# EDGAR Filing Document

**Accession Number:** 0001724714
**File Stem:** 0001104659-25-092571
**Filing Date:** 2025-9
**Character Count:** 47085
**Document Hash:** a49b616e2ba2f4c552dd4a16506a8755
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-25-092571.hdr.sgml**: 20250923

**ACCESSION NUMBER**: 0001104659-25-092571

**CONFORMED SUBMISSION TYPE**: 1-SA

**PUBLIC DOCUMENT COUNT**: 1

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250923

**DATE AS OF CHANGE**: 20250923

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Gryphon Online Safety, Inc.
- **CENTRAL INDEX KEY:** 0001724714
- **STANDARD INDUSTRIAL CLASSIFICATION:** COMPUTER COMMUNICATIONS EQUIPMENT [3576]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 471246855
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 1-SA
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 24R-00411
- **FILM NUMBER:** 251334555

**BUSINESS ADDRESS:**
- **STREET 1:** 10265 PRAIRIE SPRINGS ROAD
- **CITY:** SAN DIEGO
- **STATE:** CA
- **ZIP:** 92127
- **BUSINESS PHONE:** 858-775-8331

**MAIL ADDRESS:**
- **STREET 1:** 10265 PRAIRIE SPRINGS ROAD
- **CITY:** SAN DIEGO
- **STATE:** CA
- **ZIP:** 92127

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 1-SA**

⌧ **SEMIANNUAL REPORT PURSUANT TO REGULATION A**

**or**

◻ **SPECIAL FINANCIAL REPORT PURSUANT TO REGULATION A**

For the fiscal semiannual period ended: <u>June 30, 2025</u>

**<u>Gryphon Online Safety, Inc.</u>**

(Exact name of issuer as specified in its charter)

<u>Delaware </u> <u>47-1246855</u> <br> State or other jurisdiction of incorporation or organization (I.R.S. Employer Identification No.)

Gryphon Online Safety, Inc., 10265 Prairie Springs Road, San Diego, CA 92127

(Full mailing address of principal executive offices)

(858) 775-8331

(Issuer's telephone number, including area code)

**THIS SEMI-ANNUAL REPORT MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY'S MANAGEMENT. WHEN USED IN THIS REPORT, THE WORDS "ESTIMATE," "PROJECT," "BELIEVE," "ANTICIPATE," "INTEND," "EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE.**

---

| | |
|:---|:---|
| **ITEM 1.** | **MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** |

---

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in this semi-annual report and our annual report filed on Form 1-K on April 30, 2025. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.

The unaudited financial information set forth below with respect to the six-month period ended June 30, 2025 is preliminary and subject to potential adjustments. Adjustments to these financial statements may be identified when a review of our historic financial statements has been completed in conjunction with our year-end audit, which could result in significant differences from this preliminary unaudited financial information, although in the opinion of management all adjustments necessary to make interim results of operations not misleading have been included here. Unless otherwise indicated, the latest results discussed below are as of June 30, 2025.

**Operating Results**

For the six-month period ending June 30, 2025, the Company had total gross revenues of $1,098,384 compared to $920,621 for the six-month period ending June 30, 2024, an increase of 19%. This increase was primarily a result of engineering and consulting fees generated in anticipation of licensing the Company's software to others.

For the six-month period ending June 30, 2025, the Company had net losses of $248,766 compared to net losses of $659,868 for the period ending June 30, 2024, a decrease of 62%. This decrease was primarily the result of increased revenues and decreased spending for sales and marketing to preserve cash. Cash used in operating activities for the six-month period ending June 30, 2025 was $32,586, as compared to $14,293 for the sixth month period ending June 30, 2024, an increase of 128%. This increase was primarily due to increased inventory purchases, as prior years' excess inventory has been depleted.

Cost of revenues consists of material and production costs, freight costs, and software licensing costs. We expect future profit margins will increase when our software licensing sales make up a greater percentage of total sales. Overall profit margins will fluctuate slightly as our product mix changes with the introduction of new products and older products are offered at promotional prices.

The following summarizes the results of our operations for the six-month period ending June 30, 2025 as compared to the six-month period ending June 30, 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Six-month Period Ended** | **Six-month Period Ended** | |
|  | **June 30,** | **June 30,** | |
|  | **2025** | **2024** |<br>**$ Change** |
| Revenues | $1098384 | $920621 | $177763 |
| Cost of revenues | (315091) | (413567) | 98476 |
| &nbsp;&nbsp;&nbsp;Gross profit | 783293 | 507054 | 276239 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 757211 | 874440 | (117229) |
| Operating income (loss) | 26082 | (367386) | 393468 |
| Total other expense | (274848) | (292482) | 17634 |
| Loss before provision for income taxes | (248766) | (659868) | 411102 |
| Provision for income taxes | - | - | - |
| &nbsp;&nbsp;&nbsp;Net loss | $(248766) | $(659868) | $411102 |

---

 ****

***Operating Expenses***

Our total operating expenses for the six-month period ended June 30, 2025 amounted to $757,211 which represents a decrease of $117,229, or 13%, from the expenses for the six-month period ended June 30, 2024. The decrease in operating expenses is primarily due to a decrease in spending in sales and marketing.

***Other Income (expense)***

Total other income (expense) for the six-month period ended June 30, 2025 amounted to a loss of $274,848, which represents a decrease of $17,634 or 6% from the loss for the six-month period ended June 30, 2024. The decrease in loss from other income is due to a decrease in amortization of capitalized software costs, offset by an increase in interest expense.

**Liquidity and Capital Resources**

As of June 30, 2025, the company had $2,462,447 in total assets, including $447,126 in cash and cash equivalents and $1,509,846 in intangible assets, compared to $2,284,592 in total assets, $267,766 in cash and cash equivalents and $1,579,346 in intangible assets as of December 31, 2024.

At the end of the sixth-month period ending June 30, 2025, the Company had $447,126 in cash and cash equivalents. By comparison, for the fiscal year ended December 31, 2024, the Company had $267,766 in cash and cash equivalents, representing a 67% increase. This increase was due to the proceeds from a loan received in June 2025.

As of June 30, 2025, the company had $4,187,195 in total liabilities including $1,510,741 in accounts payable and accrued expenses, $414,036 in deferred revenue, and $111,873 in short term notes payable, compared to $3,820,574 in total liabilities, $1,504,545 in accounts payable and accrued expenses, $447,406 in deferred revenue, and $105,332 in short term notes payable as of December 31, 2024.

To date, our activities have primarily been funded from the sale of preferred stock, long and short-term loans, and revenues generated from our operations. The company has enough capital to last approximately 6 months at its current level of operations and is working to secure additional sources of capital.

**Trends** 

Our efforts for the next twelve months will be focused on the following:

&nbsp;&nbsp;&nbsp;&nbsp;· Launch Gryphon Home containerized network protection solution with Nokia Corteca

&nbsp;&nbsp;&nbsp;&nbsp;· Continued development of software and IP licensing SaaS business

&nbsp;&nbsp;&nbsp;&nbsp;· Expand sales channels for white labeled Gryphon 6E

&nbsp;&nbsp;&nbsp;&nbsp;· Launch containerized software with other partners, currently in progress

Our current cash reserves will allow us to make progress on accomplishing these objectives. We will need further capital to fully implement them.

---

| | |
|:---|:---|
| **ITEM 2.** | **OTHER INFORMATION** |

---

None.

**Gryphon Online Safety, Inc.**

**Balance Sheets**

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025 (unaudited)** | **December 31, 2024** |
| Assets |  |  |
| Current assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $447126 | $267766 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts Receivable, net | 62599 | 65017 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory, net | 326055 | 185986 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 10500 | 3139 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits | 3344 | 50891 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other receivables | 102977 | 132447 |
| Total current assets | 952601 | 705246 |
| Intangible assets, net | 1509846 | 1579346 |
| Total assets | $2462447 | $2284592 |
| Liabilities and Stockholders' Equity |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | $1510741 | $1504545 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest - long term notes |  | 3650 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue and customer deposits | 414036 | 447406 |
| &nbsp;&nbsp;&nbsp;&nbsp;Short term notes payable | 111873 | 105332 |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible equity instruments, net of discount | 517289 | 517289 |
| Total current liabilities | 2553939 | 2578222 |
| Long Term notes payable, net of issuance costs | 838068 | 500000 |
| SAFE Notes, net of discount | 795188 | 742352 |
| Total liabilities | 4187195 | 3820574 |
| Commitments and contingencies |  |  |
| Stockholders' equity |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Series Seed Preferred stock, 9,136,468 shares issued and outstanding at June 30, 2025 and December 31, 2024 | 914 | 914 |
| &nbsp;&nbsp;&nbsp;&nbsp;Series A-1 Preferred stock, 5,616,525 shares issued and and outstanding at June 30, 2025 and December 31, 2024 | 562 | 562 |
| &nbsp;&nbsp;&nbsp;&nbsp;Series A-2 Preferred stock, 454,544 shares issued and outstanding at June 30, 2025 and December 31, 2024 | 45 | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, 10,756,391 shares issued and outstanding at June 30, 2025 and December 31, 2024 | 1076 | 1076 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 11137473 | 11077473 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (12864818) | (12616052) |
| Total stockholders' equity | (1724748) | (1535982) |
| Total liabilities and stockholders' equity | $2462447 | $2284592 |

---

See accompanying notes

**Gryphon Online Safety, Inc.**

**Statements of Operations**

(unaudited)

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2025** | **2024** |
| Net revenue |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Product | $350382 | $427616 |
| &nbsp;&nbsp;&nbsp;&nbsp;Service and other | 748002 | 493005 |
| Total net revenue | 1098384 | 920621 |
| Cost of goods sold | (315091) | (413567) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 783293 | 507054 |
| Operating expenses |  |  |
| Operations | 196603 | 166493 |
| Sales and marketing | 222108 | 365407 |
| General and administrative | 145223 | 163253 |
| Research and development | 193277 | 179287 |
| Total operating expenses | 757211 | 874440 |
| Income (loss) from operations | 26082 | (367386) |
| Other income (expense) |  |  |
| Interest expense | (19848) | (11982) |
| Interest income |  |  |
| Amortization | (255000) | (280500) |
| Total other income (expense) | (274848) | (292482) |
| Net loss before income tax | (248766) | (659868) |
| Provision for income tax |  |  |
| Net loss | $(248766) | $(659868) |

---

See accompanying notes

**Gryphon Online Safety, Inc.**

**Statements of Cash Flows**

(unaudited)

---

| | | |
|:---|:---|:---|
|  | **For the six months ended June 30,** | **For the six months ended June 30,** |
|  | **2025** | **2024** |
| Cash flows from operating activities |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(248766) | $(659868) |
| Adjustments to reconcile net loss to net cash |  |  |
| used by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Amortization | 255000 | 280500 |
| &nbsp;&nbsp;&nbsp;Stock based compensation | 60000 | 60000 |
| &nbsp;&nbsp;&nbsp;Currency exchange gain (loss) | 1044 | 118 |
| &nbsp;&nbsp;&nbsp;Allowance for inventory loss |  | (147344) |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 2418 | (6698) |
| &nbsp;&nbsp;&nbsp;Inventory | (140070) | 205838 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | (7361) | (6956) |
| &nbsp;&nbsp;&nbsp;Deposits | 47547 | 18760 |
| &nbsp;&nbsp;&nbsp;Other receivables | 28426 | 44179 |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 6196 | 252595 |
| &nbsp;&nbsp;&nbsp;Accrued interest | (3650) | (3343) |
| &nbsp;&nbsp;&nbsp;Deferred revenue and customer deposits | (33370) | (52074) |
| Net cash used by operating activities | (32586) | (14293) |
| Cash flows from investing activities |  |  |
| &nbsp;&nbsp;&nbsp;Payments for the purchase of intangible assets | (185500) | (146000) |
| Net cash used by investing activities | (185500) | (146000) |
| Cash flows from financing activities |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of short term notes payable | 127460 | 60000 |
| &nbsp;&nbsp;&nbsp;Repayment of short term notes payable | (120920) | (60715) |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of long term notes payable | 350000 |  |
| &nbsp;&nbsp;&nbsp;Payment of issuance costs for long term notes payable | (7212) |  |
| &nbsp;&nbsp;&nbsp;Repayment of long term notes payable | (4718) |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of SAFE notes | 57120 | 168365 |
| &nbsp;&nbsp;&nbsp;Payment of issuance costs for SAFE notes | (4284) | (12627) |
| Net cash provided by financing activities | 397446 | 155023 |
| &nbsp;&nbsp;&nbsp;Net increase (decrease) in cash and cash equivalents | 179360 | (5270) |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents, beginning of period | 267766 | 82149 |
| Cash and cash equivalents, end of period | $447126 | $76879 |
| **Supplemental Cash Flow Information:** |  |  |
| Cash paid for interest | $23498 | $15326 |
| Cash paid for taxes | $- | $- |

---

See accompanying notes

**Gryphon Online Safety, Inc.**

**Statements of Changes in Stockholders' Equity**

(unaudited)

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series Seed Preferred Stock** | **Series Seed Preferred Stock** | **Series A-1 Preferred Stock** | **Series A-1 Preferred Stock** | **Series A-2 Preferred Stock** | **Series A-2 Preferred Stock** | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** |<br>**Additional**<br>**Paid-In Capital** |<br>**Accumulated**<br>**Deficit** | **Total**<br>**Stockholders'**<br>**Equity** |
| **Balance on December 31, 2023** | 9136468 | $914 | 5616525 | $562 | 454544 | $45 | 10756391 | $1076 | $10957473 | $(12042100) | $(1082030) |
| Stock based compensation |  |  |  |  |  |  |  |  | 60000 |  | 60000 |
| Net Loss |  |  |  |  |  |  |  |  |  | (659868) | (659868) |
| **Balance on June 30, 2024** | 9136468 | 914 | 5616525 | 562 | 454544 | 45 | 10756391 | 1076 | 11017473 | (12701968) | (1681898) |
| Stock based compensation |  |  |  |  |  |  |  |  | 60000 |  | 60000 |
| Prior period adjustment |  |  |  |  |  |  |  |  |  | (25000) | (25000) |
| Net Loss |  |  |  |  |  |  |  |  |  | 110916 | 110916 |
| **Balance on December 31, 2024** | 9136468 | 914 | 5616525 | 562 | 454544 | 45 | 10756391 | 1076 | 11077473 | (12616052) | (1535982) |
| Stock based compensation |  |  |  |  |  |  |  |  | 60000 |  | 60000 |
| Net Loss |  |  |  |  |  |  |  |  |  | (248766) | (248766) |
| **Balance on June 30, 2025** | 9136468 | $914 | 5616525 | $562 | 454544 | $45 | 10756391 | $1076 | $11137473 | $(12864818) | $(1724748) |

---

See accompanying notes

**Gryphon Online Safety, Inc.**

NOTES TO THE FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;(unaudited)

**NOTE 1 – DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

<u>Description of Business</u>

Gryphon Online Safety, Inc. ("the Company") is a Delaware corporation headquartered in San Diego, California, that provides WiFi routers and software which utilizes artificial intelligence based learning to make the internet a safer place for children, and all connected devices. The router comes with a mobile application for real time management of all connected devices and allows collaboration with others. The Company has also begun licensing its software for use in hardware sold by others.

<u>Basis of Presentation</u>

The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are normal and recurring in nature. The Company's fiscal year-end is December 31.

<u>Use of Estimates</u>

The preparation of financial statements in accordance with GAAP requires management to make certain judgments, estimates and assumptions that affect the amounts reported in the financial statements and the disclosures made in the accompanying notes. Despite the Company's intention to establish accurate estimates and use reasonable assumptions, actual results may differ from the estimates.

<u>Revenue Recognition and Deferred Revenue</u>

The Company accounts for revenue arising from contracts with customers pursuant to ASC Topic 606, which outlines the following five-step process for revenue recognition:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Identification of the contract with a customer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Identification of the performance obligations in the contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Determination of the transaction price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Allocation of the transaction price to the performance obligations
in the contract; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Recognition of revenue when, or as, the Company satisfies the
performance obligations.

The Company derives revenue from the sale of its WiFi routers and licenses to use its security software. The Company enters into contracts with customers that include promises to transfer products and services, which are generally distinct and can be accounted for as separate performance obligations. Revenue is recognized when the promised goods or services are transferred to the customer, in amounts that reflect the consideration allocated to the various performance obligations. Certain products are sold with a software license included. The revenue component related to hardware is recognized when the product is shipped to the customer. Revenue attributable to the use of the security software is deferred and recognized on a monthly basis as the performance obligation is satisfied. Amounts received for prepayments of additional terms of use of the security software and for extended warranty services are recorded as deferred revenue and recognized as revenue on a monthly basis over the term of the contract. Amounts received for software engineering services are recognized as revenue as the costs of generating the revenue are incurred. Amounts for software licensing to other hardware providers is recognized monthly, based on the number of units subscribed to use the software.

**Gryphon Online Safety, Inc.**

NOTES TO THE FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;(unaudited)

<u>Freight and Shipping Costs</u>

Freight and shipping costs are expensed as incurred.

<u>Inventory</u>

Inventory is stated at the lower of cost or net realizable value and is accounted for using the first-in-first-out method ("FIFO"). The Company analyzes inventory for any potential obsolescence or shrinkage, and records impairment and obsolescence reserves against inventory as deemed necessary. At June 30, 2025 and December 31, 2024, the Company determined that allowances of $50,000 and $50,000, respectively were necessary.

Returns are recognized on the date the returned inventory is received by the Company or its sales channel partners.

At June 30, 2025 and December 31, 2024, inventory consisted of completed hardware units.

<u>Intangibles</u>

Intangible assets purchased or developed by the Company are recorded at cost. Amortization is recognized over the estimated useful life of the asset using the straight-line method for financial statement purposes. The Company reviews the recoverability of intangible assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. No impairment was considered necessary at June 30, 2025 or December 31, 2024.

Costs for internally developed software to be marketed to outside users are recorded pursuant to ASC Section 985 *Software*. Research and development costs prior to attaining 'technological feasibility' are expensed as incurred. Costs incurred thereafter to develop final products are capitalized and amortized over an estimated useful life of the asset using the straight-line method for financial statement purposes. The Company reviews the recoverability of internally-developed software assets, including the useful lives, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. No impairment was considered necessary at June 30, 2025 or December 31, 2024.

<u>Research and Development Costs</u>

Research and development costs, including salaries, research material, and administrative costs are expensed as incurred. During the six months ended June 30, 2025 and 2024, the Company recognized $193,277 and $179,287 in research and development costs, respectively.

**Gryphon Online Safety, Inc.**

NOTES TO THE FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;(unaudited)

<u>Advertising costs</u>

The Company's advertising costs are expensed as incurred. During the six months ended June 30, 2025 and 2024, the Company recognized $222,108 and $365,407 in advertising costs, respectively.

<u>Income Taxes</u>

Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax basis of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled as prescribed in Financial Accounting Standards Board (FASB) ASC 740. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

Current year taxable income (loss) varies from income (loss) before current year tax expense primarily due to the method of revenue recognition and the use of accelerated amortization for tax reporting purposes.

<u>Cash and Cash Equivalents</u>

The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. At June 30, 2025 and December 31, 2024, the Company had no items, other than bank deposits, that would be considered cash equivalents. The Company maintains its cash in bank deposit accounts, that may at times, exceed federal insured limits.

<u>Accounts Receivable and Allowance for Uncollectible Accounts</u>

Accounts receivable are recorded at the amount the Company expects to collect. The Company recognizes an allowance for losses on accounts receivable deemed to be uncollectible, in accordance with ASU 2016-13, *Measurement of Credit Losses on Financial Instruments*. The allowance is based on an analysis of historical bad debt experience as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. The Company also considers any changes to the financial condition of its customers and any other external market factors that could impact the collectability of the receivables in the determination of the allowance for uncollectible accounts. Based on management's assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and credit to the allowance. At June 30, 2025 and December 31, 2024, the Company determined that no allowances were necessary.

**Gryphon Online Safety, Inc.**

NOTES TO THE FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;(unaudited)

<u>Stock-Based Compensation</u>

The Company accounts for stock-based compensation issued to employees in accordance with FASB ASC Topic 718 *Compensation – Stock Compensation.* Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense ratably over the requisite service period, which is generally the option vesting period.

<u>Concentrations</u>

Approximately 28% and 59% of revenue for the six-month periods ended June 30, 2025 and 2024 respectively was generated through one online seller. The loss of the ability to sell the Company's products via this online seller would cause significant negative impact on the Company's operations. Additionally, one software licensee represents 30% of revenue for the six months ended June 30, 2025. Material changes to this license agreement would have a significant negative impact on the Company's operations.

<u>SAFE Notes</u>

The Company began issuing Simple Agreement for Future Equity ("SAFE") notes to investors during the year ended December 31, 2023. The SAFE notes provide the investors the right to certain shares of the Company's capital stock upon a future equity financing. The SAFE notes include a provision allowing for the investors to receive a portion of the proceeds upon a change of control equal to the greater of their investment amount or the amount payable based upon a number of shares of common stock equal to the investment amount divided by the liquidity price. The SAFE notes are recorded as a long-term liability at their estimated fair value.

<u>Recent Accounting Pronouncements</u>

No recently issued accounting pronouncements are expected to have a significant impact on the Company's financial statements.

<u>Subsequent Events</u>

The Company has evaluated subsequent events through September 19, 2025, the date these financial statements were available to be issued. Subsequent to June 30, 2025, there are no events that require disclosure.

**Gryphon Online Safety, Inc.**

NOTES TO THE FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;(unaudited)

**NOTE 2 – FAIR VALUE MEASUREMENTS**

Financial Accounting Standards Board ("FASB") guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:

*Level 1* - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

*Level 2* - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).

*Level 3* - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The carrying amounts reported in the balance sheets approximate their fair value. Fair value of stock options issued during the six-month period ended June 30, 2025 and the year ended December 31, 2024 were determined using level 3 inputs.

**NOTE 3 – INTANGIBLE ASSETS (NET)**

Intangible assets consist of the following:

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | December 31, 2024 |
| Software | $4538737 | $4353237 |
| Other Intangible Assets | 447 | 447 |
|  | 4539184 | 4353684 |
| Accumulated Amortization | (3029338) | (2774338) |
|  | $1509846 | $1579346 |

---

Amortization expense for the six-month periods ended June 30, 2025 and 2024, was $255,000 and $280,500, respectively.

**NOTE 4 – OTHER RECEIVABLES**

Other Receivables consist of the following:

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | December 31, 2024 |
| Sales channel partner holdbacks | $97097 | $126460 |
| Other | 5880 | 5987 |
|  | $102977 | $132447 |

---

**Gryphon Online Safety, Inc.**

NOTES TO THE FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;(unaudited)

Sales channel partner holdbacks are an accumulation of payments from customers that have not yet transferred to the Company's bank account.

**NOTE 5 – SHORT TERM AND LONG TERM DEBT**

*SHORT TERM DEBT*

 

In April 2025, the Company received $80,000 of proceeds from a loan from a member of the company's Board of Directors. The loan accrues interest at a rate of 15% per annum and matures in April 2026. During the six months ended June 30, 2025, the Company incurred $1,926 of interest expense on this short-term loan.

In March 2025, the Company received $47,460 of proceeds from an advance against future receivables from a payment processing vendor to provide working capital. The fixed fee for the advance was $5,460. Payments approximating 15% of sales through this channel are due periodically until the advance is repaid.

In July 2024, the Company received $150,000 of proceeds from a loan from an individual. The loan accrues interest at a rate of 12% per annum and matures in July 2025. During the six months ended June 30, 2025, the Company incurred $3,375 of interest expense on this short-term loan.

In July 2024, the Company received $39,600 of proceeds from an advance against future receivables from a payment processing vendor to provide working capital. The fixed fee for the advance was $3,600. Payments approximating 17% of sales through this channel are due periodically until the advance was repaid in March 2025.

*LONG TERM DEBT*

In June 2025, the Company received $350,000 of proceeds from an advance against future receivables from an investment entity to provide working capital. Payments of $27,884 are due monthly through September 2026.

The Company received proceeds from an SBA loan totaling $500,000. The SBA loan is secured by substantially all of the Company's assets and accrues interest at 3.75% per annum. The loan matures in June 2050. During the six months ended June 30, 2025, the Company incurred $9,087 of interest expense on this long-term loan.

Following is a summary of short-term and long-term minimum debt payments required over the next six months of 2025 and the next 5 years:

---

| | |
|:---|:---|
| 2025 | $419769 |
| 2026 | 61466 |
| 2027 | 11904 |
| 2028 | 12309 |
| 2029 | 12828 |
| 2030 | 13317 |
| Thereafter | 425561 |
|  | $957154 |

---

**Gryphon Online Safety, Inc.**

NOTES TO THE FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;(unaudited)

**NOTE 6 – CONVERTIBLE EQUITY INSTRUMENTS**

The Company received $517,289 of proceeds from the issuance of convertible equity instruments that matured in December 2023. These instruments do not bear interest and may convert to 419,502 shares of preferred stock upon the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Upon the Company receiving cash of a specified amount ($2,000,000 – $5,000,000)
for the sale of the Company's shares ("Qualified Financing"), the purchase amount will be automatically converted into
shares of Company Series A preferred stock at a price of $1.2331 per share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Holders may elect to convert outstanding principal into a number of common shares
of the Company at a price equal to the quotient of the valuation cap and the fully diluted capitalization of the Company, as defined in
the agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Upon maturity, outstanding principal must be converted into a number of common
shares of the Company at a price equal to the quotient of the valuation cap and the fully diluted capitalization of the Company, as defined
in the agreement.

**NOTE 7 – SAFE NOTES**

The Company began issuing Simple Agreement for Future Equity ("SAFE") notes to investors during the year ended December 31, 2023, receiving $872,015 in proceeds from the sale of these notes through June 30, 2025. These notes do not bear interest and will convert to shares of Company stock upon the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Upon the Company completing an Equity Financing, at which time the SAFE will automatically
convert into shares of Company preferred stock at a price defined in the agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Upon a Liquidity Event, SAFE holders will receive the greater of cash equal to
the purchase amount or shares of common stock equal to the purchase amount divided by the liquidity price, as defined in the agreement.

The Company incurred $76,827 of costs associated with the issue of these notes.

**NOTE 8 - PREFERRED STOCK**

The Company has 19,137,353 $0.0001 par value, shares of Preferred Stock authorized at June 30, 2025 and December 31, 2024. At June 30, 2025 and December 31, 2024, there were issued and outstanding preferred shares of 15,207,537.

**Gryphon Online Safety, Inc.**

NOTES TO THE FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;(unaudited)

At June 30, 2025 and December 31, 2024, the authorized Preferred Stock consists of 9,582,809 shares designated Series Seed, 9,100,000 shares designated Series A-1 and 454,544 shares designated Series A-2.

The holders of all classes of Preferred Stock have the following rights and preferences: The holders of Preferred Stock are entitled to vote, together with the holders of common stock as a single class, on all matters submitted to stockholders for a vote and have the right to vote the number of shares equal to the number of shares of common stock into which each share of Preferred Stock could convert on the record date for determination of stockholders entitled to vote. Holders of Series A Preferred Stock are entitled to dividends before any other Preferred Stock or Common Stock holders. Preferred stock maintains liquidation preferences at the original issue price, plus any declared but unpaid dividends. Preferred stock is convertible at any time into common stock at the conversion price. Preferred Stock holders owning 300,000 or more shares have the right of first refusal to purchase newly issued securities, in amounts sufficient to maintain their current overall ownership percentage.

**NOTE 9 – COMMON STOCK**

The Company has 40,000,000 $0.0001 par value shares of common stock authorized at June 30, 2025 and December 31, 2024.

During the six months ended June 30, 2024, the Company issued 152,500 stock options to employees for services. In addition, stock options issued in prior periods continued to vest during the current period. The Company recognized $60,000 of stock compensation expense related to stock options during the six months ended June 30, 2025. During the six months ended June 30, 2024, the Company recognized $60,000 of stock compensation expense.

A summary of option activity for the periods is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  |<br>Share Equivalents | Weighted Average<br>Exercise Price | Weighted Average<br>Remaining Term |
| Outstanding December 31, 2023 | 1772500 | $0.33 | 7.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted | 152500 | 0.47 | 10.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercised |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Expired/Forfeited | - | - | - |
| Outstanding June 30, 2024 | 1925000 | 0.34 | 6.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted | 24000 | 0.47 | 10.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercised |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Expired/Forfeited | - | - | - |
| Outstanding December 31, 2024 | 1949000 | 0.34 | 6.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercised |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Expired/Forfeited | - | - | - |
| Outstanding June 30, 2025 | 1949000 | $0.34 | 5.8 |

---

**Gryphon Online Safety, Inc.**

NOTES TO THE FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;(unaudited)

Options exercisable at June 30, 2025 and December 31, 2024 are 1,598,833 and 1,478,958, respectively.

The options vest ratably over periods of one to four years. At June 30, 2025, there are 350,167 unvested stock options outstanding and approximately $40,000 of unrecognized stock-based compensation expense.

The Company estimates the fair value of stock options using the Black-Scholes option pricing model. The range of input assumptions used by the Company were as follows:

---

| | | |
|:---|:---|:---|
|  | June 30, | June 30, |
|  | 2025 | 2024 |
| Expected life (years) | n/a | 1-4 |
| Risk-free interest rate | n/a | 4.25% |
| Expected volatility | n/a | 50% |
| Annual dividend yield | n/a | 0% |

---

**NOTE 10 – WARRANTS**

A summary of warrant activity for the periods is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | Warrants - Common<br>Share Equivalents | Weighted Average<br>Exercise Price | Weighted Average<br>Remaining Life |
| Outstanding December 31, 2023 | 446341 | $0.71 | 3.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercised |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Expired/Forfeited | - | - | - |
| Outstanding June 30, 2024 | 446341 | 0.71 | 3.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercised |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Expired/Forfeited | - | - | - |
| Outstanding December 31, 2024 | 446341 | 0.71 | 2.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercised |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Expired/Forfeited | - | - | - |
| Outstanding June 30, 2025 | 446341 | $0.71 | 2.1 |

---

These warrants were vested in full upon issue, valued using the Black Scholes Merton pricing model and stock compensation expense was recognized in the year of issue.

**Gryphon Online Safety, Inc.**

NOTES TO THE FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;(unaudited)

**NOTE 11 – INCOME TAXES**

Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences relate primarily to amortizable assets using accelerated amortization methods for income tax purposes, stock-based compensation expense and net operating loss carryforwards. As of June 30, 2025 and December 31, 2024, the Company had net deferred tax assets before valuation allowance of $3,761,597 and $3,716,533, respectively. As of June 30, 2025, and December 31, 2024, the Company had net deferred tax liabilities before valuation allowance of $0. The following table presents the deferred tax assets and liabilities by source:

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | December 31, 2024 |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net operating loss carryforwards | $3730797 | $3658655 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue timing difference | (36843) | (27165) |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 17400 | 34800 |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development tax credit carryforwards | 50243 | 50243 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax assets | 3761597 | 3716533 |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax liabilities |  |  |
| Valuation allowance | (3761597) | (3716533) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net deferred tax assets | $- | $- |

---

The Company assessed the need for a valuation allowance against net deferred tax assets and determined a full valuation allowance is appropriate, due to taxable losses for the six months ended June 30, 2025 and the year ended December 31, 2024 and no history of generating taxable income. Therefore, valuation allowances of $3,761,597 and $3,716,533 were recorded as of June 30, 2025 and December 31, 2024, respectively. Deferred tax assets and liabilities were calculated using the Company's combined effective tax rate, which is estimated to be 29%. The effective rate is reduced to 0% due to the full valuation allowance on the net deferred tax assets.

**Gryphon Online Safety, Inc.**

NOTES TO THE FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;(unaudited)

**NOTE 12 – COMMITMENTS AND CONTINGENCIES**

The Company may be subject to pending legal proceedings and regulatory actions in the ordinary course of business. In December 2019, the Company was sued for patent infringement. One of the asserted patents was the subject of inter partes review at the Patent Trial and Appeal Board (PTAB) and as of December 2022, the PTAB had determined all but one of the claims to be invalid. As of February 2024, the case was closed without prejudice. The Company anticipates that there will be no financial impact arising out of this matter.

**NOTE 13 - GOING CONCERN**

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business.

The Company has yet to achieve positive cash flow from operations and has incurred losses from inception of $12,864,818 which raises substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon management's ability to raise additional capital from the issuance of debt or the sale of stock, its ability to commence profitable sales of its flagship product and licensing agreements, and its ability to generate positive operational cash flow. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to continue as a going concern.

**NOTE 14 – RELATED PARTIES**

During the six months ended June 30, 2024, the Company issued options for the purchase of common stock of 105,000 to members of the Company's Board of Directors. In addition, for the six months ended June 30, 2025 and 2024, the Company paid $1,576 and $6,620 respectively for legal counsel to a firm in which one of the directors is a partner.

In April 2025, the Company received $80,000 of proceeds from a loan from a member of the company's Board of Directors. The loan accrues interest at a rate of 15% per annum and matures in April 2026.

---

| | |
|:---|:---|
| **ITEM 4.** | **EXHIBITS** |

---

The documents listed in the Exhibit Index of this report are incorporated by reference or are filed with this report, in each case as indicated below.

---

| | |
|:---|:---|
| **Exhibit <br> No.** | **Description** |
| [2.1](https://www.sec.gov/Archives/edgar/data/1724714/000110465921036326/tm213406d2_ex2-1.htm) | [Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 2.1 to the Offering Statement on Form 1-A filed on March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1724714/000110465921036326/tm213406d2_ex2-1.htm) |
| [2.2](https://www.sec.gov/Archives/edgar/data/1724714/000110465921005306/tm213406d1_ex2-2.htm) | [Amended and Restated Bylaws (incorporated by reference to Exhibit 2.2 to the Offering Statement on Form 1-A filed on March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1724714/000110465921005306/tm213406d1_ex2-2.htm) |
| [3.1](https://www.sec.gov/Archives/edgar/data/1724714/000110465921005306/tm213406d1_ex2-2.htm) | [Form of Amended and Restated Investor Rights Agreement (incorporated by reference to Exhibit 3.1 to the Offering Statement on Form 1-A filed on March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1724714/000110465921005306/tm213406d1_ex2-2.htm) |
| [3.2](https://www.sec.gov/Archives/edgar/data/1724714/000110465921036326/tm213406d2_ex3-2.htm) | [Form of Amended and Restated Right of First Refusal and Co-Sale Agreement (incorporated by reference to Exhibit 3.2 to the Offering Statement on Form 1-A filed on March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1724714/000110465921036326/tm213406d2_ex3-2.htm) |
| [3.3](https://www.sec.gov/Archives/edgar/data/1724714/000110465921036326/tm213406d2_ex3-3.htm) | [Form of Amended and Restated Voting Agreement (incorporated by reference to Exhibit 3.3 to the Offering Statement on Form 1-A filed on March 31, 2021)](https://www.sec.gov/Archives/edgar/data/1724714/000110465921036326/tm213406d2_ex3-3.htm) |

---

**SIGNATURES**

Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

**Gryphon Online Safety Inc.**

---

| |
|:---|
| /s/ John Wu |
| Chief Executive Officer<br>Date: September 19, 2025 |

---

Pursuant to the requirements of Regulation A, this report has been signed below by the following persons on behalf of the issuer and in the capacities and on the dates indicated.

---

| |
|:---|
| /s/ John Wu |
| Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer, and Director |
| Date: September 19, 2025 |

---