What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-09-27 compared with 2021-05-12 · 241 added, 249 removed, 26 unchanged (95% of the section changed)

5 - MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Company’s common stock has been quoted on a tier of the OTC Markets Group, currently on the OTC Pink and previously on the OTC

QB, where it is quoted under the symbol “BOXS”.

The Company’s shares were quoted under the symbol UVND until February

28, 2018 when it applied for and was granted a change of symbol from “UVND”.

The Company has 600,000,000 shares of common

stock authorized.

last reported sales price of BoxScore’s common stock on the OTC Pink on May 10, 2021 was $0.01.

and Outstanding Shares

Company’s certificate of incorporation authorizes 600,000,000 shares of common stock, par value $0.001, and 10,000,000 shares of

preferred stock, par value $0.001.

As of May 10, 2021, the Company had 37,717,755 shares of common stock, and no shares of preferred

stock, issued and outstanding.

of May 10, 2021, the Company had approximately 980 record holders of its common stock.

This number does not include the number of persons

whose shares are in nominee or in “street name”

ITEM 5 - MARKET FOR REGISTRANT’S COMMON

EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s common stock has been quoted

on a tier of the OTC Markets Group, currently on the OTC Pink and previously on the OTC QB, where it is quoted under the symbol “BOXS”.

The Company’s shares were quoted under the symbol UVND until February 28, 2018 when it applied for and was granted a change of symbol

from “UVND”.

The Company has 600,000,000 shares of common stock authorized.

The last reported sales price of BoxScore’s

common stock on the OTC Pink on September 24, 2021 was $0.1.

Issued and Outstanding Shares

The Company’s certificate of incorporation

authorizes 600,000,000 shares of common stock, par value $0.001, and 10,000,000 shares of preferred stock, par value $0.001.

As of September

24, 2021, the Company had 226,604,039 shares of common stock, and no shares of preferred stock, issued and outstanding.

As of September 24, 2021, the Company had approximately

980 record holders of its common stock.

This number does not include the number of persons whose shares are in nominee or in “street

accounts through brokers.

Company did not pay dividends during the years ended December 31, 2019 and 2018.

BoxScore has never declared or paid any cash dividends

or distributions on our common stock and intend to retain future earnings, if any, to support our operations and to finance expansion.

Therefore, it does not anticipate paying any cash dividends on the common stock in the foreseeable future.

Transfer Agent and Warrant Agent

Company’s stock transfer agent is Corporate Stock Transfer Inc., 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209.

BoxScore acts as its own warrant agent for its outstanding warrants.

Issuances of Unregistered Securities

Dividend Policy

The Company did not pay dividends during the years

ended December 31, 2020 and 2019.

BoxScore has never declared or paid any cash dividends or distributions on our common stock and intend

to retain future earnings, if any, to support our operations and to finance expansion.

Therefore, it does not anticipate paying any cash

dividends on the common stock in the foreseeable future.

Stock Transfer Agent and Warrant Agent

The Company’s stock transfer agent is Corporate

Stock Transfer Inc., 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209.

BoxScore acts as its own warrant agent for its

outstanding warrants.

Recent Issuances of Unregistered Securities

Shares Repurchased by the Registrant

Company did not purchase or repurchase any of its securities in the years ended December 31, 2019 and 2018.

Authorized for Issuance under Equity Compensation Plans

July 22, 2011, the Board of Directors of the Company approved the Company’s 2011 Equity Incentive Plan (the “Plan”)

and on July 26, 2011, stockholders holding a majority of shares of the Company approved, by written consent, the Plan and the issuance

under the Plan of 5,000,000 shares.

On November 16, 2017, the Board of Directors approved an increase of 10,000,000 shares to be made

available for issuance under the Plan.

Accordingly, the total number of shares of common stock available for issuance under the Plan

is 15,000,000 shares.

Awards may be granted to employees, officers, directors, consultants, agents, advisors and independent contractors

of the Company and its related companies.

Such options may be designated at the time of grant as either incentive stock options or nonqualified

stock options.

Stock based compensation includes expense charges related to all stock-based awards.

Such awards include options, warrants

and stock grants.

Generally, the Company issues stock options that vest over three years and expire in 5 to 10 years.

Company records share based payments under the provisions of FASB ASC 718.

Stock based compensation expense is recognized over the requisite

service period based on the grant date fair value of the awards.

The fair value of each option grant is estimated on the date of grant

using the Black-Scholes option-pricing model on certain assumptions.

The Company estimated the expected volatility based on data used

by peer group of public companies.

The expected term was estimated using the simplified method.

The risk-free interest rate assumption

was determined using the equivalent U.S.

The Company did not purchase or repurchase any of its securities in

the years ended December 31, 2020 and 2019.

Securities Authorized for Issuance under Equity Compensation Plans

On July 22, 2011, the Board of Directors of the

Company approved the Company’s 2011 Equity Incentive Plan (the “Plan”) and on July 26, 2011, stockholders holding a

majority of shares of the Company approved, by written consent, the Plan and the issuance under the Plan of 5,000,000 shares.

16, 2017, the Board of Directors approved an increase of 10,000,000 shares to be made available for issuance under the Plan.

the total number of shares of common stock available for issuance under the Plan is 15,000,000 shares.

Awards may be granted to employees,

officers, directors, consultants, agents, advisors and independent contractors of the Company and its related companies.

may be designated at the time of grant as either incentive stock options or nonqualified stock options.

Stock based compensation includes

expense charges related to all stock-based awards.

Such awards include options, warrants and stock grants.

Generally, the Company issues

stock options that vest over three years and expire in 5 to 10 years.

The Company records share based payments under

the provisions of FASB ASC 718.

Stock based compensation expense is recognized over the requisite service period based on the grant date

fair value of the awards.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing

model on certain assumptions.

The Company estimated the expected volatility based on data used by peer group of public companies.

expected term was estimated using the simplified method.

The risk-free interest rate assumption was determined using the equivalent U.S.

Treasury bonds yield over the expected term.

The Company has never paid any cash dividends and

does not anticipate paying any cash dividends in the foreseeable future.

Therefore, the Company assumed an expected dividend yield of

following table sets forth information as of December 31, 2019 regarding equity compensation plans under which the equity securities

are authorized for issuance.

Plan Compensation Information

The Company has never paid any cash dividends and does not anticipate paying any cash dividends

in the foreseeable future.

Therefore, the Company assumed an expected dividend yield of zero.

The following table sets forth information as

of December 31, 2020 regarding equity compensation plans under which the equity securities are authorized for issuance.

Equity Plan Compensation Information

Plan Category

5 unchanged sentences

Equity compensation plans approved by securities holders (1)

to the 2011 Equity Incentive Plan, as amended.

6 - SELECTED FINANCIAL DATA

item is not applicable to us as a smaller reporting company.

7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING

Certain statements contained herein constitute “forward-looking

statements”.

Except for the historical information contained herein, this report contains forward-looking statements (identified

by the words “estimate,”

Pursuant to the 2011 Equity Incentive Plan, as amended.

ITEM 6 - SELECTED FINANCIAL DATA

This item is not applicable to us as a smaller reporting company.

ITEM 7 - MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

Certain statements contained herein constitute

“forward-looking statements”.

Except for the historical information contained herein, this report contains forward-looking

statements (identified by the words “estimate,”

“project,”

6 unchanged sentences

“strategy”

and similar expressions), which are based on our current expectations

and speak only as of the date made.

These forward-looking statements are subject to various risks, uncertainties and factors that could

cause actual results to differ materially from the results anticipated in the forward-looking statements, including, without limitation,

those discussed under Part I, Item 1A “Risk Factors”

in this Annual Report, and those described herein that could cause actual

results to differ materially from the results anticipated in the forward-looking statements, and the following:

limited operating history with our business model;

low cash balance and limited financing currently available to us.

We may in the near future have a number of obligations that we

will be unable to meet without generating additional income or raising additional capital;

cost reductions or curtailment in future operations due to our low cash balance and negative cash flow;

ability to effect a financing transaction to fund our operations which could adversely affect the value of our stock;

limited cash resources may not be sufficient to fund continuing losses from operations;

failure of our products and services to achieve market acceptance;

inability to compete in our market, especially against established industry competitors with greater market presence and financial

following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of

our results of operations and financial condition, and should be read in conjunction with the consolidated financial statements and footnotes

that appear elsewhere in this report.

Company develops, markets and distributes various self-serve electronic kiosks and mall/airport co-branded islands throughout North America.

The Company seeks to place its kiosks in high-traffic host locations such as big box stores, restaurants, malls, airports, casinos, universities,

and colleges.

At the current time, due to the COVID-19 pandemic, our business model has been disrupted because of the closure of heavily

trafficked and major retail locations.

Management is evaluating all business opportunities.

to December 31, 2018, the Company had an active license and sponsorship agreement in place with the National Hockey League.

never produced product under the license.

During the year ended December 31, 2018, the Company and NHL agreed to terminate the NHL Agreement.

In return, the Company agreed to pay the NHL an amount equal to one percent (1%) of the Company’s net sales of certain products

as defined under the agreement.

June 2016, the Company entered into a license agreement beginning January 1, 2016 through December 31, 2018 with Major League Baseball

Properties, Inc.

(“MLB”, “Licensor”) for the non-exclusive right to certain proprietary intangible property of

the Licensor to be used in connection with the manufacturing, distribution, promotion and advertisement of an ice cream novelty product

to be sold within the U.S., the District of Columbia and U.S.

2017, the Company modified its agreement with Major League Baseball Properties to extend through calendar year 2019.

Additionally, the

Company has a revenue sharing agreement with MLB on screen advertising at Point-of- sale.

The Company received an initial purchase order

for pallets of MLB ice cream in May 2018 and shipped this product in June.

The Company planned to sell pallets of MLB ice cream to large

national wholesale distributors as well as through reach-in MLB branded freezers which include a digital advertising screen.

On March 18, 2019, the Company approved of an asset

sale of the assets related to the legacy MiniMelts brand for $350,000 in cash, which was approved by a majority of stockholders.

of the proceeds from the sale was used to retire certain lease obligations as well as for general operating purposes.

The Company will

continue to explore opportunities in the frozen business, seeking to leverage its vending assets to pursue new revenue streams and test

concepts for new offerings at retail, including health and wellness.

The Board of Directors had agreed to begin to explore the development

of certain products in the cannabis industry with a focus on non-THC Cannabinoids in frozen desserts as well as other complimentary CBD

product offerings though vending as well as online sales and direct to retail, under a new brand.

Due to the global pandemic and the closure

and reduction of heavily trafficked business, management is reevaluating all business partnerships and opportunities.

of Operations

the Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

the year ended December 31, 2019, the Company’s revenue decreased by $1,203,518 or 94% to $80,233 compared to revenues of $1,283,751

during the year ended December 31, 2018.

The decrease in revenue was due to asset sale (see

As of December 31, 2018, the Company had an installed base of 118 electronic kiosks in Southern California

and Las Vegas, Nevada.

of Goods Sold (exclusive of depreciation shown separately below)

the year ended December 31, 2019, the Company’s cost of goods sold decreased by $687,375 or 89% to $88,965 compared to cost of

goods sold of $776,340 during the year ended December 31, 2018.

The Company’s gross margin during the year ended December 31, 2019

was (11)%, compared to 40% in 2018.

The decrease in 2019 was because all inventory was liquidated during the quarter ended March 31,

2019 prior to the sale of the MiniMelts assets (see Note 1).

expenses for year ended December 31, 2019 decreased by $1,324,259 or 90% to $143,323 compared to $1,467,582 during the year ended December

During the year ended December 31, 2019, the Company expensed $115,000 compared to $1,040,863 in 2018 for sponsorship and media

commitment fees in connection with the NHL Corporate Marketing Agreement and Major League Baseball Properties, Inc.

and Administrative Expenses

and administrative expenses for the year ended December 31, 2019 were $821,122, a decrease of $704,120 or 46%, compared to $1,525,242

for the year ended December 31, 2018.

The decrease in general and administrative expenses was mainly due

to decrease in professional fees .

on settlement of liability

the year ended December 31, 2019, the Company recorded a gain on settlement of liabilities of $156,709.

During the year ended December

31, 2018, the Company and NHL agreed to terminate the NHL Agreement (see note 11).

As a result, the Company recorded a gain on settlement

of liability of $2,674,419.

There was no gain on settlement of liability during the year ended December 31, 2018.

on asset impairment

and similar expressions), which are based on our

current expectations and speak only as of the date made.

These forward-looking statements are subject to various risks, uncertainties

and factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements, including,

without limitation, those discussed under Part I, Item 1A “Risk Factors”

in this Annual Report, and those described herein

that could cause actual results to differ materially from the results anticipated in the forward-looking statements, and the following:

Our limited operating history with our business model;

The low cash balance and limited financing currently available to us.

We may in the near future have a number of obligations that we will be unable to meet without generating additional income or raising additional capital;

Further cost reductions or curtailment in future operations due to our low cash balance and negative cash flow;

Our ability to effect a financing transaction to fund our operations which could adversely affect the value of our stock;

Our limited cash resources may not be sufficient to fund continuing losses from operations;

The failure of our products and services to achieve market acceptance;

The inability to compete in our market, especially against established industry competitors with greater market presence and financial resources.

The following discussion and analysis provides

information that our management believes is relevant to an assessment and understanding of our results of operations and financial condition,

and should be read in conjunction with the consolidated financial statements and footnotes that appear elsewhere in this report.

BoxScore Brands, Inc.

(formerly U-Vend Inc.) (the

“Company”) formerly developed, marketed and distributed various self-serve electronic kiosks and mall/airport co-branded islands

throughout North America.

Due to the nationwide shutdown related to the COVID-19 pandemic, the Company spent a portion of 2020 restructuring

and retiring certain corporate debt and obligations.

The Company focused on implementing a new operational direction.

After a thorough

evaluation process, the Company found that there is a substantial long-term demand for specific commodities relating to battery and new

energy technologies.

This presents a timely and unique opportunity based on rising demand characteristics.

By capitalizing on market trends

and current sustainable energy government mandates and environmental, social, and corporate governance (ESG) initiatives, we will focus

on bringing a vertically-integrated solution to market.

Results of Operations

For the Year Ended December 31, 2020 Compared

to Year Ended December 31, 2019

For the year ended December 31, 2020, the Company

had no revenue, compared to revenues of $80,233 during the year ended December 31, 2019.

decrease in revenue was due to asset sale (see note 1), resulting in no sales activity during the year ended December 31, 2020.

Cost of Goods Sold

For the year ended December 31, 2020, the Company

had no cost of goods sold compared to cost of goods sold $88,965 during the year ended December 31, 2019.

The Company’s gross margin

during the year ended December 31, 2019 was (11)%, The decrease in 2020 was because all inventory was liquidated during the quarter ended

March 31, 2019 prior to the sale of the MiniMelts assets (see Note 1).

Selling Expenses

For the year ended December 31, 2020, the Company

had no selling expenses, compared to $143,323 during the year ended December 31, 2019.

During the year ended December 31, 2019, the Company

recorded asset impairment charges of $192,705.

on Fair Value of Debt and Warrant Liabilities

warrants issued by the Company have a “down round provision”.

As such, the warrants have been recorded as liabilities and

are subject to remeasurement at each balance sheet date.

The warrants are valued using the Black Scholes method and will continue to

be adjusted each reporting period for changes in fair value until the warrant is exercised or expires.

Gains or losses on revaluation

are recorded as a component of other expense on the accompanying consolidated statements of operations.

the year ended December 31, 2019, the Company recognized a gain on the change in fair value of debt and warrant liabilities in the amount

$34,986, as compared to $62,097 during the year ended December 31, 2018.

of Debt Discount and Deferred Financing Costs

of debt discount and deferred financing costs for the year ended December 31, 2019 were $171,513, compared to $86,295for the year ended

December 31, 2018.

expense for the year ended December 31, 2019 was $622,797, as compared to $661,332 during the year ended December 31, 2018.

on sale of asset

the year ended December 31, 2019, the Company sold certain equipment and recorded $27,465 in loss on sale of assets.

expensed $115,000 for sponsorship and media commitment fees in connection with the Major League Baseball Properties, Inc.

During the year

ended December 31, 2018, the Company recorded $23,984 in gain on sale of assets.

a result of the foregoing, the net loss for the year ended December 31, 2019 was $1,896,150 as compared to $683,780 incurred during the

year ended December 31, 2018.

and Capital Resources

accompanying consolidated financial statements have been prepared on a going concern basis.

The Company had net loss of $1,896,150 during

the year ended December 31, 2019, has accumulated losses totaling $14,198,142, and has a working capital deficit of $6,876,803 at December

These factors, among others, indicate that the Company may be unable to continue as a going concern.

The consolidated financial

statements do not include any adjustments that might result from the outcome of these uncertainties.

Company will need to raise additional financing in order to fund the its operations for the next 12 months, and to allow the Company

to continue the development of its business plans and satisfy its obligations on a timely basis.

Should additional financing not be available,

the Company will have to negotiate with its lenders to extend the repayment dates of its indebtedness.

There can be no assurance that

the Company will be able to successfully restructure its debt obligations in the event it fails to obtain additional financing.

ended December 31, 2020, the Company had no sales and there were no fees recorded under the agreement with MLB as it expired on December

General and Administrative Expenses

General and administrative expenses for the year

ended December 31, 2020 were $245,813, a decrease of $575,309 or 70%, compared to $821,122 for the year ended December 31, 2019.

in general and administrative expenses was mainly due to decrease in in stock compensation

expenses and professional fees as a result of our reduction in operations as we contemplated our business restructuring .

Gain on Settlement of Liability

During the year ended December 31, 2019, the Company

recorded a gain on settlement of liabilities of $156,709.

During the year ended December 31, 2020, the Company recorded a gain on settlement

of liabilities of $11,000.

Loss on Asset Impairment

During the year ended December 31, 2019, the Company

recorded asset impairment charges of $192,705.

No such impairments were noted during the year ended December 31, 2020.

Gain on Fair Value of Derivative Liabilities

During the year ended December 31, 2019, the Company

recognized a gain on the change in fair value of derivative liabilities in the amount $34,986, as compared to a loss on the change in

fair value of derivative liabilities of $3,069,702 during the year ended December 31, 2020.

Amortization of Debt Discount and Deferred

Financing Costs

Amortization of debt discount and deferred financing

costs for the year ended December 31, 2019 were $171,513, compared to $4,432 for the year ended December 31, 2020.

The majority of the

debt discount was fully amortized at December 31, 2019, leaving only a minimal amount remaining to be amortized during 2020.

31, 2020, there was $0 in unamortized debt discount.

Interest Expense

Interest expense for the year ended December 31,

2019 was $622,797, as compared to $611,294 during the year ended December 31, 2020.

Gain on Sale of Asset

During the years ended December 31, 2020 and 2019,

the Company sold certain equipment and recorded $12,074 and $27,465, respectively, in loss on sale of assets.

As a result of the foregoing, the net loss for

the year ended December 31, 2019 was $1,896,150 as compared to $3,932,313 for the year ended December 31, 2020.

Liquidity and Capital Resources

The accompanying consolidated financial statements

have been prepared on a going concern basis.

The Company had net loss of $3,932,313 during the year ended December 31, 2020, has accumulated

losses totaling $18,130,455, and has a working capital deficit of $8,117,241 at December 31, 2020.

These factors, among others, indicate

that the Company may be unable to continue as a going concern.

The consolidated financial statements do not include any adjustments that

might result from the outcome of these uncertainties.

The Company will need to raise additional financing

in order to fund their operations for the next 12 months, and to allow the Company to continue the development of its business plans and

satisfy its obligations on a timely basis.

Should additional financing not be available, the Company will have to negotiate with its lenders

to extend the repayment dates of its indebtedness.

There can be no assurance that the Company will be able to successfully restructure

its debt obligations in the event it fails to obtain additional financing.

Operating Activities

During the year ended December 31, 2020, the Company

used $40,394 of cash in operating activities primarily as a result of the Company’s net loss of $3,932,313, offset by change in

fair value of derivative liabilities of $3,069,702, loss on sale of asset of $12,074, share-based compensation of $5,772, $4,432 in amortization

and accretion of debt discount, gain on settlement of liabilities of $11,000, and net changes in operating assets and liabilities of $810,939.

During the year ended December 31, 2019, the Company

used $751,637 of cash in operating activities primarily as a result of the Company’s net loss of $1,896,150, offset by gain on change

in fair value of debt and warrant liabilities of $34,986, loss on sale of asset of $27,465, loss on asset impairment of $192,705, share-based

in fair value of derivative liabilities of $34,986, loss on sale of asset of $27,465, loss on asset impairment of $192,705, share-based

compensation of $285,379, $100,188 in depreciation expense, $171,513 in amortization and accretion of debt discount, loss on default of

convertible notes of $42,625, gain of settlement of debt $156,709 and net changes in operating assets and liabilities of $516,333.

the year ended December 31, 2019, investing activities provided $350,000 in cash in proceeds from sale of property and equipment.

Company does not anticipate any investing purchasing activities in the near future.

the year ended December 31, 2019, financing activities provided $338,559.

Financing activities provided $270,000 in proceeds from promissory

notes and $619,303 in proceeds from convertible notes.

The Company used $296,508 in repayments of promissory notes, $64,300 in repayment

of convertible notes, and $189,936 in repayments of capital lease obligations.

Sheet Arrangements

Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, an effect on its financial condition,

financial statements, revenues or expenses.

the Company’s operations are influenced by general economic conditions, it does not believe that inflation had a material effect

on its results of operations during the last two years as it is generally able to pass the increase in material and labor costs to its

customers or absorb them as it improves the efficiency of its operations.

Accounting Policies

preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United

States requires management to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial

statements and accompanying notes.

The consolidated financial statements as of December 31, 2019 describe the significant accounting

policies and methods used in the preparation of the consolidated financial statements.

Actual results could differ from those estimates

and be based on events different from those assumptions.

Future events and their effects cannot be predicted with certainty;

therefore, requires the exercise of judgment.

Thus, accounting estimates change as new events occur, as more experience is acquired or

as additional information is obtained.

The following critical accounting policies are impacted significantly by judgments, assumptions

and estimates used in the preparation of our consolidated financial statements:

Value of Financial Instruments

certain of the Company’s financial instruments, including cash and equivalents, restricted cash, accounts receivable, accounts

payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities.

Topic 820, “Fair Value Measurements and Disclosures,”

requires disclosure of the fair value of financial instruments held

by the Company.

ASC Topic 825, “Financial Instruments,”

defines fair value, and establishes a three-level valuation hierarchy

for disclosures of fair value measurement that enhances disclosure requirements for fair value measures.

The three levels of valuation

hierarchy are defined as follows:

Investing Activities

During the year ended December 31, 2020, investing

activities provided $18,000 in cash in proceeds from sale of property and equipment.

During the year ended December 31, 2019, investing

activities provided $350,000 in cash in proceeds from sale of property and equipment.

The Company does not anticipate any investing purchasing

activities in the near future.

Financing Activities

During the year ended December 31, 2020, financing

activities provided $45,980, resulting from $76,500 in proceeds from convertible notes, $15,000 repayments of promissory notes and $15,520

in repayments of capital lease obligations.

During the year ended December 31, 2019, financing

activities provided $338,559, resulting from $270,000 in proceeds from promissory notes and $619,303 in proceeds from convertible notes.

The Company used $296,508 in repayments of promissory notes, $64,300 in repayment of convertible notes, and $189,936 in repayments of

capital lease obligations.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet

arrangements that have, or are reasonably likely to have, an effect on its financial condition, financial statements, revenues or expenses.

Although the Company’s operations are influenced

by general economic conditions, it does not believe that inflation had a material effect on its results of operations during the last

two years as it is generally able to pass the increase in material and labor costs to its customers or absorb them as it improves the

efficiency of its operations.

Critical Accounting Policies

The preparation of financial statements and related

disclosures in conformity with accounting principles generally accepted in the United States requires management to make judgments, assumptions

and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes.

The consolidated financial

statements as of December 31, 2020 describe the significant accounting policies and methods used in the preparation of the consolidated

financial statements.

Actual results could differ from those estimates and be based on events different from those assumptions.

events and their effects cannot be predicted with certainty;

estimating therefore, requires the exercise of judgment.

Thus, accounting

estimates change as new events occur, as more experience is acquired or as additional information is obtained.

The following critical

accounting policies are impacted significantly by judgments, assumptions and estimates used in the preparation of our consolidated financial

Fair Value of Financial

For certain of the Company’s

financial instruments, including cash and equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and

short-term debt, the carrying amounts approximate their fair values due to their short maturities.

ASC Topic 820, “Fair Value Measurements

and Disclosures,”

requires disclosure of the fair value of financial instruments held by the Company.

ASC Topic 825, “Financial

Instruments,”

defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that

enhances disclosure requirements for fair value measures.

The three levels of valuation hierarchy are defined as follows:

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and

volume to provide pricing information on an ongoing basis

Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially

the full term of the asset or liability.

This category includes those derivative instruments that the Company values using observable

Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments,

can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less

observable from objective sources (i.e.

The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis

Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

This category includes those derivative instruments that the Company values using observable market data.

Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e.

supported by little or no market activity).

Level 3 instruments include derivative warrant

The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level

1 or Level 2.

Financial Instruments

Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded

Certain warrants issued by the Company contain terms that result in the warrants being classified as derivative liabilities

for accounting purposes.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially

recorded at its fair market value and then is revalued at each reporting date, with changes in fair value reported in the consolidated

statement of operations.

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency

Accounting Pronouncements

February 2016, the FASB issued ASU 2016-02, “Leases”, which requires that lease arrangements longer than 12 months result

in an entity recognizing an asset and liability.

ASU 2016-02 is effective for interim and annual periods beginning after December 15,

2018, and early adoption is permitted.

The Company has adopted ASU 2016-02 and determined that its adoption had no impact on its financial

position, results of operations or cash flows.

7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Level 3 instruments include derivative warrant instruments.

The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.

Derivative Financial Instruments

The Company evaluates its financial instruments

to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.

Certain warrants issued by

the Company contain terms that result in the warrants being classified as derivative liabilities for accounting purposes.

For derivative

financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value

and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations.

does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

Not applicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity