●

As disclosed in Note 1, the Company effected a 1-for-5 reverse stock split of its Class A and Class B Common Stock, par value $0.0001 per share. The Company’s Class A common stock began trading on a split-adjusted basis on July 6, 2026.

●

On July 1, 2026, we received written notice from the Nasdaq Listing Qualifications Department notifying us that Nasdaq had determined to delist our Class A common stock from The Nasdaq Capital Market as a result of our continued noncompliance with Nasdaq’s minimum bid price requirement. We subsequently requested a hearing before the Nasdaq Hearings Panel to appeal this determination, and a hearing is scheduled for August 13, 2026.

●

Earlier in the year, we received a deficiency letter from the Nasdaq Staff notifying us that we were not in compliance with the requirement to maintain a minimum of $500,000 in net income from continuing operations in the most recently completed fiscal year, or two of the last three fiscal years (the “Net Income Requirement”). Additionally, we did not meet either of the alternative Nasdaq continued listing standards under the Nasdaq Listing Rules, which include (i) a market value of listed securities of at least $35 million or (ii) a minimum stockholders’ equity requirement of at least $2,500,000 (collectively with the Net Income Requirement, the “Nasdaq Requirements”). On July 21, 2026, we received a letter from the Nasdaq Listing Qualifications Department confirming that we had then regained compliance with the minimum bid price requirement. The letter further noted that the hearing on August 13, 2026 will proceed as scheduled due to our continued noncompliance with Nasdaq’s requirements relating to net income, market value of listed securities, and stockholders’ equity.

●

On August 5, 2026, Interactive Films, LLC entered into a Short Drama Production Business Agreement with Suzhou Snail Digital Technology Co., Ltd. for technical development, marketing, and commercial operation services related to the SaltyTV platform, covering the period from August 1, 2026 through July 31, 2027 for a total contract sum of $864,000, payable in four quarterly installments of $216,000 beginning September 30, 2026.

●

On August 5, 2026, Snail Games USA entered into a Game Testing Service Agreement with Suzhou Snail Digital Technology Co., Ltd. for functionality, compatibility, network, compliance, regression, and cross-platform game testing services, covering the period from August 1, 2026 through July 31, 2027 for a total contract sum of $252,000, payable in four quarterly installments of $63,000 beginning September 30, 2026.

●

After the close of the quarter, between July 10 and July 30, 2026, the Company issued an additional 112,341 shares pursuant to its ATM offering for gross proceeds of $582,763. As of July 30, 2026, total current activity under the ATM program yielded cumulative gross proceeds of $4,950,626 through the issuance of 771,770 shares.