GXAI

MKT CAP $4.7MP/E —DIV YIELD —FCF YIELD —REV TTM $6M +2922.0%NET INCOME −$3.9MNET CASH —52W 0.42 – 2.00SEC XBRL · TTM TO Invalid Date

How GXAI rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Our limited operating experience, combined with the rapidly evolving nature of the AI markets in which we operate, substantial uncertainty concerning how this market may develop, and other economic factors beyond our control reduce our ability to accurately forecast quarterly or annual revenue.
Maintaining and improving our platforms will require significant capital.
Our future performance will depend upon a number of factors, including our ability to: ● implement our growth strategy; ● aggressively counter and respond to actions by our competitors; ● pursue new users and maintain relationship with current users; ● maintain adequate control of our expenses; ● attract, retain and motivate qualified personnel; ● react to user preferences and demands; and ● regulatory compliance.
While we generate operating revenues from the sale of our digital products, our operating revenues are not be sufficient to finance our operations including our marketing efforts.
On January 26, 2026, we entered into the ATM Agreement with H.
Wainwright and Co., LLC (“Wainwright”) under which we can offer and sell shares of our common stock having an aggregate sales price of up to $5,600,000 through Wainwright as the sales agent pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-283758), including an accompanying base prospectus dated December 18, 2024 and prospectus supplements dated January 23, 2026 and February 4, 2026.
Sales of shares of our common stock through Wainwright, if any, will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended.
Wainwright will use commercially reasonable efforts to sell shares of the Company’s common stock from time to time, based on instructions from the Company (including any price, time or size limits or other parameters or conditions we may impose).
We will pay Wainwright a commission equal to 3.0% of the aggregate gross proceeds from the sales of shares of the Company’s common stock sold through Wainwright under the ATM Agreement and will also reimburse Wainwright for certain specified expenses in connection with the ATM Agreement.
There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all, if needed.
On December 31, 2025, we had a cash balance of $840,499, had short-term investments of $11,345,187, and had working capital of $11,919,230.
During the year ended December 31, 2025, we used net cash in operations of $3,853,757.
Until such time that we implement our growth strategy, we expect to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead, research and development, and costs of being a public company.
We believes that our existing working capital and cash on hand will provide sufficient cash to enable us to meet our operating needs and debt requirements for the next twelve months from the issuance date of this report.
We may utilize artificial intelligence, which exposes us to liability and affects our business.
We use, or may in the future use, artificial intelligence, generative artificial intelligence, machine learning and similar tools and technologies (collectively, “AI”) in connection with our business.
The use of AI is still a relatively new and emerging technology, and the introduction and incorporation of AI may expose us to additional risks, such as damage to our reputation, competitive position, and business, legal and regulatory risks and additional costs.
For example, AI algorithms and machine learning methods may contain flaws, raising ethical and legal concerns, such as unintentional bias in credit decisions.
Additionally, the complexity and fast-paced evolution of AI present significant challenges, especially as we compete with other companies in this space.
We may not always succeed in identifying or resolving problems before they emerge.
AI-related challenges, including potential government regulations, flaws, or other deficiencies, could further complicate our efforts and adversely affect our business.
The use of new and evolving technologies, such as artificial intelligence, in our business may result in spending material resources and presents risks and challenges that can impact our business including by posing security and other risks to our confidential and/or proprietary information, including personal information, and as a result we may be exposed to reputational harm and liability.
We may use and integrate artificial intelligence into our business processes, and this innovation presents risks and challenges that could affect its adoption, and therefore our business.
The use of AI presents risks and challenges that could adversely affect our business and reputation, including cybersecurity, data privacy, IT, confidentiality, regulatory, legal, operational, competitive, reputational, intellectual property and other risks.
Specifically, risks related to accuracy, bias, AI hallucinations, discrimination, harmful content, misinformation, fraud, scams, targeted attacks (including model poisoning or data poisoning), surveillance, data leakage, bias and inequality, environmental and other harms may flow from our development or use of AI technologies.
For example, use of certain AI tools may increase the risk of unauthorized disclosure of confidential information, compromise of proprietary intellectual property, or inadvertent inclusion of third-party intellectual property or other protected material, which could result in disputes or claims of infringement.
Additionally, government and supranational regulation related to AI is evolving as new laws and regulations are implemented globally and could increase the operational cost of compliance, including through requirements related to transparency, accountability, risk management, human oversight, and data governance.
We expect to see increasing regulation related to AI governance, use and ethics, which may also significantly increase the burden and cost of research, development and compliance in this area.
For example, the EU’s Artificial Intelligence Act (“AI Act”) - the world’s first comprehensive AI law -entered into force on August 1, 2024, with most important provisions scheduled to become effective on August 1, 2026.
As currently enacted, the AI Act imposes significant obligations on providers and deployers of high-risk AI systems and general purpose AI models, and encourages providers and deployers of AI systems to account for EU ethical principles when developing and using AI technology.
The scope of requirements depends on legal and risk determinations that rely on novel legal provisions that have not yet been fully interpreted by courts or regulators, and non-compliance can lead to significant fines.
In the U.S., the regulatory environment is complex and uncertain.
Over the past year, states have advanced, and in some cases passed, dozens of laws focusing on AI governance and regulation, including deployment of AI in healthcare settings.
At the Federal level, the current executive administration has endorsed a federal moratorium on the enforcement of state AI laws, including through a December 11, 2025, executive order on “Ensuring a National Policy Framework for Artificial Intelligence.” So far, these efforts have not been successful at curtailing state action on AI regulation, contributing to a complicated legislative patchwork, which may be litigated in state and federal courts.
In addition, there is continued uncertainty regarding the application of existing federal and state legal frameworks to uses and development of AI, and legal norms and market standards regarding AI continue to evolve.
For example, various federal and state regulators have issued guidance and focused enforcement efforts on the use of AI in regulated sectors.
The FDA, for example, issued guidance on the use of artificial intelligence in medical devices, requiring detailed risk management and review processes to obtain approvals.
The FDA has further issued, for example, draft guidance on the use of AI in regulatory decision-making for drug and biological products that centers on the context of use while establishing a credibility assessment framework for establishing and evaluating AI model outputs intended to support regulatory decision-making.
If we develop or use AI systems that are governed by these laws or regulations, including as informed by regulatory guidance, we will need to meet higher standards of data quality, transparency, and human oversight, and we would need to adhere to specific, potentially burdensome and costly ethical, accountability, and administrative requirements.
We may also be subject to significant enforcement or litigation in the event of any perceived non-compliance.

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For example, we intend to launch our Platform.
There is no guarantee that the Platform will be launched or that expenditures will result in profit or growth of our business.
Our limited operating experience, combined with the rapidly evolving nature of the NFT market in which we intend to operate, substantial uncertainty concerning how this market may develop, and other economic factors beyond our control reduce our ability to accurately forecast quarterly or annual revenue.
Maintaining and improving our Platform will require significant capital.
Our future performance will depend upon a number of factors, including our ability to: ● implement our growth strategy; ● aggressively counter and respond to actions by our competitors; ● pursue new users and maintain relationship with current users; ● maintain adequate control of our expenses; ● attract, retain and motivate qualified personnel; ● react to user preferences and demands; ● our ability to successfully implement, launch, and achieve market acceptance of our NFT products and to anticipate and manage the risks associated therewith; and ● regulatory compliance.
While we expect to be able to generate operating revenues from the sale of our video digital products, our operating revenues will not be sufficient to finance our operations including our marketing efforts.
We do not have any contracts or commitments for additional funding, and there can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all, if needed.
The uncertainties regarding the commencement of adequate commercial revenues raise substantial doubt about our ability to continue as a going concern.
Our Platform is currently under development and no assurance can be given that our Platform will be accepted by others or generate sufficient interest .
Our proposed Platform is currently under development.
It is our intent that the Platform will (i) support our owned-and-operated games; (ii) provide third-party game creators and publishers with the ability to integrate our NFT infrastructure; and (iii) create a unified environment where all the games and users on the Platform can participate in promotions, opportunities, and various experiences.
Failure to develop a robust gaming platform will adversely affect our business objectives.
The Platform is based on new and unproven technologies and is subject to the risks of failure inherent in the development of new products and services.
Because the Platform is based on certain new technologies, it is subject to risks of failure that are particular to new technologies, including the possibility that: ● the Platform may not gain market acceptance; ● proprietary rights of third parties may preclude us from marketing a new product or service; ● the Platform may not receive the exposure required to obtain new users; or ● third parties may market superior products or services.
Digital ecosystems, including offerings of digital assets, is evolving, and uncertain, and new regulations or policies may materially adversely affect our development.
The technologies supporting these digital assets like blockchain and NFTs are new and rapidly evolving.
To the extent these technologies become more widely utilized in the industry, our revenues could be negatively impacted.
If we fail to explore these new technologies and apply them innovatively to keep our products and services competitive, we may not experience significant growth of our business.
Regulation of digital assets like, cryptocurrencies, blockchain technologies, NFTs and cryptocurrency exchanges, is currently underdeveloped and likely to rapidly evolve as government agencies take greater interest in them.
Regulation also varies significantly among international, federal, state and local jurisdictions and is subject to significant uncertainty.
Various legislative and executive bodies in the United States and in other countries may in the future adopt laws, regulations, or guidance, or take other actions, which may severely impact the permissibility of tokens generally and the technology behind them or the means of transacting in or transferring them.
The regulatory regime governing blockchain technologies, NFTs, cryptocurrencies, digital assets, utility tokens, security tokens and offerings of digital assets is uncertain, and new regulations or policies may materially adversely affect our development and our value if we materially embrace digital assets and cryptocurrencies in the future.
Marketplace demand of the NFTs is unpredictable.
The appetite in the marketplace is unpredictable as it is related to NFTs and may change over time.
The trading of NFTs in the open market and use in gameplay are based purely on marketplace demand.
We may not be able to adequately evaluate the risks associated with our planned NFT platform.
The Platform may not be successful and may expose us to legal, regulatory, and other risks.
Given the nascent and evolving nature of cryptocurrencies, NFTs, and blockchain technology, we may be unable to accurately anticipate or adequately address such risks or the potential impact of such risks.
The occurrence of any such risks could materially and adversely affect our business, financial condition, results of operations, reputation, and prospects.
As the market for NFTs is relatively nascent, it is difficult to predict how the legal and regulatory framework around NFTs will develop and how such developments will impact our business and the Platform.
Further, market acceptance of NFTs is uncertain as buyers may be unfamiliar or uncomfortable with digital assets generally, how to transact in digital assets, or how to assess the value of NFTs.
The launch of the Platform also subjects us to risks similar to those associated with any new platform offering, including, but not limited to, our ability to accurately anticipate market demand and acceptance, our ability to successfully launch our new offering, creator and buyer acceptance, technical issues with the operation of the Platform, and legal and regulatory risks as discussed above.
We believe these risks may be heightened with respect to the Platform, as NFTs are still considered a relatively novel concept.
If we fail to accurately anticipate or manage the risks associated with the Platform or with our facilitation of crypto asset transactions, or if we directly or indirectly become subject to disputes, liability, or other legal or regulatory issues in connection with the Platform or crypto asset transactions, the Platform may not be successful and our business, financial condition, results of operations, reputation, and prospects could be materially harmed.
Worsening economic conditions that negatively impact discretionary consumer spending and consumer demand, including inflation, slower growth, recession, and other macroeconomic conditions, including those resulting from public health outbreaks such as the COVID-19 pandemic and geopolitical issues could have a material adverse impact on our business and operating results.
Increasing gas fees on Polygon could materially affect our revenues.
Users must pay gas fees on NFT platforms when minting NFTs.
Gas fees are transaction fees specific to the Ethereum (“ETH”) blockchain network.
The fee is determined by the number of transactions on the protocol and type of computations required to verify transactions; the greater the popularity, the greater the fee.
Increased traffic can also lead to scalability problems which may also push gas fees higher.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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