Company: MYSEW
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001013762-25-004290
Chunk: 966

Company: Myseum, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 7
Chunk 966
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 for on a straight-line basis over the expected useful life
of the internal-use software development costs and related upgrades and enhancements. 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. Software development costs
incurred during the year ended December 31, 2024 and 2023 were expensed since the Metaverse software development project is in the preliminary
project stage. Such costs are included in research and development costs on the accompanying consolidated statement of operations.

28

Variable interest entities

Pursuant to ASC 810-10-25-22, an entity
is defined as a VIE if it either lacks sufficient equity to finance its activities without additional subordinated financial support,
or it is structured such that the holders of the voting rights do not substantively participate in the gains and losses of the entity.
When determining whether an entity that meets the definition of a business qualifies for a scope exception from applying VIE guidance,
the Company considers whether: (i) it has participated significantly in the design of the entity, (ii) it has provided more than half
of the total financial support to the entity, and (iii) substantially all of the activities of the VIE are conducted on its behalf. A
VIE is consolidated by its primary beneficiary, the party that has the power to direct the activities that most significantly impact
the VIE’s economic performance and has the right to receive benefits or the obligation to absorb losses of the entity that could
be potentially significant to the VIE. The primary beneficiary assessment must be re-evaluated on an ongoing basis.

Based on the Company’s analysis, on February
14, 2023, Metabizz, LLC, a Florida corporation, and Metabizz SAS, a company incorporated under the laws of Columbia (collectively “Metabizz”),
were determined to be VIE entities in accordance with ASC 810-10-25-22 because the equity owners in Metabizz did not have the
characteristics of a controlling financial interest and the initial equity investments in these entities may be or were insufficient
to meet or sustain its operations without additional subordinated financial support from DatChat. The equity owners of Metabizz had only
a nominal equity investment at risk, and the Company absorbed or received a majority of the entity’s expected losses or benefits.
The Company participated significantly in the design of Metabizz. The Company provided working capital advances to Met