[Part I](index=6&type=section&id=Part%20I) [Business](index=6&type=section&id=Item%201.%20Business) DatChat, Inc. is a private messaging, cybersecurity, and social media company focused on user privacy and secure digital content management, while also developing AI-generated mobile game apps and podcasts - The company's core business is a privacy-focused messaging platform, DatChat Messenger, which allows users to delete messages from recipient devices and protects against screenshots[21](index=21&type=chunk)[22](index=22&type=chunk) - DatChat has expanded its business by launching the Myseum social media platform for secure digital content storage and acquiring RPM Interactive, Inc. to enter the AI-generated gaming and podcasting market[20](index=20&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - Following the acquisition of RPM Interactive in October 2024, the company ceased development of its Habytat metaverse platform to refocus resources on AI-driven technologies[20](index=20&type=chunk)[28](index=28&type=chunk) - The company holds **15 issued patents** related to its encryption and digital asset technologies as of March 28, 2024, with these patents set to expire in 2036[41](index=41&type=chunk) - As of March 26, 2025, the company has **10 full-time employees** and utilizes external professionals for various operational tasks[47](index=47&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks due to its limited operating history, lack of revenue, recurring net losses, intense competition, and dependence on third-party platforms - The company has a limited operating history with minimal revenues and significant net losses, reporting a net loss of **$5,025,007 in 2024** and **$8,404,970 in 2023**[51](index=51&type=chunk) - DatChat faces intense competition from large, well-resourced companies such as Apple, Alphabet (Google), Meta (Facebook), and Snap Inc[56](index=56&type=chunk) - The business is heavily reliant on third-party services, including the Apple App Store for distribution and Amazon Web Services (AWS) for its entire computing infrastructure, posing risks from potential disruptions or unfavorable policy changes[57](index=57&type=chunk)[75](index=75&type=chunk) - The company's metaverse strategy through its Habytat platform was unsuccessful, leading to the cessation of its development, highlighting risks associated with investing in new and unproven technologies[98](index=98&type=chunk) - As an "emerging growth company," DatChat is subject to reduced public company reporting requirements, which could make its common stock less attractive to some investors[126](index=126&type=chunk) [Unresolved Staff Comments](index=29&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[142](index=142&type=chunk) [Cybersecurity](index=29&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity program, led by the Chief Technology Officer, employs a multi-faceted approach to manage risks and utilizes third-party service providers and external audits - The cybersecurity team, led by the CTO, uses a multi-pronged approach including an enterprise risk management program, security reviews, vulnerability management, and internal 'red team' simulations to manage threats[143](index=143&type=chunk) - The company supplements its internal security with external audits, a bug bounty program, and a vendor risk management program, also engaging third-party cybersecurity consultants and professional service firms[144](index=144&type=chunk)[145](index=145&type=chunk) [Properties](index=30&type=section&id=Item%202.%20Properties) The company's principal executive office lease terminated on December 31, 2024, and it is currently leasing the space on a month-to-month basis - The company's office lease expired on December 31, 2024, and it is now leasing the space on a month-to-month basis[148](index=148&type=chunk) [Legal Proceedings](index=30&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently aware of any legal proceedings or claims that would have a material adverse effect on its business, financial condition, or operating results - The company is not currently a party to any material legal proceedings[149](index=149&type=chunk) [Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[150](index=150&type=chunk) [Part II](index=31&type=section&id=Part%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=31&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock and Series A Warrants are listed on the Nasdaq Capital Market, with 1,439 shareholders of record as of March 26, 2025, and no cash dividends paid or anticipated - Common stock and Series A Warrants are traded on the Nasdaq Capital Market under symbols **DATS** and **DATSW**[152](index=152&type=chunk) - As of March 26, 2025, there were **1,439 shareholders of record**[153](index=153&type=chunk) - The company has never paid cash dividends and does not intend to in the foreseeable future[154](index=154&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal year 2024, DatChat's net loss decreased to $5.0 million from $8.4 million in 2023, primarily due to a 39.9% reduction in operating expenses, with liquidity bolstered by a January 2025 stock offering Fiscal Year 2024 vs. 2023 Financial Performance | Financial Metric | FY 2024 ($) | FY 2023 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | 436 | 672 | (236) | (35.1%) | | Total Operating Expenses | 5,281,339 | 8,784,703 | (3,503,364) | (39.9%) | | Loss from Operations | (5,280,903) | (8,784,031) | 3,503,128 | 39.9% | | Net Loss | (5,025,007) | (8,404,970) | 3,379,963 | 40.2% | | Net Loss Attributable to Common Shareholders | (4,239,160) | (8,404,970) | 4,165,810 | 49.6% | | Net Loss Per Share (Basic & Diluted) | (1.43) | (4.14) | 2.71 | 65.5% | - The significant decrease in operating expenses was mainly due to a **$2.44 million (51.3%) reduction in compensation expenses** (from lower stock-based compensation and staff cuts), a **$0.26 million (67.0%) decrease in marketing**, and a **$0.49 million (36.5%) drop in R&D costs** after ceasing development of the Metaverse software[184](index=184&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk) - As of December 31, 2024, the company had **$1.2 million in cash and cash equivalents** and **$3.0 million in short-term investments**, with a subsequent stock offering in January 2025 raising net proceeds of **$4.5 million**, which management believes is sufficient to fund operations for the next 12 months[196](index=196&type=chunk)[197](index=197&type=chunk) - Net cash used in operating activities decreased to **$4.4 million in 2024** from **$6.5 million in 2023**[199](index=199&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, DatChat is not required to provide this information - The company is not required to provide this information as it qualifies as a smaller reporting company[208](index=208&type=chunk) [Financial Statements and Supplementary Data](index=40&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section references the consolidated financial statements and related notes, which are included at the end of the Form 10-K report, starting from page F-1 - The company's audited financial statements are located in pages **F-1 through F-22** of the report[209](index=209&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=40&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None reported[210](index=210&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that as of December 31, 2024, the company's disclosure controls and procedures and its internal control over financial reporting were not effective due to identified material weaknesses - Management concluded that disclosure controls and procedures were not effective as of December 31, 2024[211](index=211&type=chunk) - Internal control over financial reporting was also deemed not effective due to material weaknesses[213](index=213&type=chunk) - Identified material weaknesses include: lack of segregation of duties, insufficient levels of management review, and inadequate system/manual controls, primarily due to limited personnel[214](index=214&type=chunk)[219](index=219&type=chunk) [Other Information](index=41&type=section&id=Item%209B.%20Other%20Information) During the last fiscal quarter, no directors or executive officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement in the fourth quarter of 2024[217](index=217&type=chunk) [Part III](index=42&type=section&id=Part%20III) [Directors, Executive Officers and Corporate Governance](index=42&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section provides biographical information for the company's executive officers and directors, detailing the composition of the Board's committees and the adoption of a code of business conduct and an insider trading policy - The executive team includes **Darin Myman (CEO)**, **Peter Shelus (CTO)**, and **Brett Blumberg (CFO)**[222](index=222&type=chunk) - The Board has three independent directors: Wayne D. Linsley, Joseph Nelson, and Carly Luogameno, who comprise the entirety of the Audit, Compensation, and Nominating and Corporate Governance committees[234](index=234&type=chunk)[235](index=235&type=chunk)[236](index=236&type=chunk) - The company has adopted a formal code of business conduct and ethics and an insider trading policy[237](index=237&type=chunk)[238](index=238&type=chunk) [Executive Compensation](index=45&type=section&id=Item%2011.%20Executive%20Compensation) For fiscal year 2024, CEO Darin Myman's total compensation was $750,000, with details on other executive salaries and employment agreements provided Named Executive Officer Compensation (2024) | Name and Principal Position | Year | Salary ($) | Bonus ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | | Darin Myman, CEO | 2024 | 450,000 | 300,000 | 750,000 | | Brett Blumberg, CFO | 2024 | 60,000 | - | 60,000 | | Peter Shelus, CTO | 2024 | 275,000 | - | 275,000 | - CEO Darin Myman's employment agreement provides for a **$450,000 base salary** and a potential annual bonus up to **$350,000**, including severance benefits equal to 24 months of base salary upon certain termination events[248](index=248&type=chunk) - CFO Brett Blumberg's employment agreement provides for an annual base salary of **$60,000**[249](index=249&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=48&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of March 26, 2025, CEO Darin Myman beneficially owned 4.65% of the company's common stock, with all directors and named executive officers as a group owning 7.64% Security Ownership of Management (as of March 26, 2025) | Name | Shares | Percentage | | :--- | :--- | :--- | | Darin Myman (CEO) | 200,000 | 4.65% | | Peter Shelus (CTO) | 100,000 | 2.34% | | All Directors & NEOs as a group (6 persons) | 327,500 | 7.64% | - As of December 31, 2024, there were **485,430 securities** remaining available for future issuance under the company's equity compensation plans[254](index=254&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=49&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company disclosed a related party transaction involving VR Interactive LLC, an entity partially owned by the CEO and CTO, and confirmed the independence of three Board members - On January 10, 2024, VR Interactive LLC, an entity partially owned by the CEO and CTO, purchased **8,000,000 shares** of subsidiary RPM Interactive for **$120,000**, becoming a 25% non-controlling interest holder[258](index=258&type=chunk)[309](index=309&type=chunk) - The Board of Directors has determined that Wayne D. Linsley, Carly Luogameno, and Joseph Nelson are independent directors[262](index=262&type=chunk) [Principal Accountant Fees and Services](index=50&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The company paid its principal accountant, Salberg & Company, P.A., total fees of $102,100 in fiscal year 2024, primarily for audit services, all pre-approved by the audit committee Accountant Fees | Fee Type | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Audit Fees | 91,200 | 78,600 | | Audit Related Fees | 10,900 | – | | Tax Fees | – | – | | All Other Fees | – | – | | **Total** | **102,100** | **78,600** | - All audit and non-audit services provided by the independent registered public accounting firm were pre-approved by the audit committee[266](index=266&type=chunk) [Part IV](index=51&type=section&id=Part%20IV) [Exhibits and Financial Statement Schedules](index=51&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the 10-K report, including references to the consolidated financial statements and notes on omitted schedules - This section provides an index of the financial statements and a list of all exhibits filed with the 10-K report[269](index=269&type=chunk)[273](index=273&type=chunk) [Form 10-K Summary](index=52&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Not applicable[275](index=275&type=chunk)

Core Points - DatChat, Inc. has launched its Myseum Social Media Platform for storing and sharing digital photos, now available for download on Apple iOS and Android devices [1][2] - The company will sponsor and participate in The Photo Managers Conference 2025, scheduled for April 22-26 in San Diego, California [1][3] Company Overview - DatChat, Inc. is a secure messaging and social media company that emphasizes user privacy and control over shared information [5] - The Myseum platform allows users to create a digital legacy, enabling secure storage and sharing of messages, photos, videos, and documents within a private family library [2][5] - The company’s technology includes features that allow users to control message visibility duration and prevent screenshots, enhancing user security [5] Industry Context - The Photo Managers, founded in 2009, is a leader in training professionals to help individuals and families organize, preserve, and share memories [4] - The upcoming conference provides a platform for DatChat to showcase Myseum to a targeted audience of photo professionals and potential users [3][4]

Core Insights - DatChat, Inc. has received a Notice of Allowance for a patent in Mexico, which is expected to be formally issued within 90 days [1] - The patent application is titled "Systems and Methods of Transforming Electronic Content," enhancing DatChat's intellectual property portfolio to a total of 15 patents [2] - The company emphasizes the importance of robust intellectual property as a cornerstone for scaling technology and expanding services within the digital metaverse [2] Company Overview - DatChat, Inc. is a secure messaging and social media company focused on protecting user privacy on personal devices and after content is shared [3] - The DatChat Messenger allows users to control the duration messages can be viewed, prevents screenshots, and hides encrypted photos, providing a secure messaging experience [3] - DatChat's Myseum platform serves as a secure digital library for storing and sharing various digital content, enhancing user privacy and control [3]

Core Viewpoint - DatChat, Inc. is set to launch its Myseum platform, a secure digital content management and storage solution, at the RootsTech 2025 conference, aiming to redefine social media privacy and content preservation [1][2]. Company Overview - DatChat, Inc. is a secure messaging and social media company that focuses on protecting user privacy both on personal devices and after content is shared [5]. - The company holds a robust intellectual property portfolio with 14 patents related to blockchain-based communication systems and privacy technology [3]. Myseum Platform - Myseum is described as a "Forever Digital Shoebox," allowing users to create a digital legacy for sharing photos, videos, and other content securely [2][5]. - The platform utilizes AI technology and proprietary software to enable a multi-tiered social media ecosystem for families and groups [2]. - Myseum aims to provide a highly secure and private family library for storing and sharing digital content [5]. Event Details - The RootsTech 2025 conference will take place from March 6-8, 2025, in Salt Lake City, Utah, with an expected attendance of over 16,000 in-person and over 4.7 million online participants [1][4].

Core Viewpoint - DatChat, Inc. has announced a registered direct offering of 1,200,000 shares of common stock at a price of $4.25 per share, expected to close around January 10, 2025, subject to customary conditions [1][2]. Group 1: Offering Details - The gross proceeds from the offering are anticipated to be approximately $5.1 million before deducting offering expenses [2]. - The offering is being facilitated by The Benchmark Company, LLC, which is acting as the sole placement agent [2]. - The shares are being offered under an effective "shelf" registration statement filed with the SEC on October 28, 2022, and declared effective on December 6, 2022 [3]. Group 2: Use of Proceeds - DatChat intends to utilize the net proceeds from the offering for working capital and general corporate expenses [2]. Group 3: Company Overview - DatChat, Inc. specializes in secure messaging, social media, and metaverse technologies, focusing on user privacy and control over shared information [6]. - The company's technology allows users to manage the visibility duration of their messages and prevents screenshots, enhancing message security [6].

Group 1 - DatChat, Inc. will attend The Benchmark Company's 13th Annual Discovery One-on-One Investor Conference on December 11, 2024, in New York City [1] - CEO Darin Myman will discuss the acquisition of RPM Interactive, Inc. by its subsidiary, Dragon Interact, and provide an update on the Myseum platform [2] - The conference allows emerging growth companies to engage with institutional and individual investors through one-on-one meetings [3] Group 2 - DatChat, Inc. focuses on secure messaging and social media, emphasizing user privacy and control over shared information [5] - The DatChat Messenger allows users to set message visibility duration, prevent screenshots, and manage message deletion, enhancing user security [5]

Financial Performance - Revenue for the three months ended September 30, 2024, was $62, a decrease of 64.6% compared to $175 for the same period in 2023 [157]. - Operating expenses for the three months ended September 30, 2024, decreased to $1,238,246, down 51.3% from $2,542,326 in 2023 [159]. - Compensation and related expenses for the three months ended September 30, 2024, were $461,422, a decrease of 63.0% from $1,247,302 in 2023 [161]. - Marketing and advertising expenses for the three months ended September 30, 2024, were $34,134, down 84.4% from $219,008 in 2023 [163]. - Research and development expenses for the three months ended September 30, 2024, were $363,472, a decrease of 4.4% from $380,017 in 2023 [167]. - Net loss for the three months ended September 30, 2024, was $1,183,458, a decrease of 50.0% from $2,364,580 in 2023 [177]. - Net cash used in operating activities for the nine months ended September 30, 2024, was $3,507,202, a decrease of 32.1% from $5,159,510 in 2023 [185]. - Net cash flow used in operating activities for the nine months ended September 30, 2024 was $3,949,373, an improvement from a net loss of $7,051,024 for the same period in 2023 [186][187]. - The accumulated deficit as of September 30, 2024, was $51,526,948, raising substantial doubt about the company's ability to continue as a going concern [179]. Cash Flow and Investments - Cash and cash equivalents as of September 30, 2024, were $632,497, with short-term investments totaling $3,919,697 [178]. - Cash flows from investing activities provided $1,269,566 in 2024, a decrease from $4,496,890 in 2023 [188][189]. - The company received gross proceeds from the sale of short-term investments of $9,757,175 in 2024, compared to $9,845,000 in 2023 [188][189]. - Net cash provided by financing activities totaled approximately $1,916,771 in 2024, a significant increase from a net cash used of $(398,284) in 2023 [190][191]. - The company raised $559,251 from the sale of common stock and $495,998 from the sale of subsidiary common stock during the nine months ended September 30, 2024 [190]. - The company purchased short-term investments totaling $8,487,609 in 2024, compared to $5,363,163 in 2023 [188][189]. Business Developments - The company currently owns approximately 45.5% of Dragon, the entity that operates the Habytat platform business, following a planned spin-off to create a standalone public company [143]. - The company launched the open mobile metaverse, Habytat 1.0, in May 2023, aiming to democratize access to the metaverse by offering free ownership of virtual land and homes [140]. - The company introduced HabyPets in August 2023, an AI-powered interactive pet experience within the Habytat world, enhancing user engagement [141]. - The company is developing "Myseum," a platform scheduled to launch in the second half of 2024, allowing users to create personal museums for sharing digital media [142]. - The company aims to leverage its patents and develop new technology to enhance user experience in the metaverse, particularly through the Habytat platform [136]. - The company has assembled a team of over twenty game developers and graphic artists to support the development of Habytat 1.0 [140]. - The company plans to utilize the "Nirad" as the official in-world currency of Habytat, which can be earned through participation and used to upgrade properties [138]. Consolidation and Financial Adjustments - The company recorded a gain on initial consolidation of variable interest entities of $42,737 on February 14, 2023, related to Metabizz, LLC and Metabizz SAS [152]. - The company deconsolidated Metabizz, LLC and Metabizz SAS on March 31, 2024, and recorded a gain on deconsolidation of $107 during the nine months ended September 30, 2024 [154]. - The company recorded a research and development expense of $166,667 related to the acquisition of RenAI Software [168]. - The company reported a non-cash research and development expense of $166,667 for the nine months ended September 30, 2024 [186]. - The company experienced a foreign currency exchange loss of $12,965 in 2024 [186]. - The company has not entered into any financial guarantees or derivative contracts that are not reflected in its financial statements [191]. - The company intends to rely on exemptions under the JOBS Act until it no longer qualifies as an "emerging growth company" [194].

AI-generated podcast invites listeners into an engaging, immersive trivia experience all about the first family of American politics – the Trumps. DatChat launches AI-generated podcast Trump Trivia, an engaging immersive trivia experience New Brunswick, NJ, Oct. 31, 2024 (GLOBE NEWSWIRE) -- Dragon Interact, a subsidiary of DatChat, Inc. (Nasdaq: DATS), a developer of AI-driven gaming and media, announced today the launch of Trump Trivia, a unique, AI-generated podcast offering an engaging, immersive trivia ...

Group 1: Acquisition Details - Dragon Interact Inc has acquired 100% ownership of RPM Interactive, Inc through a share exchange transaction involving 3.5 million shares of its common stock [1] - Prior to the acquisition, Dragon Interact had approximately 35,663,326 shares issued and outstanding [1] - Following the acquisition, Dragon Interact plans to change its corporate name to RPM Interactive to reflect its new focus on AI-driven podcast and gaming technologies [1] Group 2: Leadership Changes - Michael Mathews, a tech industry veteran, will become the Chairman of the Board for the newly named RPM Interactive Inc [2] - Mathews has extensive experience, having served as CEO and director of Aspen Group Inc and Interclick, Inc, and brings a proven track record in managing early-stage and growth businesses [2] Group 3: Strategic Vision - The acquisition of RPM Interactive is expected to provide access to unique AI technology that could disrupt trivia gaming, online entertainment, and podcasting industries [3] - RPM Interactive aims to leverage generative AI systems to create interactive and engaging content at scale, focusing on niche audiences with highly engaged viewers and listeners [4] Group 4: Company Background - DatChat, Inc, the parent company of Dragon Interact, specializes in secure messaging, metaverse, and social media, emphasizing user privacy and control over shared information [5]

Incoming Industry Veteran Michael Mathews takes the helm as Chairman with proven record of managing tech businesses New Brunswick, NJ, Oct. 30, 2024 (GLOBE NEWSWIRE) -- Dragon Interact Inc, a subsidiary of DatChat, Inc (NASDAQ: DATS), a secure messaging and social media company, is pleased to announce the acquisition of RPM Interactive, Inc. in a share exchange transaction. Pursuant to the agreement, Dragon Interact acquired 100% ownership of RPM Interactive, including all of its intellectual property, in c ...