DATS.NASDAQDatchat, INC
10-K: Myseum Reports 2025 Losses, Strategic Shift, & VIE Exit
Sentiment:
Annual Report
Myseum, Inc. reported a net loss of $3.04 million for fiscal year 2025, driven by operating expenses despite a significant gain from the deconsolidation of its RPM Interactive subsidiary.
Capital raiseOn January 8, 2025, the company sold 1,200,000 shares of common stock to institutional investors for gross proceeds of $5.1 million, receiving net proceeds of $4,532,000.On February 10, 2025, the company entered into a Sales Agreement for an at-the-market offering program to sell shares up to an aggregate sales price of $6,000,000.On February 6, 2026, this Sales Agreement was amended to allow offering and selling shares up to an aggregate price of $3,500,000.The company's ability to continue as a going concern is dependent on its ability to raise additional capital.
Worse than expectedThe company reported a net loss of $3,040,119 for 2025 and an accumulated deficit of $54,980,520.Cash used in operating activities was $4,267,074 in 2025.Revenues were nominal at $550 in 2025, indicating a failure to generate significant income.The auditors issued a "going concern" warning, highlighting substantial doubt about the company's ability to continue operations.Management identified material weaknesses in internal control over financial reporting, including a lack of segregation of duties and insufficient management review.
Summary
- Myseum, Inc. reported a net loss of $3,040,119 for the fiscal year ended December 31, 2025, a decrease from $5,025,007 in 2024.
- Loss from continuing operations increased to $5,254,646 in 2025 from $2,948,415 in 2024.
- The company generated nominal revenues of $550 in 2025 and $436 in 2024, primarily from subscriptions.
- Operating expenses increased by 70.6% to $5,490,608 in 2025, largely due to higher compensation, marketing, and professional fees.
- A gain of $2,875,892 was recognized from the sale and deconsolidation of RPM Interactive, Inc. in December 2025.
- Myseum launched its Myseum social media platform in March 2025 and Picture Party by Myseum in December 2025.
- The company received a "going concern" warning from its auditors due to ongoing operating losses and dependence on future capital raises.
- Management identified material weaknesses in internal control over financial reporting, including a lack of segregation of duties and insufficient management review.
Sentiment
Score: 3
Explanation: StockSavvy.ai views this as a highly concerning report due to persistent net losses, negative operating cash flow, a going concern warning, and identified material weaknesses in internal controls. While the divestiture of RPM Interactive provided a significant one-time gain and new platforms were launched, the core business struggles with revenue generation and profitability.
Positives
- Net loss decreased by 39.5% to $3,040,119 in 2025 from $5,025,007 in 2024.
- Realized a significant gain of $2,875,892 from the deconsolidation of RPM Interactive, Inc.
- Successfully launched two new platforms: Myseum social media platform in March 2025 and Picture Party by Myseum in December 2025.
- Maintained a cash balance of $749,030 and short-term investments of $2,981,909 as of December 31, 2025.
- Increased cash provided by financing activities to $4,493,355 in 2025 from $2,394,971 in 2024.
- Holds 20 issued patents related to encryption technologies, blockchain platform, and digital assets, with the earliest expiring in 2036.
Negatives
- Incurred a net loss of $3,040,119 in 2025 and an accumulated deficit of $54,980,520 as of December 31, 2025.
- Used $4,267,074 in net cash from operating activities in 2025.
- Generated only nominal revenues of $550 in 2025, indicating a lack of sustainable revenue generation.
- Operating expenses increased significantly by 70.6% to $5,490,608 in 2025.
- Received a "going concern" warning from auditors due to operating losses and dependence on additional capital.
- Management concluded that disclosure controls and procedures were not effective as of December 31, 2025.
- Identified material weaknesses in internal control over financial reporting, including lack of segregation of duties and insufficient management review of complex issues.
- The company has a limited operating history and has not yet developed a strong customer base or sustainable revenue.
Risks
- Limited operating history and minimal revenues make evaluating the business and future prospects difficult and increase investment risk.
- Dependence on certain key management personnel, employees, and advisors; loss of whom could hamper operations and growth.
- The mobile application industry is subject to rapid technological change, requiring continuous enhancement of applications to remain competitive.
- Major network failures or disruptions in services from third-party providers (e.g., Amazon Web Services) could adversely affect the business.
- Inability to adequately protect proprietary technology, potentially allowing competitors to offer similar products and harm competitive position.
- Risk of costly litigation if third parties claim intellectual property infringement.
- Potential for improper disclosure or loss of sensitive or confidential data due to security breaches or cyberattacks.
- Subject to stringent and changing laws and regulations related to privacy, data protection, and data security (e.g., GDPR, CCPA, CPRA), with potential for significant costs and liabilities.
- Risk that the public may not perceive the offered privacy protections as necessary or useful, leading to low adoption and interest in services.
- Users may not want to alter their messaging behavior, potentially impacting user retention and product adoption.
- The application's privacy and encryption features could be exploited to facilitate illegal activity, leading to negative perception and regulatory scrutiny.
- Negative publicity about the company, products, or practices could adversely affect reputation, business, and operating results.
- Dependence on effectively operating with mobile operating systems (iOS, Android), hardware, networks, and standards not controlled by the company, with potential for functionality degradation or preferential treatment to competitors.
- Myseum platform is based on new and unproven technologies, subject to risks of market acceptance and competition.
- Inability to adequately evaluate risks associated with planned social metaverse and advertising platforms, potentially leading to legal, regulatory, and operational issues.
- Susceptibility to market conditions and risks associated with the metaverse and digital entertainment industry, including consumer preferences and economic downturns.
- Intense competition in the mobile application and social sharing platform industries from larger, more resourced companies.
- Increasing costs and investments in new and unproven technologies (e.g., virtual and augmented reality) are anticipated to reduce operating margin and profitability.
- The price of common stock and Series A Warrants may fluctuate substantially due to various factors, including financing, competition, and market conditions.
- Future acquisitions could divert management's attention, result in dilution to stockholders, and otherwise disrupt operations.
- As an emerging growth company, reduced disclosure requirements might make common stock less attractive to investors.
- Risk of securities class action litigation, which could result in substantial costs and diversion of management's attention.
- Financial reporting obligations of being a public company are expensive and time-consuming, with potential for non-compliance and stock price decline.
- Comprehensive tax reform bills could adversely affect business and financial condition.
- Ability to issue blank check preferred stock without stockholder approval could dilute interests of then-current stockholders and impair their voting rights.
- Failure to meet Nasdaq listing criteria could lead to delisting and reduced liquidity.
- Principal stockholders and management own a significant percentage of stock, enabling them to exert significant control over corporate actions.
- Anti-takeover provisions in charter documents and Nevada law could discourage beneficial takeovers.
- If shares become subject to "penny stock" rules, it would become more difficult for stockholders to trade their shares.
- FINRA sales practice requirements may limit a stockholder's ability to buy and sell the company's stock.
- Exclusive forum provisions in Articles of Incorporation could limit stockholders' ability to obtain a favorable judicial forum for certain disputes.
Future Outlook
The company intends to derive revenues from advertisement sales, technology licensing, and other forms of revenue in the long term. It plans to add in-app purchases such as user customization features, increased storage, AI media organizers, and time-released video messages to monetize its applications. The Myseum Platform is anticipated to be monetized with a subscription-based service for small businesses. The company also plans to roll out additional features for DatChat Messenger, including video chat and attachments, and is developing video messages that can be distributed at a future time. It expects to continue increasing investments in new platforms and technologies, including virtual and augmented reality, as part of building the metaverse.
Management Comments
- "We are a privacy and social media technology company focused on innovative and creative user platforms."
- "Our flagship platform is Picture Party by Myseum, a next-generation on demand social networking platform that makes it easier and private to share your photos, videos and messages both today, and for generations to come."
- "Our innovative social media platform brings a fresh and needed approach to digital media and content management, allowing users to create a digital legacy that makes it easier to share both today, and with future generations."
- "We believe that it is the range of privacy and security features that we offer that sets us apart from our competitors."
- "Our goal is to make the application a leader in the mobile secure messaging and social media market based upon our proprietary technology and enhanced privacy and security features."
- "Privacy and security are the foundations of our Company."
- "We do not (and cannot) read our users encrypted messages and we delete our users messages as soon as they have been successfully self-destructed or deleted. Our end-to-end encryption ensures that we will never have access to the contents of our users messages."
- "Management believes that the realization of the benefits from these losses appears unlikely due to the Company's limited operating history and continuing losses for United States income tax purposes."
- "Management concluded that the ineffectiveness of our internal controls over financial reporting was due to the following material weaknesses: We lack segregation of duties within accounting functions duties as a result of our limited financial resources to support hiring of personnel. The lack of multiples levels of management review of complex business, accounting and financial reporting issues. We have not implemented adequate system and manual controls."
Industry Context
StockSavvy.ai notes that Myseum operates in the highly competitive and rapidly evolving mobile application and social media industries, facing established giants like Apple, Google, Facebook, Instagram, Snapchat, and TikTok. The company's focus on privacy and digital legacy aims to differentiate it in a market increasingly concerned with data control. Its ventures into metaverse-related technologies like VR/AR align with broader industry trends but also expose it to significant development risks and capital requirements, typical for nascent technology sectors.
Comparison to Industry Standards
- The mobile messenger application market is highly competitive with well-established competitors including Snapchat, WhatsApp, Facebook Messenger, Facebook, Telegram, MeWe, Confide, and Apple iMessage.
- The social media and photo sharing application market is highly competitive with established competitors including Facebook, Instagram, Snapchat, TikTok, iCloud Shared Photo, Pinterest, Google Photos, Amazon Drive, Photobucket, and Shutterfly.
- Many competitors have significantly greater financial and other resources and longer product development histories compared to Myseum.
- The company's products are based on new and unproven technologies, facing risks inherent in developing new products and services, unlike more mature industry offerings.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Chief Executive Officer and Chairman | NA | Darin Myman | 2015-01-01 | Appointed |
| Chief Technology Officer and Director | NA | Peter Shelus | 2016-01-01 | Appointed as CTO, joined board in Dec 2022 |
| Chief Financial Officer | NA | Brett Blumberg | 2022-02-15 | Appointed |
| Director | NA | Wayne D. Linsley | 2021-08-01 | Appointed |
| Director | NA | Joseph Nelson | 2021-08-01 | Appointed |
| Director | NA | Carly Luogameno | 2021-08-01 | Appointed |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Internal Control Weaknesses | Management concluded that disclosure controls and procedures were not effective as of December 31, 2025, and identified material weaknesses in internal control over financial reporting due to lack of segregation of duties, insufficient management review of complex issues, and inadequate system and manual controls. | 2025-12-31 | Raises concerns about the reliability of financial reporting and the prevention/detection of material misstatements. Requires significant resources and personnel expansion to remediate. |
| Board Committee Composition | Audit, Compensation, and Nominating and Corporate Governance Committees consist of Wayne D. Linsley (Chair), Carly Luogameno, and Joseph Nelson, all determined to be independent directors under Nasdaq rules. Wayne D. Linsley qualifies as an audit committee financial expert. | NA | Ensures compliance with Nasdaq independence requirements and provides oversight for key governance areas. |
| Insider Trading Policy | Adopted an insider trading policy governing the purchase, sale, and disposition of company securities and material non-public information, applicable to directors, officers, employees, and consultants. | NA | Aims to promote compliance with insider trading laws and Nasdaq standards, enhancing corporate integrity. |
| Code of Business Conduct and Ethics | Adopted a written code of business conduct and ethics applicable to directors, officers, and employees. | NA | Establishes ethical standards and guidelines for company personnel. |
| Anti-Hedging Policy | Currently does not have a policy prohibiting employees, officers, or directors from engaging in transactions that hedge or offset any decrease in the market value of the company's equity securities. | NA | Absence of such a policy could allow executives to mitigate personal risk, potentially misaligning their interests with long-term shareholder value. |
| Exclusive Forum Provisions | Amended and Restated Articles of Incorporation and Bylaws designate the Eighth Judicial District Court of Clark County, Nevada as the sole and exclusive forum for certain state law claims and federal district courts for Securities Act claims. | NA | May limit stockholders' ability to choose a favorable judicial forum, potentially discouraging certain lawsuits against the company and its management. |
Legal Proceedings
- Currently not aware of any legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on the business, financial condition, or operating results.
Related Party Transactions
- Darin Myman (CEO) and Peter Shelus (CTO) had indirect ownership in VR Interactive LLC, which purchased 8,000,000 shares of RPM Interactive from Metabizz shareholders for $120,000 on January 10, 2024.
- The wife of the CEO was employed as an executive secretary, earning $72,000 in both 2025 and 2024.
- The daughter of the CEO was employed, earning $52,000 in 2025 and $42,900 in 2024.
- The company forgave outstanding intercompany debt of $5,221,025 owed by RPM Interactive on December 11, 2025, recorded as a capital contribution to facilitate the merger and deconsolidation.
Stakeholder Impact
- Shareholders face significant risk due to persistent losses, a going concern warning, and potential dilution from future capital raises. The stock price is highly volatile. The deconsolidation of RPM Interactive provided a one-time gain, but the core business remains unprofitable.
- Employees, particularly key management personnel, are crucial for the company's future, but competition for qualified employees is intense. Stock-based compensation is a significant part of executive pay.
- Customers/Users may benefit from new privacy-focused social media platforms (Myseum, Picture Party) and enhanced features in DatChat Messenger. However, the company's financial instability could impact long-term service reliability and development.
- Creditors face increased risk due to the "going concern" warning, as the company's ability to meet obligations is dependent on uncertain future capital raises.
- Regulatory Authorities may increase scrutiny due to the company's identified material weaknesses in internal controls and its operations in a highly regulated privacy and data protection landscape.
Next Steps
- Roll out additional features for DatChat Messenger, including video chat, attachments, unique social posts, and other enhancements.
- Develop video messages that can be distributed at a future time, allowing users to set specific release dates.
- Develop an instantly created media sharing space that can be deleted or shared and saved in Myseum.
- Monetize the Myseum Platform with a subscription-based service for small businesses.
- Potentially develop other mobile applications and services for consumers once the user base reaches an economically feasible level.
- Continue expanding and strengthening the IP portfolio with additional patent applications.
- Address material weaknesses in internal control over financial reporting by expanding staff with qualified personnel.
- Raise additional capital through the amended Sales Agreement for an at-the-market offering of up to $3,500,000.
Key Dates
| Date | Description |
|---|---|
| 2014-12-04 | Company incorporated in Nevada as YssUp, Inc. |
| 2015-03-04 | Company name changed to Dat Chat, Inc. |
| 2016-08-01 | Board of Directors approved name change to DatChat, Inc. |
| 2016-09-22 | Amended and restated articles of incorporation filed to authorize preferred stock. |
| 2021-07-26 | Company adopted the 2021 Omnibus Equity Incentive Plan. |
| 2021-08-01 | Wayne D. Linsley, Joseph Nelson, and Carly Luogameno joined the board of directors. |
| 2021-08-15 | Effective date of Employment Agreement with Darin Myman. |
| 2021-08-27 | Company entered into an amendment to its office lease agreement. |
| 2022-02-15 | Effective date of employment agreement with Brett Blumberg as CFO. |
| 2022-11-01 | Launched The Habytat platform. |
| 2022-12-01 | Peter Shelus joined the board of directors. |
| 2022-12-06 | Shelf registration statement on Form S-3 (File No. 333-268058) declared effective. |
| 2022-12-19 | Shareholders approved increasing shares reserved for 2021 Equity Plan to 300,000. |
| 2023-01-06 | Board approved a stock repurchase program for up to $2 million. |
| 2023-02-14 | Metabizz, LLC and Metabizz SAS were determined to be Variable Interest Entities (VIEs). |
| 2023-07-25 | Issued 19,802 common shares for a one-year consulting agreement. |
| 2023-08-04 | Board filed Certificate of Designation for Series B Preferred Stock. |
| 2023-09-19 | 1-for-10 reverse stock split became effective. |
| 2023-11-09 | Filed Certificate of Correction for reverse stock split typographical error. |
| 2023-11-10 | Board approved adoption of Amended and Restated 2021 Equity Plan. |
| 2023-12-27 | Filed Certificate of Change to increase authorized common stock to 180,000,000 shares. |
| 2024-01-10 | VR Interactive LLC (related party) purchased 8,000,000 shares of RPM Interactive. |
| 2024-01-16 | Company entered into an underwriting agreement for a public offering of common stock and pre-funded warrants. |
| 2024-01-25 | RPM Interactive entered into a 9-month consulting agreement, issuing 1,500,000 shares. |
| 2024-03-31 | Company deconsolidated Metabizz, LLC and Metabizz SAS. |
| 2024-08-27 | Company entered into an Asset Purchase Agreement with Judaopta LLC to acquire RenAI Software and domain names. |
| 2024-08-27 | RPM Interactive determined to meet the definition of a VIE. |
| 2024-10-29 | RPM Interactive acquired 100% of RPM Florida in a Share Exchange Agreement. |
| 2024-12-13 | Shareholders approved increasing shares reserved for 2021 Equity Plan to 600,000. |
| 2025-01-01 | Distributions for Ambassador Program began. |
| 2025-01-07 | Company entered into an engagement agreement with The Benchmark Company, LLC as placement agent. |
| 2025-01-08 | Company entered into a securities purchase agreement with institutional investors to sell 1,200,000 common shares. |
| 2025-01-09 | Closing of the sale of 1,200,000 common shares, generating $4,532,000 net proceeds. |
| 2025-01-14 | Company granted 260,000 stock options to board of directors, officers, and employees. |
| 2025-01-14 | Company agreed to cancel 3,500,000 shares of RPM Common Stock. |
| 2025-02-10 | Company entered into a Sales Agreement with The Benchmark Company, LLC for an at-the-market offering program. |
| 2025-03-01 | Launched Myseum social media platform. |
| 2025-03-27 | Company issued 750,000 common shares to Benchmark for future sale under Sales Agreement. |
| 2025-04-24 | Company entered into an amendment agreement for its office lease. |
| 2025-05-01 | New office lease term commenced. |
| 2025-06-08 | Company granted 65,000 stock options to employees and consultants. |
| 2025-08-06 | Shareholders approved increasing shares reserved for 2021 Equity Plan to 1,000,000. |
| 2025-08-07 | Company filed Certificate of Amendment to change name to Myseum, Inc. |
| 2025-08-11 | Trading symbols for common stock (MYSE) and Series A warrants (MYSEW) began on Nasdaq Capital Market. |
| 2025-08-18 | Company granted 265,000 stock options to board of directors and officers. |
| 2025-09-09 | Company entered into a 6-month consulting agreement for media campaign services, issuing 55,000 common shares. |
| 2025-09-17 | RPM Interactive received $40,000 from investors in exchange for promissory notes and warrants. |
| 2025-11-26 | Shelf registration statement on Form S-3 (File No. 333-291818) filed with SEC. |
| 2025-12-01 | Launched Picture Party by Myseum. |
| 2025-12-03 | Shelf registration statement on Form S-3 (File No. 333-291818) declared effective. |
| 2025-12-10 | RPM Interactive entered into exchange agreements with note and warrant holders, exchanging debt for 400,000 common shares. |
| 2025-12-11 | Company entered into a debt forgiveness and capital contribution agreement with RPM Interactive ($5,221,025). |
| 2025-12-12 | Company completed merger of RPM Interactive with Avalon GloboCare Corp. and deconsolidated RPM Interactive. |
| 2025-12-31 | Fiscal year ended. |
| 2026-02-06 | Company entered into a First Amendment to Sales Agreement with Benchmark, updating the registration statement and reducing the aggregate offering price to $3,500,000. |
| 2026-03-02 | Company issued 60,000 common shares for a one-year consulting agreement. |
| 2026-03-05 | Company granted 200,000 warrants to a consultant for investor relations services. |
| 2026-03-30 | Date of this Annual Report on Form 10-K. |
Recommendation
sellThe company's persistent net losses, negative cash flow from operations, and the explicit 'going concern' warning from auditors indicate severe financial distress and a high risk of business failure without substantial, uncertain future capital raises. While new products have launched and a one-time gain from divestiture occurred, the core business has nominal revenue and significant operating expenses. Material weaknesses in internal controls further compound the risk, making the stock a highly speculative and unfavorable investment for seasoned investors.
Keywords
Myseum, DatChat, Picture Party, Social Media, Privacy Technology, SEC Filing, 10-K, Financial Report, Mobile Application, Digital Legacy, Content Management, Cybersecurity, Blockchain, Virtual Reality, Augmented Reality, Going Concern, Net Loss, Operating Expenses, Discontinued Operations, RPM Interactive, Avalon GloboCare, Stock Options, Warrants, Corporate Governance, Risk Factors, Nasdaq
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