UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September~~March 3031, ~~2022~~2023

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to _______

Commission File Number 000-56469

ENDI CORP.

(Exact name of registrant as specified in its charter)

Delaware	87-4284605
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2400 Old Brick Road, Suite 115, Glen Allen, Virginia	23060
(Address of principal executive offices)	(Zip Code)

(434) 336-7737

(Registrant’s telephone number, including area code)

Not ~~Applicable~~applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares outstanding of the issuer’s Class A Common Stock, $0.0001 par value, as of ~~November~~May 1012, ~~2022~~ 2023 is 5,452,383 and the number of shares outstanding of the issuer’s Class B Common Stock, $0.0001 par value, as of ~~November~~May 1012, ~~2022~~ 2023 is 1,800,000.

Table of Contents

Table of Contents

	Page No.
PART I - Financial Information
PART I
Item 1. Financial Statements	3
Condensed Consolidated Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021	3
Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	3
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021	4
Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022	4
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021	5
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2023 and 2022	5
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	6
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022	6
Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	3231
Item 4. Controls and Procedures	3231
PART II - Other Information
PART II
Item 1. Legal Proceedings	3332
Item 1A. Risk Factors	3332
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	3332
Item 3. Defaults Upon Senior Securities	3332
Item 4. Mine Safety Disclosures	3332
Item 5. Other Information	3332
Item 6. Exhibits	3433
Signatures	3534

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Quarterly Report on Form 10-Q, ~~including, without limitation, Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein,~~ contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. ~~The~~Words ~~words~~such as “believe,” “estimate,” “expect,” “intend,” “anticipate,” “plan,” “project,” and similar expressions and variations thereof, ~~identify~~including ~~certain~~the negative of these terms, identify such forward-looking statements which speak only as of the dates on which they were made. The forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including, but not limited to, changes in economic and market conditions, lack of acceptance of our products, maintenance of strategic alliances, and other factors discussed in our filings with the Securities and Exchange Commission (the “SEC”).

All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the SEC could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.

This Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications, articles and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party sources.

~~EXPLANATORY~~INTRODUCTORY NOTE

ENDI Corp. (“ENDI”) was incorporated in Delaware on December 23, 2021. On August 11, 2022 (the “Closing Date”), the Company (as defined herein) ~~successfully~~ completed its mergers (the “Mergers”) pursuant to that certain Agreement and Plan of Merger dated December 29, 2021 (as amended, the “Merger Agreement”) by and among ~~the Company~~ENDI, Enterprise Diversified, Inc. (“Enterprise Diversified”), Zelda Merger Sub 1, Inc., Zelda Merger Sub 2, LLC, CrossingBridge Advisors, LLC (“CrossingBridge” or “CBA”) and Cohanzick Management, LLC (“Cohanzick”). As a result of the Mergers, Enterprise Diversified and CrossingBridge merged with wholly owned subsidiaries of ~~the~~ENDI ~~Company~~ and now operate as wholly owned subsidiaries of the Company. The Company is the successor registrant to Enterprise Diversified’s SEC registration ~~and OTC listing~~ effective as of the consummation of the Mergers. The reporting periods covered by this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2022, reflect the standalone business of CrossingBridge prior to the consummation of the Mergers on the Closing Date, ~~and reflect the consolidated business~~ of ~~CrossingBridge and Enterprise Diversified for~~ the ~~post-Merger period from August 12, 2022, through September 30, 2022~~Mergers. Unless the context otherwise requires, and when used in this Quarterly Report on Form 10-Q, the “Company,” “ENDI,” “we,” “our,” or “us” refers to ENDI Corp. and its subsidiaries as of and after August 11, 2022, and to CrossingBridge for the periods up to August 11, 2022, due to the determination that CrossingBridge represents the accounting acquiror.

OnThe ~~the~~reporting ~~Closing~~period ~~Date,~~covered ~~Enterprise~~by ~~Diversified~~this ~~and~~Quarterly ~~CrossingBridge~~Report ~~became~~on ~~wholly~~Form ~~owned~~10-Q ~~subsidiaries~~for ~~of ENDI Corp. as a result of~~ the ~~Mergers~~three-month ~~(collectively~~period ~~with~~ended ~~the~~March ~~other~~31, ~~transactions~~2023 ~~described~~reflects in the ~~Merger~~standalone ~~Agreement, the “Business Combination”). The Business Combination is accounted for as a reverse merger~~ business ~~combination using the acquisition method~~ of ~~accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations, with~~ CrossingBridge ~~representing~~prior ~~the accounting acquiror. Following Financial Accounting Standards Board guidance related~~ to the ~~accounting~~Closing ~~for~~Date ~~reverse~~of ~~acquisitions,~~the ~~CrossingBridge’s~~Mergers ~~historical~~and ~~carve-out financial statements replaced~~ the ~~Company’s,~~three-month ~~the~~period ~~successor~~ended ~~registrant~~March ~~to Enterprise Diversified~~31, ~~historical financial statements. Accordingly~~2022, ~~the capital structure,~~ and ~~per~~reflects ~~share amounts presented in CrossingBridge’s historical carve-out financial statements for~~ the ~~periods~~consolidated ~~prior~~business toof the ~~Closing~~Company, ~~Date~~including ~~have been recast to reflect the capital activity in accordance with the Merger Agreement.~~ CrossingBridge’s ~~historical~~and ~~carve-out~~Enterprise ~~financial~~Diversified ~~statements as of and~~ for the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March 3031, ~~2021,~~2023 and as of ~~and for the year ended~~ December 31, ~~2021, reflecting the recasting, are included as part of the condensed consolidated financial statements presented on this Quarterly Report on Form 10-Q~~2022.

~~The~~On ~~CrossingBridge carve-out for activity prior to~~ the Closing Date, ~~including~~Enterprise ~~the~~Diversified ~~period~~and ~~from~~CrossingBridge ~~January~~became 1,wholly ~~2022,~~owned tosubsidiaries ~~August~~of ~~11,~~ENDI ~~2022,~~as ~~the~~a ~~year~~result ~~ended~~of ~~December~~the ~~31,~~Mergers ~~2021,~~(collectively ~~and~~with the ~~three-~~other ~~and~~transactions ~~nine-month~~described ~~periods~~in ~~ended~~the ~~September~~Merger 30Agreement, ~~2021,~~the is“Business ~~part~~Combination”). ofThe ~~the~~Business ~~Cohanzick~~Combination ~~Management,~~is ~~LLC~~accounted ~~financial~~for ~~statements.~~as ~~Prior~~a toreverse acquisition using the ~~consummation~~acquisition method of ~~the~~accounting ~~Mergers,~~in ~~CrossingBridge~~accordance ~~was~~with aAccounting ~~100%~~Standards Codification 805, ~~wholly~~Business ~~owned~~Combinations, ~~subsidiary~~with ofCrossingBridge ~~Cohanzick~~representing ~~Management,~~the ~~LLC~~accounting acquiror. ~~The~~Following ~~historical~~Financial ~~carve-out~~Accounting ~~financial~~Standards ~~statements~~Board ofguidance ~~CrossingBridge~~related ~~reflect~~to the ~~assets,~~accounting ~~liabilities,~~for ~~revenue~~reverse acquisitions, ~~and~~CrossingBridge’s ~~expenses~~historical ~~directly~~carve-out ~~attributable~~financial tostatements ~~CrossingBridge,~~replaced asthe ~~well~~Company’s (as ~~allocations~~the ~~deemed~~successor ~~reasonable~~registrant ~~by management,~~ to ~~present~~Enterprise ~~the~~Diversified) historical financial ~~position~~statements. Accordingly, ~~statements~~the ofcapital ~~operations~~structure, ~~statements~~and ofper ~~changes~~share amounts presented in ~~stockholders~~CrossingBridge’s ~~equity,~~historical ~~and~~carve-out financial statements offor ~~cash~~the ~~flows~~periods ofprior ~~CrossingBridge~~to onthe aClosing ~~stand-alone~~Date ~~basis~~have ~~and~~been dorecast ~~not~~to ~~necessarily~~ reflect the ~~financial~~capital ~~position,~~activity ~~statements~~in ofaccordance ~~operations,~~with ~~statements~~the ofMerger ~~changes~~Agreement. ~~in stockholders~~CrossingBridge’s ~~equity,~~historical ~~and~~carve-out financial statements offor ~~cash~~the ~~flows~~three-month ofperiod ~~CrossingBridge~~ended inMarch ~~the~~31, ~~future~~2022, orreflecting ~~what~~the ~~they~~recasting, ~~would~~are ~~have~~included ~~been~~as ~~had~~part ~~CrossingBridge~~of ~~been~~the acondensed ~~separate,~~consolidated ~~stand-alone~~financial ~~entity~~statements ~~during the periods~~ presented ~~that~~in ~~include~~this ~~activity~~Quarterly ~~prior~~Report toon ~~the~~Form ~~Closing Date~~10-Q.

The CrossingBridge carve-out for activity prior to the Closing Date, including the three-month period ended March 31, 2022, is part of the Cohanzick financial statements. Prior to the consummation of the Mergers, CBA was a 100%, wholly owned subsidiary of Cohanzick. The historical financial carve-out statements of CBA reflect the assets, liabilities, revenue, and expenses directly attributable to CBA, as well as allocations deemed reasonable by management, to present the financial position, statements of operations, statements of changes in stockholders’ equity, and statements of cash flows of CBA on a stand-alone basis and do not necessarily reflect the financial position, statements of operations, statements of changes in stockholders’ equity, and statements of cash flows of CBA in the future or what they would have been had CBA been a separate, stand-alone entity during the periods presented that include activity prior to the Closing Date.

Unless the context otherwise requires, and when used in this Quarterly Report on Form 10-Q, the “Company,” “ENDI,” “ENDI Corp.,” “we,” “our,” or “us” refers to ENDI Corp. individually, or as the context requires, collectively with its subsidiaries as of and after the Closing Date, and to CrossingBridge for the periods up to the Closing Date, due to the determination that CrossingBridge represents the accounting acquiror.

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

ENDI CORP.

and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2022 (unaudited)			December 31, 2021
	March 31, 2023 (unaudited)			December 31, 2022
Assets
Current Assets
Cash and cash equivalents	$	11$ 9,~~685~~801,~~819~~659		$	1$ 10,~~272~~690,~~924~~398
Investments in securities, at fair value		56,~~721~~408,~~047~~355			25,~~265~~860,~~088~~688
Accounts receivable, net		~~726~~772,~~841~~859			~~511~~744,~~248~~638
Prepaids		~~136~~102,~~463~~372			-91,473
Notes receivable		300,000			-
Note receivable		384,400			50,000
Other current assets		30,781			4,567
Due from affiliate		-			123,823
Total current assets		18,600,951			4,053,827
Other current assets		34,929			57,446
Total current assets		17,504,574			17,618,466
Long-term Assets
Goodwill		1737,~~677,425~~869			-737,869
Intangible assets, net		1,~~300~~203,~~444~~211			-1,223,926
Property and equipment, net		3,095			-
Investments in private companies, at cost		1,405,266			450,000
Investment in private company, at cost		450,000			-
Deferred tax assets, net		1,409,001			1,441,234
Due from affiliate		38,823			-
Total long-term assets		4,755,347			3,853,029
Deferred tax assets, net		400,283			-
Total assets		$ 22,259,921			$ 21,471,495
Total long-term assets		3,870,070			-
Total assets	$	22,471,021		$	4,053,827
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	21$ 12,~~381~~209		$	-$ 71,306
Accrued compensation		1401,~~239,929~~625			-23,342
Accrued expenses		~~233~~378,~~857~~665			84260,~~627~~185
Deferred revenue		~~175~~168,~~552~~047			-156,859
Other current liabilities		~~1,898~~970			-1,110
Total current liabilities		1961,~~672,617~~516			84512,~~627~~802
Long-term Liabilities
Due to affiliate		-			3,377,291
Class W-1 Warrant and redeemable Class B Common Stock		828,000			576,000
Class W-1 Warrant and Redeemable Class B Common Stock		954,000			-
Total long-term liabilities		828,000			576,000
Total long-term liabilities		954,000			3,377,291
Total liabilities		1,789,516			1,088,802
Total liabilities		2,626,617			3,461,918
Stockholders' Equity
Preferred stock, $0.0001 par value, 2,000,000 and 30,000,000 shares authorized; none issued		-			-
Preferred stock, $0.0001 par value, 2,000,000 and 30,000,000 shares authorized, respectively; none issued and outstanding		-			-
Class A common stock, $0.0001 par value, 14,000,000 and 10,000,000 shares authorized; 5,452,383 and 2,400,000 shares issued and outstanding		545			240
Class A common stock, $0.0001 par value, 14,000,000 and 10,000,000 shares authorized, respectively; 5,452,383 and 2,400,000 shares issued and outstanding, respectively		545			545
Additional paid-in capital		20,~~217~~299,~~472~~218			-20,217,472
Retained earnings (deficit)		(373,612	)		591,669
Retained earnings		170,642			164,676
Total stockholders' equity		1920,~~844~~470,405			~~591~~20,~~909~~382,693
Total liabilities and stockholders' equity	$	$ 22,~~471~~259,~~021~~921		$	4$ 21,~~053~~471,~~827~~495

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ENDI CORP.

and Subsidiaries

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	For the three months ended						~~For the nine months ended~~
	September 30						September 30
	March 31,
	2022			2021			2022			2021
	2023			2022
Revenues
Revenues - CrossingBridge	$	1,~~993~~727,~~772~~254		$	1,~~158~~707,~~674~~124		$	~~5,463,253~~		$	~~2,880,477~~
Revenues - Willow Oak		2124,~~975~~513			-			~~21,975~~			-
Revenues - internet		~~111~~186,~~659~~162			-			~~111,659~~			-
Total revenues		21,~~127~~937,~~406~~929			1,~~158~~707,~~674~~124			~~5,596,887~~			~~2,880,477~~
Cost of Revenues
Cost of revenues - internet		3360,~~564~~751			-			~~33,564~~			-
Total cost of revenues		3360,~~564~~751			-			~~33,564~~			-
Gross Profit
Gross profit - CrossingBridge		1,~~993~~727,~~772~~254			1,~~158~~707,~~674~~124			~~5,463,253~~			~~2,880,477~~
Gross profit - Willow Oak		2124,~~975~~513			-			~~21,975~~			-
Gross profit - internet		78125,~~096~~411			-			~~78,096~~			-
Total gross profit		21,~~093~~877,~~843~~178			1,~~158~~707,~~674~~124			~~5,563,324~~			~~2,880,477~~
Operating Expenses
Compensation and benefits		~~917~~1,~~415~~149,730			~~497~~756,~~079~~643			~~2,461,892~~			~~1,487,409~~
Stock compensation expenses		~~881~~81,~~755~~746			-			~~881,755~~			-
Computer expenses		3546,~~336~~769			3128,~~891~~878			~~114,903~~			~~93,485~~
Insurance		2029,~~539~~555			3634,~~513~~358			~~28,581~~			~~44,111~~
Fund distribution, custody, and administrative expenses		6965,~~212~~273			247,~~145~~972			~~185,303~~			~~9,894~~
Professional fees		~~206~~557,~~137~~993			441,~~107~~200			~~233,156~~			~~71,961~~
Research		2,~~156~~844			43,~~652~~871			~~13,832~~			~~58,019~~
Travel and entertainment		1590,~~553~~749			12,~~488~~078			~~67,538~~			~~21,689~~
Transaction expenses		~~470,329~~-			-			~~470,329~~			-
Other operating expenses		~~108~~134,~~223~~558			~~127~~57,~~619~~665			~~197,828~~			~~180,174~~
Total operating expenses		2,~~726~~159,~~654~~217			~~756~~942,~~494~~665			~~4,655,116~~			~~1,966,742~~
Income (loss) from operations before income taxes		(632,812	)		402,180			908,207			913,735
Income from operations before income taxes		(282,039	)		764,459
Other Income (Expenses)
W-1 Warrant mark-to-market		~~522~~(252,000	)		-			~~522,000~~			-
Interest income		23,878			36			23,892			111
Note receivable revaluation		334,400			-
Dividend income		6,364			17			30,907			17
Interest and dividend income		112,114			9,799
Realized losses on investments		(17,321	)		-			(17,321	)		-
Realized gains on investments		21,430			-
Unrealized gains (losses) on investments		18104,~~095~~451			-(12,641	)		~~(22,979~~	)		-
Other expenses, net		(~~691~~157	)		-			~~(691~~	)		-
Total other income		552,323			53			535,806			128
Total other income (expenses)		320,238			(2,842	)
Income tax benefit (expense)		400,283			-			400,283			-
Income tax expense		(32,233	)		-
Net income	$	~~319~~5,~~795~~966		$	~~402~~761,~~233~~617		$	~~1,844,297~~		$	~~913,863~~
Net income per share, basic and diluted	$	0.08		$	0.17		$	0.62		$	0.38
Net (loss) income per share, basic and diluted	$	0.00		$	0.32
Weighted average number of shares, basic and diluted		45,~~061~~457,~~267~~983			2,400,000			~~2,959,841~~			~~2,400,000~~

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ENDI CORP.

and Subsidiaries

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Common Stock		Amount		Additional Paid-in Capital		Retained Earnings			Total Stockholders' Equity
Balance December 31, 2021		2,400,000	$	240	$	-	$	591,669		$	591,909
Balance December 31, 2022		5,452,383	$	545	$	20,217,472	$	164,676		$	20,382,693
Net income		-		-		-		~~761~~5,~~617~~966			~~761~~5,~~617~~966
Balance March 31, 2022		2,400,000		240		-		1,353,286			1,353,526
Stock compensation expense		-		-		81,746		-			81,746
Net income		-		-		-		762,885			762,885
Balance March 31, 2023		5,452,383	$	545	$	20,299,218	$	170,642		$	20,470,405
Balance June 30, 2022		2,400,000		240		-		2,116,171			2,116,411
Net income		-		-		-		319,795			319,795
Distribution		-		-		-		(2,809,578	)		(2,809,578	)
Stock issued pursuant to Merger Agreement		2,647,383		265		17,161,312		-			17,161,577
Additional stock purchased pursuant to Merger Agreement		405,000		40		2,174,405		-			2,174,445
Stock based compensation		-		-		881,755		-			881,755
Balance September 30, 2022		5,452,383	$	545	$	20,217,472	$	(373,612	)	$	19,844,405

	Common Stock		Amount		Additional Paid-in Capital		Retained Earnings			Total Stockholders' Equity
Balance December 31, 2020		2,400,000	$	240	$	-	$	593,683		$	593,923
Balance December 31, 2021		2,400,000	$	240	$	-	$	591,669		$	591,909
Net income		-		-		-		~~205~~761,~~428~~617			~~205~~761,~~428~~617
Balance March 31, 2021		2,400,000		240		-		799,111			799,351
Balance March 31, 2022		2,400,000	$	240	$	-	$	1,353,286		$	1,353,526
Net income		-		-		-		306,202			306,202
Distribution		-		-		-		(400,000	)		(400,000	)
Balance June 30, 2021		2,400,000		240		-		705,313			705,553
Net income		-		-		-		402,233			402,233
Distribution		-		-		-		(1,000,000	)		(1,000,000	)
Balance September 30, 2021		2,400,000	$	240	$	-	$	107,546		$	107,786

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ENDI CORP.

and Subsidiaries

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~Nine~~Three Months Ended ~~September~~March 3031, ~~2022~~ 2023 and ~~2021~~2022

	2022			2021
	2023			2022
Cash flows from operating activities:
Net income	$	15,~~844,297~~966		$	~~913~~761,~~863~~617
Adjustments to reconcile net income to net cash flows from operating activities:
Adjustments to reconcile net (loss) income to net cash flows from operating activities:
Other income from W-1 Warrant mark-to-market		(522,000	)		-
Note receivable revaluation		(334,400	)		-
Stock based compensation		881,755			-
Other income from W-1 Warrant mark-to-market		252,000			-
Amortization and depreciation		14,892			-
Stock based compensation		81,746			-
Amortization and depreciation		20,715			-
(Increase) decrease in:
Accounts receivable		(~~180~~28,~~566~~221	)		(~~111~~138,~~078~~606	)
Prepaids		(8410,~~530~~899	)		-
Other current assets		9322,~~571~~517			4,~~432~~567
Deferred tax assets, net		~~(400~~32,~~283~~233	)		-
Increase (decrease) in:
Accounts payable		~~875~~(59,097	)		-
Accrued compensation		1378,~~239,929~~283			-
Accrued expenses		~~(364~~118,~~692~~480	)		~~577~~321,~~366~~717
Deferred revenue		~~(27~~11,~~995~~188	)		-
Other current liabilities		~~1,250~~(140	)		-
Net cash provided by operating activities		2490,~~496,503~~371			1949,~~384,583~~295
Cash flows from investing activities:
Cash from Business Combination		15,873,598			-
(Increase) decrease in investments		(547,667	)		2,849
Increase in investments		(3,455,959	)		(2,250,000	)
Investment in private company		(955,266	)		-
Investment in private company		(450,000	)		-
Net cash (used in) provided by investing activities		(1,502,933	)		2,849
Decrease in dividend receivable		-			2
Cash flows from financing activities:
Net cash provided by (used in) investing activities		11,967,639			(2,249,998	)
Decrease in due from affiliate		123,823			-
Cash flows used in financing activities:
Decrease in due to affiliate		-			(1,582,396	)
Distributions paid		(2,809,578	)		(1,400,000	)
Net cash provided by (used in) financing activities		123,823			(1,582,396	)
Issuance of Class A common stock		2,174,445			-
Net decrease in cash		(888,739	)		(630,252	)
(Decrease) Increase in due to affiliate		(3,377,291	)		327,297
Cash and cash equivalents at beginning of the period - January 1		10,690,398			1,272,924
(Increase) Decrease in due from affiliate		(38,823	)		150,000
Cash and cash equivalents at end of the period - March 31	$	9,801,659		$	642,672
Net cash used in financing activities		(4,051,247	)		(922,703	)
Net increase (decrease) in cash		10,412,895			(1,788,118	)
Cash and cash equivalents at beginning of the period - January 1		1,272,924			2,258,670
Cash and cash equivalents at end of the period - September 30	$	11,685,819		$	470,552
Non-cash and other supplemental information:
Consulting services received in lieu of cash receipts	$	6,992		$	-
None
Cash paid for interest	$	-		$	-
Income taxes paid	$	-		$	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ENDI CORP.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization and Lines of Business

ENDI Corp. (“ENDI”) was incorporated in Delaware on December 23, 2021. On August 11, 2022 (the “Closing Date”), the Company (as defined herein) ~~successfully~~ completed its mergers (the “Mergers”) pursuant to that certain Agreement and Plan of Merger dated December 29, 2021 (as amended, the “Merger Agreement”) by and among ~~the Company~~ENDI, Enterprise Diversified, Inc. (“Enterprise Diversified”), Zelda Merger Sub 1, Inc., Zelda Merger Sub 2, LLC, CrossingBridge Advisors, LLC (“CrossingBridge” or “CBA”) and Cohanzick Management, LLC (“Cohanzick”). OnAs ~~the~~a ~~Closing~~result ~~Date~~of the Mergers, Enterprise Diversified and CrossingBridge ~~became~~merged with wholly owned subsidiaries of ENDI ~~Corp. as a result of the Mergers. Pursuant to the Merger Agreement, Enterprise Diversified~~ and ~~CrossingBridge~~now ~~merged~~operate ~~with~~as wholly owned subsidiaries of the Company. The Company is the successor registrant to Enterprise Diversified’s Securities and Exchange Commission (“SEC”) registration ~~and OTC listing~~ effective as of the ~~consummation~~Closing ofDate ~~the Mergers. The Business Combination is accounted for as a reverse merger business combination using the acquisition method~~ of ~~accounting in accordance with Accounting Standards Codification 805, Business Combinations, with CrossingBridge representing~~ the accounting acquiror. The reporting periods covered by the Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2022, reflect the standalone business of CrossingBridge prior to the consummation of the Mergers ~~on August 11, 2022, and reflect the consolidated business of CrossingBridge and Enterprise Diversified for the post-Merger period from August 12, 2022, through September 30, 2022~~. Unless the context otherwise requires, and when used herein, the “Company,” “ENDI,” “we,” “our,” or “us” refers to ENDI Corp. and its subsidiaries as of and after August 11, 2022, and to CrossingBridge for the periods up to August 11, 2022, due to the determination that CrossingBridge represents the accounting acquiror.

~~Prior~~The toreporting ~~the~~period ~~Closing~~covered ~~Date,~~by ~~the~~this ~~Company~~Quarterly ~~operated~~Report ~~through a single reportable segment, CrossingBridge Operations. Beginning~~ on ~~August~~ ~~12,~~Form ~~2022,~~10-Q ~~and~~for ~~continuing through~~ the period ended ~~September~~March 3031, ~~2022,~~2023 ~~the~~reflects ~~post-Merger period,~~ the ~~Company~~standalone ~~operated through~~business ~~four~~of ~~reportable segments:~~ CrossingBridge ~~operations,~~prior ~~Willow~~to ~~Oak~~the ~~operations,~~Closing ~~internet~~Date ~~operations,~~of ~~and~~the ~~other~~Mergers ~~operations. Other operations include corporate operations~~ and ~~nonrecurring~~the ~~or one~~three-~~time~~month ~~strategic~~period ~~funding~~ended March or31, ~~similar~~2022, ~~activity~~and ~~that~~reflects isthe ~~not~~consolidated ~~considered to be one of our primary lines of~~ business. ~~The management~~ of the Company, ~~also~~including ~~continually~~CrossingBridge ~~reviews~~and ~~various~~Enterprise ~~business~~Diversified ~~opportunities~~ for the ~~Company,~~period ~~including~~ended March ~~those~~31, in2023 ~~other~~and ~~lines~~as of December ~~business~~31, 2022.

On the Closing Date, Enterprise Diversified and CrossingBridge became wholly owned subsidiaries of ENDI as a result of the Mergers (collectively with the other transactions described in the Merger Agreement, the “Business Combination”). The Business Combination is accounted for as a reverse acquisition using the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations, with CrossingBridge representing the accounting acquiror.

Prior to the Closing Date, including during the period ended March 31, 2022, the Company operated through a single reportable segment, CrossingBridge operations. Beginning on the Closing Date through the year ended December 31, 2022, the post-Merger period, and continuing through the current period ended March 31, 2023, the Company operated through four reportable segments: CrossingBridge operations, Willow Oak operations, internet operations, and other operations. The management of the Company also continually reviews various business opportunities for the Company, including those in other lines of business.

Unless the context otherwise requires, and when used herein, the “Company,” “ENDI,” “ENDI Corp.,” “we,” “our,” or “us” refers to ENDI Corp. individually, or as the context requires, collectively with its subsidiaries as of and after the Closing Date, and to CrossingBridge for the periods up to the Closing Date, due to the determination that CrossingBridge represents the accounting acquiror.

CrossingBridge Operations

CBA was formed as a limited liability company on December 23, 2016, under the laws of the State of Delaware. CBA derives its revenue and net income from investment advisory services. CBA is a registered investment adviser under the Investment Advisers Act of 1940, as amended (the “~~1940~~Investment Advisers Act”)., ~~CBA~~and it provides investment advisory services to investment companies (including mutual funds and exchange-traded funds (“ETFs”)) registered under the Investment Company Act of 1940, as amended (“1940 Act”), both as an adviser and as a sub-adviser.

~~CBA~~As ~~advises~~of March ~~three~~31, ~~SEC registered mutual funds and one ETF~~2023, ~~and~~CBA ~~sub-advises~~serves ~~two~~as ~~mutual~~an ~~funds.~~adviser ~~Two~~to ofits ~~the~~four ~~advised~~proprietary ~~mutual~~products ~~funds~~ and ~~the~~sub-adviser ~~ETF~~to ~~were~~two ~~launched~~additional ~~during the year ended December 31, 2021~~products. As of ~~September~~March 3031, ~~2022~~2023, the assets under management (“AUM”) for CBA, including advised and sub-advised funds, were in excess of $1.43 billion. The investment strategies for CBA include: ultra-short duration, low duration high yield, responsible credit, and special purpose acquisition companies (“SPACs”). These strategies primarily employ high yield and investment grade corporate debt, as well as credit opportunities in event-driven securities, post ~~re-org~~reorganization investments, and stressed and distressed debt.

~~Asset~~Willow ~~Management~~Oak Operations

Beginning on August 12, 2022, the start of the post-Merger period (“Post-Merger”), the Company operates its Willow Oak operations business through its wholly owned subsidiaries, Willow Oak Asset Management, LLC (“Willow Oak”), Willow Oak Capital Management, LLC, Willow Oak Asset Management Affiliate Management Services, LLC (“Willow Oak AMS”) and Willow Oak Asset Management Fund Management Services, LLC (“Willow Oak FMS”).

Willow Oak is an asset management platform focused on ~~growing~~partnering ~~and~~with ~~enhancing~~independent ~~the~~asset ~~alternative~~managers ~~investment~~throughout ~~landscape.~~various ~~Willow~~phases ~~Oak~~of ~~seeks~~their ~~partnerships~~firm’s ~~with~~lifecycle ~~alternative~~to ~~investment~~provide ~~managers~~comprehensive inoperational ~~the~~services ~~early~~that ~~stages~~support ofthe growth inof ~~order~~their tobusinesses. ~~build~~Through aminority ~~network~~ownership ofstakes ~~unique~~and ~~investment~~bespoke ~~opportunities~~service ~~for~~based ~~investors and scalable~~contracts, ~~professional operations for managers.~~ Willow Oak offers affiliated managers strategic consulting, operational support, and growth opportunities ~~through minority partnerships and other bespoke relationships~~. ~~Affiliations~~Services to date include consulting, fund launching, investor relations and marketing, accounting and bookkeeping, compliance program monitoring, fund management, ~~administrative~~and business development support. The Company intends to actively expand its Willow Oak platform with additional offerings that enhance the value of the Willow Oak platform to independent managers ~~and funds~~ across the investing community.

Internet Operations

Beginning ~~on August 12, 2022, the start of the post~~Post-Merger ~~period~~, the Company operates its internet operations segment through Sitestar.net, aits wholly owned subsidiary. Sitestar.net is an internet service provider that offers consumer and business-grade internet access, e-mail hosting and storage, wholesale managed modem services, web hosting, third-party software as a reseller, and various ancillary services. Sitestar.net provides services to customers in the United States and Canada. In addition, the Company owns a portfolio of domain names.

Other Operations

Beginning ~~on August 12, 2022, the start of the post~~Post-Merger ~~period~~, the Company operates its other operations segment which includes nonrecurring or one-time strategic funding or similar activity and other corporate operations that are not considered to be one of the Company’s primary lines of business. Below are the ~~main~~primary ~~recent~~ activities comprising other operations. Additional investment activity that is not specifically mentioned below is included in the accompanying condensed consolidated financial statements.

eBuild Ventures, LLC

Pursuant to the Merger Agreement, the Company was transferred ~~the~~ interests of eBuild Ventures, LLC (“eBuild”) on ~~August~~ ~~11,~~the ~~2022~~Closing Date. eBuild ~~operates~~acquires, ~~primarily to acquire~~ or ~~provide~~provides growth equity to, consumer product businesses in the digital or brick and mortar marketplaces. On September 8, 2022, through eBuild, the Company made a capital contribution of $450,000, representing approximately a 10% ownership stake, in a start-up phase private company that operates in the consumer beverage product space. This investment is carried at its cost basis of $450,000 as of September 30, 2022.

Through eBuild, the Company also operates SPACinformer.com (“SPACinformer”), an electronic newsletter service focusing primarily on the aggregation and distribution of publicly-available ~~special purpose acquisition company (“~~SPAC”) data, news, and analytics. During the ~~three-month~~ period ended ~~September~~March 3031, ~~2022~~2023, SPACinformer did not contribute material revenue or expenses to eBuild under the other operations segment.

On September 8, 2022, through eBuild, the Company made a capital contribution of $450,000, representing approximately a 10% ownership stake, in a start-up phase private company that operates in the consumer beverage product space. This investment is carried at its cost basis of $450,000 as of March 31, 2023.

On March 16, 2023, through eBuild, the Company made a capital contribution of $955,266, representing approximately a 3% ownership stake, in a private company that operates in the consumer products e-commerce space fulfilled by Amazon. This investment is carried at its cost basis of $955,266 as of March 31, 2023.

Financing Arrangement Regarding Triad Guaranty, Inc.

In August 2017, Enterprise Diversified entered into an agreement with several independent third parties to provide debtor-in-possession financing to an unaffiliated third party, Triad Guaranty, Inc., through Triad DIP Investors, LLC. Triad Guaranty, Inc. exited bankruptcy in April 2018, and Enterprise Diversified was subsequently ~~entered~~issued ~~into~~ an amended and restated promissory note. As of ~~September~~December 3031, 2022, Enterprise Diversified reported $~~300~~50,000 of promissory ~~notes~~note ~~receivable~~receivables, measured at fair value, from Triad DIP Investors, LLC, and 847,847 aggregate shares of Triad Guaranty, Inc. common stock. ~~Terms~~As ~~to the promissory notes include, among other things, an interest rate~~ of ~~12% annually and a maturity date of~~ ~~December~~March 31, ~~2022. As of September 30~~2023, ~~2022,~~ the Company ~~attributes~~attributed no value to its shares of Triad Guaranty, Inc. common stock held due to the stocks’ general lack of marketability. See Note 5 for more information.

On January 9, 2023, Enterprise Diversified was issued a second amended and restated promissory note by Triad DIP Investors, LLC. Amended terms to the promissory note include an increase in the interest rate from 12% to 18% per annum, with unpaid historical accrued interest and future monthly accrued and unpaid interest to be capitalized and added to the then-outstanding principal balance on the last business day of each month. Further, the maturity date of the note was extended from December 31, 2022 to April 30, 2023, with early payoff permitted. Also during the three-month period ended March 31, 2023, Triad notified the Company that it was able to secure a new financing resource that was not previously available to Triad. Subsequent to March 31, 2023, the Company received repayment of the full historical principal balance and accrued interest related to the second amended and restated promissory note receivable, which was greater than the Company’s historical recorded carrying amount of $50,000 as of December 31, 2022. Given these developments, the Company recognized $334,000 of other income related to the remeasured fair market value of the note receivable, which is included on the unaudited condensed consolidated statements of operations for the period ended March 31, 2023. As of March 31, 2023, the Company reported $384,400 on the condensed consolidated balance sheets related to the value of its promissory note receivable.

Corporate Operations

Corporate operations include any revenue or expenses derived from the Company’s corporate office operations, as well as expenses related to public company reporting, the oversight of subsidiaries, and other items that affect the overall Company. ~~Additionally,~~Also ~~during~~included under corporate operations is investment activity earned through the ~~quarterly~~reinvestment ~~period~~of corporate cash. Corporate investments are typically short-term, highly liquid investments, including vehicles such as mutual funds, ETFs, commercial paper, and corporate and municipal bonds. During the year ended ~~September~~December 3031, 2022, through Enterprise Diversified, ~~Inc.~~ under the other operations segment, the Company invested a total of $4,500,000 among three CrossingBridge mutual funds: the CrossingBridge Responsible Credit Fund, the CrossingBridge Ultra Short Duration Fund, and the CrossingBridge Low Duration High Yield Fund. The Company also routinely invests in the CrossingBridge Pre-Merger SPAC ETF through its other operations segment as well, which as of March 31, 2023, totaled $511,672. There are no liquidity restrictions in connection with these investments and any intercompany revenue and expenses have been eliminated in consolidation.

Principles of Consolidation

The accompanying ~~unaudited~~ condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and those entities in which it otherwise has a controlling financial interest as of and for the ~~periods~~period ended ~~September~~March 3031, ~~2022~~2023, including: CrossingBridge Advisors, LLC, and for the ~~post~~Post-Merger period beginning on August 12, 2022, Bonhoeffer Capital Management, LLC, eBuild Ventures, LLC, Enterprise Diversified, Inc., ~~Willow Oak Asset Management~~Sitestar.net, ~~LLC~~Inc., Willow Oak ~~Capital~~Asset Management, LLC, Willow Oak Asset Management Affiliate Management Services, LLC, Willow Oak Asset Management Fund Management Services, LLC, ~~Bonhoeffer~~and Willow Oak Capital Management, LLC~~, Sitestar~~.~~net, Inc., and eBuild Ventures, LLC.~~

All intercompany accounts and transactions have been eliminated in consolidation.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying interim condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the ~~U.S. Securities and Exchange Commission (“~~SEC”) for interim financial information. Accordingly, they do not include all the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. ~~The December 31, 2021 balance sheet included herein was derived from audited carve-out financial statements as of that date.~~ Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the SEC. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited carve-out financial statements and notes previously filed in our Registration Statement on Form S-4 initially filed with the SEC on February 3, 2022, as subsequently amended and declared effective by the SEC on July 14, 2022. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all the adjustments (consisting of normal recurring adjustments) necessary to state fairly the Company’s financial position as of ~~September~~March 3031, ~~2022,~~2023 and the results of operations for the three-month ~~and~~periods ~~nine months~~ ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022.

~~The~~Following ~~CrossingBridge~~Financial ~~Advisors,~~Accounting ~~LLC~~Standards ~~carve-out~~Board ~~for~~guidance ~~activity~~related ~~prior~~ to the ~~Closing~~accounting ~~Date,~~for ~~including~~reverse ~~the~~acquisitions, ~~period~~CrossingBridge’s ~~from January~~historical 1,carve-out ~~2022~~financial ~~to August~~statements ~~11,~~replaced ~~2022,~~ the ~~year~~Company’s ~~ended December~~(as ~~31, 2021, and~~ the ~~three-~~successor ~~and~~registrant ~~nine-month~~to ~~periods~~Enterprise ~~ended September~~Diversified) ~~30,~~historical ~~2021, is part of the Cohanzick Management, LLC~~ financial statements. ~~Prior~~Accordingly, to the ~~consummation~~capital ~~of the Mergers~~structure, ~~CrossingBridge~~and ~~Advisors,~~per ~~LLC~~share ~~was~~amounts apresented ~~100%,~~in ~~wholly~~CrossingBridge’s ~~owned subsidiary of Cohanzick Management, LLC. The~~ historical ~~financial~~ carve-out financial statements offor ~~CBA reflect~~ the ~~assets,~~periods ~~liabilities,~~prior ~~revenue, and expenses directly attributable~~ to ~~CBA,~~the asClosing ~~well~~Date ashave ~~allocations~~been ~~deemed~~recast ~~reasonable by management,~~ to ~~present~~reflect the ~~financial~~capital ~~position,~~activity ~~statements~~in ofaccordance ~~operations,~~with ~~statements~~the ofMerger ~~changes~~Agreement. ~~in stockholders~~CrossingBridge’s ~~equity,~~historical ~~and~~carve-out financial statements offor ~~cash~~the ~~flows of CBA on a stand~~three-~~alone~~month ~~basis~~period ~~and~~ended March do31, ~~not~~2022, ~~necessarily~~reflecting ~~reflect~~ the ~~financial position~~recasting, ~~statements~~are ofincluded ~~operations,~~as ~~statements~~part of ~~changes~~the inunaudited ~~stockholders’~~interim ~~equity,~~condensed ~~and~~consolidated financial statements ofpresented ~~cash flows of CBA~~ in the ~~future~~Company’s orQuarterly ~~what~~Report ~~they~~on ~~would~~Form ~~have been had CBA been a separate, stand~~10-~~alone~~Q ~~entity~~for ~~during~~ the ~~periods~~period ~~presented~~ended March ~~that~~31, ~~include activity prior to the Closing Date~~2023.

The CrossingBridge Advisors, LLC carve-out for activity prior to the Closing Date, including the three-month period ended March 31, 2022, is part of the Cohanzick financial statements. Prior to the Closing Date of the Mergers, CBA was a wholly owned subsidiary of Cohanzick. The historical financial carve-out statements of CBA reflect the assets, liabilities, revenue, and expenses directly attributable to CBA, as well as allocations deemed reasonable by management, to present the financial position, statements of operations, statements of changes in stockholders’ equity, and statements of cash flows of CBA on a stand-alone basis and do not necessarily reflect the financial position, statements of operations, statements of changes in stockholders’ equity, and statements of cash flows of CBA in the future or what they would have been had CBA been a separate, stand-alone entity during the periods presented that include activity prior to the Closing Date.

Use of Estimates

In accordance with GAAP, the preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.

On an ongoing basis, management evaluates its estimates and judgments, including, among other items, those related to fair value of investments, revenue recognition, accrued expenses, financing operations, fair value of goodwill, fixed asset lives and impairment, lease right-of-use assets and impairment, deferred tax assets, liabilities and valuation allowance, other assets, the present value of lease liabilities, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. These accounting policies are described at relevant sections in the notes to the unaudited condensed consolidated financial statements.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash, cash equivalents, accounts receivable, and notes receivable. The Company places its cash with high-quality financial institutions and, at times, exceeds the FDIC and CDIC insurance limit. The Company extends credit based on an evaluation of customers’ financial condition, generally without collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses.

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company defines cash equivalents as all highly liquid instruments purchased with a maturity and/or liquidation option of three months or less.

Investments

The Company holds various investments through its other operations segment. Investments are typically short-term, highly liquid investments, including vehicles such as: mutual funds, ETFs, commercial paper, and corporate and municipal bonds. Investments held at fair value are remeasured to fair value on a recurring basis. Certain assets held through the other operations segment do not have a readily determinable value as these investments are either not publicly traded, do not have published sales records, or do not routinely make current financial information available. Assets that do not have a readily determinable value are remeasured when additional valuation inputs become observable. See Note 5 for more information.

Accounts Receivable

The Company’s CrossingBridge operations segment records receivable amounts for management fee shares earned on a monthly basis. Management fee shares are calculated and collected on a monthly basis. The Company historically has had no collection issues with management fee shares and the overall possibility for non-collection is extremely low. For these reasons, management has determined that it is not necessary to record an allowance against these receivables.

The Company’s Willow Oak operations segment records receivable amounts for management fee shares and fund management services revenue earned on a monthly basis. Management fee shares and fund management services fees are calculated and collected on either a monthly or quarterly basis as dictated by the respective partnership agreement. The Company historically has had no collection issues with management fee shares and fund management receivables and the overall possibility for non-collection is extremely low. For these reasons, management has determined that it is not necessary to record an allowance against these receivables.

The Company’s Willow Oak operations segment also records receivable amounts for performance fee shares earned on an annual basis. Performance fee shares are dependent upon exceeding specified relative or absolute investment return thresholds, which vary by affiliate relationship, and typically include annual measurement periods. The Company historically has had no collection issues with performance fee shares and the overall possibility for non-collection is extremely low. For these reasons, management has determined that it is not necessary to record an allowance against these receivables.

The Company grants credit in the form of unsecured accounts receivable to its customers through its internet operations segment. The estimate of the allowance for doubtful accounts, which is the recorded allowance for doubtful accounts and bad debt expense, is based on management’s assessment of current economic conditions and historical collection experience with each customer. Specific customer receivables are considered past due when they are outstanding beyond their contractual terms and are written off from the allowance for doubtful accounts when an account or invoice is individually determined to be uncollectible. The internet operations segment attempts to reduce the risk of non-collection by including a late-payment fee and a manual-processing-payment fee to customer accounts. Receivables more than 90 days past due are no longer included in accounts receivable and are turned over to a collection agency. Accounts receivable more than 30 days are considered past due.

As of ~~September~~March 3031, ~~2022,~~2023 and December 31, ~~2021~~2022, allowances offsetting gross accounts receivable on the accompanying condensed consolidated balance sheets totaled $43,~~038~~239 and $02,283, respectively. For the three- ~~and nine-~~month periods ended ~~September~~March 3031, 2023 and 2022, bad debt expenses totaled $1,~~537.~~244 ~~The Company did not incur any bad debt expenses for the three-~~ and ~~nine-month periods ended September 31~~$0, ~~2021~~respectively.

Notes Receivable

The Company does not routinely issue notes receivable in the ordinary course of business, but when a business opportunity arises, a subsidiary may issue a note if it appears to be favorable to the Company. Notes receivable are recorded at their principal amount and interest is accrued quarterly based on the applicable interest rate. The Company makes an assessment of the ultimate collectability of each note receivable on an annual basis based upon the financial condition of the borrower and adjusts the carrying value of the note receivable as deemed appropriate.

Property and Equipment

Property and equipment are recorded at cost. Expenditures for maintenance and repairs are charged to operations as incurred, while renewals and betterments are capitalized. Gains and losses on disposals are included in the results of operations. Depreciation is computed using the straight-line method based on the estimated useful lives for each of the following asset classifications:.

Furniture and fixtures (in years)			5
Equipment (in years)			7

The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, then the Company uses estimated future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. Property and equipment to be disposed are reported at the lower of carrying amount or fair value of the asset less cost to sell.

Goodwill and Other Intangible Assets

Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations accounted for under the acquisition method of accounting. The Company tests its goodwill annually as of December 31, or more often if events and circumstances indicate that those assets might not be recoverable. As of March 31, 2023 and December 31, 2022, the Company reported $737,869 of goodwill under the CrossingBridge operations segment. None of the Company’s recorded goodwill is tax deductible. The fair values assigned to tangible and intangible assets acquired as part of the Mergers are based on management’s estimates and assumptions and may be subject to change as additional information is received. The Company expects to finalize the fair values of assets acquired and liabilities assumed as soon as practicable, but not later than one year from the Closing Date.

Impairment testing of goodwill is required at the reporting-unit level (operating segment or one level below operating segment). The impairment test involves calculating the impairment of goodwill based solely on the excess of the carrying value of the reporting unit over the fair value of the reporting unit. Prior to performing the impairment test, the Company may make a qualitative assessment of the likelihood of goodwill impairment to determine whether a detailed quantitative analysis is required. The Company estimates the fair value of its reporting units using discounted expected future cash flows.

Intangible assets (other than goodwill) consist of customer relationships, trade names, and domain names held under the Willow Oak and internet operations segments. ~~The~~As ~~Company~~of March ~~owns~~31, ~~242 domain names~~2023, ofthe ~~which~~Company ~~108~~owned ~~are~~242 ~~available~~domain ~~for sale~~names. When management determines that material intangible assets are acquired in conjunction with the purchase of a business, the Company determines the fair values of the identifiable intangible assets by taking into account internal and external appraisals. Intangible assets determined to have definite lives are amortized over their estimated useful lives. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, then the Company uses estimated future undiscounted cash flows of the related intangible asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. As of the period ended March 31, 2023, the Company reported $523,659 and $679,552 of intangible assets, net of amortization, under the Willow Oak and internet operations segments, respectively.

~~Amortization~~As ~~expenses~~a onresult ~~intangible~~of ~~assets~~the ~~during~~Company’s ~~the~~impairment ~~three-~~testing of goodwill and ~~nine-month~~other ~~periods~~intangible ~~ended~~assets on ~~September~~December 3031, 2022 ~~totaled $14~~,~~556.~~ ~~There~~the ~~was~~Company nodetermined ~~comparable~~that ~~amortization~~there ~~expense~~was ~~for~~no ~~the~~impairment ~~three-~~adjustment ~~and nine-month periods ended September 30, 2021~~necessary.

Amortization expenses on intangible assets during the three-month period ended March 31, 2023 totaled $20,715. There was no comparable amortization expense for the three-month period ended March 31, 2022.

W-1 Warrant and Redeemable Class B Common Stock

Pursuant to the Merger Agreement, the Company issued 1,800,000 Class B common shares that are mandatorily redeemable upon exercise of the W-1 Warrant, which provides the holder the ability to purchase 1,800,000 Class A Common Shares at certain terms. Management has determined that the W-1 Warrant represents an embedded equity-linked feature within the Class B common shares, and therefore is valued in conjunction with the Class B common shares. The value of the W-1 Warrant and Class B common shares is determined using a Black-Scholes pricing model and is classified as a long-term liability on the condensed consolidated balance ~~sheet~~sheets. The value is remeasured at each reporting date with the change in value flowing through the unaudited condensed consolidated statements of operations for the relevant period. OnAs ~~the~~of December ~~Closing~~31, ~~Date~~2022, the liability associated with the W-1 Warrant and Class B common shares was valued at $1576,~~476,~~000. Subsequently, as of the period ended ~~September~~March 3031, ~~2022~~2023, the liability associated with the W-1 Warrant and Class B common shares was valued at $~~954~~828,000. This change in value resulted in the Company recognizing $~~522~~252,000 of other ~~income~~expenses related to the “mark-to-market” of the W-1 Warrant on the unaudited condensed consolidated statements of operations for the three- ~~and nine-~~month ~~periods ended September 30, 2022. As the W-1 Warrant and Class B common shares were issued pursuant to the Merger Agreement, there is no comparable prior~~ period ~~activity for the three- and nine-month periods~~ ended ~~September~~March 3031, ~~2021~~2023. See Note 4 for additional terms of the W-1 Warrant and Class B common shares.

Accrued Compensation

Accrued compensation represents performance-based bonuses that have not yet been paid. Bonuses are subjective and are based on numerous factors including, but not limited to, individual performance, the underlying funds’ performance, and profitability of the firm, as well as the consideration of future outlook. Accrued bonus amounts can fluctuate due to a future perceived change in any one or more of these factors. Additionally, differences between historical, current, and future personnel allocations could significantly impact the comparability of bonus expenses period over period.

Other Accrued Expenses

Other accrued expenses represent incurred but not-yet-paid expenses from payroll accruals, professional fees, and other accrued taxes.

Stock Compensation Expense

The board of directors of the Company adopted the ENDI Corp. 2022 Omnibus Equity Incentive Plan, dated December 19, 2022 (the “2022 Plan”), which remains subject to approval by the Company’s stockholders at the 2023 Annual Meeting scheduled for May 22, 2023 (“2023 Annual Meeting”). On February 28, 2023 (the “Grant Date”), the Company granted (i) restricted stock units, and (ii) restricted Class A common stock. Each grant remains contingent on the approval of the 2022 Plan by Company stockholders. If the 2022 Plan is not approved by the stockholders at the 2023 Annual Meeting scheduled for May 22, 2023, then the grants of restricted stock units and restricted stock will be automatically forfeited and deemed null and void. Vested restricted stock unit awards will be settled by the Company in the form of cash or the issuance and delivery of shares of Company common stock in the year following the year the awards have become vested, but no later than March 15 of the following year. The Company has elected to ratably recognize the stock compensation expense associated with its outstanding equity awards over each award’s respective vesting period. Equity awards are valued on their respective Grant Date at fair market value, the then current trading value of the Company’s Class A Common Stock, and are not subject to future revaluation. On the Grant Date, the closing stock price of the Company’s Class A Common Stock was $4.35.

The table below further details the awards granted on February 28, 2023 (which, as described above, are still subject to, and contingent on, the approval of the 2022 Plan by the Company’s stockholders at the 2023 Annual Meeting), and represents the number of outstanding awards and the relevant income statement impact as of and during the three-month period ended March 31, 2023.

Award Type	Number of Awards Outstanding		Vesting Schedule	Income Statement Impact
Restricted stock units		99,766	25% on the second anniversary of January 1, 2023, and thereafter in three equal installments on the subsequent three anniversaries of the initial vesting date, with 100% of the restricted stock vested on the fifth anniversary of the initial vesting, subject to the recipient’s continuous employment.	$	7,233
Restricted stock units		15,750	Fully vested on the date of grant.		68,513
Restricted stock		82,761	25% on the second anniversary of January 1, 2023, and thereafter in three equal installments on the subsequent three anniversaries of the initial vesting date, with 100% of the restricted stock vested on the fifth anniversary of the initial vesting, subject to the recipient’s continuous employment.		6,000
Total outstanding awards		198,277		$	81,746

Leases

The Company records right-of-use assets and lease liabilities arising from both financing and operating leases that contain terms extending longer than one year. The Company does not recognize right-of-use assets or lease liabilities for short-term leases (those with original terms of 12 months or less). In making ~~our~~its determinations, the Company combines lease and non-lease elements of ~~our~~its leases.

Concentration of Revenue

CBA is the adviser to four ~~regulated~~registered investment companies under the CrossingBridge Family of Funds. The advised funds are the CrossingBridge Low Duration High Yield Fund, CrossingBridge Ultra-Short Duration Fund, CrossingBridge Responsible Credit Fund, and the CrossingBridge Pre- Merger SPAC ETF. The combined ~~assets under management (“~~AUM”) for these advised funds was approximately $~~697~~626 million and $~~385~~724 million as of ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively. CBA is also the sub-adviser to two 1940 Act ~~regulated~~registered mutual funds with AUM totaling approximately $~~779~~723 million and $~~831~~822 million as of ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively. Finally, CBA also earns revenue through a service agreement with a related party. See Note 3 for more information on the terms of the service agreement.

CBA fee revenues earned from advised funds, sub-advised funds, and service agreements for the three- ~~and nine-~~month periods ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022 included in the accompanying unaudited condensed consolidated statements of operations are detailed below:.

Three-Month Period Ended September 30

Nine-Month Period Ended September 30

Three-Month Period Ended March 31,

CrossingBridge Operations Revenue

~~2022~~2023

~~2021~~2022

~~2022~~

~~2021~~

Advised fund fee revenue

1,~~092~~025,~~079~~464

~~357~~999,~~454~~258

~~3,251,263~~

~~905,601~~

Sub-advised fund fee revenue

~~815~~547,~~269~~926

~~801~~707,~~220~~866

~~2,125,566~~

~~1,974,876~~

Service fee revenue

86153,~~424~~864

~~86,424~~

Total fee revenue

1,~~993~~727,~~772~~254

1,~~158~~707,~~674~~124

~~5,463,253~~

~~2,880,477~~

If CBA were to lose a significant amount of AUM, the Company’s revenue would also decrease.

Revenue Recognition

CrossingBridge Operations Revenue

Management fee shares earned through the CrossingBridge operations segment are recorded on a monthly basis and are included in revenue on the accompanying unaudited condensed consolidated statements of operations. The Company has performed an assessment of its revenue contracts under the CrossingBridge operations segment and has not identified any contract assets or liabilities.

Willow Oak Operations Revenue

Management fee shares and fund management services fees earned through the Willow Oak operations segment are recorded on a monthly basis and are included in revenue on the accompanying unaudited condensed consolidated statements of operations. Performance fee shares are dependent upon exceeding specified relative or absolute investment return thresholds, which vary by affiliate relationship, and typically include annual measurement periods. Performance fee shares are recognized only when it is determined that there is no longer potential for significant reversal, such as when a fund’s performance exceeds a contractual threshold at the end of a specified measurement period. Consequently, a portion of the performance fee shares recognized may be partially or wholly related to services performed in prior periods. The Company has performed an assessment of its revenue contracts under the Willow Oak operations segment and has not identified any contract assets or liabilities.

A summary of revenue earned through Willow Oak operations during the ~~post~~three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022~~2023 ~~through September 30, 2022~~ and included on the accompanying unaudited condensed consolidated statements of operations for the three- ~~and nine-~~month ~~periods~~ period ended ~~September~~March 3031, ~~2022~~2023 are detailed below:

	Three-Month Period Ended September 30		Nine-Month Period Ended September 30
Willow Oak Operations Revenue	Three-Month Period Ended March 31, 2023
Willow Oak Operations Revenue	2022		2022
Management fee revenue	$	15,167
Management fee revenue	$	8,206	$	8,206
Fund management services revenue		9,346
Fund management services revenue		13,768		13,768
Performance fee revenue		-
Performance fee revenue		-		-
Total revenue	$	24,513
Total revenue	$	21,975	$	21,975

Internet Operations Revenue

The Company generates revenue inthrough its internet operations segment from consumer and business-grade internet access, e-mail hosting and storage, wholesale managed modem services, ~~for~~e-mail ~~downstream~~and ~~internet service providers,~~ web hosting, third-party software as a reseller, and various ancillary services in the United States and Canada. Services include narrow-band (dial-up and ISDN) and broadband services (DSL, fiber-optic, and wireless), web hosting, and additional related services to consumers and businesses. Customers may also subscribe to web hosting plans to include email access and storage. Customer contracts through the internet operations segment can be structured as monthly or annual contracts. Under annual contracts, the subscriber pays a one-time annual fee, which is recognized as revenue ratably over the life of the contract. Under monthly contracts, the subscriber is billed monthly and revenue is recognized for the period to which the service relates. Domain name registration revenue is recognized at the point of registration. Sales of hardware are recognized as revenue upon delivery and acceptance of the product by the customer. Sales are adjusted for any returns or allowances. Management has concluded that the nature of the performance obligation is cyclical with a very low possibility for nonperformance. Contract liabilities (deferred revenue) are recognized in the amount of collections received in advance of services to be performed. No contract assets are recognized or incurred.

Deferred Revenue

Deferred revenue represents collections from customers in advance of internet services to be performed. Revenue is recognized in the period service is provided. Total deferred revenue recorded under the internet operations segment as of ~~September~~March 3031, 2023 and December 31, 2022 was $~~175~~168,~~552~~047 and $156,859, respectively. During the three-month period ended March 31, 2023, $70,744 of revenue was recognized from prior-year contract liabilities (deferred revenue). The internet operations segment ~~does~~did not have comparable activity asfor of the ~~year~~three-month period ended ~~December~~March 31, ~~2021~~2022.

Income Taxes

Income taxes for ENDI Corp. are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax benefits or consequences of events that have been included in the condensed consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment, inclusive of the recent tax reform act. ENDI Corp. filed its first tax return for the year ended December 31, 2021, which is open to potential ~~IRS~~ examination by the Internal Revenue Service for three years.

As of ~~September~~March 3031, ~~2022~~2023, the Company reported $~~400~~1,~~283~~409,001 of net deferred tax assets on the condensed consolidated balance ~~sheet~~sheets. These net deferred tax assets consist primarily of ~~post-closing~~historic ~~activity,~~net ~~including~~operating ~~certain~~losses ~~transactions~~that ~~related~~were toacquired by the Company as part of the Business Combination, ~~and~~as well as post-closing activity which includes certain deferred tax assets and liabilities that were not previously recognized when CrossingBridge was a nontaxable entity. ~~The~~In accordance with Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”), the Company has ~~not~~performed ~~yet~~an ~~completed~~analysis ~~its~~to ~~measurement~~determine if a change of ~~potential~~control ~~deferred~~occurred ~~tax~~as ~~assets~~a result of the Business Combination and ~~liabilities~~has determined that ~~were~~a ~~acquired~~change inof control is more likely than not to have occurred on August 11, 2022. Under Section 382, net operating loss carryforwards that arose prior to the ~~Business~~ownership ~~Combination~~change aswill ~~discussed~~have limited availability to offset taxable income arising in ~~Note~~future 4periods following the ownership change. ~~The~~Section ~~Company~~382 ~~currently~~imposes ~~maintains~~multiple aseparate ~~full~~and ~~valuation~~distinct ~~allowance~~limits ~~against~~on ~~certain~~the ~~historical~~utilization ~~deferred~~of ~~tax~~pre-change ~~assets,~~of ~~that~~control ~~are~~net ~~subject~~operating losses based on the fair market value of the Company immediately prior to the change of control, as well as certain ~~limitations~~activities ~~and~~that may ~~restrictions~~or may not occur during the 60 months immediately following the change of control. ~~The~~While the majority of the Company’s ~~did~~historic ~~not~~net ~~report~~operating ~~any~~losses ~~deferred~~will ~~tax~~be ~~assets~~limited orto ~~liabilities~~an asannual threshold, the majority of historic net operating losses also will not be subject to future expiration. As of the period ended ~~December~~March 31, ~~2021~~2023, the Company has not provided a valuation allowance against its net operating losses as the Company expects to be able to use its net operating losses in full to offset future taxable income generated by the Company.

In as much as CBA had a single member prior to the Closing Date, it had historically been treated as a disregarded entity for income tax purposes. Consequently, Federal and state income taxes have not been provided for periods prior to the Closing Date ~~as its single member was taxed directly on CBA’s earnings. During 2021~~, ~~CBA’s~~including ~~historical~~the ~~single member made a pass~~three-~~through~~month ~~entity~~period ~~tax (“PTET”) election with New York State. The PTET is an optional tax that partnerships or New York S corporations~~ended ~~may~~March ~~annually elect to pay on certain income for tax years beginning on or after January 1~~31, ~~2021. If an eligible partnership or New York S corporation elects to pay the PTET~~2022, as its ~~partners,~~single ~~members,~~member orwas ~~shareholders~~taxed ~~subject~~directly ~~to personal income tax may be eligible for a PTET credit~~ on ~~their New York State income tax returns.~~ CBA’s carve-out piece of the 2021 PTET election made by CBA’s historical single member was $112,100 and is included in the due to affiliate balance on the balance sheet as of the year ended December 31, 2021earnings. CBA activity subsequent to the Closing Date ~~will~~was be consolidated within ENDI Corp.’s tax return that will be filed for the year ended December 31, 2022 and ~~has~~was ~~been~~ included in the income tax provision for the ~~three-~~year ~~and nine-month periods~~ ended ~~September~~December 3031, 2022.

During the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March 3031, ~~2022~~2023, the Company reported $~~400~~32,~~283~~233 of income tax ~~benefit as a result of the change in net deferred tax assets~~expenses. As noted above, due to CBA’s disregarded status for periods prior to the Closing Date, no comparable income tax expenses existed for the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March 3031, ~~2021~~2022.

Income (Loss) Per Share

Basic income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Included in the basic income (loss) per share for the three-month period ended March 31, 2023, in addition to the number of shares of common stock outstanding, are 15,750 shares underlying common stock equity incentives awarded pursuant to the Company’s 2022 Plan, subject to the approval of the 2022 Plan by the Company’s stockholders at the 2023 Annual Meeting. These shares represent equity awards in the form of restricted stock units that will become fully vested upon stockholder approval of the 2022 Plan at the 2023 Annual Meeting.

In periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all potentially dilutive common shares is anti-dilutive. In periods of net income, diluted earnings per share is computed using the more dilutive of the “two-class method” or the “treasury method.” Dilutive earnings per share under the “two-class method” is calculated by dividing net income available to common stockholders as adjusted for the participating securities, by the weighted-average number of shares outstanding plus the dilutive impact of all other potentially dilutive common shares, consisting primarily of common shares underlying ~~common~~the ~~stock~~Class ~~equity~~W-1 ~~incentives~~and W-2 Warrants issued pursuant to the Merger Agreement. Dilutive earnings per share under the “treasury method” is calculated by dividing net income available to common stockholders by the weighted-average number of shares outstanding plus the dilutive impact of all potentially dilutive common shares, consisting primarily of common shares underlying ~~common~~the ~~stock~~Class ~~equity~~W-1 ~~incentives~~and W-2 Warrants issued pursuant to the Merger Agreement.

The number of potentially dilutive shares for the ~~three-~~period ~~and nine-month periods~~ ended ~~September~~March 3031, ~~2022~~2023, consisting of the Class W-1 and W-2 Warrants issued pursuant to the Merger Agreement, was 2,050,000. There were no potentially dilutive shares for the ~~three-~~period ~~and nine-month periods~~ ended ~~September~~March 3031, ~~2021~~2022. None of the potentially dilutive securities had a dilutive impact during the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March 3031, ~~2022~~2023.

Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments - Credit Losses” (Topic 326). The guidance eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate should now reflect an entity’s current estimate of all future expected credit losses. Under the previous guidance, an entity only considered past events and current conditions. In April 2019, the FASB further clarified the scope of the credit losses standard and addressed issues related to accrued interest receivable balances, recoveries, variable interest rates, and prepayments. In May 2019, the FASB issued further guidance to provide entities with an option to irrevocably elect the fair value option applied on an instrument-by-instrument basis for eligible financial instruments. In November 2019, the FASB issued further guidance on expected recoveries for purchased financial assets with credit deterioration, and transition refiled for troubled debt restructurings, disclosures related to accrued interest receivables, and financial assets secured by collateral maintenance provisions. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of certain amendments of this guidance must be applied on a modified retrospective basis and the adoption of the remaining amendments must be applied on a prospective basis. The Company currently expects that the adoption of this guidance may change the way weit ~~assess~~assesses the collectability of ~~our~~its receivables and recoverability of other financial instruments. The Company ~~will~~adopted ~~adopt~~ this guidance as of January 1, 2023. The adoption of this guidance isdid not ~~expected to~~ have a material impact on ~~our~~the Company’s condensed consolidated financial statements.

In ~~October~~August ~~2021~~2020, the FASB issued ASU ~~2021~~2020-0806, “~~Accounting~~Debt ~~for~~- ~~Contract~~Debt ~~Assets~~with Conversion and ~~Contract~~Other ~~Liabilities~~Options ~~from~~(Subtopic 470-20) and Derivatives and Hedging - Contracts ~~with~~in ~~Customers”~~Entity’s Own Equity (~~Topic~~Subtopic ~~805~~815-40)”. This update ~~provided~~simplifies ~~that~~the anaccounting ~~acquiror~~for noconvertible ~~longer~~debt ~~records~~and ~~deferred~~convertible ~~revenue~~preferred ofstock by removing the ~~acquiree~~requirements ~~based~~to onseparately ~~its~~present ~~acquisition~~certain ~~date~~conversion ~~fair~~features ~~value~~in equity. ~~Rather~~ In addition, the ~~acquiror~~amendments ~~accounts~~in ~~for~~the ~~contract~~ASU ~~assets~~also simplify the guidance in ASC 815-40, Derivatives and ~~liabilities~~Hedging: Contracts in ~~accordance~~Entity’s ~~with~~Own ~~Accounting~~Equity, ~~Standards~~by ~~Codification~~removing ~~(“ASC”)~~certain ~~606~~criteria asthat ifmust itbe ~~had~~satisfied ~~originated~~in ~~the~~order to classify a contract (ias equity.e. Finally, ~~continue~~the toamendments ~~account~~revise the guidance on calculating earnings per share, requiring use of the if-converted method for ~~such~~all ~~assets~~convertible instruments and ~~liabilities~~rescinding asan ~~has~~entity’s ~~historically~~ability ~~been~~to ~~done~~rebut by the ~~acquiree~~presumption of share settlement for instruments that may be settled in ~~accordance~~cash ~~with~~or ~~ASC~~other ~~606)~~assets. This new guidance is required to be adopted by public entities in years beginning after December 15, ~~2022~~2023, onwith aearly ~~prospective basis. Early~~ adoption is permitted. The Company ~~has~~ adopted this guidance as of ~~December~~January 311, ~~2021~~2022. The adoption of this guidance did not have a material impact on ~~our~~the Company’s condensed consolidated financial statements.

The Company does not believe that any other recently issued effective standards, or standards issued but not yet effective, if adopted, would have a material effect on the accompanying condensed consolidated financial statements.

NOTE 3. RELATED PARTY TRANSACTIONS

CrossingBridge Advisors, LLC

Historical Shared Expenses Prior to Consummation of the Merger

The Company, through CrossingBridge ~~Advisors~~, ~~LLC,~~ and its majority shareholder, Cohanzick ~~Management~~, ~~LLC (“Cohanzick”),~~ the historical sole member of CBA that is majority owned by the Company’s CEO and director, David Sherman, shared certain staff, office facilities, and administrative services. The parties involved had agreed to allocate these expenses based on the AUM of each party for activity occurring prior to the consummation of the Merger. These allocated expenses are reported under the CrossingBridge operations segment in the accompanying unaudited condensed consolidated statements of operations in the categories for which the utilization of services relates. A summary of the expenses allocated from Cohanzick to CBA for the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March 3031, 2022 ~~and~~is ~~2021 are~~ noted below:. There is no comparable activity for the quarterly period ended March 31, 2023, because Post-Merger there were no CBA expenses allocated in this manner.

Three-Month Period Ended September 30

Nine-Month Period Ended September 30

Three-Month Period Ended March 31,

Cohanzick Management Expense Allocation

~~2022~~2023

~~2021~~2022

~~2022~~

~~2021~~

Employee compensation and benefit expenses allocated

~~55,985~~-

~~153~~426,~~030~~996

~~502,445~~

~~602,344~~

Owner compensation and benefit expenses allocated

~~60,526~~-

~~146~~329,~~754~~647

~~394,793~~

~~293,180~~

Other allocated expenses

~~44,411~~-

~~128~~127,~~447~~195

~~327,303~~

~~306,566~~

Total allocated expenses

~~160,922~~-

~~428~~883,~~231~~838

~~1,224,541~~

~~1,202,090~~

AsThere ofwas ~~the~~no ~~periods ended September 30, 2022 and December 31, 2021, the~~ due to affiliate balance between CBA and Cohanzick reported on the Company’s ~~accompanying~~ condensed consolidated balance sheets ~~was~~as $0of the periods ended March 31, 2023 and December $331,~~377,291,~~ ~~respectively~~2022. ~~The~~Any due to affiliate balance is due 13 months after the calendar year-end upon 60 days’ written notice. If no notice is given, the date payment is due ~~will~~would extend for another 12 months with 0% interest. Repayments made ~~by CBA to Cohanzick for the allocated expenses~~ during the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March 3031, 2022 ~~totaled~~by ~~$913,122~~CBA ~~and~~to $3Cohanzick,~~764,351,~~ ~~respectively.~~for Noallocated ~~repayments~~expenses ~~were~~recorded ~~made~~ during the ~~three-~~year ~~and nine-month periods~~ ended ~~September~~December 3031, 2021, totaled $1,756,334.

Services Agreement with Cohanzick

~~Pursuant~~In toconnection with the ~~Merger~~closing ~~Agreement,~~of the ~~Company~~Merger, ~~through~~ CrossingBridge ~~Advisors, LLC, and Cohanzick have~~ entered into a ~~services~~Services ~~agreement,~~Agreement (the ~~initial~~“Services ~~term~~Agreement”) ofwith ~~which commenced on the Closing Date and ends on the first anniversary thereof, and will automatically renew for subsequent terms unless either CBA or~~ Cohanzick ~~elects~~pursuant to ~~terminate~~which ~~with~~CrossingBridge ~~120 days’ prior written notice. Pursuant to the services agreement, CBA~~ will make available to Cohanzick certain of its employees to provide investment advisory, portfolio management and other services to Cohanzick and, through Cohanzick, to Cohanzick’s clients. Any such individuals will be subject to the oversight and control of Cohanzick, and any services so provided to Cohanzick or a client of Cohanzick will be provided by such CBA employees in the capacity of a supervised person of Cohanzick. Cohanzick additionally may use the systems of CBA or its affiliates for its daily operations; provided that appropriate policies, procedures, and other safeguards are established to assure that (a) the books and records of each of CBA and Cohanzick are created and maintained in a manner so as to be clearly separate and distinct from those of the other person and the clients of such person, and (b) confidential client and/or other material non-public information relating to the investment advisory activities of CBA or Cohanzick, as applicable, or other proprietary information regarding either such person or its clients, is safeguarded and maintained for the benefit of such person. As consideration for its services, Cohanzick will pay CBA a quarterly fee equal to 0.05% per annum of the monthly weighted average AUM during such quarter with respect to all clients for which Cohanzick has full investment discretion. Cohanzick and CrossingBridge will also split the payment of certain costs of other systems which use is shared between Cohanzick and CrossingBridge. The initial term of the agreement is one year from the Closing Date. The Services Agreement shall continue until terminated pursuant to its terms. Specifically, after the one year anniversary of the execution of such agreement, either party may terminate the Services Agreement upon at least 120 days’ prior written notice to the other party. Notwithstanding the foregoing, either party may terminate the Services Agreement at any time upon written notice following a material breach of the Services Agreement by other party that remains uncured for at least 30 days after the other party receives notice of, or otherwise reasonably should have been aware of, the material breach.

During the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March 3031, ~~2022~~2023, CBA earned $86153,~~424~~864 of revenue from the ~~service~~Services ~~agreement~~Agreement with Cohanzick. No comparable revenue was earned during the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March 3031, ~~2021~~2022 as the ~~service~~Services ~~agreement~~Agreement was not in force until the Closing Date. As of March 31, 2023, a receivable of $153,864 related to the Services Agreement revenue is included in accounts receivable on the accompanying condensed consolidated balance sheets. All Services Agreement receivable amounts recorded of the year ended December 31, 2022, totaling $160,330, were collected during the three-month period ended March 31, 2023.

~~Willow~~License ~~Oak~~Agreement ~~Asset~~between ~~Management,~~CBA ~~LLC~~and Cohanzick

~~Services~~Pursuant to the Merger Agreement, the Company, through CBA and Cohanzick entered into a license agreement. The license agreement provides CBA with ~~Arquitos~~the right to use and occupy certain office space originally leased by Cohanzick from a third-party landlord pursuant to a lease agreement dated November 23, 2018. The initial term of the license agreement runs through the first anniversary of the commencement date of the license agreement and will automatically renew for subsequent one year terms unless otherwise earlier terminated pursuant to the terms thereof. Pursuant to the license agreement, CBA shall pay Cohanzick a fee equal to Licensee’s Share (as defined herein) of the following charges: a monthly base rental and increases in certain taxes and operating expenses. “Licensee’s Share” means for a calendar month that occurs in whole or in part during the term, the fraction, expressed as a percentage, the numerator of which is the number of CBA employees that occupied the licensed premises as of the first business day of such calendar month, and the denominator of which is the number of Cohanzick and CBA employees that occupied the premises as of the first business day of such calendar month, as reasonably determined by Cohanzick.

~~The~~During Company, through Willow Oak Asset Management, LLC, is party to a fund management services agreement with Arquitos Investment Manager, LP, Arquitos Capital Management, LLC, Arquitos Epicus, LP, and Arquitos Capital Offshore Master, Ltd. (collectively “Arquitos”), which are managed by our director, Steven L. Kiel, to provide Arquitos with Willow Oak Fund Management Services (“FMS”) consisting of the ~~following~~three-month ~~services:~~period ~~investor~~ended March ~~relations~~31, ~~marketing~~2023, ~~administration,~~CBA ~~legal,~~paid ~~accounting and bookkeeping~~$21,814 ~~annual audit coordination, and liaison to third-party service providers. This arrangement includes terms that provide for an exchange~~ of ~~services~~rental ~~between Willow Oak and Arquitos. Steven Kiel~~expenses, ~~through~~including ~~Arquitos~~utilities, ~~has~~per ~~been contracted to perform ongoing consulting services for~~ the ~~benefit~~license ofagreement ~~Willow~~with ~~Oak in the following areas: strategic development, marketing, networking, and fundraising~~Cohanzick. InNo ~~addition~~comparable toexpenses ~~the~~were ~~exchange~~paid ofduring ~~services, Willow Oak also earns monthly and annual fees as consideration for these services. These terms are in effect until December 31, 2022. During~~ the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March 3031, 2022, as the ~~Company~~license ~~earned~~agreement ~~$8,637~~with ofCohanzick ~~revenue~~was ~~through~~not ~~this~~in ~~fund~~force ~~management~~until ~~services arrangement. No comparable activity exists for~~ the ~~three-~~Closing ~~and nine-month periods ended September 30, 2021~~Date.

Enterprise Diversified, Inc.

Due from Affiliate

Pursuant to the Merger Agreement, Enterprise Diversified agreed to reimburse Cohanzick for certain fees and expenses, comprising primarily of legal and accounting fees incurred as part of the share registration process. These fees were initially recorded and reimbursed for a total of $594,152 during the year ended December 31, 2022. Upon further analysis by both parties, it was determined that only $470,329 of these fees were subject to reimbursement in accordance with the Merger Agreement. The initial over payment of these fees, totaling $123,823, has been included within the due from affiliate amount on the accompanying condensed consolidated balance sheets as of December 31, 2022. During the three-month period ended March 31, 2023, this over payment was repaid in full and the corresponding due from affiliate amount has been settled.

NOTE 4. MERGER AND BUSINESS COMBINATION WITH CROSSINGBRIDGE ADVISORS, LLC AND ENTERPRISE DIVERSIFIED, INC.

Overview

As previously announced on December 29, 2021, ~~the~~ENDI ~~Company~~ entered into the Merger Agreement with Enterprise Diversified, Zelda Merger Sub 1, Inc., a Delaware corporation (“First Merger Sub”), Zelda Merger Sub 2, LLC, a Delaware limited liability company (“Second Merger Sub”), CrossingBridge, ~~a Delaware limited liability company~~ and Cohanzick~~, a Delaware limited liability company, which was consummated on August 11, 2022~~.

Pursuant to the terms of the Merger Agreement, Enterprise Diversified merged with First Merger Sub, a wholly owned subsidiary of the Company, with Enterprise Diversified being the surviving entity ~~(the “First Merger”)~~, and CrossingBridge merged with Second Merger Sub, ~~also~~ a wholly owned subsidiary of the Company, with CrossingBridge being the surviving entity. In connection with the Mergers, each share of common stock of Enterprise Diversified was converted into the right to receive one share of Class A common stock, par value $0.0001 per share, of the Company (the “Class A Common Shares” or the “Class A Common Stock”), and Cohanzick, as the sole member of CrossingBridge, received 2,400,000 Class A Common Shares and 1,800,000 shares of Class B common stock, par value $0.0001 per share, of the Company (the “Class B Common Shares” or the “Class B Common Stock”, and together with the Class A Common Shares, the “Common Shares”), a Class W-1 Warrant to purchase 1,800,000 Class A Common Shares (“Class W-1 Warrant” or “W-1 Warrant”) and a Class W-2 Warrant to purchase 250,000 Class A Common Shares (“Class W-2 Warrant” or “W-2 Warrant”). The Class A Common Shares and Class B Common Shares are identical other than the Class B Common Shares: (i) have the right to designate directors (as described below); (ii) shall not be entitled to participate in earnings, dividends or other distributions with respect to the Class A Common Shares; and (iii) shall not receive any assets of the Company in the event of a liquidation. ~~The~~and ~~warrant~~(iv) toshall ~~purchase~~be ~~1,800,000~~subject ~~Class~~to Aredemption ~~Common~~in ~~Shares~~certain ~~and~~circumstances. ~~the~~The ~~warrant~~Class toW-1 ~~purchase~~Warrant ~~250,000~~and the Class AW-2 ~~Common~~Warrant ~~Shares~~ issued to Cohanzick may be exercised in whole or in part at any time prior to the date that is five years after the Closing Date, at an exercise price of $8.00 per Class A Common Share, subject to certain adjustments. Each of the warrants may also be exercised on a “cashless” basis at any time at the election of the holder and if not fully exercised prior to the expiration date of the warrant, shall be automatically exercised on a “cashless” basis. In addition, pursuant to the terms of ~~the~~a ~~Merger~~Securities Purchase Agreement dated as of August 18, 2022, certain designees of Cohanzick and certain officers, directors and employees of Enterprise Diversified purchased an aggregate of 405,000 Class A Common Shares at a price of $5.369 per share.

Pursuant to the Merger Agreement, Enterprise Diversified agreed to reimburse Cohanzick certain fees and expenses, which amount to ~~approximately~~ $470,329. These fees were reimbursed during the ~~current~~year ~~period~~ ended ~~September~~December 3031, 2022 and ~~are~~were reported on the ~~condensed~~ consolidated statements of operations as transaction expenses for the ~~three-~~year ~~and nine-month periods~~ ended ~~September~~December 3031, 2022. ~~The~~On ~~Company~~the ~~has~~Closing Date, the Company also entered into a registration rights agreement, (as amended, the “Registration Rights Agreement” or “RRA”), with certain stockholders that are deemed to be affiliates of ENDI immediately following the closing of the Mergers, pursuant to which such stockholders’ Class A Common Shares, including the Class A Common Shares underlying any warrants issued in connection with the Mergers, will be registered for resale on a registration statement to be filed by the Company with the SEC under the Securities Act of 1933, as amended.

The holders of the Class B Common Stock, voting together as a single class, have the right to designate a number of directors of the Company’s board of directors (rounded up to the nearest whole number) equal to the percentage of the Company’s common shares beneficially owned by the holders of Class B Common Stock and their affiliates at the time of such designation, provided however, that for purposes of this designation right, the holders of the Company’s Class B Common Stock, voting together as a single class, shall have the right to designate not more than a majority of the members of the Company’s board of directors then in office, and, provided further that so long as holders of Class B Common Stock and their affiliates beneficially own at least 5.0% of the total outstanding common shares of the Company, holders of Class B Common Stock, voting together as a single class, shall have the right to designate at least one director. Any director elected to the Company’s board of directors pursuant to the above provisions of the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) will be referred to as a “Class B Director” and may only be removed by the holders of a majority of the Class B Common Stock. The Company has also entered into a stockholder agreement and separate voting agreement with Cohanzick and certain other stockholders pursuant to which, among other provisions, from and after the date that the holders of Class B Common Shares are no longer entitled to elect at least one director to our board of directors pursuant to Certificate of Incorporation as described above, so long as David Sherman, Cohanzick and any of their successors or assigns (collectively, the “Principal Stockholder”) and their affiliates beneficially own at least 5% of our outstanding shares, the Principal Stockholder has the right to designate a number of the Company’s directors (rounded up to the nearest whole number) equal to the percentage of the Company’s common shares beneficially owned by the Principal Stockholder and its affiliates at the time of such designation, provided however that for purposes of this designation right, the Principal Stockholder and its affiliates shall have the right to designate not more than a majority of the members of the Company’s board of directors then in office and, provided further, that so long as the Principal Stockholder and its affiliates beneficially owns at least 5% of the total outstanding common shares of the Company, its shall have the right to designate at least one director.

~~The~~On ~~above~~the ~~description~~Closing ofDate, the ~~Merger~~Company also entered into a stockholder agreement (the “Stockholder Agreement”) with Cohanzick pursuant to which from and after the ~~transactions~~date ~~contemplated~~that ~~therein~~the ~~does~~holders ~~not~~of ~~purport~~Class B Common Shares are no longer entitled to beelect ~~complete~~at ~~and~~least isone ~~qualified~~director into ~~its~~our ~~entirety~~board byof ~~reference~~directors pursuant to the ~~Merger~~Certificate ~~Agreement~~of Incorporation as described above, ~~which~~the ~~was~~following ~~included~~provisions apply: so long as anDavid ~~exhibit~~Sherman, Cohanzick and any of their successors or assigns (collectively, the “Principal Stockholder”) and their Affiliates (as defined in the Stockholder Agreement) beneficially own at least 5% of the Company’s outstanding shares, the Principal Stockholder has the right to ~~Enterprise~~designate ~~Diversified~~a number of the Company’s ~~Current~~directors ~~Report~~of onthe ~~Form~~Company’s ~~8-K~~board ~~filed~~of ~~with~~directors (rounded up to the ~~SEC~~nearest ~~on December~~whole 29number) equal to the percentage of the Company’s common shares beneficially owned by the Principal Stockholder and its Affiliates at the time of such designation, provided ~~2021~~however that for purposes of this designation right, asthe ~~well~~Principal asStockholder and its Affiliates shall have the ~~information~~right ~~contained~~to indesignate ~~ENDI’s~~not ~~Current~~more ~~Report~~than ona ~~Form~~majority ~~8-K~~of ~~filed~~the ~~with~~members of the ~~SEC~~Company’s ~~on August~~board 12of directors then in office and, provided ~~2022~~further, that so long as the Principal Stockholder and ~~on October~~its 24Affiliates beneficially owns at least 5% of the total outstanding common shares of the Company, ~~2022~~its shall have the right to designate at least one director.

~~The~~On ~~Business~~the ~~Combination~~Closing isDate, ~~accounted~~the ~~for~~Company asalso aentered ~~reverse~~into ~~merger~~a ~~business~~voting ~~combination~~agreement ~~using~~ (the ~~acquisition~~“Voting ~~method~~Agreement”) with ofCohanzick ~~accounting~~and inSteven ~~accordance~~Kiel ~~with~~and ~~ASC~~Arquitos ~~805,~~Capital ~~Business~~Offshore ~~Combinations~~Master, ~~with~~Ltd., in ~~CrossingBridge~~their ~~representing~~capacity as the ~~accounting~~voting ~~acquiror.~~party ~~Because~~ (the ~~Merger~~“Voting ~~qualifies as a reverse acquisition~~Party”), ~~and~~pursuant ~~given~~to ~~that~~which ~~CrossingBridge~~the ~~was~~Voting aParty ~~private~~shall ~~company~~vote atall ~~the time~~ of ~~the Merger and therefore~~ its ~~value~~securities ~~was not readily determinable, the fair value~~ of the ~~Merger~~Company ~~consideration~~entitled ~~was deemed~~ to bevote ~~equal~~in to the ~~fair~~election ~~value~~ of ~~Enterprise~~the ~~Diversified~~Company’s atdirectors ~~the~~that ~~Closing~~such ~~Date.~~Voting AsParty ~~part~~or ofits ~~the~~affiliates ~~purchase~~own ~~price allocation~~(collectively, the ~~Company~~“Voting ~~engaged~~Shares”) anto ~~independent~~elect ~~third-party~~or ~~valuation~~maintain ~~consultant.~~in Inoffice ~~determining~~ the ~~total~~directors ~~consideration~~designated ~~for~~by Cohanzick (the ~~ASC~~“Cohanzick ~~805~~Member ~~analysis,~~Designees”). ~~the~~The ~~valuation~~Voting ~~consultant~~Agreement ~~utilized~~will ~~the~~terminate ~~volume~~automatically ~~weighted~~on ~~average~~the ~~price~~earlier of ~~Enterprise Diversified’s stock from~~ the ~~Merger announcement~~ date~~, December~~ ~~30,~~that ~~2021,~~(i) ~~through~~ the ~~Closing~~holders ~~Date.~~of ~~In doing so,~~ the ~~valuation consultant considered that the~~ Company’s ~~stock~~Class ~~was~~B ~~very~~Common ~~thinly~~Stock ~~traded~~or ~~and~~Cohanzick’s ~~the~~right ~~float~~to ~~was~~designate ~~only~~the ~~approximately~~Cohanzick ~~18.0%~~Member ofDesignees ~~total~~is ~~shares.~~terminated ~~The~~or ~~consultant~~expires ~~also~~for ~~noted~~any ~~the~~reason, ~~book~~(ii) ~~value~~Steven ofKiel ~~equity~~is ~~was~~no ~~approximately~~longer ~~$15.1~~a ~~million,~~member ~~and~~of ~~composed~~the ~~primarily~~Company’s board of ~~short-term~~directors ~~assets~~ and ~~liabilities,~~(iii) ~~while~~ the ~~market~~Voting ~~cap~~Party asand ofits ~~the~~affiliates ~~Closing~~cease ~~Date~~to ~~was~~hold ~~approximately~~any ~~$14~~Voting Shares.5 ~~million~~The ~~based~~Voting onAgreement ~~the~~will ~~closing~~also ~~price~~terminate ofautomatically ~~$5.49.~~with Asrespect ato ~~result~~any ofVoting ~~these~~Shares ~~considerations,~~no ~~the~~longer ~~valuation~~held ~~consultant~~by ~~determined that~~ the ~~purchase~~Voting ~~consideration~~Party ~~was~~or ~~estimated~~its ~~to be $18,637,576~~affiliates.

The Business Combination is accounted for as a reverse acquisition using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with CrossingBridge representing the accounting acquiror. Because the Merger qualifies as a reverse acquisition, and given that CrossingBridge was a private company at the time of the Merger and therefore its value was not readily determinable, the fair value of the Merger consideration was deemed to be equal to the fair value of Enterprise Diversified at the Closing Date. As part of the purchase price allocation, the Company engaged an independent third-party valuation consultant. In determining the total consideration for the ASC 805 analysis, the valuation consultant utilized the volume weighted average price of Enterprise Diversified’s stock from the Merger announcement date, December 30, 2021, through the Closing Date. In doing so, the valuation consultant considered that the Company’s stock was very thinly traded and the public float was only approximately 18.0% of total shares. The consultant also noted the book value of equity was approximately $15.1 million, and composed primarily of short-term assets and liabilities, while the market capitalization as of the Closing Date was approximately $14.5 million based on the closing price of $5.49. As a result of these considerations, the valuation consultant determined that the purchase consideration was estimated to be $18,637,576.

Purchase Price Allocation

The following table summarizes the fair values of assets acquired and liabilities assumed as of the Closing Date:

Cash	$	15,873,598
Accounts receivable		35,027
Accounts receivable, net		35,027
Note receivable		~~300~~50,000
Prepaid expenses		51,933
Other current assets		119,785
Fixed assets		3,431
Intangible assets		1,315,000
Goodwill		737,869
Goodwill		1,677,425
Intangible assets		1,255,000
Deferred tax assets, net		1,249,556
Accounts payable		(20,506	)
Accrued expenses		(513,922	)
Deferred revenue		(203,547	)
Other current liabilities		(648	)
Total consideration	$	18,637,576

The excess of purchase consideration over the fair value of net tangible and intangible assets acquired was recorded as goodwill, which is primarily attributed to the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized including expected synergies and the assembled workforce in place. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions and may be subject to change as additional information is received. The primary areas where provisional amounts have been used relate to the fair values of intangible assets acquired, certain tangible assets and liabilities acquired, ~~notes~~note receivable, deferred income tax assets and liabilities, and residual goodwill. As the total amount of residual goodwill remains preliminary, the Company has not yet assigned the residual goodwill amongst its segments. All residual goodwill will be held under the other operations segment until the assignment can be finalized. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the Closing Date.

During the Post-Merger period, the Company recorded three measurement period adjustments to the preliminary recorded values assigned to certain Company assets acquired as of the Closing Date. The ~~following~~fair ~~table~~value ~~sets~~assigned ~~forth~~to the ~~components~~Company’s note receivable was reduced from $300,000 to $50,000, the fair value assigned to the Company’s domain names was reduced from $235,000 to $175,000, and the fair value assigned to the Company’s net deferred tax assets was increased from $0 to $1,249,556. The net changes in fair value, totaling an increase of ~~identifiable~~$939,556, ~~intangible~~proportionally decreased the balance of residual goodwill from $1,677,425 to $737,869 as of December 31, 2022. These adjustments are the product of expanded valuation analyses performed by management and are incorporated within the values noted in the table above. The Company expects to finalize the fair values of assets acquired and ~~their~~liabilities ~~estimated~~assumed ~~useful~~as ~~lives~~soon as ofpracticable, but not later than one year from the Closing Date:.

Intangible Asset	Estimated Fair Value		Estimated Useful Life (in years)
Customer relationships - Sitestar.net	$	490,000		14
Customer relationships - Willow Oak	$	510,000		14
Trade Name - Sitestar.net	$	40,000		7
Trade Name - Willow Oak	$	40,000		7
Internet Domains - Sitestar.net	$	235,000		7

While the total amount of residual goodwill remains preliminary, the Company has assigned the residual goodwill based on an internal analysis that compared the anticipated future economic benefit to be generated by each operating segment with the Post-Merger carrying value of the respective operating segment. By way of this analysis, management has allocated the balance of the residual goodwill to the CrossingBridge operations segment as of December 31, 2022.

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the Closing Date.

Intangible Assets	Estimated Fair Value		Estimated Useful Life (in Years)
Customer relationships - Sitestar.net	$	490,000		14
Customer relationships - Willow Oak	$	510,000		14
Trade Name - Sitestar.net	$	40,000		7
Trade Name - Willow Oak	$	40,000		7
Internet Domains - Sitestar.net	$	175,000		Indefinite

The estimated fair values of (i) the customer relationships were determined using the multi-period excess earnings method, (ii) the trade names were determined using the relief from royalty income approach, and (iii) the internet domain names were estimated using a market approach. The approaches used to estimate the fair values use significant unobservable inputs including revenue and cash flow forecasts, customer attrition rates, and appropriate discount rates.

Unaudited Pro Forma Information

The unaudited pro forma financial information presented below summarizes the combined results of operations for the Company as though the Merger was completed on January 1, 2021.

The unaudited pro forma financial information for all periods presented includes, among other items, amortization charges from acquired intangible assets, retention and other compensation expenses accounted for separately from the purchase accounting, and the related tax effects, but excludes the impacts of any expected operational synergies. The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the Merger actually been completed on January 1, 2021.

The unaudited pro forma financial information for the ~~nine~~three-month ~~periods~~period ended ~~September 30~~March 31, 2022 ~~and~~combines ~~2021 combine~~ the historical results of the Company for those periods, the historical results of Enterprise Diversified for the periods prior to the Closing Date, and the effects of the pro forma adjustments discussed above. The unaudited pro forma financial information is as follows:

	Nine Months Ended September 30
	Three Months Ended March 31, 2022
	2022			2021
Revenue		$	1,964,099
Revenues	$	6,222,381		$	8,458,192
Net income			1,362,088
Net income		1,298,552			4,127,954
Net income per share		$	0.25
Net income per share	$	0.24		$	0.76

Revenues from the Business Combination recognized by the Company from the Closing Date to September 30, 2022 totaled $133,634.

NOTE 5. FAIR VALUE OF ASSETS AND LIABILITIES

GAAP defines fair value as the amount that would be received from the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants at the measurement date, and establishes a hierarchy for disclosing assets and liabilities measured at fair value based on the inputs used to value them. The fair value hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are based on market pricing data obtained from sources independent of the Company. Unobservable inputs reflect management’s judgment about the assumptions market participants would use in pricing the asset or liability. The fair value hierarchy includes three levels based on the objectivity of the inputs as follows:

● Level I - inputs are quoted prices in active markets as of the measurement date for identical assets and liabilities that the Company has the ability to access;. ~~this~~This category includes exchange-traded mutual funds and equity securities; ● Level II - inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates or yield curves, that are observable at commonly quoted intervals; this category includes mortgage-backed securities, asset-backed securities, corporate debt securities, certificates of deposit, commercial paper, U.S. agency and municipal debt securities, U.S. Treasury securities, and derivative contracts; and ● Level III - inputs are unobservable inputs for the asset or liability and include situations where there is little, if any, market activity for the asset or liability; the measurements are highly subjective.

●

Level II - inputs are inputs other than quoted prices included in Level I that are observable for the asset or liability, either directly or indirectly. Level II inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates or yield curves, that are observable at commonly quoted intervals; this category includes mortgage-backed securities, asset-backed securities, corporate debt securities, certificates of deposit, commercial paper, U.S. agency and municipal debt securities, U.S. Treasury securities, and derivative contracts; and

●

Level III - inputs are unobservable inputs for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The measurements are highly subjective.

The availability of observable inputs can vary and is affected by a variety of factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is the greatest for assets or liabilities categorized in Level III.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment.

The following table presents information about the Company’s assets measured at fair value as of the periods ended ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021:~~2022.

	Level 1		Level 2		Level 3
	Level I		Level II		Level III
September 30, 2022	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
March 31, 2023	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Investments in securities, at fair value (cost $5,753,067)	$	5,721,047	$	-	$	-
Investments in securities, at fair value (cost $6,255,614)	$	6,408,355	$	-	$	-
W-1 Warrant and Class B common stock liability, at fair value		-		-		954,000
W-1 Warrant and Class B Common Stock liability, at fair value		-		-		828,000
Total	$	56,~~721~~408,~~047~~355	$	-	$	~~954~~828,000

	Level 1		Level 2		Level 3
	Level I		Level II		Level III
December 31, 2021	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
December 31, 2022	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Investments in securities, at fair value (cost $2,265,489)	$	2,265,088	$	-	$	-
Investments in securities, at fair value (cost $5,802,395)	$	5,860,688	$	-	$	-
W-1 Warrant and Class B common stock liability, at fair value		-		-		-
W-1 Warrant and Class B Common Stock liability, at fair value		-		-		576,000
Total	$	25,~~265~~860,~~088~~688	$	-	$	-576,000

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As discussed previously, through Enterprise Diversified, the Company holds Level I investments, ~~that~~among which include shares of CrossingBridge Ultra-Short Duration Fund, CrossingBridge Low Duration High Yield Fund, and CrossingBridge Responsible Credit Fund, which are SEC registered mutual funds for which CBA is the ~~advisor.~~adviser, ~~The~~as ~~Company~~well as shares of CrossingBridge Pre-Merger SPAC ETF, which is an ETF also ~~holds~~advised by CBA. As of March 31, ~~through~~2023, ~~Enterprise~~Level ~~Diversified~~I investments held by the Company in investment products advised by CBA totaled $5,133,383. The Company’s remaining Level I investments ~~that~~held ~~include~~as of March 31, 2023 includes marketable U.S. fixed income and equity securities. There isare no liquidity ~~restriction~~restrictions in connection with these investments held through Enterprise Diversified.

As discussed previously, pursuant to the Merger Agreement, the Company issued 1,800,000 Class B common shares that are mandatorily redeemable upon exercise of the W-1 Warrant. Management has determined that the W-1 Warrant represents an embedded equity-linked feature within the Class B common shares, and therefore is valued in conjunction with the Class B common shares as a long-term liability on the condensed consolidated balance ~~sheet~~sheets. The value of the W-1 Warrant and Class B common shares is determined using a Black-Scholes pricing model, resulting in a Level III classification. The pricing model considers a variety of inputs at each measurement date including, but not ~~limited to~~exclusively, the Company’s closing stock price, the Company’s estimated equity volatility over the remaining warrant term, the warrant exercise price, the Company’s annual rate of dividends, the bond equivalent yield, and remaining term of the W-1 Warrant. Additionally, a discount is applied based on an analysis of the underlying marketability of the Company’s Class A common stock with respect to Rule 144 restrictions. ~~The~~This value is ~~then~~ remeasured at each reporting date with the change in value flowing through the unaudited condensed consolidated ~~statement~~statements of operations for the relevant period. The table below represents the relevant inputs used in the value determination as of March 31, 2023 and change in value from the Closing Date to March 31, 2023.

On the Closing Date, the fair market value of the liability associated with the W-1 Warrant and Class B common shares was recorded for $1,476,000. Subsequently, as of the period ended September 30, 2022, the liability was remeasured to $954,000. This change in value, largely attributed to fluctuation of the Company’s closing stock price, resulted in the Company recognizing $522,000 of other income related to the “mark-to-market” of the W-1 Warrant on the condensed consolidated statements of operations for the three- and nine-month periods ended September 30, 2022.

W-1 Warrant and Class B Common Stock
Inputs below are as of March 31, 2023

ENDI Corp. closing stock price	$	4.35
Warrant exercise price	$	8.00
Estimated equity volatility over remaining term		40.30	%
ENDI Corp. annual rate of dividends		0.00	%
Bond equivalent yield		3.60	%
Remaining term of W-1 Warrant		4.37
Discount for lack of marketability		23.00	%

August 11, 2022	$	1,476,000
Less: Unrealized gains reported in other income		(900,000	)
December 31, 2022		576,000
Plus: Unrealized losses reported in other income		252,000
March 31, 2023	$	828,000

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company analyzes its intangible assets — goodwill, customer relationships, trade names, and domain names — on an annual basis or more often if events or changes in circumstances indicate potential impairments. No impairments were recorded during the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March 3031, ~~2022~~2023. No comparable analysis was performed ~~for~~during ~~any~~the ~~prior~~three-month period ~~presented~~ended March 31, 2022 as the Company did not hold any intangible assets prior to the ~~period~~Closing ~~ended September 30, 2022~~Date.

As discussed previously, Enterprise Diversified holds a promissory ~~notes~~note receivable from Triad DIP Investors, LLC and 847,847 aggregate shares of Triad Guaranty, Inc. common stock. ~~The~~During ~~Company~~the ~~carries~~three-month ~~the~~period ended March 31, 2023, Enterprise Diversified was issued a second amended and restated promissory ~~notes~~note onby Triad DIP Investors, LLC and was further notified that Triad had successfully secured a new financing resource that would permit a full repayment of Enterprise Diversified’s promissory note. Subsequent to March 31, 2023, the ~~condensed~~Company ~~consolidated~~received repayment of the full historical principal balance ~~sheet~~and ataccrued ~~fair~~interest ~~value~~related to the amended and restated promissory note receivable, which iswas ~~reported~~greater atthan the Company’s historical recorded carrying amount of $~~300~~50,000 as of ~~September~~December 3031, 2022. As a result of these developments, the Company recognized $334,000 of other income related to the subsequent increase in value of the note receivable, which is included on the unaudited condensed consolidated statements of operations for the period ended March 31, 2023. As of March 31, 2023, the Company reported $384,400 on the condensed consolidated balance sheets related to the value of its promissory note receivable. The Company periodically reassesses the collectability of its notes receivable if events or circumstances indicate that a note may not be fully recoverable. As of ~~September~~March 3031, ~~2022~~2023, the Company ~~attributes~~attributed no value to its shares of Triad Guaranty, Inc. common stock due to the stocks’ general lack of marketability.

NOTE 6. INTANGIBLE ASSETS AND PROPERTY AND EQUIPMENT

The Company’s intangible assets as of September 30, 2022 are included below:

	September 30, 2022
Customer relationships	$	1,000,000
Domain names		235,000
Trade names		80,000
		1,315,000
Less: accumulated amortization		(14,556	)
Intangible assets, net	$	1,300,444

The Company did not report any comparable intangible assets as of December 31, 2021.

Amortization expenses on intangible assets during the three- and nine-month periods ended September 30, 2022 totaled $14,556. There was no comparable amortization expense for the three- and nine-month periods ended September 30, 2021.

The cost of property and equipment as of September 30, 2022 consisted of the following:

	September 30, 2022
Property and equipment	$	3,431
Less: accumulated depreciation		(336	)
Property and equipment, net	$	3,095

The Company did not report any comparable property and equipment as of December 31, 2021.

Depreciation expense was $336 for the three- and nine-month periods ended September 30, 2022. There was no comparable depreciation expense reported for the three- and nine-month periods ended September 30, 2021.

NOTE 6. INTANGIBLE ASSETS

The Company’s intangible assets as of March 31, 2023 and December 31, 2022 are included below.

	March 31, 2023			December 31, 2022

Customer relationships	$	1,000,000		$	1,000,000
Domain names		175,000			175,000
Trade names		80,000			80,000
		1,255,000			1,255,000
Less: accumulated amortization		(51,789	)		(31,074	)
Intangible assets, net	$	1,203,211		$	1,223,926

Amortization expenses on intangible assets during the three-month period ended March 31, 2023 totaled $20,715. There was no comparable amortization expense reported for the three-month period ended March 31, 2022.

NOTE 7. SEGMENT INFORMATION

Prior to the Closing Date, including during the period ended March 31, 2022, the Company operated through a single reportable segment, CrossingBridge operations. Beginning on ~~August~~ ~~12,~~the ~~2022~~Closing ~~and~~Date ~~continuing~~ through the ~~period~~year ended ~~September~~December 3031, 2022, the ~~post~~Post-Merger period, and continuing through the current period ended March 31, 2023, the Company operated through four reportable segments: CrossingBridge operations, Willow Oak operations, internet operations, and other operations.

The CrossingBridge operations segment includes revenue and expenses derived from investment management and advisory and sub-advisory services.

Beginning on August 12, 2022, the Willow Oak operations segment includes revenues and expenses derived from various joint ventures, service offerings, and initiatives undertaken in the asset management industry.

Beginning on August 12, 2022, the internet operations segment includes revenue and expenses related to our sale of internet access, e-mail and hosting, storage, and other ancillary services. Our internet segment includes revenue generated by operations in both the United States and Canada. Included in ~~accompanying~~unaudited condensed consolidated statements of operations for the three- ~~and nine-~~month ~~periods~~ period ended ~~September~~March 3031, ~~2022~~2023, the internet operations segment generated revenue of $~~106~~176,~~736~~796 in the United States and revenue of $49,~~923~~366 in Canada~~, respectively~~. All assets reported under the internet operations segment for the period ended ~~September~~March 3031, ~~2022~~2023 are located within the United States.

Beginning on August 12, 2022, the other operations segment includes revenue and expenses from nonrecurring or one-time strategic funding or similar activity and any revenue or expenses derived from corporate office operations, as well as expenses related to public company reporting, the oversight of subsidiaries, and other items that affect the overall Company.

Summarized financial information concerning the Company’s reportable segments is shown in the following tables for the three- ~~and nine-~~month periods ended ~~September~~March 3031, ~~2022,~~ 2023 and ~~2021~~2022.

Three-Month Period Ended September 30, 2022	CrossingBridge		Willow Oak			Internet			Other			Consolidated
Three-Month Period Ended March 31, 2023	CrossingBridge		Willow Oak			Internet			Other			Consolidated
Revenues	$	1,~~993~~727,~~772~~254	$	2124,~~975~~513		$	~~111~~186,~~659~~162		$	-		$	21,~~127~~937,~~406~~929
Cost of revenue		-		-			3360,~~564~~751			-			3360,~~564~~751
Operating expenses		~~934~~1,~~584~~363,094		5494,~~547~~818			3261,~~011~~526			1639,~~705,512~~779			2,~~726~~159,~~654~~217
Other income (expense)		31,965		(1,262	)		(691	)		922,595			952,606
Other income (expenses)		291		(95	)		(157	)		287,966			288,005
Net income (loss)		1364,~~091,153~~451		(3370,~~834~~400	)		4563,~~393~~728			(~~782~~351,~~917~~813	)		~~319~~5,~~795~~966
Goodwill		-737,869		-			-			~~1,677,425~~-			1737,~~677,425~~869
Identifiable assets	$	12,~~747~~407,~~869~~023	$	~~733~~647,~~065~~997		$	~~921~~856,~~946~~920		$	17,~~390~~610,~~716~~112		$	2021,~~793~~522,~~596~~052

Nine-Month Period Ended September 30, 2022	CrossingBridge			Willow Oak			Internet			Other			Consolidated
Three-Month Period Ended March 31, 2022	CrossingBridge			Willow Oak			Internet			Other			Consolidated
Revenues	$	51,~~463~~707,~~253~~124		$	~~21,975~~-		$	~~111,659~~-		$	-		$	51,~~596~~707,~~887~~124
Cost of revenue		-			-			~~33,564~~-			-			~~33,564~~-
Operating expenses		2942,~~863,046~~665			~~54,547~~-			~~32,011~~-			~~1,705,512~~-			4942,~~655,116~~665
Other income (expense)		15,448			(1,262	)		(691	)		922,595			936,089
Other expenses		(2,842	)		-			-			-			(2,842	)
Net income (loss)		2,615,655			(33,834	)		45,393			(782,917	)		1,844,297
Net income		761,617			-			-			-			761,617
Goodwill		-			-			-			~~1,677,425~~-			~~1,677,425~~-
Identifiable assets	$	13,~~747~~554,~~869~~765		$	~~733,065~~-		$	~~921,946~~-		$	~~17,390,716~~-		$	203,~~793~~554,~~596~~765

Three-Month Period Ended September 30, 2021	CrossingBridge		Willow Oak		Internet		Other		Consolidated
Revenues	$	1,158,674	$	-	$	-	$	-	$	1,158,674
Cost of revenue		-		-		-		-		-
Operating expenses		756,494		-		-		-		756,494
Other income		53		-		-		-		53
Net income		402,233		-		-		-		402,233
Goodwill		-		-		-		-		-
Identifiable assets	$	3,021,827	$	-	$	-	$	-	$	3,021,827

Nine-Month Period Ended September 30, 2021	CrossingBridge		Willow Oak		Internet		Other		Consolidated
Revenues	$	2,880,477	$	-	$	-	$	-	$	2,880,477
Cost of revenue		-		-		-		-		-
Operating expenses		1,966,742		-		-		-		1,966,742
Other income		128		-		-		-		128
Net income		913,863		-		-		-		913,863
Goodwill		-		-		-		-		-
Identifiable assets	$	3,021,827	$	-	$	-	$	-	$	3,021,827

NOTE 8. COMMITMENTS AND CONTINGENCIES

Leases

As of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, the Company ~~has~~ had no long-term leases that ~~require~~required right-of-use assets or lease liabilities to be recognized.

In accordance with ongoing accounting policy elections, the Company does not recognize right-of-use assets or lease liabilities for short-term or month-to-month leases. Total rental expenses attributed to short-term leases, including its membership agreement through ENDI Corp. and its license agreement through CBA, for the three- ~~and nine-~~month periods ended ~~September~~March 3031, ~~2022~~2023 and ~~2021,~~ 2022 were $1623,~~004~~914 and $6219,~~160~~795, ~~and $21,239 and $57,101,~~ respectively.

There are no other operating lease costs for the three- ~~and nine-~~month periods ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022.

Other Commitments

Registration Rights Agreement

As ~~has been~~ previously reported, ~~pursuant~~on to the ~~Merger~~Closing ~~Agreement~~Date, the Company entered into athe ~~Registration Rights Agreement (“~~RRA”) ~~dated August 11, 2022,~~ with certain stockholders that are deemed to be affiliates of ENDI immediately following the Closing Date, pursuant to which such stockholders’ Class A Common Shares, including the Class A Common Shares underlying any warrants issued in connection with the Mergers, will be registered for resale on a registration statement to be filed by the Company with the SEC under the Securities Act of 1933, as amended. ~~As has been previously reported, on~~On ~~August~~May 311, ~~2022~~2023, the Company entered into ana second amendment ~~(the “Amendment”)~~ to the RRA. ~~Pursuant~~pursuant to ~~the~~which ~~Amendment,~~ the parties extended the deadline by which the Company shall prepare and file or cause to be prepared and filed with the SEC a registration statement ~~under~~to ~~the Securities Act of 1933, as amended, registering certain securities as set forth in the RRA~~ on or before ~~May~~August 1, 2023.

Litigation & Legal Proceedings

Enterprise Diversified, Inc. (f/k/a Sitestar Corporation) v. Frank Erhartic, Jr.

~~As has been previously reported, on~~On April 12, 2016, Enterprise Diversified filed a civil action complaint against Frank Erhartic, Jr. (the “Former CEO”), Enterprise Diversified’s former CEO and director (prior to December 14, 2015) and an owner of record of Enterprise Diversified’s common stock, alleging, among other things, that the Former CEO engaged in, and caused Enterprise Diversified to engage in, to its detriment, a series of unauthorized and wrongful related party transactions, including: causing Enterprise Diversified to borrow certain amounts from the Former CEO’s mother unnecessarily and at a commercially unreasonable rate of interest,; converting certain funds of Enterprise Diversified for personal rent payments to the Former CEO,; commingling in land trusts certain real properties owned by Enterprise Diversified and real properties owned by the Former CEO,; causing Enterprise Diversified to pay certain amounts to the Former CEO for lease payments under an unauthorized lease as to a storage facility owned by the Former CEO,; causing Enterprise Diversified to pay rent on its corporate headquarters owned by the Former CEO’s ex-wife in amounts commercially unreasonable and excessive, and tomaking ~~make~~ real estate tax payments thereon for the personal benefit of the Former CEO,; converting to the Former CEO and/or absconding with five motor vehicles owned by Enterprise Diversified,; causing Enterprise Diversified to pay real property and personal property taxes on numerous properties owned personally by the Former CEO,; causing Enterprise Diversified to pay personal credit card debt of the Former CEO,; causing Enterprise Diversified to significantly overpay the Former CEO’s health and dental insurance for the benefit of the Former CEO,; and causing Enterprise Diversified to pay the Former CEO’s personal automobile insurance. Enterprise Diversified is seeking, among other relief available, monetary damages in excess of $350,000. This litigation matter is currently pending in the Circuit Court for the City of Lynchburg (Lynchburg, Virginia), and is set and scheduled for trial on ~~November~~September 1714, ~~2022~~2023. ~~Beginning~~During in the ~~prior quarterly~~ period ended March 31, ~~2022 and during the prior quarterly period ended June 30~~2023, ~~2022,~~ the parties ~~had~~ engaged in settlement discussions with respect to the case; however, ~~during~~ the ~~quarterly~~parties ~~period~~have ~~ended September~~thus ~~30,~~far ~~2022,~~been ~~the~~unsuccessful ~~parties ceased engaging~~ in ~~such~~reaching ~~settlement~~an ~~discussions~~agreement. ~~Accordingly,~~ Enterprise Diversified intends to move forward with a trial of the case to conclusion should the parties fail to reach a settlement agreement.

NOTE 9. STOCKHOLDERS’ EQUITY

Classes of Shares

As of ~~September~~March 3031, ~~2022~~2023, ~~ENDI~~the ~~Corp.~~Company’s Certificate of Incorporation, authorizes the issuance of an aggregate of 17,800,000 shares of capital stock of ~~ENDI~~the ~~Corp.~~Company consisting of 14,000,000 authorized shares of Class A Common Stock, par value of $0.0001 per share, 1,800,000 authorized shares of Class B Common Stock, par value of $0.0001 per share, and 2,000,000 shares of ~~Preferred~~preferred ~~Stock~~stock, par value of $0.0001 per share (“Preferred Stock”).

Class A Common Stock

As of ~~September~~March 3031, ~~2022~~2023, 5,452,383 shares of ~~ENDI~~the ~~Corp.~~Company’s Class A Common Stock were issued and outstanding.

Holders of the Company’s Class A Common Stock are entitled to one vote per share on all matters toon bewhich ~~voted~~stockholders onof by the Company generally or holders of the Company’s Class A Common Stock as a separate class are entitled to vote. However, holders of the Company’s Class A Common Stock will have no voting power as to any amendment to ~~ENDI Corp.~~Company’s Certificate of Incorporation relating solely to the terms of any outstanding series of ENDI Corp. Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Company’s Certificate of Incorporation or pursuant to the Delaware General Corporation Law (“DGCL”).

~~Holders~~Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or any other outstanding class or series of stock of the Company, having a preference over or the right to participate with the Class A Common Stock with respect to the payment of dividends and other distributions in cash, property or shares of stock of the Company, holders of the Company’s Class A Common Stock are entitled to receive such dividends and other distributions in cash, property or shares of ENDI Corp. stock ifwhen, aas ~~dividend~~and isif so declared thereon by the Company’s board of directors from assets or funds legally available therefor. Upon a liquidation, dissolution or winding up of the Company’s affairs, after payment or provision for payment of the debts and other liabilities of the Company and of the preferential and other amounts, if any, to which the holders of ENDI Corp. Preferred Stock ~~will~~shall be entitled, the holders of all outstanding shares of ENDI Corp.’s Class A Common Stock will be entitled to receive, on a pro rata basis, the remaining assets of the Company available for distribution ratably in proportion to the number of shares held by each such stockholder.

Class B Common Stock

As of ~~September~~March 3031, ~~2022~~2023, 1,800,000 shares of ~~ENDI~~the ~~Corp.~~Company’s Class B Common Stock were issued and outstanding.

Holders of the Company’s Class B Common Stock are entitled to one vote per share on all matters toon bewhich ~~voted~~stockholders onof by the Company generally or holders of ~~the~~ Company’s Class B Common Stock as a separate class are entitled to vote. However, holders of the Company’s Class B Common Stock will have no voting power as to any amendment to ~~ENDI~~the ~~Corp.~~Company’s Certificate of Incorporation relating solely to the terms of any outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Company’s Certificate of Incorporation or pursuant to the DGCL. The holders of ENDI Corp.’s Class B Common Stock are not entitled to receive any dividends or other distributions in cash, property, or shares of the Company’s stock and will not be entitled to receive any assets of ENDI Corp. in the event of any liquidation, dissolution, or winding up of ~~its~~the Company’s affairs.

Preferred Stock

As of ~~September~~March 3031, ~~2022~~2023, ~~ENDI~~the ~~Corp.~~Company had no issued shares of Preferred Stock.

The voting, dividend, distribution, and any other rights of holders of any series of ~~ENDI~~the ~~Corp.~~Company’s Preferred Stock will be as described in the applicable Certificate of Designation designating such series of Preferred Stock.

NOTE 10. SUBSEQUENT EVENTS

~~Management~~On May ~~has~~10, ~~evaluated~~2023, ~~all~~the ~~subsequent~~board ~~events~~of ~~from~~trustees of the RiverPark Strategic Income Fund (the “RiverPark Fund”) and holders of a majority of the outstanding voting securities of RiverPark Fund approved that certain Purchase and Assignment and Assumption Agreement dated as of ~~September~~November 3018, 2022, ~~through~~and subsequently amended on ~~November~~December 1428, 2022, by and between CBA, whose President is David Sherman, the ~~date~~Company’s Chief Executive Officer and director, RiverPark Advisors, LLC (“RiverPark”) and Cohanzick, a registered investment adviser established by David Sherman (as amended, the ~~condensed~~“RiverPark ~~consolidated~~Agreement”) ~~financial~~and ~~statements~~the ~~were~~transactions ~~issued~~contemplated thereby. ~~Management~~On May ~~concluded~~12, 2023 (the “Closing Date”), as contemplated by the RiverPark Agreement, CBA assumed (i) the advisory services role under that nocertain ~~additional~~Amended ~~subsequent~~and ~~events~~Restated ~~have~~Investment ~~occurred~~Advisory Agreement (the “RiverPark Advisory Agreement”) dated February 14, 2012 by and between RiverPark and RiverPark Funds Trust (“RiverPark Trust”) pursuant to which RiverPark provided investment advisory services to the RiverPark Fund and (ii) the Operating Expense Limitation Agreement (“RiverPark Expense Limitation Agreement”) dated as of July 1, 2019 by and between RiverPark and RiverPark Trust. Furthermore, pursuant to the RiverPark Agreement, on the Closing Date, the parties to that ~~would~~certain ~~require~~Sub-Advisory ~~recognition~~Agreement ordated ~~disclosure~~as inof August 1, 2012 by and among RiverPark, Cohanzick and the ~~condensed~~RiverPark ~~consolidated~~Trust, ~~financial~~on ~~statements~~behalf of the RiverPark Fund, have terminated such agreement and made CrossingBridge a party to the RiverPark Expense Limitation Agreement.

In connection with the RiverPark Agreement, Cohanzick and CBA entered into an agreement which prohibits Cohanzick from competing with a substantially similar strategic income strategy as the RiverPark Fund as an adviser or sub-adviser to a fund registered under the 1940 Act or any Undertakings for the Collective Investment in Transferable Securities products.

Management has evaluated all subsequent events from March 31, 2023, through May 15, 2023, the date the condensed consolidated financial statements were issued. Management concluded that no additional subsequent events have occurred that would require recognition or disclosure in the condensed consolidated financial statements.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This section is intended to provide readers of our financial statements information regarding our financial condition, results of operations, and items that management views as important. The following discussion and analysis of financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related footnotes as of and for the ~~quarterly~~ three-month period ended ~~September~~March 3031, ~~2022~~2023 appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis of financial condition and results of operations contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in other reports we file with the SEC from time to time. The discussion of results, causes, and trends should not be construed to imply any conclusion that such results or trends will necessarily continue in the future. Additionally, it should be noted that a uniform comparative analysis cannot be performed for all segments, as a segment’s limited financial history or restructuring results in less comparable financial performance. As a result of the Business Combination that was consummated on August 11, 2022, and the determination that the Business Combination would be accounted for as a reverse ~~business combination~~acquisition, all historic activity for the three- ~~and nine-~~month ~~periods~~period ended ~~September~~March ~~30, 2021, and for the year ended December~~ 31, ~~2021,~~ 2022 represents only the financial activity of CrossingBridge Advisors, LLC. Activity presented for ~~the~~and ~~current~~as of the three-month period ended March 31, 2023 and ~~nine-month~~as ~~periods~~of the year ended ~~September~~December 3031, 2022, includes CrossingBridge financial activity, which ~~was then~~has been consolidated with the activity of Enterprise Diversified, Inc. and its subsidiaries as of ~~the Closing Date on~~ August 11, 2022, through the ~~current~~ period ended ~~September~~March 3031, ~~2022~~2023. All amounts ~~in this report~~ are in U.S. dollars, unless otherwise noted.

Overview

~~During~~The ~~the~~Company ~~quarterly~~operates ~~period ended September 30, 2022, ENDI Corp. operated~~ through four reportable segments:.

● CrossingBridge Operations - this segment includes revenue and expenses derived from investment advisory and sub-advisory services offered through various SEC registered mutual funds and an ETF through CrossingBridge Advisors, LLC;

● Willow Oak Operations - this segment includes revenue and expenses derived from our various joint ventures, service offerings, and initiatives undertaken in the asset management industry through Willow Oak Asset Management, LLC and its subsidiaries;

● Internet Operations - this segment includes revenue and expenses related to our sale of internet access, hosting, storage, and other ancillary services through Sitestar.net, Inc.; and

● Other Operations - this segment includes any revenue and expenses from nonrecurring or one-time strategic funding or similar activity that is not considered to be one of our primary lines of business, and any revenue or expenses derived from corporate office operations, as well as expenses related to public company reporting, the oversight of subsidiaries, and other items that affect the overall Company.

The management of the Company also continually reviews various business opportunities for the Company, including those in other lines of business.

CrossingBridge Operations

~~CrossingBridge~~This ~~Advisors,~~segment ~~LLC~~includes ~~was~~revenue and ~~formed~~expenses asderived afrom ~~limited~~the ~~liability~~Company’s ~~company~~investment onadvisory ~~December~~and ~~23,~~sub-advisory ~~2016,~~services ~~under~~offered ~~the~~through ~~laws~~various ofSEC ~~the~~registered ~~State~~mutual offunds ~~Delaware.~~and ~~CBA~~an ~~derives~~exchange-traded ~~its~~fund ~~revenue~~(“ETF”) ~~and~~through ~~net~~CrossingBridge ~~income~~Advisors, ~~from~~LLC. ~~investment~~As ~~advisory~~of ~~services.~~March ~~CBA~~31, is2023, aCBA ~~registered~~serves ~~investment~~as an adviser ~~under~~to ~~the~~its ~~Investment~~four ~~Advisers~~proprietary ~~Act~~products ofand ~~1940,~~sub-adviser asto ~~amended.~~two ~~CBA~~additional ~~provides~~products. ~~investment~~As ~~advisory~~of ~~services~~March to31, ~~investment~~2023, ~~companies~~the ~~(including~~assets ~~mutual~~under ~~funds~~management ~~and exchange-traded funds~~(“AUM”) ~~registered~~for ~~under~~CBA, ~~the~~including ~~Investment~~advised ~~Company~~and ~~Act~~sub-advised ~~of 1940~~funds, aswere ~~amended,~~in ~~both~~excess asof an$1.3 ~~adviser and a sub-adviser~~billion.

~~CBA~~The ~~has~~investment ~~served~~strategies as a sub-adviser to the Destinations Low Duration Fixed Income Fund and the Destinations Global Fixed Income Opportunities Fund since their inception in 2017. Fees generated from these activities serve as a core revenue stream for CBA. ~~Given~~include: ~~the~~ultra-short ~~strong demand for conservative~~duration, low duration ~~strategies~~high inyield, ~~this~~strategic ~~ultra-low-to-rising-interest~~credit, ~~rate~~responsible ~~environment~~credit, ~~the~~and ~~CrossingBridge~~special ~~Low~~purpose ~~Duration~~acquisition ~~High~~companies ~~Yield~~(“SPACs”). ~~Fund~~These ~~has~~strategies ~~experienced~~primarily ~~strong~~employ ~~growth~~high ~~and~~yield ~~is a strong~~ and ~~growing~~investment ~~revenue~~grade ~~source~~corporate ~~for~~debt, ~~CBA.~~as ~~The~~well ~~funds~~as ~~launched~~credit byopportunities ~~CBA~~ in ~~2021 (CrossingBridge Ultra~~event-~~Short~~driven ~~Duration Fund~~securities, ~~the~~post ~~CrossingBridge~~reorganization ~~Responsible Credit Fund~~investments, and ~~the~~stressed ~~CrossingBridge~~and ~~Pre-Merger~~distressed ~~SPAC~~debt. ~~ETF)~~Details ~~currently represent less than 10%~~ of CBA’s ~~assets~~products ~~under~~are ~~management~~included ~~(“AUM”), but CBA believes they have the ability to continue to grow and become a core contributor of AUM and revenue for CBA.~~below:

Product Name	Ticker Symbol	Inception Date	Advisory Role	AUM as of March 31, 2023 (in dollars)
CrossingBridge Low Duration High Yield Fund	CBLDX	January 31, 2018	Adviser	544,256,472
CrossingBridge Ultra-Short Duration Fund	CBUDX	June 30, 2021	Adviser	89,423,512
CrossingBridge Responsible Credit Fund	CBRDX	June 30, 2021	Adviser	23,444,166
CrossingBridge Pre-Merger SPAC ETF	SPC	September 20, 2021	Adviser	65,429,043
Destinations Low Duration Fixed Income Fund	DLDFX	March 20, 2017	Sub-adviser	272,082,490
Destinations Global Fixed Income Opportunities Fund	DGFFX	March 20, 2017	Sub-adviser	354,260,090

In the first quarter of 2023, CBA’s AUM increased by approximately 5.5% to approximately $1.349 billion, but AUM comparatively declined by approximately $197 million, or approximately 12.7%, from the period ended March 31, 2022 compared to the period ended March 31, 2023. Management believes CBA’s net outflows period over period are attributable to disintermediation caused by significantly higher short-term interest rates as well as a steep, inverted yield curve. While CBA’s overall AUM has decreased from March 31, 2022 to March 31, 2023, the AUM of CBA’s proprietary advised funds, having higher management fee rates than CBA’s sub-advised funds, grew by approximately 17.7% during the first quarter of 2023 and remained comparable to advised fund AUM as of the period ended March 31, 2022. CBA’s advised fund AUM represented approximately 53.6% of total AUM as of March 31, 2023 in comparison to 46.8% of total AUM as of March 31, 2022.

All four of CBA’s proprietary advised products generated positive returns for investors during the three-month period ended March 31, 2023 and during the year ended December 31, 2022. During the three-month period ended March 31, 2023, CBA believes its contributions to the performance of Destinations Low Duration Fixed Income Fund and the Destinations Global Fixed Income Opportunities Fund were accretive as CBA continues to be a steward of a significant allocation within these funds.

CBA has seen interest in its funds continuing to grow in the registered investment adviser, bank/trust company, and family office segments of the market and believes that a potential indication from the Federal Reserve that a pause in raising interest rates could occur may also help drive momentum for additional AUM growth. CBA expects demand for the CrossingBridge Low Duration High Yield Fund to continue to increase as the fund has recently attained a strong five-year track record and a five-out-of-five star rating, as of January 31, 2023.

For the two newer mutual funds (CrossingBridge Ultra-Short Duration Fund and the CrossingBridge Responsible Credit Fund), although they do not have established track records as individual funds, CBA believes that the market environment paired with its long-standing reputation in the fixed income space will be helpful in continuing to raise assets for those funds. As for the CrossingBridge Pre-Merger SPAC ETF which was launched on September 20, 2021, we believe the fund remains a viable ultra-short, fixed income alternative. The size of the opportunity set, however, has significantly decreased from peak levels as a substantial amount of SPACs have either completed deals or liquidated, paired with a slowdown in new issuance/capital market activity over the past year. Looking forward, the size of the SPAC market will continue to fluctuate and will be dependent upon a number of factors, including the number and size of mergers and/or liquidations as well as new issues. CBA will continue to closely monitor developments in the market; CBA saw a 37% increase in new SPAC issuances during the three-month period ended March 31, 2023 as compared to December 31, 2022.

On November 18, 2022, CBA entered into a Purchase and Assignment and Assumption Agreement, as amended on December 28, 2022 with RiverPark Advisors, LLC and Cohanzick pursuant to which RiverPark Advisors, LLC intended to sell to CBA certain assets and CBA intended to assume certain liabilities, including certain rights and responsibilities under the RiverPark Advisory Agreement (as defined herein) and the RiverPark Expense Limitation Agreement (as defined herein) relating to the provision of investment advisory services for the mutual fund known as RiverPark Strategic Income Fund (“RSIIX”), subject to certain terms and conditions set forth in the agreement. The transactions contemplated by such agreement closed on May 12, 2023. See “Part II, Item 5. Other Information for additional information.” Since the RiverPark Agreement was announced on November 28, 2022, which proposed CBA assuming the role as the adviser to the RiverPark Fund, RSIIX has grown by approximately $59 million, or approximately 32%, with ending AUM as of March 31, 2023 totaling approximately $242 million. RSIIX attained a five-out-of-five star rating for both a three- and five-year period. On September 30, 2023, the RiverPark Fund will celebrate its 10-year anniversary.

CBA’s investment strategies with associated advised and/or sub-advised mutual funds and the ETF are as follows:

Ultra-Short Duration Strategy
	●	Primarily invest in investment grade fixed income securities with an ultra-short portfolio duration target of typically 1 year or less.
		○	CrossingBridge Ultra-Short Duration Fund is advised
Low Duration Strategy
	Low Duration High Yield
	●	Primarily invest in below investment grade fixed income securities with a short portfolio duration target of 3 years or less.
		○	CrossingBridge Low Duration High Yield Fund is advised
		○	Destinations Low Duration Fixed Income Fund is sub-advised
	Pre-Merger Special Purpose Acquisition Companies (“SPACs”)
	●	Primarily invest in purchasing common stock and units of SPACs that are trading at or below their pro rata share of the collateral trust account with the intent of disposing the shares prior to business combination.
	●	Aims to capture the fixed income nature of pre-merger SPACs along with the potential equity upside that they present.
		○	CrossingBridge Pre-Merger SPAC ETF is advised
		○	Other CrossingBridge investment strategies may employ pre-merger SPACs as part of their portfolios
Strategic Income Strategy
	●	A flexible investment and duration mandate without restrictions as to issuer credit quality, capitalization, or security maturity.
		○	Destinations Global Fixed Income Opportunities Fund is sub-advised
Responsible Investing Strategy
	●	Primarily invest in corporate debt of issuers that portray a mindfulness toward environment, social, and governance (“ESG”) practices. The strategy has a flexible investment and duration mandate without restrictions as to issuer credit quality, capitalization, or security maturity. Further, the strategy may have concentrated holdings.
	●	CBA uses its “responsible investing criteria” (i.e., specific exclusionary and inclusionary criteria based on ESG standards) when making investment decisions for this strategy. To the extent an issuer’s business generates 10% or more of its revenues from certain businesses considered by CBA to be incompatible with its ESG criteria, then such business will be deemed “primarily engaged” in such business and excluded from the portfolio. Generally, issuers primarily engaged in weapons, tobacco, alcohol, gambling, pornography, or other categories are excluded. After applying the initial exclusionary screen, CBA applies an inclusionary screen based on environmental objectives (such as reduction of carbon emissions), social objectives (such as treating all constituencies in a proper and ethical manner) and governance objectives (such as diversification of backgrounds, skills, and philosophy among an issuers board or executive officers). CBA utilizes a proprietary matrix to measure an issuer’s ESG engagement. CBA’s proprietary matrix sets a minimum threshold level that must be achieved for an issuer’s securities or other instruments to satisfy the fund’s responsible investing criteria. Ratings are based on positive and negative attributes found, both of which can have an impact on the final score given for an issuer. CBA sources information relating to its responsible investing criteria from publicly-available resources such as financial filings, presentations, news articles, and management discussions. CBA monitors an issuer’s conformity to its responsible investing criteria and each holding will be formally reviewed by the CBA at least annually.
		○	CrossingBridge Responsible Credit Fund is advised

Management believes that the greatest negative impact on portfolio returns is the failure of a large position to perform according to the original thesis, which results in loss of capital. We attempt to mitigate this risk through investment analysis, portfolio construction, and hedging of risks with respect to individual positions and/or the overall portfolio as we see fit. In most cases, our investment analysis begins with a fundamental understanding of an issuer’s business model and management objectives followed by an analysis of the capital structure. Depending on the nature of the investment, the analysis may continue with a more in-depth study of legal aspects, pending transactions, and processes that may impact the issuer. A good investment in a bad business is not a recipe for enduring success.

CBA has seen interest in its funds continuing to grow in the registered investment adviser, bank/trust company, and family office segments of the market. The marketing environment remains strong as attractive options to invest cash or to invest generally in fixed income securities without substantial interest rate and credit risk have become scarce. CBA’s investment thesis for its funds is expected to become stronger as expectations for interest rate hikes and low duration strategies are topics of interest in 2022. CBA expects demand for the CrossingBridge Low Duration High Yield Fund to continue to increase as CBA has developed a strong and more established track record. For the two new mutual funds (CrossingBridge Ultra-Short Duration Fund and the CrossingBridge Responsible Credit Fund), although they do not have established track records as individual funds, CBA believes that the market environment paired with its long-standing reputation in the fixed income space will be helpful in continuing to raise assets for those funds. As for the CrossingBridge Pre-Merger SPAC ETF, which was launched on September 20, 2021, CBA believes this will grow into a core AUM/revenue source as investors become more comfortable with the strategy as a complement or alternative to traditional fixed income allocations.

CBA’s primary objective is to fulfill its fiduciary duty to its clients. CBA’s secondary objective is to grow its intrinsic value to achieve an adequate long-term return for our member.

Willow Oak Operations

~~Beginning~~This onsegment ~~August~~includes ~~12,~~revenue and ~~2022,~~expenses ~~the~~derived ~~start~~from of the ~~post-Merger~~Company’s ~~period,~~various ~~the~~joint ~~Company~~ventures, ~~operates~~service ~~its~~offerings, ~~Willow~~and ~~Oak~~initiatives ~~operations~~undertaken ~~business~~in ~~through~~the ~~its~~asset ~~wholly~~management ~~owned~~industry ~~subsidiaries,~~through Willow Oak Asset Management, LLC ~~(“Willow~~and ~~Oak”),~~its ~~Willow~~subsidiaries. ~~Oak~~Subsequent ~~Capital~~to ~~Management~~the period ended March 31, ~~LLC~~2023, Willow Oak Asset Management ~~Affiliate~~Fund Management Services, LLC (“Willow Oak ~~AMS~~”), ~~and~~entered into a consulting services agreement with an independently managed third-party investment firm aiming to launch a private investment partnership in 2023. Pursuant to such agreement, Willow Oak ~~Asset~~and ~~Management~~its ~~Fund~~affiliates ~~Management~~will ~~Services~~earn revenue for services related to fund launch activities, ~~LLC~~compliance ~~(“Willow~~related ~~Oak~~activities, ~~FMS”)~~marketing, operational consulting, and service-provider on-boarding.

Willow Oak is party to a fee share arrangement with Coolidge Capital Management, LLC (“Coolidge”), whose sole member is Keith D. Smith. Willow Oak and Coolidge are the members of Bonhoeffer Capital Management, LLC, the general partner to Bonhoeffer Fund, LP, a private investment partnership launched by Willow Oak in 2017 and managed by Coolidge. Under their agreement concerning Bonhoeffer Fund, LP, Willow Oak paid all start-up expenses and pays agreed-upon operating expenses that are not partnership expenses, Coolidge is responsible for all investment management, and Willow Oak receives 50% of all performance and management fees earned. Additionally, Willow Oak FMS earns a direct fee from the private limited partnership for the administrative, compliance program management, and tax and audit liaison services it renders.

Willow Oak is also party to a fund management services agreement with Arquitos Investment Manager, LP, Arquitos Capital Management, LLC, Arquitos Epicus, LP, and Arquitos Capital Offshore Master, Ltd. (collectively “Arquitos”), which are managed by our director, Steven L. Kiel, to provide Arquitos with Willow Oak’s Fund Management Services (“FMS”) consisting of the following services: strategic planning, investor relations, marketing, operations, compliance program management and legal coordination, accounting and bookkeeping, annual audit and tax coordination, and liaison to third-party service providers. In exchange for these services, Steven Kiel, through Arquitos, has been contracted to perform ongoing consulting services for the benefit of Willow Oak in the following areas: strategic development, marketing, networking, and fundraising. In addition to this exchange of services, Willow Oak also earns an annual performance fee share.

Willow Oak, through Willow Oak Capital Management, LLC, also partners with Geoff Gannon and Andrew Kuhn through Focused Compounding Capital Management, LLC (“Focused Compounding”). Willow Oak Capital Management is a 10% beneficial owner of Focused Compounding, which manages capital through separately managed accounts and a private investment fund which launched in January 2020. Willow Oak provides ongoing FMS and operational support to both the separately managed accounts and the private investment fund. As consideration for the arrangement, Willow Oak Capital Management is entitled to 10% of gross management and performance fees earned by Focused Compounding. Additionally, Willow Oak FMS earns a direct fee from the private limited partnership for the administrative, compliance program management, and tax and audit liaison services it renders.

Willow Oak, through Willow Oak AMS and Willow Oak FMS, is also party to a strategic relationship agreement with SVN Capital, LLC (“SVN Capital”), whereby Willow Oak receives certain economic rights in exchange for the provision of certain ongoing FMS and operational services. Pursuant to these economic rights, Willow Oak is entitled to 20% of gross management and performance fees earned by SVN Capital. SVN Capital manages separately managed accounts as well as a private investment fund, SVN Capital Fund, LP, which was launched by SVN Capital’s managing member in January 2020. Willow Oak FMS also earns a direct fee from SVN Capital Fund, LP, for the administrative, compliance program management, and tax and audit liaison services it renders.

Internet Operations

~~Beginning~~This onsegment ~~August~~includes ~~12,~~revenue ~~2022,~~and ~~the~~expenses ~~start~~related ofto the ~~post-Merger period, the~~ Company’s ~~operates~~sale ~~its~~of internet ~~operations segment through Sitestar.net~~access, ae-mail ~~wholly owned subsidiary. Sitestar.net is an internet service provider (“ISP”) that offers consumer~~ and ~~business-grade internet access, wholesale managed modem services, web~~ hosting, ~~third-party software as a reseller~~storage, and ~~various~~other ancillary services. Wethrough ~~provide services to customers in the United States and Canada~~Sitestar. ~~This segment markets and sells narrow-band (dial-up and ISDN) and broadband services (Digital Subscriber Line (“DSL”)~~net, ~~fiber-optic, and wireless), as well as web hosting and related services to consumers and businesses~~Inc.

Our primary competitors include regional and national cable and telecommunications companies that have substantially greater market presence, brand-name recognition, and financial resources compared to Sitestar.net. Secondary competitors include local and regional ISPs.

The residential broadband internet access market is dominated by cable and telecommunications companies. These companies offer internet connectivity through the use of cable modems, DSL programs, and fiber. These competitors have extensive scale and significantly more resources than Sitestar.net. Competitors often offer incentives for customers to purchase internet access by offering discounts for bundled service offerings (i.e., phone, television, and internet). While we are a reseller of broadband services including DSL and fiber services, our profit margin is heavily influenced by these competitive forces.

There are currently laws and regulations directly applicable to access or commerce on the internet, covering issues such as user privacy, freedom of expression, pricing, characteristics and quality of products and services, taxation, advertising, intellectual property rights, information security, and the convergence of traditional telecommunications services with internet communications. We may be positively or negatively affected by the repeal, modification, or adoption of various laws and regulations. These changes may occur at the international, federal, state, and local levels, and may cover a wide range of issues.

As of September 30, 2022, the focus of our internet operations segment is to generate cash flow, work to make our costs variable, and reinvest in our operations when an acceptable return is available. We did not make significant reinvestments into the internet operations segment during the quarterly period ended September 30, 2022.

Management routinely endeavors to identify the market value for domain names owned by the Company in order to assess potential income opportunities. Management evaluates these domain names for third-party sales potential, as well as for other marketing opportunities that could generate new revenue from current customers who utilize the domains.

Other Operations

~~Beginning~~This onsegment ~~August~~includes ~~12,~~any ~~2022,~~revenue ~~the~~and ~~start~~expenses of from the ~~post-Merger~~Company’s ~~period, other operations include~~ nonrecurring or one-time strategic funding or similar activity ~~and~~ ~~other corporate operations~~ that ~~are~~ is not considered to be one of the Company’s primary lines of business, and any revenue or expenses derived from the Company’s corporate office operations, as well as expenses related to public company reporting, the oversight of subsidiaries, and other items that affect the overall Company.

~~Corporate~~Management ~~operations~~of ~~include any~~the ~~revenue~~Company oralso ~~expenses~~continually ~~derived~~reviews ~~from~~various ~~corporate~~business ~~office~~opportunities ~~operations~~for the Company, asincluding ~~well~~those in other lines of business. The Company’s primary focus is on generating cash flow so that the Company has the flexibility to pursue opportunities as ~~expenses~~they ~~related~~present themselves. The Company intends to ~~public~~only ~~company~~invest ~~reporting,~~cash in a segment if the ~~oversight~~Company ofbelieves ~~subsidiaries,~~that the return on the invested capital is appropriate for the risk associated with the investment. This consideration is measured against all investment opportunities available to the Company and ~~other~~is ~~items~~not ~~that~~limited ~~affect~~to the ~~overall~~foregoing segments nor the Company’s historical operations.

24 eBuild Ventures, LLC

On March 16, 2023, through eBuild Ventures, LLC, the Company made a capital contribution of $955,266, representing approximately a 3% ownership stake, in a private company that operates in the consumer products e-commerce space fulfilled by Amazon. This investment is carried at its cost basis of $955,266 as of March 31, 2023.

Financing Arrangement - Triad Guaranty, Inc.

In August 2017, Enterprise Diversified, Inc. (“Enterprise Diversified”) entered into an agreement with several independent third parties to provide debtor-in-possession financing to an unaffiliated third party, Triad Guaranty, Inc., through Triad DIP Investors, LLC. Triad Guaranty, Inc. exited bankruptcy in April 2018, and Enterprise Diversified was subsequently issued a second amended and restated promissory note. Subsequent to the period ended March 31, 2023, this note was collected in full. Enterprise Diversified also holds shares of Triad Guaranty, Inc. common stock, which were received as consideration for certain amounts of accrued interest earned pursuant to the amended and restated promissory note. As of March 31, 2023, we attribute no value to the shares of Triad Guaranty, Inc. common stock held due to the stocks’ general lack of marketability.

Summary of Financial Performance

Stockholders’ equity increased from $~~591~~20,~~909~~382,693 at December 31, ~~2021~~2022 to $1920,~~844~~470,405 at ~~September~~March 3031, ~~2022~~2023. This change was ~~attributable~~primarily attributed to $2364,~~615,655~~451 of net income in the CrossingBridge operations segment ~~for the nine-month period ended September 30~~, ~~2022,~~ $4563,~~393~~728 of net income in the internet operations segment, a net loss of $3370,~~834~~400 in the Willow Oak operations segment, and a net loss of $~~782~~351,~~917~~813 in other segments for the ~~post~~three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022 through September 30, 2022~~2023. Corporate expenses for the ~~post~~three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022~~2023 ~~through September 30, 2022~~ included in the net loss from other operations totaled $1614,~~705,512~~306. Total comprehensive net income for all segments for the ~~nine~~three-month period ended ~~September~~March 3031, ~~2022~~2023 ~~equaled~~was $15,~~844,297~~966.

Balance Sheet Analysis

This section provides an overview of changes in our assets, liabilities, and equity and should be read together with our ~~accompanying~~ condensed consolidated financial statements, including the accompanying notes to the financial statements included elsewhere in this Quarterly Report on Form 10-Q. The table below provides a balance sheet summary for the periods presented and is designed to provide an overview of the balance sheet changes from quarter to quarter. Ending balances for Enterprise Diversified, ~~Inc.~~ and its subsidiaries have been consolidated as of the quarterly period ended September 30, 2022, the period in which the Mergers occurred.

	September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021
	March 31, 2023		December 31, 2022		March 31, 2022
Assets
Cash and cash equivalents	$	119,~~685~~801,~~819~~659	$	110,~~062~~690,~~375~~398	$	642,672	$	~~1,272,924~~	$	~~470,552~~
Investments in securities, at fair value		56,~~721~~408,~~047~~355		25,~~248~~860,~~556~~688		2,262,239		~~2,265,088~~		~~2,250,000~~
Accounts receivable, net		~~726~~772,~~841~~859		~~506~~744,~~593~~638		649,854		~~511,248~~		~~301,275~~
Intangible assets, net		2,977,869		-		-		-		-
Goodwill		737,869		737,869		-
Deferred tax assets, net		400,283		-		-		-		-
Intangible assets, net		1,203,211		1,223,926		-
Other assets		959,162		11,416		-		4,567		-
Investments in private companies, at cost		1,405,266		450,000		-
Total assets	$	22,471,021	$	3,828,940	$	3,554,765	$	4,053,827	$	3,021,827
Deferred tax assets, net		1,409,001		1,441,234		-
Liabilities and Stockholders' Equity
Other assets		521,701		322,742		-
Accounts payable	$	21,381	$	-	$	-	$	-	$	-
Total assets	$	22,259,921	$	21,471,495	$	3,554,765
Accrued compensation		1,239,929		763,750		381,875		-		591,885
Liabilities and Stockholders' Equity
Accrued expenses		233,857		8,829		24,469		84,627		57,593
Accounts payable	$	12,209	$	71,306	$	-
Deferred revenue		175,552		-		-		-		-
Accrued compensation		401,625		23,342		381,875
Class W-1 Warrant and Class B Common Stock		954,000		-		-		-		-
Accrued expenses		378,665		260,185		24,469
Due to affiliate		-		939,950		1,794,895		3,377,291		2,264,563
Deferred revenue		168,047		156,859		-
Other liabilities		1,898		-		-		-		-
Class W-1 Warrant and redeemable Class B Common Stock		828,000		576,000		-
Total liabilities		2,626,617		1,712,529		2,201,239		3,461,918		2,914,041
Due to affiliate		-		-		1,794,895
Total stockholders' equity		19,844,405		2,116,411		1,353,526		591,909		107,786
Other liabilities		970		1,110		-
Total liabilities and stockholders' equity	$	22,471,021	$	3,828,940	$	3,554,765	$	4,053,827	$	3,021,827
Total liabilities		1,789,516		1,088,802		2,201,239
Total stockholders' equity		20,470,405		20,382,693		1,353,526
Total liabilities and stockholders' equity	$	22,259,921	$	21,471,495	$	3,554,765

As of the period ended ~~September~~March 3031, ~~2022~~2023, the Company reported ana ~~increase~~decrease in cash and cash equivalents of approximately $~~10.4 million~~889,000, an increase in investments in securities, at fair value, of approximately $~~3.5 million~~548,000, and an increase in ~~net~~investments ~~intangible~~in ~~assets~~private companies, at cost, of approximately $~~3.0~~955,000 ~~million when~~ compared to the year ended December 31, ~~2021~~2022. As of ~~September~~the 30period ended March 31, ~~2022~~2023, the Company also reported an increase of ~~approximately $1.2 million of~~ accrued compensation expenses, ~~a decrease~~ of approximately $~~3.4 million in its due to affiliate balance~~378,000 and an increase ~~of approximately $0.9 million~~ in aits liability associated with the ~~issuance~~Class ~~of the~~ W-1 Warrant ~~when~~and redeemable Class B Common Stock of $252,000 compared to the year ended December 31, ~~2021~~2022. These ~~period-over-period~~ changes ~~are~~were ~~largely~~primarily ~~due~~the toresult ~~the~~of ~~purchase~~operating ~~accounting~~and ofinvesting ~~the~~activities ~~Business~~that ~~Combination~~management ~~and~~consider to be within the ~~consolidation~~Company’s normal course-of-business during the ~~assets~~three-month ~~and~~period ~~liabilities~~ended ofMarch ~~Enterprise~~31, ~~Diversified~~2023.

2524

Results of Operations

CrossingBridge Operations

Revenue attributed to the CrossingBridge operations segment for the three-month period ended ~~September~~March 3031, ~~2022,~~2023 was $1,~~993~~727,~~772~~254, representing an increase of $~~835~~20,~~098~~130 compared to the three-month period ended ~~September~~March 3031, ~~2021~~2022. This marginal increase was primarily due to athe ~~corresponding~~current ~~increase~~period inrevenue ~~the~~attributed ~~AUM~~to ~~period~~CBA’s ~~over period~~Services Agreement with Cohanzick. The increase in revenue was offset by an increase of $~~178~~420,~~090~~429 in operating expenses, which totaled $~~934~~1,~~584~~363,094 for the three-month period ended ~~September~~March 3031, ~~2022~~2023. The increase in operating expenses for the three-month period ended ~~September~~March 3031, ~~2022~~2023, compared to the three-month period ended ~~September~~March 3031, ~~2021~~2022, was primarily associated with an increase in employee compensation expenses and ~~mutual~~professional ~~fund expenses~~fees. Net profit margin ~~increased~~decreased ~~from~~to 3521% for the three-month period ended ~~September~~March 3031, ~~2021,~~2023 tofrom 5545% for the three-month period ended ~~September~~March 3031, 2022. This was largely due to the increase in ~~AUM~~operating ~~and~~expenses ~~corresponding~~period ~~increase~~over ~~in revenue~~period.

Compensation and related costs are typically comprised of salaries, bonuses, and benefits. Salary compensation and bonuses are generally the largest expenses for the CBA segment. Bonuses are subjective and based on individual performance, the underlying funds’ performance, and profitability of the firm, as well as the consideration of future outlook. Compensation and related costs increased by $~~252~~172,~~932~~662 for the three-month period ended ~~September~~March 3031, ~~2022~~2023 compared to the three-month period ended ~~September~~March 3031, ~~2021~~2022. This increase was due to ansalary ~~increase~~increases inthat ~~allocated~~took ~~compensation~~effect ~~expenses~~at ~~from~~the ~~Cohanzick~~beginning ~~due~~of to the current year, a relative increase in ~~AUM~~accrued ~~period~~but ~~over~~unpaid ~~period~~annual ~~for~~bonus amounts, and the ~~CBA~~hiring ~~funds~~of an additional employee during the period ended March 31, 2023. Compensation expense can fluctuate period over period as management evaluates investment performance, individual performance, Company performance, and other factors.

~~Other~~Professional ~~general~~fees ~~and~~increased ~~administrative expenses decreased~~ by $74204,~~842~~471 for the three-month period ended ~~September~~March 3031, ~~2022~~2023 compared to the three-month period ended ~~September~~March 3031, ~~2021~~2022. This ~~decrease~~increase was ~~substantially~~ due to ~~costs~~additional ~~associated~~legal ~~with~~and ~~marketing~~consulting ~~two~~fees ~~new~~paid ~~mutual~~in ~~funds~~relation ~~that~~to ~~were~~the ~~launched~~Purchase inand ~~2021~~Assignment asand ~~well~~Assumption asAgreement ~~costs~~with ~~associated~~RiverPark ~~with~~Advisors, ~~the~~LLC ~~ETF~~and ~~that~~Cohanzick ~~was~~as ~~launched~~well inas ~~September~~new ~~2021~~product development.

CBA expects that its net margin will fluctuate from period to period based on various factors, including: revenues, investment results, and the development of investment strategies, products, and/or channels.

Assets Under Management

CBA derives its revenue from its investment advisory fees. Investment advisory fees paid to CBA are based on the value of the investment portfolios it manages and fluctuate with changes in the total value of its ~~assets under management~~ AUM.

~~With respect to both Destinations Low Duration Fixed Income Fund and Destinations Global Fixed Income Opportunities Fund (collectively, the “Destination Funds”),~~ CBA’s ~~serves~~revenues asare ~~one~~highly ~~sub-adviser~~dependent ason ~~part~~both ~~of a manager of managers strategy. As one of many sub-advisers, CBA does not select~~ the ~~benchmarks,~~value and ~~does~~composition ~~not~~of ~~have a license to use, the benchmark performance information for the Destination Funds~~AUM. ~~CBA~~The ~~believes~~following ~~that the benchmark performance information~~ is ~~not~~a ~~material~~summary inof ~~this context because~~ CBA’s ~~advisory~~AUM ~~services~~by ~~with~~product ~~respect~~and toinvestment ~~the~~strategy, ~~Destination~~as ~~Funds involves only a portion~~ of ~~the~~March ~~assets~~31, ~~while~~2023 ~~the~~and ~~benchmarks~~March ~~are~~31, ~~selected as an appropriate comparison based on the entire portfolio across all of the relevant sub-advisers~~2022.

CBA’s revenues are highly dependent on both the value and composition of AUM. The following is a summary of CBA’s AUM by product and investment strategy, as of September 30, 2022 and September 30, 2021:

Assets Under Management by Product	March 31, 2023		March 31, 2022		% Change
(in millions, except percentages)
Advised funds		723		724		(13.5	)%
Sub-advised funds		626		822		(12.0	)%
Total AUM		1,349		1,546		(12.7	)%

Assets Under Management by Product	September 30, 2022		September 30, 2021		% Change
Assets Under Management by Investment Strategy	March 31, 2023		March 31, 2022		% Change
(in millions, except percentages)
Advised funds		697		385		81.0	%
Ultra-Short Duration		90		62		45.2	%
Sub-advised funds		779		831		(6.3	%)
Low Duration		882		1,109		(20.5	)%
Total AUM		1,476		1,216		21.4	%
Responsible Investing		23		17		35.3	%
Strategic Income		354		358		(1.1	)%
Total AUM		1,349		1,546		(12.7	)%

Assets Under Management by Investment Strategy	September 30, 2022		September 30, 2021		% Change
(in millions, except percentages)
Ultra-Short Duration		68		37		83.8	%
Low Duration		1,060		774		37.0	%
Responsible Investing		21		17		23.5	%
Strategic Income		327		388		(15.7	%)
Total AUM		1,476		1,216		21.4	%

CrossingBridge Low Duration High Yield Fund (in dollars)

	Beginning Balance		Gross Inflows		Gross Outflows			Market Appreciation (Depreciation)			Ending Balance
3Q 2021		208,391,848		151,985,791		(41,361,958	)		5,993,525			325,009,206
4Q 2021		325,009,206		116,793,140		(48,158,802	)		2,003,010			395,646,554
1Q 2022		395,646,554		246,380,999		(52,333,341	)		761,371			590,455,583
2Q 2022		590,455,583		81,578,448		(113,049,267	)		(7,650,146	)		551,334,618
3Q 2022		551,334,618		64,761,170		(72,441,879	)		1,154,842			~~551~~544,~~334~~808,~~618~~751
4Q 2022		544,808,751		64,535,197		(171,525,452	)		9,774,294			447,592,790
1Q 2023		447,592,790		136,950,544		(47,248,479	)		6,961,617			544,256,472

CrossingBridge Ultra-Short Duration Fund (in dollars)

Inception Date - June 30, 2021	Beginning Balance		Gross Inflows		Gross Outflows			Market Appreciation (Depreciation)		Ending Balance
	Beginning Balance		Gross Inflows		Gross Outflows			Market Appreciation (Depreciation)		Ending Balance
3Q 2021		-		36,952,935		(11	)		29,594		36,982,518
4Q 2021		36,982,518		22,647,523		(649,626	)		74,398		59,054,813
1Q 2022		59,054,814		6,390,858		(2,836,014	)		1,793		62,611,451
2Q 2022		62,611,451		6,911,112		(6,545,551	)		125,669		63,102,681
3Q 2022		63,102,681		9,219,316		(4,567,382	)		462,466		68,217,081
4Q 2022		68,217,081		19,355,710		(7,395,986	)		1,101,691		81,278,496
1Q 2023		81,278,496		14,713,171		(7,428,835	)		860,680		89,423,512

CrossingBridge Responsible Credit Fund (in dollars)

Inception Date - June 30, 2021	Beginning Balance		Gross Inflows		Gross Outflows			Market Appreciation (Depreciation)			Ending Balance
	Beginning Balance		Gross Inflows		Gross Outflows			Market Appreciation (Depreciation)			Ending Balance
3Q 2021		-		17,104,851		(298,030	)		122,216			16,929,037
4Q 2021		16,929,037		744,812		(1,364,539	)		101,418			16,410,728
1Q 2022		16,410,728		1,279,115		(798,198	)		(46,898	)		16,844,747
2Q 2022		16,844,747		622,284		(854,348	)		(269,160	)		16,343,523
3Q 2022		16,343,523		6,301,617		(1,749,280	)		266,748			21,162,608
4Q 2022		21,162,608		3,378,563		(1,884,885	)		429,010			23,085,296
1Q 2023		23,085,296		1,948,211		(2,030,345	)		441,004			23,444,166

CrossingBridge Pre-Merger SPAC ETF (in dollars)

Inception Date - September 20, 2021	Beginning Balance		Gross Inflows		Gross Outflows			Market Appreciation (Depreciation)			Ending Balance
	Beginning Balance		Gross Inflows		Gross Outflows			Market Appreciation (Depreciation)			Ending Balance
3Q 2021		-		5,803,772		-			(1,989	)		5,801,783
4Q 2021		5,801,783		37,690,217		(807,972	)		319,711			43,003,739
1Q 2022		43,003,739		11,051,749		-			54,845			54,110,333
2Q 2022		54,110,333		8,806,469		(1,436,663	)		(119,608	)		61,360,531
3Q 2022		61,360,531		9,217,570		(7,642,075	)		375,499			63,311,525
4Q 2022		63,311,525		1,660,044		(4,173,316	)		1,029,348			61,827,601
1Q 2023		61,827,601		4,146,350		(1,678,392	)		1,133,484			65,429,043

Destinations Low Duration Fixed Income Fund (in dollars)

	Beginning Balance		Gross Inflows		Gross Outflows			Market Appreciation (Depreciation)			Ending Balance
3Q 2021		400,514,823		30,000,000		-			12,327,273			442,842,096
4Q 2021		442,842,096		16,000,000		-			4,078,846			462,920,942
1Q 2022		462,920,942		-		-			1,243,070			464,164,012
2Q 2022		464,164,012		-		-			(6,746,187	)		457,417,825
3Q 2022		457,417,825		-		(5,000,000	)		(815,114	)		451,602,711
4Q 2022		451,602,711		-		(140,000,000	)		7,644,667			319,247,378
1Q 2023		319,247,378		-		(52,500,000	)		5,335,112			272,082,490

Destinations Global Fixed Income Opportunities Fund (in dollars)

	Beginning Balance		Gross Inflows		Gross Outflows			Market Appreciation (Depreciation)			Ending Balance
3Q 2021		382,218,080		-		-			5,908,735			388,126,815
4Q 2021		388,126,815		-		(5,000,000	)		8,515,628			391,642,443
1Q 2022		391,642,443		-		(41,000,000	)		7,203,378			357,845,821
2Q 2022		357,845,821		-		(4,000,000	)		(15,473,946	)		338,371,875
3Q 2022		338,371,875		-		(8,000,000	)		(3,429,003	)		326,942,872
4Q 2022		326,942,872		17,000,000		-			1,268,523			345,211,395
1Q 2023		345,211,395		-		-			9,048,695			354,260,090

~~Total~~In ~~AUM of~~ the ~~mutual~~tables ~~funds increased by $260.4 million from September 30~~above, ~~2021 compared~~gross ~~to September 30, 2022. This net AUM increase consisted of $268.2 million of net~~ inflows ~~and~~include ~~$7.8~~reinvested ~~million~~dividends ~~of net losses~~ and ~~capital~~gross ~~losses~~outflows ~~which~~include ~~were~~dividends ~~retained~~paid/withdrawn ~~within~~from the funds. ~~The AUM for all of CBA’s strategies increased during the period with the exception of the strategic income strategy.~~

27 Total CBA AUM decreased by approximately $197 million from March 31, 2023 compared to March 31, 2022. This net AUM decrease consisted of approximately $210 million of net outflows, which were offset by approximately $13 million of net gains and capital gains, which were retained within the funds.

Performance

Although performance is a key metric to measure an ~~advisor~~adviser’s success, there are other metrics that CBA believes are more meaningful to its investors, including downside protection during difficult environments, sensitivity to rising interest rates, upside/downside capture, and the risk-adjusted return. Although CBA does not manage to benchmarks, CBA does provide benchmarks to investors as a frame of reference, which are set forth below:

	3Q 2021	4Q 2021	1Q 2022	2Q 2022	3Q 2022
		1Q 2023				4Q 2022			3Q 2022			2Q 2022			1Q 2022
CrossingBridge Low Duration High Yield Fund	~~2.02%~~	~~0.55%~~	01.~~18%~~56	~~(1.32~~%)	~~0.21%~~		1.96	%		0.21	%		(1.32	)%		0.18	%
ICE BofA 0-3 Year US HY Index ex Financials	~~0.85%~~	~~0.05%~~	(13.~~49%)~~22	~~(3.93~~%)	~~1.02%~~		2.17	%		1.02	%		(3.93	)%		(1.49	)%
ICE BofA 1-3 Year Corporate Bond Index	~~0.18%~~	~~(0.55%)~~	(31.~~16%)~~29	~~(1.01~~%)	~~(1.29%)~~		1.40	%		(1.29	)%		(1.01	)%		(3.16	)%
ICE BofA 0-3 Year US Treasury Index	~~0.05%~~	~~(0.38%)~~	(1.~~69%)~~42	~~(0.37~~%)	~~(0.99%)~~		0.78	%		(0.99	)%		(0.37	)%		(1.69	)%
CrossingBridge Ultra-Short Duration Fund	~~0.07%~~	~~0.18%~~	01.~~00%~~02	~~0.22~~%	~~0.72%~~		1.50	%		0.72	%		0.22	%		0.00	%
ICE BofA 0-3 Year US Treasury Index	0.05%	(0.38%)	(1.69%)	(0.37%)	(0.99%)
ICE BofA 0-1 Year US Corporate Index			1.19	%			1.12	%		0.31	%		0.04	%		(1.44	)%
CrossingBridge Responsible Credit Fund	0.57%	0.62%	(0.29%)	(1.62%)	1.77%
ICE BofA 0-1 Year US Treasury Index			1.18	%			0.85	%		0.16	%		(0.11	)%		(0.22	)%
Bloomberg Barclays US Aggregate Bond Index	0.05%	0.01%	(5.93%)	(4.69%)	(4.75%)
ICE BofA 0-3 Year US Fixed Rate Asset Backed Securities Index			1.49	%			0.70	%		(0.53	)%		(0.52	)%		(1.64	)%
ICE BofA US High Yield Index	0.94%	0.66%	(4.51%)	(9.97%)	(0.68%)
CrossingBridge Responsible Credit Fund			1.93	%			1.98	%		1.77	%		(1.62	)%		(0.29	)%
CrossingBridge Pre-Merger SPAC ETF (Price)	0.20%	2.30%	0.10%	(0.15%)	0.44%
ICE BofA US High Yield Index			3.72	%			3.98	%		(0.68	)%		(9.97	)%		(4.51	)%
CrossingBridge Pre-Merger SPAC ETF (NAV)	0.03%	2.36%	0.09%	(0.21%)	0.60%
ICE BofA US Corporate Index			3.45	%			3.53	%		(5.11	)%		(6.71	)%		(7.74	)%
ICE BofA 0-3 Year US Treasury Index	(0.06%)	(0.38%)	(1.69%)	(0.37%)	(0.99%)
ICE BofA 3-7 Year US Treasury Index			2.53	%			1.30	%		(3.94	)%		(1.91	)%		(4.91	)%
CrossingBridge Pre-Merger SPAC ETF (Price)			1.74	%			1.63	%		0.44	%		(0.15	)%		0.10	%
CrossingBridge Pre-Merger SPAC ETF (NAV)			1.74	%			1.64	%		0.60	%		(0.21	)%		0.09	%
ICE BofA 0-3 Year US Treasury Index			1.42	%			0.78	%		(0.99	)%		(0.37	)%		(1.69	)%

28 With respect to both Destinations Low Duration Fixed Income Fund and Destinations Global Fixed Income Opportunities Fund (collectively, the “Destination Funds”), CBA serves as one sub-adviser as part of a manager of managers strategy. As one of many sub-advisers, CBA does not select the benchmarks, and does not have a license to use, the benchmark performance information for the Destination Funds. CBA believes that the benchmark performance information is not material in this context because CBA’s advisory services with respect to the Destination Funds involves only a portion of the assets of the Destination Funds while the benchmarks are selected as an appropriate comparison based on the entire portfolio of the Destination Funds across all of the relevant sub-advisers.

Willow Oak Operations

~~Beginning on August 12, 2022, the start of the post-Merger period, the Company operates its~~ Willow Oak operations business through its wholly owned subsidiaries, Willow Oak Asset Management, LLC, Willow Oak Capital Management, LLC, Willow Oak Asset Management Affiliate Management Services, LLC, and Willow Oak Asset Management Fund Management Services, LLC. Willow Oak generates its revenue through various fee share agreements with private investment firms and partnerships in exchange for providing its fund management services. Willow Oak does not manage, direct, or invest any capital itself, but rather earns fee shares based on the AUM and periodic performance of the investment firms and partnerships with which it partners. Fee shares earned on AUM, management fee shares, and fund management services revenue are recognized and recorded on a monthly or quarterly basis in alignment with the underlying terms of each investment partnership. ~~Fee~~Revenue fee shares earned on performance are recognized and recorded only when the underlying investment partnership’s performance crystalizes, which is typically on an annual, calendar-year basis. As performance fee shares are based on investments returns, these fee shares have the potential to be highly variable.

During the ~~post~~three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022 through September 30~~2023, ~~2022,~~ the Willow Oak operations segment generated $2124,~~975~~513 of revenue. Operating expenses totaled $5494,~~547~~818 and other expenses were $~~1,262~~95. ~~The~~Willow Oak’s net loss for the ~~post~~three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022~~2023 ~~through~~totaled ~~September 30~~$70,400. ~~2022~~Compensation ~~totaled~~and ~~$33~~related costs represent Willow Oak’s most significant operating expense during the three-month period ended March 31,~~834~~ 2023.

The ~~tables~~table below ~~provide~~provides a summary of revenue amounts for Willow Oak, ~~revenue~~which ~~amounts~~are included onin the unaudited condensed consolidated statements of operations for the ~~post~~three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022 through September 30, 2022~~2023.

	Three-Month Period Ended September 30		Nine-Month Period Ended September 30
Willow Oak Operations Revenue	Three-Month Period Ended March 31, 2023
Willow Oak Operations Revenue	2022		2022
Management fee revenue	$	15,167
Management fee revenue	$	8,206	$	8,206
Fund management services revenue		9,346
Fund management services revenue		13,768		13,768
Performance fee revenue		-
Performance fee revenue		-		-
Total revenue	$	24,513
Total revenue	$	21,975	$	21,975

No comparable activity is available or included for the Willow Oak operations segment for periods presented prior to August 1112, 2022, including the three-month period ended March 31, 2022, because the Willow Oak operations were not part of CBA pre-merger. See Note 4 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information.

Internet Operations

Revenue attributed to the internet operations segment during the ~~post~~ three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022~~2023 ~~through September 30, 2022~~ totaled $~~111~~186,~~659~~162 and cost of revenue totaled $3360,~~564~~751. Operating expenses for the segment totaled $3261,~~011~~526 for the ~~post~~three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022~~2023 ~~through September 30, 2022~~ and other expenses totaled $~~691~~157. Total net income for the internet operations segment was $4563,~~393~~728 for the ~~post~~three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022 through September 30, 2022~~2023.

As of ~~September~~March 3031, ~~2022~~2023, the internet operations segment ~~has~~ had a total of 65,~~185~~445 customer accounts across the U.S. and Canada. As of ~~September~~March 3031, ~~2022~~2023, approximately 92% of our customer accounts are U.S.-based, while 8% are Canada-based. During the ~~post~~three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022 through September 30~~2023, ~~2022,~~ approximately 4846% of our revenue was driven by internet access services, with the remaining 5254% being earned though web hosting, email, and other web-based ~~storage~~ services.

Revenue generated by our U.S. customers totaled $~~106~~176,~~736~~796, and revenue generated by our Canadian customers totaled $49,~~923~~366 during the ~~post~~three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022 through September 30, 2022~~2023.

No comparable activity is available or included for the internet operations segment for periods presented prior to August 1112, 2022, including the three-month period ended March 31, 2022, because the internet operations were not part of CBA pre-merger. See Note 4 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information.

Other Operations

During the ~~post~~ three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022 through September 30~~2023, ~~2022,~~ the Company’s other operations segment did not produce any revenue or cost of ~~sales~~revenue. Operating expenses totaled $1639,~~705,512,~~779 and other income totaled $~~922~~287,~~595~~966. Corporate operating expenses accounted for ~~the full~~ $1614,~~705,512~~306 of reported operating expenses for our other operations segment. Included in corporate operating expenses reported for the period are $~~881~~81,~~755~~746 of non-cash stock compensation expenses ~~incurred~~recorded inas ~~conjunction~~part ~~with~~of ~~the~~equity ~~Business~~awards ~~Combination.~~granted ~~These~~to ~~expenses~~directors ~~were~~and ~~associated~~employees ~~with~~under the ~~issuance~~Company’s of2022 ~~Class~~Omnibus AEquity ~~common~~Incentive ~~stock and the W-2 Warrant~~Plan. During the ~~post~~ three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022 through September 30~~2023, ~~2022,~~ the other operations segment ~~also~~ reported ~~transaction~~$252,000 of other expenses ~~incurred~~related asto ~~part~~the Company’s periodic revaluation of its liability associated with the ~~Business~~Class ~~Combination~~W-1 ~~totaling~~Warrant ~~$470,329~~and Class B Common Stock. These ~~transaction~~revaluation expenses were offset by $~~522~~334,~~000~~400 of other income ~~reported~~related asto ~~part of~~ the ~~Company’s~~subsequent ~~periodic~~ revaluation of ~~its liability associated with~~ the ~~Class~~Company’s ~~W-1~~promissory ~~Warrant~~note ~~and~~to ~~redeemable~~Triad ~~Class~~DIP BInvestors, ~~common stock~~LLC. This resulted in a net loss of $~~782~~351,~~917~~813 for the other operations segment for the ~~post~~three-~~Merger~~month period ~~from~~ended ~~August~~March 1231, ~~2022 through September 30, 2022~~2023.

~~During~~Included in corporate operating expenses for the three-month period ended ~~September~~March 3031, ~~2022,~~2023 ~~the~~were ~~Company reported~~ $~~400~~337,~~283~~792 of ~~income~~professional ~~tax~~expenses ~~benefit.~~related Asto ~~noted~~legal, ~~above~~accounting, ~~due~~and toconsulting ~~CBA’s~~services, ~~disregarded~~as ~~status~~well ~~for~~as ~~periods prior to the Closing Date~~$121,294 noof ~~comparable~~compensation ~~income~~related ~~tax~~ expenses ~~existed for the three-month period ended September 30, 2021~~.

NoDuring ~~comparable~~the ~~activity~~three-month isperiod ~~available~~ended orMarch ~~included~~31, ~~for~~2023, the ~~other~~Company ~~operations~~reported ~~segment~~$32,233 of income tax expenses, primarily related to a decrease in net deferred tax assets. As noted above, due to CBA’s disregarded status for periods ~~presented~~ prior to ~~August~~the 11Closing Date, ~~2022.~~no ~~See~~comparable ~~Note~~income 4tax expenses existed for ~~more~~the ~~information~~three-month period ended March 31, 2022.

29 No additional other operations activity is available or included for the other operations segment for periods presented prior to August 12, 2022, including the three-month period ended March 31, 2022, because the other operations were not part of CBA pre-merger. See Note 4 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information.

Liquidity and Capital Resources

During the ~~nine~~three-month period ended ~~September~~March 3031, ~~2022~~2023, the Company carried out its business strategy in four operating segments: CrossingBridge operations, Willow Oak operations, internet operations, and other operations. As a result of the ~~Merger~~Business Combination that occurred on August 11, 2022 and the determination that the ~~Merger~~Business Combination would be accounted for as a reverse ~~business combination~~acquisition, historical activity presented for the ~~current nine~~three-month period ended ~~September~~March 3031, 2022, includes only CrossingBridge financial activity ~~for the full nine-month period and Enterprise Diversified, Inc~~. ~~activity as of the closing of the Merger on August 11, 2022 through September 30, 2022.~~

Our primary focus is on generating cash flow so that we have the flexibility to pursue opportunities as they present themselves. We intend to only invest cash in a segment if we believe that the return on ~~this~~the invested capital is appropriate for the risk associated with the investment. This consideration is measured against all investment opportunities available to us and is not limited to these particular segments nor the Company’s historical operations.

~~The~~A ~~Company’s current financial condition is liquid, with a~~ significant amount of ~~its~~the Company’s assets are comprised of cash and cash equivalents, investments in securities, and accounts receivable. The Company’s main source of liquidity is cash flows from operating activities, which are primarily generated from investment advisory fees generated through CrossingBridge operations. Cash and cash equivalents, investments in securities, and accounts receivable represented approximately $119.78 million, $56.74 million and $0.78 million of total assets as of ~~September~~March 3031, ~~2022~~2023, respectively, and approximately $110.37 million, $25.39 million and $0.57 million of total assets as of December 31, ~~2021~~2022, respectively. The Company believes that these sources of liquidity, as well as its continuing cash flows from operating activities will be sufficient to meet its current and future operating needs for at least the next 12 months.

In line with the Company’s objectives, it anticipates that its main uses of cash will be for operating expenses and seed capital to fund new and existing investment strategies through its CrossingBridge operations segment. The Company’s management regularly reviews various factors to determine whether it has capital in excess of that required for its business, and the appropriate uses of any such excess capital.

The aging of accounts receivable as of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~ 2022 is as follows:

	September 30, 2022		December 31, 2021
	March 31, 2023		December 31, 2022
Current	$	~~722~~769,~~157~~478	$	~~511~~741,~~248~~363
30 - 60 days		42,~~266~~085		-3,275
60+ days		~~418~~1,296		-
Total	$	~~726~~772,~~841~~859	$	~~511~~744,~~248~~638

We have no material capital expenditure requirements.

Cash Flow Analysis

Cash Flows from Operating Activities

The Company reported $2490,~~496,503~~371 of net cash provided by operating activities for the ~~nine~~three-month period ended ~~September~~March 3031, ~~2022~~2023. ~~Increases~~The revaluation of the note receivable, an increase in accrued compensation expenses, and ~~expenses~~other ~~related~~expense torecognized ~~the~~from ~~issuance of~~ the W-21 Warrant ~~and~~revaluation ~~additional share purchases~~ represented significant adjusting items to cash flows generated through operations. During the three-month period ended March 31, 2022, the Company reported $949,295 of net cash provided by operating activities, which was primarily attributed to net income generated for the period.

Cash Flows from Investing Activities

The Company reported $111,~~967~~502,~~639~~933 of net cash ~~provided~~used byin investing activities for the ~~nine~~three-month period ended ~~September~~March 3031, ~~2022~~2023. ~~The~~This ~~majority~~was ofprimarily ~~this~~related ~~inflow~~to ~~was~~an ~~related~~investment tomade in a private company during the ~~consolidation~~current period. During the three-month period ended March 31, 2022, the Company reported $2,849 of ~~Enterprise~~net ~~Diversified’s~~cash ~~assets~~provided ~~and~~by ~~liabilities~~investing ~~pursuant~~activities, which was primarily attributed to ~~the~~a ~~Business~~decrease ~~Combination~~in investments for the period.

Cash Flows from Financing Activities

The Company reported $4123,~~051,247~~823 of net cash flows ~~used~~provided inby financing activities for the ~~nine~~three-month period ended ~~September~~March 3031, ~~2022~~2023. ~~Prior~~This was primarily related to the ~~Closing~~collection ~~Date,~~of the ~~Company~~due ~~repaid~~from ~~the~~affiliate balance ofduring ~~its~~the ~~due~~period. toDuring ~~affiliate~~the ~~amount~~three-month ~~and~~period ~~made~~ended ~~distributions~~March to31, ~~CrossingBridge’s~~2022, ~~historical~~the ~~sole~~Company ~~member.~~reported ~~These~~$1,582,396 ~~outflows~~of ~~were~~net ~~offset~~cash byused ~~the~~in ~~issuance~~financing ofactivities, ~~Class~~which Awas ~~common~~primarily ~~stock~~attributed ~~pursuant~~ to a decrease in the ~~Business~~due ~~Combination~~to affiliate amount during the period.

Summary Discussion of Critical Accounting Estimates

The financial statements were prepared in accordance with U.S. generally accepted accounting principles, which requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions affect various matters, including our reported amounts of assets and liabilities in our condensed consolidated balance sheets at the dates of the financial statements; our disclosure of contingent assets and liabilities at the dates of the financial statements; and our reported amounts of revenues and expenses in our ~~condensed~~pre-merger ~~consolidated~~ carve-out statements of operations during the reporting periods. These estimates involve judgments with respect to numerous factors that are difficult to predict and are beyond management’s control. As a result, actual amounts could materially differ from these estimates.

The SEC defines critical accounting estimates as those that are both most important to the portrayal of a company’s financial condition and results of operations and require management’s most difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. We base our estimates on historical experience and on various other assumptions we believe to be reasonable according to current facts and circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. In Note 2 to ~~our~~the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, we discuss our significant accounting policies, including those that do not require management to make difficult, subjective, or complex judgments or estimates. The most significant areas involving management’s judgments and estimates are described below.

3029

Fair-Value of Long-Term Assets

Assets Acquired Pursuant to the Business Combination

During the Post-Merger period, the Company recorded three measurement period adjustments to the preliminary recorded fair values assigned to certain Company assets acquired as of the Closing Date. The net changes in fair value, netting an increase of $939,556, proportionally decreased the balance of residual goodwill from $1,677,425 to $737,869 as of December 31, 2022. These adjustments are the product of expanded valuation analyses performed by management during the Post-Merger period. The Company expects to finalize the fair values of assets acquired and liabilities assumed as soon as practicable, but not later than one year from the Closing Date. See Note 4 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information.

Goodwill

The Company tests its goodwill annually as of December 31, or more often if events and circumstances indicate that those assets might not be recoverable. Impairment testing of goodwill is required at the reporting-unit level (operating segment or one level below operating segment). The impairment test involves calculating the impairment of goodwill based solely on the excess of the carrying value of the reporting unit over the fair value of the reporting unit. Prior to performing the impairment test, the Company may make a qualitative assessment of the likelihood of goodwill impairment to determine whether a detailed quantitative analysis is required. This qualitative assessment and the ongoing evaluation of events and circumstances represent critical accounting estimates. Management considers a variety of factors when making these estimates, which include, but are not limited to, internal changes in the segment’s operations, external changes that affect the segment’s industry, and overall financial condition of the segment and Company.

Management did not identify any events or circumstances during the three-month period ended ~~September~~March 3031, ~~2022~~2023 that would indicate potential goodwill impairment, nor did management’s qualitative assessment performed on December 31 , 2022 indicate a potential goodwill impairment. Total goodwill reported on the condensed consolidated balance sheets was $1737,~~677,425~~869 as of the period ended ~~September~~March 3031, ~~2022~~2023.

Long-Term Investments

When investment inputs or publicly available information are limited or unavailable, management estimates the value of certain long-term ~~investment~~investments using the limited information it has available, which can include the Company’s cost basis. This process, which was used to measure the ~~value~~values of the Company’s ~~investment~~investments in the private ~~company~~companies made through eBuild ~~Ventures~~, ~~LLC,~~ represents a critical accounting ~~estimate~~estimates. Management utilizes the available inputs to perform an initial valuation estimate and subsequently updates that valuation when additional inputs become available.

Management did not identify any events or circumstances during the three-month period ended ~~September~~March 3031, ~~2022~~2023 that would indicate potential impairment of ~~the Company~~eBuild’s ~~investment in the~~ private company investments. ~~This~~These ~~investment~~investments isare reported on the condensed consolidated balance ~~sheet~~sheets for a total of $~~450~~1,~~000~~ 405,266 as of the period ended ~~September~~March 3031, ~~2022~~2023.

Other Intangible Assets

When management determines that material intangible assets are acquired in conjunction with the purchase of a business, the Company determines the fair values of the identifiable intangible assets by taking into account internal and external appraisals. The Company evaluates, at each balance sheet date, whether events and circumstances have occurred that indicate possible impairment. These initial appraisals, as well as the subsequent evaluation of events and circumstances that may indicate impairment, represent critical accounting estimates.

Management did not identify any events or circumstances during the three-month period ended ~~September~~March 3031, ~~2022~~2023 that would indicate potential impairment of the Company’s customer lists, trade names, or domain names. The total value of the Company’s customer lists, trade names, and domain names, net of amortization, reported under long-term assets on the condensed consolidated balance ~~sheet~~sheets is $1,~~300~~203,~~444~~211 as of the period ended ~~September~~March 3031, ~~2022~~2023.

Deferred Tax Assets and Liabilities

Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax benefits or consequences of events that have been included in the condensed consolidated financial statements. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management’s analysis of the amount of deferred tax assets that will ultimately be realized represents a critical accounting estimate.

As of ~~the~~March ~~period ended September 30~~31, ~~2022~~2023, the Company ~~recognized~~had afederal and state net ~~deferred~~operating ~~tax~~loss ~~asset~~carryforwards of approximately $~~400~~6.8 million. A portion of these carryforwards will expire in various amounts beginning in 2035; however the majority of these carryforwards will not expire as they were generated after December 31,~~283~~ 2017. InThe anCompany ~~effort~~expects it will be able to ~~remain~~use ~~conservative~~its ~~and~~carryforwards ~~limit~~subject to expiration in full prior to 2035. Section 382 of the ~~potential~~Internal ~~financial~~Revenue ~~impact~~Code of ~~management’s~~1986, ~~estimate~~as amended (“Section 382”), limits the ~~Company~~use ~~has~~of ~~provided~~net operating loss carryforwards in certain situations where changes occur in the stock ownership of a ~~full~~company. Net ~~valuation~~operating ~~allowance~~losses ~~against~~that ~~certain~~arose ~~historical~~prior ~~net~~to ~~deferred~~that ~~tax~~ownership ~~assets~~change will have limited availability to offset taxable income arising in periods following the ownership change. During the year ended December 31, 2022, the Company performed an analysis to determine if a change of control occurred as a product of the ~~period~~Business ~~ended~~Combination, ~~September~~and 30has concluded that a change of control is more likely than not to have occurred on August 11, 2022. ~~This~~Under ~~results~~Section in382, nonet ~~value~~operating ~~being~~loss ~~attributed~~carryforwards that arose prior to ~~these~~the ~~historical~~ownership ~~deferred~~change ~~tax~~will ~~assets~~have limited availability to offset taxable income arising in future periods following the ownership change. Section 382 imposes multiple separate and distinct limits on the ~~accompanying~~utilization ~~condensed~~of ~~consolidated~~pre-change ~~balance~~of ~~sheet~~control net operating losses based on the fair market value of the Company immediately prior to the change of control, as well as certain activities that may or may not occur during the 60 months immediately following the change of control. While the majority of the Company’s historic net operating losses will be limited to an annual threshold, the majority of historic net operating losses also will not be subject to future expiration. As of the period ended ~~September~~March 3031, ~~2022~~2023, the Company has not provided a valuation allowance against its net operating losses as the Company expects to be able to use its net operating losses in full to offset future taxable income generated by the Company.

As of the period ended March 31, 2023, the Company reported $1,409,001 of net deferred tax assets on its condensed consolidated balance sheets.

Contingencies, Commitments, and Litigation

Liabilities are recognized when management determines that contingencies, commitments, and/or litigation represent events that are more likely than not to result in a measurable obligation to the Company. Management’s analysis of these events represents a critical accounting estimate.

W-1 Warrant and Class B Common Shares

Pursuant to the Merger Agreement, ~~during~~on the ~~three-month~~Closing ~~period~~Date ~~ended September 30, 2022,~~ the Company issued a Class W-1 Warrant to purchase 1,800,000 of the Company’s Class A ~~common~~Common ~~stock~~Stock. The liability associated with the issuance of the such warrant, and the embedded shares of Class B ~~common~~Common ~~stock~~Stock, is based on an independent third-party valuation methodology, which includes a Black-Scholes pricing model. As of the period ended ~~September~~March 3031, ~~2022~~2023, the long-term liability reported on the Company’s condensed consolidated balance ~~sheet~~sheets for the W-1 Warrant and shares of Class B ~~common~~Common ~~stock~~Stock totals $~~954~~828,000. See Note 5 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information.

~~Accrued Compensation~~ 30

The balance reported as accrued compensation expense as of the period ended September 30, 2022 is primarily attributed to management’s allocation of estimated pro rata bonus amounts to be paid to employees for services performed during the current period. Bonuses are subjective and are based on numerous factors including, but not limited to, individual performance, the underlying funds’ performance, and profitability of the firm, as well as the consideration of future outlook. Accrued bonus amounts can fluctuate due to a future perceived change in any one or more of these factors. Additionally, differences between historical, current, and future personnel allocations could significantly impact the comparability of bonus expenses period over period.

As of the period ended September 30, 2022, the Company reported $1,239,929 of accrued compensation expenses on its condensed consolidated balance sheet.

Discussion Regarding COVID-19 Potential Impacts

Due to the continuing uncertainty surrounding the COVID-19 pandemic, management has continued to regularly monitor and assess all Company operations for potential impacts of the COVID-19 pandemic. As of the quarterly period ended September 30, 2022, the Company has not been required to make significant operational changes as a result of the pandemic. Management does not anticipate additional challenges in meeting existing obligations, nor do we expect significant customer or vendor interruptions. However, the extent to which the continuing COVID-19 pandemic ultimately may impact our business, financial condition, liquidity, and results of operations likely will continue to depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the continuing pandemic, the direct and indirect impact of the continuing pandemic on our employees, customers, and service providers, as well as the U.S. economy and the actions taken by governmental authorities and other third parties in response to the continuing pandemic.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

The Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of our principal executive officer and principal financial officer, have evaluated the effectiveness of the design and operation of our “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of ~~September~~March 3031, ~~2022~~2023. Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures. Based upon this evaluation, and based upon material weaknesses in our internal control over financial reporting identified as of the date of our most recent evaluation of internal controls over financial reporting as set forth below, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of ~~September~~March 3031, ~~2022~~2023.

Material Weaknesses in Internal Controls

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis.

As a result of our evaluations, we identified the following material weaknesses in our internal control over financial reporting as of ~~September~~March 3031, ~~2022~~2023:

Segregation of Duties: ~~The~~We ~~Company has a~~ lack of segregation of duties. Specifically - :

●

There is not a formal review of all adjusting journal entries;

● Revenues for the internet operations segment are processed by a single individual;

●

There is not a formal procedure for the review and assignment of access rights within certain software systems; and

● The individual with responsibility for reviewing journal entries, reviewing bank and credit card payments, and other reconciliations also has a wide range of access within the Company’s systems and is an authorized ~~signor~~signatory on bank accounts.

Financial Close and Reporting: ~~The~~We ~~Company~~do ~~does~~ not have effective internal controls over all parts of the financial close and reporting process in that one individual is responsible for reconciling significant accounts, preparing the most significant journal entries, evaluating complex transactions and reporting requirements, and also is responsible for the financial statement close, consolidation, and reporting process.

During the ~~quarterly~~year ~~period~~ ended ~~September~~December 3031, 2022, ~~the Company,~~ as a result of the closing of the Merger, ~~was~~we were afforded additional personnel resources that can now be integrated into ~~its~~our internal control processes. ~~The~~We ~~Company~~are is actively working to restructure ~~its~~our historical internal controls over financial reporting to leverage these resources accordingly. ~~The~~We ~~Company~~continue ~~continues~~ to make efforts to reinforce ~~its~~our internal control environment by utilizing an external accounting firm during ~~its~~our financial closing process, engaging third-party consultants to review the accounting and related disclosures for transactions that management and the board of directors determine to be particularly complex, and maintaining strict document retention policies and procedures that allow for full visibility of all financial statements and schedules by all ~~Company~~of our managers and officers.

In response to the identified material weaknesses, ~~the~~we ~~Company~~are ~~is internally~~ developing a phased approach that is intended to increase the effectiveness of the design and operation of ~~the~~our ~~Company’s~~financial ~~disclosure~~reporting controls and ~~procedures~~processes. In the first phase, ~~the~~we ~~Company~~expect ~~expects~~ to work with a third-party professional consultant to prepare formal documentation for ~~its~~our internal controls over financial reporting, which may include: an entity level controls assessment, an IT general controls assessment, and process area flowcharts where necessary. In the second phase, ~~the~~we ~~Company~~expect ~~expects~~ to use ~~its~~our control documentation to identify ineffectively designed and/or control gaps and work to remediate them. Finally, in phase three, ~~the~~we ~~Company~~expect ~~expects~~ to design a systematic monitoring plan to sufficiently test ~~its~~our new key controls over the course of future reporting periods. ~~The~~We ~~Company~~aim ~~aims~~ to complete the first and second phase of this project before the end of the ~~next~~current fiscal year ~~on December 31, 2023~~. Notwithstanding the foregoing, there is no guarantee ~~the~~that ~~Company~~we will be successful in completing this multi-phased approach and remediating the material weaknesses.

Changes in Internal Control Over Financial Reporting

There have been no changes in ~~the~~our ~~Company’s~~ internal control over financial reporting during the ~~quarterly~~three-month period ended ~~September~~March 3031, ~~2022~~2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting ~~subsequent to the date of its most recent evaluation of its internal control over financial reporting~~.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

3231

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

~~See~~From “time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation &is ~~Legal~~subject ~~Proceedings”~~to inherent uncertainties, and an adverse result in ~~Note~~these 8or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that will have, individually or in the ~~accompanying~~aggregate, ~~unaudited~~a ~~condensed~~material ~~consolidated~~adverse effect on our business, financial ~~statements~~condition or operating results. Except as set forth below, we are not currently aware of any other legal proceedings to which the Company is party.

Enterprise Diversified, Inc. (f/k/a Sitestar Corporation) v. Frank Erhartic, Jr.

On April 12, 2016, Enterprise Diversified filed a civil action complaint against Frank Erhartic, Jr. (the “Former CEO”), Enterprise Diversified’s former CEO and director (prior to December 14, 2015) and an owner of record of Enterprise Diversified’s common stock, alleging, among other things, that the Former CEO engaged in, and caused Enterprise Diversified to engage in, to its detriment, a series of unauthorized and wrongful related party transactions, including: causing Enterprise Diversified to borrow certain amounts from the Former CEO’s mother unnecessarily and at a commercially unreasonable rate of interest; converting certain funds of Enterprise Diversified for personal rent payments to the Former CEO; commingling in land trusts certain real properties owned by Enterprise Diversified and real properties owned by the Former CEO; causing Enterprise Diversified to pay certain amounts to the Former CEO for lease payments under an unauthorized lease as to a storage facility owned by the Former CEO; causing Enterprise Diversified to pay rent on its corporate headquarters owned by the Former CEO’s ex-wife in amounts commercially unreasonable and excessive, and making real estate tax payments thereon for the personal benefit of the Former CEO; converting to the Former CEO and/or absconding with five motor vehicles owned by Enterprise Diversified; causing Enterprise Diversified to pay real property and personal property taxes on numerous properties owned personally by the Former CEO; causing Enterprise Diversified to pay personal credit card debt of the Former CEO; causing Enterprise Diversified to significantly overpay the Former CEO’s health and dental insurance for the benefit of the Former CEO; and causing Enterprise Diversified to pay the Former CEO’s personal automobile insurance. Enterprise Diversified is seeking, among other relief available, monetary damages in excess of $350,000. This litigation matter is currently pending in the Circuit Court for the City of Lynchburg (Lynchburg, Virginia), and is set and scheduled for trial on September 14, 2023. During the period ended March 31, 2023, the parties engaged in settlement discussions with respect to the case; however, the parties have thus far been unsuccessful in reaching an agreement. Enterprise Diversified intends to move forward with a trial of the case to conclusion should the parties fail to reach a settlement agreement.

Item 1A.

Risk Factors

~~The~~Risk ~~Company~~factors isthat ~~not~~affect ~~required~~our tobusiness ~~provide~~and ~~the~~financial ~~information~~results ~~required~~are bydiscussed ~~this~~in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2022 as itfiled iswith athe ~~“smaller~~SEC ~~reporting~~on ~~company~~March 30, 2023 (“Annual Report”). asThere ~~defined~~have been no material changes in ~~Rule~~our ~~12b-2~~risk factors from those previously disclosed in our Annual Report. You should carefully consider the risks described in our Annual Report, which could materially affect our business, financial condition or future results. The risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the ~~Exchange~~risks ~~Act~~actually occur, our business, financial condition, and/or results of operations could be negatively affected.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

~~None~~On May 10, 2023, the board of trustees of the RiverPark Strategic Income Fund (the “RiverPark Fund”) and holders of a majority of the outstanding voting securities of RiverPark Fund approved that certain Purchase and Assignment and Assumption Agreement dated as of November 18, 2022 and subsequently amended on December 28, 2022, by and between CBA, whose President is David Sherman, the Company’s Chief Executive Officer and director, RiverPark Advisors, LLC (“RiverPark”) and Cohanzick, a registered investment adviser established by David Sherman (as amended, the “RiverPark Agreement”) and the transactions contemplated thereby. On May 12, 2023 (the “Closing Date”), as contemplated by the RiverPark Agreement, CBA assumed (i) the advisory services role under that certain Amended and Restated Investment Advisory Agreement (the “RiverPark Advisory Agreement”) dated February 14, 2012 by and between RiverPark and RiverPark Funds Trust (“RiverPark Trust”) pursuant to which RiverPark provided investment advisory services to the RiverPark Fund and (ii) the Operating Expense Limitation Agreement (“RiverPark Expense Limitation Agreement”) dated as of July 1, 2019 by and between RiverPark and RiverPark Trust. Furthermore, pursuant to the RiverPark Agreement, on the Closing Date, the parties to that certain Sub-Advisory Agreement dated as of August 1, 2012 by and among RiverPark, Cohanzick and the RiverPark Trust, on behalf of the RiverPark Fund, have terminated such agreement and made CrossingBridge a party to the RiverPark Expense Limitation Agreement.

33 In connection with the RiverPark Agreement, Cohanzick and CBA entered into an agreement which prohibits Cohanzick from competing with a substantially similar strategic income strategy as the RiverPark Fund as an adviser or sub-adviser to a fund registered under the Investment Company Act of 1940, as amended, or any Undertakings for the Collective Investment in Transferable Securities products.

Pursuant to the RiverPark Agreement, no consideration was paid upon closing; however, CrossingBridge shall pay an amount approximately equal to 50% of RiverPark Fund’s management fees (as set forth in RiverPark Fund’s prospectus) to RiverPark (the prior adviser) and Cohanzick (the prior sub-adviser) for a period of three years after closing, and pay an amount approximately equal to 20% of the RiverPark Fund’s management fees in the fourth and fifth years after closing as set forth in the RiverPark Agreement. Notwithstanding the foregoing, certain of the amounts payable based on the RiverPark Fund’s management fees pursuant to the RiverPark Agreement during the first three years after the closing shall be capped such that they are less than $1.3 million in the aggregate.

Item 6.

Exhibits

Exhibit		Description
Exhibit No.		Description
2.1		Amendment No. 2 to the Merger Agreement, dated July 13, 2022, by and among the Company, Enterprise Diversified, Inc., Zelda Merger Sub 1, Inc. and Zelda Merger Sub 2, LLC, CrossingBridge Advisors LLC and Cohanzick Management LLC (incorporated by reference to Enterprise Diversified, Inc.’s Form 8-K filed with the SEC on July 15, 2022)
10.1+		ENDI Corp. 2022 Omnibus Equity Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-8 filed with the SEC on January 18, 2023)
2.2		Amended and Restated Certificate of Incorporation of ENDI Corp. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 12, 2022)
10.2		Second Amendment to Registration Rights Agreement dated as of May 1, 2023 by and among the Company, Cohanzick Management, LLC and the parties listed on the signature page thereto (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 2, 2023)
2.3		Amended and Restated Bylaws of ENDI Corp. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on August 12, 2022)
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
10.1		Voting Agreement dated August 11, 2022 by and among the Company, Cohanzick Management, LLC, Steven Kiel and Arquitos Capital Offshore Master, Ltd. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 12, 2022)
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
10.2		Stockholder Agreement dated August 11, 2022 by and between the Company and Cohanzick Management, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on August 12, 2022)
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
10.3		Registration Rights Agreement dated August 11, 2022 by and among Cohanzick Management, LLC and certain holders of the Company’s Securities (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on August 12, 2022)
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
10.4		Class W-1 Warrant (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on August 12, 2022)
101.INS*		Inline XBRL Instance Document
10.5		Class W-2 Warrant (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on August 12, 2022)
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
10.6		Services Agreement dated August 11, 2022 by and between the CrossingBridge Advisors, LLC and Cohanzick Management, LLC (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC on August 12, 2022)
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
10.7+		Form of Indemnification Agreement (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the SEC on August 12, 2022)
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
10.8+		Amended and Restated Employment Agreement by and between CrossingBridge Advisors, LLC and David Sherman dated June 3, 2022 (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed with the SEC on August 12, 2022)
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
10.9		Form of Securities Purchase Agreement dated August 18, 2022 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 18, 2022)
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
10.10		Amendment to Registration Rights Agreement dated as of August 31, 2022 by and among the Company, Cohanzick Management, LLC and the parties listed on the signature page thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 1, 2022)
104*		Cover Page Interactive Data File - the cover page from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 is formatted in Inline XBRL and included in the Exhibit 101 Inline XBRL Document Set
31.1*		Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)
31.2*		Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
32.1**		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended
32.2**		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended
101*		Pursuant to Rule 405 of Regulation S-T, the following materials from ENDI Corp.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) Condensed Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021; (ii) Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021; (iii) Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021; (iv) Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021; and (v) Notes to Unaudited Condensed Consolidated Financial Statements
104*		Cover Page Interactive Data File - the cover page from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 is formatted in Inline XBRL

+ Indicates a management contract or any compensatory plan, contract or arrangement.

* Filed herewith.

** Furnished herewith.

34 + Indicates a management contract or any compensatory plan, contract or arrangement.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ENDI Corp.
Date: November 14, 2022		/s/ David Sherman
Date: May 15, 2023		/s/ David Sherman
		David Sherman
		Chief Executive Officer
		(Principal Executive Officer)
Date: November 14, 2022		/s/ Alea A. Kleinhammer
Date: May 15, 2023		/s/ Alea Kleinhammer
		Alea A. Kleinhammer
		Alea Kleinhammer
		Chief Financial Officer
		(Principal Financial Officer)
		(Principal Financial and Accounting Officer)

3534

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