NOTE 4 — Segment Information

ASC Topic 280, “Segment Reporting”, establishes standards for companies to report, in their financial statements, information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.

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Management has determined that the Company operates and reports in a single operating segment, which currently focuses on the development of AI-powered software tools. The Company has commenced commercial operations and generates revenue from its AI-powered software services.

The Company’s Chief Operating Decision Maker is the Company’s Chief Executive Officer. The CODM evaluates the performance of the Company's single operating segment and makes decisions regarding the allocation of resources based on net loss before income taxes, which is the sole measure of segment profit (loss) used by the CODM. In assessing segment performance and making resource allocation decisions, the CODM regularly reviews revenue and significant expense categories included in net loss before income taxes. The measure of segment assets is total assets, which is reported in the accompanying balance sheets.

The CODM regularly reviews the following significant expense categories that are provided to the CODM and used in assessing operating performance:

• Software and website development expenses, which represent costs directly attributable to the development of AI-powered software tools;
• Amortization expense related to capitalized assets used in operations;
• Server lease expense which attributable to host the company’s commercial, artificial intelligence-based service (HeadLab) and maintain live product operations for active users.

All other operating expenses that are not individually significant and not regularly reviewed by the CODM are aggregated into “Other Segment Items”. These amounts primarily consist of professional fees and other general and administrative expenses.

The CODM reviews actual results against budget and prior period amounts for these expense categories on a monthly basis to support resource allocation decisions. The Company has disclosed all significant expense categories that are regularly provided to and reviewed by the CODM. No other significant segment expense categories require separate disclosure.

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The CODM reviews the position of total assets as reported in the Company’s balance sheets available with the Company to assess if the Company has sufficient resources available to discharge its liabilities. Additionally, the CODM regularly reviews the intangible assets which consist of the capitalized software development costs incurred to assess whether they remain recoverable and continue to provide expected future economic benefits.