitalized internal-use software development costs of $56,971, offset by proceeds received from the sale of short-term investments
of $1,015,000.
For the year ended December 31, 2022, net cash
used in investing activities was $62,836, which resulted from the execution of a software and patent license agreement.
Cash Flows from Financing Activities
For the year ended December 31, 2023, net cash
provided by financing activities was $5,858,734. On February 17, 2023, we closed an IPO pursuant to which we issued 1,686,755 of our common
stock for gross proceeds of approximately $7 million and net proceeds of $5,958,470, after deducting underwriting discounts and commissions,
and offering expenses. Additionally, during the year ended December 31, 2023, we purchased and cancelled 244,184 treasury shares for $99,736,
or at an average price of $0.408 per share.
For the year ended December 31, 2022, net cash
used in financing activities was $75,099 and consisted of the payment of deferred offering costs, offset by proceeds from subscriptions
receivable of $37,500.
Our ultimate success is dependent on our ability
to obtain additional financing and generate sufficient cash flow to meet our obligations on a timely basis. We will require significant
amounts of capital to sustain operations, and we will need to make the investments we need to execute our longer-term business plan to
support new technologies and help advance innovation. Absent generation of sufficient revenue from the execution of our long-term business
plan, we will need to obtain debt or equity financing, especially if we experience downturns in our business that are more severe or longer
than anticipated, or if we experience significant increases in expense levels resulting from being a publicly-traded company or from operations.
Such additional debt or equity financing may not be available to us on favorable terms, if at all. We plan to pursue our plans with respect
to the research and development of our products which will require resources beyond those that we currently have, ultimately requiring
additional capital from third party sources. However, we believe the net proceeds received in the IPO that closed in February 2023 will
be sufficient to meet our financial obligations for at least the next 12 months.
Comparison of Our
Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023
.
Revenue
During the three and
nine months ended September 30, 2024, we generated revenues of $2,704 and $2,723, respectively, primarily from the sale of health coaching
packages to its customers. Health coaching packages consist of a series of lab tests and personal health coaching sessions. We did not
generate during the 2023 periods.
Operating Expenses
During the three months
ended September 30, 2024 and 2023, we incurred operating expenses of $908,573 and $873,616, respectively, an increase of $34,957, or 4.0%.
During the nine months ended September 30, 2024 and 2023, we incurred operating expenses of $2,806,934 and $3,184,549, respectively, a
decrease of $377,615, or 11.9%. For the three and nine months ended September 30, 2024 and 2023, operating expenses consisted of the following:
Research and development
expenses
We enter into agreements
with third-party developers that require us to make payments for game and software development services. In exchange for our payments,
we receive the exclusive publishing and distribution rights to the finished game title and software. During the preliminary project stage
and prior to the application development stage of the product, we record any costs incurred by third-party developers as research
and development expenses.
We capitalize all development
and production service payments to third-party developers as internal-use software development costs and licenses once we reach
the application development stage. Prior to this stage, we expense all research and development fees. During the three months ended September
30, 2024 and 2023, we reported research and development expense of $252,657 and $258,405, respectively, a decrease of $5,748, or 2.2%.
The decrease is primarily due to a decrease in outside development costs incurred in connection with the development of Gaxos Games offset
by an increase in development of the Gaxos Health platforms. During the nine months ended September 30, 2024 and 2023, we reported research
and development expense of $684,327 and $630,574, respectively, an increase of $53,753, or 8.5%. The increase is primarily due to an increase
in outside development costs incurred in connection with the development of Gaxos Health platforms offset by a decrease in outside development
costs incurred in connection with the development of Gaxos Games. We expect research and development expenses to increase in the future
as development of Gaxos Games and Gaxos Health accelerates.
40
General and administrative
expenses
For the
Three Months ended
September 30,
2024
For the
Three Months ended
September 30,
2023
For the
Nine Months ended
September 30,
2024
For the
Nine Months ended
September 30,
2023
Compensation and related benefit
$
172,502
$
208,365
$
689,565
$
1,202,199
Professional fees
259,167
254,553
819,528
952,431
Other general and administrative expenses
224,247
152,293
613,514
346,982
Total general and administrative expenses
$
655,916
$
615,211
$
2,122,607
$
2,501,612
Compensation and
related benefits
During the three months
ended September 30, 2024 and 2023, compensation and related benefits amounted to $172,502 and $208,365, respectively, a decrease of $35,863,
or 17.2%. The decrease during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily
attributable to a decrease in executive officer and employee compensation.
During the nine months
ended September 30, 2024 and 2023, compensation and related benefits amounted to $689,565 and $1,202,199, respectively, a decrease of
$512,634, or 42.6%. The decrease during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
was primarily attributable to a decrease in accretion of stock-based compensation related to issuance of stock options to executive officers,
directors and employees of $640,537, offset by an increase in executive officer and employee compensation of $127,903.
Professional fees
During the three months
ended September 30, 2024 and 2023, we incurred professional fees of $259,167 and $254,553, respectively, an increase of $4,614, or 1.8%,
attributable to an increase in advisory fees of $129,500, offset by a decrease in other professional fees of $124,886.
During the nine months
ended September 30, 2024 and 2023, we incurred professional fees of $819,528 and $952,431, respectively, a decrease of $132,903, or 13.9%,
attributable to a decrease in stock-based consulting fees due to the accretion of stock options expense to consultants of $189,699, and
a decrease in investor relations fees of $328,050, offset by an increase in advisory fees of $306,695 and an increase in other professional
fees of $78,151.
Other general and
administrative expenses
General and administrative
expenses consist of advertising and marketing expenses, office expenses, insurance, listing fees, computer and interest expenses, travel
expenses, amortization expense, and other general business expenses. During the three months ended September 30, 2024 and 2023, we incurred
general and administrative expenses of $224,247 and $152,293, respectively, an increase of $71,954, or 47.2%. During the nine months ended
September 30, 2024 and 2023, we incurred general and administrative expenses of $613,514 and $346,982, respectively, an increase of $266,532,
or 76.8%. Generally, the increase in other general and administrative expenses during the three and nine months ended September 30, 2024
as compared to the three and nine months ended September 30, 2023 was primarily attributable to an increase in advertising and marketing
expenses and a ramp up of operations which began in February 2023 following the Company's IPO.
Impairment loss
On August 9, 2023 and
effective August 1, 2023, the Company and Columbia University agreed to the termination of the Software and Patent License Agreement between
the Company and The Trustees of Columbia University in the City of New York, dated August 29, 2022. Accordingly, as of September 30, 2023,
we wrote off the remaining unamortized book value of the intangible asset of $52,363, and during the nine months ended September 30, 2023,
recorded an impairment loss of $52,363, which is included in operating expenses on the accompany statement of operations and comprehensive
loss.
41
Loss from operations
During the three months
ended September 30, 2024 and 2023, we reported a loss from operations of $905,869 and $873,616, respectively, an increase of $32,253,
or 3.7%. During the nine months ended September 30, 2024 and 2023, we reported a loss from operations of $2,804,211 and $3,184,549, respectively,
a decrease of $380,338, or 11.9%. The change in loss from operations was due to changes in general and administrative expenses, research
and development, and impairment loss as discussed above.
Other income
During the three months
ended September 30, 2024 and 2023, we reported other income of $41,459 and $16,557, respectively, an increase of $24,902, or 150.4%. This
increase is attributable to an increase in interest income. During the nine months ended September 30, 2024 and 2023, we reported other
income of $218,418 and $37,415, respectively, an increase of $181,003, or 483.8%. This increase is attributable to an increase in interest
income of $59,238. Additionally, we recorded a realized gain on short-term investments during the nine months ended September 30, 2024
and 2023 of $121,765 and $0, respectively.
Net loss
During the three months
ended September 30, 2024 and 2023, our net loss amounted to $864,410, or a net loss per common share of $0.61 (basic and diluted) and
$857,059, or a net loss per common share of $0.85 (basic and diluted), respectively, an increase of $7,351, or 0.86%. During the three
months ended September 30, 2024 and 2023, our total comprehensive loss amounted to $864,410 and $815,218, respectively, an increase of
$49,192, or 6.0%.
During the nine months
ended September 30, 2024 and 2023, our net loss amounted to $2,585,793, or a net loss per common share of $1.95 (basic and diluted) and
$3,147,134, or a net loss per common share of $3.20 (basic and diluted), respectively, a decrease of $561,341, or 17.8%. During the nine
months ended September 30, 2024 and 2023, our total comprehensive loss amounted to $2,668,279 and $3,067,488, respectively, a decrease
of $389,325, or 12.7%.
Liquidity, Capital
Resources and Plan of Operations
Liquidity is the ability
of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing
basis. On September 30, 2024, we had a cash balance of $5,227,894, had short-term investments of $1,416,056, and had working capital of
$6,525,650.
On March 13, 2024, we
entered into a securities purchase agreement (the "March 2024 Purchase Agreement") with an institutional investor ("the
"Purchaser") for the issuance and sale in a private placement (the "March 2024 Private Placement") of aggregate
Units consisting of (i) 108,000 shares of the Company's common stock, (ii) series A warrants to purchase up to 628,367 shares of
the Company's common stock (the "Series A Warrants"), and (iii) series B warrants to purchase up to 628,367 shares of
the Company's common stock (the "Series B Warrants" and together with the Series A Warrants, the "March 2024 Common
Warrants"). The purchase price of each Unit consisted of one share of the Company's common stock and associated March 2024
Common Warrants, was $5.57 per Unit for aggregate gross proceeds of $601,560. Additionally, we sold pre-funded warrants to purchase up
to 520,367 shares of the Company's common stock (the "Pre-Funded Warrants"). Pre-funded Warrants are a type of warrant
that allows the warrant holder to purchase a specified number of a company's securities at a nominal exercise price. The purchase
price of each Pre-Funded Warrant was $5.569 for aggregate gross proceeds of $2,897,924. In connection with this March 2024 Private Placement,
we raised aggregate gross proceeds of $3,499,484 consisting of $601,560 from the sales of common stock units and $2,897,924 from the sale
of pre-funded warrants, and we received net proceeds of $3,056,984, net of offering costs paid to the placement agent of $382,500 and
legal fees of $60,000, which were netted against the $601,560 of gross proceeds from the sale of common stock units for net proceeds allocated
to the sale of common stock units of $159,060. We are using the net proceeds received from the March 2024 Private Placement for general
corporate purposes and working capital.
42
On September 20, 2024,
we entered into an inducement offer agreement with the Holder of the March 2024 Common Warrants to immediately exercise for cash an aggregate
1,256,734 of the March 2024 Common Warrants to purchase shares of the Company's common stock at a reduced exercise price of $2.58
per share for gross proceeds to the Company of $3,242,374 and we received net proceeds of $2,834,843 after deducting placement agent
fees of $376,552 and other offering expenses paid by the Company of $30,979. The exercised March 2024 Common Warrants were issued pursuant
to a March 2024 Purchase Agreement dated March 13, 2024 by and between the Company and the Holder. Each March 2024 Common Warrant was
initially exercisable at an original exercise price of $5.50 per share.
Until such time that
the Company implements its growth strategy, we expect 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.
Cash Flows from
Operating Activities
For the nine months ended
September 30, 2024, net cash used in operations was $2,512,166, which primarily resulted from our net loss of $2,585,793, adjusted for
the add back of amortization expense of $37,036, stock-based compensation to employees of $84,190, and a realized gain on short-term investments
of $121,765, and changes in operating asset and liabilities such as an increase in prepaid expenses and other current assets of $61,477,
an increase in accounts payable of $113,406, and an increase in accrued expenses of $19,089.
For the nine months ended
September 30, 2023, net cash used in operations was $2,307,697, which primarily resulted from our net loss of $3,147,134, adjusted for
the add back of amortization expense of $6,968, stock-based compensation to employees and consultants of $914,426, and impairment loss
of $52,363, and changes in operating asset and liabilities such as an increase in prepaid expenses and other current assets of $79,319,
a decrease in accounts payable of $65,967, and an increase in accrued expenses of $10,966.
Cash Flows from
Investing Activities
For the nine months ended
September 30, 2024, net cash provided by investing activities was $842,604, which resulted from proceeds received from the sale of short-term
investments of $3,312,205, offset by cash used for the purchase of short-term investments of $2,096,293, the purchase of equity securities
of $199,998, an increase in capitalized internal-use software development costs of $23,310, and the purchase of an intangible asset of
$150,000.
For the nine months ended
September 30, 2023, net cash used in investing activities was $3,515,867, which resulted from the purchase of short-term investments of
$3,491,242 and an increase in capitalized software development costs of $24,625. For the nine months ended September 30, 2022, there was
no net cash used in investing activities.
Cash Flows from
Financing Activities
For the nine months ended
September 30, 2024, net cash provided by financing activities was $5,872,746. On March 13, 2024, we entered into the March 2024 Private
Placement of aggregate Units consisting of (i) 108,000 shares of the Company's common stock, (ii) the March 2024 Common Warrants.
The purchase price of each Unit consisted of one share of the Company's common stock and associated March 2024 Common Warrants,
was $5.57 per Unit for aggregate gross proceeds of $601,560. Additionally, we sold pre-funded warrants to purchase up to 520,367 shares
of the Company's common stock (the "Pre-Funded Warrants"). Pre-funded Warrants are a type of warrant that allows the
warrant holder to purchase a specified number of a company's securities at a nominal exercise price. The purchase price of each
Pre-Funded Warrant was $5.569 for aggregate gross proceeds of $2,897,924. In connection with this March 2024 Private Placement, we raised
aggregate gross proceeds of $3,499,484 consisting of $601,560 from the sales of common stock units and $2,897,924 from the sale of pre-funded
warrants, and we received net proceeds of $3,056,984, net of offering costs paid to the placement agent of $382,500 and legal fees of
$60,000, which were netted against the $601,560 of gross proceeds from the sale of common stock units for net proceeds allocated to the
sale of common stock units of $159,060. Additionally, on September 20, 2024, we entered into an inducement offer agreement with the Holder
of the March 2024 Common Warrants to immediately exercise for cash an aggregate 1,256,734 of the March 2024 Common Warrants to purchase
shares of the Company's common stock at a reduced exercise price of $2.58 per share for gross proceeds to the Company of $3,242,374 and
the Company received net proceeds of $2,834,843 after deducting placement agent fees of $376,552 and other offering expenses paid by the
Company of $30,979. Furthermore, during the nine months ended September 30, 2024, we purchased and cancelled 6,846 treasury shares for
$19,602, or at an average price of $2.86 per share.
43
For the nine months ended
September 30, 2023, net cash provided by financing activities was $5,908,760. On February 17, 2023, we closed an IPO pursuant to which
we issued 1,686,755 of our common stock for gross proceeds of approximately $7 million and net proceeds of $5,958,470, after deducting
underwriting discounts and commissions, and offering expenses. Additionally, during the nine months ended September 30, 2023, we purchased
and cancelled 105,931 treasury shares for $49,710, or at an average price of $0.469 per share.
Our ultimate success
is dependent on our ability to obtain additional financing and generate sufficient cash flow to meet our obligations on a timely basis.
We will require significant amounts of capital to sustain operations, and we will need to make the investments we need to execute our
longer-term business plan to support new technologies and help advance innovation. Absent generation of sufficient revenue from the execution
of our long-term business plan, we will need to obtain debt or equity financing, especially if we experience downturns in our business
that are more severe or longer than anticipated, or if we experience significant increases in expense levels resulting from being a publicly-traded
company or from operations. Such additional debt or equity financing may not be available to us on favorable terms, if at all. We plan
to pursue our plans with respect to the research and development of our products which will require resources beyond those that we currently
have, ultimately requiring additional capital from third party sources. However, we believe the net proceeds received in the IPO that
closed in February 2023 will be sufficient to meet our financial obligations for at least the next 12 months.
Off-Balance Sheet
Arrangements
We did not have any off-balance sheet
arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations for the periods
presented.
Recently Issued Accounting
Standards Not Yet Effective or Adopted
Management does not believe
that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying
unaudited condensed consolidated financial statements.
JOBS Act
On April 5, 2012, the
JOBS Act was enacted. Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. In other
words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies.
We have chosen to take
advantage of the extended transition periods available to emerging growth companies under the JOBS Act for complying with new or revised
accounting standards until those standards would otherwise apply to private companies provided under the JOBS Act. As a result, our financial
statements may not be comparable to those of companies that comply with public company effective dates for complying with new or revised
accounting standards.
Subject to certain conditions
set forth in the JOBS Act, as an "emerging growth company," we intend to rely on certain of these exemptions, including, without
limitation, (i) providing an auditor's attestation report on our system of internal controls over financial reporting pursuant to
Section 404(b) of Sarbanes-Oxley and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight
Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the
audit and the financial statements, known as the auditor discussion and analysis. We will remain an "emerging growth company"
until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii)
the last day of our fiscal year following the fifth anniversary of the date of our initial public offering; (iii) the date on which we
have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be
a large accelerated filer under the rules of the SEC
44
DETERMINATION OF THE
OFFERING PRICE
The
prices at which the shares of Common Stock covered by this prospectus may actually be sold will be determined by the prevailing public
market price for shares of our Common Stock or by negotiations between the Selling Stockholders and buyers of our Common Stock in private
transactions or as otherwise described in "Plan of Distribution."
45
BUSINESS
Our Business
We are a technology-based company that is developing
applications aimed at redefining the way we utilize artificial intelligence ("AI") to optimize the user experience. We are
committed to addressing the need for AI solutions in both health and entertainment.
Gaxos Labs
Our flagship product, Gaxos Labs, launched in
September 2024 and is a transformative generative AI service that empowers game developers and publishers. Key features of the product
include:
●
AI-Powered
Creativity: Reduces creative asset development time from hours to minutes, transforming artistic visions into reality with ease. Rapid
prototyping abilities allows for experimentation with different designs quickly and easily.
●
Monetization:
Publishers have the ability to offer users AI-generated assets for player customization.
●
Seamless
Integration: With plug-and-play functionality for Unity and Godot, integration is effortless into existing workflows.
●
API:
Connect to any game development engine and build for any platform including mobile and PC.
●
Dynamic
Content Generation: User-Generated-Ai-Content ("UGAiC") feature offers new experiences with each playthrough by letting gamers
use AI in real time, fostering a dynamic gaming environment.
●
Customized
Solutions: From personalized AI models including images and sound capabilities to expert consulting services, our offering includes customizable
solutions to meet the unique needs of any developer.
Gaxos Gaming
Gaxos Gaming (the "Platform" or "Gaxos
Gaming") was created with a vision to develop, design, acquire, and manage conventional games and to combine these games with unconventional
game mechanisms, such as the ability for gamers and developers to utilize AI to create and design in-game features, as well as to mint
unique in-game features, such as skins, characters, weapons, gear, levels, and virtual lands, in the form of non-fungible tokens, or "NFTs,"
that will allow users to have unique experiences and more control over in-game assets.
In 2023, we launched our own proprietary games
that are simple and fun to play, and that offer gamers the ability to utilize AI to personalize their gaming experience as well as to
mint their own affordable NFTs, with unique and exclusive features, that can be utilized across our network of games. As of December 2024,
we have launched four games, Space Striker AI, Brawl Bots, BattleFleet AI, and Jigsaw Puzzle AI.  Space Striker AI allows players
to engage in a captivating storyline and exciting retro shooting space action in the players AI-generated spaceship. Players can fuse
crystals to upgrade their ship parts to craft, clash and conquer the galaxy all within a dynamic free-to-play economy. Brawl Bots immerses
users in high-octane battles in real time against other players, in solo play or teams. Each player gets to control their own exclusive
Bot character, ensuring a personalized gaming experience. BattleFleet AI is a take on the classic Battleship game with AI elements that
allow gamers to design their ships. Jigsaw Puzzle AI lets gamers solve preloaded jigsaw puzzles as well as design and solve new jigsaw
puzzles using AI.
Gaxos Health
In July 2024, we launched Gaxos Health, which
is dedicated to revolutionizing personal health and wellness by developing a suite of innovative AI-powered health optimization solutions.
Gaxos Health will integrate AI-driven insights with individual biometric data and health goals to create web and application based personalized
wellness strategies for users. We believe that this cutting-edge approach will redefine preventative medicine, offering unparalleled personalization
in health and wellness. Gaxos Health solutions will analyze a wide range of health data to provide tailored wellness plans and address
the growing demand for personalized health solutions. We believe that this technology is not just a step but a leap forward in empowering
individuals to take control of their health and longevity with AI's precision and intelligence. Currently, Gaxos Health offers customized
health plans and coaching based on collected DNA, blood biomarkers, and individual goals and traits.
46
RNK Health
On September 23, 2024, the Company formed a wholly-owned
subsidiary, RNK Health LLC ("RNK Health"), to form a partnership and potential relationship with Nekwellness to engage in
the proposed business of marketing certain health-related products. On October 10, 2024, the Company, RNK Health and Nekwellness entered
into an operating agreement with respect to the regulation and management of the affairs of RNK Health and, as of such date, the Company
owns a 70% membership interest in RNK Health and Nekwellness owns a 30% membership interest in RNK Health.
Intellectual Property
Our business is dependent upon the creation, acquisition,
use and protection of intellectual property. Some of this intellectual property is expected to be in the form of software code, patented
technology, copyright, and trade secrets that we will use to develop our games and the Platform. While we will develop our own intellectual
property, we may also acquire and/or license other intellectual property which is owned by third parties.
We protect our intellectual property rights by
relying on federal, state and common law protections, as well as contractual restrictions. We actively seek protection covering any intellectual
property we believe may be useful or relevant to our business.
Our goal is to obtain, maintain and enforce protection
for our intellectual property, and to operate without infringing on the rights of other parties. Our policy is to actively seek the broadest
intellectual property protection possible for our intellectual property through a combination of contractual arrangements, registration
of our domain names, copyrights, trademarks, service marks and/or patents. We have established business procedures designed to maintain
the confidentiality of our proprietary information, including the use of confidentiality agreements with employees, independent contractors,
consultants, and entities with which we conduct business.
The Platform will allow third-party game
developers to mint NFTs using their own intellectual property and our tools to list those NFTs for sale (primary sales) on the Platform.
The Platform only allows NFTs that were originally minted using the Company's NFT infrastructure to be listed for sale. All third-party
game developers who create NFTs on the Platform will be required to agree to our Terms of Service and Privacy Policy prior to engaging
with the Platform. Our Terms of Service and Privacy Policy will require creators to attest they own the intellectual property used to
create their NFTs and to monitor for obvious copyright violations. It is not yet certain to what extent the Digital Millennium Copyright
Act (DMCA) applies to NFT platforms. However, it seems likely that NFT platform owners will be subject to at least some responsibility
for responding to copyright infringement on their sites, therefore, we plan to take proactive approach by registering with the DMCA to
retain a designated agent for DMCA notices as well as instructions for submitting copyright infringement claims.
Government Regulation
Data Privacy Laws and Regulations
We are subject to various federal, state, and
international laws and regulations that affect companies conducting business on the Internet and mobile platforms, including those relating
to privacy, use and protection of player and employee personal information and data (including the collection of data from minors), the
Internet, behavioral tracking, mobile applications, content, advertising and marketing activities and anti-corruption. Additional laws
in all of these areas are likely to be passed in the future, which could result in significant limitations on or changes to the ways in
which we can collect, use, host, store or transmit the personal information and data of our customers or employees, communicate with our
players and deliver products and services, which may significantly increase our compliance costs.
47
We recognize that users of Gaxos Gaming and Gaxos
Health care deeply about how their personal information is collected, used and shared.
Users of Gaxos Gaming and Gaxos Health may be
required to provide us with certain personal information such as their name, email address and phone number. We take commercially reasonable
and appropriate measures to protect this personal information from accidental loss, misuse, and unauthorized access, disclosure, alteration,
or destruction, taking into account the risks involved in processing and the nature of such data, and comply with applicable laws and
regulations. We do not currently transfer any personal information to third-parties that do not act on our behalf, and we will not do
so without users' opt-in consent. Similarly, we do not currently collect sensitive personal information from users without opt-in
consent. We may disclose personal information to certain types of third-party companies, but only to the extent needed to enable them
to provide such services. The types of companies that may receive personal information and their functions are: marketing assistance,
analytics and reporting, customer support, email and SMS delivery, cloud infrastructure, and systems monitoring. All such third parties
function as our agents, performing services at our instruction and on our behalf pursuant to contracts which require them to provide at
least the same level of privacy protection as is required by our Privacy Policy. In addition, we may be required to disclose personal
information in response to lawful requests by public authorities, including for the purpose of meeting national security or law enforcement
requirements. We may also disclose personal information to other third parties when compelled to do so by government authorities or required
by law or regulation including, but not limited to, in response to court orders and subpoenas.
With respect to retention of personal information,
we may only retain such users' personal information in a form that identifies them only for as long as it serves the purpose(s)
for which it was initially collected as stated in our Privacy Policy, as may be subsequently authorized. We may continue processing users'
personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of statistical
analysis, and subject to the protection of our Privacy Policy. After such time periods have expired, we may either delete the personal
information or retain it in a form such that it does not identify the user personally.
Healthcare Laws and Regulations
We will be subject to healthcare regulation and
enforcement by the federal government and the states and foreign governments in which we might conduct our business, including the Health
Insurance Portability and Accountability Act of 1996 ("HIPAA"), as amended by the Health Information Technology for Economic
and Clinical Health Act of 2009 and their implementing regulations, impose obligations on certain types of individuals and entities regarding
the electronic exchange of information in common healthcare transactions, as well as standards relating to the privacy and security of
individually identifiable health information.
Competition
We operate in industries that are highly competitive
and evolving. Specifically, our business faces intense competition in gaming, NFT marketplaces, and other various digital products. In
addition, our Platform may face competition from other AI services that cater to game users and game developers. Further, our competition
may become more intense if gaming industry leaders such as Sony, Nintendo, and Microsoft, all
of whom
have significant
financial, technical and other resources, greater brand recognition and longer operating histories, decide to focus their efforts on blockchain
gaming.
Gaxos Health will also operate in a competitive
health and wellness landscape. Specifically, Gaxos Health may face intense competition from other companies catering to individuals that
are seeking for ways to improve their longevity and health span. Certain competitors, such as Inside Tracker and Tally Health, may expand
their offering to include artificial intelligence and other proprietary methodologies that can further increase competition.
Our ability to compete depends in large part on
our continuous commitment to research and development, our ability to rapidly introduce new features and functionality, and to acquire
users. We intend to work closely with our customers to continuously enhance the performance, functionality, usability, reliability and
flexibility of the Platform.
48
Employees
As of January 17, 2024, we
have a total of 3 full-time employees, We have established a network of external professionals and consultants to which we outsource
various research and development and operational tasks in an effort to minimize administrative overhead. We are not a party to any collective
bargaining agreements. We believe that we maintain good relations with our employees.
Our Corporate Information
We were originally incorporated in the State of
Wyoming on October 27, 2021 ("NFT Wyoming"). On March 29, 2022, the Board of Directors of the Company approved,
subject to shareholder approval, a Plan of Conversion, pursuant to which the Company converted from a corporation incorporated under the
laws of the State of Wyoming to a corporation incorporated under the laws of the State of Delaware (the "Reincorporation"),
and such approval included the adoption of the Certificate of Incorporation (the "Delaware Certificate") and the Bylaws (the
"Delaware Bylaws") for the Company under the laws of the State of Delaware, under the name, "The NFT Gaming Company,
Inc.," to become effective with the effectiveness of the Reincorporation. On March 29, 2022, we received majority shareholder
approval. On March 30, 2022, we completed the Reincorporation by filing the Delaware Certificate with the Delaware Secretary of State.
On January 5, 2024, we filed an amendment to our Certificate of Incorporation with the Delaware Secretary of State to change our name
to "Gaxos.ai Inc." On March 7, 2024, we filed a Certificate of Amendment with the Delaware Secretary of State to effectuate
a 1-for-12 reverse stock split of our issued and outstanding and authorized shares of common stock. The reverse stock split became effective
on March 7, 2024.
49
MANAGEMENT
Executive Officers and Directors
Set forth below is certain
information with respect to the individuals who are our directors and executive officers as of January 17, 2025:
Name
Age
Positions
Vadim Mats
40
Chief Executive Officer and Chairman
Steven A. Shorr
55
Chief Financial Officer
Adam Holzer
56
Director
Alex Kisin
36
Director
Scott A. Grayson
65
Director
Vadim Mats
Vadim Mats has served as Chief Executive Officer
and Chairman since October 2021. Mr. Mats was previously Chief Financial Officer of DatChat, Inc. (NASDAQ: DATS) from July 2021 to January
2022 and supported the company's successful IPO on the NASDAQ. From March 2018 to June 2021, Mr. Mats served as the Chief Financial
Officer of Grand Private Equity, a fintech-focused family office. Mr. Mats is also the Founder and Partner of BespokeCFO, a finance and
accounting advisory practice. From June 2010 to December 2016, Mr. Mats was Chief Financial Officer of a hedge fund based in New Jersey.
Mr. Mats also served as the Assistant Controller at Eton Park Capital Management, LP, a multi-strategy fund, from July 2007 to December
2009. From June 2006 to July 2007, Mr. Mats was a Senior Fund Accountant at The Bank of New York Mellon. Mr. Mats holds a Master of Science
degree in accounting and finance and a Bachelor's Degree in Business Administration specializing in finance and investments from
the Zicklin School of Business at Bernard Baruch College. Further, Mr. Mats is a CAIA © Charterholder and a Certified Public Accountant
in the State of New York. We believe that Mr. Mats is qualified to serve as a member of our board of directors due the perspective and
experience he brings as our founder and Chief Executive Officer, his extensive experience in technology and finance companies and in the
management of public companies.
Steven A. Shorr
Steven A. Shorr has served as our Chief Financial
Officer since March 2022. Mr. Shorr is an accomplished accounting professional with over 30 years of experience. Since 2006, he has been
Partner of Jubran, Shorr & Company, a tax, accounting, and advisory firm. In 2001, Mr. Shorr founded Steven Shorr CPA, an accounting
and tax practice, operating until 2006. Prior to 2001, he served as the Controller of CounterPoint Capital Management, a New York-based
hedge fund. Mr. Shorr has also previously worked for public accounting firms, Kenneth Leventhal & Company and Cavalcante & Company.
Mr. Shorr earned his Bachelor of Arts degree in Accounting from Queens College and is a Certified Public Accountant in the State of New
York.
Adam Holzer
Adam Holzer has served as a director since March
2022. Mr. Holzer is an accomplished sales and marketing executive with leadership experience at large media and marketing organizations.
Since 2019, he has served as Chief Executive Order of AJH Media & Sponsorship Consulting, an advisory media and sponsorship company
for entertainment and sports companies. From 2017 to 2019, Mr. Holzer was Vice President of National Sales at Learfield, a collegiate
sports marketing company. Prior to December 2017, he served as Senior Vice President of Media in the Americas at Lagardere Sports &
Entertainment and as Sales Executive at FOX Sports Media Group. Mr. Holzer earned his Bachelor of Science in Marketing from the University
of Maryland. We believe that Mr. Holzer is qualified to serve as a member of our board of directors because of his extensive professional
experience in senior leadership positions and marketing.
50
Alex Kisin
Alex Kisin has served as a director since February
2023. Mr. Kisin is an experienced Account Executive with a demonstrated history of working in tech and startups. Since 2017, he has been
the Regional Sales Manager at OwnBackup, an enterprise software company. Mr. Kisin earned his Bachelor of Arts degree in Sociology from
Rutgers University and is skilled in sales, management, SaaS, business analytics, and business development. e believe that Mr. Kisin is
qualified to serve as a member of our board of directors because of his extensive professional experience in tech, startups and business
development.
Scott A. Grayson
Scott Grayson has served as a director since February
2023. Mr. Grayson is an accomplished senior sales executive with over 25 years of experience in establishing the vision and strategies
necessary to be successful in the Financial Services software industry. Since November 2019, he has worked for Luxoft USA, Inc., a digital
transformation services and software engineering firm providing bespoke IT solutions, as the Head of Alliances for North America then
moved to the Head of Revenue for the banking, capital markets & insurance divisions at Luxoft USA, Inc in 2020. In 2019, Mr. Grayson
was Head of Sales at AlphaPoint, a software company powering crypto exchanges worldwide. Prior to 2019, he served as Chief Sales Officer
for R3, a leading provider of enterprise technology and services. Mr. Grayson has significant expertise in both on-premise and SaaS delivery
models and is specially skilled at building sales organizations in both direct sales and partnership models while maintaining an entrepreneurial
environment to creatively close business. Mr. Grayson earned his Bachelor of Science degree in Accounting from Lehigh University. We believe
that Mr. Grayson is qualified to serve as a member of our board of directors because of his extensive professional experience in technology
and financial services.
Family Relationships
There are no family relationships
among any of our executive officers or directors.
Arrangements between Officers and Directors
Except as set forth herein,
to our knowledge, there is no arrangement or understanding between any of our officers or directors and any other person pursuant to which
the officer or director was selected to serve as an officer or director.
Involvement in Certain Legal Proceedings
We are not aware of any of
our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy, insolvency,
criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of
Regulation S-K.
Committees of Our Board of Directors
Our board of directors directs
the management of our business and affairs, as provided by Nevada law, and conducts its business through meetings of the board of directors
and its standing committees. We have a standing audit committee, compensation committee and nominating and corporate governance committee.
In addition, from time to time, special committees may be established under the direction of the board of directors when necessary to
address specific issues.
Our board of directors has
determined that all of the members of the audit committee, the compensation committee and the nominating and corporate governance committee
are independent as defined under the applicable rules of Nasdaq, including, in the case of all of the members of our audit committee,
the independence requirements contemplated by Rule 10A-3 under the Exchange Act. In making such determination, the board of directors
considered the relationships that each director has with our Company and all other facts and circumstances that the board of directors
deemed relevant in determining director independence, including the beneficial ownership of our capital stock by each director.
51
Audit Committee
The audit committee is appointed by the Board
to assist the Board in its duty to oversee the Company's accounting, financial reporting, and internal control functions and the
audit of the Company's financial statements. The role of the audit committee is to oversee management in the performance of its
responsibility for the integrity of the Company's accounting and financial reporting and its systems of internal controls, the performance
and qualifications of the Company's independent auditor, including the independent auditor's independence, the performance
of the Company's internal audit function; and the Company's compliance with legal and regulatory requirements.
Our audit committee consists of Scott A. Grayson,
Alex Kisin, and Adam Holzer, with Mr. Grayson serving as chair. Each member of our audit committee meets the financial literacy requirements
of Nasdaq rules. In addition, our board of directors has determined that Scott A. Grayson will qualify as an "audit committee
financial expert," as such term is defined in Item 407(d)(5) of Regulation S-K. Our board of directors have
adopted a written charter for the audit committee, which is available on our principal corporate website at
https://gaxos.ai
.
Compensation Committee
The compensation committee is responsible for
reviewing and recommending, among other things: the adequacy and form of compensation of the board; the compensation of our Chief Executive
Officer, including base salary, incentive bonus, stock option and other grant, award and benefits upon hiring and on an annual basis;
the compensation of other senior management upon hiring and on an annual basis; and our incentive compensation and other equity-based plans
and recommending changes to such plans to our board of directors, when necessary.
Our compensation committee consists of Adam Holzer,
Scott A. Grayson, and Alex Kisin, with Mr. Holzer serving as chair. Our board of directors have adopted a written charter for
the compensation committee, which is available on our principal corporate website at
https://gaxos.ai
.
Nominating and Governance Committee
The nominating and corporate governance committee
is responsible for, among other things: developing criteria for membership on the board of directors and committees; identifying individuals
qualified to become members of the board of directors; recommending persons to be nominated for election as directors and to each committee
of the board of directors; annually reviewing our corporate governance guidelines; and monitoring and evaluating the performance of the
board of directors and leading the board in an annual self-assessment of its practices and effectiveness.
Our nominating and corporate governance committee
consists of Alex Kisin, Adam Holzer, and Scott A. Grayson, with Mr. Kisin serving as chair. Our board of directors will adopt
a written charter for the nominating and corporate governance committee, which is available on our principal corporate website at
https://gaxos.ai
.
Medical Advisory Board
In February 2024, our Board of Directors
formed a Medical Advisory Board. As of the Record Date, the members of such board are (i) Jeff R. Pavell, M.D.; (ii) Eric
J. Margolis, M.D. and (iii) Nathaniel E. Lebowitz, M.D.
Code of Business Code and Ethics Conduct
We have adopted a written code of business conduct
and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar functions. A copy of the code posted on our website,
https://gaxos.ai
.
In addition, we intend to post on our website all disclosures that are required by law or rules concerning any amendments to, or waivers
from, any provision of the code.
52
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth
for the year ended December 31, 2023 and 2022, the compensation awarded to, paid to, or earned by, our Chief Executive Officer and
Chief Financial Officer (collectively, the "named executive officers"):
●
Vadim Mats, Chief Executive Officer; and
●
Steven Shorr, Chief Financial Officer.
Name and Principal Position
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
(1)
Non-Equity
Incentive Plan
Compensation
($)
Nonqualified
Deferred
Compensation
Earnings
($)
All Other
Compensation
($)
Total
($)
Vadim Mats,
2023
$
357,692
$
0
$
0
$
504,177
$
0
$
0
$
0
$
861,869
Chief Executive Officer
2022
$
158,654
$
0
$
0
$
0
$
0
$
0
$
0
$
158,654
Steven Shorr,
2023
$
55,385
$
0
$
0
$
63,022
$
0
$
0
$
0
$
118,407
Chief Financial Officer
2022
$
30,000
$
0
$
0
$
0
$
0
$
0
$
0
$
30,000
(1)
As required by SEC rules, the amounts in this column reflect
the grant date or modification date fair value as required by FASB ASC Topic 718. A discussion of the assumptions and methodologies
used to calculate these amounts is contained in the notes to our financial statements under "Shareholders' Equity".
In February 2023, Mr. Mats received 16,667 stock options to purchase 16,667 shares of restricted stock at $49.80 per share.
In February 2023, Mr. Shorr received 2,083 stock options to purchase 2,083 shares of restricted stock at $49.80 per share.
Employment Agreements
Other than as set forth below,
we do not currently have employment agreements with any of our officers or employees.
Vadim Mats Employment Agreement
On February 17, 2023,
upon the consummation of the IPO, we entered into an employment agreement with Vadim Mats (the "Mats Employment Agreement"),
pursuant to which he shall receive a base salary at the annual rate of $400,000 payable in equal installments in accordance with the Company's
standard payroll policies. Mr. Mats shall also receive stock options to purchase up to 16,667 shares of Common Stock under our
2022 Equity Incentive Plan. Mr. Mats shall also be eligible to receive an annual cash bonus in an amount up to 2x his then-current base
salary. On February 17, 2023, and in connection with the consummation of the IPO, the Company issued 16,667 stock options to Mr. Mats.
Steven Shorr Employment Agreement
On March 23, 2022, we
entered into an employment agreement with Steven Shorr, (the "Shorr Employment Agreement"), pursuant to which he shall receive
a base salary at the annual rate of $60,000 payable in equal installments in accordance with the Company's standard payroll policies.
Mr. Shorr is also entitled to receive stock options to purchase up to 2,083 shares of Common Stock under our 2022 Equity Incentive
Plan. On February 17, 2023, and in connection with the consummation of the IPO, the Company issued 2,083 stock options to Mr. Shorr.
53
Equity Grant Practices
2022 Equity Incentive Plan
On March 30, 2022, the Company's Board
of Directors authorized and adopted the 2022 Equity Incentive Plan (the "
2022 Plan
") and reserved 208,333 shares
of common stock for issuance thereunder. The 2022 Plan was approved by shareholders on March 30, 2022. The 2022 Plan's purpose
is to encourage ownership in the Company by employees, officers, directors and consultants whose long-term service the Company considers
essential to its continued progress and, thereby, encourage recipients to act in the stockholders' interest and share in the Company's
success. The 2022 Plan provides for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights
("
SARs
"), restricted stock, restricted stock units ("
RSUs
"), and other stock-based awards.
As of the Record Date, the outstanding option awards under the 2022 Plan totaled 239,533.
Outstanding Equity Awards at 2023 Fiscal Year-End
The following table sets forth
information as options outstanding on December 31, 2023.
OPTION AWARDS
Name
Number of
Securities
Underlying
Unexercised
options (#)
Exercisable
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
Unexercisable
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
Shares or
Units of
Stock
that have
not
Vested
(#)
Market
Value of
Shares or
Units of
Stock
that Have
not
Vested
($)
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
that have
not
Vested
(#)
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
other
Rights
that have
not
Vested
($)
Vadim Mats
16,667
—
—
49.80
2/14/2033
—
—
—
—
Steven Shorr
2,083
—
—
49.80
2/14/2033
—
—
—
—
54
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AND DIRECTOR INDEPENDENCE
Transactions with Related Persons
Except for employment arrangements
which are described under "Executive Compensation," during the fiscal years ended December 31, 2023 and 2022, there
have not been, nor are there currently proposed, any transaction in which we are or were a participant, the amount involved exceeds the
lesser of $120,000 or 1% of the average of the total assets at December 31, 2023, and any of our directors, executive officers, holders
of more than 5% of our Common Stock, or any immediate family member of any of the foregoing had or will have a direct or indirect material
interest.
Related Person Transaction Policy
We have adopted a related person
transaction policy that sets forth our procedures for the identification, review, consideration and approval or ratification of related
person transactions. For purposes of our policy only, a related person transaction is a transaction, arrangement or relationship, or any
series of similar transactions, arrangements or relationships, in which we and any related person are, were or will be participants in
which the amount involved exceeds the lesser of $120,000 or 1% of our total assets at year-end for our last two completed fiscal years.
Transactions involving compensation for services provided to us as an employee or director are not covered by this policy. A related person
is any executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate
family members and any entity owned or controlled by such persons.
Under the policy, if a transaction
has been identified as a related person transaction, including any transaction that was not a related person transaction when originally
consummated or any transaction that was not initially identified as a related person transaction prior to consummation, our management
must present information regarding the related person transaction to our audit committee, or, if audit committee approval would be inappropriate,
to another independent body of our board of directors, for review, consideration and approval or ratification. The presentation must include
a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to
us of the transaction and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be,
an unrelated third party or to or from employees generally. Under the policy, we will collect information that we deem reasonably necessary
from each director, executive officer and, to the extent feasible, significant shareholder to enable us to identify any existing or potential
related-person transactions and to effectuate the terms of the policy. In addition, under our code of business conduct and ethics,
our employees and directors will have an affirmative responsibility to disclose any transaction or relationship that reasonably could
be expected to give rise to a conflict of interest. In considering related person transactions, our audit committee, or other independent
body of our board of directors, will take into account the relevant available facts and circumstances including, but not limited to:
●
the risks, costs and benefits to us;
●
the impact on a director's independence in the event
that the related person is a director, immediate family member of a director or an entity with which a director is affiliated;
●
the availability of other sources for comparable services
or products; and
●
the terms available to or from, as the case may be, unrelated
third parties or to or from employees generally.
The policy requires that, in
determining whether to approve, ratify or reject a related person transaction, our audit committee, or other independent body of our board
of directors, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests
and those of our shareholders, as our audit committee, or other independent body of our board of directors, determines in the good faith
exercise of its discretion.
Director Independence
Our Board of Directors has undertaken a review
of the independence of each director and considered whether each director has a material relationship with us that could compromise his
or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our Board of
Directors determined that Alex Kisin, Adam Holzer and Scott A. Grayson, representing three of our four incumbent directors, are "independent
directors" as defined under the applicable rules and regulations of the SEC and the listing requirements and rules of the Nasdaq
Stock Market. In making these determinations, our Board of Directors reviewed and discussed information provided by the directors and
us with regard to each directors' business and personal activities and relationships as they may relate to us and our management,
including the beneficial ownership of our capital stock by each non-employee director and any affiliates.
55
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth
certain information regarding beneficial ownership of shares of our common stock as of January 17, 2025 based on 6,923,453 shares issued
and outstanding by (i) each person known to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors,
(iii) our executive officers and (iv) all directors and executive officers as a group. Shares are beneficially owned when an individual
has voting and/or investment power over the shares or could obtain voting and/or investment power over the shares within 60 days of January
17, 2025. Except as otherwise indicated, the persons named in the table have sole voting and investment power with respect to all shares
beneficially owned, subject to community property laws, where applicable.
Beneficial Owner
(1)
Shares of
Common
Stock
Beneficially
Owned
Percentage
(2)
Directors and Named Executive Officers:
Vadim Mats
239,099
(3)
3.45
%
Alex Kisin
4,800
(4)
*
Steven A. Shorr
2,083
(5)
*
Adam Holzer
1,667
(4)
*
%
Scott Grayson
1,667
(4)
*
All Named Executive Officers and Directors as a Group (5 persons)
249,316
3.60
%
*
Represents beneficial ownership of less than 1%.
(1)
The address of each person is c/o Gaxos.ai Inc., 101 Eisenhower Parkway, Suite 300, Roseland, NJ, 07068 unless otherwise indicated herein.
(2)
The calculation in this column is based upon 6,923,453 shares of common
stock outstanding on January 17, 2025. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes
voting or investment power with respect to the subject securities. Shares of common stock that are currently exercisable or convertible
within 60 days of January 17, 2025 are deemed to be beneficially owned by the person holding such securities for the purpose of computing
the percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial
ownership of any other person.
(3)
Includes options to purchase up to 16,667 shares of the Company's common stock.
(4)
Includes options to purchase up to 1,667 shares of the Company's common stock.
(5)
Includes options to purchase up to 2,083 shares of the Company's common stock.
56
DESCRIPTION OF CAPITAL STOCK
The following description
of our common stock and preferred stock, together with the additional information we include in any prospectus supplement and in any related
free writing prospectus that we may authorize to be provided to you, summarizes the material terms and provisions of the common stock
and preferred stock that we may offer pursuant to this prospectus. While the terms we have summarized below will apply generally to any
future common stock or preferred stock that we may offer, we will describe the particular terms of any class or series of these securities
in more detail in the particular prospectus supplement and in any related free writing prospectus that we may authorize to be provided
to you. For the complete terms of our common stock and preferred stock, please refer to our current certificate of incorporation, as amended
to date ("Certificate of Incorporation"), and our bylaws, as amended to date ("Bylaws"), which have been filed
with the SEC and are incorporated herein by reference. The terms of these securities may also be affected by the Delaware General Corporation
Law (the "DGCL"). The summary below and any update which may be contained in any prospectus supplement and/or and in any related
free writing prospectus that we may authorize to be provided to you is qualified in its entirety by reference to our Certificate of Incorporation
and our Bylaws as either may be amended from time to time after the date of this prospectus, but before the date of any such prospectus
supplement and/or related free writing prospectus.
Our authorized capital stock
consists of 50,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001
per share. As of January 17, 2025, we had 6,923,453 shares of common stock outstanding and no shares of preferred stock outstanding.
Common Stock
Dividends
. Subject
to preferences that may be applicable to any outstanding shares of our preferred stock, holders of our common stock are entitled to receive
dividends, if any, as may be declared from time to time by our board of directors out of the Company's assets which are legally
available.
Voting Rights
.
Except as set forth in the Certificate of Incorporation, holders of our common stock are entitled to one vote for each share held on all
matters submitted to a vote of the Company's stockholders. Holders of our common stock have no cumulative voting rights.
Liquidation Rights
.
Upon our liquidation, dissolution or winding-up, holders of our common stock are entitled to share in all assets remaining after payment
of all liabilities and the liquidation preferences of any outstanding shares of preferred stock.
Other Rights
.
Holders of the Company's common stock have no preemptive or conversion rights or other subscription rights.
Fully Paid
.
The issued and outstanding shares of our common stock are fully paid and non-assessable. This means the full purchase price for the outstanding
shares of common stock has been paid and the holders of such shares will not be assessed any additional amounts for such shares. Any additional
shares of common stock that we may issue in the future will also be fully paid and non-assessable.
Preferred Stock
We are authorized to issue
up to 5,000,000 shares of preferred stock, par value $0.0001 per share. Our board of directors, without further action by the holders
of our common stock, may issue shares of preferred stock. The board of directors is vested with the authority to fix the designations,
preferences and relative, participating, optional or other special rights, and such qualifications, limitations or restrictions thereof,
including, without limitation, redemption rights, dividend rights, liquidation preferences and conversion or exchange rights of any class
or series of preferred stock, and to fix the number of classes or series of preferred stock, the number of shares constituting any such
class or series and the voting powers for each class or series.
The authority possessed
by our board of directors to issue preferred stock could potentially be used to discourage attempts by third parties to obtain control
of the company through a merger, tender offer, proxy contest or otherwise by making such attempts more difficult or more costly. Our board
of directors may issue preferred stock with voting rights or conversion rights that, if exercised, could adversely affect the voting power
of the holders of our common stock.
57
A prospectus supplement relating
to a series of preferred stock offered hereby and any related free writing prospectus that we may authorize to be provided to you will
describe terms of that series of preferred stock, including:
●
the
designation and stated value of that series;
●
the number of shares of preferred stock we are offering;
●
the initial public offering price at which the shares of preferred stock will be sold;
●
the dividend rate of that series, the conditions and dates upon which those dividends will be payable, whether those dividends will be cumulative or noncumulative, and, if cumulative, the date from which dividends will accumulate;
●
the process for any auction and remarketing, if any;
●
the relative ranking and preferences of that series as to dividend rights and rights upon any liquidation, dissolution or winding up of the affairs of our Company;
●
any redemption, repurchase or sinking fund provisions;
●
any conversion or exchange rights of the holder or us;
●
any voting rights;
●
any preemptive rights;
●
any restrictions on transfer, sale or other assignment;
●
any restrictions on further issuances;
●
whether interests in the preferred stock will be represented by depositary shares;
●
a discussion of any material United States federal income tax considerations applicable to the preferred stock;
●
any application for listing of that series on any securities exchange or market;
●
any limitations on the issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of our affairs; and
●
any
other specific terms, preferences, rights or limitations of, or restrictions on, that series of preferred stock.
The rights, preferences, privileges,
and restrictions granted to or imposed upon any series of preferred stock that we offer and sell under this prospectus and applicable
prospectus supplements will be set forth in a certificate of designation relating to the series. We will incorporate by reference into
the registration statement of which this prospectus is a part the form of any certificate of designation that describes the terms of the
series of preferred stock we are offering before the issuance of shares of that series of preferred stock. You should read any prospectus
supplement and any free writing prospectus that we may authorize to be provided to you related to the series of preferred stock being
offered, as well as the complete certificate of designation that contains the terms of the applicable series of preferred stock.
58
Restrictions on Payment of Dividends
We are incorporated in Delaware
and governed by Delaware law. Delaware law allows a corporation to pay dividends only:
●
out
of surplus, as determined under Delaware law; or
●
in
case there is no such surplus, out of the corporation's net profits for the fiscal year in which the dividend is declared and/or
the preceding fiscal year.
Anti-takeover Effects of our Certificate of
Incorporation, Bylaws and Delaware Law
Set forth below is a summary
of the provisions of our Certificate of Incorporation and Bylaws and the DGCL that could have the effect of delaying or preventing a change
in control of our Company. The following description is only a summary, and it is qualified by reference to our Certificate of Incorporation,
Bylaws and the relevant provisions of the DGCL.
Delaware Law
We are governed by the provisions
of Section 203 of the DGCL ("Section 203"). In general, Section 203 prohibits a publicly traded Delaware corporation from
engaging in a business combination with an interested stockholder for a period of three years after the date of the transaction in which
the person became an interested stockholder, unless the business combination is approved in a prescribed manner. A business combination
includes mergers, asset sales or other transactions resulting in a financial benefit to the stockholder. An interested stockholder is
a person who, together with affiliates and associates, owns (or within three years, did own) 15% or more of the corporation's voting
stock, subject to certain exceptions. The statute could have the effect of delaying, deferring or preventing a change in control of the
Company.
Board of Directors Vacancies
Our Bylaws authorize our board
of directors to fill vacant directorships. In addition, the number of directors constituting our board of directors may be set by resolution
of the incumbent directors.
Special Meeting of Stockholders
Our Bylaws provide that special
meetings of our stockholders may be called by the Chief Executive Officer of the Company, the board of directors or a committee of the
board of directors that has been duly designated by the board of directors and whose powers and authority include the power to call such
meetings.
Advance Notice Requirements for Stockholder
Proposals and Director Nominations
Our Bylaws provide that stockholders
seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual
meeting of stockholders, must provide timely notice of their intent in writing. To be timely, a stockholder's notice must be delivered
to the secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the close of
business on the 120th day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the
event the date of the annual meeting is not within 30 days before or after such anniversary date, to be timely, notice by the stockholder
must be so delivered not later than the close of business on the 10th day following the day on which such notice of the date of annual
meeting was mailed or public disclosure of the date of the annual meeting was made, whichever occurs first. These provisions may preclude
our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual
meeting of stockholders.
59
SELLING
STOCKHOLDERS
The Common Stock being offered
by the Selling Stockholders are those issuable to the Selling Stockholders, upon exercise of the Warrants. We are registering the shares
of Common Stock in order to permit the Selling Stockholders to offer the shares for resale from time to time. Except for the ownership
of the Warrants and as noted below, the Selling Stockholders have not had any material relationship with us within the past three years.
The table below lists the Selling
Stockholders and other information regarding the beneficial ownership of the shares of Common Stock by each of the Selling Stockholders.
The second column lists the number of shares of Common Stock beneficially owned by each Selling Stockholder, based on its ownership of
the shares of Common Stock and Warrants, as of January 17, 2024, assuming exercise of the Warrants held by the Selling Stockholders on
that date, without regard to any limitations on exercises.
The third column lists the
shares of Common Stock being offered by this prospectus by the Selling Stockholders.
In accordance with the terms
of a registration rights agreement with the Selling Stockholders, this prospectus generally covers the resale of the maximum number of
shares of Common Stock issuable upon exercise of the Warrants, determined as if the outstanding Warrants were exercised in full as of
the trading day immediately preceding the date this registration statement was initially filed with the SEC, each as of the trading day
immediately preceding the applicable date of determination and all subject to adjustment as provided in the registration rights agreement,
without regard to any limitations on the exercise of the Warrants. The fourth column assumes the sale of all of the shares offered by
the Selling Stockholders pursuant to this prospectus.
Under the terms of the Warrants,
a Selling Stockholder may not exercise the Warrants to the extent such exercise would cause such Selling Stockholder, together with its
affiliates and attribution parties, to beneficially own a number of shares of Common Stock which would exceed 4.99% of our then outstanding
Common Stock following such exercise, excluding for purposes of such determination shares of Common Stock issuable upon exercise of such
Warrants which have not been exercised. The number of shares in the second and fourth columns do not reflect this limitation. The Selling
Stockholders may sell all, some or none of their shares in this offering. See "Plan of Distribution."
Name of Selling Stockholder
Number of
Shares of Common
Stock
Beneficially
Owned
Prior to
Offering
(1)
Maximum
Number of
Shares of Common
Stock to be Sold
in this
Offering
Number of
Shares of Common
Stock
Beneficially
Owned After
Offering
Percentage
of Shares
Beneficially
Owned after
Offering
(1)
Intracoastal Capital LLC
(2)
839,228
839,228
-
-
CVI Investments, Inc.
(3)
911,692
911,692
-
-
Anson Investments Master Fund
(4)
711,119
711,119
-
-
Anson East Master Fund LP
(5)
200,573
200,573
-
-
Stuywater Capital LLC
(6)
239,135
133,334
120,646
1.22
%
Michael Vasinkevich
(7)
164,688
134,467
30,221
*
%
Noam Rubinstein
(7)
349,725
199,389
120,646
1.22
%
Craig Schwabe
(7)
8,668
7,077
1,591
*
%
Charles Worthman
(7)
2,568
2,097
471
*
%
*
Less than 1%
(1)
The ability to exercise the Warrants held by the Selling Stockholders is subject to a beneficial ownership limitation that, at the time of initial issuance of the Warrants was capped at 4.99% beneficial ownership of the Company's issued and outstanding Common Stock (post-exercise). These beneficial ownership limitations may be adjusted up or down, subject to providing advanced notice to the Company. Beneficial ownership as reflected in the selling stockholder table reflects the total number of shares potentially issuable underlying the Warrants and does not give effect to these beneficial ownership limitations. Accordingly, actual beneficial ownership, as calculated in accordance with Section 13(d) and Rule 13d-3 thereunder may be lower than as reflected in the table.
60
(2)
Mitchell P. Kopin ("Mr. Kopin") and Daniel B. Asher ("Mr.
Asher"), each of whom are managers of Intracoastal Capital LLC ("Intracoastal"), have shared voting control and investment
discretion over the securities reported herein that are held by Intracoastal. As a result, each of Mr. Kopin and Mr. Asher may be deemed
to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of the securities reported herein that are held by Intracoastal.
(3)
Heights Capital Management, Inc., the authorized agent of CVI Investments,
Inc. ("CVI"), has discretionary authority to vote and dispose of the shares held by CVI and may be deemed to be the beneficial
owner of these shares. Martin Kobinger, in his capacity as President of Heights Capital Management, Inc., may also be deemed to have investment
discretion and voting power over the shares held by CVI. Mr. Kobinger disclaims any such beneficial ownership of the shares. CVI Investments,
Inc.is affiliated with one or more FINRA member, none of whom are currently expected to participate in the sale pursuant to the prospectus
contained in the Registration Statement of shares purchased by the investor in this offering.
(4)
Anson Advisors Inc and Anson Funds Management LP, the Co-Investment
Advisers of Anson Investments Master Fund LP ("AIMF"), hold voting and dispositive power over the Common Shares held by AIMF.
Tony Moore is the managing member of Anson Management GP LLC, which is the general partner of Anson Funds Management LP. Moez Kassam and
Amin Nathoo are directors of Anson Advisors Inc. Mr. Moore, Mr. Kassam and Mr. Nathoo each disclaim beneficial ownership of these Common
Shares except to the extent of their pecuniary interest therein. The principal business address of AIMF is Maples Corporate Services Limited,
PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
(5)
Anson Advisors Inc and Anson Funds Management LP, the Co-Investment Advisers of Anson East Master Fund LP ("Anson"), hold voting and dispositive power over the Common Shares held by Anson. Tony Moore is the managing member of Anson Management GP LLC, which is the general partner of Anson Funds Management LP. Moez Kassam and Amin Nathoo are directors of Anson Advisors Inc. Mr. Moore, Mr. Kassam and Mr. Nathoo each disclaim beneficial ownership of these Common Shares except to the extent of their pecuniary interest therein. The principal business address of Anson is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
(6)
Noam Rubinstein is the sole member of Stuywater Capital LLC and has sole voting and dispositive power
over the securities that are held by Stuywater Capital LLC. Mr. Rubinstein is an affiliated of H.C. Wainwright & Co., LLC.
(7)
Each of the selling shareholders is affiliated with H.C. Wainwright & Co., LLC, a registered broker dealer and has a registered address of c/o H.C. Wainwright & Co., 430 Park Ave, 3rd Floor, New York, NY 10022, and has sole voting and dispositive power over the securities held. The Selling Stockholder acquired the Placement Agent Warrants in the ordinary course of business and, at the time the Placement Agent Warrants were acquired, the Selling Stockholder had no agreement or understanding, directly or indirectly, with any person to distribute such securities.
61
Plan
of Distribution
Each Selling Stockholder of
the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities
covered hereby on the principal Trading Market or any other stock exchange, market or trading facility on which the securities are traded
or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following
methods when selling securities:
●
ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;
●
block
trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
●
purchases
by a broker-dealer as principal and resale by the broker-dealer for its account;
●
an
exchange distribution in accordance with the rules of the applicable exchange;
●
privately
negotiated transactions;
●
settlement
of short sales;
●
in
transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated
price per security;
●
through
the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
●
a
combination of any such methods of sale; or
●
any
other method permitted pursuant to applicable law.
The Selling Stockholders may
also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended (the "Securities
Act"), if available, rather than under this prospectus. Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any
broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth
in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance
with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance with FINRA Rule 2121.
In connection with the sale
of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling
Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities
to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer
or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and
any broker-dealers or agents that are involved in selling the securities may be deemed to be "underwriters" within the meaning
of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act. Each Selling Stockholder has informed us that it does not have any written or oral agreement or understanding, directly or indirectly,
with any person to distribute the securities.
We are required to pay certain
fees and expenses incurred by us incident to the registration of the securities. We have agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
We agreed to keep this prospectus
effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and
without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for us to be in compliance with
the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities
have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities
will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in
certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the Common Stock for the applicable restricted period, as defined in Regulation M,
prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the Common
Stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and
have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by
compliance with Rule 172 under the Securities Act).
62
LEGAL MATTERS
Sheppard, Mullin, Richter & Hampton LLP, New
York, New York, will pass upon the validity of the shares of our Common Stock offered hereby.
EXPERTS
Our consolidated
financial statements as of and for the years ended December 31, 2023 and 2022, incorporated by reference in this prospectus and the
registration statement, of which it forms a part, have been audited by Salberg & Company, P.A. and D. Brooks & Associates
CPAs, independent public accounting firms, as set forth in each of their reports herein, and are included in reliance on such
reports given on the authority of such reports given on the authority of such firms as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement
on Form S-1 under the Securities Act with respect to the securities offered by this prospectus. This prospectus, which constitutes a part
of the registration statement, does not contain all of the information set forth in the registration statement, some of which is contained
in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to
us and our securities, we refer you to the registration statement, including the exhibits filed as a part of the registration statement.
Statements contained in this prospectus concerning the contents of any contract or any other document is not necessarily complete. If
a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that
has been filed. Each statement is this prospectus relating to a contract or document filed as an exhibit is qualified in all respects
by the filed exhibit. We are subject to the informational requirements of the Exchange Act and in accordance therewith file annual, quarterly
and current reports, proxy statements and other information with the SEC. The SEC maintains an Internet website that contains reports,
proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov
.
The
registration statement and the documents referred to below under "Incorporation of Documents By Reference" are also available
on our website, www.astrotechcorp.com. We have not incorporated by reference into this prospectus the information on our website,
and you should not consider it to be a part of this prospectus.
63
INDEX
TO FINANCIAL STATEMENTS
Report
    of Independent Registered Public Accounting Firm (PCAOB ID No. 106)
F-2
Report
    of Independent Registered Public Accounting Firm (PCAOB ID No. 4048)
F-3
Financial
    Statements:
Balance
    Sheets as of December 31, 2023 and 2022
F-4
Statements
    of Operations and Comprehensive Loss – For the Years Ended December 31, 2023 and 2022
F-5
Statements
    of Changes in Stockholders' Equity – For the Years Ended December 31, 2023 and 2022
F-6
Statements
    of Cash Flows – For the Years Ended December 31, 2023 and 2022
F-7
Notes
    to Financial Statements
F-8
Balance
    Sheets as of September 30, 2024 (Unaudited) and December 31, 2023
F-18
Statements
    of Operations and Comprehensive Loss – For the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)
F-19
Statements
    of Changes in Stockholders' Equity – For the Nine Months Ended September 30, 2024 and 2023 (Unaudited)
F-20
Statements
    of Cash Flows – For the Nine Months Ended September 20, 2024 and 2023 (Unaudited)
F-21
Notes
    to the Financial Statements (Unaudited)
F-22
F-
1
Report of Independent Registered Public Accounting
Firm
To the Stockholders and the Board of Directors
of:
Gaxos.AI Inc. (formerly The NFT Gaming Company,
Inc.)
Opinion on the Financial Statements
We have audited the accompanying balance sheet
of Gaxos.AI Inc. (formerly The NFT Gaming Company, Inc.) (the "Company") as of December 31, 2023, the related statements of
operations, changes in stockholders' equity and cash flows for the year then ended, and the related notes (collectively referred
to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended,
in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of internal control over financial reporting. As part of our audit, we are required to obtain an understanding of
internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters are matters arising
from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee
and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ Salberg & Company, P.A.
SALBERG & COMPANY, P.A.
We have served as the Company's auditor
since 2023
.
Boca Raton, Florida
March 27, 2024
2295 NW Corporate Blvd., Suite 240 ● Boca
Raton, FL 33431-7326
Phone: (561) 995-8270 ● Toll Free: (866)
CPA-8500 ● Fax: (561) 995-1920
www.salbergco.com ● info@salbergco.com
Member National Association of Certified Valuation
Analysts ● Registered with the PCAOB
Member CPAConnect with Affiliated Offices Worldwide
● Member AICPA Center for Audit Quality
F-
2
Report of Independent Registered Public Accounting
Firm
To the Board of Directors and
Stockholders of Gaxos.AI Inc. (formerly The NFT Gaming Company, Inc.)
Opinion on the Financial Statements
We have audited the accompanying balance sheets
of Gaxos.AI Inc. (formerly The NFT Gaming Company, Inc.) (the Company) as of December 31, 2022 and the related statements of operations,
stockholders' equity, and cash flows for year ended December 31, 2022 and the related notes (collectively referred to as the financial
statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2022 and the results of its operations and its cash flows for the year ended December 31, 2022 in conformity with accounting
principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We served as the Company's auditor since 2021
Palm Beach Gardens, FL
March 31, 2023, except for the evaluation of the
retroactive effect of the reverse stock split described in Note 1, which is as of March 27, 2024
F-
3
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
BALANCE SHEETS
December 31,
December 31,
2023
2022
ASSETS
CURRENT ASSETS:
Cash
$
1,024,710
$
679,781
Short-term investments, at fair value
2,592,689
-
Accounts receivable
8
-
Prepaid expenses and other current assets
25,132
400
Deferred offering costs
-
202,599
Total Current Assets
3,642,539
882,780
LONG-TERM ASSETS:
Property and equipment, net
52,606
-
Digital currencies
801
-
Intangible asset, net
-
58,647
Total Long-Term Assets
53,407
58,647
TOTAL ASSETS
$
3,695,946
$
941,427
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
$
215,882
$
245,011
Accrued expenses
54,154
10,683
Total Current Liabilities
270,036
255,694
Total Liabilities
270,036
255,694
Commitments and Contingencies (See Note 7)
STOCKHOLDERS' EQUITY:
Preferred stock; par value $
0.0001
;
5,000,000
shares authorized;
No
shares issued and outstanding on December 31, 2023 and 2022
-
-
Common stock; par value $
0.0001
:
50,000,000
shares authorized;
988,368
and
868,154
share issued and outstanding on December 31, 2023 and 2022, respectively
99
87
Additional paid-in capital
8,711,550
2,119,073
Accumulated other comprehensive income
95,785
-
Accumulated deficit
(
5,381,524
)
(
1,433,427
)
Total Stockholders' Equity
3,425,910
685,733
Total Liabilities and Stockholders' Equity
$
3,695,946
$
941,427
See accompanying notes to financial statements.
F-
4
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Year Ended
December 31,
2023
2022
REVENUES
$
256
$
-
OPERATING EXPENSES:
Research and development
915,818
824,523
General and administrative
3,047,360
599,573
Impairment loss
52,363
-
Total Operating Expenses
4,015,541
1,424,096
LOSS FROM OPERATIONS
(
4,015,285
)
(
1,424,096
)
OTHER INCOME:
Interest income
46,526
2,924
Realized gain on short-term investments
20,662
-
Total other income
67,188
2,924
NET LOSS
$
(
3,948,097
)
$
(
1,421,172
)
COMPREHENSIVE LOSS:
Net loss
$
(
3,948,097
)
$
(
1,421,172
)
Other comprehensive gain:
Unrealized gain on short-term investments
95,785
-
Comprehensive loss
$
(
3,852,312
)
$
(
1,421,172
)
NET LOSS PER COMMON SHARE:
Basic and diluted
$
(
4.00
)
$
(
1.64
)
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING:
Basic and diluted
987,938
868,154
See accompanying notes to financial statements.
F-
5
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
Accumulated
Preferred Stock
Common
    Stock
Additional
Other
Total
#
    of
Shares
Amount
#
    of
Shares
Amount
Paid-in
Capital
Subscription
Receivable
Comprehensive
Income
Accumulated
Deficit
Stockholders'
Equity
Balance,
    December 31, 2021
-
$
-
868,154
$
87
$
2,119,073
$
(
37,500
)
$
-
$
(
12,255
)
$
2,069,405
Proceeds
    from subscriptions receivable
-
-
-
-
-
37,500
-
-
37,500
Net
    loss
-
-
-
-
-
-
-
(
1,421,172
)
(
1,421,172
)
Balance,
    December 31, 2022
-
-
868,154
87
2,119,073
-
-
(
1,433,427
)
685,733
Common
    shares issued for cash
-
-
140,563
14
5,755,857
-
-
-
5,755,871
Purchase
    and cancellation of treasury stock
-
-
(
20,349
)
(
2
)
(
99,734
)
-
-
-
(
99,736
)
Accretion
    of stock option expense
-
-
-
-
936,354
-
-
-
936,354
Accumulated
    other comprehensive gain - short-term investments
-
-
-
-
-
-
95,785
-
95,785
Net
    loss
-
-
-
-
-
-
-
(
3,948,097
)
(
3,948,097
)
Balance,
    December 31, 2023
-
$
-
988,368
$
99
$
8,711,550
$
-
$
95,785
$
(
5,381,524
)
$
3,425,910
See accompanying notes to financial statements.
F-
6
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
STATEMENTS OF CASH FLOWS
For the Years Ended
December 31,
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(
3,948,097
)
$
(
1,421,172
)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization expense
10,649
4,189
Stock-based compensation
936,354
-
Realized gain on short-term investments
(
20,662
)
-
Impairment loss
52,363
-
Change in operating assets and liabilities:
Accounts receivable
(
8
)
-
Prepaid expenses and other current assets
(
24,732
)
(
400
)
Accounts payable
(
29,930
)
148,761
Accrued expenses
43,471
8,197
NET CASH USED IN OPERATING ACTIVITIES
(
2,980,592
)
(
1,260,425
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments
(
3,491,242
)
-
Proceeds from sale of short-term investments
1,015,000
-
Increase in capitalized internal-use software development costs
(
56,971
)
-
Purchase of intangible asset
-
(
62,836
)
NET CASH USED IN INVESTING ACTIVITIES
(
2,533,213
)
(
62,836
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the sale of common stock
5,958,470
-
Proceeds from subscriptions receivable
-
37,500
Payment of deferred offering costs
-
(
112,599
)
Purchase and cancellation of treasury shares
(
99,736
)
-
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
5,858,734
(
75,099
)
NET INCREASE (DECREASE) IN CASH
344,929
(
1,398,360
)
CASH, beginning of year
679,781
2,078,141
CASH, end of year
$
1,024,710
$
679,781
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for:
Interest
$
-
$
-
Income taxes
$
-
$
-
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Reclassification of deferred offering costs to equity
$
202,599
$
-
Unrealized gain on short-term investments
$
95,785
$
-
Increase in digital currency and accounts payable
$
801
$
-
Deferred offering costs in accounts payable
$
-
$
90,000
See accompanying notes to financial statements.
F-
7
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
NOTE 1 –
NATURE OF OPERATIONS
Gaxos.ai Inc. (formerly The NFT Gaming Company,
Inc.) (the "Company") was incorporated in the state of Wyoming on October 27, 2021 ("Inception"). On March 30,
2022, the Company reincorporated to the State of Delaware pursuant to a Plan of Conversion approved by the Board of Directors and a majority
of the shareholders. On January 5, 2024, the Company changed its name from The NFT Gamimg Company, Inc. to Gaxos.ai Inc. The Company develops,
designs, acquires, and manages games that offer affordable non-fungible tokens (NFTs) for unique and exclusive features, rewards, and
opportunities. In addition to developing proprietary games, the Company's platform will onboard third-party game publishers and
provide access to blockchain and NFT architecture, product experiences, exclusive content, and revenue opportunities.
On November 4, 2022, the Company filed a
Certificate of Amendment to the Amended and Restated Articles of Incorporation (the "Certificate of Amendment") with the Secretary
of State of the State of Delaware to effect a 1-for-1.33 reverse stock split with respect to the outstanding shares of the Company's
common stock.
The Certificate of Amendment and the reverse stock split became effective on November 4, 2022.
Additionally, on February 28, 2024, a majority
of the Company shareholders granted discretionary authority to the Company's Board of Directors to amend the Company's Certificate
of Incorporation to effect one or more consolidations of the Company's issued and outstanding shares of common stock, pursuant to
which the shares of common stock would be combined and reclassified into on the basis of one share of common stock for each 12 shares
of the Company's common stock then issued and outstanding (the "Reverse Stock Split"). On March 7, 2024, the Company
filed a Certificate of Amendment to the Amended and Restated Articles of Incorporation (the "Certificate of Amendment") with
the Secretary of State of the State of Delaware to effect a 1-for-12 reverse stock split with respect to the outstanding shares of the
Company's common stock. The Certificate of Amendment and the reverse stock split became effective on March 7, 2024. All share and
per share data in the accompanying financial statements have been retroactively adjusted to reflect the effect of the Reverse Stock Split.
On January 9, 2024, the Staff notified the Company
that it has not regained compliance with Listing Rule 5550(a)(2) and was not eligible for a second 180-day period (the "Delisting
Determination"). Further, unless the Company requested an appeal of the Delisting Determination to a Hearings Panel (the "Panel"),
the Company's securities would be scheduled for delisting from The Nasdaq Capital Market.
In early January 2024, the Company submitted a
request to the Panel to appeal the Delisting Determination, and on January 16, 2024, the Panel notified the Company that it received the
request which stayed the suspension of the Company's securities and the filing of the Form 25-NSE, pending the Hearing Panel's
final written decision.
On March 22, 2024, the Company received written
notice from the Panel that the Company regained compliance with the minimum bid price requirement under NASDAQ Listing Rule 5550(a)(2)
for continued listing on the Nasdaq Capital Market.
NOTE 2 –
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
This summary of significant account policies of
the Company is presented to assist in understanding the Company's financial statements. The financial statements and the notes are
the representation of the Company's management, who are responsible for their integrity and objectivity. These accounting policies
conform to U.S. generally accepted accounting principles ("US GAAP") and have been consistently applied in the preparation
of the financial statements.
The accompanying 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.
Liquidity is the ability of a company to generate
funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. On December 31,
2023, the Company had a cash balance of $
1,024,710
, had short-term investments of $
2,592,689
, and had working capital of $
3,372,503
. On
February 17, 2023, the Company completed an initial public offering ("IPO") and sold
140,563
shares of its common stock at
a price to the public of $
49.80
per share for gross proceeds of $
7,000,000
. The Company received net proceeds of $
5,958,470
which is net
of offering related expenses paid with proceeds of $
1,041,530
. The Company also reclassified $
202,559
of deferred offering costs as of
December 31, 2022 to additional paid in capital upon completing the IPO which resulted in total net proceeds, after equity issuance costs,
of $
5,755,871
. During the year ended December 31, 2023, the Company used net cash in operations of $
2,980,592
and purchased liquid short-term
investments of $
3,491,242
. On March 13, 2024, the Company entered into a securities purchase agreement (the "Purchase Agreement")
with an institutional investor ("the "Purchaser") for the issuance and sale in a private placement (the "Private
Placement"). In connection with this Private Placement, the Company raised aggregate gross proceeds of $
3,499,484
and received net
proceeds of $
3,056,984
, net of offering costs of $
382,500
and legal fees of $
60,000
(See Note 9).
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. The Company believes that its 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.
F-
8
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
Use of Estimates
The preparation of financial statements in conformity
with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure
of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements
include valuation of intangible assets and other long-lived assets, estimates of deferred tax valuation allowances and the fair value
of stock options issued for services.
Fair Value Measurements and Fair Value of
Financial Instruments
The Company analyzes all financial instruments
with features of both liabilities and equity under the Financial Accounting Standard Board's (the "FASB") accounting
standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest
level of input that is significant to the fair value measurement. The Company identified the following assets or liabilities that are
required to be presented on the balance sheet at fair value in accordance with Accounting Standards Codification ("ASC") Topic 820.
The three levels of the fair value hierarchy are
as follows:
●
Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
●
Level 2 - Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
●
Level 3 - Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
The following table represents the Company's
fair value hierarchy of its financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 and 2022.
December 31, 2023
December 31, 2022
Description
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Short-term investments
$
2,592,689
$
-
$
-
$
-
$
-
$
-
The Company's short-term investments are
level 1 measurements and are based on the quoted fair value at each date.
The carrying amounts reported in the balance sheets
for cash, accounts receivable, prepaid expenses and other current assets, deferred offering costs, accounts payable, and accrued expenses
approximate their fair market value based on the short-term maturity of these instruments.
Cash and Cash Equivalents
For purposes of the statements of cash flows,
the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market
accounts to be cash equivalents. The Company has no cash equivalents as of December 31, 2023 and 2022.
The Company's cash is held at major commercial
banks, which may at times exceed the Federal Deposit Insurance Corporation ("FDIC") limit. To date, the Company has not experienced
any losses on its invested cash. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's
financial condition, results of operations, and cash flows.
On December 31, 2023, the Company had approximately
$
507,000
of cash in excess of FDIC limits of $
250,000
.
Accounts receivable
The Company adopted ASC 326, "Financial
Instruments - Credit Losses" on January 1, 2023 and recognizes an allowance for losses on accounts receivable in an amount equal
to the estimated probable losses net of recoveries under the current expected credit loss method. The allowance is based on an analysis
of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable
customer accounts considered at risk or uncollectible. The bad debt expense associated with the allowance for doubtful accounts related
to accounts receivable is recognized in general and administrative expenses. As of December 31, 2023 and 2022, accounts receivable amounted
to $
8
and
$0
, respectively, and for the years ended December 31, 2023 and 2022, the Company did not recognize any bad debt expense.
F-
9
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
Short-Term Investments
The Company's portfolio of short-term investments
consists of marketable debt securities which are comprised solely of rated U.S. government securities with maturities of more than three
months, but less than one year. The Company classifies these as available-for-sale at purchase date and will reevaluate such designation
at each period end date. The Company may sell these marketable debt securities prior to their stated maturities depending upon changing
liquidity requirements. These debt securities are classified as current assets in the balance sheets and recorded at fair value, with
unrealized gains or losses included in accumulated other comprehensive income (loss) on the balance sheet and as a component of the statements
of comprehensive loss. Gains and losses are recognized when realized. Gains and losses are determined using the specific identification
method and are reported in other income (expense), net in the statements of operations.
An impairment loss may be recognized when the
decline in fair value of the debt securities is determined to be other-than-temporary. The Company evaluates its investments for other-than-temporary
declines in fair value below the cost basis each quarter, or whenever events or changes in circumstances indicate that the cost basis
of the short-term investments may not be recoverable. The evaluation is based on a number of factors, including the length of time and
the extent to which the fair value has been below the cost basis, as well as adverse conditions related specifically to the security,
such as any changes to the credit rating of the security and the intent to sell or whether the Company will more likely than not be required
to sell the security before recovery of its amortized cost basis.
The Company recorded $
95,785
and
$0
of unrealized
gains as a component of other comprehensive loss for the years ended December 31, 2023 and 2022, respectively. During the years ended
December 31, 2023 and 2022, the Company recognized a gain on sale of short-term investments of $
20,662
and
$0
, respectively.
Accounting for Digital Currencies and Other
Digital Assets
The Company accounts for digital currencies and
other digital assets as indefinite-lived intangible assets and accounts for them at historical cost in accordance with ASC 350, Intangibles - Goodwill
and Other Indefinite-lived intangible assets are not subject to amortization but rather evaluated for impairment annually and more frequently,
if events or circumstances change that indicate that it is more likely than not that the asset is impaired (i.e., if an impairment indicator
exists). As a result, the Company only recognizes decreases in the value of its digital currencies and other digital assets, and any increase
in value will be recognized only upon disposition. The Company plans to dispose of cryptocurrency received as a form of payment into fiat
currency and anticipates ownership of cryptocurrency to be minimal. As of December 31, 2023, the Company's digital currencies consisted
of
1,553.37
units of Polygon (MATIC), an Ethereum token. The Company held no such digital currencies as of December 31, 2022.
Property and Equipment
Property and equipment are stated at cost and
are depreciated using the straight-line method over their estimated useful lives. Maintenance and repairs are charged to expense as incurred.
When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or
losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets
when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
Property and equipment includes capitalized internal-use
software development costs. Costs incurred to develop internal-use software, including game 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, which currently
is three years. 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. During the years ended December 31, 2023 and 2022, internal-use software development costs
of $
56,971
and
$0
have been capitalized into property and equipment and are being amortized over 36 months, respectively.
Intangible Assets
Intangible assets, consisting of software licenses
and technology licenses, are carried at cost less accumulated amortization, computed using the straight-line method over the estimated
useful life of
5
years, less any impairment charges. During the years ended December 31, 2023 and 2022, the Company recorded an impairment
loss of $
52,363
and
$0
, respectively (see Note 5).
Stock-based Compensation
Stock-based compensation is accounted for based
on the requirements of ASC 718 –
"Compensation–Stock Compensation
", which requires recognition in the financial
statements of the cost of employee, non-employee and director services received in exchange for an award of equity instruments over the
period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The
ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date
fair value of the award. The Company has elected to account for forfeitures as they occur.
F-
10
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
Income Taxes
Deferred income taxes are provided using the liability
method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards,
and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.
When tax returns are filed, it is highly certain
that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about
the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized
in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not
that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions
taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured
as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing
authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected
as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that
would be payable to the taxing authorities upon examination. Applicable interest and penalties associated with unrecognized tax benefits
are classified as additional income taxes in the statements of operations.
Revenue Recognition
The Company follows Accounting Standards Codification
("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"). This standard establishes a single
comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASC 606 requires an entity
to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures.
In accordance with ASU Topic 606 -
Revenue
from Contracts with Customers
, the Company recognizes revenue in accordance with that core principle by applying the following steps:
Step 1: Identify the contract(s) with
a customer.
Step 2: Identify the performance obligations
in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price
to the performance obligations in the contract.
Step 5: Recognize revenue when (or as)
the entity satisfies a performance obligation.
The Company plans to generate revenue from the
following sources:
●
The Company generates revenue from the sale of our in-game items to our customers. Revenue generated from such sales, primarily through the app stores, such as Google Play Store or Apple App Store, is recognized upon delivery of the in-game items to the customer, which is when the Company completes its sole performance obligation. Fees incurred by the Company, such as commissions to the app stores, are recognized in operating expenses.
●
The Company plans to generate revenue from advertising fees paid by game advertisers, developers, hardware companies, or other strategic partners to the Company for promotion on our platform. Revenues from these fees will be recognized ratably over the agreed upon advertising service period and upon delivery of agreed upon advertising services, which constitutes satisfaction of the performance obligation.
●
The Company plans to generate royalty revenues when a third party sells one of our NFTs on a third-party platform. We will recognize royalty revenue when it is probable that we will collect the royalty fee owed which is typically when we receive notification from the third-party platform that an NFT has been sold, which constitutes satisfaction of the performance obligation. In the instance where the Company will receive royalty payments when a customer disposes of an in-game NFT in the secondary market on a third-party platform or any other payment that is not in fiat currency, the Company will recognize the revenue in accordance with ASC 606-10-32-21, "
Noncash Consideration"
. The fair value of the non-cash consideration received shall be determined by using the quoted price for such non-cash consideration on the date of the transaction.
Research and Development
Research and development costs incurred in the
development of the Company's products are expensed as incurred and include costs such as labor and outside development costs, software
license fees, materials, and other allocated costs incurred.
F-
11
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
Net Loss per Share
The Company computes net loss per share in accordance
with ASC 260-10,
"Earnings Per Share."
The basic net loss per common share is computed by dividing the net loss
by the weighted average number of common shares outstanding. Diluted net loss per share gives effect to all dilutive potential common
shares outstanding during the period using the
"as if converted"
basis.
Pursuant to ASC 260-10-45, basic loss per
common share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock
outstanding for the period presented. Diluted loss per share is computed by dividing net loss attributable to common stockholders by the
weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the
period.
The following were excluded from the computation
of diluted shares outstanding as they would have had an anti-dilutive impact on the Company's net loss.
December 31,
2023
2022
Common stock equivalents:
Warrants
11,245
-
Stock options
38,333
-
Total
49,578
-
Recent Accounting Pronouncements
The Company has implemented all new accounting
pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting
pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE 3 –
SHORT-TERM INVESTMENTS
On December 31, 2023, the Company's short-term
investments consisted of the following:
Cost
Unrealized
Gain
Fair Value
US Treasury bills
$
2,496,904
$
95,785
$
2,592,689
Total short-term investments
$
2,496,904
$
95,785
$
2,592,689
NOTE 4 –
PROPERTY AND EQUIPMENT
On December 31, 2023 and 2022, property and
equipment consists of the following:
Useful life
December 31,
2023
December 31,
2022
Capitalized internal-use software development costs
3
years
$
56,971
$
-
Less: accumulated amortization
(
4,365
)
-
$
52,606
$
-
For the year ended December 31, 2023, amortization
of capitalized internal-use software development costs amounted to $4,365.
NOTE 5 –
INTANGIBLE ASSET
On December 31, 2023 and 2022, intangible
asset consisted of the following:
Useful life
December 31,
2023
December 31,
2022
License
5
years
$
-
$
62,836
Less: accumulated amortization
-
(
4,189
)
$
-
$
58,647
F-
12
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
On August 29, 2022, the Company entered into
a Software and Patent License Agreement (the "License Agreement") with Columbia University ("Columbia"), whereby
the Company obtained a license from Columbia with respect to software and intellectual property rights and patents. In connection with
the License Agreement, Columbia granted to the Company a royalty-bearing, exclusive, worldwide, non-transferable license under the licensed
software and licensed patents, as defined in the License Agreement, to discover, develop, manufacture, have made, use, sell, offer to
sell, have sold, import, export, distribute, rent or lease licensed products and copy, use, modify, and create derivative works from licensed
software and technical information during the term of the License Agreement. The licensed documentation, licensed software, and licensed
patents will be used facilitate a "certificate of authentication" capability for image and video assets to prevent fraudulent
activity. This will allow us to certify the image is unaltered in an externally available and trusted way and for a chain-of-trust architecture
to be implemented within our system. The technology will also allow us to add an extra validation layer as well as track manipulation
of our NFT assets. This will further provide increased trust in our gaming partners to use our platform and provide additional validation
and control of third-party assets integrated into our platform.
In consideration of the Licenses granted under
this License Agreement, the Company paid or was to pay to Columbia fees and royalties as follows:
1)
License Fee: A non-refundable, non-recoverable and non-creditable license fee in the sum of $
25,000
was paid to Columbia within 30 days of the effective date of August 29, 2022;
2)
Revenue-based Milestone Payments including non-refundable, nonrecoverable and non-creditable milestone payments;
3)
Royalties: Non-refundable, non-recoverable and non-creditable running royalty on all Licensed Products that are Sold by Company, its Affiliates and Sublicenses, or as otherwise used in to generate Gross Revenue during the term of this Agreement:
4)
Fees and expenses: In connection with the License, the Company paid Columbia $
30,704
to cover expenses and paid professional fees of $
7,132
. These fees and expenses were capitalized into intangible assets on the accompany balance sheets.
5)
Win-State Payments: In the event of the Company's success results in significant shareholder value appreciation after as Initial Financing ("Initial Financing" being the first bona fide equity financing of the Company after the Effective Date that results in gross proceeds to the Company of at least $
500,000
), the Company will make a number of valuation dependent Win-State Payments" to Columbia in connection with a financing or sale (each such transaction a 'Transaction").
On August 9, 2023 and effective August 1, 2023,
the Company and Columbia University agreed to the termination of the Software and Patent License Agreement between the Company and The
Trustees of Columbia University in the City of New York, dated August 29, 2022. Based on management's analysis, the Company determined
the Licenses were not commercially viable in the current competitive landscape. The termination of the Agreement will not have any impact
on the Company's future revenues. Accordingly, as of December 31, 2023, the Company wrote off the remaining unamortized book value
of the intangible asset of $
52,363
, and during the year ended December 31, 2023, the Company recorded an impairment loss of $
52,363
, which
is included in operating expenses on the accompanying statement of operations and comprehensive loss.
For the year ended December 31, 2023, amortization
of intangible assets, prior to the impairment loss, amounted to $
6,284
.
NOTE 6 –
STOCKHOLDERS' EQUITY
Preferred Stock
The Company is authorized to issue
5,000,000
shares
of its $
0.0001
par value preferred stock. The Company's board of directors will have the authority to fix and determine the relative
rights and preferences of preferred shares, as well as the authority to issue such shares, without further stockholder approval. As of
December 31, 2023 and 2022,
no
preferred shares have been designated and no preferred shares were issued and outstanding.
Common Stock
In January 2022, subscriptions receivable of $
37,500
were collected.
2023 Stock Repurchase Plan
On March 20, 2023, the Board of Directors of the
Company approved a stock repurchase program authorizing the purchase of up to $
500,000
of the Company's common stock until December
31, 2023 (the "2023 Stock Repurchase Program"). In connection with the 2023 Stock Repurchase Program, during the year ended
December 31, 2023, the Company purchased and cancelled
20,349
shares of its common stock for $
99,736
, or at an average price of $
4.90
per share.
F-
13
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
Initial Public Offering
On February 17, 2023, the Company completed the
IPO and sold
140,563
shares of its common stock at a price to the public of $
49.80
per share for gross proceeds of $
7,000,000
. The Company
received net proceeds of $
5,958,470
which is net of offering expenses of $
1,041,530
. Additionally, the Company reclassified deferred offering
costs of $
202,599
which were paid and deferred as of December 31, 2022 as a charge to additional paid in capital as equity issuance costs.
In connection with the IPO, the Company issued
11,245
warrants to the placement agent. The warrants are exercisable at $
54.78
per share
and expire on
February 14, 2028
. The fair value of these warrant of $
3,657,258
was estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted-average assumptions: dividend yield of
0
%; expected volatility of
69.8
%; risk-free interest
rate of
4.03
%; and an estimated holding period of
5
years. These warrants had no financial statement impact as they were considered to
be equity issuance costs.
2022 Equity Incentive Plan
On March 30, 2022, the Company's Board
of Directors authorized and adopted the 2022 Equity Incentive Plan (the "2022 Plan") and reserved
208,333
shares of common
stock for issuance thereunder. The 2022 Plan was approved by shareholders on March 30, 2022. The 2022 Plan's purpose is to encourage
ownership in the Company by employees, officers, directors and consultants whose long-term service the Company considers essential to
its continued progress and, thereby, encourage recipients to act in the stockholders' interest and share in the Company's
success. The 2022 Plan provides for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights ("SARs"),
restricted stock, restricted stock units ("RSUs"), and other stock-based awards.
Stock Options
On February 14, 2023, the Company granted aggregate
stock options to purchase
33,333
of the Company's common stock at an exercise price of $
49.80
per share to the Company's chief
executive officer, an executive officer, and employee and consultants pursuant to the 2022 Equity Incentive Plan. The grant date of the
stock options was February 14, 2023 and the options expire on
February 14, 2033
.
The options vest as to (i) 28,333 of such options on
February 14, 2023; and (ii) the remaining 5,000 options vest quarterly (417 each quarter) beginning on May 14, 2023 and each quarter thereafter
through February 14, 2026.
The stock options were valued at $
1,023,290
on the grant date using a Black-Scholes option pricing model which
will be recognized as stock-based compensation expense over the vesting period.
On March 6, 2023, the Company granted stock options
to purchase
5,000
of the Company's common stock at an exercise price of $
49.80
per share to the Company's board of directors
pursuant to the 2022 Equity Incentive Plan. The grant date of the stock options was March 6, 2023 and the options expire on March 6, 2028.
The options vest on the one-year anniversary of the stock option grant on March 6, 2024. The stock options were valued at the grant
date using a Black-Scholes option pricing model which will be recognized as stock-based compensation expense over the vesting period.
The stock options were valued at $
33,972
on the grant date using a Black-Scholes option pricing model which will be recognized as stock-based
compensation expense over the vesting period.
The stock options were valued at the grant date
using a Black-Scholes option pricing model with the following assumptions: risk-free interest rates ranging from
3.95
% to
4.0
%, expected
dividend yield of
0
%, expected option term of
three
to
six
years
using the simplified method, and expected volatilities ranging from
68.8
%
to
71.6
% based on the calculated volatility of comparable companies.
During the year ended December 31, 2023, the Company
recognized total stock-based expenses related to stock options of $
936,354
which has been reflected in general and administrative expenses
on the statements of operations and comprehensive loss. A balance of $
120,908
remains to be expensed over future vesting periods related
to unvested stock options issued for services to be expensed over a weighted average period of
2.1
years.
There was no option activity during the year ended
December 31, 2022. Option activity for the year ended December 31, 2023 are summarized as follows:
Number of
Options
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life
(Years)
Balance on December 31, 2022
-
$
-
-
Granted
38,333
49.80
-
Balance on December 31, 2023
38,333
$
49.80
8.49
Options exercisable on December 31, 2023
29,583
$
49.80
9.13
Weighted average fair value of options granted during the period
-
$
27.60
-
On December 31, 2023, the aggregate intrinsic
value of options outstanding was $
0
.
F-
14
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
Stock Warrants
In connection with the IPO, the Company issued
11,245
fully vested warrants to the placement agent. The warrants are exercisable at $
54.78
per share and expire on February 14, 2028.
The warrants were considered equity issuance costs; therefore, there was no financial statement impact for the grant during the year ended
December 31, 2023.
There was no warrant activity during the year
ended December 31, 2022.
Warrant activity for the year ended December 31, 2023 are summarized as follows:
Number of Warrants
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
(Years)
Aggregate
Intrinsic
Value
Balance Outstanding, December 31, 2022
-
$
-
-
-
Granted
11,245
54.78
-
-
Balance Outstanding, December 31, 2023
11,245
$
54.78
4.13
-
Exercisable, December 31, 2023
11,245
$
54.78
4.13
-
NOTE 7 –
COMMITMENTS AND CONTINGENCIES
Employment Agreement
On February 17, 2023, the Company entered into
an executive employment agreement with Vadim Mats, the Company's Chief Executive Officer (CEO) in connection with the Company's
initial public offering (the "
IPO
"). The term of the agreement will continue for one (1) year from the date
of execution and automatically renews for successive one (1) year periods at the end of each term until either party delivers written
notice of their intent not to review at least 90 days prior to the expiration of the then effective term. Pursuant to the agreement, Mr.
Mats shall receive a base salary at the annual rate of $
400,000
payable in equal installments in accordance with the Company's standard
payroll policies. Additionally, on February 14, 2023, the board of directors approved the issuance of stock options, with immediate vesting,
to Mr. Mats to purchase up to
16,667
shares of common stock under the Company's 2022 Equity Incentive Plan (see Note 6). Mr. Mats
shall also be eligible to receive an annual cash bonus in an amount up to 2x his then-current base salary if the Company meets or
exceeds criteria to be adopted by the compensation committee annually.
NOTE 8 –
INCOME TAXES
The Company accounts for income tax using the
liability method prescribed by ASC 740, "Income Taxes". Under this method, deferred tax assets and liabilities are determined
based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in
effect in the year in which the differences are expected to reverse. The deferred tax assets on December 31, 2023 and 2022 consist of
net operating loss carryforwards and the mandatory capitalization of research and development cost for tax purposes pursuant to Section
174, as revised by the Tax Cuts and Jobs Act ("TCJA"). The TCJA amended Section 174 relating to the federal tax treatment
of research or experimental expenditures paid or incurred during the taxable year. The new Section 174 rules require taxpayers to capitalize
and amortize specified research and experimental expenditures, including software development, over a period of
five
years (attributable
to domestic research) or
15
years (attributable to foreign research). The net deferred tax asset has been fully offset by a valuation
allowance because of the uncertainty of the attainment of future taxable income.
As of December 31, 2023 and 2022, components of
deferred tax assets and liabilities are as follows:
December 31,
2023
December 31,
2022
Net operating loss carryforward
$
795,489
$
190,123
Research and development
366,256
204,069
Total deferred tax assets
1,161,745
394,192
Valuation allowance
(
1,161,745
)
(
394,192
)
Net Deferred Tax Assets
$
-
$
-
F-
15
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
A reconciliation of the effective tax rate with
the statutory Federal income tax rate was as follows for the years ended December 31, 2023 and 2022:
For the
Year ended
December 31,
2023
For the
Year ended
December 31,
2022
Federal tax benefit at statutory rate
(
21.0
)%
(
21.0
)%
State tax benefit, net of Federal tax benefit
(
5.1
)%
(
6.5
)%
Non-deductible expenses
6.2
%
-
%
Change in estimated effective tax rate
(
1.4
)%
-
%
Change in valuation allowance
21.3
%
27.5
%
Effective tax rate
0
%
0
%
As of December 31, 2023, the Company had approximately
$
3,043,768
in net operating loss carry forwards for federal income tax purposes of which $
3,043,768
may be carried forward indefinitely
subject to annual usage limitations of
80
% of taxable income. Generally, these can be carried forward and applied against future
taxable income at the tax rate applicable at that time. The Company is currently using a
26.135
% effective tax rate for its projected
available net operating loss carry-forward.
In accordance with FASB ASC 740 "Income
Taxes", valuation allowances are provided against deferred tax assets, if based on the weight of available evidence, some or all
of the deferred tax assets may or will not be realized. The Company has evaluated its ability to realize some or all of the deferred tax
assets on its balance sheet for the coming year and has established a valuation allowance in the amount of $
1,161,745
as of December 31,
2023 due to the uncertainty of generating taxable income. The valuation allowance increased in 2023 by $
767,553
.
The Company does not have any uncertain tax positions
or events leading to uncertainty in a tax position. The Company's 2023, 2022 and 2021 Corporate Income Tax Returns are subject to
Internal Revenue Service examination.
NOTE 9 –
SUBSEQUENT EVENTS
Reverse split
On February 28, 2024, a majority of the Company
shareholders granted discretionary authority to the Company's Board of Directors to amend the Company's Certificate of Incorporation
to effect one or more consolidations of the Company's issued and outstanding shares of common stock, pursuant to which the shares
of common stock would be combined and reclassified into on the basis of
one share of common stock for each 12 shares of the Company's
common stock
then issued and outstanding (the "Reverse Stock Split"). On March 7, 2024, the Company filed a Certificate of
Amendment to the Amended and Restated Articles of Incorporation (the "Certificate of Amendment") with the Secretary of State
of the State of Delaware to effect a
1-for-12
reverse stock split with respect to the outstanding shares of the Company's common
stock. The Certificate of Amendment and the reverse stock split became effective on March 7, 2024. All share and per share data in the
accompanying financial statements have been retroactively adjusted to reflect the effect of the Reverse Stock Split.
Technology purchase agreement
On March 4, 2024, the Company entered into a Purchase
Agreement with a third party (the "Seller") to acquire certain technology and computer code. The Purchase Agreement grants
the Company a perpetual, worldwide, non-exclusive, non-transferable, royalty free, fully paid license to (a) modify and create derivative
works ("Derivative Works") from certain technology and related codebase including, but not limited to, "Habit-tracking
Module," "Administrative Panel," and related computer code (the "Code"). The aggregate purchase price shall
be $
150,000
("Purchase Price") payable in
4
monthly installments of $
37,500
beginning on March 15, 2024.
Stock options
On March 5, 2024, the Company granted stock options
to purchase an aggregate of
6,249
(
2,083
stock options to each director) shares of the Company's common stock at an exercise price
of $
6.00
per share to the Company's board of directors pursuant to the 2022 Equity Incentive Plan. The grant date of the stock options
was March 5, 2024 and the options expire on
March 5, 2029
. The options vest on the one-year anniversary of the stock option grant on
March
5, 2025
. The stock options will be valued on the grant date using a Black-Scholes option pricing model which will be recognized as
stock-based compensation expense over the vesting period.
On March 7, 2024, the Company entered into Advisory
Board Agreements (the Advisory Agreements") with three members of the Company's Medical Advisory Board. In connection with
the Advisory Agreements, each medical Board member shall be paid an annual cash fee of $
40,000
paid quarterly, and Company shall grant
each Medical Advisory Board member stock options to purchase
4,167
shares of the Company's common stock. As of the date of this
report, the Company has not granted these options. The stock options will be valued on the grant date using a Black-Scholes option pricing
model which will be recognized as stock-based professional fees over the vesting period.
F-
16
GAXOS.AI INC.
(FORMERLY THE NFT GAMING COMPANY, INC.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
Private Placement
On March 13, 2024, the Company entered into a
securities purchase agreement (the "Purchase Agreement") with an institutional investor ("the "Purchaser")
for the issuance and sale in a private placement (the "Private Placement") of aggregate Units consisting of (i)
108,000
shares
of the Company's common stock, (ii) series A warrants to purchase up to
628,367
shares of the Company's common stock (the
"Series A Warrants"), and (iii) series B warrants to purchase up to
628,367
shares of the Company's common stock (the
"Series B Warrants" and together with the Series A Warrants, the "Common Warrants"). The purchase price of each
Unit consisted of one share of the Company's common stock and associated Common Warrants, was $
5.57
per Unit for aggregate gross
proceeds of $
601,560
. Additionally, the Company sold pre-funded warrants to purchase up to
520,367
shares of the Company's common
stock (the "Pre-Funded Warrants"). Pre-funded Warrants are a type of warrant that allows the warrant holder to purchase a
specified number of a company's securities at a nominal exercise price. The purchase price of each Pre-Funded Warrant was $
5.569
for aggregate gross proceeds of $
2,897,924
. In connection with this Private Placement, the Company raised aggregate gross proceeds of
$
3,499,484
and received net proceeds of $
3,056,984
, net of offering costs of $
382,500
and legal fees of $
60,000
.
The Common Warrants are exercisable immediately
upon issuance at an exercise price of $
5.50
per share. The Series A Warrants will expire five and one-half years from the date of issuance
and the Series B Warrants will expire twenty-four months from the date of issuance. The Pre-Funded Warrants are exercisable immediately
upon issuance at a nominal exercise price of $
0.001
and may be exercised at any time until the Pre-Funded Warrants are exercised in full.
A holder of Pre-Funded Warrants or Common Warrants (together with its affiliates) may not exercise any portion of a warrant to the extent
that the holder would own more than
4.99
% (or, at the election of the holder
9.99
%) of the Company's outstanding Common Stock immediately
after exercise.
In connection with the Private Placement, the
Company entered into a registration rights agreement (the "Registration Rights Agreement"), dated as of March 13, 2024, with
the Purchaser, pursuant to which the Company agreed to prepare and file a registration statement with the Securities and Exchange Commission
(the "
SEC
") registering the resale of the securities issued in the Private Placement no later than 30 days after the
date of the Registration Rights Agreement, and to use its best efforts to have the registration statement declared effective as promptly
as practical thereafter, and in any event no later than 60 days following the date of the Registration Rights Agreement (or 90 days following
the date of the Registration Rights Agreement in the event of a "full review" by the SEC).
The Private Placement closed on March 15, 2024.
The gross proceeds to the Company from the Private Placement were approximately $
3.5
million, before deducting placement agent fees and
expenses and estimated offering expenses payable by the Company. The Company intends to use the net proceeds received from the Private
Placement for general corporate purposes and working capital.
H.C. Wainwright & Co., LLC ("Wainwright")
acted as the Company's exclusive placement agent in connection with the Private Placement, pursuant to that certain engagement letter,
dated as of March 7, 2024 and as amended on March 13, 2024, between the Company and Wainwright (the "Engagement Letter").
Pursuant to the Engagement Letter, the Company paid Wainwright (i) a total cash fee equal to
7.5
% of the aggregate gross proceeds of the
Private Placement and (ii) a management fee of
1.0
% of the aggregate gross proceeds of the Private Placement. In addition, the Company
agreed to pay Wainwright certain expenses and issued to Wainwright or its designees warrants (the "Placement Agent Warrants")
to purchase up to an aggregate of
47,128
shares of the Company's common stock at an exercise price equal to $
6.9625
per share. The
Placement Agent Warrants are exercisable immediately upon issuance and have a term of exercise equal to five and a half years from the
date of issuance. In addition, pursuant to the Engagement Letter, the Company agreed that upon any exercise for cash of any privately
placed warrants issued to investors in an offering covered by the Engagement Letter,
the Company shall (i) pay Wainwright a cash fee of
7.5% and a management fee of 1.0% of the aggregate gross exercise paid in cash with respect thereto, and (ii) issue warrants to purchase
that number of shares of common stock equal to 7.5% of the aggregate number of shares of common stock underlying the warrants that were
exercised.
Treasury Shares
In connection with the 2023 Stock Repurchase Program,
from January 1, 2024 to March 28, 2024, the Company purchased and cancelled
6,846
shares of its common stock for $
19,601
, or at an average
price of $
2.86
per share.
F-
17
GAXOS.AI INC.
BALANCE SHEETS
September 30,
December 31,
2024
2023
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash
$
5,227,894
$
1,024,710
Short-term investments, at fair value
1,416,056
2,592,689
Investment in equity securities, at fair value
199,998
-
Accounts receivable
-
8
Prepaid expenses and other current assets
86,609
25,132
Total Current Assets
6,930,557
3,642,539
LONG-TERM ASSETS:
Property and equipment, net
56,380
52,606
Intangible assets, net
132,500
-
Digital currencies
37
801
Total Long-Term Assets
188,917
53,407
TOTAL ASSETS
$
7,119,474
$
3,695,946
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
$
329,288
$
215,882
Accrued expenses
73,243
54,154
Deferred revenue
2,376
-
Total Current Liabilities
404,907
270,036
Total Liabilities
404,907
270,036
Commitments and Contingencies (See Note 7)
STOCKHOLDERS' EQUITY:
Preferred stock; par value $
0.0001
;
5,000,000
shares authorized;
No
shares issued and outstanding on September 30, 2024 and December 31, 2023
-
-
Common stock; par value $
0.0001
:
50,000,000
shares authorized;
1,892,773
and
988,368
share issued and outstanding on September 30, 2024 and December 31, 2023, respectively
189
99
Additional paid-in capital
14,668,396
8,711,550
Accumulated other comprehensive income
13,299
95,785
Accumulated deficit
(
7,967,317
)
(
5,381,524
)
Total Stockholders' Equity
6,714,567
3,425,910
Total Liabilities and Stockholders' Equity
$
7,119,474
$
3,695,946
See accompanying notes to unaudited financial statements.
F-
18
GAXOS.AI INC.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
(Unaudited)
For the Three Months Ended
For the Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
REVENUES
$
2,704
$
-
$
2,723
$
-
OPERATING EXPENSES:
Research and development
252,657
258,405
684,327
630,574
General and administrative
655,916
615,211
2,122,607
2,501,612
Impairment loss
-
-
-
52,363
Total Operating Expenses
908,573
873,616
2,806,934
3,184,549
LOSS FROM OPERATIONS
(
905,869
)
(
873,616
)
(
2,804,211
)
(
3,184,549
)
OTHER INCOME:
Interest income
39,409
16,557
96,653
37,415
Realized gain on short-term investments
2,050
-
121,765
-
Total other income
41,459
16,557
218,418
37,415
NET LOSS
$
(
864,410
)
$
(
857,059
)
$
(
2,585,793
)
$
(
3,147,134
)
COMPREHENSIVE LOSS:
Net loss
$
(
864,410
)
$
(
857,059
)
$
(
2,585,793
)
$
(
3,147,134
)
Other comprehensive income:
Unrealized (loss) income on short-term investments
9,884
41,841
(
82,486
)
79,646
Comprehensive loss
$
(
854,526
)
$
(
815,218
)
$
(
2,668,279
)
$
(
3,067,488
)
NET LOSS PER COMMON SHARE:
Basic and diluted
$
(
0.61
)
$
(
0.85
)
$
(
1.95
)
$
(
3.20
)
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING:
Basic and diluted
1,418,506
1,005,979
1,329,259
984,625
See accompanying notes to unaudited financial statements.
F-
19
GAXOS.AI INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2024 AND 2023
(Unaudited)
Additional
Accumulated Other
Total
Preferred Stock
Common Stock
Paid-in
Comprehensive
Accumulated
Stockholders'
# of Shares
Amount
# of Shares
Amount
Capital
Income
Deficit
Equity
Balance, December 31, 2023
-
$
-
988,368
$
99
$
8,711,550
$
95,785
$
(
5,381,524
)
$
3,425,910
Common shares and warrants issued for cash, net
-
-
108,000
11
159,049
-
-
159,060
Sale of pre-funded warrants for cash
-
-
-
-
2,897,924
-
-
2,897,924
Purchase and cancellation of treasury stock
-
-
(
6,846
)
(
1
)
(
19,601
)
-
-
(
19,602
)
Accretion of stock option expense
-
-
-
-
15,806
-
-
15,806
Rounding shares from reverse split
-
-
4,150
-
-
-
-
-
Accumulated other comprehensive loss - short-term investments
-
-
-
-
-
(
99,414
)
-
(
99,414
)
Net loss
-
-
-
-
-
-
(
912,145
)
(
912,145
)
Balance, March 31, 2024
-
-
1,093,672
109
11,764,728
(
3,629
)
(
6,293,669
)
5,467,539
Common shares issued for warrant exercise
-
-
103,367
11
93
-
-
104
Accretion of stock option expense
-
-
-
-
33,435
-
-
33,435
Accumulated other comprehensive gain - short-term investments
-
-
-
-
-
7,044
-
7,044
Net loss
-
-
-
-
-
-
(
809,238
)
(
809,238
)
Balance, June 30, 2024
-
-
1,197,039
120
11,798,256
3,415
(
7,102,907
)
4,698,884
Common shares issued for exercise of March 2024 Common Warrants for cash under warrants inducement offer, net
-
-
278,734
27
2,834,816
-
-
2,834,843
Common shares issued for Pre-funded warrant exercises
-
-
417,000
42
375
-
-
417
Accretion of stock option expense
-
-
-
-
34,949
-
-
34,949
Accumulated other comprehensive gain - short-term investments
-
-
-
-
-
9,884
-
9,884
Net loss
-
-
-
-
-
-
(
864,410
)
(
864,410
)
Balance, September 30, 2024
-
$
-
1,892,773
$
189
$
14,668,396
$
13,299
$
(
7,967,317
)
$
6,714,567
Additional
Accumulated Other
Total
Preferred Stock
Common Stock
Paid-in
Comprehensive
Accumulated
Stockholders'
# of Shares
Amount
# of Shares
Amount
Capital
Income
Deficit
Equity
Balance, December 31, 2022
-
-
868,154
87
2,119,073
-
(
1,433,427
)
685,733
Common shares issued for cash
-
-
140,563
14
5,755,857
-
-
5,755,871
Accretion of stock option expense
-
-
-
-
870,572
-
-
870,572
Accumulated other comprehensive gain - short-term investments
-
-
-
-
-
18,156
-
18,156
Net loss
-
-
-
-
-
-
(
1,536,031
)
(
1,536,031
)
Balance, March 31, 2023
-
-
1,008,717
101
8,745,502
18,156
(
2,969,458
)
5,794,301
Purchase and cancellation of treasury stock
-
-
(
32,048
)
(
3
)
(
24,238
)
-
-
(
24,241
)
Accretion of stock option expense
-
-
-
-
21,927
-
-
21,927
Accumulated other comprehensive gain - short-term investments
-
-
-
-
-
19,649
-
19,649
Net loss
-
-
-
-
-
-
(
754,044
)
(
754,044
)
Balance, June 30, 2023
-
-
976,669
98
8,743,191
37,805
(
3,723,502
)
5,057,592
Purchase and cancellation of treasury stock
-
-
(
73,883
)
(
7
)
(
25,462
)
-
-
(
25,469
)
Accretion of stock option expense
-
-
-
-
21,927
-
-
21,927
Accumulated other comprehensive gain - short-term investments
-
-
-
-
-
41,841
-
41,841
Net loss
-
-
-
-
-
-
(
857,059
)
(
857,059
)
Balance, September 30, 2023
-
$
-
902,786
$
91
$
8,739,656
$
79,646
$
(
4,580,561
)
$
4,238,832
See accompanying notes to unaudited financial statements.
F-
20
GAXOS.AI INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months Ended
September 30,
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(
2,585,793
)
$
(
3,147,134
)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization expense
37,036
6,968
Stock-based compensation
84,190
914,426
Impairment loss
-
52,363
Realized gain on short-term investments
(
121,765
)
-
Non-cash transaction fees
764
-
Change in operating assets and liabilities:
Accounts receivable
8
-
Prepaid expenses and other current assets
(
61,477
)
(
79,319
)
Accounts payable
113,406
(
65,967
)
Accrued expenses
19,089
10,966
Deferred revenue
2,376
-
NET CASH USED IN OPERATING ACTIVITIES
(
2,512,166
)
(
2,307,697
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments
(
2,096,293
)
(
3,491,242
)
Purchase of marketable equity securities
(
199,998
)
-
Proceeds from sale of short-term investments
3,312,205
-
Increase in capitalized internal-use software development costs
(
23,310
)
(
24,625
)
Purchase of intangible asset
(
150,000
)
-
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
842,604
(
3,515,867
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the sale of common stock units
159,060
5,958,470
Proceeds from exercise of pre-funded warrants
521
-
Proceeds from sale of pre-funded warrants
2,897,924
-
Proceeds from induced exercise of warrants
2,834,843
-
Purchase and cancellation of treasury shares
(
19,602
)
(
49,710
)
NET CASH PROVIDED BY FINANCING ACTIVITIES
5,872,746
5,908,760
NET INCREASE IN CASH
4,203,184
85,196
CASH, beginning of period
1,024,710
679,781
CASH, end of period
$
5,227,894
$
764,977
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for:
Interest
$
-
$
-
Income taxes
$
-
$
-
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Reclassification of deferred offering costs to equity
$
-
$
202,599
Unrealized (loss) income on short-term investments
$
(
82,486
)
$
79,646
Increase in digital currency and accounts payable
$
-
$
808
See accompanying notes to unaudited financial statements.
F-
21
GAXOS.AI INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)
NOTE 1 –
NATURE OF OPERATIONS
Gaxos.ai Inc. (the "Company") was
incorporated in the state of Wyoming on
October 27, 2021
("Inception"). On March 30, 2022, the Company reincorporated
to the State of Delaware pursuant to a Plan of Conversion approved by the Board of Directors and a majority of the shareholders. On January
5, 2024, the Company changed its name from The NFT Gaming Company, Inc. to Gaxos.ai Inc. The Company is a technology-based company that
is developing applications aimed at redefining the way we utilize artificial intelligence ("AI") to optimize the user experience.
The Company's flagship product is its gaming platform called "Gaxos" (the "Platform" or "Gaxos Gaming"),
created with a vision to develop, design, acquire, and manage conventional games and to combine these games with unconventional game mechanisms,
such as the ability for gamers and developers to utilize artificial intelligence to create and design in-game features, as well as to
mint unique in-game features, such as skins, characters, weapons, gear, levels, and virtual lands, in the form of non-fungible tokens,
or "NFTs," that will allow users to have unique experiences and more control over in-game assets. Recently, we began to develop
a new initiative, Gaxos Health, which is dedicated to revolutionizing personal health and wellness by developing a suite of innovative
AI-powered health optimization solutions.
On February 28, 2024, a majority of the Company
shareholders granted discretionary authority to the Company's Board of Directors to amend the Company's Certificate of Incorporation
to effect one or more consolidations of the Company's issued and outstanding shares of common stock, pursuant to which the shares
of common stock would be combined and reclassified into on the basis of one share of common stock for each 12 shares of the Company's
common stock then issued and outstanding (the "Reverse Stock Split").
On March 7, 2024, the Company filed a Certificate of
Amendment to the Amended and Restated Articles of Incorporation (the "Certificate of Amendment") with the Secretary of State
of the State of Delaware to effect a 1-for-12 reverse stock split with respect to the outstanding shares of the Company's common
stock.
The Certificate of Amendment and the reverse stock split became effective on March 7, 2024. All share and per share data in the
accompanying financial statements have been retroactively adjusted to reflect the effect of the Reverse Stock Split.
On September 23, 2024, the Company formed a wholly-owned
subsidiary, RNK Health, LLC ("RNK Health"), a company incorporated under the laws of the State of Delaware as a limited liability
company. RNK Health was formed in order to form a partnership and potential relationship with Nekwellness, LLC ("Nekwellness"),
a third party, to engage in the proposed business of marketing certain products, including GLP-1 products (GLP-1 is short for glucagon-like
peptide-1), TRT (Testosterone replacement therapy) products and other potential products. In October 2024, the Company and Nekwellness
entered into an operating agreement (See Note 8 – Subsequent Events).
NOTE 2 –
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
This summary of significant accounting policies
of the Company is presented to assist in understanding the Company's financial statements. The financial statements and the notes
are the representation of the Company's management, who are responsible for their integrity and objectivity. These accounting policies
conform to U.S. generally accepted accounting principles ("US GAAP") and have been consistently applied in the preparation
of the financial statements.
The accompanying unaudited 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.
Management acknowledges its responsibility for
the preparation of the accompanying unaudited financial statements which reflect all adjustments, consisting of normal recurring and non-recurring
adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for
the periods presented.
The accompanying unaudited financial statements
of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the "U.S.
GAAP") for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim
periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. Certain information and note disclosure
normally included in financial statements prepared in accordance with U.S. GAAP has been condensed or omitted from these statements pursuant
to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial
statements. These unaudited financial statements should be read in conjunction with the summary of significant accounting policies and
notes to the financial statements for the year ended December 31, 2023 included in the Company's Annual Report on Form 10-K as filed
with the Securities and Exchange Commission on March 27, 2024.
F-
22
GAXOS.AI INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)
Liquidity
Liquidity is the ability of a company to generate
funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. On September 30,
2024, the Company had a cash balance of $
5,227,894
, had short-term investments of
1,416,056
, and had working capital of $
6,525,650
. During
the nine months ended September 30, 2024, the Company used net cash in operations of $
2,512,166
. 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. The Company believes that its 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.
Use of Estimates
The preparation of financial statements in conformity
with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure
of contingent assets and liabilities at the date of the unaudited financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying unaudited financial
statements include the valuation of investments, valuation of intangible assets and other long-lived assets, estimates of deferred tax
valuation allowances and the fair value of stock options issued for services.
Fair Value Measurements and Fair Value of
Financial Instruments
The Company analyzes all financial instruments
with features of both liabilities and equity under the Financial Accounting Standard Board's (the "FASB") accounting
standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest
level of input that is significant to the fair value measurement. The Company identified the following assets or liabilities that are
required to be presented on the balance sheet at fair value in accordance with Accounting Standards Codification ("ASC") Topic 820.
The three levels of the fair value hierarchy are
as follows:
●
Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
●
Level 2 - Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
●
Level 3 - Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
The carrying amounts reported in the balance sheets
for cash, accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair
market value based on the short-term maturity of these instruments.
F-
23
GAXOS.AI INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)
The following table represents the Company's
fair value hierarchy of its financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and
December 31, 2023.
September 30, 2024
December 31, 2023
Description
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Short-term investments
$
1,416,056
$
-
$
-
$
2,592,689
$
-
$
-
Equity securities
$
-
$
-
$
199,998
$
-
$
-
$
-
The Company's short-term investments are
level 1 measurements and are based on the quoted fair value on each date.
Investment in Equity Securities, at Fair Value
The following table summarizes activity in the
Company's investment in equity securities, at fair value for the periods presented:
Nine Months
Ended
September 30,
Nine Months
Ended
September 30,
2024
2023
Balance, beginning of period
$
-
$
-
Additions
199,998
-
Balance, end of period
$
199,998
$
-
On September 30, 2024, equity securities, at fair
value consisted of
666,660
shares of common equity securities of one entity, Dragon Interactive Corporation, a security without a readily
determinable fair value. On May 16, 2024, the Company purchased
666,660
common shares of Dragon Interactive Corporation for $
199,998
.
Cash and Cash Equivalents
For purposes of the statements of cash flows,
the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market
accounts to be cash equivalents. The Company has no cash equivalents as of September 30, 2024 and December 31, 2023.
The Company's cash is held at major commercial
banks, which may at times exceed the Federal Deposit Insurance Corporation ("FDIC") limit. To date, the Company has not experienced
any losses on its invested cash. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's
financial condition, results of operations, and cash flows.
On September 30, 2024, the Company had approximately
$
4,709,000
of cash in excess of FDIC limits of $
250,000
.
Accounts receivable
The Company adopted ASC 326, "Financial
Instruments - Credit Losses" on January 1, 2023 and recognizes an allowance for losses on accounts receivable in an amount equal
to the estimated probable losses net of recoveries under the current expected credit loss method. The allowance is based on an analysis
of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable
customer accounts considered at risk or uncollectible. The bad debt expense associated with the allowance for doubtful accounts related
to accounts receivable is recognized in general and administrative expenses. As of September 30, 2024 and December 31, 2023, accounts
receivable amounted to
$0
and $
8
, respectively, and for the nine months ended September 30, 2024 and 2023, the Company did not recognize
any bad debt expense.
F-
24
GAXOS.AI INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)
Short-Term Investments
The Company's portfolio of short-term investments
consists of marketable debt securities which are comprised solely of rated U.S. government securities with maturities of more than three
months, but less than one year. The Company classifies these as available-for-sale at purchase date and will reevaluate such designation
at each period end date. The Company may sell these marketable debt securities prior to their stated maturities depending upon changing
liquidity requirements. These debt securities are classified as current assets in the balance sheets and recorded at fair value, with
unrealized gains or losses included in accumulated other comprehensive income (loss) on the balance sheet and as a component of the statements
of comprehensive loss. Gains and losses are recognized when realized. Gains and losses are determined using the specific identification
method and are reported in other income (expense), net in the statements of operations.
An impairment loss may be recognized when the
decline in fair value of the debt securities is determined to be other-than-temporary. The Company evaluates its investments for other-than-temporary
declines in fair value below the cost basis each quarter, or whenever events or changes in circumstances indicate that the cost basis
of the short-term investments may not be recoverable. The evaluation is based on a number of factors, including the length of time and
the extent to which the fair value has been below the cost basis, as well as adverse conditions related specifically to the security,
such as any changes to the credit rating of the security and the intent to sell or whether the Company will more likely than not be required
to sell the security before recovery of its amortized cost basis.
The Company recorded $(
82,486
) and $
79,646
of
unrealized (loss) income on short-term investments as a component of other comprehensive loss for the nine months ended September 30,
2024 and 2023, respectively. During the nine months ended September 30, 2024 and 2023, the Company recognized a gain on sale of short-term
investments of $
121,765
and
$0
, respectively.
Investment in Equity Securities, at Fair
Value
Equity investments are carried at fair value with
unrealized gains or losses which are recorded as net unrealized gain (loss) on equity investments in the accompanying statement of operations
and comprehensive loss. Realized gains and losses are determined on a specific identification basis which is recorded in earnings
or loss as a net realized gain (loss) on equity investments in the statement of operations and comprehensive loss. The Company reviews
investments in equity securities, at fair value, for impairment whenever circumstances and situations change such that there is an indication
that the carrying amounts may not be recovered.
Accounting for Digital Currencies and Other
Digital Assets
The Company accounts for digital currencies and
other digital assets as indefinite-lived intangible assets and accounts for them at historical cost in accordance with ASC 350,
Intangibles - Goodwill
and Other Intangible Assets
. Indefinite-lived intangible assets are not subject to amortization but rather evaluated for impairment
annually and more frequently, if events or circumstances change that indicate that it is more likely than not that the asset is impaired
(i.e., if an impairment indicator exists). As a result, the Company only recognizes decreases in the value of its digital currencies and
other digital assets, and any increase in value will be recognized only upon disposition. The Company plans to dispose of cryptocurrency
received as a form of payment into fiat currency and anticipates ownership of cryptocurrency to be minimal. As of September 30, 2024,
the Company's digital currencies consisted of
52.78
units of Polygon (MATIC), an Ethereum token. As of December 31, 2023, the Company's
digital currencies consisted of
1,553.37
units of Polygon (MATIC), an Ethereum token.
Property and Equipment
Property and equipment are stated at cost and
are depreciated using the straight-line method over their estimated useful lives. Maintenance and repairs are charged to expense as incurred.
When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or
losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets
when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
F-
25
GAXOS.AI INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)
Property and equipment includes capitalized internal-use
software development costs. Costs incurred to develop internal-use software, including game 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, which currently
is three years. 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.
Intangible Assets
Intangible assets, consisting of software licenses
and technology licenses, are carried at cost less accumulated amortization, computed using the straight-line method over the estimated
useful life of
5
years, less any impairment charges.
Stock-based Compensation
Stock-based compensation is accounted for based
on the requirements of ASC 718 –
"Compensation–Stock Compensation
", which requires recognition in the financial
statements of the cost of employee, non-employee and director services received in exchange for an award of equity instruments over the
period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The
ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date
fair value of the award. The Company has elected to account for forfeitures as they occur.
Income Taxes
Deferred income taxes are provided using the liability
method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards,
and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.
When tax returns are filed, it is highly certain
that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about
the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized
in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not
that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions
taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured
as the largest amount of tax benefit that is more than
50
percent likely of being realized upon settlement with the applicable taxing
authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected
as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that
would be payable to the taxing authorities upon examination. Applicable interest and penalties associated with unrecognized tax benefits
are classified as additional income taxes in the statements of operations.
Revenue Recognition
The Company follows Accounting Standards Codification
("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"). This standard establishes a single
comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASC 606 requires an entity
to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures.
In accordance with ASU Topic 606 -
Revenue
from Contracts with Customers
, the Company recognizes revenue in accordance with that core principle by applying the following steps:
Step 1: Identify the contract(s) with
a customer.
Step 2: Identify the performance obligations
in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price
to the performance obligations in the contract.
Step 5: Recognize revenue when (or as)
the entity satisfies a performance obligation.
F-
26
GAXOS.AI INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)
The Company plans to generate revenue from the
following sources:
●
The Company generates revenue from the sale of our in-game items to our customers. Revenue generated from such sales, primarily through the app stores, such as Google Play Store or Apple App Store, is recognized upon delivery of the in-game items to the customer, which is when the Company completes its sole performance obligation. Fees incurred by the Company, such as commissions to the app stores, are recognized in operating expenses.
●
The Company generates revenue from the sale of health coaching packages to its customers. Health coaching packages consist of a series of lab tests and personal health coaching sessions. Revenues generated from such sales are recognized upon the completion of lab testing and the utilization of health coaching sessions, which is when the Company completes its performance obligation. Any fees paid in advance by the customer are reflected as a contract liabilities until such time as the performance obligation is completed. Fees incurred by the Company, such as the lab testing charges, are recognized in operating expenses.
●
The Company plans to generate revenue from advertising fees paid by game advertisers, developers, hardware companies, or other strategic partners to the Company for promotion on our platform. Revenues from these fees will be recognized ratably over the agreed upon advertising service period and upon delivery of agreed upon advertising services, which constitutes satisfaction of the performance obligation.
●
The Company plans to generate royalty revenues when a third party sells one of our NFTs on a third-party platform. We will recognize royalty revenue when it is probable that we will collect the royalty fee owed which is typically when we receive notification from the third-party platform that an NFT has been sold, which constitutes satisfaction of the performance obligation. In the instance where the Company will receive royalty payments when a customer disposes of an in-game NFT in the secondary market on a third-party platform or any other payment that is not in fiat currency, the Company will recognize the revenue in accordance with ASC 606-10-32-21, "
Noncash Consideration"
. The fair value of the non-cash consideration received shall be determined by using the quoted price for such non-cash consideration on the date of the transaction.
Research and Development
Research and development costs incurred in the
development of the Company's products are expensed as incurred and include costs such as labor and outside development costs, software
license fees, materials, and other allocated costs incurred.
Net Loss per Share
The Company computes net loss per share in accordance
with ASC 260-10,
"Earnings Per Share."
The basic net loss per common share is computed by dividing the net loss
by the weighted average number of common shares outstanding. Diluted net loss per share gives effect to all dilutive potential common
shares outstanding during the period using the
"as if converted"
basis.
Pursuant to ASC 260-10-45, basic loss per
common share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock
outstanding for the period presented. Diluted loss per share is computed by dividing net loss attributable to common stockholders by the
weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the
period.
For the three and nine months ended September
30, 2024 and 2023, the following common stock equivalents were excluded from the computation of diluted shares outstanding as they would
have had an anti-dilutive impact on the Company's net loss.
September 30,
2024
2023
Common stock equivalents:
Warrants
2,666,096
11,245
Stock options
64,084
38,333
Total
2,730,180
49,578
Recent Accounting Pronouncements
The Company has implemented all new accounting
pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting
pronouncements that have been issued that might have a material impact on its financial position or results of operations.
F-
27
GAXOS.AI INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)
NOTE 3 –
SHORT-TERM INVESTMENTS AND
INVESTMENT IN EQUITY SECURITIES
Short-Term Investments
On September 30, 2024, the Company's short-term
investments consisted of the following:
Cost
Cumulative
Unrealized
Gain
Fair Value
US Treasury bills
$
1,402,757
$
13,299
$
1,416,056
Total short-term investments
$
1,402,757
$
13,299
$
1,416,056
On December 31, 2023, the Company's short-term
investments consisted of the following:
Cost
Cumulative
Unrealized
Gain
Fair Value
US Treasury bills
$
2,496,904
$
95,785
$
2,592,689
Total short-term investments
$
2,496,904
$
95,785
$
2,592,689
Investment in Equity Securities, at Fair Value
The following table summarizes activity in the
Company's investment in equity securities, at fair value for the periods presented:
Nine Months
Ended
September 30,
Nine Months
Ended
September 30,
2024
2023
Balance, beginning of period
$
-
$
-
Additions
199,998
-
Balance, end of period
$
199,998
$
-
On September 30, 2024, investment in equity securities,
at fair value consisted of
666,660
shares of common equity securities of one entity, Dragon Interactive Corporation. On May 16, 2024,
the Company purchased
666,660
common shares of Dragon Interactive Corporation for $
199,998
.
NOTE 4 –
PROPERTY AND EQUIPMENT
On September 30, 2024 and December 31, 2023,
property and equipment consisted of the following:
Useful life
September 30,
2024
December 31,
2023
Capitalized internal-use software development costs
3
years
$
80,281
$
56,971
Less: accumulated amortization
(
23,901
)
(
4,365
)
$
56,380
$
52,606
During the nine months ended September 30, 2024
and 2023, internal-use software development costs of $
23,310
and $
24,625
have been capitalized into property and equipment and are being
amortized over
36
months, respectively. For the three months ended September 30, 2024 and 2023, amortization of capitalized internal-use
software development costs amounted to $
6,690
and $
684
, respectively. For the nine months ended September 30, 2024 and 2023, amortization
of capitalized internal-use software development costs amounted to $
19,536
and $
684
, respectively.
F-
28
GAXOS.AI INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)
NOTE 5 –
INTANGIBLE ASSET
On September 30, 2024 and December 31, 2023,
intangible asset consisted of the following:
Useful life
September 30,
2024
December 31,
2023
License
5
years
$
150,000
$
-
Less: accumulated amortization
(
17,500
)
-
$
132,500
$
-
On August 29, 2022, the Company entered into
a Software and Patent License Agreement (the "License Agreement") with Columbia University ("Columbia"), whereby
the Company obtained a license from Columbia with respect to software and intellectual property rights and patents. In connection with
the License Agreement, Columbia granted to the Company a royalty-bearing, exclusive, worldwide, non-transferable license under the License
Agreement, to discover, develop, manufacture, have made, use, sell, offer to sell, have sold, import, export, distribute, rent or lease
licensed products and copy, use, modify, and create derivative works from licensed software and technical information during the term
of the License Agreement. On August 9, 2023 and effective August 1, 2023, the Company and Columbia University agreed to the termination
of the License Agreement. Based on management's analysis, the Company determined the Licenses were not commercially viable in the
current competitive landscape. The termination of the Agreement will not have any impact on the Company's future revenues. Accordingly,
as of June 30, 2023, the Company wrote off the remaining unamortized book value of the intangible asset of $
52,363
, and during the three
and nine months ended September 30, 2023, the Company recorded an impairment loss of
$0
and $
52,363
, respectively, which was included
in operating expenses.
On March 4, 2024, the Company entered into a Purchase
Agreement with a third party to acquire certain technology and computer code. The Purchase Agreement grants the Company a perpetual, worldwide,
non-exclusive, non-transferable, royalty free, fully paid license to (a) modify and create derivative works from certain technology and
related codebase including, but not limited to, "Habit-tracking Module," "Administrative Panel," and related computer
code. The aggregate purchase price was $
150,000
and is included in intangible assets on the accompanying balance sheet. The purchase price
of $
150,000
was payable in 4 monthly installments of $
37,500
, beginning on March 15, 2024.
For the three months ended September 30, 2024
and 2023, amortization of intangible assets amounted to $
7,500
and $
6,284
, respectively, and for the nine months ended September 30, 2024
and 2023, amortization of intangible assets amounted to $
17,500
and $
6,284
, respectively, which is based on an estimated useful life of
5
years and includes amortization expense related to the License Agreement prior to the impairment loss as discussed above.
Amortization of the intangible asset attributable
to future periods is as follows:
Year ending September 30:
Amount
2025
$
30,000
2026
30,000
2027
30,000
2028
30,000
2029
12,500
$
132,500
NOTE 6 –
STOCKHOLDERS' EQUITY
Preferred Stock
The Company is authorized to issue
5,000,000
shares
of its $
0.0001
par value preferred stock. The Company's board of directors will have the authority to fix and determine the relative
rights and preferences of preferred shares, as well as the authority to issue such shares, without further stockholder approval. As of
September 30, 2024 and December 31, 2023,
no
preferred shares have been designated and no preferred shares were issued and outstanding.
Common Stock
2023 Stock Repurchase Plan
On March 20, 2023, the Board of Directors of the
Company approved a stock repurchase program authorizing the purchase of up to $
500,000
of the Company's common stock until December
31, 2023 (the "2023 Stock Repurchase Program"). On January 1, 2024, the Board of Directors of the Company approved an extension
of the 2023 Stock Repurchase Program until March 31, 2024. In connection with the 2023 Stock Repurchase Program, from January 1, 2024
to March 31, 2024, the Company purchased and cancelled
6,846
shares of its common stock for $
19,602
, or at an average price of $
2.86
per
share, and during the nine months ended September 30, 2023, the Company purchased and cancelled
105,931
shares of its common stock for
$
49,710
, or at an average price of $
0.469
per share
F-
29
GAXOS.AI INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)
Initial Public Offering
On February 17, 2023, the Company completed the
IPO and sold
140,563
shares of its common stock at a price to the public of $
49.80
per share for gross proceeds of $
7,000,000
. The Company
received net proceeds of $
5,958,470
which is net of offering expenses of $
1,041,530
. Additionally, the Company reclassified deferred offering
costs of $
202,599
which were paid and deferred as of December 31, 2022 as a charge to additional paid in capital as equity issuance costs.
In connection with the IPO, the Company issued
11,245
warrants to the placement agent. The warrants are exercisable at $
54.78
per share
and expire on
February 14, 2028
. The fair value of these warrant of $
3,657,258
was estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted-average assumptions: dividend yield of
0
%; expected volatility of
69.8
%; risk-free interest
rate of
4.03
%; and an estimated holding period of
5
years. These warrants had no financial statement impact as they were considered to
be equity issuance costs.
Capital Raises
March 2024
On March 13, 2024, the Company entered into a
securities purchase agreement (the "March 2024 Purchase Agreement") with an institutional investor ("the "Purchaser")
for the issuance and sale in a private placement (the "March 2024 Private Placement") of aggregate Units consisting of (i)
108,000
shares of the Company's common stock, (ii) series A warrants to purchase up to
628,367
shares of the Company's common
stock (the "Series A Warrants"), and (iii) series B warrants to purchase up to
628,367
shares of the Company's common
stock (the "Series B Warrants" and together with the Series A Warrants, the "March 2024 Common Warrants"). The
purchase price of each Unit consisted of one share of the Company's common stock and associated March 2024 Common Warrants, was
$
5.57
per Unit for aggregate gross proceeds of $
601,560
. Additionally, the Company sold pre-funded warrants to purchase up to
520,367
shares of the Company's common stock (the "Pre-Funded Warrants"). Pre-funded Warrants are a type of warrant that allows
the warrant holder to purchase a specified number of a company's securities at a nominal exercise price. The purchase price of each
Pre-Funded Warrant was $
5.569
for aggregate gross proceeds of $
2,897,924
. In connection with this March 2024 Private Placement, the Company
raised aggregate gross proceeds of $
3,499,484
consisting of $
601,560
from the sales of common stock units and $
2,897,924
from the sale
of pre-funded warrants, and the Company received net proceeds of $
3,056,984
, net of offering costs paid to the placement agent (see below)
of $
382,500
and legal fees of $
60,000
, which were netted against the $
601,560
of gross proceeds from the sale of common stock units for
net proceeds allocated to the sale of common stock units of $
159,060
. The Company is using the net proceeds received from the March 2024
Private Placement for general corporate purposes and working capital.
The March 2024 Common Warrants are exercisable
immediately upon issuance at an exercise price of $
5.50
per share. The Series A Warrants will expire
five and one-half years
from the
date of issuance and the Series B Warrants will expire
twenty-four months
from the date of issuance. The Pre-Funded Warrants are exercisable
immediately upon issuance at a nominal exercise price of $
0.001
and may be exercised at any time until the Pre-Funded Warrants are exercised
in full. A holder of Pre-Funded Warrants or March 2024 Common Warrants (together with its affiliates) may not exercise any portion of
a warrant to the extent that the holder would own more than
4.99
% (or, at the election of the holder
9.99
%) of the Company's outstanding
Common Stock immediately after exercise.
In connection with the March 2024 Private Placement,
the Company entered into a registration rights agreement (the "Registration Rights Agreement"), dated as of March 13, 2024,
with the Purchaser, pursuant to which the Company agreed to prepare and file a registration statement with the Securities and Exchange
Commission (the "
SEC
") registering the resale of the securities issued in the March 2024 Private Placement no later
than 30 days after the date of the Registration Rights Agreement, and to use its best efforts to have the registration statement declared
effective as promptly as practical thereafter, and in any event no later than 60 days following the date of the Registration Rights Agreement
(or 90 days following the date of the Registration Rights Agreement in the event of a "full review" by the SEC).
H.C. Wainwright & Co., LLC ("Wainwright")
acted as the Company's exclusive placement agent in connection with the March 2024 Private Placement, pursuant to that certain engagement
letter, dated as of March 7, 2024 and as amended on March 13, 2024, between the Company and Wainwright (the "Engagement Letter").
Pursuant to the Engagement Letter, the Company paid Wainwright (i) a total cash fee equal to
7.5
% of the aggregate gross proceeds of the
March 2024 Private Placement and (ii) a management fee of
1.0
% of the aggregate gross proceeds of the March 2024 Private Placement. In
addition, the Company agreed to pay Wainwright certain expenses and issued to Wainwright or its designees warrants (the "March 2024
Placement Agent Warrants") to purchase up to an aggregate of
47,128
shares of the Company's common stock at an exercise price
equal to $
6.9625
per share. The March 2024 Placement Agent Warrants are exercisable immediately upon issuance and have a term of exercise
equal to five and a half years from the date of issuance. The fair value of the March 2024 Placement Agent Warrants of $
318,900
was calculated
using the Binomial Lattice valuation model, which is considered an offering cost and is netted against the net proceeds received. In addition,
pursuant to the Engagement Letter, the Company agreed that upon any exercise for cash of any privately placed warrants issued to investors
in an offering covered by the Engagement Letter, the Company shall (i) pay Wainwright a cash fee of
7.5
% and a management fee of
1.0
%
of the aggregate gross exercise paid in cash with respect thereto, and (ii) issue warrants to purchase that number of shares of common
stock equal to
7.5
% of the aggregate number of shares of common stock underlying the warrants that were exercised.
F-
30
GAXOS.AI INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)
The March 2024 Placement Agent Warrants were valued
on the date of issuance using Binomial Lattice valuation model with the following assumptions:
March 15,
2024
Dividend rate
—
%
Term (in years)
5.5
years
Volatility
186.5
%
Risk—free interest rate
4.33
%
The risk-free interest rate is based on the U.S.
Treasury rates at the date of issuance with a maturity date approximately equal to the expected life at issuance date. Volatility is based
on historical and expected future volatility of the Company's common stock. The Company has not historically issued any dividends
and does not expect to in the future.
September 2024
On September 20, 2024, the Company entered into
an inducement offer agreement with the Holder of the March 2024 Common Warrants to immediately exercise for cash an aggregate
1,256,734
of the March 2024 Common Warrants to purchase shares of the Company's common stock at a reduced exercise price of $
2.58
per share
for gross proceeds to the Company of $
3,242,374
and the Company received net proceeds of $
2,834,843
after deducting placement agent
fees of $
376,552
and other offering expenses paid by the Company of $
30,979
. The exercised March 2024 Common Warrants were issued pursuant
to a March 2024 Purchase Agreement dated March 13, 2024 by and between the Company and the Holder. Each March 2024 Common Warrant was
initially exercisable at an original exercise price of $
5.50
per share.
As an inducement to such exercise, the Company
also agreed to issue new unregistered warrants to purchase new Series A common stock purchase warrants (the "New Series A Warrants")
and new Series B common stock purchase warrants (the "New Series B Warrants", and together with the Series A Warrants, the
"New Warrants"), as described below, to purchase an aggregate of up to
2,513,468
shares of the Company's common stock
(the "New Warrant Shares") at an exercise price of $
2.33
per share. The New Series A Warrants to purchase up to
1,256,734
shares of common stock have a term of five and one-half years from the issuance date, and the New Series B Warrants to purchase up to
1,256,734
shares of common stock have a term of twenty-four months from the issuance date.
The Company engaged H.C. Wainwright & Co.,
LLC (the "Placement Agent") to act as its exclusive placement agent in connection with the transactions summarized above and
has agreed to pay the Placement Agent a cash fee equal to
7.5
% of the gross proceeds received from the Holder's exercise of its
Existing Warrants of $
243,178
, as well as a management fee equal to
1.0
% of the gross proceeds from the exercise of the Existing Warrants
of $
32,424
. Additionally, the Company paid the Placement Agent $
85,000
for non-accountable expenses and clearing fees in the amount
of $
15,950
. The Company has also issued to the Placement Agent, or its designees, warrants (the "September 2024 Placement Agent
Warrants") to purchase up to
7.5
% of the aggregate number of shares of common stock underlying the Existing Warrants (or Placement
Agent Warrants to purchase an aggregate of up to
94,255
shares of common stock), which Placement Agent Warrants have the same terms as
the New Series A Warrants except for an exercise price per share equal to
125
% of the exercise price of the New Warrants (or $
3.225
per
share).
The amendment to the March 2024 Common Warrants
on September 20, 2024 to lower the exercise price thereof and issue new warrants, was considered a modification of the March 2024 Common
Warrants under the guidance of ASU 2021-04. The modification is consistent with the "Equity Issuance" classification under
that guidance as the reason for the modification was to induce the holders to cash exercise their warrants, resulting in the exercise
of the March 2024 Common Warrants on September 20, 2024.
On September 20, 2024, in connection with the
inducement offer agreement, with the Holder of the March 2024 Common Warrants, the Holder exercised the March 2024 Common Warrants for
cash at a reduced exercise price of $
2.58
per share resulting in net proceeds to the Company of approximately $
2,834,843
as discussed
above. In connection with such exercise, the Company was to issue up to
1,256,734
Warrant Shares upon the exercise of the March 2024 Comon
Warrants. As of September 30, 2024,
978,000
of the Warrant Shares were held in abeyance and were not reflected as issued and outstanding
common shares on the accompanying consolidated balance sheet, in accordance with the terms of the inducement offer agreement. Pursuant
to the inducement offer agreement, the Company only issued such number of Warrant Shares to the Holder that would not cause the Holder
to exceed the maximum number of Warrant Shares permitted thereunder, as directed by the Holder, with the balance of the Warrant Shares
held in abeyance until notice from the Holder that the balance (or portion thereof) may be issued in compliance with the limitations set
forth in the inducement offer agreement, which abeyance shall be evidenced through the March 2024 Common Warrants which shall be deemed
prepaid thereafter (including the cash payment in full of the exercise price), and exercised pursuant to a Notice of Exercise in the March
2024 Common Warrants (provided no additional exercise price shall be due and payable). As of September 30, 2024, the Company issued
278,734
Warrant Shares to the Holder, and
978,000
Warrant Shares were held in abeyance for future issuance. Subsequent to September 30, 2024,
the
978,000
Warrant Shares held in abeyance were issued (See Note 8).
F-
31
GAXOS.AI INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)
On September 20, 2024, the Company calculated
the total fair value of the consideration for the modification of the March 2024 Common Warrants, which includes the incremental fair
value of the March 2024 Common Warrants (determined by comparing the fair values immediately prior to and immediately after the modification).
The fair values were calculated using the Binomial Lattice valuation model, and the Company determined that the total fair value of the
consideration related to the modification of the March 2024 Common Warrants amounted to approximately $
297,500
, which are considered offering
costs and were netted against the net proceeds received by the warrant exercise under the guidance of ASU 2021-04, resulting in both a
credit and a charge to additional paid-in capital and therefore no net accounting effect.
On September 20, 2024, in connection with the
inducement offer agreement issuance of the New Warrants and the September 2024 Placement Agent Warrants, the Company calculated the fair
value of such warrants using the Binomial option-pricing model, and the Company determined that the aggregate total fair value of the
New Warrants and the September 2024 Placement Agent Warrants amounted to approximately $
5,460,000
, which are considered offering costs
and were netted against the net proceeds received by the warrant exercise under the guidance of ASU 2021-04, resulting in both a credit
and a charge to additional paid-in capital and therefore no net accounting effect.
The fair value of the March 2024 Common Warrants
on the modification date, the fair value of the New Warrants, and the fair value of the September 2024 Placement Agent Warrants were estimated
using the Binomial option-pricing model with the following assumptions:
September 20,
2024
Exercise price
$
2.33
to $
3.225
Term (years)
1.75
to
5.5
Expected stock price volatility
162.4
%
Risk-free rate of interest
3.48
% to
3.55
%
Common Stock Issued for Pre-Funded Warrant
Exercises
During the three months ended June 30, 2024, the
Company issued
103,367
common shares in connection with the exercise of
103,367
pre-funded warrants for net proceeds of $
104
.
During the three months ended September 30, 2024,
the Company issued
417,000
common shares in connection with the exercise of
417,000
pre-funded warrants for net proceeds of $
417
.
Stock Warrants
In connection with the IPO, in February 2023,
the Company issued
11,245
fully vested warrants to the placement agent. The warrants are exercisable at $
54.78
per share and expire on
February 14, 2028
. The warrants were considered equity issuance costs; therefore, there was no financial statement impact for the grant
during the year ended December 31, 2023.
On March 13, 2024, in connection with the March
2024 Private Placement, the Company issued an aggregate of
1,256,734
Common Warrants consisting of (i) the Series A Warrants to purchase
up to
628,367
shares of the Company's common stock, and (iii) the Series B Warrants to purchase up to
628,367
shares of the Company's
common stock. Additionally, the Company sold the Pre-Funded Warrants to purchase up to
520,367
shares of the Company's common stock
(See above). Additionally, in connection with the March 2024 Private Placement, the Company issued
47,128
March 2024 placement agent warrants.
On September 20, 2024, in connection with the
inducement offer agreement discussed above , the Company issued an aggregate of
2,513,468
New Warrants consisting of (i) the Series A
Warrants to purchase up to
1,256,734
shares of the Company's common stock, and (ii) the Series B Warrants to purchase up to
1,256,734
shares of the Company's common stock. Additionally, the Company issued
94,255
September 2024 placement agent warrants.
F-
32
GAXOS.AI INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)
Warrant activity for the nine months ended September
30, 2024 is summarized as follows:
Number of
Warrants
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
(Years)
Aggregate
Intrinsic
Value
Balance Outstanding, December 31, 2023
11,245
$
54.78
4.13
$
-
Granted
4,431,952
3.02
-
-
Exercised
(
1,777,101
)
1.82
-
-
Balance Outstanding, September 30, 2024
2,666,096
$
2.66
3.55
$
4,239,093
Exercisable, September 30, 2024
2,666,096
$
2.66
3.55
$
4,239,093
2022 Equity Incentive Plan
On March 30, 2022, the Company's Board
of Directors authorized and adopted the 2022 Equity Incentive Plan (the "2022 Plan") and reserved an initial
208,333
shares
of common stock for issuance thereunder. The 2022 Plan was approved by shareholders on March 30, 2022. The 2022 Plan's purpose is
to encourage ownership in the Company by employees, officers, directors and consultants whose long-term service the Company considers
essential to its continued progress and, thereby, encourage recipients to act in the stockholders' interest and share in the Company's
success. The 2022 Plan provides for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights ("SARs"),
restricted stock, restricted stock units ("RSUs"), and other stock-based awards. Pursuant to the 2022 Plan, there shall be
annual increase in the number shares reserved under the 2022 Plan on the first day of each calendar year beginning with the first January
1 following the effective date of the 2022 Plan and ending with the last January 1 during the initial ten-year term of the 2022 Plan,
equal to the lesser of (A) five percent (
5
%) of the Shares outstanding (on an as-converted basis, which shall include Shares
issuable upon the exercise or conversion of all outstanding securities or rights convertible into or exercisable for Shares, including
without limitation, preferred stock, warrants and employee options to purchase any Shares) on the final day of the immediately preceding
calendar year and (B) such lesser number of Shares as determined by the Board; provided, that, shares of Common Stock issued under the
2022 Plan with respect to an Exempt Award shall not count against such share limit. Accordingly, in June 2024, the number of shares reserved
under the 2022 Plan was increased by
95,304
to
303,637
reserved shares.
Stock Options
On February 14, 2023, the Company granted aggregate
stock options to purchase
33,333
of the Company's common stock at an exercise price of $
49.80
per share to the Company's chief
executive officer, an executive officer, and employee and consultants pursuant to the 2022 Equity Incentive Plan. The grant date of the
stock options was February 14, 2023 and the options expire on
February 14, 2033
.
The options vest as to (i) 28,333 of such options on
February 14, 2023; and (ii) the remaining 5,000 options vest quarterly (417 each quarter) beginning on May 14, 2023 and each quarter thereafter
through February 14, 2026.
The stock options were valued at $
1,023,290
on the grant date using a Black-Scholes option pricing model which
will be recognized as stock-based compensation expense over the vesting period.
On March 6, 2023, the Company granted stock options
to purchase
5,000
of the Company's common stock at an exercise price of $
49.80
per share to the Company's board of directors
pursuant to the 2022 Equity Incentive Plan. The grant date of the stock options was March 6, 2023 and the options expire on March 6, 2028.
The options vest on the one-year anniversary of the stock option grant on March 6, 2024. The stock options were valued at the grant
date using a Black-Scholes option pricing model which will be recognized as stock-based compensation expense over the vesting period.
The stock options were valued at $
33,972
on the grant date using a Black-Scholes option pricing model which will be recognized as stock-based
compensation expense over the vesting period.
On March 5, 2024, the Company granted stock options
to purchase an aggregate of
6,249
(
2,083
stock options to each director) shares of the Company's common stock at an exercise price
of $
6.00
per share to the Company's board of directors pursuant to the 2022 Equity Incentive Plan. The grant date of the stock options
was March 5, 2024 and the options expire on March 5, 2029. The options vest on the one-year anniversary of the stock option grant on March
5, 2025. The stock options were valued on the grant date at an aggregate fair value of $
33,880
using a Black-Scholes option pricing
model which will be recognized as stock-based compensation expense over the vesting period.
On March 7, 2024, the Company entered into Advisory
Board Agreements (the Advisory Agreements") with three members of the Company's Medical Advisory Board. In connection with
the Advisory Agreements, each medical Board member shall be paid an annual cash fee of $
40,000
paid quarterly, and Company shall grant
each Medical Advisory Board member stock options to purchase
4,167
shares of the Company's common stock. On May 28, 2024, the Company
granted these options for an aggregate of
12,501
stock options at an exercise price of $
3.82
per share to the Company's Advisory
board pursuant to the 2022 Equity Incentive Plan. The grant date of the stock options was May 28, 2024 and the options expire on May 28,
2029. The options vest
25
% immediately and the remainder vest quarterly. The stock options were valued on the grant date at an aggregate
fair value of $
46,124
using a Black-Scholes option pricing model which will be recognized as stock-based professional fees over the vesting
period.
F-
33
GAXOS.AI INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2024
(Unaudited)
On July 17, 2024, the Company granted stock options
to purchase
7,000
shares of the Company's common stock at an exercise price of $
2.15
per share to ta member of the Medical Advisory
Board pursuant to the 2022 Equity Incentive Plan. The grant date of the stock options was July 17, 2024 and the options expire on July
17, 2034. The options vest quarterly (875 each quarter) beginning on October 17, 2024 and each quarter thereafter through October 17,
2026. The stock options were valued at $
14,536
on the grant date using a Black-Scholes option pricing model which will be recognized as
stock-based compensation expense over the vesting period.
The stock options were valued at the grant date
using a Black-Scholes option pricing model with the following assumptions:
Nine Months Ended
September 30,
2024
Nine Months Ended
September 30,
2023
Dividend rate
—%
—%
Term (in years)
3.0
to
6.0
years
3.0
to
6.0
years
Volatility
168.9
to
184.6
%
68.8
% to
71.6
%
Risk—free interest rate
4.07
% to
4.56
%
3.95
% to
4.00
%
The expected terms of the options are based on
evaluations of historical and expected future employee exercise behavior using the simplified method. The risk-free interest rate is based
on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at grant date. Volatility
is based on historical and expected future volatility of the Company's common stock. The Company has not historically issued any
dividends and does not expect to in the future.
During the nine months ended September 30, 2024
and 2023, the Company recognized total stock-based expenses related to stock options of $
84,190
and $
914,426
, respectively, which has
been reflected in general and administrative expenses on the statements of operations and comprehensive loss. As of September 30, 2024,
a balance of $
131,258
remains to be expensed over future vesting periods related to unvested stock options issued for services to be expensed
over a weighted average period of
1.19
years.
Stock option activity during the nine months ended
September 30, 2024 is summarized as follows:
Number of
Options
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life
(Years)
Balance on December 31, 2023
38,334
$
49.80
8.49
Granted
25,750
3.90
-
Balance on September 30, 2024
64,084
$
31.35
8.01
Options exercisable on September 30, 2024
38,960
$
46.11
7.85
Weighted average fair value of options granted during the period
-
$
3.67
-
On September 30, 2024, the aggregate intrinsic
value of options outstanding was $
0
.
NOTE 7 –
COMMITMENTS AND CONTINGENCIES
Employment Agreement
On February 17, 2023, the Company entered into
an executive employment agreement with Vadim Mats, the Company's Chief Executive Officer (CEO) in connection with the Company's
initial public offering (the "
IPO
"). The term of the agreement will continue for one (1) year from the date
of execution and automatically renews for successive one (1) year periods at the end of each term until either party delivers written
notice of their intent not to review at least 90 days prior to the expiration of the then effective term. Pursuant to the agreement, Mr.
Mats shall receive a base salary at the annual rate of $
400,000
payable in equal installments in accordance with the Company's standard
payroll policies. Additionally, on February 14, 2023, the board of directors approved the issuance of stock options, with immediate vesting,
to Mr. Mats to purchase up to
16,667
shares of common stock under the Company's 2022 Equity Incentive Plan (see Note 6). Mr. Mats
shall also be eligible to receive an annual cash bonus in an amount up to 2x his then-current base salary if the Company meets or
exceeds criteria to be adopted by the compensation committee annually.
NOTE 8 –
SUBSEQUENT EVENTS
On September 23, 2024, the Company formed a wholly-owned
subsidiary, RNK Health, a company incorporated under the laws of the State of Delaware as a limited liability company. RNK Health was
formed in order to form a partnership and potential relationship with Nekwellness to engage in the proposed business of marketing certain
products. On October 10, 2024, the Company, RNK Health, and Nekwellness entered into an operating agreement (the "Operating Agreement")
of RNK Health for the regulation and management of the affairs of RNK Health. On October 10, 2024, the Company, the sole member of RNK
Health, admitted Nekwellness as a member of RNK Health and accordingly, Nekwellness was granted a
30
% membership interest in RNK Health,
with the Company reduced to a
70
% membership interest.
Subsequent to September 30, 2024,
978,000
Warrant
Shares held in abeyance were issued.
F-
34
Gaxos.ai Inc.
3,005,642 Shares of Common Stock
PRELIMINARY PROSPECTUS
, 2025
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and
Distribution.
We estimate that expenses in connection with the
distribution described in this registration statement (other than brokerage commissions, discounts or other expenses relating to the sale
of the shares in this offering) will be as set forth below. We will pay all of the expenses with respect to the distribution, and such
amounts, with the exception of the SEC registration fee, are estimates.
SEC expenses
$
927.23
Legal fees and expenses
20,000.00
Accounting fees and expenses
10,000.00
Miscellaneous expenses
2,500.00-
Total offering expenses (other than placement agent's fees)
$
33,427.23
Item 14. Indemnification of Directors and Officers
Our directors and officers are indemnified as
provided by the Delaware General Corporation Law (the "DGCL"), our Certificate of Incorporation and our Bylaws.
Section 102 of the DGCL permits a corporation
to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach
of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional
misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate
law or obtained an improper personal benefit. Our Certificate of Incorporation provides that no director of the Company shall be personally
liable to us or our stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of
law imposing such liability, except to the extent that the DGCL prohibits the elimination or limitation of liability of directors for
breaches of fiduciary duty.
Section 145 of the DGCL provides that a corporation
has the power to indemnify a director, officer, employee, or agent of the corporation, or a person serving at the request of the corporation
for another corporation, partnership, joint venture, trust or other enterprise in related capacities against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with an action, suit
or proceeding to which he was or is a party or is threatened to be made a party to any threatened, ending or completed action, suit or
proceeding by reason of such position, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his conduct was
unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect
to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all
of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
Our Certificate of Incorporation and Bylaws
provide indemnification for our directors and officers to the fullest extent permitted by the DGCL. We will indemnify each person
who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other
than an action by or in the right of us) by reason of the fact that he or she is or was, or has agreed to become, a director or
officer, or is or was serving, or has agreed to serve, at our request as a director, officer, partner, employee or trustee of, or in
a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (all such persons being referred
to as an "Indemnitee"), or by reason of any action alleged to have been taken or omitted in such capacity, against all
expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in
connection with such action, suit or proceeding and any appeal therefrom, if such Indemnitee acted in good faith and in a manner he
or she reasonably believed to be in, or not opposed to, our best interests, and, with respect to any criminal action or proceeding,
he or she had no reasonable cause to believe his or her conduct was unlawful. Our Certificate of Incorporation and Bylaws provide
that we will indemnify any Indemnitee who was or is a party to an action or suit by or in the right of us to procure a judgment in
our favor by reason of the fact that the Indemnitee is or was, or has agreed to become, a director or officer, or is or was serving,
or has agreed to serve, at our request as a director, officer, partner, employee or trustee of, or in a similar capacity with,
another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, against all expenses (including attorneys' fees) and, to the extent permitted by law, amounts paid
in settlement actually and reasonably incurred in connection with such action, suit or proceeding, and any appeal therefrom, if the
Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, except
that no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to
be liable to us, unless a court determines that, despite such adjudication but in view of all of the circumstances, he or she is
entitled to indemnification of such expenses. Notwithstanding the foregoing, to the extent that any Indemnitee has been successful,
on the merits or otherwise, he or she will be indemnified by us against all expenses (including attorneys' fees) actually and
reasonably incurred in connection therewith. Expenses must be advanced to an Indemnitee under certain circumstances.
Certificate of Incorporation
Our Certificate of Incorporation provides that
the Company shall, to the fullest extent permitted by the provisions of Delaware General Corporation Law, indemnify any and all persons
whom it shall have the power to indemnify under such section.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions,
or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in such
Act and is, therefore, unenforceable.
Item 15. Recent Sales of Unregistered Securities
None.
II-
1
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
Exhibit Number
Title of Document
3.1
Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Company's Form S-1/A Filed on February 8, 2023).
3.2
Certificate of Incorporation (Incorporated by reference to Exhibit 3.2 to the Company's Form S-1/A Filed on February 8, 2023).
3.3
Certificate of Amendment to Articles of Incorporation (Incorporated by reference to Exhibit 3.4 to the Company's Annual Report on Form 10-K filed on March 31, 2023.)
3.4
Bylaws (Incorporated by reference to Exhibit 3.3 to the Company's Form S-1/A filed on February 8, 2023).
3.5
Second Amendment to the Certificate of Incorporation of Gaxos.ai Inc. (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on January 10, 2024.)
3.6
Amendment to the Bylaws of Gaxos.ai Inc. (Incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on January 10, 2024.)
3.7
Third Amendment to the Certificate of Incorporation of Gaxos.ai Inc. (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on March 11, 2024.)
4.1
Description of the Registrant's Securities (Incorporated by reference to Exhibit 4.1 to the Company's Form 10-K filed on March 27, 2024).
4.2
Form of Stock Certificate (Incorporated by reference to Exhibit 4.2 to the Company's Form S-1/A filed on February 8, 2023.)
4.3
Form of Representatives Warrant (Incorporated by reference to Exhibit 4.4 to the Company's Form S-1/A filed on February 8, 2023).
4.4
Form of New Series A Warrant (Incorporated by reference to Exhibit 4.1 to the Company's Form 8-K filed on September 23, 2024)
4.5
Form of New Series B Warrant (Incorporated by reference to Exhibit 4.2 to the Company's Form 8-K filed on September 23, 2024)
4.6
Form of Placement Agent Warrant (Incorporated by reference to Exhibit 4.3 to the Company's Form 8-K filed on September 23, 2024)
4.7
Form of Warrant (Incorporated by reference to Exhibit 4.1 to the Company's Form 8-K filed on December 20, 2024)
4.8
Form of Placement Agent Warrant (Incorporated by reference to Exhibit 4.2 to the Company's Form 8-K filed on December 20, 2024)
4.9
Form of Warrant (Incorporated by reference to Exhibit 4.1 to the Company's Form 8-K filed on December 30, 2024)
4.10
Form of Placement Agent Warrant (Incorporated by reference to Exhibit 4.2 to the Company's Form 8-K filed on December 30, 2024)
5.1*
Opinion of Sheppard, Mullin, Richter & Hampton LLP
10.1+
Executive Employment Agreement dated February 17, 2023, by and between the Company and Vadim Mats (Incorporated by reference to Exhibit 10.1 to the Company Current Report on Form 8-K filed on February 17, 2023.)
10.2+
Employment Agreement dated March 23, 2022, by and between the Company and Steven Shorr (Incorporated by reference to Exhibit 10.2 to the Company's Form S-1/A filed on February 8, 2023.)
10.3+
2022 Omnibus Equity Incentive Plan (Incorporated by reference to Exhibit 10.3 to the Company's S-1/A filed on February 8, 2023.)
10.4#
Software and License Agreement dated August 29, 2022, by and between the Company and Columbia University (Incorporated by reference to Exhibit 10.4 to the Company's S-1/A filed on February 8, 2023.)
10.5
Form of Underwriting Agreement (Incorporated by reference to Exhibit 1.1 to the Company's S-1/A filed on February 8, 2023).
10.6
Form of Subscription Agreement (Incorporated by reference to Exhibit 4.3 to the Company's Form S-1/A filed on February 8, 2023.)
10.7
Form of Inducement Letter (Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on September 23, 2024)
10.8
Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on December 20, 2024)
10.9
Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on December 30, 2024)
23.1*
Consent of Salberg & Company PA
23.2*
Consent of D, Brooks and Associates CPA's P.A.
23.3*
Consent of Sheppard, Mullin, Richter & Hampton LLP (included in Exhibit 5.1)
24.1*
Power of Attorney (included on signature pages to the registration statement)
101.INS*
Inline XBRL Instance Document
101.SCH
*
Inline XBRL Taxonomy Extension Schema Document
101.CAL
*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
*
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
107*
Filing Fee Table
*
Filed herewith
+
Executive Compensation Plan or Agreement
#
Portions of this exhibit (indicated by asterisks) have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv).
II-
2
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
1.
To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:
i.
Include
any prospectus required by Section 10(a)(3) of the Securities Act.
ii.
Reflect
in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
iii.
Include
any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material
change to such information in the registration statement;
provided, however
, that paragraphs (1)(i),
(ii) and (iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained
in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to
Rule 424(b) that is part of the registration statement.
2.
That,
for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to securities offered therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering thereof;
3.
To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering;
4.
That,
for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as
part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses
filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.
The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such issue.
II-
3
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement on Form S-1 to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of Roseland, State of New Jersey, on the 23
rd
day of January,
2025.
GAXOS.AI INC.
By:
/s/ Vadim Mats
Vadim Mats
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each
individual whose signature appears below constitutes and appoints Vadim Mats, his/her true and lawful attorney-in-fact and agent with
full power of substitution and re-substitution, for him/her and in his/her name, place and stead, in any and all capacities to sign any
or all amendments (including, without limitation, post-effective amendments) to this Registration Statement, any related Registration
Statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and any or all pre- or post-effective amendments
thereto, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises, as fully for all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming that said attorney-in-fact and agent, or any substitute or substitutes for him, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, as amended, this Registration Statement on Form S-1 has been signed by the following persons in the capacities and on
the dates indicated below.
Signature
Title
Date
/s/ Vadim Mats
Chief Executive Officer and Director
January
23, 2025
Vadim Mats
(Principal Executive Officer)
/s/ Steven Shorr
Chief Financial Officer
January
23, 2025
Steven Shorr
(Principal Financial and Accounting Officer)
/s/ Adam Holzer
Director
January
23, 2025
Adam Holzer
/s/ Alex Kisin
Director
January
23, 2025
Alex Kisin
/s/ Scott Grayson
Director
January
23, 2025
Scott Grayson
II-
4