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Item 1A. Risk Factors

2024-07-15 compared with 2023-06-23 · 757 added, 687 removed, 382 unchanged (79% of the section changed)

Readers should carefully consider the risks and uncertainties

described below.

Our failure to successfully address the risks and

uncertainties described below would have a material adverse effect on our business, financial condition and/or results of operations,

Readers should carefully consider the risks and

uncertainties described below.

Our failure to successfully address the risks

and uncertainties described below would have a material adverse effect on our business, financial condition and/or results of operations,

and the trading price of our common stock may decline and investors may lose all or part of their investment.

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Summary Risk Factors

The following summarizes

certain principal factors that make an investment in our Company speculative or risky, all of which are more fully described in the “ Risk

Factors ” section herein.

This summary should be read in conjunction with the “ Risk Factors ” section and should

not be relied upon as an exhaustive summary of the material risks facing the Company.

Business interruptions, including any interruptions

resulting from COVID-19, could significantly disrupt our operations and could have a material adverse impact on us if the situation continues.

The following summarizes certain principal factors

that make an investment in our Company speculative or risky, all of which are more fully described in the “ Risk Factors ”

section herein.

This summary should be read in conjunction with the “ Risk Factors ” section and should not be relied

upon as an exhaustive summary of the material risks facing the Company.

If we default on the Secured Debenture, the secured holder could take possession of our assets, including our patents and other intellectual property.

Several of the convertible notes issued by us are

in litigation with uncertain outcomes.

Our stockholders have limited voting power compared to the holder of our Series A Preferred Stock.

We have a limited operating history in an evolving and highly volatile industry, which makes it difficult to evaluate future prospects and may increase the risk that we will not be successful.

We have experienced rapid growth recently through a series of acquisitions, and if we do not effectively manage our growth and the associated demands on operational, risk management, sales and marketing, technology, compliance, and finance and accounting resources, our business may be adversely impacted.

Our growth may not be sustainable and depends on our ability to retain existing customers, attract new customers, expand product offerings, and increase revenue from both new and existing customers.

We face intense and increasing competition and, if we do not compete effectively, our competitive positioning and our operating results will be harmed.

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There is no assurance that we will achieve profitability or that our revenue and business models will be successful.

We will require additional capital to support business growth, and this capital might not be available or may require stockholder approval to obtain.

We will require additional capital to support business growth,

and this capital might not be available or may require stockholder approval to obtain.

You may experience dilution of your ownership interests because of the future issuance of additional shares of our common or preferred stock or other securities that are convertible into or exercisable for our common or preferred stock.

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RISKS RELATED TO OUR BUSINESS

Business interruptions, including any interruptions

resulting from COVID-19, could significantly disrupt our operations and could have a material adverse impact on us if the situation continues .

The ongoing coronavirus outbreak which began in China

at the beginning of 2020 has impacted various businesses throughout the world, including travel restrictions and the extended shutdown

of certain businesses in impacted geographic regions.

If the coronavirus outbreak situation should worsen, we may experience disruptions

to our business including, but not limited to equipment, to our workforce, or to our business relationships with other third parties.

The extent to which the coronavirus impacts our operations

or those of our third-party partners will depend on future developments, which are highly uncertain and cannot be predicted with confidence,

including the duration of the outbreak, new information that may emerge concerning the severity of the coronavirus and the actions to

contain the coronavirus or treat its impact, among others.

Any such disruptions or losses we incur could have a material adverse effect

on our financial results and our ability to conduct business as expected.

We may be adversely

affected by natural disasters, pandemics, and other catastrophic events, and by man-made problems such as war or terrorism, that could

disrupt our business operations, and our business continuity and disaster recovery plans may not adequately protect us from a serious

Natural disasters or other

catastrophic events may also cause damage or disruption to our operations, international commerce, and the global economy, and could have

an adverse effect on our business, operating results, and financial condition.

Our business operations are subject to interruption by

natural disasters, fire, power shortages, and other events beyond our control.

In addition, our global operations expose us

to risks associated with public health crises, such as pandemics and epidemics, which could harm our business and cause its operating

results to suffer.

For example, the ongoing effects of the COVID-19 pandemic and/or the precautionary measures that we have adopted have

resulted, and could continue to result, in difficulties or changes to our customer support, or create operational or other challenges,

any of which could adversely impact our business and operating results.

Further, war, acts of terrorism,

labor activism and other geopolitical unrest could cause disruptions in our business or the businesses of its partners or the economy

In the event of a natural disaster, including a major earthquake, blizzard, or hurricane, or a catastrophic event such as

a fire, power loss, or telecommunications failure, we may be unable to continue our operations and may endure system interruptions, reputational

harm, delays in development of our products and services, lengthy interruptions in service, breaches of data security, and loss of critical

data, all of which could have an adverse effect on our future operating results.

Escalating global tensions, including the conflict

between Russia and Ukraine, could negatively impact us.

The ongoing conflict between Russia and Ukraine could

led to disruption, instability and volatility in global markets and industries that could negatively impact our operations.

and other governments in jurisdictions in which we operate have imposed severe sanctions and export controls against Russia and Russian

interests and threatened additional sanctions and controls.

The impact of these measures, as well as potential responses to them by Russia,

is currently unknown and they could adversely affect our business, partners or customers.

Our former wholly-owned subsidiary, Optilan

(UK) Limited, is in liquidation.

As an unsecured creditor, we are at risk of losing significant repayment obligations due from Optilan

(UK) Limited.

On May 3, 2023, Eversheds Sutherland (International)

LLP, a creditor of Optilan (UK) Limited, filed a petition to wind up (“ Winding up Petition ”) Optilan (UK) Limited,

a wholly owned subsidiary of the Company’s Subsidiary, Optilan HoldCo 3 Limited, and the matter was due to be heard in the Portsmouth

Combined Court Centre on June 28, 2023.

On June 28, 2023, the High Court of Justice in

the United Kingdom issued a winding-up order for the liquidation and winding up of the affairs of Optilan (UK) Limited (“ Optilan

Liquidation ”).

In conjunction with the order, the court appointed the Official Receiver’s Office (“ OR ”)

to take the appointment as liquidator of Optilan (UK) Limited and take control of Optilan (UK) Limited’s assets.

At the same time the court appointed the OR to

take the appointment as liquidator of Optilan (UK) Limited.

The OR has taken control of Optilan (UK) Limited’s assets.

ORs Office has initiated contact with Optilan but we still wait to receive details of the individual who will be taking the role of OR.

On July 3, 2023, Optilan (UK) Limited received

a letter from The Insolvency Service, an executive agency sponsored by the Department for Business and Trade located in the U.K.

to the letter of The Insolvency Services, the Company was required to provide information relating to Optilan (UK) Limited to the Official

Receiver’s Office (a government body of Plymouth, the United Kingdom) and attend an interview with staff of the Official Receiver’s

Office to review the prospect of recovering the assets of Optilan (UK) Limited for the benefit of creditors.

The interview was scheduled

for July 18, 2023.

On July 18, 2023, the interview was held between

the OR and the CEO at time of dissolution.

The OR office requested a list of assets, bank account information and amounts along with any

contracts held by Optilan (UK) Limited to begin the liquidation process.

On August 9, 2023, Evelyn Partners was appointed Joint Liquidator.

There are no new claims as of April 16, 2024 against

Optilan (UK) Limited and Evelyn Partners continue to liquidate the company’s assets.

We are an unsecured creditor of Optilan (UK) Limited

and are at risk of losing any repayment of obligations due from Optilan (UK) Limited because there are several intercompany relationships

between the Company and Optilan (UK) Limited, the financial impact of any future claims and liabilities may not be known for several months.

We have approximately $19.4 million intercompany payables due from Optilan (UK), which will increase our liabilities for any obligations

We expect the remaining assets held by Optilan (UK) Limited to be fully impaired and reported as Loss on Deconsolidation during

the second quarter of 2023 as a result of the winding-up order for liquidation.

We are still evaluating the full effects of the winding-up

order for liquidation and the material adverse effects it will have on our continued operations and ability to meet future obligations.

In the event we lose the repayment obligations of Optilan (UK) Limited, our financial condition could be materially adversely effected.

We may be adversely affected by natural

disasters, pandemics, and other catastrophic events, and by man-made problems such as war or terrorism, that could disrupt our business

operations, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

Natural disasters or other catastrophic events

may also cause damage or disruption to our operations, international commerce, and the global economy, and could have an adverse effect

on our business, operating results, and financial condition.

Our business operations are subject to interruption by natural disasters,

fire, power shortages, and other events beyond our control.

In addition, our global operations expose us to

risks associated with public health crises, such as pandemics and epidemics, which could harm our business and cause its operating results

Further, war, acts of terrorism, labor activism

and other geopolitical unrest could cause disruptions in our business or the businesses of its partners or the economy as a whole.

the event of a natural disaster, including a major earthquake, blizzard, or hurricane, or a catastrophic event such as a fire, power loss,

or telecommunications failure, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays

in development of our products and services, lengthy interruptions in service, breaches of data security, and loss of critical data, all

of which could have an adverse effect on our future operating results.

Escalating global tensions, including the

conflict between Russia and Ukraine, could negatively impact us.

The ongoing conflict between Russia and Ukraine

could led to disruption, instability and volatility in global markets and industries that could negatively impact our operations.

government and other governments in jurisdictions in which we operate have imposed severe sanctions and export controls against Russia

and Russian interests and threatened additional sanctions and controls.

The impact of these measures, as well as potential responses to

them by Russia, is currently unknown and they could adversely affect our business, partners or customers.

If we default on the Secured Debenture, the secured holder could

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were to occur, investors would likely lose all of their investment.

Several of the convertible notes issued by us

are in litigation with uncertain outcomes.

We have issued several convertible notes which are

currently the subject of litigation (See “ Legal Proceedings ”).

The outcomes of each of these matters is uncertain and

we may be required to both expend large sums of resources on both defending against and pursuing our causes of action in each of these

Several of the convertible notes issued

by us are in litigation with uncertain outcomes.

We have issued several convertible notes which

are currently the subject of litigation (See “ Legal Proceedings ”).

The outcomes of each of these matters is uncertain

and we may be required to both expend large sums of resources on both defending against and pursuing our causes of action in each of these

In addition, there is no certainty that any outcome will be in favor of us and we may be required to pay settlements or judgments

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with convertible note holders, it could have a material adverse effect on us and our operations may fail.

Our future growth depends

significantly on our marketing efforts, and if our marketing efforts are not successful, our business and results of operations will be

We have dedicated some, and

intend to significantly increase, resources to marketing efforts.

Our ability to attract and retain customers depends in large part on

the success of these marketing efforts and the success of the marketing channels we use to promote our products and services.

Our marketing

channels include, but are not limited to, social media, traditional media such as the press, online affiliations, search engine optimization,

search engine marketing, and offline partnerships.

While our goal remains to

increase the strength, recognition and trust in our brand by increasing our customer base and expanding our products and services, if

any of our current marketing channels becomes less effective, if we are unable to continue to use any of these channels, if the cost of

using these channels was to significantly increase or if we are not successful in generating new channels, we may not be able to attract

new customers in a cost-effective manner or increase the use of our products and services.

If we are unable to recover our marketing costs

through increases in the size, value or other product selection and utilization, it could have a material adverse effect on our business,

financial condition, results of operations, cash flows and future prospects.

Our stockholders have

limited voting power compared to the holder of our Series A Preferred Stock.

Our CEO, Dennis O’Leary,

is the sole holder of our Series A Preferred Stock, will control a majority of the voting power of our Company.

Our future growth depends significantly

on our marketing efforts, and if our marketing efforts are not successful, our business and results of operations will be harmed.

We have dedicated some, and intend to significantly

increase, resources to marketing efforts.

Our ability to attract and retain customers depends in large part on the success of these marketing

efforts and the success of the marketing channels we use to promote our products and services.

Our marketing channels include, but are

not limited to, social media, traditional media such as the press, online affiliations, search engine optimization, search engine marketing,

and offline partnerships.

While our goal remains to increase the strength,

recognition and trust in our brand by increasing our customer base and expanding our products and services, if any of our current marketing

channels becomes less effective, if we are unable to continue to use any of these channels, if the cost of using these channels was to

significantly increase or if we are not successful in generating new channels, we may not be able to attract new customers in a cost-effective

manner or increase the use of our products and services.

If we are unable to recover our marketing costs through increases in the size,

value or other product selection and utilization, it could have a material adverse effect on our business, financial condition, results

of operations, cash flows and future prospects.

Our stockholders have limited voting power

compared to the holder of our Series A Preferred Stock.

Our CEO, Dennis O’Leary, is the sole holder

of our Series A Preferred Stock, will control a majority of the voting power of our Company.

For so long as Mr.

holds all of the shares of Series A Preferred Stock, he is expected to hold a majority of our outstanding voting power and he will control

the outcome of matters submitted to a stockholder vote, including the appointment of all directors of the Company.

O’Leary holds all

of the shares of Series A Preferred Stock, he is expected to hold a majority of our outstanding voting power and he will control the outcome

of matters submitted to a stockholder vote, including the appointment of all directors of the Company.

Our management controls all corporate activities

and can approve all transactions, including mergers, without the approval of other stockholders.

Our CEO, Dennis O’Leary, owns 100 shares of

our Series A Preferred Stock that gives him the right to a majority of the voting power of the Company.

Our CEO, Dennis O’Leary, owns 100 shares

of our Series A Preferred Stock that gives him the right to a majority of the voting power of the Company.

Therefore, our management effectively

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stockholders.

This capital structure may have anti-takeover effects

preventing a change in control transaction that the minority owners of our Common Stock might consider in their best interest.

The ability of our management to control our

business may limit or eliminate minority stockholders’ ability to influence corporate affairs.

Our CEO, Dennis O’Leary, owns 100 shares of

Series A Preferred Stock that gives him the right to a majority of the voting power of our Company.

Because of this beneficial stock ownership,

O’Leary is in a position to continue to elect our entire board of directors, decide all matters requiring stockholder approval,

including potential mergers or business changes, and determine our policies.

The interests of our management may differ from the interests

of our minority stockholders with respect to the issuance of shares, business transactions with or sales to other companies, selection

of officers and directors and other business decisions.

Our minority stockholders have no way of overriding decisions made by our management.

This level of control may also have an adverse impact on the market value of our shares because our management may institute or undertake

transactions, policies or programs that may result in losses, may not take any steps to increase our visibility in the financial community

and/or may sell sufficient numbers of shares to significantly decrease our price per share.

We have made and expect

to continue to make acquisitions that could disrupt our operations and harm our operating results.

Our growth depends upon market

growth, our ability to enhance our existing products, and our ability to introduce new products on a timely basis.

We intend to continue

to address the need to develop new products and enhance existing products through acquisitions of other companies, product lines, technologies,

and personnel.

This capital structure may have anti-takeover

effects preventing a change in control transaction that the minority owners of our Common Stock might consider in their best interest.

The ability of our management to control

our business may limit or eliminate minority stockholders’ ability to influence corporate affairs.

Our CEO, Dennis O’Leary, owns 100 shares

of Series A Preferred Stock that gives him the right to a majority of the voting power of our Company.

Because of this beneficial stock

ownership, Mr.

O’Leary is in a position to continue to elect our entire board of directors, decide all matters requiring stockholder

approval, including potential mergers or business changes, and determine our policies.

The interests of our management may differ from

the interests of our minority stockholders with respect to the issuance of shares, business transactions with or sales to other companies,

selection of officers and directors and other business decisions.

Our minority stockholders have no way of overriding decisions made by

our management.

This level of control may also have an adverse impact on the market value of our shares because our management may institute

or undertake transactions, policies or programs that may result in losses, may not take any steps to increase our visibility in the financial

community and/or may sell sufficient numbers of shares to significantly decrease our price per share.

We have made and expect to continue to make

acquisitions that could disrupt our operations and harm our operating results.

Our growth depends upon market growth, our ability

to enhance our existing products, and our ability to introduce new products on a timely basis.

We intend to continue to address the need

to develop new products and enhance existing products through acquisitions of other companies, product lines, technologies, and personnel.

Acquisitions involve numerous risks, including the following:

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The potential loss of key employees, customers, distributors, vendors and other business partners of the companies we acquire following and continuing after announcement of acquisition plans.

Acquisitions may also cause

Acquisitions may also cause us to:

Issue common stock that would dilute our current shareholders’ percentage ownership;

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Assume liabilities;

Record goodwill and nonamortizable intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges;

Record goodwill and non-amortizable intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges;

Incur amortization expenses related to certain intangible assets;

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Become subject to intellectual property or other litigation.

Mergers and acquisitions

are inherently risky and subject to many factors outside of our control, and no assurance can be given that our previous or future acquisitions

will be successful and will not materially adversely affect our business, operating results, or financial condition.

Failure to manage

and successfully integrate acquisitions could materially harm our business and operating results.

Prior acquisitions could result in a

wide range of outcomes, from successful introduction of new products and technologies to a failure to do so.

Even when an acquired company

has already developed and marketed products, there can be no assurance that product enhancements will be made in a timely fashion or that

pre-acquisition due diligence will have identified all possible issues that might arise with respect to such products.

From time to time, we have

made acquisitions that resulted in charges in an individual quarter.

These charges may occur in any particular quarter, resulting in variability

in our quarterly earnings.

Mergers and acquisitions are inherently risky

and subject to many factors outside of our control, and no assurance can be given that our previous or future acquisitions will be successful

and will not materially adversely affect our business, operating results, or financial condition.

Failure to manage and successfully integrate

acquisitions could materially harm our business and operating results.

Prior acquisitions could result in a wide range of outcomes, from

successful introduction of new products and technologies to a failure to do so.

Even when an acquired company has already developed and

marketed products, there can be no assurance that product enhancements will be made in a timely fashion or that pre-acquisition due diligence

will have identified all possible issues that might arise with respect to such products.

From time to time, we have made acquisitions that

resulted in charges in an individual quarter.

These charges may occur in any particular quarter, resulting in variability in our quarterly

In addition, our effective tax rate for future periods is uncertain and could be impacted by mergers and acquisitions.

Risks related to new product development also apply to acquisitions.

Acquisitions, joint

ventures or other strategic transactions create certain risks and may adversely affect our business, financial condition or results of

Acquisitions, partnerships

and joint ventures are part of our growth strategy.

We evaluate and expect in the future to evaluate potential strategic acquisitions

of, and partnerships or joint ventures with, complementary businesses, services or technologies.

We may not be successful in identifying

acquisition, partnership and joint venture targets.

In addition, we may not be able to successfully finance or integrate any businesses,

services or technologies that we acquire or with which we form a partnership or joint venture.

We may not be able to identify

suitable acquisition candidates or complete acquisitions in the future, which could adversely affect our future growth;

or businesses

that we acquire may not perform as well as expected or may be more difficult or expensive to integrate and manage than expected, which

could adversely affect our business and results of operations.

In addition, the process of integrating these acquisitions may disrupt

our business and divert our resources.

related to new product development also apply to acquisitions.

Acquisitions, joint ventures or other strategic

transactions create certain risks and may adversely affect our business, financial condition or results of operations.

Acquisitions, partnerships and joint ventures

are part of our growth strategy.

We evaluate and expect in the future to evaluate potential strategic acquisitions of, and partnerships

or joint ventures with, complementary businesses, services or technologies.

We may not be successful in identifying acquisition, partnership

and joint venture targets.

In addition, we may not be able to successfully finance or integrate any businesses, services or technologies

that we acquire or with which we form a partnership or joint venture.

We may not be able to identify suitable acquisition

candidates or complete acquisitions in the future, which could adversely affect our future growth;

or businesses that we acquire may not

perform as well as expected or may be more difficult or expensive to integrate and manage than expected, which could adversely affect

our business and results of operations.

In addition, the process of integrating these acquisitions may disrupt our business and divert

our resources.

In addition, acquisitions outside our current operating jurisdictions

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general economic and political conditions.

These risks may arise for

a number of reasons:

These risks may arise for a number of reasons:

we may not be able to find suitable businesses to acquire at affordable valuations or on other acceptable terms;

we may face competition for acquisitions from other potential acquirers;

we may need to borrow money or sell equity or debt securities

to the public to finance acquisitions and the terms of these financings may be adverse to us;

changes in accounting, tax, securities or

other regulations could increase the difficulty or cost for us to complete acquisitions;

we may incur unforeseen obligations or liabilities

in connection with acquisitions;

we may face competition

for acquisitions from other potential acquirers;

we may need to borrow money or sell equity or debt securities to the public to finance

acquisitions and the terms of these financings may be adverse to us;

changes in accounting, tax, securities or other regulations could

increase the difficulty or cost for us to complete acquisitions;

we may incur unforeseen obligations or liabilities in connection with

acquisitions;

we may need to devote unanticipated financial and management resources to an acquired business;

not realize expected operating efficiencies or product integration benefits from an acquisition;

we could enter markets where we have

minimal prior experience;

we may not realize expected

operating efficiencies or product integration benefits from an acquisition;

we could enter markets where we have minimal prior experience;

and we may experience decreases in earnings as a result of non-cash impairment charges.

We cannot ensure that any

acquisition, partnership or joint venture we make will not have a material adverse effect on our business, financial condition and results

of operations.

We cannot ensure that any acquisition, partnership

or joint venture we make will not have a material adverse effect on our business, financial condition and results of operations.

Because of the unique difficulties and uncertainties

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or that with which we are licensing that also extend the time and cost of product development.

Successful technical development of our products

does not guarantee successful commercialization.

Successful technical development of our

products does not guarantee successful commercialization.

We may successfully complete the technical development

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Demonstrations of the products not aligning with or meeting customer needs.

Our success in the market for the products we develop

will depend largely on our ability to prove our products’ capabilities.

Upon demonstration, our products and/or technology may not

have the capabilities they were designed to have or that we believed they would have.

Furthermore, even if we do successfully demonstrate

our products’ capabilities, potential customers may be more comfortable doing business with a larger, more established, more proven

company than us.

Our success in the market for the products we

develop will depend largely on our ability to prove our products’ capabilities.

Upon demonstration, our products and/or technology

may not have the capabilities they were designed to have or that we believed they would have.

Furthermore, even if we do successfully

demonstrate our products’ capabilities, potential customers may be more comfortable doing business with a larger, more established,

more proven company than us.

Moreover, competing products may prevent us from gaining wide market acceptance of our products.

Significant revenue

from new product investments may not be achieved for a number of years, if at all.

If we do not effectively

manage our growth and the associated demands on our operational, risk management, sales and marketing, technology, compliance and finance

and accounting resources, our business may be adversely impacted.

We have experienced recent

significant growth through our acquisition of Optilan, and other subsidiaries.

In our recent acquisitions, including our acquisition of

Optilan, our business has become increasingly complex by expanding the services we offer.

To effectively manage and capitalize on our

growth, we must continue to expand our information technology and financial, operating, and administrative systems and controls, and continue

revenue from new product investments may not be achieved for a number of years, if at all.

If we do not effectively manage our growth

and the associated demands on our operational, risk management, sales and marketing, technology, compliance and finance and accounting

resources, our business may be adversely impacted.

To effectively manage and capitalize on our growth,

we must continue to expand our information technology and financial, operating, and administrative systems and controls, and continue

to manage headcount, capital, and processes efficiently.

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authorizations, or loss of relationships that could substantially impair or even suspend company operations.

We intend to continue to

develop our technology.

Successful implementation of this strategy may require significant expenditure before any substantial associated

revenue is generated and we cannot guarantee that these increased investments will result in corresponding and offsetting revenue growth.

Our growth may not be sustainable and depends on our ability to retain existing customers, attract new customers, expand product offerings,

and increase processed volumes and revenue from both new and existing customers.

A customer’s use of

our services may decrease for a variety of reasons, including the customer’s level of satisfaction with our products and services,

the expansion of business to offer new products and services, the effectiveness of our support services, the pricing of our products and

services, the pricing, range and quality of competing products or services, the effects of global economic conditions, regulatory limitations,

trust, or perception and interest in our products and services.

Furthermore, the complexity and costs associated with switching to a competitor

may not be significant enough to prevent a customer from switching service providers, especially for larger customers.

Any failure by us to retain

existing customers, attract new customers, and increase revenue from both new and existing customers could materially and adversely affect

our business, financial condition, results of operations and prospects.

These efforts may require substantial financial expenditures,

commitments of resources, developments of our processes, and other investments and innovations.

We face intense and

increasing competition and, if we do not compete effectively, our competitive positioning and our operating results will be harmed.

We operate in a rapidly changing

and highly competitive industry, and our results of operations and future prospects depend on, among other things:

We intend to continue to develop our technology.

Successful implementation of this strategy may require significant expenditure before any substantial associated revenue is generated

and we cannot guarantee that these increased investments will result in corresponding and offsetting revenue growth.

Our growth may not

be sustainable and depends on our ability to retain existing customers, attract new customers, expand product offerings, and increase

processed volumes and revenue from both new and existing customers.

A customer’s use of our services may decrease

for a variety of reasons, including the customer’s level of satisfaction with our products and services, the expansion of business

to offer new products and services, the effectiveness of our support services, the pricing of our products and services, the pricing,

range and quality of competing products or services, the effects of global economic conditions, regulatory limitations, trust, or perception

and interest in our products and services.

Furthermore, the complexity and costs associated with switching to a competitor may not be

significant enough to prevent a customer from switching service providers, especially for larger customers.

Any failure by us to retain existing customers,

attract new customers, and increase revenue from both new and existing customers could materially and adversely affect our business, financial

condition, results of operations and prospects.

These efforts may require substantial financial expenditures, commitments of resources,

developments of our processes, and other investments and innovations.

We face intense and increasing competition

and, if we do not compete effectively, our competitive positioning and our operating results will be harmed.

We operate in a rapidly changing and highly competitive

industry, and our results of operations and future prospects depend on, among other things:

the growth of our customer base;

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our ability to increase our overall value to each of our customers while they use our products and services.

Despite the barriers to enter

the markets we serve, we expect our competition to continue to increase.

In addition to established enterprises, we may also face competition

from early-stage companies attempting to capitalize on the same, or similar, opportunities as we are.

Some of our current and potential

competitors have longer operating histories, significantly greater financial, technical, marketing and other resources, and a larger customer

base than we do.

This allows them, among others, to potentially offer more competitive pricing or other terms or features, a broader range

of products, or a more specialized set of specific products or services, as well as respond more quickly than we can to new or emerging

technologies and changes in customer preferences.

Our existing or future competitors

may develop products or services that are similar to our products and services or that achieve greater market acceptance than our products

and services.

Despite the barriers to enter the markets we serve,

we expect our competition to continue to increase.

In addition to established enterprises, we may also face competition from early-stage

companies attempting to capitalize on the same, or similar, opportunities as we are.

Some of our current and potential competitors have

longer operating histories, significantly greater financial, technical, marketing and other resources, and a larger customer base than

This allows them, among others, to potentially offer more competitive pricing or other terms or features, a broader range of products,

or a more specialized set of specific products or services, as well as respond more quickly than we can to new or emerging technologies

and changes in customer preferences.

Our existing or future competitors may develop

products or services that are similar to our products and services or that achieve greater market acceptance than our products and services.

This could attract new customers away from our services and reduce our market share in the future.

Additionally, when new

competitors seek to enter our markets, or when existing market participants seek to increase their market share, these competitors sometimes

undercut, or otherwise exert pressure on, the pricing terms prevalent in that market, which could adversely affect our market share and/or

ability to capitalize on new market opportunities.

Cyberattacks and security

breaches of our systems, or those impacting our customers or third parties, could adversely impact our brand and reputation and our business,

operating results and financial condition.

Our business involves the

collection, storage, processing and transmission of confidential information, customer, employee, service provider and other personal

data, as well as information required to access customer assets.

Any actual or perceived security breach of our or our third-party partners

Additionally, when new competitors

seek to enter our markets, or when existing market participants seek to increase their market share, these competitors sometimes undercut,

or otherwise exert pressure on, the pricing terms prevalent in that market, which could adversely affect our market share and/or ability

to capitalize on new market opportunities.

Cyberattacks and security breaches of our

systems, or those impacting our customers or third parties, could adversely impact our brand and reputation and our business, operating

results and financial condition.

Our business involves the collection, storage,

processing and transmission of confidential information, customer, employee, service provider and other personal data, as well as information

required to access customer assets.

Any actual or perceived security breach of our or our third-party partners may:

harm our reputation and brand;

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adversely affect our business and operating results.

Further, any actual or perceived

breach or cybersecurity attack directed at other similar institutions, whether or not we are directly impacted, could lead to a general

loss of customer confidence in the use of our technology, which could negatively impact us including the market perception of the effectiveness

of our security measures and technology infrastructure.

An increasing number

of organizations, including large businesses, technology companies and financial institutions, as well as government institutions, have

disclosed breaches of their information security systems, some of which have involved sophisticated and highly targeted attacks, including

on their websites, mobile applications, and infrastructure.

Attacks upon systems across a variety of industries are increasing in their

frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded, and organized groups

and individuals, including state actors.

The techniques used to obtain unauthorized, improper, or illegal access to systems and information

(including customers’ personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving,

may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target.

attacks may occur on our systems or those of its third-party service providers or partners.

Certain types of cyberattacks could harm us

even if our systems are left undisturbed.

For example, attacks may be designed to deceive employees and service providers into releasing

control of our systems to a hacker, while others may aim to introduce computer viruses or malware into our systems with a view to stealing

confidential or proprietary data.

Additionally, certain threats are designed to remain dormant or undetectable until launched against

a target and we may not be able to implement adequate preventative measures.

Although we do not have a

past history of material security breaches or cyberattacks, and do not believe we are a target of such breaches or attacks, we have developed

systems and processes designed to protect the data we manage, prevent data loss and other security breaches, and effectively respond to

known and potential risks.

We expect to continue to expend significant resources to bolster these protections, but there can be no assurance

that these security measures will provide absolute security or prevent breaches or attacks.

Threats can come from a variety of sources,

including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders.

Certain threat actors may be

supported by significant financial and technological resources, making them even more sophisticated and difficult to detect.

our costs and the resources it devotes to protecting against these advanced threats and their consequences may increase over time.

Although we maintain insurance

coverage that we believe is adequate for our business, it may be insufficient to protect us against all losses and costs stemming from

security breaches, cyberattacks, and other types of unlawful activity, or any resulting disruptions from such events.

Outages and disruptions

of our systems, including any caused by cyberattacks, may harm our reputation and our business, operating results, and financial condition.

We may incur significant

liability as a result of ongoing disputes.

We are a party to multiple

legal disputes the resolutions of which may adversely affect our business and results of operations.

We may be subject to various

other legal proceedings, arbitrations, and regulatory investigation matters as further described in “ Legal Proceedings ”.

If any of these matters are resolved unfavorably to us, our business and results of operations may be adversely affected.

We have a limited operating

history in an evolving and highly volatile industry, which makes it difficult to evaluate our future prospects and may increase the risk

that we will not be successful.

Because we have a limited

history operating our business at our current scale and scope, it is difficult to evaluate our current business and future prospects,

including our ability to plan for and model future growth.

For example, recently launched services require substantial resources and there

is no guarantee that such expenditures will result in profit or growth of our business.

The rapidly evolving nature of the market in which

we operate, substantial uncertainty concerning how these markets may develop, and other economic factors beyond our control, reduces our

ability to accurately forecast quarterly or annual revenue.

Failure to manage our current and future growth effectively could have an

adverse effect on our business, operating results, and financial condition.

Adverse economic conditions

may adversely affect our business.

Our performance is subject

to general economic conditions, and their impact on the industries in which we operate, as well as our customers.

The United States and

other key European and other international economies have experienced cyclical downturns from time to time in which economic activity

declined resulting in lower consumption rates, restricted credit, reduced profitability, weaknesses in financial markets, bankruptcies,

and overall uncertainty with respect to the economy.

The impact of general economic conditions on our business is highly uncertain and

dependent on a variety of factors, including market activity, global economic trends, and other events beyond our control.

developments, such as trade wars and foreign exchange limitations can also increase the severity and levels of unpredictability globally

and increase the volatility of global financial markets.

To the extent that conditions in the general economic markets materially deteriorate,

our ability to attract and retain customers may suffer.

Further, any actual or perceived breach or cybersecurity

attack directed at other similar institutions, whether or not we are directly impacted, could lead to a general loss of customer confidence

in the use of our technology, which could negatively impact us including the market perception of the effectiveness of our security measures

and technology infrastructure.

An increasing number of organizations, including

large businesses, technology companies and financial institutions, as well as government institutions, have disclosed breaches of their

information security systems, some of which have involved sophisticated and highly targeted attacks, including on their websites, mobile

applications, and infrastructure.

Attacks upon systems across a variety of industries are increasing in their frequency, persistence,

and sophistication, and, in many cases, are being conducted by sophisticated, well-funded, and organized groups and individuals, including

state actors.

The techniques used to obtain unauthorized, improper, or illegal access to systems and information (including customers’

personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect

quickly, and often are not recognized or detected until after they have been launched against a target.

These attacks may occur on our

systems or those of its third-party service providers or partners.

Certain types of cyberattacks could harm us even if our systems are

left undisturbed.

For example, attacks may be designed to deceive employees and service providers into releasing control of our systems

to a hacker, while others may aim to introduce computer viruses or malware into our systems with a view to stealing confidential or proprietary

Additionally, certain threats are designed to remain dormant or undetectable until launched against a target and we may not be able

to implement adequate preventative measures.

Although we do not have a past history of material

security breaches or cyberattacks, and do not believe we are a target of such breaches or attacks, we have developed systems and processes

designed to protect the data we manage, prevent data loss and other security breaches, and effectively respond to known and potential

We expect to continue to expend significant resources to bolster these protections, but there can be no assurance that these security

measures will provide absolute security or prevent breaches or attacks.

Threats can come from a variety of sources, including criminal

hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders.

Certain threat actors may be supported by significant

financial and technological resources, making them even more sophisticated and difficult to detect.

As a result, our costs and the resources

it devotes to protecting against these advanced threats and their consequences may increase over time.

Although we maintain insurance coverage that we

believe is adequate for our business, it may be insufficient to protect us against all losses and costs stemming from security breaches,

cyberattacks, and other types of unlawful activity, or any resulting disruptions from such events.

Outages and disruptions of our systems,

including any caused by cyberattacks, may harm our reputation and our business, operating results, and financial condition.

We may incur significant liability as a

result of ongoing disputes.

We are a party to multiple legal disputes the

resolutions of which may adversely affect our business and results of operations.

We may be subject to various other legal proceedings,

arbitrations, and regulatory investigation matters as further described in “ Legal Proceedings ”.

If any of these matters

are resolved unfavorably to us, our business and results of operations may be adversely affected.

We have a limited operating history in an

evolving and highly volatile industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will

not be successful.

Because we have a limited history operating our

business at our current scale and scope, it is difficult to evaluate our current business and future prospects, including our ability

to plan for and model future growth.

For example, recently launched services require substantial resources and there is no guarantee that

such expenditures will result in profit or growth of our business.

The rapidly evolving nature of the market in which we operate, substantial

uncertainty concerning how these markets may develop, and other economic factors beyond our control, reduces our ability to accurately

forecast quarterly or annual revenue.

Failure to manage our current and future growth effectively could have an adverse effect on our

business, operating results, and financial condition.

Adverse economic conditions may adversely

affect our business.

Our performance is subject to general economic

conditions, and their impact on the industries in which we operate, as well as our customers.

The United States and other key European

and other international economies have experienced cyclical downturns from time to time in which economic activity declined resulting

in lower consumption rates, restricted credit, reduced profitability, weaknesses in financial markets, bankruptcies, and overall uncertainty

with respect to the economy.

The impact of general economic conditions on our business is highly uncertain and dependent on a variety

of factors, including market activity, global economic trends, and other events beyond our control.

Geopolitical developments, such as

trade wars and foreign exchange limitations can also increase the severity and levels of unpredictability globally and increase the volatility

of global financial markets.

To the extent that conditions in the general economic markets materially deteriorate, our ability to attract

and retain customers may suffer.

The nature of our business involves significant

risks and uncertainties that may not be covered by insurance or indemnity.

We develop and sell products where insurance or indemnification

may not be available, including:

We develop and sell products where insurance or

indemnification may not be available, including:

Designing and developing products using advanced technologies in intelligence and homeland security applications that are intended to operate in high demand, high risk situations;

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over financial reporting may, until remedied, cause errors in our financial statements or cause our filings with the SEC to not be timely.

We believe that material weaknesses exist in

our internal control over financial reporting as of December 31, 2021, including those related to (i) our internal audit functions

and (ii) a lack of segregation of duties within accounting functions.

We believe that material weaknesses exist in our

internal control over financial reporting as of December 31, 2023, including those related to (i) our internal audit functions and

(ii) a lack of segregation of duties within accounting functions.

If our internal control over financial reporting or disclosure controls

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Being a public company is expensive and administratively burdensome.

As a public reporting company, we are subject to the

information and reporting requirements of the Securities Act, the Exchange Act and other federal securities laws, rules and regulations

As a public reporting company, we are subject

to the information and reporting requirements of the Securities Act, the Exchange Act and other federal securities laws, rules and regulations

related thereto, including compliance with the Sarbanes-Oxley Act.

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of our Board of Directors and management team, and increases our expenses.

We estimate we will incur approximately $200,000 to $300,000

annually in connection with being a public company.

Among other things, we are required to:

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future, we may be required to accept reduced coverage or incur substantially higher costs to obtain this coverage.

If we fail to establish and maintain an effective

system of internal control, we may not be able to report our financial results accurately or to prevent fraud.

Any inability to report

and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our common stock.

Effective internal control is necessary for us to

provide reliable financial reports and prevent fraud.

If we cannot provide reliable financial reports or prevent fraud, we may not be

able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with

investors may be harmed.

If we fail to establish and maintain an

effective system of internal control, we may not be able to report our financial results accurately or to prevent fraud.

Any inability

to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our

common stock.

Effective internal control is necessary for us

to provide reliable financial reports and prevent fraud.

If we cannot provide reliable financial reports or prevent fraud, we may not

be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation

with investors may be harmed.

As a result, our small size and any current internal control deficiencies may adversely affect our financial

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failures of internal controls exist, and may in the future discover areas of our internal control that need improvement.

Public company compliance may make it more difficult

to attract and retain officers and directors.

Public company compliance may make it more

difficult to attract and retain officers and directors.

The Sarbanes-Oxley Act and new rules subsequently

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to serve on our Board of Directors or as executive officers.

Delaware law and our

Certificate of Incorporation and Bylaws will contain certain provisions, including anti-takeover provisions that limit the ability of

stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

Our Certificate of Incorporation

and bylaws contains provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable

by our board and therefore depress the trading price of our Common Stock.

In addition, as a Delaware corporation, we will generally be

subject to provisions of Delaware law, including the DGCL.

These provisions could also make it difficult for stockholders to take certain

actions, including electing directors who are not nominated by the current members of our board or taking other corporate actions, including

effecting changes in management.

Such provisions, alone

or together, could delay or prevent hostile takeovers and changes in control or changes in our board or management.

Any provision of our Certificate

of Incorporation or bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity

for stockholders to receive a premium for their shares of our stock and could also affect the price that some investors are willing to

pay for our Common Stock.

Delaware law and our Certificate of Incorporation

and Bylaws will contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain

actions and could delay or discourage takeover attempts that stockholders may consider favorable.

Our Certificate of Incorporation and bylaws contains

provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board

and therefore depress the trading price of our Common Stock.

In addition, as a Delaware corporation, we will generally be subject to provisions

of Delaware law, including the DGCL.

These provisions could also make it difficult for stockholders to take certain actions, including

electing directors who are not nominated by the current members of our board or taking other corporate actions, including effecting changes

in management.

Such provisions, alone or together, could delay

or prevent hostile takeovers and changes in control or changes in our board or management.

Any provision of our Certificate of Incorporation

or bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for stockholders

to receive a premium for their shares of our stock and could also affect the price that some investors are willing to pay for our Common

RISKS RELATED TO OUR FINANCIAL CONDITION

If we do not obtain additional financing or

sufficient revenues, our business will fail.

If we do not obtain additional financing

or sufficient revenues, our business will fail.

Our current operating funds are less than necessary

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we are generating revenues, we are not generating net income.

We will require additional financing to execute our

business plan through raising additional capital and/or generating greater revenues.

We will require additional financing to execute

our business plan through raising additional capital and/or generating greater revenues.

Obtaining additional financing is subject to a

number of factors, including acceptance of our BOTDA technology and current financial condition as well as general market conditions.

These factors affect the timing, amount, terms or

conditions of additional financing unavailable to us.

If additional financing is not arranged, we will face the risk of going out of business.

Our management is currently engaged in actively pursuing multiple financing options in order to obtain the capital necessary to execute

our business plan.

The most likely source of future funds presently available

to us is through the additional sales of equity or through convertible debt instruments.

Any sales of share capital or conversion of convertible

debt will most likely result in dilution to existing shareholders.

These factors affect the timing, amount, terms

or conditions of additional financing unavailable to us.

If additional financing is not arranged, we will face the risk of going out of

Our management is currently engaged in actively pursuing multiple financing options in order to obtain the capital necessary

to execute our business plan.

The most likely source of future funds presently

available to us is through the additional sales of equity or through convertible debt instruments.

Any sales of share capital or conversion

of convertible debt will most likely result in dilution to existing shareholders.

There is no history upon which to base any assumption

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If we are unsuccessful in addressing these risks, our business will most likely fail.

We might require additional

capital to support business growth, and this capital might not be available or may require stockholder approval to obtain.

We have funded our operations

since inception primarily through equity financings, convertible notes, and revenue generated by our products and services.

to continue to make investments in our business to respond to business challenges, including developing new products and services, enhancing

our operating infrastructure, expanding our international operations, and acquiring complementary businesses and technologies, all of

which may require us to secure additional funds.

Additional financing may

not be available on terms favorable to us, if at all.

If we incur additional debt, the debt holders may have rights senior to holders

of our common stock to make claims on our assets, and the terms of any debt could restrict our operations.

Our only existing commitment for financing is

pursuant to the Equity Financing Agreement with GHS Investments LLC but our ability to make puts is subject to certain conditions which

We might require additional capital to support

business growth, and this capital might not be available or may require stockholder approval to obtain.

We have funded our operations since inception

primarily through equity financings, convertible notes, and revenue generated by our products and services.

We intend to continue to make

investments in our business to respond to business challenges, including developing new products and services, enhancing our operating

infrastructure, expanding our international operations, and acquiring complementary businesses and technologies, all of which may require

us to secure additional funds.

Additional financing may not be available on terms

favorable to us, if at all.

If we incur additional debt, the debt holders may have rights senior to holders of our common stock to make

claims on our assets, and the terms of any debt could restrict our operations.

Our only existing commitment for financing

is pursuant to Equity Financing Agreement with GHS Investments LLC but our ability to make puts is subject to certain conditions which

may limit our ability to make puts or the amount of each put.

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financing, our business will fail.

On June 5, 2023, we entered

an Amended Equity Financing Agreement (the “ EFA ”) with GHS Investments LLC (“ GHS ”), pursuant to

which GHS agreed to purchase up to $30,000,000 in shares of our Common Stock, from time to time over the course of 12 months (the “ Contract

The EFA grants us the right,

from time to time at our sole discretion (subject to certain conditions) during the Contract Period, to direct GHS to purchase shares

of Common Stock on any business day (a “ Put ”), provided that at least ten Trading Days (as defined in the EFA) have

On July 10, 2023, we entered the Second Amended

Equity Financing Agreement with GHS, pursuant to which GHS agreed to purchase up to $30,000,000 in shares of our Common Stock, from time

to time over the course of 12 months.

On January 30, 2024, we and GHS entered into the Amendment No.

1 to the EFA pursuant to which the

Contract Period was amended to 24 months.

The EFA grants us the right, from time to time

at our sole discretion (subject to certain conditions) during the Contract Period (as defined in the EFA), to direct GHS to purchase shares

of Common Stock on any business day (a “ Put ”), provided that at least five Trading Days (as defined in the EFA) have

passed since the most recent Put.

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outstanding on such date, as determined in accordance with Rule 13d-1(j) of the Exchange Act.

Due to these limitations,

we may be unable to make Puts sufficient to finance our business operations.

In the event we are unable to make Puts or obtain other commitments

for financing, our business will fail.

We need to continue as a going concern if our business is to succeed.

Our independent registered

public accounting firm reports on our audited financial statements for the years ended December 31, 2022 and 2021, indicate that there

are a number of factors that raise substantial risks about our ability to continue as a going concern.

Such factors identified in the

report are our accumulated deficit since inception, our failure to attain profitable operations, the excess of liabilities over assets,

and our dependence upon obtaining adequate additional financing to pay our liabilities.

If we are not able to continue as a going concern,

investors could lose their investments.

There is no assurance

that we will achieve or maintain profitability or that our revenue and business models will be successful.

The purpose of the limitation is to prevent

GHS from controlling the Company so that is it not an “affiliate,” as defined in Rule

405 promulgated under the Securities Act of 1933, as amended.

The beneficial ownership limitation does not prevent GHS from selling

some or all of the shares it acquires and then acquiring additional shares so that it is able to sell shares in excess of the 4.99% beneficial

ownership limitation while never holding more than 4.99% of our outstanding shares.

From August 2021 until February 9, 2024, GHS has purchased

and sold 2,272,007,223 and 2,055,590,956 shares of our Common Stock, respectively.

Due to these limitations, we may be unable to

make Puts sufficient to finance our business operations.

In the event we are unable to make Puts or obtain other commitments for financing,

our business will fail.

We need to continue as a going concern if our business is to

Our independent registered public accounting firm

reports (from two separate independent registered public accounting firms) on our audited financial statements for the years ended December

31, 2023 and 2022, each indicate that there are a number of factors that raise substantial risks about our ability to continue as a going

Such factors identified in the report are our accumulated deficit since inception, our failure to attain profitable operations,

the excess of liabilities over assets, and our dependence upon obtaining adequate additional financing to pay our liabilities.

not able to continue as a going concern, investors could lose their investments.

There is no assurance that we will achieve

or maintain profitability or that our revenue and business models will be successful.

Our ability to achieve and maintain profitability

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have an adverse effect on pour business, operating results and financial condition.

We may be affected

by fluctuations in currency exchange rates

We are potentially exposed

to adverse as well as beneficial movements in currency exchange rates.

An increase in the value of the dollar could increase the real

cost to our customers of our products in those markets outside the U.S.

where we sell in dollars, and a weakened dollar could increase

the cost of local operating expenses from sources outside the United States, and overseas capital expenditures.

We also conduct certain

investing and financing activities in local currencies.

Therefore, changes in exchange rates could harm our financial condition and results

of operations.

We may experience fluctuations

in our quarterly operating results.

We could experience significant

fluctuations in our quarterly operating results due to a number of factors, many of which are beyond our control.

You should not rely

on period-to-period comparisons of our operating results as an indication of our future performance.

Factors that may cause fluctuations

in our quarterly operating results include, but are not limited to, the following:

We may be affected by fluctuations in currency

exchange rates

We are potentially exposed to adverse as well

as beneficial movements in currency exchange rates.

An increase in the value of the dollar could increase the real cost to our customers

of our products in those markets outside the U.S.

where we sell in dollars, and a weakened dollar could increase the cost of local operating

expenses from sources outside the United States, and overseas capital expenditures.

We also conduct certain investing and financing activities

in local currencies.

Therefore, changes in exchange rates could harm our financial condition and results of operations.

We may experience fluctuations in our quarterly

operating results.

We could experience significant fluctuations in

our quarterly operating results due to a number of factors, many of which are beyond our control.

You should not rely on period-to-period

comparisons of our operating results as an indication of our future performance.

Factors that may cause fluctuations in our quarterly

operating results include, but are not limited to, the following:

a change in the volume of our customers use of our products and services and generally;

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changes in accounting standards, policies, guidance, interpretations or principles;

general economic conditions in either domestic or international markets, including the impact of the ongoing COVID-19 pandemic.

Our operating results may

fall below the expectations of market analysts and investors in some future periods, which could cause the market price of our Common

Stock to decline substantially.

general economic conditions in either domestic or international markets

Our operating results may fall below the expectations

of market analysts and investors in some future periods, which could cause the market price of our Common Stock to decline substantially.

Changes in U.S.

foreign tax laws, as well as the application of such laws, could adversely impact our financial position and operating results.

We are subject to complex

income and non-income tax laws and regulations in the United States and a variety of foreign jurisdictions.

Both the United States and

foreign jurisdictions may revise corporate income tax and other non-income tax laws which could impact the amount of tax due in such jurisdiction.

Our determination of our

corporate income tax liability is subject to review and may be challenged by applicable U.S.

and foreign tax laws, as

well as the application of such laws, could adversely impact our financial position and operating results.

We are subject to complex income and non-income

tax laws and regulations in the United States and a variety of foreign jurisdictions.

Both the United States and foreign jurisdictions

may revise corporate income tax and other non-income tax laws which could impact the amount of tax due in such jurisdiction.

Our determination of our corporate income tax

liability is subject to review and may be challenged by applicable U.S.

and foreign tax authorities.

outcome of such challenge could harm our operating results and financial condition.

The determination of our worldwide provision for income

taxes and other tax liabilities requires significant judgment and, in the ordinary course of business, there are many transactions and

calculations where the ultimate tax determination is complex and uncertain.

Moreover, as a multinational business, we have subsidiaries

that engage in many intercompany transactions in a variety of tax jurisdictions where the ultimate tax determination is complex and uncertain.

Our existing corporate structure and intercompany arrangements have been implemented in a manner we believe is in compliance with current

prevailing tax laws.

Furthermore, as we operate in multiple taxing jurisdictions, the application of tax laws can be subject to diverging

and sometimes conflicting interpretations by tax authorities of these jurisdictions.

It is not uncommon for taxing authorities in different

countries to have conflicting views with respect to, among other things, the characterization and source of income or other tax items,

the manner in which the arm’s-length standard is applied for transfer pricing purposes, or with respect to the valuation of intellectual

Any adverse outcome of such challenge

could harm our operating results and financial condition.

The determination of our worldwide provision for income taxes and other tax

liabilities requires significant judgment and, in the ordinary course of business, there are many transactions and calculations where

the ultimate tax determination is complex and uncertain.

Moreover, as a multinational business, we have subsidiaries that engage in many

intercompany transactions in a variety of tax jurisdictions where the ultimate tax determination is complex and uncertain.

corporate structure and intercompany arrangements have been implemented in a manner we believe is in compliance with current prevailing

Furthermore, as we operate in multiple taxing jurisdictions, the application of tax laws can be subject to diverging and sometimes

conflicting interpretations by tax authorities of these jurisdictions.

It is not uncommon for taxing authorities in different countries

to have conflicting views with respect to, among other things, the characterization and source of income or other tax items, the manner

in which the arm’s-length standard is applied for transfer pricing purposes, or with respect to the valuation of intellectual property.

The taxing authorities of the jurisdictions in which we operate may challenge our tax treatment of certain items or the methodologies

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financial position and operating results.

We are also subject to non-income

taxes, such as payroll, sales, use, value-added, net worth, property, and goods and services taxes in the United States and various foreign

jurisdictions.

We are also subject to non-income taxes, such

as payroll, sales, use, value-added, net worth, property, and goods and services taxes in the United States and various foreign jurisdictions.

A change in the tax law could impact tax positions which could result in an increased exposure related to such tax liabilities.

Such changes could have an adverse effect on our operating results and financial condition.

In addition, under Section 382 of the Internal Revenue

Code of 1986, as amended (the “ Code ”), a corporation that undergoes an “ownership change” (as defined under

Sections 382 and 383 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change

could have an adverse effect on our operating results and financial condition.

In addition, under Section 382 of the Internal

Revenue Code of 1986, as amended (the “ Code ”), a corporation that undergoes an “ownership change” (as defined

under Sections 382 and 383 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change

NOLs and certain other tax attributes to offset post-change taxable income or taxes.

We have not performed a study

to determine whether its NOLs are currently subject to Section 382 limitations.

DarkPulse may also experience a future ownership change

under Section 382 of the Code that could affect our ability to utilize its NOLs to offset our income.

If our estimates or

judgment relating to our critical accounting policies prove to be incorrect, our operating results could be adversely affected.

The preparation of financial

statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated

financial statements and accompanying notes.

We base our estimates on historical experience and on various other assumptions that we believe

to be reasonable under the circumstances, as provided in the section titled “ Management’s Discussion and Analysis of Financial

Condition and Results of Operations ”.

The results of these estimates form the basis for making judgments about the carrying

values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources.

We have not performed a study to determine whether

its NOLs are currently subject to Section 382 limitations.

We may also experience a future ownership change under Section 382 of the Code

that could affect our ability to utilize its NOLs to offset our income.

If our estimates or judgment relating to

our critical accounting policies prove to be incorrect, our operating results could be adversely affected.

The preparation of financial statements in conformity

with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements

and accompanying notes.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable

under the circumstances, as provided in the section titled “ Management’s Discussion and Analysis of Financial Condition

and Results of Operations ”.

The results of these estimates form the basis for making judgments about the carrying values of

assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources.

estimates and judgments involve the identification of performance obligations in revenue recognition, evaluation of tax positions, inter-company

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to fall below the expectations of analysts and investors, resulting in a decline in the trading price of our Common Stock.

Business metrics and

other estimates are subject to inherent challenges in measurement, and our business, operating results, and financial condition could

be adversely affected by real or perceived inaccuracies in those metrics.

We regularly review business

metrics and other measures to evaluate growth trends, measure our performance, and makes strategic decisions.

These metrics are calculated

using internal company data and have not been validated by an independent third party.

While these numbers are based on what we currently

believe to be reasonable estimates for the applicable period of measurement, there are inherent challenges in such measurements.

fail to maintain an effective analytics platform, our calculations may be inaccurate, and we may not be able to identify those inaccuracies.

We are subject to changes

in financial reporting standards or policies, including as a result of choices made by us, which could materially adversely affect our

reported results of operations and financial condition and may have a corresponding material adverse impact on capital ratios.

Our consolidated financial

statements are prepared in accordance with GAAP, which are periodically revised or expanded.

Accordingly, from time to time we are required

to adopt new or revised accounting standards issued by recognized bodies.

It is possible that future accounting standards and financial

reporting standards or policies, including as a result of choices made by us, which we are required to adopt, could change the current

accounting treatment that applies to our consolidated financial statements and that such changes could have a material adverse effect

on our reported results of operations and financial condition, and may have a corresponding material adverse effect on capital ratios.

RISKS RELATED TO OUR EMPLOYEES

AND OTHER SERVICE PROVIDERS

Business metrics and other estimates are

subject to inherent challenges in measurement, and our business, operating results, and financial condition could be adversely affected

by real or perceived inaccuracies in those metrics.

We regularly review business metrics and other

measures to evaluate growth trends, measure our performance, and makes strategic decisions.

These metrics are calculated using internal

company data and have not been validated by an independent third party.

While these numbers are based on what we currently believe to

be reasonable estimates for the applicable period of measurement, there are inherent challenges in such measurements.

If we fail to maintain

an effective analytics platform, our calculations may be inaccurate, and we may not be able to identify those inaccuracies.

We are subject to changes in financial reporting

standards or policies, including as a result of choices made by us, which could materially adversely affect our reported results of operations

and financial condition and may have a corresponding material adverse impact on capital ratios.

Our consolidated financial statements are prepared

in accordance with GAAP, which are periodically revised or expanded.

Accordingly, from time to time we are required to adopt new or revised

accounting standards issued by recognized bodies.

It is possible that future accounting standards and financial reporting standards or

policies, including as a result of choices made by us, which we are required to adopt, could change the current accounting treatment that

applies to our consolidated financial statements and that such changes could have a material adverse effect on our reported results of

operations and financial condition, and may have a corresponding material adverse effect on capital ratios.

RISKS RELATED TO OUR

EMPLOYEES AND OTHER SERVICE PROVIDERS

We are heavily reliant on Dennis O’Leary,

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to manage our business.

If we are unable to recruit and retain key management,

technical and sales personnel, our business would be negatively affected.

For our business to be successful, we need to attract

and retain highly qualified technical, management and sales personnel.

The failure to recruit additional key personnel when needed with

specific qualifications and on acceptable terms or to retain good relationships with our partners might impede our ability to continue

If we are unable to recruit and retain key

management, technical and sales personnel, our business would be negatively affected.

For our business to be successful, we need to

attract and retain highly qualified technical, management and sales personnel.

The failure to recruit additional key personnel when needed

with specific qualifications and on acceptable terms or to retain good relationships with our partners might impede our ability to continue

to develop, commercialize and sell our products.

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business to succeed.

In the event of employee

or service provider misconduct or error, our business may be adversely impacted.

Employee or service provider

misconduct or error could subject us to legal liability, financial losses, and regulatory sanctions, and could seriously harm our reputation

and negatively affect our business.

Such misconduct could include engaging in improper or unauthorized transactions or activities, misappropriation

of customer funds, and misappropriation of information, failing to supervise other employees or service providers, or improperly using

confidential information.

Employee or service provider

errors could expose us to the risk of material losses even if the errors are detected.

Although we have implemented processes and procedures

and provide trainings to our employees and service providers to reduce the likelihood of misconduct and error, these efforts may not be

Moreover, the risk of employee or service provider error or misconduct may be even greater for novel products and services.

This can lead to high risk

of confusion among employees and service providers, particularly in a fast growth company like ours, with respect to compliance obligations

particularly including confidentiality, data access, and conflicts.

It is not always possible to deter misconduct and the precautions

we take to prevent and detect this activity may not be effective in all cases.

If we were found not to have met our regulatory oversight

and compliance and other obligations, we could be subject to regulatory sanctions, financial penalties and restrictions on our activities

for failure to properly identify, monitor and respond to potentially problematic activity, which could seriously damage our reputation.

Our employees, contractors, and agents could also commit errors that subject us to financial claims for negligence, as well as regulatory

actions, or result in financial liability.

Further, allegations by regulatory or criminal authorities of improper transactions could affect

our brand and reputation.

In the event of employee or service provider

misconduct or error, our business may be adversely impacted.

Employee or service provider misconduct or error

could subject us to legal liability, financial losses, and regulatory sanctions, and could seriously harm our reputation and negatively

affect our business.

Such misconduct could include engaging in improper or unauthorized transactions or activities, misappropriation of

customer funds, and misappropriation of information, failing to supervise other employees or service providers, or improperly using confidential

Employee or service provider errors could expose

us to the risk of material losses even if the errors are detected.

Although we have implemented processes and procedures and provide trainings

to our employees and service providers to reduce the likelihood of misconduct and error, these efforts may not be successful.

the risk of employee or service provider error or misconduct may be even greater for novel products and services.

This can lead to high risk of confusion among

employees and service providers, particularly in a fast growth company like ours, with respect to compliance obligations particularly

including confidentiality, data access, and conflicts.

It is not always possible to deter misconduct and the precautions we take to prevent

and detect this activity may not be effective in all cases.

If we were found not to have met our regulatory oversight and compliance and

other obligations, we could be subject to regulatory sanctions, financial penalties and restrictions on our activities for failure to

properly identify, monitor and respond to potentially problematic activity, which could seriously damage our reputation.

Our employees,

contractors, and agents could also commit errors that subject us to financial claims for negligence, as well as regulatory actions, or

result in financial liability.

Further, allegations by regulatory or criminal authorities of improper transactions could affect our brand

and reputation.

RISKS RELATED TO OUR COMMON STOCK

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capital raising efforts, including at a price (or exercise or conversion prices) below the price an investor paid for stock.

Because the SEC imposes additional sales practice

requirements on brokers who deal in our shares that are penny stocks, some brokers may be unwilling to trade them.

This means that investors

may have difficulty reselling their shares and may cause the price of the shares to decline.

Because the SEC imposes additional sales

practice requirements on brokers who deal in our shares that are penny stocks, some brokers may be unwilling to trade them.

that investors may have difficulty reselling their shares and may cause the price of the shares to decline.

Our shares qualify as penny stocks and are covered

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We do not expect to declare or pay any dividends.

We have not declared or paid any dividends on our

common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future.

We have not declared or paid any dividends on

our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future.

Volatility of Stock Price.

Our common shares are currently publicly traded on

the OTC Markets under the symbol “DPLS.” In the future, the trading price of our common shares may be subject to wide fluctuations.

Our common shares are currently quoted on the

OTC Markets under the symbol “DPLS.” In the future, the trading price of our common shares may be subject to wide fluctuations.

Trading prices of the common shares may fluctuate in response to a number of factors, many of which will be beyond our control.

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uncertainties described below before deciding whether to invest in shares of our common stock.

Our failure to successfully address the risks and

uncertainties described below would have a material adverse effect on our business, financial condition and/or results of operations,

Our failure to successfully address the risks

and uncertainties described below would have a material adverse effect on our business, financial condition and/or results of operations,

and the trading price of our common stock may decline and investors may lose all or part of their investment.

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we will successfully address these risks or other unknown risks that may affect our business.

As an enterprise engaged in the development of new

technology, our business is inherently risky.

As an enterprise engaged in the development of

new technology, our business is inherently risky.

Our common shares are considered speculative during the development of our new business

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has fluctuated significantly.

Being a public company is expensive and administratively burdensome.

As a public reporting company, we are subject

to the information and reporting requirements of the Securities Act, the Exchange Act and other federal securities laws, rules and regulations

related thereto, including compliance with the Sarbanes-Oxley Act.

Complying with these laws and regulations requires the time and attention

of our Board of Directors and management team, and increases our expenses.

Among other things, we are required to:

Maintain and evaluate a system of internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board;

Prepare and distribute periodic reports in compliance with our obligations under federal securities laws;

Institute a more comprehensive compliance function, including with respect to corporate governance;

Involve, to a greater degree, our outside legal counsel and accountants in the above activities.

The costs of preparing and filing annual and quarterly

reports, proxy statements and other information with the SEC and furnishing audited reports to stockholders are expensive and much greater

than that of a privately-held company, and compliance with these rules and regulations may require us to hire additional financial reporting,

internal controls and other finance personnel, and will involve a material increase in regulatory, legal and accounting expenses and the

attention of management.

There can be no assurance that we will be able to comply with the applicable regulations in a timely manner,

In addition, being a public company makes it more expensive for us to obtain director and officer liability insurance.

future, we may be required to accept reduced coverage or incur substantially higher costs to obtain this coverage.

If we fail to establish and maintain an

effective system of internal control, we may not be able to report our financial results accurately or to prevent fraud.

Any inability

to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our

common stock.

Effective internal control is necessary for us

to provide reliable financial reports and prevent fraud.

If we cannot provide reliable financial reports or prevent fraud, we may not

be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation

with investors may be harmed.

As a result, our small size and any current internal control deficiencies may adversely affect our financial

condition, results of operation and access to capital.

We have not performed an in-depth analysis to determine if historical un-discovered

failures of internal controls exist, and may in the future discover areas of our internal control that need improvement.

Public company compliance may make it more

difficult to attract and retain officers and directors.

The Sarbanes-Oxley Act and rules subsequently

implemented by the SEC have required changes in corporate governance practices of public companies.

As a public company, we expect these

rules and regulations to increase our compliance costs in 2024 and beyond and to make certain activities more time consuming and costly.

As a public company, we also expect that these rules and regulations may make it more difficult and expensive for us to obtain director

and officer liability insurance in the future and we may be required to accept reduced policy limits and coverage or incur substantially

higher costs to obtain the same or similar coverage.

As a result, it may be more difficult for us to attract and retain qualified people

to serve on our Board of Directors or as executive officers.

You could lose all of your investment.

An investment in our securities is speculative and

involves a high degree of risk.

Potential investors should be aware that the value of an investment in the Company may go down as well

An investment in our securities is speculative

and involves a high degree of risk.

Potential investors should be aware that the value of an investment in the Company may go down as

In addition, there can be no certainty that the market value of an investment in the Company will fully reflect its underlying

You could lose your entire investment.

The ability of our Board of Directors to issue

additional stock may prevent or make more difficult certain transactions, including a sale or merger of the Company.

Our Board of Directors is authorized to issue up to

2,000,000 shares of preferred stock with powers, rights and preferences designated by it.

Shares of voting or convertible preferred stock

could be issued, or rights to purchase such shares could be issued, to create voting impediments or to frustrate persons seeking to effect

a takeover or otherwise gain control of the Company.

The ability of the Board of Directors to issue such additional shares of preferred

stock, with rights and preferences it deems advisable, could discourage an attempt by a party to acquire control of the Company by tender

offer or other means.

Such issuances could therefore deprive stockholders of benefits that could result from such an attempt, such

as the realization of a premium over the market price for their shares in a tender offer or the temporary increase in market price that

such an attempt could cause.

The ability of our Board of Directors to

issue additional stock may prevent or make more difficult certain transactions, including a sale or merger of the Company.

Our Board of Directors is authorized to issue

up to 2,000,000 shares of preferred stock with powers, rights and preferences designated by it.

Shares of voting or convertible preferred

stock could be issued, or rights to purchase such shares could be issued, to create voting impediments or to frustrate persons seeking

to effect a takeover or otherwise gain control of the Company.

The ability of the Board of Directors to issue such additional shares

of preferred stock, with rights and preferences it deems advisable, could discourage an attempt by a party to acquire control of the Company

by tender offer or other means.

Such issuances could therefore deprive stockholders of benefits that could result from such an attempt,

such as the realization of a premium over the market price for their shares in a tender offer or the temporary increase in market price

that such an attempt could cause.

Moreover, the issuance of such additional shares of preferred stock to persons friendly to the Board

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to stockholders generally.

Our stock may be traded infrequently and in

low volumes, so you may be unable to sell your shares at or near the quoted bid prices if you need to sell your shares.

Until our common stock is listed on a national securities

exchange such as the New York Stock Exchange or the Nasdaq, we expect our common stock to remain eligible for quotation on the OTC Markets,

or on another over-the-counter quotation system.

In those venues, however, the shares of our common stock may trade infrequently and in

low volumes, meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given time may

be relatively small or non-existent.

An investor may find it difficult to obtain accurate quotations as to the market value of our common

stock or to sell his or her shares at or near bid prices or at all.

In addition, if we fail to meet the criteria set forth in SEC regulations,

various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and

accredited investors.

Consequently, such regulations may deter broker-dealers from recommending or selling our common stock, which may

further affect the liquidity of our common stock.

Our stock may be traded infrequently and

in low volumes, so you may be unable to sell your shares at or near the quoted bid prices if you need to sell your shares.

Until our common stock is listed on a national

securities exchange such as the New York Stock Exchange or the Nasdaq, we expect our common stock to remain eligible for quotation on

the OTC Markets, or on another over-the-counter quotation system.

In those venues, however, the shares of our common stock may trade infrequently

and in low volumes, meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given time

may be relatively small or non-existent.

An investor may find it difficult to obtain accurate quotations as to the market value of our

common stock or to sell his or her shares at or near bid prices or at all.

In addition, if we fail to meet the criteria set forth in SEC

regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established

customers and accredited investors.

Consequently, such regulations may deter broker-dealers from recommending or selling our common stock,

which may further affect the liquidity of our common stock.

This would also make it more difficult for us to raise capital.

There currently is no active public market for

our common stock and there can be no assurance that an active public market will ever develop.

There currently is no active public market

for our common stock and there can be no assurance that an active public market will ever develop.

Failure to develop or maintain a trading

market could negatively affect the value of our common stock and make it difficult or impossible for you to sell your shares.

There is currently no active public market for shares

of our common stock and one may never develop.

There is currently no active public market for

shares of our common stock and one may never develop.

Our common stock is quoted on the OTC Markets.

The OTC Markets is a thinly traded market

and lacks the liquidity of certain other public markets with which some investors may have more experience.

We may not ever be able to

satisfy the listing requirements for our common stock to be listed on a national securities exchange, which is often a more widely-traded

The OTC Markets is a thinly traded

market and lacks the liquidity of certain other public markets with which some investors may have more experience.

We may not ever be

able to satisfy the listing requirements for our common stock to be listed on a national securities exchange, which is often a more widely-traded

and liquid market.

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may reduce the value of an investment in the stock.

Rule 15g-9 under the Exchange Act establishes the

definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than

$5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions.

Rule 15g-9 under the Exchange Act establishes

the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less

than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions.

For any transaction involving

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quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions

in penny stocks, the broker or dealer must:

(a) obtain financial information and investment experience objectives of the person and (b)

make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge

and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any

transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:

In order to approve a person’s account for

transactions in penny stocks, the broker or dealer must:

(a) obtain financial information and investment experience objectives of the

person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient

knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior

to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight

(a) sets forth the basis on which the broker or dealer made the suitability determination;

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received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute

transactions in securities subject to the “penny stock” rules.

This may make it more difficult for investors to dispose of

our common stock and cause a decline in the market value of our common stock.

Disclosure also has to be made about the risks of

investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker or dealer

and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases

of fraud in penny stock transactions.

Generally, brokers may be less willing to execute transactions

in securities subject to the “penny stock” rules.

This may make it more difficult for investors to dispose of our common stock

and cause a decline in the market value of our common stock.

Disclosure also has to be made about the risks

of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker or

dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in

cases of fraud in penny stock transactions.

Finally, monthly statements have to be sent disclosing recent price information for the penny

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Our stock price may be volatile.

The market price of our common stock is likely to

be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including

The market price of our common stock is likely

to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including

the following:

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Economic and other external factors.

In addition, the securities markets have from time-to-time

experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.

fluctuations may also materially and adversely affect the market price of our common stock.

In addition, the securities markets have from

time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.

These market fluctuations may also materially and adversely affect the market price of our common stock.

Offers or availability for sale of a substantial

number of shares of our common stock may cause the price of our common stock to decline.

If our stockholders sell substantial amounts of our

common stock in the public market, including upon the expiration of any statutory holding period under Rule 144, or issued upon the conversion

of preferred stock or exercise of warrants, it could create a circumstance commonly referred to as an "overhang" and in anticipation

of which the market price of our common stock could fall.

The existence of an overhang, whether or not sales have occurred or are occurring,

also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the

future at a time and price that we deem reasonable or appropriate.

If our stockholders sell substantial amounts of

our common stock in the public market, including upon the expiration of any statutory holding period under Rule 144, or issued upon the

conversion of preferred stock or exercise of warrants, it could create a circumstance commonly referred to as an "overhang"

and in anticipation of which the market price of our common stock could fall.

The existence of an overhang, whether or not sales have

occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related

securities in the future at a time and price that we deem reasonable or appropriate.

Offers or availability for sale of a substantial

number of shares of our common stock may cause the price of our common stock to decline.

If our stockholders sell substantial amounts of

our common stock in the public market, including upon the expiration of any statutory holding period under Rule 144, or issued upon the

conversion of preferred stock or exercise of warrants, it could create a circumstance commonly referred to as an "overhang"

and in anticipation of which the market price of our common stock could fall.

The existence of an overhang, whether or not sales have

occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related

securities in the future at a time and price that we deem reasonable or appropriate.

RISKS RELATED TO GOVERNMENT

Legislative and regulatory

actions taken now or in the future may increase our costs and impact our business, governance structure, financial condition or results

of operations.

Federal, state and international

regulatory agencies frequently adopt changes to their regulations or change the way existing regulations are applied.

Regulatory or legislative

changes to laws applicable to the industries in which we operate, if enacted or adopted, may impact the profitability of our business

activities, require more oversight or change certain of our business practices, including the ability to offer new products and services

and to continue offering our current products and services, and could expose us to additional costs, including increased compliance costs.

These changes also may require us to invest significant management attention and resources to make any necessary changes to operations

to comply and could have a material adverse effect on its business, financial condition and results of operations.

The regulatory environment

to which we are subject gives rise to various licensing requirements, legal and financial compliance costs and management time, and non-compliance

could result in monetary and reputational damages, all of which could have a material adverse effect on our business, financial position

and results of operations.

There can be no assurance

that we will be able to maintain our existing, or obtain additional, required regulatory licenses, certifications and regulatory approvals

in the countries where we provide services or want to expand to.

Furthermore, where we have obtained such regulatory licenses, certifications

and regulatory approvals, there are costs and potential product changes involved in maintaining such regulatory licenses, certifications,

and approvals, and we could be subject to fines or other enforcement action if we are found to violate disclosure, reporting, anti-money

laundering, capitalization, corporate governance or other requirements of such licenses.

These factors could impose substantial additional

costs and involve considerable delay to the development or provision of our products or services, or could require significant and costly

operational changes or prevent us from providing any products or services in a given market.

If we are unable to commit

sufficient resources to regulatory compliance, this could lead to delays and errors and may force us to choose between prioritizing compliance

matters over administrative support for business activities, or may ultimately force us to cease offering certain products or services

globally or in certain jurisdictions.

Any delays or errors in implementing regulatory compliance could lead to substantial monetary damages

and fines, public reprimands, a material adverse effect on our reputation, regulatory measures in the form of cease and desists orders,

increased regulatory compliance requirements or other potential regulatory restrictions on our business, enforced suspension of operations

and in extreme cases, withdrawal of regulatory licenses or authorizations to operate particular businesses, or criminal prosecution in

certain circumstances.

We are and may continue

to be subject to litigation, including individual and class action lawsuits, as well as regulatory audits, disputes, inquiries, investigations

and enforcement actions by regulators and governmental authorities.

We have been and may from

time to time become subject to material claims, arbitrations, individual and class action lawsuits, government and regulatory investigations,

inquiries, actions or requests and other proceedings alleging violations of laws, rules, and regulations, both foreign and domestic, involving

competition and antitrust law, intellectual property, privacy, data protection, information security, anti-money laundering, counter terrorist

financing, sanctions, anti-corruption, accessibility claims, securities, tax, labor and employment, payment network rules, commercial

disputes, services, and other matters.

The laws, rules and regulations

affecting our business are subject to ongoing interpretation by the courts and governmental and supervisory authorities, and the resulting

uncertainty in the scope and application of these laws, rules and regulations increases the risk that we will be subject to private claims,

governmental and regulatory actions alleging violations of those laws, rules, and regulations.

The scope, determination, and impact of claims, lawsuits,

government and regulatory investigations, enforcement actions, disputes, and proceedings to which we are subject cannot be predicted with

certainty, and may result in:

Legislative and regulatory actions taken

now or in the future may increase our costs and impact our business, governance structure, financial condition or results of operations.

Federal, state and international regulatory agencies

frequently adopt changes to their regulations or change the way existing regulations are applied.

Regulatory or legislative changes to

laws applicable to the industries in which we operate, if enacted or adopted, may impact the profitability of our business activities,

require more oversight or change certain of our business practices, including the ability to offer new products and services and to continue

offering our current products and services, and could expose us to additional costs, including increased compliance costs.

These changes

also may require us to invest significant management attention and resources to make any necessary changes to operations to comply and

could have a material adverse effect on its business, financial condition and results of operations.

The regulatory environment to which we are

subject gives rise to various licensing requirements, legal and financial compliance costs and management time, and non-compliance could

result in monetary and reputational damages, all of which could have a material adverse effect on our business, financial position and

results of operations.

There can be no assurance that we will be able

to maintain our existing, or obtain additional, required regulatory licenses, certifications and regulatory approvals in the countries

where we provide services or want to expand to.

Furthermore, where we have obtained such regulatory licenses, certifications and regulatory

approvals, there are costs and potential product changes involved in maintaining such regulatory licenses, certifications, and approvals,

and we could be subject to fines or other enforcement action if we are found to violate disclosure, reporting, anti-money laundering,

capitalization, corporate governance or other requirements of such licenses.

These factors could impose substantial additional costs and

involve considerable delay to the development or provision of our products or services, or could require significant and costly operational

changes or prevent us from providing any products or services in a given market.

If we are unable to commit sufficient resources

to regulatory compliance, this could lead to delays and errors and may force us to choose between prioritizing compliance matters over

administrative support for business activities, or may ultimately force us to cease offering certain products or services globally or

in certain jurisdictions.

Any delays or errors in implementing regulatory compliance could lead to substantial monetary damages and fines,

public reprimands, a material adverse effect on our reputation, regulatory measures in the form of cease and desists orders, increased

regulatory compliance requirements or other potential regulatory restrictions on our business, enforced suspension of operations and in

extreme cases, withdrawal of regulatory licenses or authorizations to operate particular businesses, or criminal prosecution in certain

circumstances.

We are and may continue to be subject to

litigation, including individual and class action lawsuits, as well as regulatory audits, disputes, inquiries, investigations and enforcement

actions by regulators and governmental authorities.

We have been and may from time to time become

subject to material claims, arbitrations, individual and class action lawsuits, government and regulatory investigations, inquiries, actions

or requests and other proceedings alleging violations of laws, rules, and regulations, both foreign and domestic, involving competition

and antitrust law, intellectual property, privacy, data protection, information security, anti-money laundering, counter terrorist financing,

sanctions, anti-corruption, accessibility claims, securities, tax, labor and employment, payment network rules, commercial disputes, services,

and other matters.

The laws, rules and regulations affecting our

business are subject to ongoing interpretation by the courts and governmental and supervisory authorities, and the resulting uncertainty

in the scope and application of these laws, rules and regulations increases the risk that we will be subject to private claims, governmental

and regulatory actions alleging violations of those laws, rules, and regulations.

The scope, determination, and impact of claims,

lawsuits, government and regulatory investigations, enforcement actions, disputes, and proceedings to which we are subject cannot be predicted

with certainty, and may result in:

substantial payments to satisfy judgments, fines, or penalties;

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damage to our brand and reputation.

Any such matters can have

an adverse impact, which may be material, on our business, operating results, or financial condition because of legal costs, diversion

of management resources, reputational damage, and other factors.

RISKS RELATED TO OUR INTELLECTUAL

Our intellectual property

rights are valuable, and any inability to protect them could adversely impact our business, operating results, and financial condition.

Our business depends in large

part on our proprietary technology and our brand.

We rely on, and expect to continue to rely on, a combination of trademark, trade dress,

domain name, copyright, and trade secret and laws, as well as confidentiality and license agreements with our employees, contractors,

consultants, and third parties with whom we have relationships, to establish and protect our brand and other intellectual property rights.

Our efforts to protect our

intellectual property rights may not be sufficient or effective.

Our proprietary technology and trade secrets could be lost through misappropriation

or breach of our confidentiality and license agreements, and any of our intellectual property rights may be challenged, which could result

in them being narrowed in scope or declared invalid or unenforceable.

There can be no assurance that our intellectual property rights

will be sufficient to protect against others offering products, services, or technologies that are substantially similar to ours and that

compete with our business.

As we grow, we will seek

to obtain and protect our intellectual property rights in an increasing number of countries, a process that can be expensive and may not

always be successful.

Any such matters can have an adverse impact, which

may be material, on our business, operating results, or financial condition because of legal costs, diversion of management resources,

reputational damage, and other factors.

RISKS RELATED TO OUR

INTELLECTUAL PROPERTY

Our intellectual property rights are valuable,

and any inability to protect them could adversely impact our business, operating results, and financial condition.

Our business depends in large part on our proprietary

technology and our brand.

We rely on, and expect to continue to rely on, a combination of trademark, trade dress, domain name, copyright,

and trade secret and laws, as well as confidentiality and license agreements with our employees, contractors, consultants, and third parties

with whom we have relationships, to establish and protect our brand and other intellectual property rights.

Our efforts to protect our intellectual property

rights may not be sufficient or effective.

Our proprietary technology and trade secrets could be lost through misappropriation or breach

of our confidentiality and license agreements, and any of our intellectual property rights may be challenged, which could result in them

being narrowed in scope or declared invalid or unenforceable.

There can be no assurance that our intellectual property rights will be

sufficient to protect against others offering products, services, or technologies that are substantially similar to ours and that compete

with our business.

As we grow, we will seek to obtain and protect

our intellectual property rights in an increasing number of countries, a process that can be expensive and may not always be successful.

For example, the U.S.

Patent and Trademark Office and various foreign governmental intellectual property agencies

require compliance with a number of procedural requirements to complete the trademark application process and to maintain issued trademarks,

and noncompliance or non-payment could result in abandonment or lapse of a trademark or trademark application, resulting in partial or

complete loss of trademark rights in a relevant jurisdiction.

Further, intellectual property protection may not be available to us in

every country in which our products and services are available.

We may also agree to license our intellectual property to third parties

as part of various agreements.

Those licenses may diminish our ability, though, to counter-assert our intellectual property rights against

certain parties that may bring claims against us.

Patent and Trademark Office and various foreign governmental intellectual property agencies require compliance with

a number of procedural requirements to complete the trademark application process and to maintain issued trademarks, and noncompliance

or non-payment could result in abandonment or lapse of a trademark or trademark application, resulting in partial or complete loss of

trademark rights in a relevant jurisdiction.

Further, intellectual property protection may not be available to us in every country in

which our products and services are available.

We may also agree to license our intellectual property to third parties as part of various

Those licenses may diminish our ability, though, to counter-assert our intellectual property rights against certain parties

that may bring claims against us.

In the future we may be sued by third parties for alleged infringement

of their proprietary rights.

In recent years, there has

been considerable patent, copyright, trademark, domain name, trade secret and other intellectual property development activity, as well

as litigation, based on allegations of infringement or other violations of intellectual property, including by large financial institutions.

Furthermore, individuals and groups can purchase patents and other intellectual property assets for the purpose of making claims of infringement

to extract settlements from companies like ours.

We use of third-party intellectual property rights also may be subject to claims of infringement

or misappropriation.

We cannot guarantee that

our internally developed or acquired/licensed technologies and content do not or will not infringe the intellectual property rights of

From time to time, our competitors or other third parties may claim that we are infringing upon or misappropriating their intellectual

property rights, and we may be found to be infringing upon such rights.

Any claims or litigation could cause us to incur significant expenses

and, if successfully asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering

our products or services or using certain technologies, force us to implement expensive work-arounds, or impose other unfavorable terms.

Our exposure to damages resulting from infringement claims could increase and this could further exhaust our financial and management

Further, during the course of any litigation, we may make announcements regarding the results of hearings and motions, and

other interim developments.

If securities analysts and investors regard these announcements as negative, the market price of our Common

Stock may decline.

Even if intellectual property claims do not result in litigation or are resolved in our favor, these claims, and the

time and resources necessary to resolve them, could divert the resources of our management and require significant expenditures.

the foregoing could prevent us from competing effectively and could have an adverse effect on our business, operating results, and financial

UNRESOLVED STAFF COMMENTS

In recent years, there has been considerable patent,

copyright, trademark, domain name, trade secret and other intellectual property development activity, as well as litigation, based on

allegations of infringement or other violations of intellectual property, including by large financial institutions.

Furthermore, individuals

and groups can purchase patents and other intellectual property assets for the purpose of making claims of infringement to extract settlements

from companies like ours.

We use of third-party intellectual property rights also may be subject to claims of infringement or misappropriation.

We cannot guarantee that our internally developed

or acquired/licensed technologies and content do not or will not infringe the intellectual property rights of others.

From time to time,

our competitors or other third parties may claim that we are infringing upon or misappropriating their intellectual property rights, and

we may be found to be infringing upon such rights.

Any claims or litigation could cause us to incur significant expenses and, if successfully

asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our products

or services or using certain technologies, force us to implement expensive work-arounds, or impose other unfavorable terms.

to damages resulting from infringement claims could increase and this could further exhaust our financial and management resources.

during the course of any litigation, we may make announcements regarding the results of hearings and motions, and other interim developments.

If securities analysts and investors regard these announcements as negative, the market price of our Common Stock may decline.

intellectual property claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary

to resolve them, could divert the resources of our management and require significant expenditures.

Any of the foregoing could prevent

us from competing effectively and could have an adverse effect on our business, operating results, and financial condition.

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 1A. Risk Factors